Table of ContentsTHE APPLICABLE LAWS .................................................................................................................................................................... 1 GENERAL PRINCIPLES ...................................................................................................................................................................... 1 1. Singer Sewing Machine vs. NLRC, 193 SCRA 271 ..................................................................................................................... 1 2. Manila Golf Club vs. IAC, 237 SCRA 207 .................................................................................................................................... 1 3. Encyclopedia Britanica vs. NLRC, 264 SCRA 4 [1996] ................................................................................................................ 2 4. Carungcong vs. Sunlife, 283 SCRA 319 ...................................................................................................................................... 2 5. Ramos vs CA, 380 SCRA 467 ..................................................................................................................................................... 3 6. Sonza vs. ABS-CBN, G.R. No. 138051, June 10, 2004 ............................................................................................................... 3 7. Lazaro vs. Social Security Commission, 435 SCRA 472 [2004] .................................................................................................. 4 8. Phil. Global Communications v. De Vera, 459 SCRA 260 [2005] ................................................................................................ 5 9. ABS-CBN vs. Nazareno, G.R. No. 164156, Sept. 26, 2006 ......................................................................................................... 6 10. Francisco vs. NLRC, 500 SCRA 690 [2006]............................................................................................................................... 6 11. Nogales et. al., vs. Capitol Medical Center et al., G.R. No. 142625, December 19, 2006 ......................................................... 7 12. Coca-Cola Bottlers Phils., vs. Dr. Climaco, G.R. No. 146881, February 15, 2007 ..................................................................... 8 13. Consolidated Broadcasting System vs. Oberio, G.R. No. 168424, June 8, 2007....................................................................... 9 14. Dumpit-Morillo vs. CA, G.R. No. 164652, June 8, 2007, citing 2004 Sonza............................................................................. 10 15. Lopez vs. Bodega City, G.R. No. 155731, Sept. 3, 2007, citing 2004 Abante & 2005 Consulta .............................................. 10 16. Calamba Medical Center vs. NLRC et al., G.R. No. 176484, Nov. 25, 2008............................................................................ 11 17. Escasinas et al., vs. Shangri-las Mactan Island Resort et al., G.R. No. 178827, March 4, 2009 ............................................. 12 18. Tongko v. Manufacturer Life Insurance Co. (MANULIFE) Inc., et al., G.R. No 167622, January 25, 2011 .............................. 14 19. Caong, Jr. v. Begualos, G.R. No. 179428, January 26, 2011 .................................................................................................. 15 20. Atok Big Wedge Company vs. Gison, G.R. No. 169510, August 8, 2011 ................................................................................ 16 21. Semblante vs. CA, G.R. No. 196426, August 15, 2011............................................................................................................ 18 22. Bernarte vs. Phil. Basketball Assoc., G.R. No. 192084, September 14, 2011 ......................................................................... 19 23. Lirio vs. Genovia, G.R. No. 169757, November 23, 2011 ........................................................................................................ 20 24. Jao vs. BCC Product Sales Inc., G.R. No. 163700, April 18, 2012 .......................................................................................... 22 RIGHT TO SECURITY OF TENURE .................................................................................................................................................. 23 1. ALU-TUCP vs. NLRC, 234 SCRA 678 [1994] ............................................................................................................................ 23 2. Cosmos Bottling Corp., vs NLRC, 255 SCRA 358 [1996] .......................................................................................................... 23 3. Purefoods v. NLRC 283 SCRA 136 [1997] ................................................................................................................................ 24 4. Phil. Fruit and Vegetable Industries v. NLRC, 310 SCRA 680 [1999] ........................................................................................ 25 5. Philips Semiconductor vs. Fardiquela, G.R. No. 141717, April 14, 2004 ................................................................................... 26 6. Alcira vs. NLRC, G.R. No. 149859, June 9, 2004 ...................................................................................................................... 28 7. Mitsubishi Motors Phils. vs. Chrysler Phil Labor Union, G.R. No. 148738, June 29, 2004 ......................................................... 29 8. Pangilinan vs. General Milling Co., G.R. No. 149329, July 2, 2004 ........................................................................................... 29 9. Ravago vs. Esso Eastern Marine Ltd., G.R. No. 158324, March 14, 2005 ................................................................................ 30 10. Hacienda Bino/Hortencia Stark vs. Cuenca, G.R. No. 150478, April 15, 2005, citing 2003 Hacienda Fatima ......................... 31 11. Phil Global Communication v. De Vera, G.R. No. 157214, June 7, 2005................................................................................. 32 12. Integrated Contractor and Plumbing Works, Inc. vs. National Labor Relations Commission and Glen Solon, G.R. No. 152427. August 9, 2005 ............................................................................................................................................................................... 35 13. Lacuesta vs. Ateneo de Manila, G.R. No. 152777, December 9, 2005 .................................................................................... 36 14. Poseidon Fishing/Terry De Jesus v. NLRC, G.R. No. 168052, February 20. 2006 .................................................................. 37 15. Abesco Construction vs. Ramirez, G.R. No. 141168, April 10, 2006 ....................................................................................... 38 16. Cebu Metal Corp., vs. Saliling, G.R. No. 154463, September 5, 2006 ..................................................................................... 38 17. Liganza v. RBL Shipyard Corp., G.R. No. 159682, October 17, 2006...................................................................................... 39 18. Fabeza v. San Miguel Corp., G.R. No. 150658, February 9, 2007 ........................................................................................... 41 19. Soriano vs. NLRC, G.R. No. 165594, April 23, 2007, citing 2005 Filipina Pre-fabricated Bldg. System (Filisystem) ............... 42 20. Caseres vs. Universal Robina Sugar Milling Corp., et al., G.R. No. 159343, September 28, 2007.......................................... 42 21. Pier 8 Arrastre & Stevedoring Services, Inc. vs Boclot, G.R. No. 173849, September 28, 2007 ............................................. 44 22. Pacquing vs. Coca-Cola Bottlers Phils., Inc., G.R. No. 157966, January 31, 2008, citing Magsalin vs. National Organization of Workingmen, G.R. No. 148492, May 9, 2003................................................................................................................................. 46 23. Cocomangas Hotel Beach Resort v. Visca, G.R. No. 167045, August 29, 2008...................................................................... 48 24. Price, et al., v Innodata Phils., G.R. No. 178505, September 30, 2008.................................................................................... 50 25. Agusan del Norte Electric Cooperative v. Cagampang, G.R. No. 167627, October 10, 2008 .................................................. 52 26. William Uy Construction et. al vs. Trinidad, GR No. 183250, March 10, 2010 ......................................................................... 53 27. Dacuital vs. L.M. Camus Engineering Corp.,G.R. No. 176748, September 1, 2010 ................................................................ 54 28. Millenium Erectors Corp. vs. Magallanes, G.R. No. 184362, November 15, 2010 ................................................................... 55 29. EXODUS INTERNATIONAL CONSTRUCTION CORPORATION vs. GUILLERMO BISCOCHO et. al.G.R. No. 166109, February 23, 2011 .......................................................................................................................................................................... 56 30. Leyte Geothermal Power Progressive Employees Union v. Phil National Oil Co., G.R. No. 176351, March 30, 2011 ............ 57 31. St. Paul College Quezon City vs. Ancheta II, G.R. No. 169905, September 7, 2011 ............................................................... 59 32. Lynvil Fishing Enterprises vs. Ariola, G.R. No. 181974, February 1, 2012............................................................................... 61 33. D.M. Consunji Inc. vs. Jamin, G.R. No. 192514, April 18, 2012 citing Maraguinot................................................................... 62 MANAGEMENT PREROGATIVE ....................................................................................................................................................... 64 1. Dosch vs. NLRC, 123 SCRA 296 [1983] .................................................................................................................................... 64 2. PT&T v. Court of Appeals, G.R. No. 152057, September 23, 2003 ........................................................................................... 65 3. Mendoza vs. Rural Bank of Lucban, G.R. No. 155421, July 7, 2004 ......................................................................................... 66 4. Duncan Assn. of Detailman-PTFWO vs Glaxo Wellcome Phils. G.R. 162994 ........................................................................... 67 5. Norkis Trading Co., vs. NLRC, G.R. No. 168159, August 19, 2005 ........................................................................................... 67 6. PLDT vs. Paquio, G.R. No. 152689, October 12, 2005 .............................................................................................................. 69 7. Star Paper Corp., vs. Simbol, G.R. No. 164774, April 12, 2006 ................................................................................................. 70 8. Rivera vs. Solidbank, G.R. No. 163269, April 19, 2006.............................................................................................................. 71 9. Tiu v. Platinum Plans, Inc., G.R. No. 163512, February 28, 2007 .............................................................................................. 72 10. Duldulao vs. Court of Appeals, G.R. No. 164893, March 1, 2007 ............................................................................................ 73 11. Almario v. Philippine Airlines, G.R. No. 170928, September 11, 2007 ..................................................................................... 74 12. San Miguel Corp. v. Pontillas, G.R. No. 155178, May 07, 2008 ............................................................................................... 75 13. Bisig Manggagawa sa Tryco vs. NLRC, G.R. No. 151309, Oct. 15, 2008................................................................................ 76 14. Coca-Cola Bottler‘s Philippines, Inc. v. Del Villar, G.R. No. 163091, October 6, 2010............................................................. 77 15. Manila Electric Co. vs. Lim, G.R. No. 184769, October 5, 2010 .............................................................................................. 80 16. Bello vs. Bonifacio Security Services, G.R. No. 188086, August 3, 2011 ................................................................................ 80 17. Alert Security and Investigation Agency vs. Pasawilan, G.R. No. 182397, September 14, 2011............................................. 81 18. Manila Pavilion Hotel vs. Delada, G.R. No. 189947, January 25, 2012 ................................................................................... 82 TERMINATION OF EMPLOYMENT ................................................................................................................................................... 84 1. Retuya v. NLRC, G.R. No. 148848, August 5, 2003, citing Bustamante .................................................................................... 84 2. Agabon vs. NLRC, G.R. No. 158693, November 17, 2004 ........................................................................................................ 85 3. Jaka Food Processing vs. Pacot, G.R. No. 151378, March 28, 2005 ........................................................................................ 87 4. Mauricio v. NLRC, G.R. No. 164635, November 17, 2005 ......................................................................................................... 88 5. Industrial Timber Corp. vs. Ababon, G.R. No. 164518, Janury 25, 2006 and March 28, 2007................................................... 89 6. Equitable Bank vs Sadac, G.R. No. 164772, June 8, 2006 ........................................................................................................ 90 7. Heirs of Sara Lee vs. Rey, G.R. No. 1499013, August 31, 2006 ............................................................................................... 91 8. Galaxi Steel Workers Union vs. NLRC, G.R. No. 165757, October 17, 2006, citing North Davao Mining ................................. 92 9. Sy vs. Metro Bank, G.R. No. 160618, November 2, 2006 ......................................................................................................... 93 10. King of Kings Transport vs. NLRC, G.R. No. 166208, June 29, 2007 ...................................................................................... 94 11. Johnson & Johnson v. Johnson Office & Sales Union, G.R. No. 172799, July 6, 2007 ........................................................... 96 12. Asian Terminal vs. NLRC, G.R. No. 158458, December 19, 2007, citing Standard Electric Mfg. vs. Standard Electric Employees Union, G.R. No. 166111, August 25, 2005 .................................................................................................................. 97 13. Smart Communications v. Astorga, G.R. No. 148142, January 28, 2008 ................................................................................ 98 14. Enriquez v. Bank of the Philippine Islands, G.R. No. 172812, February 12, 2008 ................................................................. 100 15. RB Michael Press vs. Galit, G.R. No. 153510, February 13, 2008 ......................................................................................... 102 16. Cosmos Bottling Corporation v. Nagrama, G.R. No 164403, March 4, 2008 ......................................................................... 104 17. School of the Holy Spirit of Q.C. vs. Taguiam, G.R. No. 165565, July 14, 2008 .................................................................... 105 18. Universal Staffing Services Inc. v. NLRC, G.R. No. 177576, July 21, 2008 ........................................................................... 106 19. Flight Attendants and Steward Association of the Philippines (FASAP) v. Philippine Airlines, G.R. No. 178083, G.R. No. 178083, July 22, 2008 .................................................................................................................................................................. 107 20. John Hancock Life Insurance Corp. vs. Davis, G.R. No. 169549, Sept. 3, 2008.................................................................... 111 21. Merin vs. NLRC, G.R. No. 171790, October 17, 2008 ........................................................................................................... 112 22. Yrasuegui vs. Phil Airlines, G.R. No. 168081, Oct. 17, 2008 ................................................................................................. 114 23. Sagales v. Rustans Commercial Corporation, G.R. No. 166554, November 27, 2008 .......................................................... 115 24. Garcia vs. PAL, G.R. No. 164856, Jan. 20, 2009, En Banc, citing Genuino vs. NLRC, G.R. No. 142732-33, December 4, 2007 ............................................................................................................................................................................................. 117 25. La Union Cement Workers Union et al., vs NLRC et al., G.R. No. 174621, January 30, 2009 .............................................. 118 26. Mendros, Jr. vs. Mitsubishi Motors Phils Corp., G.R. No. 169780, Feb. 16, 2009 ................................................................. 120 27. Rosa vs. Ambassador Hotel, G.R. No. 177059, March 13, 2009 ........................................................................................... 121 28. Motorola Phils. v. Ambrocio, G.R. No. 173279, March 30, 2009 ............................................................................................ 122 29. Perez et al., vs. Phil Telegraph & Telephone Company et al., G.R. No. 152048, April 7, 2009 ............................................. 123 30. Telecommunications Distributors Specialists Inc. et al., vs. Garriel, G.R. No. 174981, May 25, 2009, citing 2009 Perez ..... 124 31. Triumph International Philippines v. Apostol, G.R. No. 164423, June 16, 2009 ..................................................................... 125 32. Technological Institute of the Phils Teachers and Employees Organization vs. Court of Appeals, et al., G.R. No. 158703, June 26, 2009 .............................................................................................................................................................................. 127 33. Llamas v. Ocean Gateway Maritime and Management Services Inc., G.R. No. 179293, August 14, 2009 ........................... 128 34. Lowe Inc., v. CA, G.R. 164813 & 174590, August 14, 2009 .................................................................................................. 129 35. Estacio v. Pampanga I Electric Cooperative, G.R. No. 183196, August 19, 2009 ................................................................. 130 36. Maralit v. PNB, G.R. No. 163788, August 24, 2009 ............................................................................................................... 131 37. Quevedo v. Benguet Electric Cooperative, G.R. No. 168927, September 11, 2009 .............................................................. 133 38. Placido et al. v. NLRC, G.R. No. 180888, September 18, 2009 ............................................................................................. 134 39. Martinez v. B&B Fish Broker, G.R. No. 179985, September 18, 2009 ................................................................................... 135 40. Flight Attendants and Steward Association of the Phils vs. Phil Airlines, G.R. No. 178083, October 2, 2009, see July 22, 2008, main decision ..................................................................................................................................................................... 136 41. Eats-Cetera Food Services Outlet v. Letran, G.R. No. 179507, October 2, 2009 .................................................................. 137 42. Plantation Bay Resort and Spa, et al. vs. Dubrico, G.R. No. 182216, December 4, 2009 ..................................................... 139 43. Fulache v. ABS-CBN Broadcasting Corporation, G.R. No. 183810, January 21, 2010 .......................................................... 140 44. Ancheta vs. Destiny Financial Plans Inc. et al., G.R. No. 179702, Feb. 16, 2010 .................................................................. 141 45. Javellana, Jr. vs. Belen, G.R. Nos. 181913 & 182158, March 5, 2010................................................................................... 142 46. WPP Marketing Communications Inc., et al., vs. Galera, G.R. No. 169207, March 25, 2010 ................................................ 143 47. Mercado v. AMA Computer College, G.R. No. 183572, April 13, 2010 .................................................................................. 144 48. Pantoja vs. SCA Hygiene Products Corp., G.R. No. 163554, April 23, 2010 ......................................................................... 145 49. BPI v. NLRC, G.R. No. 179801, June 18, 2010 ..................................................................................................................... 146 50. Phil. Rural Reconstruction Movement vs. Pulgar, G.R. No. 169227, July 5, 2010 ................................................................. 147 51. Maribago Bluewater Beach Resort v. Dual, G.R. No. 180660, July 20, 2010 ........................................................................ 149 52. New Puerto Commercial vs. Lopez, G.R. No. 169999, July 26, 2010 .................................................................................... 151 53. Artificio vs. NLRC, G.R. No. 172988, July 26, 2010 ............................................................................................................... 152 54. Calipay vs. NLRC, G.R. No. 166411, August 3, 2010 ............................................................................................................ 154 55. Nacague v. Sulpicio Lines, G.R. No. 172589, August 8, 2010 ............................................................................................... 155 56. Century Canning Corp. vs. Ramil, G.R. No. 171630, August 8, 2010 .................................................................................... 156 57. D.M Consunji vs. Gobres, G.R. No. 169170, August 8, 2010 ................................................................................................ 158 58. Nagkaka-sang Lakas ng Manggagawa sa Keihin vs. Keihin Phils. Corp., G.R. No. 171115, August 9, 2010 ....................... 159 59. Garcia v. Molina, G.R. No. 157383, August 18, 2010 ............................................................................................................ 160 60. Escario v. NLRC, G.R. No. 160302, September 27, 2010 ..................................................................................................... 161 61. Simizu Phils Contractors v. Callanta, G.R. No. 165923, September 29, 2010 ....................................................................... 163 62. Solidbank Corporation v. Gamier, G.R. No. 159461, November 15, 2010 ............................................................................. 165 63. Coca-Cola Export Corp. v. Gacayan, G.R. No. 149433, December 15, 2010 ........................................................................ 166 64. Robinsons Galleria/Robinsons Supermarket v. Ranchez, G.R. No. 177937, January 19, 2011 ............................................ 168 65. Hospital Management Services v. HMSI-Medical Center Manila Employees Asso., G.R. No. 176287, January 31, 2011 ... 169 66. Culili v. Eastern Telecommunications Phils., G.R. No. 165381, February 9, 2011 ................................................................. 171 67. Plastimer Industrial Corp. v. Gopo, G.R. No. 183390, February 16, 2011 ............................................................................. 172 68. St. Mary‘s Academy of Dipolog City vs. Palacio, G.R. No. 164913, September 8, 2010 ....................................................... 174 69. PLDT vs. Teves, G.R. No. 143511, November 15, 2010 ....................................................................................................... 175 70. University of the Immaculate Concepcion vs. NLRC, G.R. No. 181146, January 26, 2011 ................................................... 176 71. Simizu Phils Contractors v. Callanta, G.R. No. 165923, September 29, 2010 ....................................................................... 177 72. Manila Mining Corp. Employees Association-FFW vs. Manila Mining Corp., G.R. No. 178222-23, September 29, 2010...... 179 73. Lopez vs. Alturas Group of Companies, G.R. No. 191008, April 11, 2011 ............................................................................. 180 74. Apacible vs. Multimed Industries Inc., G.R. No. 178903, May 30, 2011................................................................................. 181 75. Barroga vs. Data Center College, G.R. No. 174158, June 27, 2011 ...................................................................................... 182 76. Lopez vs. Keppel Bank Phils., G.R. No. 176800, September 5, 2011.................................................................................... 183 77. St. Paul College Quezon City vs. Ancheta II, G.R. No. 169905, September 7, 2011 ............................................................. 184 78. Jumuad vs. Hi-Flyer Food, G.R. No. 187887, September 7, 2011 ......................................................................................... 185 79. Nissan Motor Phils. Angelo, G.R. No. 164181, September 14, 2011 ..................................................................................... 186 80. Phil. National Bank vs. Padao, G.R. No. 180849, November 16, 2011 .................................................................................. 187 81. Tamsons Enterprises Inc. vs. CA, G.R. No. 192881, November 16, 2011 ............................................................................. 188 82. Concepcion vs. Minex Import Corp., G.R. No. 153569, January 24, 2012 ............................................................................. 189 83. Morales vs. Harbour Centre Port Terminal Inc., G.R. No. 174208, January 25, 2012 ........................................................... 190 84. Mansion Printing Center vs. Bitara, G.R. No. 168120, January 25, 2012 .............................................................................. 191 85. Manila Electric Co. vs. Beltran, G.R. No. 173774, January 30, 2012 ..................................................................................... 192 86. Bank of Lubao vs. Manabat, G.R. No. 188722, February 1, 2012 ......................................................................................... 194 87. Canadian Opportunities Unlimited vs. Dalangin, G.R. No. 172223, February 6, 2012 ........................................................... 195 88. Manila Electric Co. vs. Gala, G.R. No. 191288 & 191304, March 7, 2012 ............................................................................. 196 89. Aro vs. NLRC, G.R. No. 174792, March 7, 2012.................................................................................................................... 197 90. Ymbong vs. ABS-CBN Broadcasting Corp., G.R. No. 184885, March 7, 2012 ...................................................................... 198 91. Blue Sky Trading Co. vs. Blas, G.R. No. 190559, March 7, 2012 .......................................................................................... 200 92. Internation management Services vs. Logarta, G.R. No. 163657, April 18, 2012 .................................................................. 201 93. Jiao vs. NLRC, G.R. No. 182331, April 18, 2012 ................................................................................................................... 203 94. Realda vs. New Age Graphics Inc., G.R. No. 192190, April 25, 2012 .................................................................................... 204 95. Kakampi and Its Members Panuelos vs. Kingspoint Express & Logistics, G.R. No. 194813, April 25, 2012 ......................... 205 SUSPENSION OF BUSINESS OPERATIONS................................................................................................................................. 207 1. JPL Marketing Promotion vs. Court of Appeals, G.R. No. 151966, July 8, 2005...................................................................... 207 2. Pido vs NLRC, G.R. No. 169812, February 23, 2007............................................................................................................... 207 3. Megaforce Security & Allied Services vs. Lactao, G.R. No. 160940, July 21, 2008 ................................................................. 208 4. National Mines and Allied Workers Union vs. Marcopper Mining Corp., G.R. No. 174641, Nov. 11, 2008 .............................. 210 5. Eagle Star Security Services Inc. vs. Mirando et al., G.R. No. 179512, July 30, 2009 ............................................................. 211 6. Nationwide Security & Allied Services v. Valderama, G.R. No. 186614, February 23, 2011 ................................................... 212 7. Nippon Housing Phils. vs. Leynes, G.R. No. 177816, August 3, 2011 ..................................................................................... 214 DISEASE AS A GROUND FOR TERMINATION .............................................................................................................................. 216 1. Sy vs. Court of Appeals, G.R. No. 142293, February 27, 2003................................................................................................ 216 2. Manly Express vs. Payong, G.R. No. 167462, October 25, 2005 ............................................................................................ 216 3. Duterte vs. Kingswood Trading Co., G.R. No. 160325, October 4, 2007 ................................................................................. 217 4. Villaruel vs. Yeo Han Guan, G.R. No. 169191, June 1, 2011 ................................................................................................... 218 OTHER CAUSES OF SEVERANCE OF EMPLOYMENT RELATION ............................................................................................. 220 1. Pantranco North Express vs. NLRC, 259 SCRA 161 [1996] .................................................................................................... 220 2. Phil. Airlines vs. Airline Pilots Asso. Of Phils., G.R. No. 143686, January 15, 2002 ................................................................ 221 3. Cainta Catholic School vs. Cainta Catholic School Employees Union, G.R. No. 151021, May 4, 2006 citing 1996 Pantranco North Express .............................................................................................................................................................................. 221 4. Jaculbe vs. Silliman University, G.R. No. 156934, March 16, 2007 ......................................................................................... 223 5. Globe Telecom vs. Crisologo, G.R. No. 17644, August 10, 2007 ............................................................................................ 226 6. BMG Records Phils et al., vs. Aparecio, et al., G.R. No. 153290, September 5, 2007, citing Phil Today vs. NLRC, 267 SCRA 202 [1996] .................................................................................................................................................................................... 227 7. Blue Angel Manpower and Security Services vs. CA, G.R. No. 161196, July 28, 2008 ........................................................... 228 8. Guerzon Jr et al vs. Pasig Industries Inc., et al., G.R. No. 170266, Sept. 12, 2008 ................................................................. 229 9. Suarez Jr. et al., vs. National Steel Corp., G.R. No. 150180, Oct. 17, 2008 ............................................................................ 230 10. Goodrich Mfg Corp vs. Ativo et al., G.R. No. 188002, Feb. 1, 2010 ....................................................................................... 231 11. Korean Air Co. Ltd. v. Yuson, G.R. No. 170369, June 16, 2010 ............................................................................................ 232 12. Cercado v. Uniprom Inc., G.R. No. 188154, October 13, 2010 .............................................................................................. 233 13. Bilbao vs. Saudi Arabian Airlines, G.R. No. 183915, December 14, 2011 ............................................................................. 234 14. San Miguel Properties vs. Gucaban, G.R. No. 153982, July 18, 2011 ................................................................................... 235 15. Skippers United Pacific vs. Doza, G.R. No. 175558, February 8, 2012 ................................................................................. 236 PRESCRIPTION OF CLAIMS .......................................................................................................................................................... 238 1. Ludo & Luym Corp. vs Saornido, G.R. No. 140960, January 20, 2003 .................................................................................... 238 2. Degamo vs. Avantgarde Shipping corp., G.R. no. 154460, November 22, 2005 ..................................................................... 239 3. Intercontinental Broadcasting Corp. vs. Panganiban, G.R. No. 151407, February 6, 2007 .................................................... 239 4. Far East Agricultural Supply vs. Lebatique, G.R. No. 162813, February 12, 2007 ................................................................. 240 5. Victory Liner, Inc. vs. Race, G.R. No. 164820, March 28, 2007 ............................................................................................... 241 6. J.K. Mercado & Sons Agricultural Enterprises vs. Sto. Tomas, G.R. No. 158084, August 29, 2008 ........................................ 242 7. Reyes vs. Nlrc, G.R. No. 180551, February 10, 2009 .............................................................................................................. 243 8. LWV Construction Corp. vs. Dupo, G.R. No. 172342, July 13, 2009 ....................................................................................... 244 9. PLDT v. Pingol, G.R. No. 182622, September 8, 2010 ............................................................................................................ 245 10. Medline Management Inc. vs. Roslinda, G.R. No. 168715, September 15, 2010 .................................................................. 247 11. University of East vs. University of East Employees Assoc., G.R. No. 179593, September 14, 2011 ................................... 248 The court finds that since private respondents are not employees of the company. The question involved in the case is whether or not rendering caddying services for members of golf clubs and their guests in said clubs‘ courses or premises are the employees of such clubs and therefore within the compulsory coverage of the Social Security System (SSS). would lead to the conclusion that no employee-employer relationship exists. The following elements are generally considered in the determination of the relationship: the selection and engagement of the employee. IAC. Not all collecting agents are employees and neither are all collecting agents independent contractors. The plain language of the agreement reveals that the designation as collection agent does not create an employment relationship and that the applicant is to be considered at all times as an independent contractor. There is no constitutional and legal basis for their union to be granted their petition for direct certification. The company files the present petition on the determination of the relationship. The union insists that the provisions of the Collection Agreement belie the company‘s position that the union members are independent contractors. any control is only with respect to the end result of the collection since the requirements regulate the things to be done after the performance of the collection job or the rendition of service. These are certification election case filed by PTCCEA on behalf of the same caddies of Manila Golf and Country club which was in favor of the caddies and compulsory arbitration case involving PTCCEA and Manila Golf and Country Club which was dismissed and ruled that there was no employer-employee relationship between the caddies and the club. payment of wages. Ruling: The present case calls for the application of the control test. power of dismissal and the power to control the employee‘s conduct which is the most important element. Clerical.LABOR RELATIONS Atty. Manila Golf Club vs. caddies must submit to some supervision of their conduct while enjoying the privilege of pursuing their occupation within the premises and grounds of whatever club Page 1 . which if not satisfied. 193 SCRA 271 Facts: Singer Machine Collectors Union-Baguio filed a petition for direct certification as the sole and exclusive bargaining agent of all collectors of Singer Sewing Machine. 237 SCRA 207 Facts: This is originally filed with the Social Security Commission (SSC) via petition of 17 persons who styled themselves as ― Caddies of Manila Golf and Country Club-PTCCEA‖ for the coverage and availment of benefits of the Social Security Act as amended. Med-Arbiter ruled that there exists an employee-employer relationship and granted the certification election which was affirmed by Sec. Jefferson M. no right to organize for the purpose of bargaining or as a bargaining agent cannot be recognized. The nature of the relationship between a company and its collecting agents depends on the circumstances of each particular relationship. Singer Sewing Machine vs. Even if report requirements are to be called control measures. The agreement confirms the status of the collecting agents as independent contractor. If the union members are not employees. Ruling: The Court does not agree that the facts logically point to the employer-employee relationship. The company opposed the petition mainly because the union members are not employees but independent contractors as evidenced by the collection agency agreement which they signed. they are not entitled to the constitutional right to form or join a labor organization for the purposes of collective bargaining. PTCCEA (Philippine Technical. 2. Drilon. The requirement that collection agents utilize only receipt forms and report forms issued by the company and that reports shall be submitted at least once a week is not necessarily an indication of control over the means by which the job collection is to be performed. Commercial Employees Association) a labor organization where which they claim for membership. Marquez THE APPLICABLE LAWS GENERAL PRINCIPLES CASES: 1. NLRC. The same time two other proceedings were filed and pending. In the very nature of things. He was free to conduct his work and he was free to engage in other means of livelihood. 283 SCRA 319 Facts: Susan Carungcong began her career in the insurance industry in 1974 as an agent of Sun Life Assurance Company of Canada. and in turn is compensated in according to the result of his efforts and not the amount thereof. Under the control test. The Labor Arbiter ruled that Limjoco was an employee of the company. dealt with such matters as the agent‘s commissions. This contract was superseded some five years later when she signed two (2) new agreements. These considerations clash frontally with the concept of employment. Carungcong and Sun Life executed another Agreement named New Business Manager with the function generally to manage a New Business Office established. Manager‘s Supplementary Agreement. NLRC. Under such circumstances. Limjoco was not an employee of the company since he had the free rein in the means and methods for conducting the marketing operations. She signed an Agent Agreement with Sun Life. the factual circumstances must be considered. the caddy may leave the premises and to go to such other place of work that he wishes. Limjoco maintained otherwise. Sunlife. These are things beyond the control of the petitioner. NLRC also affirmed the decision and opined that there was no evidence supporting allegation that Limjoco was an independent contractor or dealer. there was no employee-employer relationship. denominated Career Agent‘s or Unit Manager‘s Agreement. He was merely an agent or an independent dealer of the petitioner. and termination of the agreement by death. 3. On appeal. Petitioner also claims that it had no control and supervision over the complainant as to the manners and means he conducted his business operations. The caddy (LLamar) is not an employee of petitioner Manila Golf and Country Club and the petitioner is under no obligation to report him for compulsory coverage of SSS. He was also allowed to use the petitioner‘s name. He alleged he was hired by the petitioner and was assigned in the sales department. an employee-employer relationship exists where the person for whom the services are performed reserves a right to control not only the end to be achieved. on the other hand. 264 SCRA 4 [1996] Facts: Limjoco was a Sales Divison of Encyclopaedia Britannica and was in charge of selling the products through some sales representatives. Jefferson M. Encyclopedia Britanica vs.LABOR RELATIONS Atty. The element of control is absent where a person who works for another does so more or less at his own pleasure and is not subject to definite hours or conditions of work. It can happen that a caddy who has rendered services to a player on one day may still find sufficient time to work elsewhere. free to leave anytime they please. In determining the relationship. payment of wages. Carungcong vs. Limjoco resigned to pursue his private business and filed a complaint against petitioner for alleged non-payment of separation pay and other benefits and also illegal deduction from sales commissions. The issuance of guidelines by the petitioner was merely guidelines on company policies which sales managers follow and impose on their respective agents. but also the manner and means to be employed in reaching that end. The power of control is commonly regarded as the most crucial and determinative indicator of the presence or absence of an employee-employer relationship. limitations on his authority. he would receive commissions from the products sold by his agents. Petitioner alleged that Limjoco was not an employee of the company but an independent dealer authorized to promote and sell its products and in return. It explicitly described as a ―further agreement‖. It was agreed that office expenses would be deducted from Limjoco‘s commissions. They work for the club to which they attach themselves on sufferance but. to stay away for as long they like. power of dismissal and power to control the employee‘s conduct. In ascertaining the employee-employer relationship. or by written notice with or without cause. also without having to observe any working hours. In 1974. Marquez they do work in. received commissions therein. his obligations. goodwill and logo. This latest Agreement stressed that the New Business Manager in performance of his Page 2 . The second was titled. Ruling: There was no employee-employer relationship. As compensation. In virtue of which she was designated the latter‘s agent to solicit applications for its insurance and annuity policies. Hence. the following elements must be present: selection and engagement of the employee. petitioner assails that there was no employee-employer relationship. 4. The first. 1985 in the De los Santos Medical Center. the National Labor Relations Commission reversed the Arbiter‘s judgment. she was ready for operation as early as 7:30 am. (3) the power to hire and fire. It affirmed that no employment relationship existed between Carungcong and Sun Life. at the place and time she felt convenient for her to do so. had been receiving reports of anomalies in relation thereto from unit managers and agents. ABS-CBN. She was not an employee of Sun Life Co. Around 9:30. It is the patient who pays the consultants. Hosaka finally arrived at 12:10 pm more than 3 hours of the scheduled operation. fire and exercise real control over their attending and visiting consultant staff. Erlinda was being wheeled to the Intensive care Unit and stayed there for a month. who agreed to do the operation. Marketing. Carungcong was confronted with and asked to explain the discrepancies set out in Sibayan‘s report. It does not necessarily create any employer-employee relationship where the employers‘ controls have to interfere in the methods and means by which employee would like employ to arrive at the desired results. Since the ill-fated operation. Erlinda remained in comatose condition until she died. Jefferson M. Ruling: Private Hospitals hire. (2) payment of wages. She was given a letter signed by Metron V. but the means to be used in reaching such an end. On appeal. By 10 am. like the ―Career Agent‘s or Unit Manager‘s Agreement‖ first signed by her. Thereafter. Ramos vs CA. At 3 pm. shall be considered an independent contractor and not an employee of Sun Life. The nail beds of Erlinda were bluish discoloration in her left hand. Sonza vs. Dr. and that under no circumstance shall the New Business Manager and/or his employees be considered employees of Sun Life. It was indicated in the very face of the contract. Hosaka has not yet arrived. The rules and regulations of the company is not sufficient to establish an employer-employee relationship. 6. The operation was scheduled on June 17. Manager of Sun Life‘s Internal Audit Department. The hospital‘s obligation is limited to providing the patient with the preferred room accommodation and other things that will ensure that the doctor‘s orders are carried out.LABOR RELATIONS Atty. Rogelio wanted to pull out his wife from the operating room. 138051. Dr. Hosaka and Guiterrez. the hiring and the right to terminate consultants fulfill the hallmarks of an employer-employee relationship with the exception of payment of wages. June 10. a surgeon.R. The family of Ramos sued them for damages. On the following day. Carungcong would be considered an independent contractor and not an employee of Sun Life. The hospital cannot dismiss the consultant but he may lose his privileges granted by the hospital. CLU. The court finds that there is no employer-employee relationship between the doctors and the hospital. The control test is determining. She was referred to Dr. The hospital does not hire consultants but it accredits and grants him the privilege of maintaining a clinic and/or admitting patients. Hosaka. Carungcong admitted that she was free to work as she pleases. Marquez duties defined herein. In applying the four fold test. Dr. 380 SCRA 467 Facts: Petitioner Erlinda Ramos was advised to undergo an operation for the removal of her stone in the gall bladder. One of the issues involved was that there was an employee-employer relationship that existed between the medical center and Drs. Respondent Lance Kemp. Labor Arbiter found that there existed an employer-employee relationship between her and Sun Life. the following elements must be present: (1) selection and engagement of services. the control exercised. commenced an inquiry into the special fund availments of Carungcong and other New Business Managers. and that under no circumstance shall the New Business Manager and/or his employees be considered employees of Sun Life. While consultants are not technically employees. Ms. that in performance of her duties defined herein. Deveza. No. She was not paid to a fixed salary and was mainly paid by commissions depending on the volume of her performance. Ruling: Noteworthy is that this last agreement which emphasized. 5. Guiterres tried to intubate Erlinda. It has been consistently held that in determining whether an employer-employee relationship exists between the parties. Director. Carungcong is an independent contractor. and (4) the power to control not only the end to be achieved. She contented that she was an employee subject to control and supervision by Sun Life. Carungcong promptly instituted proceedings for vindication in the Arbitration Branch of the National Labor Relations Commissions on January 16. 1990. on January 1990. Erlinda was admitted to the medical center the day before the operation. There she succeeded in obtaining a favorable judgment. DLSMC cannot be considered an employer of the respondent doctors. which advised of the termination of her relationship with Sun Life. G. 2004 Page 3 . Eleizer Sibayan. Lazaro denied that Laudato was an employee but instead claimed that she was an agent of the company. 7. the more likely the worker is deemed an employee. as President and general manager. The Labor Arbiter dismissed the complaint and found that there is no employee-employer relationship. expertise or talent to distinguish them from ordinary employees. The control test is the most important test our courts apply in distinguishing an employee from an independent contractor. ABS-CBN claims that there exists a prevailing practice in the broadcast and entertainment industries to treat talents like Sonza as independent contractors. SSC promulgated a decision rendering that Laudato is a regular employee of Royal Star Marketing and entitled to social security contributions. is the most important element. How SONZA delivered his lines. 000 for the first year and P317. CA also affirmed the decision of NLRC.LABOR RELATIONS Atty. it Page 4 . Sonza filed with the Department of Labor and Employment a complaint alleging that ABS-CBN did not pay his salaries. The last element. ABS-CBN agreed to pay Sonza a monthly talent fee of P310. the more likely the worker is considered an independent contractor. NLRC affirmed the decision of the Labor Arbiter. separation pay. SONZA only needed his skills and talent. Sonza‘s services to co-host its television and radio programs are because of his peculiar talents. On April 1996. and sounded on radio were outside ABS-CBN‘s control. because of his unique skills. ABS-CBN was represented by its corporate officers while MJMDC was represented by Sonza. For violation of any provision of the Agreement. the so-called "control test". expertise and talent. MJMDC agreed to provide Sonza‘s services exclusively to ABS-CBN as talent for radio and television. ABS-CBN merely reserved the right to modify the program format and airtime schedule "for more effective programming. The right of labor to security of tenure as guaranteed in the Constitution arises only if there is an employer-employee relationship under labor laws. appeared on television. the power of dismissal and the employer‘s power to control the employee on the means and methods by which the work is accomplished. However. ABS-CBN continued to remit Sonza‘s monthly talent fees but opened another account for the same purpose. Sonza‘s work as television and radio program host required special skills and talent. Laudato filed a petition before the SSC for social security coverage and remittance of unpaid monthly social security contributions against her three (3) employers. the payment of wages. After the said letter. ABSCBN contended that no employee-employer relationship existed between the parties. The right to life and livelihood guarantees this freedom to contract as independent contractors. ABS-CBN did not exercise control over the means and methods of performance of Sonza‘s work. of his right to contract as an independent contractor. the company of Lazaro. A radio broadcast specialist who works under minimal supervision is an independent contractor. is a circumstance indicative. service incentive pay. To perform his work. 000 for the second and third year. 435 SCRA 472 [2004] Facts: Respondent Rosalina M. skills and celebrity status. Individuals with special skills. proprietor of Royal Star Marketing (―Royal Star‖). The specific selection and hiring of SONZA. She raised that Laudato was not an employee of Royal Star Marketing since Royal Star had no control over the activities of Laudato. All the talent fees and benefits paid to SONZA were the result of negotiations that led to the Agreement. Referred to in the agreement as agent. either party may terminate their relationship. Ruling: Case law has consistently held that the elements of an employee-employer relationship are selection and engagement of the employee. of an independent contractual relationship. Among the respondents was herein petitioner Angelito L. ABS-CBN signed an agreement with the Mel and Jay Management and Development Corporation (MJMDC). Lazaro. This test is based on the extent of control the hirer exercises over a worker. signing bonus. possessed with special skills. and Tiangco as its EVP and treasurer. Marquez Facts: In May 1994. travel allowance and amounts under the Employees Stock Option Plan (ESOP). This petition before the Court assails same arguments raised by Lazaro in SSC. Lazaro filed a petition for review before the CA where CA ruled that Laudato was an employee of Royal Star Marketing. The converse holds true as well – the less control the hirer exercises. which SONZA admittedly possesses. talent and celebrity status not possessed by ordinary employees. For the purpose of determining whether the respondent is entitled to social security contributions." ABS-CBN‘s sole concern was the quality of the shows and their standing in the ratings.13th month pay. Clearly. Independent contractors often present themselves to possess unique skills. Applying the control test to the present case. The greater the supervision and control the hirer exercises. The right of labor to security of tenure cannot operate to deprive an individual. which is engaged in the business of selling home appliances. Social Security Commission. ABS-CBN did not instruct SONZA how to perform his job. expertise or talent enjoy the freedom to offer their services as independent contractors. we find that SONZA is not an employee but an independent contractor. Lazaro also maintained that she was not mandated to work of definite work hours and thus not deemed to be a regular employee of Royal Star Marketing. but not conclusive. Jefferson M. Lazaro vs. Sonza wrote a letter to ABS-CBN where he irrevocably resigned in view of the recent events concerning his program and career. The controversy rose when petitioner terminated his engagement. the Court upheld the existence of an employer-employee relationship between the insurance company and its agents. it reversed the decision of the Labor Arbiter stating that de Vera is a regular employee and directed the company to reinstate him. Maalat. The parties agreed and formalized the respondent‘s proposal in a document denominated as retainership contract which will be for a period of one year. The relevant factor remains. as stated earlier. Issue: Whether or not there is an employer-employee relationship between the parties. Judico. but also as to the means and methods by which the same is accomplished. Ruling: It is an accepted doctrine that for the purposes of coverage under the Social Security Act. Remarkably absent is the element of control whereby the employer has reserved the right to control the employee not only as to the result of the work done but also as to the means and methods by which the same is to be accomplished. de Vera fileda complaint for illegal dismissal before the NLRC. The commission rendered decision in favor of Philcom and dismissed the complaint saying that de Vera was an independent contractor. Phil. In the case of Grepalife v. Either may terminate the arrangement at will. Page 5 . whether the employer controls or has reserved the right to control the employee. alleging that he had been actually employed by the company as its company physician since 1991. Marquez must be shown that Laudato was a regular employee of Royal Star Marketing. subject to renewal and clearly stated that respondent will cover the retainership the company previously with Dr. Dr.LABOR RELATIONS Atty. with or without cause. 459 SCRA 260 [2005] Facts: Philippine Global Communications inc. The Court agrees with the findings of the SSC and the CA. although compensated on commission basis. v. as the claimant according to it. On January 1997. thru a letter bearing the subject TERMINATION – RETAINERSHIP CONTRACT. It simply runs against the grain of common experience to imagine that an ordinary employee has yet to bill his employer to receive his salary. was a ―supervisor on commission basis‖ who did not observe normal hours of work. SC Ruling: The elements of an employer-employee relationship is wanting in this case. in the years 1995-1996.‖ that is. Philcom appealed to the CA where it rendered decision deleting the award but reinstating de Vera. Philcom filed this petition involving the difference of a job contracting agreements from employee-employer relationship. Global Communications v. Inc. Jefferson M. The record are replete with evidence showing that respondent had to bill petitioner for his monthly professional fees. the determination of employer-employee relationship warrants the application of the ―control test. The SSC. This Court declared that there was an employer-employee relationship. the employer similarly denied the existence of an employer-employee relationship. In the case of Cosmopolitan Funeral Homes. [is] exempt from the observance of normal hours of work for his compensation is measured by the number of sales he makes. Eulau. applying the control test found that Laudato was an employee of Royal Star. The turning point of the parties‘ relationship was when petitioner. whether the "employer" controls or has reserved the right to control the "employee" not only as to the result of the work to be done but also as to the means and methods by which the same is to be accomplished. it was renewed verbally. de Vera offered his services to petitioner. The fact that Laudato was paid by way of commission does not preclude the establishment of an employer-employee relationship. On appeal to NLRC. is a corporation engaged in the business of communication services and allied activities while Ricardo de Vera is a physician by profession whom petitioner enlisted to attend to the medical needs of its employees. noting that ―[the] supervisor. despite the fact that the compensation that the agents on commission received was not paid by the company but by the investor or the person insured.‖ 8. In 1981. not only as to the result of the work done. The agreement went until 1994. de Vera of its decision to discontinue the latter‘s retainer contract because the management has decided that it would be more practical to provide medical services to its employees through accredited hospitals near the company premises. informed Dr. The power to terminate the parties‘ relationship was mutually vested on both. Neither does it follow that a person who does not observe normal hours of work cannot be deemed an employee. De Vera. they were awarded monetary benefits. NLRC affirmed the decision of the Labor Arbiter. for various radio programs in the Cebu Broadcasting Station. all labor legislation and all labor contracts shall be construed in favor of the safety and decent living of the laborer. petitioner and the ABS-CBN Rank-and-File Employees executed a Collective Bargaining Agreement (CBA) to be effective during the period from December 11. 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. and was likewise issued a license and authority to operate by the National Telecommunications Commission. Underpayment of Overtime Pay. Deiparine. The presumption is that when the work done is an integral part of the regular business of the employer and when the worker. As regular employees. respondents were not included to the CBA. G. and relay of telecommunication signals. Jefferson M. Francisco vs. In the selection and engagement of respondents. The degree of control and supervision exercised by petitioner over respondents through its supervisors negates the allegation that respondents are independent contractors. however. Sick Leave Pay. respondents filed a Complaint for Recognition of Regular Employment Status. the employment is considered regular as long as the activity exists. 9. No. but only with respect to such activity and while such activity exists. does not furnish an independent business or professional service. and Lerasan as production assistants (PAs) on different dates. under Article 1702 of the New Civil Code: ―In case of doubt. 26.LABOR RELATIONS Atty. Respondents did not have the power to bargain for huge talent fees. the employment is considered regular. Petitioner employed respondents Nazareno. no peculiar or unique skill. whose operations revolve around the broadcast. Respondents are highly dependent on the petitioner for continued work. if the employee has been performing the job for at least a year. Sept. Holiday Pay. 500 SCRA 690 [2006] Facts: Page 6 . 1996 to December 11. Service Incentive Pay. In the case at bar. talent or celebrity status was required from them because they were merely hired through petitioner‘s personnel department just like any ordinary employee. therefore. Nazareno. Gerzon. or where the work is continuous or intermittent. Besides. Marquez Petitioner had no control over the means and methods by which respondent went about performing his work at the company premises. 1999. Additionally. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. On December 19. the parties themselves practically agreed on every terms and conditions of the engagement. In Universal Robina Corporation v. The Labor Arbiter rendered judgment in favor of the respondents. which thereby negates the element of control in their relationship. the Court states that the primary standard. 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. It has a franchise as a broadcasting company. respondents cannot be considered as project or program employees because no evidence was presented to show that the duration and scope of the project were determined or specified at the time of their engagement. ABS-CBN vs. a circumstance negating independent contractual relationship. regardless of the nature of the activity performed.R. only talent-artists were excluded from the CBA and not production assistants who are regular employees of the respondents. Premium Pay. On October 12. It was held that where a person has rendered at least one year of service. However. Also. They were assigned at the news and public affairs. the reason being that a customary appointment is not indispensable before one may be formally declared as having attained regular status. 2006 Facts: Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is engaged in the broadcasting business and owns a network of television and radio stations. 164156. such work is a regular employment of such employee and not an independent contractor. the employer-employee relationship between petitioner and respondents has been proven. In fine. Catapang. Ruling: The respondents are regular employees of ABS-CBN. and declared that they were regular employees of petitioner as such. The issue involved is whether the respondents were considered regular employees of ABS-CBN.‖ 10. Petitioner filed a motion for reconsideration but CA dismissed it. 2000. NLRC. The connection can be determined by considering the nature of work performed and its relation to the scheme of the particular business or trade in its entirety. Hence. respondents are entitled to the benefits granted to all other regular employees of petitioner under the CBA . even if the performance is not continuous and merely intermittent. 1996. It sells and deals in or otherwise utilizes the airtime it generates from its radio and television operations. relative to the employer. since petitioner refused to recognize PAs as part of the bargaining unit. Moreover. transmission. and 13th Month Pay with Damages against the petitioner before the NLRC. In addition to the standard of right-of-control. Dr. She did not anymore report to work since she was not paid for her salary. and is economically dependent upon respondent for her continued employment in that line of business.500 per month which was until September. and (2) the underlying economic realities of the activity or relationship. The following issue is to be discussed. In 2001. Marquez Petitoner was hired by Kasei Corporation during the incorporation stage. the existing economic conditions prevailing between the parties. She was designated as accountant and corporate secretary and was assigned to handle all the accounting needs of the company. there is no doubt that petitioner is an employee of Kasei Corporation because she was under the direct control and supervision of Seiji Kamura. Nogales et. such as: (1) the extent to which the services performed are an integral part of the employer‘s business. vs. courts 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. More importantly. Despite Dr. By applying the control test. skill. Espinola. Petitioner was designated as Acting Manager. 2006 Facts: Pregnant with her fourth child. Capitol Medical Center et al. Respondent Corporation hired and engaged petitioner for compensation. Ruling: The court held that in this jurisdiction. She was selected and engaged by the company for compensation. Corazon died at 9:15 a. (3) the nature and degree of control exercised by the employer." Issue in this case is whether CMC is vicariously liable for the negligence of Dr. al. judgment or foresight required for the success of the claimed independent enterprise.In 1996. (4) the worker‘s opportunity for profit and loss.. While Corazon was on her last trimester of pregnancy. which is a dangerous complication of pregnancy. She asked for her salary but was informed that she was no longer connected to the company. can help in determining the existence of an employer-employee relationship. G. Due to the inclement weather then. and (7) the degree of dependency of the worker upon the employer for his continued employment in that line of business. The proper standard of economic dependence is whether the worker is dependent on the alleged employer for his continued employment in that line of business.LABOR RELATIONS Atty. Ruling: Page 7 . There can be no other conclusion that petitioner is an employee of respondent Kasei Corporation.m.R. Respondent Corporation had the power to control petitioner with the means and methods by which the work is to be accomplished.. Around midnight of 25 May 1976. Jefferson M. December 19. Her main job function involved accounting and tax services rendered to Respondent Corporation on a regular basis over an indefinite period of engagement. After examining Corazon. to give a clearer picture in determining the existence of an employer-employee relationship based on an analysis of the totality of economic circumstances of the worker. Kasei Corporation reduced her salary to P2. who was then 37 years old. NLRC affirmed the decision while CA reversed it. She filed an action for constructive dismissal with the Labor Arbiter. Oscar Estrada. Corazon Nogales. He examined the patient and ordered some resuscitative measures to be administered. Dr. Corazon started to experience mild labor pains prompting Corazon and Rogelio Nogales ("Spouses Nogales") to see Dr. In Sevilla v. post partum. The cause of death was "hemorrhage. there has been no uniform test to determine the existence of an employer-employee relation. She was assigned to handle recruitment of all employees and perform management administration functions. Thus. Estrada. Espinola's efforts. the corporation‘s Technical Consultant. (2) the extent of the worker‘s investment in equipment and facilities. the determination of the relationship between employer and employee depends upon the circumstances of the whole economic activity. whether there was an employer-employee relationship. Court of Appeals. 11. 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. in addition to the standard of right-of-control like the inclusion of the employee in the payrolls. 142625. Estrada advised her immediate admission to the Capitol Medical Center ("CMC"). The Labor Arbiter found that the petitioner was illegally dismissed. who was fetched from his residence by an ambulance. It is therefore apparent that petitioner is economically dependent on Respondent Corporation for her continued employment in the latter‘s line of business. arrived at the CMC about an hour later or at 9:00 a. (5) the amount of initiative. she was replaced by Liza Fuentes as Manager. Dr. with the power to dismiss her for cause. the court observed the need to consider the existing economic conditions prevailing between the parties. (6) the permanency and duration of the relationship between the worker and the employer. No.m. Estrada noted an increase in her blood pressure and development of leg edema indicating preeclampsia. like the inclusion of the employee in the payrolls. Generally. Estrada at his home. was under the exclusive prenatal care of Dr. She was also designated as Liason Officer to the City of Manila to secure permits for the operation of the company. a cursory reading of the job description shows that what was sought to be controlled by FEBTC was actually the end result of the task. The last one expired on December 31. on the ascertainment of the relationship between Dr. Inc. 146881. The Court also believes that a determination of the extent of liability of the other respondents is inevitable to finally and completely dispose of the present controversy. tell Neri how the radio/telex machine should be operated. by virtue of a Retainer Agreement. Dr. respondent filed a Complaint before the NLRC. In the present case. Climaco. tallies with that of the register. The management refused to do so. After a thorough examination of the voluminous records of this case. Likewise. 1988. Despite the non-renewal of the Retainer Agreement. Villaflor.g. Through CMC's acts. respondent received a letter dated March 9. employees of [petitioner] company. It did not. No evidence linking Corazon's death and the alleged wrongful hemacel administration was introduced. CMC impliedly held out Dr. Climaco inquired from the management of the company whether it was agreeable to recognizing him as a regular employee. It is undisputed that throughout Corazon's pregnancy.. who attended to Corazon. there is no basis to hold Nurse Dumlao liable for negligence. which began on January 1. Complainant does not dispute the fact that outside of the two (2) hours that he is required to be at respondent company‘s premises. The…company lacked the power of control over the performance by respondent of his duties.. This exception is also known as the "doctrine of apparent authority. Estrada enjoyed staff privileges at CMC. however. Estrada with apparent authority thereby leading the Spouses Nogales to believe that Dr. Estrada. the allegation of complainant that since he is on call at anytime of the day and night makes him a regular employee is off-tangent." Neri v. Estrada.‖ Through the Comprehensive Medical Plan. but an independent contractor. Estrada is not an employee of CMC. in determining the existence of an employer-employee relationship. Estrada is an independent contractor-physician. Oscar Estrada. Coca-Cola Bottlers Phils. Estrada and CMC. vs. Issue: Whether or not there exists an employer-employee relationship. On February 24. CMC clothed Dr. an exception to this principle. CMC cannot now repudiate such authority.. (2) the payment of wages. respondent continued to perform his functions as company doctor to Coca-Cola until he received a letter dated March 9. Dr.LABOR RELATIONS Atty. has invariably adhered to the four-fold test: (1) the selection and engagement of the employee. 1995 from Petitioner Company concluding their retainership agreement effective thirty (30) days from receipt thereof. Jefferson M. Dr. Estrada's treatment and management of Corazon's condition. there is no evidence of Nurse Dumlao's alleged failure to follow Dr. was renewed annually. Even assuming Nurse Dumlao defied Dr. there is no showing that side-drip administration of hemacel proximately caused Corazon's death. however. G. The Court finds respondent CMC vicariously liable for the negligence of Dr. In general. Climaco is a medical doctor who was hired by Coca-Cola Bottlers Phils. No. Marquez The resolution of this issue rests. which CMC considered an emergency. such fact alone did not make him an employee of CMC. and (4) the power to control the employee‘s conduct. Dean N. Therefore. how to immunize. However. a hospital is not liable for the negligence of an independent contractor-physician. The Retainer Agreement. No employer-employee relationship exists between the parties. Estrada was an employee or agent of CMC. respectively. (3) the power of dismissal. Considering these circumstances. There is. The…Comprehensive Medical Plan. which contains the respondent‘s objectives. Estrada as a member of its medical staff. e. While the complaint was pending before the Labor Arbiter. Estrada's order. The question now is whether CMC is automatically exempt from liability considering that Dr. 1993. it was Dr. on the other hand. the Court finds no single evidence pointing to CMC's exercise of control over Dr. 1994." considered to be the most important element. Estrada's specific instructions. 12. or how to diagnose and treat his patients. 2007 Facts: Dr. National Labor Relations Commission ―…It is admitted that FEBTC issued a job description which detailed her functions as a radio/telex operator. or the so-called "control test. In fact. that the daily incoming and outgoing telegraphic transfer of funds received and relayed by her. While Dr. complainant maintains his own private clinic Page 8 . The guidelines were laid down merely to ensure that the desired end result was achieved. does not tell respondent "how to conduct his physical examination. 1995 from the company concluding their retainership agreement effective 30 days from receipt thereof. At the time of Corazon's admission at CMC and during her delivery.R. CMC merely allowed Dr. he is not at all further required to just sit around in the premises and wait for an emergency to occur so as to enable him from using such hours for his own benefit and advantage. duties and obligations. she was under the exclusive prenatal care of Dr."In the instant case. seeking recognition as a regular employee of the company and prayed for the payment of all benefits of a regular employee. Bacolod City. in each case. Estrada to use its facilities when Corazon was about to give birth. but did not control the means and methods by which respondent performed his assigned tasks. February 15. Ruling: The Court. The hospital may be liable if the physician is the "ostensible" agent of the hospital. provided guidelines merely to ensure that the end result was achieved. assisted by Dr. There was no showing that CMC had a part in diagnosing Corazon's condition. Petitioner contended that respondents are not its employees and refused to submit the payroll and daily time records despite the subpoena duces tecum issued by the DOLE Regional Director. doubts reasonably arising from the evidence should be resolved in the former's favor. being in possession of the records. The policy is to extend the doctrine to a greater number of employees who can avail of the benefits under the law. (2) the payment of wages. petitioner merely relied on its contention that respondents were piece rate contractors who were paid by results. and the programs in which they will work. a radio station owned and operated by petitioner Consolidated Broadcasting System. It is a time-honored rule that in controversies between a laborer and his master. Page 9 . this is subject to a special billing. bills them accordingly -. the termination of the Retainership Agreement. we find that respondents were illegally dismissed. rates of pay. does not constitute illegal dismissal of respondent. Marquez attending to his private practice in the city. project or contractual employees are required to be apprised of the project they will undertake under a written contract. 13. Considering that there is no employer-employee relationship between the parties. on February 3. More often than not. an employee is required to stay in the employer‘s workplace or proximately close thereto that he cannot utilize his time effectively and gainfully for his own purpose. Their drama programs were aired not only in Bacolod City but also in the sister stations of DYWB in the Visayas and Mindanao areas. an inspection of DWYB station. Whether respondents were employees of petitioner. and never presented any substantial evidence to support said allegation. Finally. Oberio. (3) the power to dismiss. Ruling: 1. petitioner allegedly pressured and intimidated respondents. Furthermore. the latter sought the intervention of the Department of Labor and Employment (DOLE). undoubtedly show that their work is necessary and indispensable to the usual business or trade of petitioner. the former claimed constructive dismissal. petitioner is obliged to execute the necessary contract specifying the nature of the work to be performed. conducted through its Regional Office. 40. the engagement of respondents for a period ranging from 2 to 25 years and the fact that their drama programs were aired not only in Bacolod City but also in the sister stations of DYWB in the Visayas and Mindanao areas. justifying the reasonable conclusion that no such contracts exist and that respondents were in fact regular employees. a contract to such effect. The results thereof revealed that petitioner is guilty of violation of labor standard laws. if doubts exist between the evidence presented by the employer and the employee. Sometime in August 1998. This was not complied with by the petitioner. which is in consonance with the avowed policy of the State to give maximum aid and protection of labor. Respondents Oberio and Delta were suspended for minor lapses and the payment of their salaries were purportedly delayed.R. therefore. Consolidated Broadcasting System vs. No. Issues: 1. Eventually. Moreover. Such is not the prevailing situation here. and (4) the power to control the employee. However. Vexed by the respondents' complaint. but was opposed by respondents. Inc.Note that under Policy Instruction No. respondents were barred by petitioner from reporting for work. which is in accordance with the provisions of the Agreement. They reported for work daily for six days in a week and were required to record their drama production in advance. Some of them were employed by petitioner since 1974. Petitioner Company did not wield the sole power of dismissal or termination. The Retainership Agreement granted to both parties the power to terminate their relationship upon giving a 30-day notice. petitioner reduced the number of its drama productions from 14 to 11. 168424. there is no basis for the moral and exemplary damages granted by the Court of Appeals to respondent due to his alleged illegal dismissal. 1998. illegal. June 8. Hence. failure to show this would necessarily mean that the dismissal was unjustified and. The test to determine whether employment is regular or not is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. or the power to hire. G. respondents‘ employment with petitioner passed the "four-fold test" on employer-employee relations. Jefferson M. where he services his patients. which on November 12. 1999. Petitioner failed to controvert with substantial evidence the allegation of respondents that they were hired by the former on various dates from 1974 to 1997. Whether respondents‘ dismissal was illegal. If petitioner did not hire respondents and if it was the director alone who chose the talents.and if it is an employee of respondent company who is attended to by him for special treatment that needs hospitalization or operation. while the latest one was hired in 1997. petitioner could have easily shown. the scales of justice must be tilted in favor of the latter -the employer must affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause. In labor cases. 2. the employer has the burden of proving that the dismissal was for a just cause. Consequently. petitioner merely contended that it was respondents who ceased to report to work. thus. 2. After the negotiations failed. Moreover. 2007 Facts: Respondents alleged that they were employed as drama talents by DYWB-Bombo Radyo. Yes. pending the outcome of the inspection case with the Regional Director. Petitioner further argued that the case should be referred to the NLRC because the Regional Director has no jurisdiction over the determination of the existence of employer-employee relationship which involves evidentiary matters that are not verifiable in the normal course of inspection.LABOR RELATIONS Atty. In this case. namely: (1) the selection and engagement of the employee. 155731. ABC also had power to dismiss her. 1995. Marquez 14. 1995. Aside from control. informing the latter that she was still interested in renewing her contract subject to a salary increase. The contract was for a period of three months. the requisites for regularity of employment have been met in the instant case. 15. that all the more bolsters the conclusion that petitioner was not in the same situation as Sonza. The Labor Arbiter dismissed the complaint for illegal constructive dismissal. petitioner stopped reporting for work. Two weeks after the expiration of the last contract. This repeated engagement under contract of hire is indicative of the necessity and desirability of the petitioner‘s work in private respondent ABC‘s business. her work was continuous for a period of four years. Ruling: Thelma Dumpit-Murillo was a regular employee under contemplation of law. its participation in the government‘s news and public information dissemination. G. the Sonza case is not applicable. vacation/sick/service incentive leaves and other monetary benefits due to a regular employee. citing 2004 Sonza Facts: Associated Broadcasting Company (ABC) hired Thelma Dumpit-Murillo under a talent contract as a newscaster and co-anchor for BalitangBalita. The assertion that a talent contract exists does not necessarily prevent a regular employment status. 3. respondents had decided to terminate the concessionaire agreement between them. No. ABC had control over the performance of petitioner‘s work. ABC also dictated the work assignments and payment of petitioner‘s wages. Dumpit-Morillo vs. there existed an employment relationship between petitioner and ABC. Thereafter. citing 2004 Abante & 2005 Consulta Facts: Petitioner was the "lady keeper" of Bodega City tasked with manning its ladies' comfort room. After four years of repeated renewals. NLRC reversed. wherein petitioner was seen to have acted in a hostile manner against a lady customer of Bodega City who informed the management that she saw petitioner sleeping while on duty. 164652.000 a month salary of Sonza. 2007.to wit: Page 10 . The practice of having fixed-term contracts in the industry does not automatically make all talent contracts valid and compliant with labor law. petitioner sent a letter to Mr. payment of 13th month pay. Noteworthy too. Jose Javier. Issue: Whether or not employer-employee relationship exists Ruling: The Court applies the four-fold test expounded in Abante v. In addition. In the case at bar. Since private respondents did not observe due process in constructively dismissing the petitioner.. but that the other claims of petitioner had no basis in fact or in law. ABC replied that a check covering petitioner‘s talent fees had been processed and prepared. CA. 2007. there was an illegal dismissal. petitioner‘s talent contract expired. 1995. Lopez vs. Petitioner‘s work was necessary or desirable in the usual business or trade of the employer which includes. All these being present. Lamadrid Bearing and Parts Corp. 1995. Bodega City. Yap informed petitioner that because of the incident that happened on February 3. Further. demanding reinstatement. No. clearly. In Sonza. the television station did not exercise control over the means and methods of the performance of Sonza‘s work. As a regular employee. payment of unpaid wages and full backwages. Concerning regular employment. is the comparatively low P28. petitioner was made to explain why the concessionaire agreement between her and respondents should not be terminated or suspended in view of an incident that happened on February 3.LABOR RELATIONS Atty. June 8. The duties of petitioner as enumerated in her employment contract indicate that ABC had control over the work of petitioner. In a subsequent letter dated February 25. Sept. G. as a pre-condition for its enfranchisement.000 monthly pay of petitioner vis the P300. petitioner is entitled to security of tenure and can be dismissed only for just cause and after due compliance with procedural due process. an early evening news program.R. Vice President for News and Public Affairs of ABC. In a letter signed by Yap dated February 10. Issue: Whether or not Murillo is an employee of Associated Broadcasting Company.R. She sent a demand letter to ABC. Jefferson M. this Court held that the complainant's ID card and the cash vouchers covering his salaries for the months indicated therein were substantial evidence that he was an employee of respondents. Petitioner later sent Dr. a privately-owned hospital. In fact. Cresenciano Trajano of the Department of Labor and Employment (DOLE) certified the labor dispute to the NLRC for compulsory arbitration and issued on April 21. Calamba Medical Center vs. thus: On April 23. petitioner was not dismissed by respondents. National Labor Relations Commission. respectively. were also issued the same ID cards for the purpose of enabling them to enter the premises of Bodega City. then Sec.R. going back to the element of control. In the meantime. the Court finds that the elements of selection and engagement as well as the power of dismissal are not present in the instant case. Nov. It has been established that there has been no employer-employee relationship between respondents and petitioner. after enjoying the benefits of the concessionaire agreement with respondents. Dr. be allowed to later disown the same through her allegation that she was an employee of the respondents when the said agreement was terminated by reason of her violation of the terms and conditions thereof. Apparently. Marquez To ascertain the existence of an employer-employee relationship. and (4) the presence or absence of the power of control. She should not. Moreover. 1998. induces another to believe certain facts to exist and to rightfully rely and act on such belief. namely: (1) the manner of selection and engagement. 176484. Lanzanas with a fellow employee. Lanzanas and Miscala were discussing the low "census" or admission of patients to the hospital. The fact that she was expected to maintain the cleanliness of respondent company's ladies' comfort room during Bodega City's operating hours does not indicate that her performance of her job was subject to the control of respondents as to make her an employee of the latter. Meluz Trinidad (Dr. Respondents did not indicate the manner in which she should go about in maintaining the cleanliness of the ladies' comfort room. Instead.LABOR RELATIONS Atty. Under the control test. Thus. it is true that the words "EMPLOYEE'S NAME" appear printed below petitioner's name. Dr. The so-called "control test" is commonly regarded as the most crucial and determinative indicator of the presence or absence of an employer-employee relationship. Trinidad). this was imposed upon petitioner as part of the terms and conditions in the concessionaire agreement. which was in accordance with the provisions of the agreement in case of violation of its terms and conditions. that he and the other "contractors" of Bodega City such as the singers and band performers. their contractual relationship was terminated by reason of respondents' termination of the subject concessionaire agreement. 16. The principle of estoppel in pais applies wherein -. However. the concessionaire agreement merely stated that petitioner shall maintain the cleanliness of the ladies' comfort room and observe courtesy guidelines that would help her obtain the results they wanted to achieve. Petitioner is likewise estopped from denying the existence of the subject concessionaire agreement. Diosdado Miscala. so as to be prejudiced if the former is permitted to deny the existence of those facts. Petitioner insists that her ID card is sufficient proof of her employment. as shown by the letter of Yap to her dated February 15. Their contractual relationship was governed by the concessionaire agreement embodied in the 1992 letter. Of these four. It is true that petitioner was required to follow rules and regulations prescribing appropriate conduct while within the premises of Bodega City. the last paragraph of the concessionaire agreement even allowed petitioner to engage persons to work with or assist her in the discharge of her functions. Lanzanas) and Merceditha Lanzanas (Dr. However. (3) the presence or absence of the power of dismissal. an employer-employee relationship exists where the person for whom the services are performed reserves the right to control not only the end achieved. Merceditha) in March 1992 and August 1995. Hence. engaged the services of medical doctors-spouses Ronaldo Lanzanas (Dr. No. as part of its team of resident physicians. 1998. she failed to dispute respondents' evidence consisting of Habitan's testimony. representations or admissions. especially in light of the fact that the latter failed to deny said evidence. but also the manner and means to be used in reaching that end. 25. 1995.intentionally or through culpable negligence. Petitioner failed to cite a single instance to prove that she was subject to the control of respondents insofar as the manner in which she should perform her job as a "lady keeper" was concerned. jurisprudence has invariably applied the four-fold test. NLRC et al. Lanzanas a notice of termination which he received on April 25.. 2008 Facts: The Calamba Medical Center (petitioner). the requirement that she had to render her services while Bodega City was open for business was dictated simply by the very nature of her undertaking. indicating as grounds therefor his failure to report back to work despite the DOLE order and his supposed role in the striking union. through an extension telephone line. On March 7. Instead. 1998. This is not the situation in the present case…As to the ID card. the last one is the most important. also a resident physician at the hospital. petitioner was not subjected to definite hours or conditions of work. There is nothing in the agreement which specifies the methods by which petitioner should achieve these results. inadvertently overheard a telephone conversation of respondent Dr. Jefferson M. Neither did respondents determine the means and methods by which petitioner could ensure the satisfaction of respondent company's customers. Lastly. (2) the payment of wages. 1998. or silence when one ought to speak out -. which was to give assistance to the users of the ladies' comfort room.by one's acts. G. 1998 return-to-work Order to the striking union officers and employees of petitioner pending resolution of the labor dispute. In Domasig v. you still did not report for work despite memorandum issued by Page 11 . Desipeda whose attention was called to the above-said telephone conversation issued to Dr. Lanzanas a Memorandum of March 7. Dr. LABOR RELATIONS Atty. Jefferson M. Marquez the CMC Medical Director implementing the Labor Secretary's ORDER…You are likewise aware that you were observed (re: signatories [sic] to the Saligang Batas of BMCMC-UWP) to be unlawfully participating as member in the rank-and-file union's concerted activities despite knowledge that your position in the hospital is managerial in nature (Nurses, Orderlies, and staff of the Emergency Room carry out your orders using your independent judgment) which participation is expressly prohibited by the New Labor Code… For these reasons as grounds for termination, you are hereby terminated for cause from employment effective today, April 25, 1998, without prejudice to further action for revocation of your license before the Philippine [sic] Regulations [sic] Commission. Dr. Lanzanas thus amended his original complaint to include illegal dismissal. Issue: Whether or not employer-employee relationship exists Ruling: YES. Under the "control test," an employment relationship exists between a physician and a hospital if the hospital controls both the means and the details of the process by which the physician is to accomplish his task. As priorly stated, private respondents maintained specific workschedules, as determined by petitioner through its medical director, which consisted of 24-hour shifts totaling forty-eight hours each week and which were strictly to be observed under pain of administrative sanctions.That petitioner exercised control over respondents gains light from the undisputed fact that in the emergency room, the operating room, or any department or ward for that matter, respondents' work is monitored through its nursing supervisors, charge nurses and orderlies. Without the approval or consent of petitioner or its medical director, no operations can be undertaken in those areas. For control test to apply, it is not essential for the employer to actually supervise the performance of duties of the employee, it being enough that it has the right to wield the power. With respect to respondents' sharing in some hospital fees, this scheme does not sever the employment tie between them and petitioner as this merely mirrors additional form or another form of compensation or incentive similar to what commission-based employees receive as contemplated in Article 97 (f) of the Labor Code, thus: …whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same… Respondents were in fact made subject to petitioner-hospital's Code of Ethics, the provisions of which cover administrative and disciplinary measures on negligence of duties, personnel conduct and behavior, and offenses against persons, property and the hospital's interest. More importantly, petitioner itself provided incontrovertible proof of the employment status of respondents, namely, the identification cards it issued them, the payslips and BIR W-2 (now 2316) Forms which reflect their status as employees, and the classification as "salary" of their remuneration. Moreover, it enrolled respondents in the SSS and Medicare (Philhealth) program. It bears noting at this juncture that mandatory coverage under the SSS Law is premised on the existence of an employer-employee relationship, except in cases of compulsory coverage of the self-employed. Finally, under Section 15, Rule X of Book III of the Implementing Rules of the Labor Code, an employer-employee relationship exists between the resident physicians and the training hospitals, unless there is a training agreement between them, and the training program is duly accredited or approved by the appropriate government agency. In respondents' case, they were not undergoing any specialization training. They were considered non-training general practitioners, assigned at the emergency rooms and ward sections. Turning now to the issue of dismissal, the Court upholds the appellate court's conclusion that private respondents were illegally dismissed. Dr. Lanzanas was neither a managerial nor supervisory employee but part of the rank-and-file. This is the import of the Secretary of Labor's Resolution of May 22, 1998 in OS A-05-15-98 which reads: In the motion to dismiss it filed before the Med-Arbiter, the employer (CMC) alleged that 24 members of petitioner are supervisors, namely Rolando Lanzonas. A close scrutiny of the job descriptions of the alleged supervisors narrated by the employer only proves that except for the contention that these employees allegedly supervise, they do not however recommend any managerial action. At most, their job is merely routinary in nature and consequently, they cannot be considered supervisory employees. They are not therefore barred from membership in the union of rank[-]and[-]file, which the petitioner [the union] is seeking to represent in the instant case. Participation in a strike and intransigence to a return-to-work order must, however, be duly proved in order to justify immediate dismissal in a "national interest" case. Mere membership in a labor union does not ipso facto mean participation in a strike. As for the case of Dr. Merceditha, her dismissal was worse, it having been effected without any just or authorized cause and without observance of due process. In fact, petitioner never proferred any valid cause for her dismissal except its view that "her marriage to [Dr. Lanzanas] has given rise to the presumption that her sympath[y] [is] with her husband; [and that when [Dr. Lanzanas] declared that he was going to boycott the scheduling of their workload by the medical doctor, he was presumed to be speaking for himself [and] for his wife Merceditha." 17. Escasinas et al., vs. Shangri-las Mactan Island Resort et al., G.R. No. 178827, March 4, 2009 Facts: Registered nurses Jeromie D. Escasinas and Evan Rigor Singco (petitioners) were engaged in 1999 and 1996, respectively, by Dr. Jessica Joyce R. Pepito (respondent doctor) to work in her clinic at respondent Shangri-la‘s Mactan Island Resort (Shangri-la) in Cebu of which she was Page 12 LABOR RELATIONS Atty. Jefferson M. Marquez a retained physician. In late 2002, petitioners filed with the National Labor Relations Commission (NLRC) Regional Arbitration Branch No. VII (NLRC-RAB No. VII) a complaint for regularization, underpayment of wages, non-payment of holiday pay, night shift differential and 13th month pay differential against respondents, claiming that they are regular employees of Shangri-la. Shangri-la claimed, however, that petitioners were not its employees but of respondent doctor whom it retained via Memorandum of Agreement (MOA) pursuant to Article 157 of the Labor Code, as amended. Respondent doctor for her part claimed that petitioners were already working for the previous retained physicians of Shangri-la before she was retained by Shangri-la; and that she maintained petitioners‘ services upon their request. Issue: Whether or not employer-employee relationship exists Ruling: The resolution of the case hinges, in the main, on the correct interpretation of Art. 157 vis a vis Art. 280 and the provisions on permissible job contracting of the Labor Code, as amended. The Court holds that, contrary to petitioners‘ postulation, Art. 157 does not require the engagement of full-time nurses as regular employees of a company employing not less than 50 workers. Thus, the Article provides: ART. 157. Emergency medical and dental services. – It shall be the duty of every employer to furnish his employees in any locality with free medical and dental attendance and facilities consisting of: (b) The services of a full-time registered nurse, a part-time physician and dentist, and an emergency clinic, when the number of employees exceeds two hundred (200) but not more than three hundred (300); and Under the foregoing provision, Shangri-la, which employs more than 200 workers, is mandated to "furnish" its employees with the services of a full-time registered nurse, a part-time physician and dentist, and an emergency clinic which means that it should provide or make available such medical and allied services to its employees, not necessarily to hire or employ a service provider. As held in Philippine Global Communications vs. De Vera: x x x while it is true that the provision requires employers to engage the services of medical practitioners in certain establishments depending on the number of their employees, nothing is there in the law which says that medical practitioners so engaged be actually hired as employees, adding that the law, as written, only requires the employer "to retain", not employ, a part-time physician who needed to stay in the premises of the non-hazardous workplace for two (2) hours. The term "full-time" in Art. 157 cannot be construed as referring to the type of employment of the person engaged to provide the services, for Article 157 must not be read alongside Art. 280 in order to vest employer-employee relationship on the employer and the person so engaged. So De Vera teaches: x x x For, we take it that any agreement may provide that one party shall render services for and in behalf of another, no matter how necessary for the latter‘s business, even without being hired as an employee. This set-up is precisely true in the case of an independent contractorship as well as in an agency agreement. Indeed, Article 280 of the Labor Code, quoted by the appellate court, is not the yardstick for determining the existence of an employment relationship. As it is, the provision merely distinguishes between two (2) kinds of employees, i.e., regular and casual. x x x The phrase "services of a full-time registered nurse" should thus be taken to refer to the kind of services that the nurse will render in the company‘s premises and to its employees, not the manner of his engagement. As to whether respondent doctor can be considered a legitimate independent contractor, the pertinent sections of DOLE Department Order No. 10, series of 1997, illuminate: Sec. 8. Job contracting. – There is job contracting permissible under the Code if the following conditions are met: (1) The contractor carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof; and (2) The contractor has substantial capital or investment in the form of tools, equipment, machineries, work premises, and other materials which are necessary in the conduct of his business. Sec. 9. Labor-only contracting. – (a) Any person who undertakes to supply workers to an employer shall be deemed to be engaged in labor-only contracting where such person: (1) Does not have substantial capital or investment in the form of tools, equipment, machineries, work premises and other materials; and (2) The workers recruited and placed by such persons are performing activities which are directly related to the principal business or operations of the employer in which workers are habitually employed. (b) Labor-only contracting as defined herein is hereby prohibited and the person acting as contractor shall be considered merely as an agent or intermediary of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him… The existence of an independent and permissible contractor relationship is generally established by considering the following determinants: whether the contractor is carrying on an independent business; the nature and extent of the work; the skill required; the term and duration of the relationship; the right to assign the performance of a specified piece of work; the control and supervision of the work to another; the employer's Page 13 LABOR RELATIONS Atty. Jefferson M. Marquez power with respect to the hiring, firing and payment of the contractor's workers; the control of the premises; the duty to supply the premises, tools, appliances, materials and labor; and the mode, manner and terms of payment. On the other hand, existence of an employer- employee relationship is established by the presence of the following determinants: (1) the selection and engagement of the workers; (2) power of dismissal; (3) the payment of wages by whatever means; and (4) the power to control the worker's conduct, with the latter assuming primacy in the overall consideration. Against the above-listed determinants, the Court holds that respondent doctor is a legitimate independent contractor. That Shangri-la provides the clinic premises and medical supplies for use of its employees and guests do not necessarily prove that respondent doctor lacks substantial capital and investment. Besides, the maintenance of a clinic and provision of medical services to its employees is required under Art. 157, which are not directly related to Shangri-la‘s principal business – operation of hotels and restaurants. As to payment of wages, respondent doctor is the one who underwrites the following: salaries, SSS contributions and other benefits of the staff; group life, group personal accident insurance and life/death insurance for the staff with minimum benefit payable at 12 times the employee‘s last drawn salary, as well as value added taxes and withholding taxes, sourced from her P60,000.00 monthly retainer fee and 70% share of the service charges from Shangri-la‘s guests who avail of the clinic services. It is unlikely that respondent doctor would report petitioners as workers, pay their SSS premium as well as their wages if they were not indeed her employees. With respect to the supervision and control of the nurses and clinic staff, it is not disputed that a document, "Clinic Policies and Employee Manual" claimed to have been prepared by respondent doctor exists, to which petitioners gave their conformity and in which they acknowledged their co-terminus employment status. It is thus presumed that said document, and not the employee manual being followed by Shangri-la‘s regular workers, governs how they perform their respective tasks and responsibilities. Contrary to petitioners‘ contention, the various office directives issued by Shangri-la‘s officers do not imply that it is Shangri-la‘s management and not respondent doctor who exercises control over them or that Shangri-la has control over how the doctor and the nurses perform their work. The letter addressed to respondent doctor dated February 7, 2003 from a certain Tata L. Reyes giving instructions regarding the replenishment of emergency kits is, at most, administrative in nature, related as it is to safety matters; while the letter dated May 17, 2004 from Shangri-la‘s Assistant Financial Controller, Lotlot Dagat, forbidding the clinic from receiving cash payments from the resort‘s guests is a matter of financial policy in order to ensure proper sharing of the proceeds, considering that Shangri-la and respondent doctor share in the guests‘ payments for medical services rendered. In fine, as Shangri-la does not control how the work should be performed by petitioners, it is not petitioners‘ employer. 18. Tongko v. Manufacturer Life Insurance Co. (MANULIFE) Inc., et al., G.R. No 167622, January 25, 2011 Facts: Tongko was, initially an insurance agent of Manulife who was promoted to the role of a manager. The contractual relationship between Tongko and Manulife had two basic phases. The initial phase began on July 1, 1977under a Career Agent‘s Agreement which regarded him as an independent contractor, not an employee. As an agent, his tasks were to canvass for applications for insurance products and collect money due to the Company. The second phase started in 1983 when Tongko was named Unit Manager. In 1990, he became a Branch Manager. In 1996, Tongko became a Regional Sales Manager, where he earned commissions, persistency income and management overrides. Since the beginning, Tongko consistently declared himself self-employed in his income tax returns. However, in 2001, Manulife instituted manpower development programs which directed the managers to increase the number of agents to at least 1,000 strong for a start. It was found that Tongko‘s region was the lowest performer in terms of recruiting in 2000. Subsequently, Tongko received another letter, dated December 18, 2001, terminating his services. Tongko then filed an illegal dismissal complaint with the NLRC Arbitration Branch. He alleged the existence of an employment relationship. In support of this he asserted that as Unit Manager, he was paid an annual over-rider, a travel and entertainment allowance in addition to his overriding commissions. He was tasked with numerous administrative functions and supervisory authority over Manulife‘s employees. He was required to follow at least three codes of conduct. On the other hand, Manulife contended that what existed between them was a mere agency relationship. Decisions of the Judicial Tribunals LA: No employer-employee relationship existed between the parties. NLRC: It found the existence of an employer-employee relationship. There was illegal dismissal. CA: It reverted to the labor arbiter‘s decision that no employer-employee relationship existed between them. SC: In reversing the CA ruling, it declared that an employment relationship existed between them. First, there exists the possibility of an insurance agent becoming an employee of an insurance company if evidence shows that the company promulgated rules or regulations that effectively controlled or restricted an insurance agent‘s choice of methods or the methods themselves in selling insurance. Second, Manulife had the power of control over Tongko, sufficient to characterize him as an employee, as shown by the fact that he complied with 3 different codes of conduct and that he performed administrative duties. Also, Tongko was tasked to recruit some agents in addition to his other administrative functions. Page 14 LABOR RELATIONS Atty. Jefferson M. Marquez Hence, a Motion for Reconsideration was filed by Manulife and was granted by the SC. Issue: Whether or not there exists an employer-employee relationship. SC Ruling: Rules regarding the desired results (e.g., the required volume to continue to qualify as a company agent & legal/ ethical rules to be followed) are built-in elements of control specific to an insurance agency and should not and cannot be read as elements of control that attend an employment relationship governed by the Labor Code. Based on decided cases, a determination of the presence of the Labor Code element of control was made on the basis of the stipulations of the subsequent contracts. In this case, while Tongko was later on designated unit manager in 1983, Branch Manager in 1990, and Regional Sales Manager in 1996, no formal contract regarding these undertakings appears in the records of the case. Any such contract or agreement, had there been any, could have at the very least provided the bases for properly ascertaining the juridical relationship established between the parties. For this reason, we can take judicial notice that as a matter of Insurance Code-based business practice, an agency relationship prevails in the insurance industry for the purpose of selling insurance. Significantly, evidence shows that Tongko‘s role as an insurance agent never changed during his relationship with Manulife. Tongko essentially remained an agent, but moved up in this role through Manulife‘s recognition that he could use other agents approved by Manulife but operating under his guidance. For want of a better term, Tongko perhaps could be labeled as a "lead agent" who guided under his wing other Manulife agents. Evidence indicates that Tongko consistently clung to the view that he was an independent agent since he invariably declared himself a business or self-employed person in his income tax returns. The concept of estoppel – a legal and equitable concept – necessarily must come into play. Tongko‘s previous admissions in several years of tax returns as an independent agent, as against his belated claim that he was all along an employee, are too diametrically opposed to be simply dismissed or ignored. There was, indeed, lack of evidence on record showing that Manulife ever exercised means-and-manner control, even to a limited extent, over Tongko during his ascent in Manulife‘s sales ladder. The reality is, prior to the directives sent by De Dios, Manulife had practically left Tongko alone not only in doing the business of selling insurance, but also in guiding the agents under his wing. In addition, the mere presentation of codes or of rules and regulations is not per se indicative of labor law control. The codes of conduct do not intrude into the insurance agents‘ means and manner of conducting their sales and only control them as to the desired results. Guidelines indicative of labor law "control," based on the case of Insular Life, should not merely relate to the mutually desirable result intended by the contractual relationship; they must have the nature of dictating the means or methods to be employed in attaining the result, or of fixing the methodology and of binding or restricting the party hired to the use of these means. Hence, the failure of Tongko to comply with the guidelines & directives of Manulife is recruiting more agents, as a ground for termination of Tongko‘s agency, is a matter that the labor tribunals cannot rule upon in the absence of an employer-employee relationship. Jurisdiction over the matter belongs to the courts applying the laws of insurance, agency and contracts. SC: Tongko is just an AGENT. In effect, the SC is telling us that, first, there must be an evidence of a contract that shows that the relationship has been converted from contract of agency to that of employment, which is absent in the case at bar. Secondly, adherence to a code of conduct is not, per se, indicative of control when it merely controls the desired results and not the means and the manner by which agents are to conduct their sales. The directive of De Dios to Tongko (in increasing the number of agents) was merely suggestive. Hence, not indicative of control 19. Caong, Jr. v. Begualos, G.R. No. 179428, January 26, 2011 Facts: Petitioners Primo E. Caong, Jr. (Caong), Alexander J. Tresquio (Tresquio), and Loriano D. Daluyon (Daluyon) were employed by respondent Avelino Regualos under a boundary agreement, as drivers of his jeepneys. In November 2001, they filed separate Page 15 LABOR RELATIONS Atty. Jefferson M. Marquez complaintshttp://sc.judiciary.gov.ph/jurisprudence/2011/january2011/179428.htm - _ftn2 for illegal dismissal against respondent who barred them from driving the vehicles due to deficiencies in their boundary payments. Issue: Whether or not the policy of suspending drivers pending payment of arrears in their boundary obligations is reasonable. Ruling: It is already settled that the relationship between jeepney owners/operators and jeepney drivers under the boundary system is that of employeremployee and not of lessor-lessee. The fact that the drivers do not receive fixed wages but only get the amount in excess of the so-called ―boundary‖ that they pay to the owner/operator is not sufficient to negate the relationship between them as employer and employee. Petitioners‘ suspension cannot be categorized as dismissal, considering that there was no intent on the part of respondent to sever the employer-employee relationship between him and petitioners. In fact, it was made clear that petitioners could put an end to the suspension if they only pay their recent arrears. As it was, the suspension dragged on for years because of petitioners‘ stubborn refusal to pay. It would have been different if petitioners complied with the condition and respondent still refused to readmit them to work. Then there would have been a clear act of dismissal. But such was not the case. Instead of paying, petitioners even filed a complaint for illegal dismissal against respondent. Respondent‘s policy of suspending drivers who fail to remit the full amount of the boundary was fair and reasonable under the circumstances. Respondent explained that he noticed that his drivers were getting lax in remitting their boundary payments and, in fact, herein petitioners had already incurred a considerable amount of arrears. He had to put a stop to it as he also relied on these boundary payments to raise the full amount of his monthly amortizations on the jeepneys. Demonstrating their obstinacy, petitioners, on the days immediately following the implementation of the policy, incurred deficiencies in their boundary remittances. It is acknowledged that an employer has free rein and enjoys a wide latitude of discretion to regulate all aspects of employment, including the prerogative to instill discipline on his employees and to impose penalties, including dismissal, if warranted, upon erring employees. This is a management prerogative. Indeed, the manner in which management conducts its own affairs to achieve its purpose is within the management‘s discretion. The only limitation on the exercise of management prerogative is that the policies, rules, and regulations on work-related activities of the employees must always be fair and reasonable, and the corresponding penalties, when prescribed, commensurate to the offense involved and to the degree of the infraction. A company policy must be implemented in such manner as will accord social justice and compassion to the employee. In case of noncompliance with the company policy, the employer must consider the surrounding circumstances and the reasons why the employee failed to comply. When the circumstances merit the relaxation of the application of the policy, then its noncompliance must be excused. In the present case, petitioners merely alleged that there were only few passengers during the dates in question. Such excuse is not acceptable without any proof or, at least, an explanation as to why passengers were scarce at that time. It is simply a bare allegation, not worthy of belief. We also find the excuse unbelievable considering that petitioners incurred the shortages on separate days, and it appears that only petitioners failed to remit the full boundary payment on said dates. 20. Atok Big Wedge Company vs. Gison, G.R. No. 169510, August 8, 2011 Facts: The respondent in this case, Jesus P. Gison, was engaged as part-time consultant of the petitioner, Atok Big Wedge Company thorugh its then Asst. VP and Acting Resident Manager, Rutillo A. Torres. As a consultant on retainer basis, the former assisted the petitioner‘s retained legal counsel with matters pertaining to the prosecution of cases against illegal surface occupants within the area covered by the company‘s mineral claims. He also tasked to perform liason work with government agencies which he said his expertise. Respondent is not required to report to its office on a regular basis, except when occassionally requested by the management to discuss the matters which needs of his expertise as a consultant. He is paid a retainer fee of 3,000Php a month and delivered to him either in his residence or in a local restaurant. They have also executed a retainer agreement however was misplaced and can no longer be found. This kind of arrangement continued on for the next 11 years. Since respondent was getting old, he requested petitioner to cause his registration with the Social Security System but petitioner did not accede to his request considering the former only a retainer/consultant. Page 16 it clearly disregarded the same by repeatedly giving petitioner several tasks to perform. Respondent's monthly retainer fees were paid to him either at his residence or a local restaurant. non-payment of 13th Month pay. petitioner did not prescribe the manner in which respondent would accomplish any of the tasks in which his expertise as a liaison officer was needed. respondent anchors his claim that he became a regular employee of the petitioner based on his contention that the "temporary" aspect of his job and its "limited" nature could not have lasted for eleven years unless some time during that period. The Court of Appeals annuled and has set aside the decision of NLRC. Respondent was well aware of the agreement that he was hired merely as a liaison or consultant of the petitioner and he agreed to perform tasks for the petitioner on a temporary employment status only. such determination should have been accorded great weight by the CA in resolving the issue. An appeal was made before the NLRC but same was dismissed and affirmed the decision of the Labor Arbiter." The so-called "control test" is commonly regarded as the most crucial and determinative indicator of the presence or absence of an employer-employee relationship Applying the aforementioned test. As such. much more a regular employee of petitioner. i. in which the lower court used to buttress its findings that respondent became a regular employee of the petitioner. Article 280 of the Labor Code. and (4) the power to control the employee's conduct. even without being hired as an employee. Among other things. Regional Arbitration Branch and Cordillera Administrative Region against the petitioner. Respondent was assigned tasks to perform. Being a question of fact. (2) the payment of wages.e. the absence of the element of control on the part of the petitioner engenders a conclusion that he is not an employee of the petitioner. (3) the power of dismissal. underpayment of wages. no matter how necessary for the latter's business. Verily. Hence. Moreover. still it was the law that recognized and considered him a regular employee after his first year of rendering service to petitioner. The CA opined that.. vacation pay and sick leave with the NLRC. an employer-employee relationship is apparently absent in the case at bar. Indeed. filed a complaint with SSS against petitioner‘s refusal to cause his registration with the SSS. In fact. To ascertain the existence of an employer-employee relationship jurisprudence has invariably adhered to the four-fold test. he still cannot be considered as a regular employee of petitioner. regular and casual employees. i. Respondent is not an employee. Furthermore. The CA added that although there was an agreement between the parties that the employment of the respondent will be only temporary. The Resident Manager of the petitioner issued then a Memorandum advising respondent that within 30 days from receipt thereof. Jefferson M. both the Labor Arbiter and NLRC overlooked Article 280 of the Labor Code. respondent was not required to report everyday during regular office hours of petitioner. As a result. despite the fact that petitioner made use of the services of respondent for eleven years. Being supported by substantial evidence.LABOR RELATIONS Atty. but petitioner did not control the manner and methods by which respondent performed these tasks. Article 280 of the Labor Code is inapplicable. respondent clearly admitted that petitioner hired him in a limited capacity only and that there will be no employer-employee relationship between them. regular employees and Page 17 .. petitioner‘s services as a retainer/consultant will be terminated since his services are no longer necessary. The said article only set the distinction between a casual employee from a regular employee for purposes of determining the rights of an employee to be entitled to certain benefits. Petitioner contends that where the existence of an employer-employee relationship is in dispute. respondent was left alone and given the freedom to accomplish the tasks using his own means and method. he became a regular employee of the petitioner by continually performing services for the company. Moreover. the Court has ruled that said provision is not the yardstick for determining the existence of an employment relationship because it merely distinguishes between two kinds of employees. Considering also that the respondent had been performing services for the petitioner for the last 11 years entitling him to the rights and privileges of a regular employee. However. unfair labor practice. The Labor Arbiter rendered a decision in favor of the petitioner ruling that there is no employer-employee relationship and dismissed the complaint for lack of merit. the determination whether such a relationship exists between petitioner and respondent was well within the province of the Labor Arbiter and the NLRC.e. is not applicable in the case at bar. although the respondent may have waived his right to attain a regular status when he agreed to perform these tasks on a temporary employment status.respondent's length of service and petitioner's repeated act of assigning respondent some tasks to be performed did not result to respondent's entitlement to the rights and privileges of a regular employee. More importantly. The respondent is deemed a regular employee of the petitioner after the lapse of one year from his employment. the waiver is ineffective. Petitioner herein posits that CA erred in applying Article 280 of the Labor Code in determining whether there exists an employer-employee relationship. to wit: (1) the selection and engagement of the employee. the absence of the parties' retainership agreement notwithstanding. or the so-called "control test. any agreement may provide that one party shall render services for and in behalf of another. respondent filed a complaint for illegal dismissal. Marquez Respondent herein. which distinguishes between the two kinds of employees. Issue: Whether or not CA erred in applying Article 280? Ruling: Well-entrenched is the doctrine that the existence of an employer-employee relationship is ultimately a question of fact and that the findings thereon by the Labor Arbiter and the NLRC shall be accorded not only respect but even finality when supported by substantial evidence. The appellate court's premise 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. A petition for review was filed under Rule 65 before the Court of Appeals. not being petitioners' employers.1993. As the masiador. Issue: Whether or not the dismissal of the petitioners is illegal on the ground that that they are regular employees of the respondents? Ruling: Respondents had no part in petitioners' selection and management. Hence. and last until 12:00 midnight. while Pilar gets PhP3. In its appeal to the CA. Further. or until the early hours of the morning depending on the needs of the cockpit. since respondents were without power or prerogative to do so in the first place. the NLRC reversed the Labor Arbiter‘s decision. and eventually declares the result of the cockfight.LABOR RELATIONS Atty. The Labor Arbiter found that there exist an employer-employee relationship between the petitioner and the respondents because the latter performed the works necessary and indispensable to the usual trade or business of the respondents for a number of years. petitioners' compensation was paid out of the arriba (which is a percentage deducted from the total bets). for purposes of determining the right of an employee to certain benefits. as the sentenciador. petitioners relied mainly on their "expertise that is characteristic of the cockfight gambling. The rule on the posting of an appeal bond cannot defeat the substantive rights of respondents to be free from an unwarranted burden of answering for an illegal dismissal for which they were never responsible.000 per month. It has ruled that petitioners were illegally dismissed and are entitled to their backwages and separation pay. Saturday. therefore. CA. However on November 14.000 per week or a total of PhP8. Respondents denied that petitioners were their employees and alleged that they were associates of respondents‘ independent contractor. He also distributes the winnings after deducting the arriba. expertise and talent to distinguish them from ordinary employees. 21. As masiador and sentenciador.R. Semblante receives PhP2. 2011 Facts: Petitioners Marticio Semblante and Dubrick Pilar worked in the Gallera de Mandaue owned by the respondents-spouses Vicente and Maria Luisa Loot.500 a week or PhP14. petitioners are akin to independent contractors who possess unique skills . Semblante calls and takes the bets from the gamecock owners and other bettors and orders the start of the cockfight. G. erroneous on the part of the Court of Appeals to rely on Article 280 in determining whether an employer-employee relationship exists between respondent and the petitioner. Meanwhile. In the conduct of their work. They claimed that petitioners have no regular working time or day and they are free to decide for themselves whether to report for work or not on any cockfighting day. and Sunday every week. And the identification card issued was only to free them from the normal entrance fees and to differentiate them from the general public. the termination of respondent's services by the petitioner after due notice did not constitute illegal dismissal warranting his reinstatement and the payment of full backwages. determines the fighting cocks' physical condition and capabilities to continue the cockfight. They only need their unique skills and talents in the performance of their job as masiador and sentenciador. Respondents. petitioners. Marquez casual employees. The petitioners rendered their services as the official massiador and sentenciador in 1993. Pilar oversees the proper gaffing of fighting cocks. petitioners were denied entry into the cockpit upon the instructions of respondents and were informed of the termination of their employment effective that date. it does not apply where the existence of an employment relationship is in dispute. or the commission for the cockpit. Considering that there is no employer-employee relationship between the parties. Jefferson M. or to security of tenure. Semblante vs. excluding monthly derbies and cockfights held on special holidays. legally or illegally.m. petitioners were not provided by tools and instrumentalities they needed to perform their work.It is. No. 196426. not by petitioners. Tomas Vega.000 per month. the latter ruled in favor for the respondents and held that referees and bet-takers in a cockfight need to have the kind of expertise that is characteristic of the game to interpret messages conveyed by mere gestures. Page 18 . could never have dismissed. They work every Tuesday." and were never given by respondents any tool needed for the performance of their work. However. Petitioners had both been issued employees' identification cards that they wear every time they report for duty. It held that respondents having no power on the selection and engagement of petitioners and that no separate individual contract with respondents was ever executed by petitioners. Their working days start at 1:00 p. allowances and other benefits. to join or form a union. Wednesday. August 15. and petitioners performed their functions as masiador and sentenciador free from the direction and control of respondents. PBA decided not to renew their contracts. Bernarte vs. Phil. changes were made on the terms of their employment. he was no longer made to sign a contract. PBA admits repeatedly engaging petitioner's services. PBA can terminate the retainer contract for petitioner's violation of its terms and conditions. based on the rules of the game. Ruling The Supreme Court affirmed the assailed decision of the Court of Appeals. 2003 to July 15. respondent Martinez issued a memorandum to Guevarra expressing dissatisfaction over his questioning on the assignment of referees officiating out-of-town games. However. The so-called "control test" is the most important indicator of the presence or absence of an employer-employee relationship. He felt that the dismissal was caused by his refusal to fix a game upon order of Ernie De Leon. exclusive of per diem or allowances. and final authority on the playing court. On March 1. which they knew were fixed. as to when and how a call or decision is to be made. In this case. as stipulated in the retainer contract. 2003. they were made to sign contracts on a year-to-year basis. 2011 Facts: Complainants (Jose Mel Bernarte and Renato Guevarra) aver that they were invited to join the PBA as referees.LABOR RELATIONS Atty. It was only during the second conference when he was made to sign a one and a half month contract for the period July 1 to August 5. The referees decide whether an infraction was committed. Issue: Whether petitioner is an employee of respondents. he signed a yearly contract as Regular Class C referee. 2003. Respondents aver. Complainants were not illegally dismissed because they were not employees of the PBA. 2004. as shown in the retainer contracts. G. 2001.R. September 14. On May 6. (b) the payment of wages. Beginning February 2004. absolute. the Court of Appeals overturned the decisions of the NLRC and Labor Arbiter on the ground that the petitioner is an independent contractor since respondents did not exercise any form of control over the means and methods by which petitioner performed his work as a basketball referee. PBA pays petitioner a retainer fee. 2003. and (d) the employer's power to control the employee on the means and methods by which the work is accomplished. The referees are the only. and the second was for September 1 to December 2003. We agree with respondents that once in the playing court. The first contract was for the period January 1. respondents argue that the all-important element of control is lacking in this case. on the other hand. to wit: (a) the selection and engagement of the employee. 192084. (c) the power of dismissal. Their respective contracts of retainer were simply not renewed. Respondents or any of the PBA officers cannot and do not determine which calls to make or not to make and cannot control the referee when he Page 19 . which in turn determines whether petitioner was illegally dismissed. 2003 to June 2003. However. however. To determine the existence of an employer-employee relationship. was not made to sign a contract during the first conference of the All-Filipino Cup which was from February 23. that complainants entered into two contracts of retainer with the PBA in the year 2003. making petitioner an independent contractor and not an employee of respondents. complainant Guevarra alleges that he was invited to join the PBA pool of referees in February 2001. Complainant Bernarte. On the other hand. case law has consistently applied the four-fold test. PBA had the prerogative of whether or not to renew their contracts. After the lapse of the latter period. he signed a contract as trainee. Marquez 22. for instance. the referees exercise their own independent judgment. On January 15. Bernarte received a letter from the Office of the Commissioner advising him that his contract would not be renewed citing his unsatisfactory performance on and off the court. Jefferson M. It was a total shock for Bernarte who was awarded Referee of the year in 2003. Beginning 2002.. Both the Labor Arbiter and NLRC decided that the petitioners were employees whose dismissals by respondents were illegal. Basketball Assoc. No. and the PBA cannot overrule them once the decision is made on the playing court. During the leadership of Commissioner Emilio Bernardino. During the term of Commissioner Eala. he was already a regular Page 20 .LABOR RELATIONS Atty. On Saturdays. Marquez blows the whistle because such authority exclusively belongs to the referees. Respondent objected and insisted that he be properly compensated. petitioner is required to report for work only when PBA games are scheduled or three times a week at two hours per game. As agreed upon. Petitioner instructed respondent that his work on the album as composer and arranger would only be done during his spare time. the same merely results in the non-renewal of the contract. respondent did not deserve a high compensation. On March 14. Respondent Genovia alleged in his position paper that on August 15. Petitioner told respondent that since he was practically a nobody and had proven nothing yet in the music industry. He also alleged that petitioner approached him and told him about his project to produce an album for his daughter.m. and no hearing was conducted before he was terminated. or for whatever other reason. G. but petitioner never kept a daily time record to avoid paying the employees overtime pay. The very nature of petitioner's job of officiating a professional basketball game undoubtedly calls for freedom of control by respondents. the hiring party must have control over the means and methods by which the hired party is to perform his work. 23. In other words. including respondent. he was hired as studio manager by petitioner Lirio. and (2) the only deductions from the fees received by the referees are withholding taxes. Moreover. 169757. Lirio vs. They also agreed that he was entitled to an additional commission of P100. Jefferson M. Petitioner informed respondent that he was entitled only to 20% of the net profit. In addition. which are the usual deductions from employees' salaries. rendered overtime work almost everyday. respondent again reminded petitioner about the contract on his compensation as composer and arranger of the album. After the album was completed and released. the following circumstances indicate that petitioner is an independent contractor: (1) the referees are required to report for work only when PBA games are scheduled. the fact that PBA repeatedly hired petitioner does not by itself prove that petitioner is an employee of the former. Philhealth or Pag-Ibig. Conversely. He was employed to manage and operate Celkor and to promote and sell the recording studio's services to music enthusiasts and other prospective clients. 2002. 2001. and he should be thankful that he was given a job to feed his family. and not of the gross sales of the album. He received a monthly salary of P7. For a hired party to be considered an employee. Respondent asserts that he was illegally dismissed as he was terminated without any valid grounds.R. No. petitioner verbally terminated respondent‘s services. owner of Celkor Ad Sonicmix Recording Studio (Celkor). which is three times a week spread over an average of only 105 playing days a year. Genovia. he was required to work half-day only. or violation of the terms and conditions of the contract. non-payment of commission and award of moral and exemplary damages. Petitioner asked respondent to compose and arrange songs for Celine and promised that he (Lirio) would draft a contract to assure respondent of his compensation for such services. whether for unsatisfactory services. In addition. Celine Mei Lirio.m. Genovia filed a complaint against petitioner Cesar Lirio and/or Celkor Ad Sonicmix Recording Studio for illegal dismissal. Furthermore. The continuous rehiring by PBA of petitioner simply signifies the renewal of the contract between PBA and petitioner. and he was instructed not to report for work. unlike regular employees who ordinarily report for work eight hours per day for five days a week. 2011 Facts: Respondent Wilmer D. the additional services that respondent would render included composing and arranging musical scores only. the applicable foreign case law declares that a referee is an independent contractor. he still rendered eight hours of work or more. All the employees of petitioner. and highlights the satisfactory services rendered by petitioner warranting such contract renewal. November 23.00. which is absent in this case. if PBA decides to discontinue petitioner's services at the end of the term fixed in the contract. in violation of his constitutional right to due process. editing or any related work. and not an employee of respondents. as in the present case. while the technical aspect in producing the album. These undisputed circumstances buttress the fact that petitioner is an independent contractor. Having worked for more than six months.00 per hour as recording technician whenever a client uses the studio for recording.000. and that the salaries he received and would continue to receive as studio manager of Celkor would be deducted from the said 20% net profit share. The non-renewal of the contract between the parties does not constitute illegal dismissal of petitioner by respondents. to 6 p. whose special skills and independent judgment is required specifically for such position and cannot possibly be controlled by the hiring party. since his other work as studio manager was the priority. such as digital editing. but most of the time. mixing and sound engineering would be performed by respondent in his capacity as studio manager for which he was paid on a monthly basis. He was made to report for work from Monday to Friday from 9:00 a. Respondent then started working on the album. and they officiate games at an average of two hours per game. there are no deductions for contributions to the Social Security System. petitioner Lirio filed this petition. In defense. and there was no illegal dismissal to speak of. 2001 to March 15. which in turn determines whether respondent was illegally dismissed. which was certified correct by petitioner. that he be paid separation pay. which showed that respondent received a monthly salary of P7. Hence. Before a case for illegal dismissal can prosper.00 every 15th of the month and another P3. respondent verbally agreed with petitioner to co-produce the album. Respondent could not have been hired as a studio manager. and (d) the employer‘s power to control the employee‘s conduct.000. (c) the power of dismissal.00 (P3. The elements to determine the existence of an employment relationship are: (a) the selection and engagement of the employee. and 12:00 noon. the documentary evidence presented by respondent to prove that he was an employee of petitioner are as follows: (a) a document denominated as "payroll" (dated July 31. after some discussion. but also as to the means and methods to accomplish it. Petitioner asserted that his relationship with respondent is one of an informal partnership and that he had no control over the time and manner by which respondent composed or arranged the songs. it must first be established that an employer-employee relationship existed between petitioner and respondent. and that they had the power to control him not only as to the result of his work. Jefferson M. Respondent reported to the recording studio between 10:00 a. It is settled that no particular form of evidence is required to prove the existence of an employer-employee relationship. However. The Labor Arbiter rendered a decision finding that an employer-employee relationship existed between petitioner and respondent. Although he was a so called ―studio manager. since the recording studio has no personnel except petitioner. Hence. that petitioner had the power to dismiss him. 2001 to March 15. In this case. and he was not known in the field of music.m. The Court of Appeals rendered a decision reversing and setting aside the resolution of the NLRC. and Petty Cash Voucher evidencing receipt of payroll payments by respondent from Celkor. and reinstating the decision of the Labor Arbiter. and that he be awarded unpaid commission for services rendered as a studio technician as well as moral and exemplary damages.‖ he had no managerial powers. not only as to the result of the work to be done. 2002. except on the result thereof. but was merely an ordinary employee. showing the amounts he received and signed for in the payrolls. 2002) certified correct by petitioner. respondent had no track record as a composer. Issue: Whether respondent is an employee of the petitioner. (b) the payment of wages.LABOR RELATIONS Atty. petitioner contended that no employer-employee relationship existed between him and the respondent. The most important element is the employer‘s control of the employee‘s conduct. backwages and overtime pay. Marquez employee. or. Any competent and relevant evidence to prove the relationship may be admitted. and (2) copies of petty cash vouchers. petitioner stated in his Position Paper that respondent was not hired as studio manager. Nevertheless. Respondent prayed for his reinstatement without loss of seniority rights. Respondent‘s evidence consisted of the Payroll dated July 31. and that respondent was illegally dismissed. Page 21 . Ruling: The Supreme Court affirmed the assailed decision of the Court of Appeals. technician or as an employee in any other capacity of Celkor. composer.00 every 30th of the month) with the corresponding deductions due to absences incurred by respondent. According to petitioner.500. the NLRC reversed and set aside the decision of the Labor Arbiter on the ground that respondent failed to prove his employment tale with substantial evidence. It held that respondent failed to proved with substantial evidence that he was selected and engaged by petitioner. in the alternative. but also as to the means and methods of accomplishing his work.500. No. (c) the power of dismissal. Hereunder are some of the circumstances and incidents occurring while petitioner was supposedly employed by BCC that debunked his claim against respondents. (a) the dismissal must be for a valid cause. Page 22 . reinstatement with full backwages. The last element. the major creditor and supplier of BCC. The Court agrees with the Court of Appeals that the evidence presented by the parties showed that an employer-employee relationship existed between petitioner and respondent. Procedural due process requires the employer to furnish an employee with two written notices before the latter is dismissed: (1) the notice to apprise the employee of the particular acts or omissions for which his sought. 1995 were frustrated because he continued to be barred from entering the premises of BCC. without distinction whether the employer admits or does not admit the dismissal. because he thereby acted for the benefit and in the interest of SFC more than of BCC. damages and attorney‘s fees. the so-called control test. and (d) the employer‘s power to control the employee on the means and methods by which the work is accomplished. BCC Product Sales Inc. April 18..00. His attempts to report to work in November and December 12. and separation pay in lieu of reinstatement. to be issued after the employee has been given reasonable opportunity to answer and to be heard on his defense. filed an action for illegal dismissal against petitioner. Petitioner wielded the power to dismiss as respondent stated that he was verbally dismissed by petitioner.000. Issue: Whether or not an employer-employee relationship existed between petitioner Jao and BCC Ruling: The Supreme Court speaking through Justice Bersamin declared that the court cannot side with petitioner. He then filed a complaint for illegal dismissal. Terrance Ty.R. 2002. and that SFC had posted him as its comptroller in BCC to oversee BCC‘s finances and business operations and to look after SFC‘s interests or investments in BCC. For an employee‘s dismissal to be valid. Nevertheless. Respondents countered that petitioner was not their employee but the employee of Sobien Food Corporation (SFC). In termination cases. Petitioner failed to comply with these legal requirements. It can be deduced from the March 1996 affidavit of petitioner that respondents challenged his authority to deliver some 158 checks to SFC. is the most important element. and (2) the notice informing the employee of his dismissal. On October 19.000. as it is sufficient that the former has a right to wield the power. 2001 to March 15. thereafter. (b) the payment of wages.00 to handle the financial aspect of BCC‘s business. barred him from entering the premises of BCC where he then worked. Jefferson M. to wit: (a) the selection and engagement of the employee. petitioner certainly had the power to check on the progress and work of respondent. Jao vs. acting upon the instruction of Ty. the Court of Appeals correctly affirmed the Labor Arbiter‘s finding that respondent was illegally dismissed. In such case. petitioner failed to prove that his relationship with respondent was one of partnership. employed him as comptroller starting from September 1995 with a monthly salary of P20. and entitled to the payment of backwages.LABOR RELATIONS Atty. 24. The power of control refers merely to the existence of the power. there were deductions from the wages of respondent for his absence from work. Considering that he contested respondents‘ challenge by pointing to the existing arrangements between BCC and SFC. Such claim was not supported by any written agreement. On the other hand. Marquez The said documents showed that petitioner hired respondent as an employee and he was paid monthly wages of P7. the security guards of BCC. it should be clear that respondents did not exercise the power of control over him. It is not essential for the employer to actually supervise the performance of duties of the employee. the burden is upon the employer to show by substantial evidence that the termination was for lawful cause and validly made.1995. 2012 Facts: Petitioner maintained that respondent BCC Product Sales Inc. In determining the presence or absence of an employer-employee relationship. and (b) the employee must be afforded due process. non-payment of wages. petitioner stated in his Position Paper that it was agreed that he would help and teach respondent how to use the studio equipment. G. and respondent. hence. The Court notes that in the payroll dated July 31.Article 277 (b) of the Labor Code puts the burden of proving that the dismissal of an employee was for a valid or authorized cause on the employer. (BCC) and its President. 163700. which negates petitioner‘s claim that the wages paid were advances for respondent‘s work in the partnership. which is the equivalent of a charge. the Court has consistently looked for the following incidents. Marquez RIGHT TO SECURITY OF TENURE CASES: 1. Petitioners were then terminated. from the other undertakings of the company. Castro was recommended for reemployment with the company‘s Maintenance Team for the Davao Project. vs NLRC. The simple fact that the employment of petitioners as project employees had gone beyond one year does not detract from or legally dissolve their status as project employees. are effected and implemented in good faith. NLRC. The case at bar falls on the second type of project activity. Ruling: Petitioners are project employees. Having satisfactorily served the company for two (2) terms. Project employees are those employed for a 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. The principal test for determining whether an employee is properly characterized as project employees is whether or not the project employees were carrying out a specific project or undertaking. It must also begin and end at determined or determinable times. Castro was not among the list of those regular employees whose services were terminated by reason of retrenchment or those who voluntarily resigned. Each component project. Their contention was that they should be considered regular employees because their jobs are necessary. During the time petitioners rendered services to NSC. They were not hired or assigned to any other purpose. Whichever type of project employment is found in a particular case. Furthermore. Such a job or undertaking must also be identifiably separate and distinct from the ordinary or regular business operations of the employer. The services of these project employees may be lawfully terminated at the completion of the project. the length of service of a project employee is not the controlling test of employment of tenure. regular employees are legally entitled to remain in the service of their employer until that service is terminated by one or another of the recognized modes or termination of service under the Labor Code. 234 SCRA 678 [1994] Facts: National Steel Corporation (NSC) employed petitioners in connection with its Five Year Expansion Program. Castro‘s employment was terminated due to the completion of the special project. They filed a complaint for unfair labor practice. 255 SCRA 358 [1996] Facts: Gil C. ALU-TUCP vs. For obvious reasons. a common basic requisite is that the designation of named employees as "project employees" and their assignment to a specific project. but which is distinct and separate and identifiable as such. First is that a project could refer to a particular job or undertaking that is within the regular or usual business of the employer company. of course. Cosmos Bottling Corporation in valid exercise of its management prerogative terminated the services of some 228 regular employees by reason of retrenchment. On the other hand. The carrying out of the Five Year Expansion Program constitutes a distinct undertaking identifiable from the ordinary business and activity of NSC. their work was limited to one or another of the specific component projects which made up the Five Year Expansion Program. There are two types of project activities. Second is a particular job or undertaking that is not within the regular business of the corporation. desirable and work related to NSC‘s main business which is steel making and that they have rendered service for more than six years. 2. he was re-hired and assigned to the Maintenance Division of the Davao Project tasked to install the private respondent‘s annex plant machines in its Davao plant. regularization and monetary benefits. Issue: Whether or not petitioners were properly characterized as regular employees rather than project employees. Cosmos Bottling Corp. Castro was employed by Cosmos Bottling Corporation for a specific period. It undertook this program with the end in view of expanding the volume and increasing the kinds of products that it may offer for sale to the public. Jefferson M. and not merely as a means of evading otherwise applicable requirements of labor laws. Such job or undertaking begins and ends at determined or determinable times. Castro filed a Page 23 . begins and ends at specified times which had already been determined by the time petitioners were engaged. the duration and the scope of which were specified at the time the employees were engaged for that project.. It is dependent and coterminous with the completion or termination of the specific undertaking or activity for which the employee was hired which has been pre-determined at the time of the engagement.LABOR RELATIONS Atty. the private respondents were employed for a period of five months only. Regular and Casual Employment. Article 280 of the Labor Code defines regular and casual employment as follows: ART. 1990 prior to the termination of the other regular employees of Cosmos by reason of retrenchment. Page 24 . shall be considered a regular employee with respect to the activity in which he is employed. Issue: Whether employees hired for a definite period and whose services are necessary and desirable in the usual business or trade of the employer are regular employees. They submit that the practice of the petitioner in hiring workers to work for a fixed duration of five months only to replace them with other workers of the same employment duration was apparently to prevent the regularization of these so-called ―casuals.. a complaint for illegal dismissal against the petitioner and its plant manager. considering that his employment was limited to the installation and dismantling of petitioner‘s annex plant machines after which there was no more work to do. however.LABOR RELATIONS Atty. After the expiration of their respective contracts of employment. 280. Besides. argue that contracts with a specific period of employment may be given legal effect provided. whether such service is continuous or broken. The private respondents filed before the NLRC Sub-Regional Arbitration Branch. Pure Foods Corp submits that the private respondents are now estopped from questioning their separation from petitioner‘s employ in view of their express conformity with the five-month duration of their employment contracts. that they are not intended to circumvent the constitutional guarantee on security of tenure. NLRC 283 SCRA 136 [1997] Facts: The private respondents (numbering 906) were hired by petitioner Pure Foods Corporation to work for a fixed period of five months at its tuna cannery plant. The company alleged that Castro was a mere project employee whose employment was coterminous with the project for which he was hired.. their services were terminated. the first paragraph of the said article must be read and interpreted in conjunction with the proviso in the second paragraph. Issue: Whether or not private respondent Gil C. Jefferson M. private respondents' prayer for reinstatement is well within the purview of the ―Release and Quitclaim‖ they had executed wherein they unconditionally released the petitioner from any and all other claims which might have arisen from their past employment with the petitioner. Ruling: Private respondent being a project employee. In any event. Moreover. seasonal employee. the termination of his employment cannot and should not constitute an illegal dismissal. That being so. The private respondents. 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 services to be performed is seasonal in nature and the employment is for the duration of the season. Castro is a regular employee or was a mere project employee of petitioner Cosmos Bottling Corporation. he could not be dismissed without a just and valid cause. which reads: ―Provided that any employee who has rendered at least one year of service..‖ which is a clear circumvention of the law on security of tenure.-. They thenexecuted a ―Release and Quitclaim‖ stating that they had no claim whatsoever against Pure Foods. they fell within the exception provided in Article 280 of the Labor Code which reads: ―[E]xcept 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. 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.The provisions of written agreement to the contrary notwithstanding and regardless of the oral argument of the parties. Ruling: We find the petition devoid of merit. or to use the correct term. on the other hand. Purefoods v. Marquez complaint for illegal dismissal against Cosmos Bottling Corporation with the Labor Arbiter contending that being a regular employee. his employment legally ended upon completion of the project. Neither should it constitute retrenchment as private respondent was a seasonal employee whose services were already terminated on May 21.‖ In the instant case. 3. xxx …criteria under which term employment cannot be said to be in circumvention of the law on security of tenure: 1) The fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force. the services employed are then necessary and desirable in the employer‘s usual business only for the period of time it takes to complete the project. Also. They alleged that the dismissals were due to complainants' involvement in union activities and were without just cause. Phil. duress.LABOR RELATIONS Atty. the private respondents could not be regarded as having been hired for a specific project or undertaking. This scheme of the petitioner was apparently designed to prevent the private respondents and the other ―casual‖ employees from attaining the status of a regular employee. skinning. That. they were performing activities which were necessary and desirable in petitioner‘s business or trade. the petitioner succeeded in evading the application of labor laws. or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent. whether such service is continuous or broken. any employee who has rendered at least one year of service. xxx Where from the circumstances it is apparent that the periods have been imposed to preclude acquisition of tenurial security by the employee. the private respondents‘ activities consisted in the receiving. It was a clear circumvention of the employees‘ right to security of tenure and to other benefits like minimum wage. The five-month period specified in private respondents‘ employment contracts having been imposed precisely to circumvent the constitutional guarantee on security of tenure should. The fact that the petitioner repeatedly and continuously hired workers to do the same kind of work as that performed by those whose contracts had expired negates petitioner‘s contention that those workers were hired for a specific project or undertaking only. loining. they should be struck down or disregarded as contrary to public policy and morals. filed a complaint for unfair labor practice and/or illegal dismissal with damages against Petitioner Corporation. whether continuous or broken. it saved itself from the trouble or burden of establishing a just cause for terminating employees by the simple expedient of refusing to renew the employment contracts. and 13th month pay. holiday pay. Provided. Marquez An employment shall be deemed to be casual if it is not covered by the preceding paragraph. and casing-up of tuna fish which were then exported by the petitioner. Thus. NLRC. Indisputably. and (2) those casual employees who have rendered at least one year of service. with respect to the activity in which they are employed. Fruit and Vegetable Industries v. the two kinds of regular employees are (1) those who are engaged to perform activities which are necessary or desirable in the usual business or trade of the employer. Indeed. None of these criteria had been met in the present case. Page 25 . In the instant case. 310 SCRA 680 [1999] Facts: Private respondent Philippine Fruit and Vegetable Workers Union-Tupas Local Chapter. shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. xxx Contrary to petitioner's submission. The term ―specific project or undertaking‖ under Article 280 of the Labor Code contemplates an activity which is not commonly or habitually performed or such type of work which is not done on a daily basis but only for a specific duration of time or until completion. Jefferson M. packing. for and in behalf of 127 of its members. therefore. be struck down or disregarded as contrary to public policy or morals 4. sick leave. cost-of-living allowance. or 2) It satisfactorily appears that the employer and the employee dealt with each other on more or less equal terms with no moral dominance exercised by the former or the latter. its operation starts only in February with the processing of tomatoes into tomato paste and ceases by the end of the same month when the supply is consumed. It then resumes operations at the end of April or early May. It also processed guyabano. sorters. truck helpers. Besides. NLRC affirmed the Arbitration Branch‘s decision but modified the awards of attorney‘s fees. Philips Semiconductor vs. Inc (PFVII) were indeed guilty of Illegal Dismissal. such as manufacturing and marketing are not seasonal. Jefferson M. they cannot invoke any tenurial benefit Ruling: By the very nature of things in a business enterprise like PFVII. 141717. PFVII filed a motion for reconsideration which was denied by NLRC Issue: Whether or not the complainants were illegal dismissed by PFVII One of PFVII‘s contentions is that the complainants are seasonal workers. The severance of complainants' employment from petitioner corporation was a necessary consequence of the nature of seasonal employment. According to them. 5. Inc. except where the employment has been fixed for a specific project. that under Article 280 of the Labor Code "the provisions of written agreement to the contrary notwithstanding and considering further that the tasks which complainants performed were usually necessary and desirable in the employers usual business or trade. therefore. and since complainants are seasonal workers as defined by the Labor Code. Considering. 2004 Facts: The petitioner Philips Semiconductors (Phils. On appeal. NLRC set aside the Labor Arbiter‘s decision and remanded the said case to the Arbitration Branch for further proceedings. Marquez Labor Arbiter rendered judgment that Philippine Fruit & Vegetable Industries. drivers. Neither is their employment seasonal in nature. Supreme Court held that complainants are regular seasonal employees. COMPLAINANTS ARE REGULAR EMPLOYEES BY VIRTUE OF THE FACT THAT THEY PERFORMED FUNCTIONS WHICH ARE NECESSARY AND DESIRABLE IN THE USUAL BUSINESS OF PFVII. the other equally important aspects of its business. Fardiquela. entitled to security of tenure. calamansi.). more than six (6) months a year. mechanics and office personnel is without doubt necessary in the usual business of a food processing company like petitioner PFVII. The company did not confine itself just to the processing of tomatoes and mangoes. It should be noted that complainants' employment has not been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of their appointment or hiring. Arbitration Branch rendered a decision finding PFVII liable for illegal dismissal. While it may be true that some phases of petitioner company's processing operations is dependent on the supply of fruits for a particular season. is a domestic corporation engaged in the production and assembly of semiconductors such Page 26 . depending on the availability of supply with the processing of mangoes into purees and ceases operation in June. pineapple. indeed. The Labor Code provides an employment shall be deemed to be regular where the employee has been engaged to perform activities that are usually necessary or desirable in the usual business or trade of the employers. April 14.LABOR RELATIONS Atty. PETITION DENIED. 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. janitors. thus. operators.R. that. On appeal. In the case at bar. provided. G. etc. the work of complainants as seeders. any employee who has rendered at least one year of service whether such service is continuous or broken. they have the office of administrative functions. cleaning and upkeeping of machines and other duties and tasks to keep up a big food processing corporation. The fact is that large-scale food processing companies such as Petitioner Company continue to operate and do business throughout the year even if the availability of fruits and vegetables is seasonal. papaya. No. An employment shall be deemed to be casual if it is not covered by the preceding paragraph. slicers. the services of the complainants are. 1993.Also. but was extended for two months when she garnered a performance rating of 3. Given the factual milieu in this case. 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. we deem it proper to order the reinstatement of petitioner to her former job and the payment of her full backwages. 1992 as production operator.4. respondent Eloisa Fadriquela executed a Contract of Employment with the petitioner in which she was hired as a production operator with a daily salary of P118. three absences in the month of May and four absences in the month of June. it was extended anew. She was assigned to wirebuilding at the transistor division. is too harsh a penalty. Line supervisor Shirley F. in accordance with the Company Rules and Regulations. but only with respect to such activity and while such activity exists. the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity. After garnering a performance rating of 3. whatever missteps may have been committed by the worker ought not to be visited with a consequence so severe such as dismissal from employment. even if true. Hence.0 for the period covered by the performance appraisal to maintain good standing as an employee. 1993. Page 27 . for three months. she was not afforded procedural due process.‖ The misery and pain attendant to the loss of jobs then could be avoided if there be acceptance of the view that under certain circumstances of the case the workers should not be deprived of their means of livelihood. Aside from contractual employees. if so. Issues and Rulings: (a) whether or not the respondent was still a contractual employee of the petitioner as of June 4. we grant petitioner‘s prayer for attorney‘s fees. Dismissal is the ultimate penalty that can be meted to an employee. attendance and work attitude. We do agree that an employee may be dismissed for violation of reasonable regulations/rules promulgated by the employer. There is no dispute that the work of the respondent was necessary or desirable in the business or trade of the petitioner. and is thus entitled to security of tenure as provided for in Article 279 of the Labor Code which reads: (b) whether or not the petitioner dismissed the respondent from her employment. The court concludes that petitioner‘s dismissal is illegal because. the respondent‘s contract was extended for another three months. and second. 1993. 1992.15. RF and metal transistors and glass diods. the Constitution guarantees the right of workers to ―security of tenure. to the same position. The respondent was warned that if she offered no valid justification for her absences.After the expiration of her third contract. Velayo asked the respondent why she incurred the said absences. RF modules. 1993 to June 4. the petitioner employed 1. as a consequence of which her performance rating declined to 2. She remained under the employ of the petitioner without any interruption since May 8. The original contract of employment had been extended or renewed for four times. the respondent was employed by the petitioner on May 8. CATV modules. whether continuous or broken. telecommunications equipment and cars. from April 5. Jefferson M. By operation of law. 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. Velayo would have no other recourse but to recommend the non-renewal of her contract. Thus. Her initial contract was for a period of three months up to August 8. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. 1993 to April 4. 1992.[22] 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.8. whether or not she was accorded the requisite notice and investigation prior to her dismissal. and On the second and third issues. if not indispensability of that activity to the business of the employer. the employment is also considered regular. from January 4. the respondent had attained the regular status of her employment with the petitioner. The employees were subjected to periodic performance appraisal based on output. the respondent‘s contract of employment was no longer renewed. three (3) absences in May 1993 and four (4) absences in June 1993. (c)whether or not the respondent is entitled to reinstatement and full payment of backwages as well as attorney‘s fees. Marquez as power devices. 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. and (2) those casual employees who have rendered at least one year of service. 1993 or for one (1) year and twenty-eight (28) days. she was dismissed in the absence of a just cause. first. She. quality. that is. but the latter failed to explain her side. If the employee has been performing the job for at least one year. having been compelled to come to court to protect her rights. when she received a performance rating of 3. that is. Her contract was again renewed for two months or up to December 16.8. 1992 to June 4. with respect to the activities in which they are employed. incurred five absences in the month of April.LABOR RELATIONS Atty. The respondent still failed to respond. 1992. Where a penalty less punitive would suffice. however.029 regular workers. with the same chores. One was required to obtain a performance rating of at least 3. On May 8. Velayo recommended to the petitioner that the respondent‘s employment be terminated due to habitual absenteeism.In this case. the respondent‘s dismissal from employment for incurring five (5) absences in April 1993. then. even if the performance is not continuous or merely intermittent. we agree with the appellate court that the respondent was dismissed by the petitioner without the requisite notice and without any formal investigation. It caters to domestic and foreign corporations that manufacture computers. For. In pursuance of Article 279 of the Labor Code. (2) Whether respondent Middleby informed petitioner of the standards for ―regularization‖ at the start of his employment. As found by the labor arbiter. Jefferson M. 1996. the NLRC and the Court of Appeals. since the number of days in each particular month was irrelevant. Marquez 6. during petitioner‘s probationary employment. he shall be deemed a regular employee. We hold that respondent Middleby substantially notified petitioner of the standards to qualify as a regular employee when it apprised him. incurred ten absences. We agree with the labor arbiter when he ruled that: In the instant case. having started work on May 20. June 9. Where no standards are made known to the employee at that time. petitioner‘s application to become a regular employee was disapproved and his employment was terminated. Page 28 . But this constitutional protection ends on the expiration of the probationary period. According to petitioner‘s computation. On that date. that it would evaluate his supervisory skills after five months. As the appointment provided that petitioner‘s status was ―probationary (6 mos. petitioner was still a probationary employee when respondent Middleby opted not to ―regularize‖ him on November 20. Petitioner insists that he already attained the status of a regular employee when he was dismissed on November 20. Thus. It is only but natural that the evaluation should be made vis-à-vis the performance standards for the job. he showed poor performance in his assigned tasks. 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. Since he failed to meet company standards. On 20 November 1996.)‖ without any specific date of termination. In short. 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. Petitioner‘s contention is incorrect. they are accorded the constitutional protection of security of tenure. the parties are free to either renew or terminate their contract of employment. 149859. Alcira vs. the 180 th day fell on November 16. the same cannot be deemed illegal. Section 6 (d) of Rule 1 of the Implementing Rules of Book VI of the Labor Code (Department Order No. Issues and Rulings: (1) Whether petitioner was allowed to work beyond his probationary period and was therefore already a regular employee at the time of his alleged dismissal. 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. was late several times and violated company rules on the wearing of uniform. an employer is deemed to substantially comply with the rule on notification of standards if he apprises the employee that he will be subjected to a performance evaluation on a particular date after his hiring.R. six months total one hundred eighty days. This runs counter to the agreement between the parties that after five months of service the petitioner‘s performance would be evaluated. when he was dismissed on November 20. This development has rendered moot the question of whether there was a just cause for the dismissal of the petitioners. 1996. It is settled that even if probationary employees do not enjoy permanent status. petitioner cannot successfully say that he was never informed by private respondent of the standards that he must satisfy in order to be converted into regular status. 2004 Facts: Middleby Philippines Corp. Taking all this in its entirety. G. 1996 because. 1996. he was already a regular employee. respondents claim that. (3) Whether petitioner was illegally dismissed when respondent Middleby opted not to renew his contract on the last day of his probationary employment. a senior officer of Middleby withheld his time card and did not allow him to work. No. Private respondent Trifona Mamaradlo speaks of such standard in her affidavit referring to the fact that petitioner did not perform well in his assigned work and his attitude was below par compared to the company‘s standard required of him. since Article 13 of the Civil Code provides that one month is composed of thirty days. 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. NLRC. hired petitioner as engineering support services supervisor on a probationary basis for six months. In their defense. respondent Middleby was clearly justified to end its employment relationship with petitioner. 1996. Alcira filed with the NLRC a complaint for illegal dismissal on the contention that he had become a regular employee when he was illegally dismissed. Series of 1997) provides that: In all cases of probationary employment. Petitioner failed to satisfactorily refute these substantiated allegations.LABOR RELATIONS Atty. at the start of his employment. the six-month probationary period ended on November 16. 10. 1996. the employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his engagement. Although we can regard petitioner‘s severance from work as dismissal. However. He was. G. he received a Notice of Termination dated November 25. 1996 would expire on November 27. As part of the MMPC‘s policy. of November 26. unless covered by an apprenticeship agreement. Under Article 281 of the Labor Code. the period of one hundred eighty (180) days. 8. the Department and Division Managers reviewed the performance evaluation made on Paras. should then be multiplied by the number of days within a month. June 29.LABOR RELATIONS Atty. he was apprised of the standards upon which his regularization would be based. may hire an employee on a probationary basis in order to determine his fitness to perform work. On November 26. some on a regular basis and others on a casual basis. CPLU. vs. in computing a period. Issue: Whether or not Paras was already a regular employee when he was terminated. in the exercise of its management prerogative. that his performance was unsatisfactory. along with Paras‘ immediate supervisors. He was assigned at the paint ovens. He and the new and re-hired employees were then given an orientation about the company‘s history. 1994. Article 13 of the Civil Code. 1996. Mitsubishi Motors Phils. and ended on November 23. argued that Paras was dismissed on his one hundred eighty third (183rd) day of employment. organizational structure.R. No. Respondent Paras was employed as a management trainee on a probationary basis. Paras was evaluated by his immediate supervisors after six (6) months. On October 29. No. As such. hence. including the company standards for regularization. After working in Saudi Arabia from 1982 to 1993. Most of them worked as chicken dressers.m. while the others served as packers or helpers. 1982." The petitioners were employed by the respondent on different dates as emergency workers at its poultry plant under separate "temporary/casual contracts of employment" for a period of five months. Later. MMPC argued that under Article 13 of the New Civil Code. which provides that the months which are not designated by their names shall be understood as consisting of thirty (30) days each. hence. 1996. Since he received the notice of termination of his employment on November 25. 1996. Paras was not considered for regularization. thirty (30). the first day shall be excluded and the last day included. 2004 Facts: The respondent General Milling Corporation is a domestic corporation engaged in the production and sale of livestock and poultry. The termination letter dated November 25. 1996. 1996. During the orientation conducted on May 15. 1994 to October 31. On May 27. As clearly provided for in the last paragraph of Article 13. Thus. already a regular employee of the petitioner under Article 281 of the Labor Code. likewise. 1996. Indeed. an employer. 1996. six (6). They unanimously agreed. 1976 to June 16. or three (3) days after the expiration of the probationary period of six (6) months. Paras‘ probationary employment which commenced on May 27. As a consequence. 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. the probationary period was from three (3) months to a maximum of six (6) months. and company rules and regulations. the employer must inform the employee of the standards for which his employment may be considered for regularization. when he resigned to work abroad. his contract was renewed from November 1. 1996. air make-up and conveyors. July 2. he was already a regular employee on the date of the termination of his probationary employment. he was re-hired as a welder-fabricator at the MMPC tooling shop from October 3. by then. 1996. Marquez 7. 2004 Facts: Nelson Paras first worked for Mitsubishi Motors Philippines Corporation (MMPC) as a shuttle bus driver from March 19. 1996 was served on respondent Paras only at 3:00 a. As per the company‘s policy. Jefferson M. Applying Article 13 of the Civil Code. a legitimate labor organization and the duly certified bargaining agent of the hourly-paid regular rank and file employees of MMPC in which Paras was a member. Ruling: Yes. General Milling Co.. He reported for work on May 27. It is. Meanwhile. shall not exceed six (6) months from the date the employee started working. Chrysler Phil Labor Union. Paras started reporting for work.R. Such probationary period. he would be regularized. Pangilinan vs. corporate philosophy. and received an average rating. 1994 up to March 3. as "emergency workers. 149329. The number of months in the probationary period. 1994. Paras was later re-hired on a probationary basis as a manufacturing trainee at the Plant Engineering Maintenance Department sometime in May of 1996. 1995. the distributor of dressed chicken to various restaurants and establishments nationwide. informing him that his services were terminated effective the said date since he failed to meet the required company standards for regularization. the one hundred eighty (180) days commenced on May 27. the probationary period of six (6) months consists of one hundred eighty (180) days. it employs hundreds of employees. G. code of conduct and companyprovided benefits.This is in conformity with paragraph one. 1996. the supervisors informed Paras that based on his performance rating. Page 29 . 148738. the same should be considered to have been served within the six-month probationary period. The petitioners were hired as "emergency workers" and assigned as chicken dressers. Ravago vs. Jefferson M. The petitioners alleged that their work as chicken dressers was necessary and desirable in the usual business of the respondent. nothing therein shows that these contracts were used as a subterfuge by the respondent GMC to evade the provisions of Articles 279 and 280 of the Labor Code.LABOR RELATIONS Atty. G. then assistant engineer. a stray bullet hit Ravago on the left leg while he was waiting for a bus ride in Cubao. EEM and Esso International Shipping (Bahamas) Co. The records reveal that the stipulations in the employment contracts were knowingly and voluntarily agreed to by the petitioners without force. unless sooner terminated for any of the causes above-cited. the period of employment shall not go beyond the duration of the work or purpose for which the aforementioned employee has been engaged. 1992. they were regular employees of the respondent. and. or any circumstances that vitiated their consent. night-shift differential and service incentive leave pay against the respondent. 13th month pay. namely. Esso Tankers. there was no illegal dismissal when the petitioners' services were terminated by reason of the expiration of their contracts. As such. they cannot be said to be regular employees. There are two separate instances whereby it can be determined that an employment is regular: (1) if the particular activity performed by the employee is necessary or desirable in the usual business or trade of the employer. shall then automatically cease on its expiry date. and." Consequently. (2) if the employee has been performing the job for at least a year. packers and helpers at the Cainta Processing Plant. without the necessity of any prior notice to the employee concerned. 3. 1971. or if she/he has violated any of the established rules and regulations of the Company. cannot be dismissed without just cause and the required due process. Ravago was granted a vacation leave with pay. (c) casual employees or those who are neither regular nor project employees. Ruling: Article 280 of the Labor Code comprehends three kinds of employees: (a) regular employees or those whose work is necessary or desirable to the usual business of the employer. On February 13. One the night. (ETI). Ravago commenced his duty as S/N wiper on board the Esso Bataan under a contract that lasted until February 10. thus. 2005 Facts: Roberto Ravago was hired by Trans-Global to work as a seaman on board various Esso vessels. 4.. 9. This employment contract shall be on a DAY-TO-DAY BASIS and shall not extend beyond the period specified therein. A regular employee is one who is engaged to perform activities which are necessary and desirable in the usual business or trade of the employer as against those which are undertaken for a specific project or are seasonal. and is a distributor of dressed chicken. a period spanning more than 22 years. The respondent GMC is a domestic corporation engaged in the production and sale of livestock and poultry. IT IS CLEARLY STIPULATED THAT THE CONDITION OF THE EMPLOYMENT CONTRACT SHALL BE AS FOLLOWS: 1. March 14. each for a fixed period. No. They stressed that based on the nature of their work. 158324. EVEN BEFORE THE EXPIRY DATE OF THIS CONTRACT. such as oiler. duress or improper pressure. Quezon City.. Shortly after completing his latest contract with EIS. Ravago worked with Esso vessels until August 22. They later filed separate complaints for illegal dismissal and non-payment of holiday pay. 1970. Marquez Upon the expiration of their respective contracts. Inc. That the employee hereby agrees to work in any work shift schedule that may be assigned to him by the Firm during the period of this contract. Thereafter. A contract for employment for a definite period terminates by its own term at the end of such period. it terminates on the expiration of such period. While the petitioners' employment as chicken dressers is necessary and desirable in the usual business of the respondent. Issue: Whether or not petitioners are regular employees and. or if such services are found to be unsatisfactory. since their employment was limited to a fixed period. but are merely "contractual employees. he was assigned to work in different Esso vessels where he was designated diverse tasks. Ltd. their services were terminated. The employee aforementioned may be laid off or separated from the Firm. In any case.R. Esso Eastern Marine Ltd. (EIS). because when the contract specifies the period of its duration. by three different companies. 2. He was employed under a total of 34 separate and unconnected contracts. could not be dismissed from their employment unless for just cause and after due notice. Lack of notice of termination is of no consequence. He fractured his left proximal tibia and was Page 30 . they were employed on a mere temporary basis. hence. Singapore Branch. if his/her services are no longer needed. and This Temporary/Casual Employment contract. (b) project employees or those whose 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 services to be performed is seasonal in nature and the employment is for the duration of the season. Similarly. According to the CA. Their employment is governed by the contracts they sign every time they are rehired and their employment is terminated when the contract expires. this Court has consistently ruled that seafarers are contractual. Herein respondents are employees of the hacienda performing various works.R. Manzo. Starke.232. employees. fracture of tibia has completely healed and patient is fit to resume pre-injury activities anytime. Respondents denied that Ravago was dismissed without notice and just cause. Any extension of the Contract period shall be subject to the mutual consent of the parties. backwages. Inc. Ravago's left leg had become apparently shorter. blatantly disregarded the constitutional mandate on protection to Filipino overseas workers. Their employment is contractually fixed for a certain period of time. that "at present. EIS paid him his Career Employment Incentive Plan (CEIP) and his final tax refund for 1992. petitioner is governed by the Rules and Regulations Governing Overseas Employment and the said Rules do not provide for separation or termination pay. In his position paper. Consequently. The Standard Employment Contract governing the Employment of All Filipino Seamen on Board Ocean-Going Vessels of the POEA. It reads: Section C. planting of cane points. Zamora. making him walk with a limp. Sec. was awarded a CEIP payment upon his termination from employment. found him to have lost his dexterity. They allege that they are regular and permanent workers of the hacienda and that they were dismissed without just and lawful cause. citing 2003 Hacienda Fatima Facts: Hortencia L. They fall under the exception of Article 280 whose employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. is the owner and operator of the Hacienda Bino." Ravago. Hacienda Bino/Hortencia Stark vs. such as cultivation. As a result of his injury. particularly in Part I. herein petitioner. 2005. Duration of Contract The period of employment shall be for a fixed period but in no case to exceed 12 months and shall be stated in the Crew Contract. They further alleged that they were dismissed because they applied as beneficiaries under the Comprehensive Agrarian Reform Program (CARP) over the land owned by petitioner Page 31 . 150478. likewise. that all Hacienda Employees who signed in favor of CARP are expressing their desire to get out of employment on their own volition and wherefore. Jefferson M. The Court of Appeals decided that the employment status of seafarers has been established with finality by the Court's reconsideration of its decision in Millares v. Ravago filed a complaint for illegal dismissal with prayer for reinstatement. Rather. he was not entitled to reinstatement or payment of separation pay.. C. After deducting his Social Security System and medical contributions. the Court ruled that seamen and overseas contract workers are not covered by the term "regular employment" as defined in Article 280 of the Labor Code. Issue: Whether or not the Court of Appeals gravely erred. As a Filipino seaman. only those who did not sign for CARP will be given employment by the hacienda. specifically provides that the contract of seamen shall be for a fixed period. instead of rehiring Ravago. hence. Cuenca. In Brent School. one of his attending physicians at the Philippine Orthopedic Hospital. wherein it was ruled that seamen are contractual employees. EIS remitted the net amount of P162. Dr. not regular. and countenanced unwarranted discrimination when it ruled that petitioner cannot become a regular employee. April 15. And in no case should the contract of seamen be longer than 12 months. making him unfit to work once again as a seaman. Marciano Foronda M.D. harvesting and loading of harvested sugarcanes to cargo trucks are those who signed in favor of CARP. 10. the fact that Ravago was not rehired upon the completion of his contract did not result in his illegal dismissal. No.LABOR RELATIONS Atty. Marquez hospitalized at the Philippine Orthopedic Hospital. his services were no longer engaged in view of the disability he suffered which rendered him unfit to work as a seafarer. damages and attorney's fees against Trans-Global and EIS with the Philippine Overseas Employment Administration Adjudication Office. G. National Labor Relations Commission. for his continuous service. weeding. watering. following Ravago's execution of a Deed of Quitclaim and/or Release. fertilization. During the off milling season of 1996 he issued an Order or Notice which stated. v. asserted that he was not a mere contractual employee because the respondents regularly and continuously rehired him for 23 years and. For this reason. Ravago's doctor opined that he would not be able to cope with the job of a seaman and suggested that he be given a desk job. Virginia G. They averred that Ravago was a contractual employee and was hired under 34 separate contracts by different companies. Ruling: In a catena of cases. Ravago insisted that he was fit to resume pre-injury activities as evidenced by the certification issued by Dr. the company physician.65. However. De Vera. the payrolls. De Vera. De Vera filed a complaint for illegal dismissal before the National Labor Relations Commission (NLRC). 2005 Facts: Petitioner Philippine Global Communications. Page 32 . Petitioner Starke alleged that in there was little work in the plantation as it was off-season. For respondents to be excluded from those classified as regular employees. She pointed out that when the milling season began. is a corporation engaged in the business of communication services and allied activities. 1996‖. thru a letter bearing on the subject boldly written as ―TERMINATION – RETAINERSHIP CONTRACT‖. show that they availed the services of the respondents since 1991. The primary standard for 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. While the records sufficiently show that the respondents‘ work in the hacienda was seasonal in nature. including the respondents. alleging that he had been actually employed by Philcom as its company physician since 1981 and was dismissed without due process. and so. 11. therein proposing his plan of works required of a practitioner in industrial medicine. 157214. there was. However. on the rationale that as a ―retained physician‖ under a valid contract mutually agreed upon by the parties. the general rule of regular employment should. Jefferson M. modifying that of the NLRC by deleting the award of traveling allowance.De Vera is Philcom‘s ―regular employee‖ and accordingly directed the company to reinstate him to his former position without loss of seniority rights and privileges and with full backwages from the date of his dismissal until actual reinstatement. 1996‖ because management has decided that it would be more practical to provide medical services to its employees through accredited hospitals near the company premises. The petitioners did not present any evidence that the respondents were required to perform certain phases of agricultural work for a definite period of time. informed De Vera of its decision to discontinue the latter‘s ―retainer‘s contract with the Company effective at the close of business hours of December 31. via a letter offered his services to the petitioner. Philcom then went to the Court of Appeals which rendered a decision. renewal of the contract was only made verbally. stand. He likewise professed that since he was not conversant with labor laws. the farm laborers worked only for a definite period for a farm owner since the area of the land was comparatively small. after which they offer their services to other farm owners. therefore.000. Absent any proof to the contrary. which is 236 hectares. Hence. In fact. however. to include [CERTAIN TASKS]. for the years 1995 and 1996. while respondent Ricardo De Vera is a physician by profession whom petitioner enlisted to attend to the medical needs of its employees. it is not enough that they perform work or services that are seasonal in nature. The parties agreed and formalized respondent‘s proposal in a document denominated as RETAINERSHIP CONTRACT–which will be for a period of one year subject to renewal.R. NLRC does not operate to abandon the settled doctrine that sugar workers are considered regular and permanent farm workers of a sugar plantation owner. In December 1996 Philcom. On 15 May 1981. No. De Vera was an ―independent contractor‖ and that he ―was not dismissed but rather his contract with [PHILCOM] ended when said contract was not renewed after December 31. simply does not allow for the respondents to work for a definite period only. (PhilCom). v. the respondents refused to report back to work. Labor Arbiter dismissed De Vera‘s complaint for lack of merit. they can properly be classified as regular employees. There is no doubt that the respondents were performing work necessary and desirable in the usual trade or business of an employer. Issue: Whether or not the respondents are regular employee? Ruling: It held that the ruling in Mercado. he did not give much attention to the designation as anyway he worked on a full-time basis and was paid a basic monthly salary plus fringe benefits. In this case. Inc. she issued the order giving preference to those who supported the re-classification. on account of the seasonal nature of the work. G. They must have been employed only for the duration of one season. The retainership arrangement went on from 1981 to 1994 with changes in the retainer‘s fee. the area of the hacienda.00 a month. the records do not. Sr. However. and that respondent‘s ―retainer fee‖ will be at P4.LABOR RELATIONS Atty. It bears stressing that the employer has the burden of proving the lawfulness of his employee‘s dismissal. June 7. Said contract was renewed yearly. informing them of the availability of work. Although the petitioners assert that the respondents made their services available to the neighboring haciendas. NLRC reversed on a finding that . In the Mercado case. no proof that they were hired for the duration of one season only. Phil Global Communication v. like any other regular employees of Philcom. He averred that he was designated as a ―company physician on retainer basis‖ for reasons allegedly known only to Philcom. the work was plentiful again and she issued notices to all workers. however. considering that there are facts peculiar in that case which are not present in the case at bar. Marquez Starke. submitted in evidence by the petitioners. support such assertion. For sure. The complainant cannot claim that he was unaware that the ‗contract‘ was good only for one year. respondent need not remit anything to the SSS in favor of the complainant. Either may terminate the arrangement at will. the existence of which is. which thereby negates the element of control in their relationship. the records are replete with evidence showing that –respondent had to bill petitioner for his monthly professional fees. as he signed the same without any objections. Here. He could even embark in the private practice of his profession. and was in fact subjected by petitioner to the ten (10%) percent withholding tax for his professional fee. Nonetheless. Marquez and ordering payment of separation pay to De Vera in lieu of reinstatement. the complainant cannot claim that he does not know what contract he signed and that it was renewed on a year to year basis. The complainant is a Doctor of Medicine. the parties themselves practically agreed on every terms and conditions of respondent‘s engagement. The tenor of this letter indicates that –the complainant was proposing to extend his time with the respondent and seeking additional compensation for said extension. given the reality that the NLRC‘s findings are at odds with those of the labor arbiter. the Court is constrained to look deeper into the attendant circumstances obtaining in this case. This clearly shows that the complainant never considered himself an employee of PHILCOM and thus. The retainer fee is indicated on the RETAINERSHIP CONTRACT. the elements of an employer-employee relationship are wanting in this case. APPLYING THE FOUR-FOLD TEST TO THIS CASE. respondent has never cited even a single instance when petitioner interfered with his work. whereby the employer has reserved the right to control the employee not only as to the result of the work done but also as to the means and methods by which the same is to be accomplished. This shows that the respondent PHILCOM did not have control over the schedule of the complainant as it [is] the complainant who is proposing his own schedule and asking to be paid for the same. a question of fact well within the province of the NLRC. Jefferson M. [AS TO WAGES] from the time he started to work with petitioner.‖ Clearly. Finally. it was respondent himself who sets the parameters of what his duties would be in offering his services to petitioner. An ordinary employee would consider the SSS payments important and thus make sure they would be paid. in itself. The complainant never bothered to ask the respondent to remit his SSS contributions. If he were an employee he could not negotiate as to his hours of work. This is proof that the complainant understood that his relationship with the respondent PHILCOM was a retained physician and not as an employee. and the duration of the contract for one year is also clearly indicated in paragraph 5 of the Retainership Contract. Issue: Whether the case is one of a LEGITIMATE JOB CONTRACTING AGREEMENT or an EMPLOYER-EMPLOYEE RELATIONSHIP. [AS TO DISMISSAL] the power to terminate the parties‘ relationship was mutually vested on both.LABOR RELATIONS Atty. not to mention the fact that respondent‘s work hours and the additional compensation therefor were negotiated upon by the parties. petitioner had no control over the means and methods by which respondent went about performing his work at the company premises. in accordance with the National Internal Revenue Code. The complainant also accepted its renewal every year thereafter until 1994. as borne by no less than his own letter which was substantially the basis of the labor arbiter‘s finding that –there existed no employer-employee relationship between petitioner and respondent in addition to the following factual settings: [AS TO SELECTION OR HIRING] The fact that –the complainant was not considered an employee was recognized by the complainant himself in a signed LETTER to the respondent. a well-educated person. It simply runs against the grain of common experience to imagine that – an ordinary employee has yet to bill his employer to receive his salary. as appearing on record. was never deducted any contribution for remittance to the Social Security System (SSS). and presumably. Ruling: The primordial issue of whether an employer-employee relationship exists between petitioner and respondent. he never was included in its payroll. But he never raised those issues. with or without cause. As a literate person and educated person. Page 33 . In fine. matters which are simply inconsistent with an employer-employee relationship. remarkably absent from the parties‘ arrangement is the ELEMENT OF CONTROL. to stress. The very phrase that they may be engaged ―on retained basis‖. This set-up is precisely true in the case of an INDEPENDENT CONTRACTORSHIP as well as in an AGENCY AGREEMENT. ART. even without being hired as an employee. That. ARTICLE 157 OF THE LABOR CODE clearly and unequivocally allows employers in non-hazardous establishments to engage ―on retained basis‖ the service of a dentist or physician. is usually necessary and desirable because the need for medical attention of employees cannot be foreseen. that execution of the NLRC decision had already been made at the Page 34 . so can petitioner put an end. and this is admitted by both parties. as written. [MOOT AND ACADEMIC] We note. shall be considered a REGULAR with respect to the activity in which he is employed and his employment shall continue while such activity exists. ARTICLE 280 OF THE LABOR CODE. hence.. Marquez ARTICLE 280 OF THE LABOR CODE (sic) provides: ‗The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreements of the parties. any employee who has rendered at least one (1) year of service. Nowhere does the law provide that the physician or dentist so engaged thereby becomes a regular employee. as found by public respondent. it is necessary to have a physician at hand. 157 OF THE LABOR CODE. nothing is there in the law which says that medical practitioners so engaged be actually hired as employees. which requires the presence of a physician depending on the number of employees and in the case at bench. the provision merely distinguishes between two (2) kinds of employees. the very existence of an employment relationship is in dispute. 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 services to be performed is seasonal in nature and the employment is for the duration of the season. As it is. in the case of petitioner. no matter how necessary for the latter‘s business. Be that as it may. as here. For.even as the contracts entered into by the parties invariably provide for a 60-DAY NOTICE REQUIREMENT prior to termination. the record shows. a part-time physician who needed to stay in the premises of the non-hazardous workplace for two (2) hours. 157 OF THE LABOR CODE while it is true that the provision requires employers to engage the services of medical practitioners in certain establishments depending on the number of their employees. the position of company physician. adding that the law. The appellate court‘s premise 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. only requires the employer ―to retain‖. with or without cause. provides that – the employer may engage the services of a physician and dentist ―on retained basis‖.e. in petitioner‘s case. regular and casual. however. Jefferson M. is not the yardstick for determining the existence of an employment relationship. as shown by their various ―retainership contracts‖. subject to such regulations as the Secretary of Labor may prescribe. to their retainership agreement as therein provided. whether such is continuous or broken. petitioner employs more than 500 employees. It does not apply where. the importance and desirability of a physician in a company premises is recognized by ART. i. The successive ―retainership‖ agreements of the parties definitely hue to the very statutory provision relied upon by respondent.‘ Parenthetically. what applies here is the last paragraph of Article 157 which. In fact.‘ ‗An employment shall be deemed to be CASUAL if it is not covered by the preceding paragraph: Provided. revolts against the idea that this engagement gives rise to an employer-employee relationship.LABOR RELATIONS Atty. With the recognition of the fact that –petitioner consistently engaged the services of respondent on a retainer basis. the same was not complied with by petitioner when it terminated the verbally-renewed retainership agreement. we take it that any agreement may provide that – one party shall render services for and in behalf of another. that . not employ. an employment shall be deemed to be REGULAR where the employee has been engaged to perform in the usual business or trade of the employer. NLRC 12 that the principal test in determining whether an employee is a "project employee" or "regular employee. Inc. 1998. and pay him service incentive leave pay. The test to determine whether employment is regular or not is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. v. Here. 2005 Facts: Petitioner is a plumbing contractor. he was informed by the warehouseman that the main office had instructed them to tell him it was his last day of work as he had been terminated. 13 "Project" refers to a particular job or undertaking that is within the regular or usual business of the employer. August 9. When private respondent went to the petitioner's office on February 24. It filed an appeal before the CA but it was subsequently dismissed for lack of merit." is. Jefferson M. the 60-day notice requirement has become moot and academic if not waived by the respondent himself. NLRC we ruled that once a project or work pool employee has been: (1) continuously. Thus. While length of time may not be the controlling test for project employment. and (2) these tasks are vital. the petition is GRANTED and the challenged decision of the Court of Appeals REVERSED and SET ASIDE. we held that where the employment of project employees is extended long after the supposed project has been finished. A review of private respondent's work assignments patently showed he belonged to a work pool tapped from where workers are and assigned whenever their services were needed. Its business depends on the number and frequency of the projects it is able to contract with its clients. They are like regular seasonal workers insofar as the effect of temporary cessation of work is concerned. the Labor Arbiter ruled that private respondent was a regular employee and could only be removed for cause. even if the performance is not continuous or merely intermittent. In Maraguinot. accounts of petitioner had already been garnished and released to respondent despite the previous Status Quo Order[29] issued by this Court. Such job or undertaking begins and ends at determined or determinable times. This arrangement is beneficial to both the employer and employee for it prevents the unjust situation of "coddling labor at the expense of capital" and at the same time enables the workers to attain the status of regular employees. vs. HELD No. re-hired by the same employer for the same tasks or nature of tasks. Jr. he found out that indeed. 1998 to verify his status. necessary and indispensable to the usual business or trade of the employer. the workers do not receive salaries and are free to seek other employment during temporary breaks in the business. Issue: Whether the respondent is a project employee of the petitioner or a regular employee. it is vital in determining if the employee was hired for a specific undertaking or tasked to perform functions vital. Petitioner was ordered to reinstate private respondent to his former position with full backwages from the time his salary was withheld until his actual reinstatement. National Labor Relations Commission and Glen Solon.LABOR RELATIONS Atty. For sure. therefore. On February 23. if the employee has been performing the job for at least one year. He was considered as a regular employee. he had been terminated. The 21 December 1998 decision of the labor arbiter is REINSTATED. and 13th month pay for three years. but which is distinct and separate and identifiable from the undertakings of the company. necessary and indispensable to the usual business or trade of the employer. as opposed to intermittently. We held in Tomas Lao Construction v." the duration (and scope) of which are specified at the time the employee is engaged in the project. 152427. while private respondent was about to log out from work. private Page 35 . whether he is assigned to carry out a "specific project or undertaking. WHEREFORE. if not indispensability of that activity to the business. Also. He filed a complaint alleging that he was illegally dismissed without just cause and without due process. Petitioner further filed a motion for reconsideration which was denied. In a work pool. To all intents and purposes. the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity. Integrated Contractor and Plumbing Works. G. No. the employees are removed from the scope of project employees and are considered regular employees.R. the pattern of re-hiring and the recurring need for his services are sufficient evidence of the necessity and indispensability of such services to petitioner's business or trade. Marquez NLRC despite the pendency of the present recourse. 15 Nonetheless. 12. then the employee must be deemed a regular employee. As a part-time lecturer. (2) the teacher must have rendered three consecutive years of service. The Manual of Regulations for Private Schools. Whether or not the Court of Appeals erred in ruling that it is the Manual of Regulations For Private Schools. petitioner already acquired permanent status. 2. Petitioner could only qualify to become a permanent employee Page 36 . Only when one has served as a full-time teacher can he acquire permanent or regular status. the petitioner was first appointed as full-time instructor on probation. Rulings: 1. 23 In the case at bar. not the Manual of Regulations for Private Schools. Whether or not after completing the three-year probation with an above-average performance. for those teaching in the tertiary level. (2) under Article 280. morals. 1993. 22 Department Order No. the three semesters she served as part-time lecturer could not be credited to her in computing the number of years she has served to qualify her for permanent status. She argues that (1) under Article 281.Petitioner filed a complaint for illegal dismissal with prayer for reinstatement. and moral and exemplary damages. His employment ceased to be coterminous with specific projects when he was repeatedly re-hired due to the demands of petitioner's business. that determines the acquisition of regular or permanent status of faculty members in an educational institution. is the applicable law to determine whether or not an employee in an educational institution has acquired regular or permanent status. December 9. Marquez respondent had been a project employee several times over. Garcia.R. Lacuesta as a part-time lecturer in its English Department for the second semester of school year 1988-1989. Thereafter. Lacuesta vs. the employee shall be considered as regular employee with respect to the activity in which he is employed while such activity exists. 20 requires employers to submit a report of an employee's termination to the nearest public employment office every time his employment was terminated due to a completion of a project. 1992. During these three years she was on probation status. in the same department effective June 1. G. Ateneo de Manila. instructors and teachers shall be subject to the standards established by the Department of Education and Culture. there was only one list of terminated workers submitted to the Department of Labor and Employment. they should be struck down as contrary to public policy. petitioner Lolita R. whether continuous or broken. not the Labor Code. 152777. probationary employment shall not exceed six (6) months from date of employment unless a longer period had been stipulated by an apprenticeship agreement. She contends that Articles 280 and 281 of the Labor Code. 19 superseding Policy Instructions No. And completing the probation period does not automatically qualify her to become a permanent employee of the university. She was again hired for a third year effective April 1. her employment as such had ended when her contract expired. The failure of the employer to file termination reports is an indication that the employee is not a project employee. notified petitioner that her contract would no longer be renewed because she did not integrate well with the English Department. On July 13. Thus. on a contractual basis. 1990 until March 31. good customs or public order. Issues: 1. 20 also expressly provides that the report of termination is one of the indications of project employment. 1991. A part-time teacher cannot acquire permanent status. 20 Where from the circumstances it is apparent that periods have been imposed to preclude the acquisition of tenurial security by the employee. Moreover. 11 issued by the Department of Labor and Employment. if the apprenticeship agreement stipulates a period longer than one year and the employee rendered at least one year of service. Dean of Ateneo‘s Graduate School and College of Arts and Sciences. Policy Instructions No. 24 If private respondent was a project employee. and (3) it is with more reason that petitioner be made regular since she had rendered services as part-time and full-time English teacher for four and a half years. her contract as faculty on probation was renewed effective April 1.‖ Section 93of the 1992 Manual of Regulations for Private Schools provides that full-time teachers who have satisfactorily completed their probationary period shall be considered regular or permanent. Jefferson M. The petitioner was a part-time lecturer before she was appointed as a full-time instructor on probation. the probationary period shall not be more than six consecutive regular semesters of satisfactory service. 13. Under Policy Instructions No. Leovino Ma. No. and not the Labor Code. 1992 until March 31. for the first and second semesters of school year 1989-1990. Respondent Dr. She was re-hired. Further. still on a contractual basis. 2005 Facts: Respondent Ateneo de Manila University (Ateneo) hired. determines whether or not a faculty member in an educational institution has attained regular or permanent status. services which are necessary and desirable to the usual business of Ateneo. 2. 1990.LABOR RELATIONS Atty. 1991 until March 31. ―the probationary employment of professors. or security of tenure. and (3) such service must have been satisfactory. are (1) the teacher is a full-time teacher. back wages.The requisites to acquire permanent employment. petitioner should have submitted a termination report for every completion of a project to which the former was assigned. Such pattern of re-hiring and the recurring need for his services are testament to the necessity and indispensability of such services to petitioners‘ business or trade. and later as Radio Operator. The date July 1 to 31. His work was. He was promoted to Boat Captain but was later demoted to Radio Operator. Poseidon‘s secretary summoned Estoquia to get his separation pay Estoquia filed a complaint for illegal dismissal with the Labor Arbiter. Jimmy S. Issue:S: WON Eustoqia was a regular employee WON deep -sea fishing is a seasonal industry WON Eustoqia was illegally dismissed Ruling: Yes. petitioner detected the error in the entry in the logbook. call after the 7:30 a. there was a provision stating that he was being employed only on a ‗‘por viaje‘‘ basis and that his employment would be terminated at the end of the trip for which he was being hired. No.R. There is nothing in the contract that says complainant is a casual. Eustoquia was a regular employee. NLRC.m. As a Radio Operator.LABOR RELATIONS Atty.At the end of the probation period. entry. 14. The provision enumerates two (2) kinds of employees. therefore. Estoquia was employed as Chief Mate in January 1988 and after five years. Page 37 . When he reviewed the two logbooks. In the morning of 4 July 2000. seasonal or a project worker. Marquez upon fulfilling the reasonable standards for permanent employment as faculty member. 168052. 2006 Facts: Petitioner Poseidon Fishing is a fishing company engaged in the deep-sea fishing industry with Terry de Jesus as the manager. Such being the scenario involved. the decision to re-hire an employee on probation. Consistent with academic freedom and constitutional autonomy. an institution of higher learning has the prerogative to provide standards for its teachers and determine whether these standards have been met. 1998 under the heading "Pagdating" had been placed there merely to indicate the possible date of arrival of the vessel and is not an indication of the status of employment of the crew of the vessel. In the case at bar. Poseidon Fishing/Terry De Jesus v. the act of hiring and re-hiring in various capacities is a mere gambit employed by petitioner to thwart the tenurial protection of private respondent.m. His job was directly related to the deep-sea fishing business of petitioner Poseidon. he monitored the daily activities in their office and recorded in the duty logbook the names of the callers and time of their calls. The regular employees consist of the following: 1) those engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer. Eustoquia worked for petitioner first as a Chief Mate. In a span of 12 years. February 20. Jefferson M. the regular employees and the casual employees. Article 280 draws a line between regular and casual employment. if the employee has been performing the job for at least one year. even if the performance is not continuous or merely intermittent. G. On 3 July 2000. he noticed that he was not able to record the said call in one of the logbooks so he immediately recorded the 7:25 a. then Boat Captain. if not indispensability of that activity to the business. And. and 2) those who have rendered at least one year of service whether such service is continuous or broken. call in one of the logbooks. the activity of catching fish is a continuous process and could hardly be considered as seasonal in nature. the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity. The test to determine whether employment is regular or not is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. Estoquia failed to record a 7:25 a. Estoquia was asked to prepare an incident report to explain the reason for the said oversight. Eustoquia is considered a regular employee.m. belongs to the university as the employer alone. No. Poseidon and Terry de Jesus asserted that Estoquia was a contractual or a casual employee employed only on a"por viaje" or per trip basis and that his employment would be terminated at the end of the trip for which he was being hired. The contract with Eustoqia per the "Kasunduan". necessary and important to the business of his employer. On the same day. 2006 Page 38 . 2006 Facts: Petitioner company was engaged in a construction business where respondents where hired on different dates from 1976 to 1992 either as laborers. In this case. They were not regular employees. re-hired by the same employer for the same tasks or nature of tasks. There is no sufficient evidence on record to prove Eustoqia‘s negligence. LA declared judgment declaring respondents as regular employees belonged to a ―workpool‖ and where hired and rehired over a period of 18 years and petitioners are guilty of illegal dismissal. 154463. Ramirez. The principal test for determining whether particular employees are "project employees" as distinguished from "regular employees. Marquez Project employees is defined as those workers hired: (1) for a specific project or undertaking.R. Petitioner failed to adhere the two-notice rule: (1) a notice informing them of the particular acts for which they are being dismissed and. The complaints included claims for non-payment of 13th month pay. Eustoquia was never informed that he will be assigned to a "specific project or undertaking‖ at the time of their engagement. At best. Petitioner then file petition for review to CA alleging that they were not guilty of illegal dismissal since respondents‘ services were merely put on hold until the resumption of their business operations. G. Issue: Whether or not respondents are project employees or regular employees. Saliling." the duration and scope of which were specified at the time the employees were engaged for that project." is whether or not the "project employees" were assigned to carry out a "specific project or undertaking. vs. His dismissal was without valid cause and where illegal dismissal is proven. Petition is denied. G. Once a project or work pool employee has been: (1) continuously. Eustoqia was illegally dismissed. he was of regular employee. Petitioners inconsistent and conflicting position on their true relation with the respondents made it all the more evident that the latter were indeed their regular employees.LABOR RELATIONS Atty. Yes. the simple negligence is punishable only with admonition or suspension for a day or two. Eustoquia‘s functions were usually necessary or desirable in the usual business or trade of petitioner fishing company and he was hired continuously for 12 years for the same nature of tasks. rest days. necessary and indispensable to the usual business or trade of the employer. 16. who would enjoy security of tenure and entitlement of separation pay. the worker is entitled to back wages and other similar benefits without deductions or conditions. Respondents were never given such notices. and (2) these tasks are vital. Petitioner appealed to NLRC which affirmed LA‘s decision. Cebu Metal Corp. and (2) the completion or termination of such project has been determined at the time of the engagement of the employee.R. Petitioners alleged that respondents were only project employees whose employment was coterminous with the project they are assigned. Abesco Construction vs. then the employee must be deemed a regular employee. Duration as well as particular work/service to be performed must be defined in an Employment Agreement and is made clear to the employees at the time of hiring. as opposed to intermittently. 5-days‘ service incentive leave pay. gross or simple. road roller operators. No. Respondents filed two separate complaints for illegal dismissal against the company and its General Manager before Labor Arbiter. premium pay for holidays. Ruling: Respondents are regular employees. in the performance of his duties to warrant a reduction of six months salary and be summarily dismissed.. CA dismissed the petition for petitioner is barred from raising a new defense at this stage of the case. 141168. (2) a notice advising them of the decision to terminate the employment. painters or drivers. Jefferson M. and moral and exemplary damages. September 5. No. Hence. April 10. Petitioners failed to comply with this requirement. 15. On March 6. such as availability of supplies. The Bacolod buying station is mainly a stockyard where scrap metal delivered by its suppliers are stockpiled. They were then free to offer their services to others. a scaler. The order of the reversal was based on the Commission‘s finding that the petty cash vouchers submitted by Cebu Metal Corporation confirmed the fact that unloaders were paid on ―pakiao‖ or task basis at Php 15. whose salaries are paid directly by its main office in Cebu. petitioner's employment was terminated on 30 October 1999. Sometimes. they could not have been illegally dismissed. The complainants challenged the decision of the NLRC with the Court of Appeals. Ruling: The Supreme Court ruled there can be no illegal dismissal to speak of. respondent complainants were not always the ones contracted to undertake the unloading of the trucks since the work was offered to whomever were available at a given time. he was told to look for another job.. RBL Shipyard Corp. They are hired whenever there are trucks of suppliers do not have any accompanying truck boys. on the one hand. holiday pay. Manuel Alquiza. It is for this reason that the unloaders hired by the respondent to unload are basically seasonal workers. respondent insisted that petitioner was a mere project employee who was terminated upon completion of the project for which he was hired. These trucks have their own driver and truck boys employed by the different suppliers. Page 39 . Usually. the corporation hires the services of people for the unloading of the scrap metal from these trucks. And. October 17. an existing jurisprudence. It is this leader who distributes the individual takes of each member of the particular group unloading the scrap metal from a particular work The complainants maintained that they are hired by Cebu Metal Corparation as employees and filed on January 10. Jefferson M. There are weeks were there are no delivery while there are weeks were a quite of number of trucks are delivered to the stockyard. On the same occasion. This is confirmed in the Petty Cash Vouchers which are in the names of different leaders who are apportion the amount earned among its members. Marquez Facts: Cebu Metal Corporation is a corporation engaged in buying and selling of scrap iron. The arrivals of these trucks and the deliveries of scrap metal iron are not regular and the schedules of deliveries to the stockyard are not known before hand by the respondent Cebu Metal Corporation. Such event prompted petitioner to file a complaint for illegal dismissal. alleging that on said date he was verbally informed that he was already terminated from employment and barred from entering the premises. price. quite telling is the fact that not every truck delivery of scrap metal requires the services of respondent complainants when particular truck is accompanied by its own unloader. on the other. Besides. the complainants cannot claim regularity in the hiring every time a truck comes loaded with scrap metal. and in these instances. Elias Bolido.00 per metric ton. the applicable law. No. these trucks do not have any truck boys. 2006 Facts: After working as a carpenter for respondent since August 1991. G. Benjie Amparado are the one who undertakes pakiao work in the unloading of scrap iron. The complainants.LABOR RELATIONS Atty. it necessarily follows that after the job of unloading was completed and unloaders are paid the contract price. Hence. competition and demand among others. 1998 includes the claim for illegal dismissal because they were dismissed after the filing of the complaint. this petition. nevertheless mandates the policy of social justice so as to strike a balance between an avowed predilection for labor. and it rendered the decision annulling the decision of the NLRC and reinstated the decision made by the Labor Arbiter. Indeed we should not be mindful of the legal norm that justice is in every case for the deserving. In the Bacolod branch it has (3) regular employees holding such positions as Officer-in-Charge. service incentive leave pay. The Labor Arbiter rendered a decision in favor of the complainants. On the other hand. 17. The supply of scrap metal is not steady as it depends upon many factors. and the maintenance of the legal rights of capital. while inexorably committed towards the protection of the working class from exploitation and unfair treatment. It should be remembered that the Philippine Constitution. Issue: Whether or not the complainant respondents are regular employees. The Commission further rationalized that with the irregular nature of the work involved in the stoppage and resumption of which depended solely on the availability or supply of scrap metal. 13th month pay. 2. the proverbial hen that lays the golden egg. Whoever is available and whoever are willing to help unload on a particular occasion are hired to unload. And whenever required. and a yardman. Liganza v. there is a leader for a particular group who is tasked to unload the scrap metal from a particular truck. he claimed that he was unceremoniously terminated from employment without any valid or authorized cause.R. The NLRC reversed and set aside the decision of the Labor Arbiter and held that the complainants were not regular employees. to be dispensed with in the light of established facts. 3. thus. 1997 a complaint with the regional arbitration in Bacolod City for underpayment of wages and non-payment of the following benefits 1. Aggrieved. the latter‘s working relationship with Cebu Metal Corporation legally ended. Gregorio Saliling. Cebu Metal Corporation filed an appeal with the NLRC. Thus. 159682. in line with the policy of the law to afford protection to labor and construe doubts in favor of labor. Nevertheless. spanning six (6) years of the total eight (8) years of his employment. or that he was terminated for just cause. respondent had been a project employee several times over. they should be struck down as contrary to public policy." Before an employee hired on a per project basis can be dismissed. it is vital in determining if the employee was hired for a specific undertaking or tasked to perform functions vital. without granting that petitioner was initially hired for specific projects or undertakings. Respondent could have easily proved that the project or phase for which petitioner was hired has already been completed. there are serious doubts in the evidence on record that petitioner is a project employee. petitioner's work was necessary or desirable to respondent's business.LABOR RELATIONS Atty. flooring. However. While it is true that the employment contract states that the contract ends upon a specific date. respondent failed to prove that the last project was indeed completed so as to justify petitioner's termination from employment. Consunji. pursuant to Article 280 of the Labor Code and jurisprudence. NLRC27 which reiterates the rule that the length of service of a project employee is not the controlling test of employment tenure but whether or not "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. 20. of the work accomplished. length of time is not the controlling test for project employment. good customs or public order.M. His employment ceased to be coterminous with specific projects when he was repeatedly re-hired due to the demands of petitioner's business. respondent claims that the records and contracts covering said period were destroyed by rains and flashfloods that hit the company's office. To explain its failure in this regard. Where from the circumstances it is apparent that periods have been imposed to preclude the acquisition of tenurial security by the employee. the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. In the case at bar. Respondent capitalizes on our ruling in D. quarters." Surely. doors. Jefferson M. and other proof of completion could have been procured by respondent. Page 40 . all that we have is respondent's self-serving assertion that the project has been completed. In the instant case. a report must be made to the nearest employment office of the termination of the services of the workers every time it completed a project. kitchen and other parts of the vessel that needs to be repaired. rehired by the same employer for the same tasks or nature of tasks. Assuming. then the employee must be deemed a regular employee. the existence of such contract is not always conclusive of the nature of one's employment. ceiling. pictures perhaps. the Court ruled that "once a project or work pool employee has been: (1) continuously. as carpenter. Jr. Whether or not the Court of Appeals seriously erred in concluding that "petitioner is a project employee. as opposed to intermittently. the repeated re-hiring and continuing need for his services for over eight (8) years have undeniably made him a regular employee." As such. A certificate from the owner of the vessel serviced by the company. pursuant to Policy Instruction No. In Maraguinot. v. Such contention is clearly unconvincing." Petitioner. While the appropriate evidence to show that a person is a project employee is the employment contract specifying the project and the duration of such project. morals. the burden of proof rests on the employer to show that the dismissal is for a just cause. This Court has held that an employment ceases to be co-terminous with specific projects when the employee is continuously rehired due to the demands of employer's business and re-engaged for many more projects without interruption. In termination cases. Marquez Issue: 1. not a regular employee? Ruling: Petitioner is a regular employee. v. or upon completion of the project. and (2) these tasks are vital. Even assuming that petitioner is a project employee. windows. Respondent failed to present the contracts purportedly covering petitioner's employment from 1991 to July 1997. Inc. necessary and indispensable to the usual business or trade of the employer. was tasked to "make and repair cabinet. These doubts shall be resolved in favor of petitioner. NLRC (Second Division). respondent failed to prove that his termination was for a just and valid cause. A project employee is one whose "employment has been fixed for a specific project or undertaking. necessary and indispensable to the usual business or trade of the employer. All considered. respondent seeks to prove the status of petitioner's employment through four (4) employment contracts covering a period of only two (2) years to declare petitioner as a project employee. Marquez WHEREFORE. The Decision of the Labor Arbiter was affirmed on appeal by the NLRC. thus giving rise to the need for temporary employees. as well as de Lara and Alovera. Supreme Court held that under the above-quoted provision. and (2) those casual employees who have rendered at least one year of service. and the members of the regular Route Crew then existing were required to undergo a training program to determine whether they possessed or could be trained for the necessary attitude and aptitude required of an Accounts Specialist. NLRC. 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 services to be performed is seasonal in nature and the employment is for the duration of the season. Jefferson M. whether continuous or broken. Page 41 . Inc. duress or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent. 18. 2007 Facts: Petitioners were hired by respondent San Miguel Corporation (SMC) as "Relief Salesmen" for the Greater Manila Area (GMA) under separate but almost similarly worded "Contracts of Employment With Fixed Period. namely: (1) those who are engaged to perform activities which are necessary or desirable in the usual business or trade of the employer.R. the petition is GRANTED and the challenged decision of the Court of Appeals is REVERSED and SET ASIDE. G. the services of petitioners. 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. Court of Appeals reversed the decision of the Labor Arbiter and of the NLRC Issue: WON the termination of the petitioners is valid. Regular and casual employment. there are two kinds of regular employees. Fabeza v. It should have no application to instances where a fixed period of employment was agreed upon knowingly and voluntarily by the parties. – The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties. While some of the qualified regular salesmen were readily upgraded to the position of Accounts Specialist. In Brent School. Zamora. the Supreme Court laid out that Article 280 of the Labor Code appears to prevent circumvention of the employee‘s right to be secure in his tenure. co-terminus with the completion of the transition period and Training Program for all prospective Accounts Specialists The petitioners alleged that they were illegally dismissed by SMC. respondents claimed that SMC still had to sell its beer products using the conventional routing system during the transition stage. as the same was merely occasioned by the need to fill in a vacuum arising from SMC‘s gradual transition to a new system of selling and delivering its products. the hiring of petitioners and others for a fixed period. The Labor Arbiter held petitioners were illegally dismissed. 150658. 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. SMC and its co-respondent Arman Hicarte. v. with respect to the activity in which they are employed. v. were terminated after SMC no longer agreed to forge another contract with them. No. 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. 280. February 9. hence. San Miguel Corp. The 22 February 2001 Decision of the Labor Arbiter is REINSTATED. without any force." After having entered into successive contracts of the same nature with SMC. who was its Human Resources Manager. Ruling: Article 280 of the Labor Code defines regular employment as follows: ART. claimed that the hiring of petitioners was not intended to be permanent.. In Pure Foods Corp.LABOR RELATIONS Atty. SO ORDERED. Article 283 of the Labor Code provides that an employer may dismiss from work an employee by reason of redundancy.R. He was also a training instructor of Switchmen in the respondent‘s office. which is not in the nature of a project employment. It is evident from the foregoing facts that respondent PLDT‘s utilization of high technology equipment in its operation such as computers and digital switches necessarily resulted in the reduction of the demand for the services of a Switchman since computers and digital switches can aptly perform the function of several Switchmen. was elevated to the position of Frameman. a determination of whether petitioners were hired as project or seasonal employees. Apostol. If petitioners fall under any of these categories. or as fixed-term employees without any force. Moreover. on the other hand. System (Filisystem) Facts: Petitioner and certain individuals namely Sergio Benjamin (Benjamin). such hiring was intended solely for winding up operations using the old system. 2007 Page 42 . In fact. No. 20. 165594. Gonzales. In November 1995. The same provision also states the procedural requirements for the validity of the dismissal. the petitioner‘s contention that he should be the last switchman to be laid-off by reason of his qualifications and outstanding work must fail. respondents have not established that the engagement of petitioners‘ services. and Noel Apostol (Apostol) were employed by the respondent as Switchman Helpers in its Tondo Exchange Office (TEO). then indeed their termination follows from the expiration of their contracts. The NLRC had sufficient basis to believe that the shift of SMC to the Pre-Selling System was not the real basis for the forging of fixed-term contracts of employment with petitioners and that the periods were fixed only as a means to preclude petitioners from acquiring security of tenure. 159343. The records show that respondent PLDT had sufficiently established the existence of redundancy in the position of Switchman. Hence. citing 2005 Filipina Pre-fabricated Bldg. NLRC. et al. the respondent PLDT gave separate letters dated 15 July 1996 to petitioner. As to whether Lazam was competent to testify on the effects of respondent PLDT‘s adoption of new technology vis-à-vis the petitioner‘s position of Switchman. He is a licensed electrical engineer and has been employed by the respondent PLDT since 1971. Marquez Since respondents attribute the termination of petitioners‘ employment to the expiration of their respective contracts. After participating in several trainings and seminars. Ruling: The Labor Arbiter. respondent PLDT implemented a company-wide redundancy program. September 28. the sustained desire of each of the petitioners to enter into another employment contract upon the termination of the earlier ones clearly indicates their interest in continuing to work for SMC. Subsequently. G. 19. As amply stated by the respondent PLDT. and Gonzales were promoted as Switchmen. and the Court of Appeals all found that substantial evidence supports the absence of illegal dismissal in the present case. petitioner. Since the respondent PLDT determined that petitioner‘s services are no longer necessary either as a Switchman or in any other position.. the NLRC. the records show that Lazam was highly qualified to do so. and had attended multiple training programs on Electronic Switching Systems in progressive countries. One of their duties as Switchmen and Frameman was the manual operation and maintenance of the Electronic Mechanical Device (EMD) of the TEO. Jefferson M. 2007. Soriano vs. on 16 August 1996.LABOR RELATIONS Atty. Caseres vs. Maximino Gonzales (Gonzales). the position of Switchman has become redundant. He was a Senior Manager for Switching Division in several offices of the respondent PLDT. G.. No. The fact that respondent PLDT hired contractual employees after implementing its redundancy program does not necessarily negate the existence of redundancy. April 23. duress or improper pressure having been exerted against them is in order. It is clear that the foregoing documentary evidence constituted substantial evidence to support the findings of Labor Arbiter Lustria and the NLRC that petitioner‘s employment was terminated by respondent PLDT due to a valid or legal redundancy program since substantial evidence merely refers to that amount of evidence which a reasonable mind might accept as adequate to support a conclusion. and Apostol informing them that their respective positions were deemed redundant due to the above-cited reasons and that their services will be terminated on 16 August 1996. Universal Robina Sugar Milling Corp. Benjamin. the petition is DENIED.10 They requested the respondent PLDT for transfer to some vacant positions but their requests were denied since all positions were already filled up. WHEREFORE.R. respondent PLDT dismissed the four from employment. Benjamin. Indubitably. and such determination was made in good faith and in furtherance of its business interest. required a definite date of termination as a sine qua non. That petitioners themselves insisted on the one-year fixed-term is not even alleged by respondents. LABOR RELATIONS Atty. The very nature of the terms and conditions of complainants' hiring reveals that they were required to perform phases of special projects for a definite period after. Jefferson M. while Andito Pael (petitioner Pael) in 1993. Regular and Casual Employees. Marquez Facts: Universal Robina Sugar Milling Corporation (respondent) is a corporation engaged in the cane sugar milling business. 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. Caseres re-applied with respondent as a seasonal project worker assisting in the general underchassis reconditioning to transport units on July 17. A project employee is one whose employment has been fixed for a specific project or undertaking. the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. Petitioners contend that respondent's repeated hiring of their services qualifies them to the status of regular employees. any employee who has rendered at least one year of service. the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season‖. Petitioners filed a complaint for illegal dismissal. (b) project employees or those ―whose employment has been fixed for a specific project or undertaking. after which their services are available to any farm owner. Pedy Caseres (petitioner Caseres) started working for respondent in 1989. Issue: Whether or not the petitioners are seasonal/project/term employees and not regular employees of respondents Ruling: Article 280 of the Labor Code provides: ART. This is so because the planting of sugar does not entail a whole year operation. Petitioners' contracts were renewed from time to time. 1989. Caseres was interviewed and made to understand that his employment would be co-terminus with the phase of work to which he would be then assigned. whether such service is continuous or broken. the completion or termination of which has been determined at the time of the engagement of the employee. would clearly reveal that the very nature of the terms and conditions of their hiring would show that complainants were required to perform phases of special projects which are not related to the main operation of the respondent for a definite period. Finally. 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 services to be performed is seasonal in nature and the employment is for the duration of the season. their services are available to other farm owners. regularization. 280. Caseres was made to understand that his services would be co-terminus with the work to which he Page 43 . agreeing with the LA. x x x it is clear that the contracts of employment are valid and binding on the complainants. At the start of their respective employments. and utility works are comparatively small during the off-milling season. After an absence of more than five (5) months. We note that complainants never bothered to deny that they voluntarily. That. further ruled that: In the case at bar. On this score. knowingly and willfully executed the contracts of employment. damages and attorney‘s fees. – The provision of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties. Upon application. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided. 1989 and thereafter he would be free to seek employment elsewhere. The principal test for determining whether an employee is a project employee or a regular employee is whether the employment has been fixed for a specific project or undertaking. A true project employee should be assigned to a project which begins and ends at determined or determinable times. The NLRC. incentive leave pay. until May 1999 when they were informed that their contracts will not be renewed anymore. the LA ruled: This is further buttressed by the fact that the relationship between complainants and the respondent URSUMCO. The foregoing provision provides for three kinds of employees: (a) regular employees or those who have been ―engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer‖. and be informed thereof at the time of hiring. the CA noted: Petitioner Pedy Caseres first applied with private respondent URSUMCO on January 9. Like his first assignment. Neither was there any showing that respondents exercised moral dominance on the complainants. 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. 13th month pay. The execution of these contracts in the case at bar is necessitated by the peculiar nature of the work in the sugar industry which has an off milling season. Caseres agreed and signed the contract of employment for specific project or undertaking. and (c) casual employees or those who are neither regular nor project employees. 1989 as a worker assisting the crane operator at the transloading station. that is until February 5. they were made to sign a Contract of Employment for Specific Project or Undertaking. the proviso in Article 280. Consequently. It must be noted that there were intervals in petitioners' respective employment contracts. It should be stressed that contracts for project employment are valid under the law. With regard to petitioner Pael. under the law. of necessity. but whether the employment has been fixed for a specific project or undertaking. and such successive employments were not continuous. NLRC. while his employment lasted from August 1989 to May 1999. petitioners were Page 44 . Petitioners' repeated and successive re-employment on the basis of a contract of employment for more than one year cannot and does not make them regular employees.R. Length of service is not the controlling determinant of the employment tenure of a project employee (Rada vs. as length of service is not the controlling determinant of the employment tenure of a project employee. 1989 to July 20. Moreover. this fact alone is not a valid reason for bestowing special treatment on them or for invalidating a contract of employment.5 days On 15 April 2000. it would be extremely burdensome for their employer to retain them as permanent employees and pay them wages even if there were no projects to work on. By virtue of a Decision dated 9 January 2001 of the Court of Appeals. and since their work depended on the availability of such contracts or projects. However. petitioners cannot complain of illegal dismissal inasmuch as the completion of the contract or phase thereof for which they have been engaged automatically terminates their employment. Neither is the employee left helpless by a prejudicial employment contract. The facts show that respondent rendered actual services to PASSI during the following periods: Period Duration September . After all.LABOR RELATIONS Atty. the Philippine Ports Authority (PPA) seized the facilities and took over the operations of PASSI through its Special Takeover Unit. September 28.5 days January . absorbing PASSI workers as well as their relievers. even if petitioners were repeatedly and successively re-hired. G. 173849. his employment never lasted for more than a month at a time. the duration of his employment ranged from one day to several months at a time. Respondent Jeff B. These support the conclusion that they were indeed project employees. and that thereafter. the interest of the worker is paramount. vs Boclot. As ruled in Palomares v. necessarily the employment of respondent‘s work force was not permanent but co-terminous with the projects to which they were assigned and from whose payrolls they were paid. While it may be true that it is the employer who drafts project employment contracts with its business interest as overriding consideration. Petitioner Eliodoro C. the employment of URSUMCO's work force was not permanent but co-terminous with the projects to which the employees were assigned and from whose payrolls they were paid (Palomares vs. The employer‘s interest is equally important as that of the employee‘s for theirs is the interest that propels economic activity. Inc.December 2001 (10 months) 85 days January . 1989 and that thereafter he is free to seek employment elsewhere to which Caseres agreed and readily signed the contract of employment for specific project or undertaking issued to him. pertains to casual employees and not to project employees. 277 SCRA 439). and that their work depended on the availability of such contracts or projects.December 2002 (12 months) 70.[16] the Court stated that: by entering into such contract. Pier 8 Arrastre & Stevedoring Services. In petitioner Caseres's case. stating that an employee who has rendered service for at least one (1) year shall be considered a regular employee. such contracts do not. The nature and terms and conditions of employment of petitioner Andito Pael were the same as that of his co-petitioner Caseres. The fact that petitioners were constantly re-hired does not ipso facto establish that they became regular employees. Caseres' services were co-terminus with the work to which he was assigned. 205 SCRA 69). Cruz is its Vice-President and General Manager.June 2003 (6 months) 32 days Total 36 months 228. an employee is deemed to understand that his employment is coterminous with the project. Further. Marquez would be then assigned that is from July 17. Project employment contracts are not lopsided agreements in favor of only one party thereto. Accordingly. National Labor Relations Commission. In Villa v. NLRC. (PASSI) is a domestic corporation engaged in the business of providing arrastre and stevedoring services[5] at Pier 8 in the Manila North Harbor. its completion has been determined at the time of the engagement of the employee. still it did not qualify them as regular employees. Boclot was hired by PASSI to perform the functions of a stevedore starting 20 September 1999. he was free to seek employment with other sugar millers or elsewhere. Inc. Their respective contracts with respondent show that there were intervals in their employment. 2007 Facts: Petitioner Pier 8 Arrastre and Stevedoring Services. prejudice the employee. Thereafter Caseres voluntarily signed several other employment contracts for various undertakings with a determinable period. as a rule. It is of judicial notice that project employees engaged for manual services or those for special skills like those of carpenters or masons. PASSI has been rendering arrastre and stevedoring services at the port area since 1974 and employs stevedores who assist in the loading and unloading of cargoes to and from the vessels. As in the first contract. National Labor Relations Commission. Jefferson M.April 2000 (4 months) 20 days March . are. unschooled. No.December 1999 (4 months) 21 days January . 21. He may not expect to be employed continuously beyond the completion of the project. Respondent alleged that he was hired by PASSI in October 1999 and was issued company ID No. but only with respect to such activity and while such activity exists. nor is there any showing. that he was disallowed or prevented from offering his services to other cargo handlers in the other piers at the North Harbor other than petitioners. As aforestated. Petitioners aver that the employment of the stevedores is governed by a system of rotation. Petitioners concede that whenever respondent worked as a reliever stevedore due to the absence of a regular stevedore. Petitioners presented a list of the days when respondent’s services as stevedore were engaged. moral. serving as a stevedore. 304. vacation and sick leaves. and attorney’s fees. all regular employees are first called and given work before any reliever is assigned. For the same reasons. warehouses. but are not limited to. National Labor Relations Commission succinctly explains the delineation of the foregoing employee classification. he remained a casual employee from the time he was first hired to perform the services of a stevedore. petitioners hire stevedores who assist in the loading and unloading of cargoes to and from the vessels. petitioners maintain that the foregoing provisions are inapplicable on the postulation that respondent is neither a probationary nor a casual employee. In fact. he performed tasks that are usually necessary and desirable to their business. In the instant petition. accident insurance. as a reliever stevedore. he should be deemed a regular employee having rendered at least one year of service with the company. the employment is also considered regular. or roughly an average of 6. dock and arrastre operations include. postulating that the hiring of respondent as a reliever is akin to a situation in which a worker goes on vacation leave. petitioners are vehemently denying that respondent has become PASSI regular employee. However. discharging of cargoes from ship to truck or dock. respondent claimed he was denied the rights and privileges of a regular employee. on the other hand. depending on the absences of the regular stevedores. this Court again refers to Article 280 of the Labor Code. He maintains that under paragraph 2 of Article 280.5 days in 36 months.34 days a month) from September 1999 to June 2003. medical. if the employee has been performing the job for at least one year. In defense of the Court of Appeals ruling grounded on Articles 280 and 281 of the Labor Code. and the employer is constrained to hire another worker from outside the establishment to ensure the smooth flow of its operations. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. the work available to reliever stevedores is dependent on the actual stevedoring and arrastre requirements at a current given time. (Emphasis supplied.) PASSI is engaged in providing stevedoring and arrastre services in the port area in Manila. however. He argued on the basis of Articles 280[9] and 281 of the Labor Code. sick leave. Hence. therefore. special separation pays. respondent does not contest that he was well aware that he would only be given work when there are absent or unavailable employees. In line with this. payment of service incentive leave and 13th month pays. including those granted under the Collective Bargaining Agreement (CBA) such as wage increase. it should be deemed part of the nature of his work that he can only work as a stevedore in the absence of the employee regularly employed for the very same function. Petitioners. 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. Anent petitioners‘ contention that respondent is neither a probationary nor a casual employee. and vice-versa. thus. claiming regularization.5 days (or only for an average of 6. Petitioners insist that respondent was hired as a mere stevedore and. while a regular stevedore working for petitioners. dental and hospitalization benefits. since it was his sixth continuous month in service in PASSI’s regular course of business. Moreover. renders service for an average of 16 days a month. Marquez able to regain control of their arrastre and stevedoring operations at Pier 8 on 12 March 2001. petitioners argue that Article XXV of the CBA cannot be used to support respondents‘ contention that he is a regular employee since the CBA provision he invokes refers to all incumbent probationary or casual employees and workers in the company and not to respondent who is neither a casual nor a probationary employee.LABOR RELATIONS Atty. No doubt. demonstrates that respondents employment is subject to the availability of work. 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. is a mere extra worker whose work is dependent on the absence of regular stevedores during any given shift. and others. could not become a regular stevedore. Stevedoring. During rotation proper as petitioners term it. Petitioners posit that respondent. Based on the circumstances of the instant case. The second paragraph thereof stipulates in unequivocal terms that all other employees who do not fall under the definitions in the first Page 45 . contend that this in itself does not make him a regular stevedore. Respondent also does not allege. Christmas gifts. 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. and other related work. productivity bonus. Ruling: De Leon v. Jefferson M. uniforms. the opening and closing of a vessel’s hatches. It takes judicial notice that it is an industry practice in port services to hire reliever stevedores in order to ensure smooth-flowing 24-hour stevedoring and arrastre operations in the port area. lighters and barges. to support its claim that respondent is a reliever. respondent performs tasks necessary or desirable to the usual business of petitioners. a PPA Pass and SSS documents. Petitioners assert that while the regular stevedores work an average of 4 days a week (or 16 days a month). Based on this system of rotation. exemplary and actual damages. even if the performance is not continuous or merely intermittent. Bearing in mind that respondent performed services from September 1999 until June 2003 for a period of only 228. albeit on a daily basis. respondent contended that he became a regular employee by April 2000. the situation of respondent is akin to that of a seasonal or project or term employee. this Court agrees. movement of cargoes inside vessels. Also. On 9 May 2003. terminals and docks. maternity leave or paternity leave. Thus. respondent performed services for a total of 228.34 days a month. respondent filed a Complaint with the Labor Arbiter of the NLRC. to wit: The primary standard. According to respondent. however.5 days does not fall under the classification of a casual turned regular employee after rendering at least one year of service. even if the performance is not continuous or merely intermittent. unless the working days in the establishment as a matter of practice or policy. and its offices. 1995 Page 46 . 1988 January 30. The probationary period for all future workers or employees shall be the following: (a) All skilled workers such as crane operator.R. 1995 February 20. respondent. 157966. Jefferson M. Inc. carpenter. David Reblora. Coca-Cola Bottlers Phils. It is clearly stipulated therein that petitioners shall agree to convert to regular status all incumbent probationary or casual employees and workers in PASSI who have served PASSI for an accumulated service term of employment of not less than six months from the original date of hiring.. Petitioners were crucified on this argument raised by respondent. 1992 September 15. project and seasonal employees. Pacquing Roderick Centeno Juanito M. Jr. Guerra. or that provided in the employment contract. The union which negotiated the existing CBA is the sole and exclusive bargaining representative of all the stevedores. culling from Article II of the CBA which stipulates: The Union and the Company (PASSI) hereby agree to adopt the Union Shop as a condition of employment to the position (sic) covered by this Agreement. NONETHELESS. are deemed casual employees. an employee is required to become a union member after a certain period. the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity. May 9. 1985 June 16. of that activity to the business of the employer. whether continuous or broken. In light of the foregoing. The same provision. whether continuous or intermittent. provides that a casual employee can be considered as regular employee if said casual employee has rendered at least one year of service regardless of the fact that such service may be continuous or broken. If the employee has been performing the job for at least one year. G. although nonmembers may be hired.R. 22. Pacquing vs. in which case said period shall be considered one year. dock workers. petitioners must accord respondent the status of a regular employee.[36] The same article of the CBA stipulates that employment in PASSI cannot be obtained without prior membership in the union. Respondent assents that he is not a member of the union. in order to retain employment. including authorized absences and paid regular holidays.LABOR RELATIONS Atty. (b) All semi-skilled personnel shall become regular after four (4) months of continuous employment.5 days. 1995 December 15. G. Juanito M. 148492. Guerra Claro Dupilad. (c) All non-skilled personnel shall be regular after six (6) months continuous employment. National Organization of Workingmen. Under a union-shop agreement. Rule V. if not indispensability.. Louie Centeno.. which was effective from 4 March 1998 to 3 March 2003: The Company agrees to convert to regular status all incumbent probationary or casual employees and workers in the Company who have served the Company for an accumulated service term of employment of not less than six (6) months from his original date of hiring. mechanic. signalman and checkers shall become regular after three (3) months continuous employment. Having rendered 228. Apropos. with the length of employment as follows: Name Date Hired Date Dismissed Eddie P. gang bosses.[25] Not qualifying under any of the kinds of employees covered by the first paragraph of Article 280 of the Labor Code. then respondent is entitled to regularization by virtue of the said CBA provisions. Inc. David R. but this Court notes that PASSI adopts a union-shop agreement. rank and file employees working at Pier 8. Reblora June 14. Claro Dupilad. Book II of the Implementing Rules and Regulations of the Labor Code clearly defines the term at least one year of service to mean service within 12 months. January 31. 2008. The NLRC ruled that respondents‘ reliance on the CBA to show that he has become a regular employee is misplaced for the reason that the CBA applies only to regular workers of the company. applying the foregoing provisions of the CBA. 1980 March 1. reckoned from the date the employee started working. No. 1987 November 15. who has performed actual stevedoring services for petitioners only for an accumulated period of 228. This requirement applies to present and future employees. Roderick Centeno. citing Magsalin vs. as he was not recognized by PASSI as its regular employee. Jr. Applying the foregoing.. respondent should be considered a regular employee after six months of accumulated service. 2003 Facts: Eddie Pacquing. or eight months of service to petitioners since 1999. Raymundo Andrade (petitioners) were sales route helpers or cargadores-pahinantes of Coca-Cola Bottlers Philippines. 1995 June 30. is less than 12 months. (respondent). 1988 January 15. Section 3. No. winchman. this Court still finds respondent to be a regular employee on the basis of pertinent provisions under the CBA between PASSI and its Workers union. Marquez paragraph of regular. then respondent is a casual employee under the second paragraph of the same provision. 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. The pernicious practice of having employees. to be hired on a day-to-day basis.. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided. sales offices. Any obvious Page 47 . vs.. and attorney's fees. although the work to be performed is only for a specific project or seasonal. In determining whether an employment should be considered regular or non-regular. In its Position Paper. when hired. and company premises.LABOR RELATIONS Atty. however.. the applicable test is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer.has upheld the legality of a fixed-term employment. for every delivery truck. supplied by the law itself. the law deems the repeated and continuing need for its performance as being sufficient to indicate the necessity or desirability of that activity to the business or trade of the employer. shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. 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 services to be performed is seasonal in nature and the employment is for the duration of the season. Inc. On October 22. While this Court. would go with route salesmen on board delivery trucks and undertake the laborious task of loading and unloading softdrink products of Petitioner Company to its various delivery points. to ensure a regular workers‘ security of tenure. Respondent workers. Regular and Casual Employment. Even while the language of law might have been more definitive. 1996. They worked exclusively at respondent's plants.― one which is not indispensable in the manufacture of its products. the clarity of its spirit and intent. That. If. Respondent workers have long been in the service of petitioner company. public order and public policy. as so argued by petitioner company. morals. a fact that can be assessed by looking into the nature of the services rendered and its relation to the general scheme under which the business or trade is pursued in the usual course. 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. Marquez Louie Centeno Raymundo Andrade September 15. scarcely can be persuasive. respondent denied liability to petitioners and countered that petitioners were temporary workers who were engaged for a five-month period to act as substitutes for an absent regular employee. can hardly be doubted. Inc. moral and exemplary damages. It is distinguished from a specific undertaking that is divorced from the normal activities required in carrying on the particular business or trade. Its pertinent provisions read: Art. i. however. 1995 Petitioners were part of a complement of three personnel comprised of a driver. Coca-Cola Bottlers Phils. 1988 March 15. recovery of benefits under the Collective Bargaining Agreement (CBA). thus: The basic law on the case is Article 280 of the Labor Code. it has done so. Zamora. Jefferson M. The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties.e. engaged for a fixed period of few months. But. 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. The 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 “post production activities. The Court of Appeals has found each of respondents to have worked for at least one year with petitioner company. short of the normal six-month probationary period of employment. whether such service is continuous or broken. thereafter. Issue: What is their status as employees? Ruling: The pivotal question of whether respondent's sales route helpers or cargadores or pahinantes are regular workers of respondent has already been resolved in Magsalin v. petitioners filed a Complaint against respondent for unfair labor practice and illegal dismissal with claims for regularization. 1996 October 15. any employee who has rendered at least one year of service. is whether the work undertaken is necessary or desirable in the usual business or trade of the employer. The employment of such person is also then deemed to be regular with respect to such activity and while such activity exists. there would have then been no need for it to even maintain regular truck sales route helpers. workers and laborers. then it should be struck down as being contrary to law. 280. 1988 January 15. is one of the leading and largest manufacturers of softdrinks in the country. good customs. 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. In their Position Paper. a salesman and a regular route helper. The standard. in Brent School. and. where a person thus engaged has been performing the job for at least one year. petitioners alleged that they should be declared regular employees of respondent since the nature of their work as cargadores-pahinantes was necessary or desirable to respondent's usual business and was directly related to respondent's business and trade. mocks the law. National Organization of Working Men. 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. even if the performance is not continuous or is merely intermittent. the Front Desk Officer/Sales Manager. subsequently visited respondent foreman Visca and informed him that the work suspension was due to budgetary constraints. as instructed. Johnny G. Page 48 . Tibus. Visa Foreman Johnny G. informed them not to report for work since the ongoing constructions and repairs would be temporarily suspended because they caused irritation and annoyance to the resort's guests.LABOR RELATIONS Atty. Aklan. VI of the National Labor Relations Commission (NLRC) in Kalibo. 23. that there was no illegal dismissal but completion of projects. The NLRC held that respondents were regular employees of petitioners since all the factors determinative of employer-employee relationship were present and the work done by respondents was clearly related to petitioners' resort business. In addition to reinstatement with payment of full backwages. In their consolidated Position Paper respondents alleged that they were regular employees of petitioners. with designations and dates of employment as follows: Name Designation Date Employed Federico F. and cost-of-living allowance. demonstrate nothing more than the serious problem of impoverishment of so many of our people and the resulting unevenness between labor and capital. petitioners denied any employer-employee relationship with respondents and countered that respondent Visca was an independent contractor who was called upon from time to time when some repairs in the resort facilities were needed and the other respondents were selected and hired by him. 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. 1987 April 23. 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. Hence. 13th month pay. 1993 Maria Nida Iñigo-Tañala. 1996 April 1998 March 27. Richard G. August 29. they did not report for work the succeeding days. (c) respondents were paid their holiday and overtime pay. Visca. John Munro. Barredo. and (d) respondents had been continuously in petitioners' employ from three to twelve years and were all paid by daily wage given weekly. G. plus moral and exemplary damages and attorney's fees. service incentive leave pay. Petitioners then filed a Motion for Reconsideration. they filed their individual complaints for illegal dismissal. Barredo Carpenter Ronald Q. Tibus Mason Richard G. NLRC: set aside the Decision of the LA and ordering the payment to respondents of backwages. Labor Arbiter: dismissed the complaint. arguing that respondents were project employees. Cocomangas Hotel Beach Resort v. In their Position Paper. When respondent Visca later discovered that four new workers were hired to do respondents' tasks. holding that respondent Visca was an independent contractor and the other respondents were hired by him to help him with his contracted works at the resort. Jefferson M. (b) all of the respondents were certified to by petitioner Munro as workers and even commended for their satisfactory performance. in addition to 10% attorney's fees. Visca Mason/Carpenter tasked with the maintenance and repair of the resort facilities. respondents prayed for payment of premium pay for rest day. Visca (Visca). Susan Munro (petitioners) before Sub-Regional Arbitration Branch No. husband of petitioner Susan Munro. not regular employees. Ronald Q. A contract of employment is impressed with public interest. It took into account the following: (a) respondent Visca was reported by petitioners as an employee in the Quarterly Social Security System (SSS) report. The provisions of applicable statutes are deemed written into the contract. he confronted petitioner Munro who explained that respondents' resumption of work was not possible due to budgetary constraints. No.R. Marquez circumvention of the law cannot be countenanced. Visca (respondents) against Cocomangas Hotel Beach Resort and/or its owner-manager. 13th month pay and service incentive leave pay for three years. 2008 Facts: The present controversy stemmed from five individual complaints for illegal dismissal filed on by Federico F. that respondents were project workers. Visca Carpenter Raffie G. October 1. 167045. 1993 November 9. Visca and Raffie G. petitioners classified respondent Visca as an independent contractor and the other respondents as his employees. at the least. respondents were regular seasonal employees. since they worked continuously for petitioners from three to twelve years without any mention of a "project" to which they were specifically assigned. Ruling: Respondents are regular employees and not project employees." "carpenter" and "mason. specific periods when the employment relationship would be terminated. he will not be permitted to change his theory on appeal. While they had designations as "foreman. Department Order No. Further. not project employees. essentially invoking the termination of the period of their employer-employee relationship." they performed work other than carpentry or masonry. in that petitioners not only gave respondents the run-around but also blatantly hired others to take respondents' place despite their claim that the so-called temporary stoppage of work was due to budgetary constraints. Jefferson M. 19. At any rate. While initially advancing the absence of an employer-employee relationship. respondents cannot be classified as project employees. the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. holding that respondents were not regular employees but project employees. while in their Motion for Reconsideration before the NLRC. petitioners on appeal. 20. In the present case. that the repeated hiring of respondents established that the services rendered by them were necessary and desirable to petitioners' resort business. sang a different tune. the NLRC made a complete turnabout from its original decision and issued a Resolution dismissing the complaint. Issue: Whether respondents are regular employees or project employees." Before an employee hired on a per-project basis can be dismissed. since their termination was attended by bad faith. To permit a party to change his theory on appeal will be unfair to the adverse party. They were tasked with the maintenance and repair of the furniture.00 as damages.LABOR RELATIONS Atty. of the termination of the services of the workers every time completes a project. a report must be made to the nearest employment office. The NLRC should not have considered the new theory offered by the petitioners in their Motion for Reconsideration. the former failed to set. Marquez NLRC (Motion for Reconsideration): Acting upon the petitioners‘ motion.00 to each complainant as financial assistance. The petitioners were ambivalent in categorizing respondents. the Court finds that the CA did not err in finding that respondents were regular employees. In addition. the CA awarded respondents P50. so to speak. 20. It is a matter of law that when a party adopts a particular theory and the case is tried and decided upon that theory in the court below. hired depending on the tourist season and when the need arose in maintaining petitioners' resort for the benefit of guests. it ordered payment of P10. The Court is not persuaded by petitioners' submission that respondents' services are not necessary or desirable to the usual trade or business of Page 49 . hired for a short period of time to do some repair jobs in petitioners' resort business. even once. Nonetheless. as well as the old Policy Instructions No. There is likewise no evidence of the project employment contracts covering respondents' alleged periods of employment. CA: The CA held respondents were regular employees. A project employee is one whose "employment has been fixed for a specific project or undertaking. More importantly. cottages. This Court has held that an employment ceases to be coterminous with specific projects when the employee is continuously rehired due to the demands of employer's business and re-engaged for many more projects without interruption. pursuant to Policy Instruction No. since in the years that petitioners repeatedly hired respondents' services. not project workers. petitioners' position in their Motion for Reconsideration before the NLRC runs contrary to their earlier submission in their Position Paper before the LA. motor boats. there is no evidence that petitioners reported the termination of respondents' supposed project employment to the DOLE as project employees. In their Position Paper filed before the LA.000. Petitioners' failure to file termination reports is an indication that the respondents were not project employees but regular employees. after a careful examination of the records. requires employers to submit a report of an employee's termination to the nearest public employment office every time his employment is terminated due to a completion of a project. petitioners treated respondents as project employees.000. and windbreakers and other resort facilities. if not indispensability. Stephanie G. insofar as accrued backwages and other benefits are concerned. Petitioners Cherry J.. Article 279 of the Labor Code. Price. the termination of which was predetermined. The parties executed an employment contract denominated as a Contract of Employment for a Fixed Period. Domingo. Jefferson M. Respondent INNODATA appealed the Labor Arbiters Decision to the NLRC. as opposed to intermittently. No. the Court ruled that "once a project or work pool employee has been: (1) continuously. Being regular employees. On 22 May 2000. The backwages due respondents must be computed from the time they were unjustly dismissed until actual reinstatement to their former positions. Petitioners finally argued that they could not be considered project employees considering that their employment was not coterminous with any project or undertaking. The Court notes that the NLRC. at the end of the close of business hours onFebruary 16. 2000. 16. 1999 to FEB. the HRAD Manager of INNODATA wrote petitioners informing them of their last day of work. 2008 Facts: INNODATA had since ceased operations due to business losses in June 2002. inclusive of allowances. and their services may not be terminated except for causes provided by law. in its earlier Decision which was affirmed by the CA. then the employee must be deemed a regular employee. v Innodata Phils. Jr.. Marquez the resort. as amended. its obligation to respondents. of their services to petitioners' resort business. On 16 February 2000. until petitioners implement the reinstatement aspect. substantial evidence supported the CA finding that respondents were regular employees. 178505. Thus. (c) petty cash vouchers showing payment of respondents' salaries and holiday and overtime pays. Issues: Whether petitioners were illegally dismissed by respondents Whether petitioners were hired by INNODATA under valid fixed-term employment contracts Ruling: Page 50 . The NLRC reversed the Labor Arbiters Decision dated 17 October 2000. petitioners employment already ceased due to the end of their contract. rehired by the same employer for the same tasks or nature of tasks. 24. Thus. petitioners filed a Complaint for illegal dismissal and damages against respondents. this petition. On 25 September 2006. The repeated and continuing need for their services is sufficient evidence of the necessity.R. full backwages.‖ That respondents were regular employees is further bolstered by the following evidence: (a) the SSS Quarterly Summary of Contribution Payments listing respondents as employees of petitioners. et al. stipulating that the contract shall be effective from FEB. Petitioners claimed that they should be considered regular employees since their positions as formatters were necessary and desirable to the usual business of INNODATA as an encoding. necessary and indispensable to the usual business or trade of the employer. and absolved INNODATA of the charge of illegal dismissal. 2002 only. 16. and (2) these tasks are vital. and Lolita Arbilera were employed as formatters by INNODATA. continues to accumulate. The Labor Arbiter issued its Decision finding petitioners complaint for illegal dismissal and damages meritorious. Price. provides that an illegally dismissed employee shall be entitled to reinstatement. for their employment was terminated due to the expiration of their terms of employment. National Labor Relations Commission. the Court of Appeals promulgated its Decision sustaining the ruling of the NLRC that petitioners were not illegally dismissed. It is evident that respondents' backwages should not be limited to said period. 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. September 30. v. pursuant to Article 280 of the Labor Code and jurisprudence. Respondents asserted that petitioners were not illegally dismissed. (b) the Service Record Certificates stating that respondents were employees of petitioners for periods ranging from three to twelve years and all have given "very satisfactory performance".LABOR RELATIONS Atty. Hence. 1999 to July 31. G. According to INNODATA. computed the award for backwages from May 8. conversion and data processing company. In Maraguinot. 2000 a period of ONE YEAR. they were entitled to security of tenure. the Court identified several circumstances wherein a fixed-term is an essential and natural appurtenance. the concept of regular employment with all that it implies does not appear ever to have been applied. Based on the afore-quoted provision.LABOR RELATIONS Atty. also appointments to the positions of dean. and the formatting of the data entered into the computers is an essential part of the process of data encoding. because the stockholders or the board of directors for one reason or another did not reelect them. While this Court has recognized the validity of fixed-term employment contracts. The decisive determinant in term employment is the day certain agreed upon by the parties for the commencement and termination of their employment relationship. 280. where not expressly set down. and where fixed terms are a necessity without which no reasonable rotation would be possible. Article 280 of the Labor Code notwithstanding. 8 of the Minister of Labor implicitly recognize that certain company officials may be elected for what would amount to fixed periods. to which. Equally important to consider is that a contract of employment is impressed with public interest such that labor contracts must yield to the common good. and (2) those who were initially hired as casual employees. a day certain being understood to be that which must necessarily come. Similarly. Policy Instructions No. Under the Civil Code. Regular and Casual Employment. which are by practice or tradition rotated among the faculty members. Formatting organizes the data encoded. the work performed by petitioners was necessary or desirable in the business or trade of INNODATA. to wit: Some familiar examples may be cited of employment contracts which may be neither for seasonal work nor for specific projects. assistant dean. the following employees are accorded regular status: (1) those who are engaged to perform activities which are necessary or desirable in the usual business or trade of the employer. it has consistently held that this is the exception rather than the general rule. regardless of the length of their employment. In the case at bar. but to which a fixed term is an essential and natural appurtenance: overseas employment contracts. 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. whether such service is continuous or broken. However. (Underscoring ours). as well as the circumstances surrounding petitioners employment at INNODATA." After considering petitioners contracts in their entirety. the Court Page 51 . as they are under the present Labor Code. at the expiration of which they would have to stand down. Under Article 280 of the Labor Code. Undoubtedly. as amended. any employee who has rendered at least one year of service. In Brent. The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties. Provided. which reads: Art. to those by nature seasonal or for specific projects with predetermined dates of completion. whatever the nature of the engagement. shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. college secretary. Jefferson M. Marquez The Court finds merit in the present Petition. 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. etc. the applicable test to determine whether an employment should be considered regular or non-regular is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. Seasonal employment and employment for a particular project are instances of employment in which a period. making it easier to understand for the clients and/or the intended end users thereof. petitioners belong to the first type of regular employees. principal. whether continuous or broken. The primary business of INNODATA is data encoding. but have rendered at least one year of service. The employment status of a person is defined and prescribed by law and not by what the parties say it should be. executive vice-president or vice president. petitioners were employed by INNODATA on 17 February 1999 as formatters. fixed-term employment contracts are not limited. despite the provisions of Article 280. More importantly. they also include those to which the parties by free choice have assigned a specific date of termination. provisions of applicable statutes are deemed written into the contract. in providing that these officials. these do not necessarily result in regular employment under Article 280 of the Labor Code. An employment shall be deemed to be casual if it is not covered by the preceding paragraph. it is also true that while certain forms of employment require the performance of usual or desirable functions and exceed one year. for one. is necessarily implied. although it may not be known when. 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 engagement of the employee or where the work or services to be performed is seasonal in nature and employment is for the duration of the season. "x x may lose their jobs as president. Regular employment has been defined by Article 280 of the Labor Code. Thus. and other administrative offices in educational institutions. with respect to the activity in which they are employed. Undeniably. That. a fixed-term employment is valid only under certain circumstances. There were no valid fixed-term contracts and petitioners were regular employees of the INNODATA who could not be dismissed except for just or authorized cause. the very same case invoked by respondents. They were both allegedly required to work eight hours a day and sometimes on Sundays. there is also a dearth of evidence that such project or undertaking had already been completed or terminated to justify the dismissal of petitioners. however. The contracts of employment submitted by respondents are highly suspect for not only being ambiguous.They later on admitted in their Memorandum filed with this Court that petitioners were originally hired on 16 February 1999 but the project for which they were employed was completed before the expiration of one year. Scrutinizing petitioners employment contracts with INNODATA. cralaIn all. October 10. Although the contracts made general references to a project. LA ruled that there was illegal dismissal. This contention is specious and devoid of merit. but continuously worked for a series of projects for various clients of INNODATA. The Petition for Review on Certiorari is GRANTED. The only reason the Court can discern from such a move on respondents part is so that they can preclude petitioners from acquiring regular status based on their employment for one year. was merely crossed out and replaced with 6 September 1999. 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. In fact. The conclusion by the Court of Appeals that petitioners were hired for the Earthweb project is not supported by any evidence on record. Page 52 . the original beginning date of effectivity. Cagampang. petitioners alleged . Obviously. In the words of Article 279 of the Labor Code: ART. If the contracts took effect only on 6 September 1999. inclusive of allowances. the total period of their employment becomes irrelevant. They prayed for payment of backwages. More importantly. 1999. 16 February 1999. The one-year period for which petitioners were hired was simply fixed in the employment contracts without reference or connection to the period required for the completion of a project. Thus. 1990. are entitled to security of tenure. under an employment contract which was for a period not exceeding three months. on January 11. 1998 and July 30. being regular employees of INNODATA. NLRC reversed the LA‘s decision. salary differential. the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title.00. 279. resulting in their loss of employment. respondents insistence that it can legally dismiss petitioners on the ground that their term of employment has expired is untenable. G. petitioners. the said contracts eventually expired on April 31. However. then its period of effectivity would obviously be less than one year. In cases of regular employment. respondents filed an illegal dismissal case against petitioners before the LA. Security of Tenure. Nonetheless. 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. getting a daily salary of P122. Marquez is convinced that the terms fixed therein were meant only to circumvent petitioners right to security of tenure and are. which was necessary in the business or trade of INNODATA. 2008 Facts: Respondents Joel Cagampang and Glenn Garzon started working as linemen for petitioner Agusan del Norte Electric Cooperative. 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. After several renewals of their job contracts in the form of job orders for similar employment periods of about three months each. therefore. While respondents submitted employment contracts with 6 September 1999 as beginning date of effectivity. INNODATA contends that petitioners were project employees whose employment ceased at the end of a specific project or undertaking.Hence. service incentive leave. Petitioners were merely rehired on 6 September 1999 for a new project. (ANECO) on October 1. 2001. To reiterate. it is obvious that in one of them. the Court emphasizes that it has already found that petitioners should be considered regular employees of INNODATA by the nature of the work they performed as formatters. Under Section 3. premium for alleged work during holidays and rest days.LABOR RELATIONS Atty. CA however set aside NLRC‘s decision. invalid.and respondents failed to dispute that petitioners did not work on just one project. The contracts themselves state that they would be effective until 16 February 2000 for a period of one year. When the contract expired. Further attempting to exonerate itself from any liability for illegal dismissal. Jefferson M.R. but also for appearing to be tampered with. or for a period of only about five months. No. This was exactly the purpose of the legislators in drafting Article 280 of the Labor Code to prevent the circumvention by unscrupulous employers of the employees 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. failed to reveal any mention therein of what specific project or undertaking petitioners were hired for. Agusan del Norte Electric Cooperative v. 25. the two were laid-off for one to five days and then ordered to report back to work but on the basis of job orders. Such modification and denial by respondents as to the real beginning date of petitioners employment contracts render the said contracts ambiguous. Respondents' contracts were no longer renewed. Inc. Article XVI of the Constitution. 167627. and separation pay. allowances. respondents wanted to make it appear that petitioners worked for INNODATA for a period of less than one year. such project was neither named nor described at all therein. GR No. the employees are removed from the scope of project employees and are considered regular employees. without justifiable reason. Ruling: SC denied the petition. Also. including respondent Trinidad. dump truck. As held in Integrated Contractor and Plumbing Works. the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity. Marquez Issue: WON Cagampang and Garzon are regular employees/workers of the petitioner. we held that where the employment of project employees is extended long after the supposed project has been finished. however.gov. For this reason. dismissing respondent Trinidad‘s complaint Page 53 . al vs. The weakness of the employee's defense should not operate to relieve nor discharge the employer of its burden to prove its charges pursuant to the guaranty of tenure granted by the Constitution to employees under the Labor Code. Inc. he had to execute an employment contract with it. Employer is burdened to prove just cause for terminating the employment of its employee with clear and convincing evidence. Petitioner company stressed that employment intervals or gaps were inherent in the construction business. William Uy Construction et. and transit mixer. ANECO as the employer had the burden of proof to show that the respondents' termination was for a just cause. necessary and indispensable to the usual business or trade of the employer. whose employments had to be co-terminous with the completion of specific company projects. 183250. His employment ceased to be coterminous with specific projects when he was repeatedly re-hired due to the demands of petitioner's business. v. Their dismissals were patently illegal.judiciary. Where from the circumstances it is apparent that periods have been imposed to preclude the acquisition of tenurial security by the employee. to renew respondents' work contracts for the performance of what would otherwise be regular jobs in relation to the trade or business of the former. There is no dispute that the respondents' work as linemen was necessary or desirable in the usual business of ANECO.LABOR RELATIONS Atty. In compliance with labor rules. 2010 Facts: Respondent Jorge R. Thus. Additionally. the respondents have been performing the job for at least one year. they should be struck down as contrary to public policy. Trinidad claimed that he had been working with the latter company for 16 years since 1988 as driver of its service vehicle. He learned later. He had signed several employment contracts with the company that identified him as a project employee although he had always been assigned to work on one project after another with some intervals. The Labor Arbiter rendered a decision. By the nature of such business. the company submitted an establishment termination report to the Department of Labor and Employment (DOLE). Trinidad. [13]Such conduct dismally falls short of the requirements of our labor laws regarding dismissals. It held that respondents Cagampang and Garzon are deemed regular workers. Petitioner company counteredhttp://sc. 26. The case of the employer must stand or fall on its own merits. Jefferson M.ph/jurisprudence/2010/march2010/183250. however. Respondent Trinidad further alleged that petitioner company terminated him from work after it shut down operations because of lack of projects. it is vital in determining if the employee was hired for a specific undertaking or tasked to perform functions vital. While length of time may not be the controlling test for project employment. it had to hire and engage the services of project construction workers. March 10. that although it opened up a project in Batangas. Trinidad filed a complaint for illegal dismissal and unpaid benefits against petitioner William Uy Construction Corporation. The law deems the repeated and continuing need for its performance as sufficient evidence of the necessity. if the employee has been performing the job for at least one year. [12] Respondents in the present case being regular employees. Unfortunately. it did not hire him back for that project. Here. No twin notices of termination were issued to the employees.htm . morals. National Labor Relations Commission: [11] The test to determine whether employment is regular or not is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. and as such were illegally dismissed. private respondent had been a project employee several times over. what petitioners did was merely to refuse._ftn1 that it was in the construction business. good customs or public order. of that activity to the business. even if the performance is not continuous or merely intermittent. if not indispensability of that activity to the business. every time the company employed Trinidad. hence the employer did not observe due process in dismissing them from their employment. if not indispensability. called Appointment as Project Worker. The Labor Arbiter rendered a decision declaring the dismissal of the complainant-employees as ILLEGAL and the complainants are entitled to reinstatement without back wages.gov.LABOR RELATIONS Atty. however. Intervals or gaps separated one contract from another. They also averred that they were not provided with sick and vacation leaves.http://sc. But this standard will not be fair. L. Petitioners.htm . Respondents denied that petitioners were illegally dismissed from employment. if applied to the construction industry. Dacuital vs.http://sc.500.ph/jurisprudence/2010/march2010/183250. There is no construction company that does not wish it has such control but the reality. length of service provides a fair yardstick for determining when an employee initially hired on a temporary basis becomes a permanent one. since Trinidad was a project employee and since his company submitted the appropriate establishment termination report to DOLE._ftn6 He remained a project employee regardless of the number of years and the various projects he worked for the company. His employment history belies the claim that he continuously worked for the company. The Labor Arbiter. service incentive leave pay.http://sc. his loss of work cannot be regarded as unjust dismissal.judiciary. before the National Labor Relations Commission (NLRC).00 in unpaid service incentive leave.M._ftn9 Petitioner company needed only to show the last status of Trinidad‘s employment.htm . and REINSTATES the decision of the National Labor Relations Commission which affirmed the decision of the Labor Arbiter. simply because construction firms cannot guarantee work and funding for its payrolls beyond the life of each project.gov. both the Labor Arbiter and the NLRC were satisfied that the fact of petitioner company‘s compliance with DOLE Order 19 had been proved in this case.ph/jurisprudence/2010/march2010/183250. they maintained that they were part of a work pool from which LMCEC drew its workers for its various projects. Camus Engineering Corp. countered that they were regular employees as they had been engaged to perform activities which are usually necessary or desirable in the usual business or trade of LMCEC.ph/jurisprudence/2010/march2010/183250. They denied that they were project or contractual employees because their employment was continuous and uninterrupted for more than one (1) year.htm . that of a project employee under a contract that had ended and the company‘s compliance with the reporting requirement for the termination of that employment. however. 2010 Facts: Petitioners (LMCEC Employees) filed a complaint for illegal dismissal and non-payment of monetary benefits against respondent LM Camus Engineering Corp. Construction companies have no control over the decisions and resources of project proponents or owners. The NLRC modified the decision of the Labor Arbiter and ordered the reinstatement of the complainants with Page 54 . Issue: Whether or not petitioner company‘s repeated rehiring of respondent Trinidad over several years as project employee for its various projects automatically entitled him to the status of a regular employee.ph/jurisprudence/2010/march2010/183250. rest day.R. ordered petitioner company to pay Trinidad P1. And getting projects is not a matter of course.judiciary. namely. They clarified that the termination of petitioners‘ employment was due to the completion of the projects for which they were hired.‖ with the duration and scope of his engagement specified at the time his service is contracted. They claimed that petitioners were project employees and.htm . Indeed.http://sc. and 13th month pay during the existence and duration of their employment.G. No.htm . entitled to the security and benefits of regularization. His employment contract simply ended with the project for which he had signed up. Ruling: The test for distinguishing a ―project employee‖ from a ―regular employee‖ is whether or not he has been assigned to carry out a ―specific project or undertaking. understood by construction workers.gov.gov. the Court GRANTS the petition. Trinidad‘s employment ended with it. 176748. When its Boni Serrano-Katipunan Interchange Project was finished. 27. taking into consideration the three-year prescriptive period for money claims. they were served notices of project completion. September 1._ftn2 The Labor Arbiter held that. Respondent Trinidad‘s series of employments with petitioner company were co-terminous with its projects.. Marquez for unjust dismissal.judiciary. WHEREFORE. The employees alleged that they were illegally dismissed from employment and that their employer failed to pay them their holiday pay.http://sc. Finally.judiciary. is that work depended on decisions and developments over which construction companies have no say.gov. Jefferson M. He was not dismissed. it is not disputed that petitioner company contracted respondent Trinidad‘s service by specific projects with the duration of his work clearly set out in his employment contracts.ph/jurisprudence/2010/march2010/183250._ftn7 Generally. premium pay for holiday. upon the completion of each project._ftn5 Here.judiciary. No. 184362. Regular and casual employment. In fact. in contrast. the Dismissal of the petitioners are declared ILLEGAL. Hence. He was assigned to different construction projects undertaken by petitioner in Metro Manila. 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 services to be performed is seasonal in nature and the employment is for the duration of the season. the contract does not show that he was informed of the nature." As the Court has consistently held. Regular employees. contending that respondent's motion for reconsideration which it treated as an appeal was not perfected.—The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties. the duration or scope of which was specified at the time the employees were engaged for that project. vs.. the last of which was for a building in Libis. Said all DOLE requirements were complied. Jefferson M. G. Marquez limited backwages. where no other evidence was offered. it having been belatedly filed. Arguments: MEC Respondent was a project employee whom it hired for a building project in Libis on January 30 and which was in near completion on August 3. and that it lacked verification and copies thereof were not furnished the adverse parties RULING: 1. prompting him to file on August 6. that there was no statement of the date of receipt of the appealed decision.xxx The principal test used to determine whether employees are project employees is whether or not the employees were assigned to carry out a specific project or undertaking. 28. 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. the service of project employees are coterminus [sic] with the project and may be terminated upon the end or completion of that project or project phase for which they were hired. as well as the duration of his employment. 2004 an illegal dismissal complaint 1 before the Labor Arbiter. Quezon City. The respondents appealed the decision to the Court of Appeals and the appellate court held that the complainants are PROJECT EMPLOYEES and hence. when services were terminated. Petitioner moved for reconsideration of the NLRC decision.. and Kenneth Construction Corporation. ISSUE: Whether or not the Court of Appeals is correct in concluding that the petitioners are PROJECT EMPLOYEES and that their dismissal from employment was legal RULING: The Supreme Court speaking through Justice Nachura answered in the NEGATIVE.R. such a contract is evidence that petitioners were informed of the duration and scope of their work and their status as project employees.LABOR RELATIONS Atty. enjoy security of tenure and are entitled to Page 55 . 2010 Facts: Respondent Virgilio Magallanes started working in 1988 as a utility man for Laurencito Tiu (Tiu). A project employee is one whose "employment has been fixed for a specific project or undertaking. 2004. the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. Tiu's family. While it is true that respondents presented the employment contract of Dacuital. there was no illegal dismissal. the duration of the project for which he was allegedly hired was not specified in the contract. Millenium Erectors Corp. In July of 2004 he was told not to report for work anymore allegedly due to old age. Chief Executive Officer of Millennium Erectors Corporation (petitioner). Magallanes. Article 280 of the Labor Code distinguishes a "project employee" from a "regular employee" in this wise: Article 280. In this case. the absence of the employment contracts raises a serious question of whether the employees were properly informed at the onset of their employment of their status as project employees. Even though the absence of a written contract does not by itself grant regular status to petitioners. November 15. Issue: Whether or not Magallanes‘ dismissal violates security of tenure. Ferdinand. As regards Gregorio. 2000. much less illegal. In the furtherance of its business. a cursory examination of the records reveal no illegal dismissal to speak of.LABOR RELATIONS Atty. as shown by the sample payrolls converted his status to that of a regular employee 2. It is a settled rule that mere absence or failure to report for work is not enough to amount to abandonment of work. February 23. 13th month pay and night-shift differential pay. Issues: WON respondents were illegally dismissed for abandonment of work WON they are regular employees. respondents could not name the particular person who effected their dismissal and under what particular circumstances. 2011 Facts: Exodus International Construction Corporation obtained a contract from Dutch Boy Philippines. there was no evidence that respondents were dismissed nor were they prevented from returning to their work. the petition is DENIED. It was only respondents' unsubstantiated conclusion that they were dismissed. Absent any showing of an overt or positive act proving that petitioners had dismissed respondents. two elements must concur: the employee must have failed to report for work or must have been absent without valid or justifiable reason and there must have been a clear intention on the part of the employee to sever the employer-employee relationship manifested by some overt act. Since then they no longer reported for work. The Labor Arbiter exonerated Exodus from the charge of illegal dismissal as respondents chose not to report for work. respondents were ordered be reinstated but without any backwages. he never reported back to work. GUILLERMO BISCOCHO et. The Labor Arbiter is also correct in ruling that there was no abandonment on the part of respondents that would justify their dismissal from their employment. the application of technical rules of procedure may be relaxed. and there was also no abandonment of job to speak of. Taguig City. As to the defective verification in the appeal memorandum before the NLRC. thus entitled to reinstatement Ruling: (1) No. and Miguel were caught eating during working hours for which they were reprimanded by their foreman.R. Where the ends of substantial justice shall be better served. In labor cases. Manila. the same liberality applies. for the painting of the Imperial Sky Garden located in Binondo. the requirement regarding verification of a pleading is formal. Since then. After all. No. not jurisdictional. Fernando. WHEREFORE. Petitioners denied respondents' allegations. the latters' claim of illegal dismissal cannot be sustained. As a matter of fact. 29. To constitute abandonment of work. his continued rehiring. On November 27. service incentive leave pay.G. Towers in Fort Bonifacio. Inc. Marquez hold on to their work or position until their services are terminated by any of the modes recognized under the Labor Code. respondents filed a complaint for illegal dismissal and non-payment of holiday pay. rules of procedure should not be applied in a very rigid and technical sense. Guillermo absented himself from work without leave. petitioners averred that he absented himself from work and applied as a painter with SAEI-EEI which is the general building contractor of Pacific Plaza Towers. Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. Exodus hired respondents as painters on different dates. There was no dismissal. (emphasis and underscoring supplied) Assuming arguendo that petitioner hired respondent initially on a per project basis. EXODUS INTERNATIONAL CONSTRUCTION CORPORATION vs. Dutch Boy awarded another contract to Exodus for the painting of Pacific Plaza. When he reported for work the following day. Indeed. Page 56 . he was reprimanded so he worked only halfday and thereafter was unheard of until the filing of the instant complaint. Since there is neither illegal dismissal nor abandonment of job. al. Technicalities should not be permitted to stand in the way of equitably and completely resolving the rights and obligations of the parties. 166109. Jefferson M. As found by the Labor Arbiter. There was no employment agreement given to respondents which clearly spelled out the duration of their employment. 2011 Facts: [Respondent Philippine National Oil Corporation]-Energy Development Corporation [PNOC-EDC] is a government-owned and controlled corporation engaged in exploration. is impossible. Majority of the employees hired by [respondent] in its Leyte Geothermal Power Projects had become members of petitioner." On the same day. their positions automatically ceased to exist.. the parties were directed to cease and desist from committing any act that would exacerbate the situation. Declaration of Loss of Employment and Damages at the NLRC-RAB VIII in Tacloban City and at the same time. and 13th month pay. assuming that respondents were initially hired as project employees. However. condominium and commercial buildings. the remedy is reinstatement but without backwages. respondents are entitled to be reinstated without loss of seniority rights. G. The evidence on record shows that respondents were employed and assigned continuously to the various projects of petitioners. On December 28. Laguesma intervened and issued the Order. Consequently. 1998. 1999. The said Project is composed of the Tongonan 1 Geothermal Project (T1GP) and the Leyte Geothermal Production Field Project (LGPF) which provide the power and electricity needed not only in the provinces and cities of Central and Eastern Visayas (Region VII and VIII). the petitioner did not abide by [the] assumption order issued by the Secretary of Labor. the [respondent] did not heed such demands of the petitioner. a project employee may acquire the status of a regular employee. the [respondent] proceeded to serve Notices of Termination of Employment upon the employees who are members of the petitioner. However. Jefferson M. filed a Petition for Cancellation of Petitioner's Certificate of Registration with DOLE. the [respondent] hired and employed hundreds of employees on a contractual basis. the petitioner filed a Notice of Strike with DOLE against the [respondent] on the ground of purported commission by the latter of unfair labor practice for "refusal to bargain collectively. there were no more positions where they can be reinstated as painters. Regional Office No.R. It is now too late for petitioners to claim that respondents are project employees whose employment is coterminous with each project or phase of the project to which they are assigned. However. Phil National Oil Co. but also in the island of Luzon as well. the specific work to be performed and that such is made clear to them at the time of hiring. the petitioner declared a strike and staged such strike. 30. Consequently. whereby. having completed their tasks. Accordingly. who are engaged in subcontracting jobs for painting of residential units. Leyte Geothermal Power Progressive Employees Union v. Petitioners posit that the reinstatement of respondents to their former positions. March 30. To avert any work stoppage." It is therefore incumbent upon petitioners to ascertain the respondents' interest or non-interest in the continuance of their employment. The consolidated case was docketed as NLRC Certified Case No. Nonetheless. respondents were automatically transferred to the next project awarded to petitioners. Further. (2) Respondents are regular employees of petitioners. highly unfair and unjust. As painters. In cases where there is no evidence of dismissal. petitioners failed to do so. all the striking workers were directed to return to work within twelve (12) hours from receipt of the Order and for the [respondent] to accept them back under the same terms and conditions of employment prior to the strike. In effect. generation and distribution of energy resources like geothermal energy. dated January 4. In view of that circumstance. However. Respondents are also entitled to their money claims such as the payment of holiday pay. utilization. they performed activities which were necessary and desirable in the usual business of petitioners. on January 15. which were no longer existing. service incentive leave pay. As regular employees. The two cases were later on consolidated pursuant to the New NLRC Rules of Procedure. No. union busting and mass termination. Sometime in 1998 when the project was about to be completed. VIII. then Secretary of Labor Bienvenido E. V- Page 57 . Tacloban City. the [respondent] filed a Complaint for Strike Illegality. their employment was only good up to the completion or termination of the project and would automatically expire upon the completion of such project. they cannot be entitled to backwages. 1999. despite earnest efforts on the part of the Secretary of Labor and Employment to settle the dispute amicably. duly registered with the Department of Labor and Employment (DOLE) Regional Office No. certifying the labor dispute to the NLRC for compulsory arbitration. The project was already completed by petitioners. Petitioner is a legitimate labor organization. causing the failure of the negotiation towards a peaceful compromise. Marquez It is the employer who has the burden of proof to show a deliberate and unjustified refusal of the employee to resume his employment without any intention of returning.LABOR RELATIONS Atty. VIII. 176351. It is clear from the records that when one project is completed. Among [respondent's] geothermal projects is the Leyte Geothermal Power Project located at the Greater Tongonan Geothermal Reservation in Leyte. development. Thus. the petitioner remained adamant and unreasonable in its position. the petitioner demands from the [respondent] for recognition of it as the collective bargaining agent of said employees and for a CBA negotiation with it. However. (c) seasonal employees or those who work or perform services which are seasonal in nature. 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. Article 280 of the Labor Code. 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." We cannot subscribe to the view taken by petitioner Union. Project employment contracts are not lopsided agreements in favor of only one party thereto. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided. the records reveal that the officers and the members of petitioner Union signed employment contracts indicating the specific project or phase of work for which they were hired.] the completion or termination of which has been determined at the time of the engagement of the employee". whether such service is continuous or broken." Thus. Marquez 02-99 (NCMB-RAB VIII-NS-12-0190-98. perfected and consummated [the employment] contracts. project. VIII-1-0019-99). project employment contracts which fix the employment for a specific project or undertaking remain valid under the law: x x x By entering into such a contract. of necessity. regardless of any contract expressing otherwise. "manifests that the `undertaking' is usually necessary and desirable to the usual trade or business of the employer. as explained by no less than the President of [petitioner] Union. Neither is the employee left helpless by a prejudicial employment contract.LABOR RELATIONS Atty. The NLRC correctly disposed of this issue: A deeper examination also shows that [the individual members of petitioner Union] indeed signed and accepted the [employment contracts] freely and voluntarily. Petitioner Union likewise points out that there was no interval in the employment contract of its officers and members. prejudice the employee. except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. as worded. The distinction between a regular and a project employment is provided in Article 280. x x x. It is of judicial notice that project employees engaged for manual services or those for special skills like those of carpenters or masons. Jefferson M. duress or Page 58 . the interest of the worker is paramount. Regular and Casual Employment. The foregoing contemplates four (4) kinds of employees: (a) regular employees or those who have been "engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer". which are usually necessary and desirable to the department. In the case at bar. That. this fact alone is not a valid reason for bestowing special treatment on them or for invalidating a contract of employment. any employee who has rendered at least one year of service. as a rule. both parties had executed the contracts freely and voluntarily without force. While it may be true that it is the employer who drafts project employment contracts with its business interest as overriding consideration. No evidence was presented by [petitioner] Union to prove improper pressure or undue influence when they entered. an employee is deemed to understand that his employment is coterminous with the project.a fixed-term employee. RAB Case No. The employer's interest is equally important as that of the employee[s'] for theirs is the interest that propels economic activity. for petitioner Union. such contracts do not. (b) project employees or those "whose employment has been fixed for a specific project or undertaking[. unschooled. notwithstanding the foregoing iterations. that the contracts of employment were read. Jurisprudence has added a fifth kind-. and the employment is for the duration of the season.-. which lack of interval. Issue:S Whether the officers and members of petitioner Union are project employees of respondent. In fact. and (d) casual employees or those who are not regular. and to other jobs pursuant to civil works. paragraph 1. petitioner Union contends that its officers and members performed activities that were usually necessary and desirable to respondent's usual business. these are imbued with public interest and therefore subject to the police power of the State. The said certified case was indorsed to the NLRC 4th Division in Cebu City on June 21. 1999 for the proper disposition thereof. 280. After all. As clearly shown by [petitioner] Union's own admission. who were all employees of respondent. labor contracts are placed on a higher plane than ordinary contracts. under the law. it was clearly established in the course of the trial of this case. In fact. Ruling: On the first issue. of the Labor Code: ART. However.The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties. He may not expect to be employed continuously beyond the completion of the project. petitioner Union reiterates that its officers and members were assigned to the Construction Department of respondent as carpenters and masons. are. The supremacy of the law over the nomenclature of the contract and the stipulations contained therein is to bring to life the policy enshrined in the Constitution to "afford full protection to labor. and Whether the officers and members of petitioner Union engaged in an illegal strike. with a fixed period of employment. and voluntarily accepted by them. comprehended. or seasonal employees. establishes that the nature of the employment is determined by law. September 7. the giving of tests in the essay form instead of the multiple choice format as mandated by the school. His wife. Cynthia was hired as a part time teacher of the Mass Communication Department in the second semester of SY 1996-1997 and her appointment was renewed for SY 1997-1998. are generally accorded not only respect but even finality. as petitioners would have us believe. the proviso is applicable only to the employees who are deemed "casuals" but not to the "project" employees nor the regular employees treated in paragraph one of Art. a letter was written to Remigio Michael. We may take cognizance of and resolve factual issues. enumerating the departmental and instructional policies that spouses failed to comply with. petitioner Union insists that they were regular employees since they performed work which was usually necessary or desirable to the usual business or trade of the Construction Department of respondent. to use the correct term. it has sent letters to the spouses informing them that the school is extending to them new contracts for the coming school year. and this is strictly adhered to in labor cases. Sr.LABOR RELATIONS Atty. They were later sent two letters informing them that the school is extending to them new contracts for SY 1998-1999. 280 was not designed to stifle small-scale businesses nor to oppress agricultural land owners to further the interests of laborers. x x x. which are deemed to have acquired expertise in matters within their respective jurisdictions. Section 5 defines substantial evidence as "that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. Respondent spouses were given an opportunity to comment on the letter-recommendation. St. 31. the high number of students with failing grades in the classes that they handled. their employment legally ends upon completion of the project or the [end of the] season. 1998. we are hard pressed to find cause to disturb the findings of the NLRC which are supported by substantial evidence. What it seeks to eliminate are abuses of employers against their employees and not. respondents signified their intentions to renew their contracts for SY 1998-1999. Subsequently however. and not being open to suggestions to improve themselves as teachers. In the case at bar. whether agricultural or industrial. The same instructions show that the proviso in the second paragraph of Art. The termination of their employment cannot and should not constitute an illegal dismissal. Bernadette (Department Coordinator) endorsed the immediate termination of the teaching services of the spouses. such as the late submission of final grades. or. petitioners being project employees. Jefferson M. Rule 133. Ancheta II. Issues: WON respondents were considered regular employees WON they were illegally dismissed Page 59 .R. On February 13. only when the findings of fact and conclusions of law of the Labor Arbiter or the NLRC are inconsistent with those of the CA. Although. they received their respective letters of termination." Consistent therewith is the doctrine that this Court is not a trier of facts. Thus. St. Paul College Quezon City vs. Paul contends that it did not extend the contracts of respondent spouses. and bind the Court when supported by substantial evidence. Hence. Thereafter. It is well-settled in jurisprudence that factual findings of administrative or quasi-judicial bodies. Nonetheless. failure to submit final test questions to the Program Coordinator. seasonal employees. both the NLRC and the CA were one in the conclusion that the officers and the members of petitioner Union were project employees. we see no reason not to honor and give effect to the terms and conditions stipulated therein. therefore. 12 of the Department of Labor and Employment discloses that the concept of regular and casual employees was designed to put an end to casual employment in regular jobs. 169905. Thus. which has been abused by many employers to prevent so . the letters do not constitute as actual employment contracts but merely offers to teach on the said school year. to prevent small-scale businesses from engaging in legitimate methods to realize profit. 2011 Facts: Remigio Michael Ancheta was a full-time probationary teacher in the School Year 1996-1997 which was renewed in the following SY 1997-1998. Policy Instruction No. No. G. among others. Thus. 280. Marquez acts tending to vitiate the worker[s'] consent. failure to report to work on time.called casuals from enjoying the benefits of regular employees or to prevent casuals from joining unions. Clearly. Thereafter. spouses filed a Complaint for illegal dismissal. It is important that the contract of probationary employment specify the period or term of its effectivity. working methods. A copy of the contract shall be furnished the personnel concerned. It is the prerogative of the school to set high standards of efficiency for its teachers since quality education is a mandate of the Constitution. Of the charges against Remigio Michael. If the contract is renewed. subject of course to the overarching limitations under the Labor Code. The same academic freedom grants the school the autonomy to decide for itself the terms and conditions for hiring its teacher. the probationary employment continues. primarily on the basis of the employee having met the reasonable standards of competence and efficiency set by the employer. implies the purpose of the term or period. lay-off and discipline.Employment Contract. Again. supervision of their work. the period and nature of service and its date of effectivity. Thus. Bernadette. qualification. particularly considering the teacher's performance. The authority to hire is likewise covered and protected by its management prerogative — the right of an employer to regulate all aspects of employment. six (6) consecutive regular semesters of satisfactory service for those in the tertiary level. this Court finds that there was a valid and just cause for their dismissal.LABOR RELATIONS Atty. petitioner school has the right not to renew the contracts of the respondents. on the other hand. not its length. For the entire duration of this three-year period. the employment relationship terminates. — Every contract of employment shall specify the designation. If the contract is not renewed. and to ascertain whether he will become an efficient and productive employee. The Labor Code commands that before an employer may legally dismiss an employee from the service. Assuming. the teacher remains under probation. courts are not at liberty to set them aside. the freedom to prescribe work assignments. If renewed. (2) No. the requirement of substantial and procedural due process must be complied with. states that: Section 91. usually for another school year. This is a right of the school that is mandated by law and jurisprudence. seeks to prove to the employer that he has the qualifications to meet the reasonable standards for permanent employment. this second renewal of the contract for another school year would then be the last year — since it would be the third school year — of probationary employment. salary rate. the employer has the option not to renew the contract. Marquez Ruling: (1) Employment on probationary status of teaching personnel is that they are not governed purely by the Labor Code. the parties may opt to renew or not to renew the contract. and such other terms and condition of employment as may be consistent with laws and rules. and dismissal and recall of workers. his spouse also shared the same defenses and admissions as to the charges against her. Jefferson M. the probationary period for academic personnel shall not be more than three (3) consecutive years of satisfactory service for those in the elementary and secondary levels. as used to describe the period of employment. As such. process to be followed. Section 92 of these regulations provides: Section 92. propriety and efficiency of a probationer to ascertain whether he is qualified for permanent employment. The failure to stipulate its precise duration could lead to the inference that the contract is binding for the full three-year probationary period. being simply on probation. Schools cannot be required to adopt standards which barely satisfy criteria set for government recognition. regulations and standards of the school. regulation regarding transfer of employees. As long as the standards fixed are reasonable and not arbitrary. effective for one school year. While the employer observes the fitness. at the end of that period. arguendo. the old ones having been expired at the end of their terms. Page 60 . he cannot automatically claim security of tenure and compel the employer to renew his employment contract. the grounds for termination of employment must be based on just or authorized causes. The common practice is for the employer and the teacher to enter into a contract. during which the latter determines whether or not he is qualified for permanent employment. The plain admissions of the charges against them were the considerations taken into account by the petitioner school in their decision not to renew the respondent spouses' employment contracts. the probationer. At the end of this third year. the letters sent by petitioner Sr. Therefore. and nine (9) consecutive trimesters of satisfactory service for those in the tertiary level where collegiate courses are offered on a trimester basis. The probationary employment is intended to afford the employer an opportunity to observe the fitness of a probationary employee while at work. that the employment contracts between the school and the spouses were renewed. which were void of any specifics cannot be considered as contracts. the employer may now decide whether to extend a permanent appointment to the employee. On the matter of probationary period. Section 91 of the Manual of Regulations for Private Schools. Under the requirement of substantial due process. At the end of the school year. such as hiring.Probationary Period. The Labor Code is supplemented with respect to the period of probation by special rules found in the Manual of Regulations for Private Schools. A probationary employee or probationer is one who is on trial for an employer. Upon the expiration of his contract of employment. The closest they can resemble to are that of informal correspondence among the said individuals. the word probationary. — Subject in all instances to compliance with the Department and school requirements. cook. the Supreme Court ruled in the negative. bodegero. one of its employees. The betrayal of this trust is the essence of the offense for which an employee is penalized. 1998. as distinguished from an act done carelessly. Just cause is required for a valid dismissal. oiler. 2012 Facts: Petitioner Lynvil Fishing Enterprises. Loss of confidence must not be indiscriminately used as a shield by the employer against a claim that the dismissal of an employee was arbitrary. respondents conspired with one another and stole eight tubs of ―pampano‖ and ―tangigue‖ fish and delivered them to another vessel. Ismael G. February 1. However. or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent. Petitioner filed a criminal complaint against respondents before the office of the City Prosecutor of Malabon City which found probable cause for indictment of respondents for the crime of qualified theft. 1998. captain. he witnessed that while on board the company vessel Analyn VIII. Jefferson M. the Court stated that nonetheless. 257 Phil. duress.LABOR RELATIONS Atty.R. Nubla. Lynvil Fishing Enterprises vs. In addition. such as the handling or care and protection of the property and assets of the employer. We ruled that proof beyond reasonable doubt of an employee‘s misconduct is not required when loss of confidence is the ground for dismissal. G. knowingly. Ariola. trust and confidence or that the employee concerned is entrusted with confidence with respect to delicate matters. Alcovendas. Jurisprudence. Lynvil contends that it cannot be guilty of illegal dismissal because the private respondents were employed under a fixed-term contract which expired at the end of the voyage. the fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force. In the context of the facts that: (1) the respondents were doing tasks necessarily to Lynvil‘s fishing business with positions ranging from captain Page 61 . Sebullen. that on July 31. Relying on the finding and Nasipit Lumber Company v. Such breach is considered willful if it is done intentionally. Breach of trust is present in this case. and purposely. without justifiable excuse. Lynvil cannot argue that since the Office of the Prosecutor found probable cause for theft the Labor Arbiter must follow the finding as a valid reason for the termination of respondents‘ employment. On the second question. Lynvil received a report from Ramonito Clarido. the employee would eternally remain at the mercy of the employer. Elorde Bañez. 1. 937 (1989). Jessie D. in order to constitute a just cause for dismissal. thoughtlessly. Respondents‘ services were engaged in various capacities: Andres G. it satisfactorily appears that the employer and the employee dealt with each other on more or less equal terms with no moral dominance exercised by the former or the latter. Inc. Jimmy B. and Leopoldo G. loss of confidence as a just cause for termination of employment is premised on the fact that the employee concerned holds a position of responsibility. The proof required for purposes that differ from one and the other are likewise different. Lynvil asserted there was sufficient basis for valid termination of employment of respondents based on serious misconduct and/or loss of trust and confidence. Issues: Whether a finding of the city prosecutor of probable cause to indict employees of qualified theft is sufficient basis for valid termination for serious misconduct and/or loss of trust or confidence? Whether the employees were validly terminated? Ruling: On the first issue. even without reliance on the prosecutor‘s finding. The Labor Code provides that an employer may terminate an employment based on fraud or willful breach of the trust reposed on the employee. chief mate. NLRC. (Lynvil) is engaged in deep-sea fishing. chief engineer. the act complained of must be work-related and shows that the employee concerned is unfit to continue working for the employer. No. or second. Ariola. Calinao. we find that there was valid cause for respondents‘ dismissal. And. Contrarily. On Aug. 181974. It must also be based on substantial evidence and not on the employer‘s whims or caprices or suspicions otherwise. 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. heedlessly or inadvertently. the private respondents (employees) contend that they became regular employees by reason of their continuous hiring and performance of tasks necessary and desirable in the usual trade and business of Lynvil. laid two conditions for the validity of a fixed-contract agreement between the employer and employee: first. Marquez 32. We agree with the CA. the Court held that "[a]ssuming. for the most part.S. there is a need to look into the procedural requirement of due process in Section 2. D. ISSUE Whether there was violation of security of tenure.M. It alleged that it submitted a report to the Department of Labor and Employment (DOLE) everytime it terminated Jamin‘s services. 1984. 2012 citing Maraguinot Facts: On December 17. G. On April 5. (2) after the end of a trip. David M. initially as a laborer and. To reiterate. Jamin entered into a contract of employment (actually an appointment paper to which he signified his conformity) with DMCI either as a field worker. Inc. Jamin became a helper carpenter. DMCI appears to be correct. a casual employee. the CA‘s findings were based on: (1) Jamin‘s repeated and successive engagements in DMCI‘s construction projects. In this case. Jamin alleged that DMCI terminated his employment without a just and authorized cause at a time when he was already 55 years old and had no independent source of livelihood. 1968.S. Brunei. Through all those years. considering that for almost 31 years. 33. he alleged that he worked for three other DMCI projects: Twin Towers. It argued that it hired Jamin on a project-to-project basis. Sometime in 1975. 1986 to May 25. 1999. In Liganza v. a temporary worker. With the completion of the project. the repeated re-hiring and continuing need for his services for over eight (8) years have undeniably made him a regular employee. No. against DMCI and its President/General Manager. On March 20. Brunei.] that [the] petitioner was initially hired for specific projects or undertakings. with several money claims (including attorney‘s fees). Marquez of the vessel to bodegero.B. thus: xxx Provided. and (2) Jamin‘s performance of activities necessary or desirable in DMCI‘s usual trade or business. shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. Consunji Inc.M. without granting[. and (3) this arrangement continued for more than ten years. Book V of the Rules Implementing the Labor Code. dismissed for cause as we have so found in this case. from January 24. And respondents are so by the express provisions of the second paragraph of Article 280. they were not entitle to separation pay and backwages. B. In addition to the schedule of projects (where he was assigned) submitted by DMCI to the labor arbiter. That any employee who has rendered at least one year of service. Ritz Towers. petitioner D. so that he never obtained tenure.LABOR RELATIONS Atty. RULING Jamin worked for DMCI for almost 31 years. 1999. and giving to said employee reasonable opportunity within which to explain his side. they were to be granted nominal damages for failure of the employer to comply with statutory due process. and New Istana Project. vs. hired respondent Estelito L. or a project employee everytime DMCI needed his services and a termination of employment paper was served on him upon completion of every project or phase of the project where he worked. 1999 where Jamin last worked. However. It is required that the employer furnish the employee with two written notices: (1) a written notice served on the employee specifying the ground or grounds for termination. 1982. 1968 or for a total of 38 Page 62 . DMCI denied liability.B. Having found that respondents are regular employees who may be. Jefferson M. the clear intention is to go around the security of tenure of the respondents as regular employees. The CA pierced the cover of Jamin‘s project employment contract and declared him a regular employee who had been dismissed without cause and without notice. whether such service is continuous or broken. however. 1982 to February 16. it is clear that the employees were not given the final written notices of dismissal. a construction company. Consunji. 1980 to June 12." We find the Liganza ruling squarely applicable to this case. Consunji. Jamin as a laborer. On the surface and at first glance. grounds have been established to justify his termination. The Court ruled that since employees were dismissed for just cause. New Istana Project. DMCI had repeatedly. it terminated Jamin‘s employment. his work at DMCI was terminated due to the completion of the SM Manila project. 1986. Rule XXIII. from July 29. Jamin. as a carpenter. Since his initial hiring.R. DMCI treated him as a project employee. He claimed that he rendered service to DMCI continuously for almost 31 years. B. continuously and successively engaged Jamin‘s services since he was hired on December 17. they will again be hired for another trip with new contracts. from June 23. This termination marked the end of his employment with DMCI as he was not rehired again. 192514. (DMCI). RBL Shipyard Corporation. and (2) a written notice of termination served on the employee indicating that upon due consideration of all the circumstances. April 18. Jamin‘s employment contract had been renewed a number of times. Jamin filed a complaint for illegal dismissal. from the start of his engagement in 1968 until the completion of its SM Manila project on March 20. but his continuous rehiring and the nature of his work unmistakably made him a regular employee. 1984 (the start of the IRRI Dorm IV project). Jefferson M. While the history of Jamin‘s employment (schedule of projects) relied upon by DMCI shows a gap of almost four years in his employment for the period between July 28. the gap was caused by the company‘s omission of the three projects. 1999. Inc. there was an almost unbroken string of Jamin‘s rehiring from December 17. Nevertheless. v. We reviewed Jamin‘s employment contracts as the CA did and we noted that while the contracts indeed show that Jamin had been engaged as a project employee. The non-disclosure might not have constituted suppression of evidence — it could just have been overlooked by the company — but the oversight is unfair to Jamin as the non-inclusion of the three projects gives the impression that there were substantial gaps not only of several months but years in his employment with DMCI. Jamin‘s employment history with DMCI stands out for his continuous. the tasks he performed as a carpenter were indisputably necessary and desirable in DMCI‘s construction business. which he claimed DMCI intentionally did not include in its schedule so as to make it appear that there were wide gaps in his engagements. 1968 up to the termination of his employment on March 20. [private] respondent had been a project employee several times over. v. as opposed to intermittently. as we stressed in Liganza.‘" "Surely. In all the 38 projects where DMCI engaged Jamin‘s services.LABOR RELATIONS Atty." Without doubt. For not disclosing that there had been other projects where DMCI engaged his services.M. NLRC which reiterates the rule that the length of service of a project employee is not the controlling test of employment tenure but whether or not ‗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. To reiterate. and (2) these tasks are vital. rehired by the same employer for the same tasks or nature of tasks. Further. necessary and indispensable to the usual business or trade of the employer. "[r]espondent capitalizes on our ruling in D. Marquez times — 35 as shown by the schedule of projects submitted by DMCI to the labor arbiter and three more projects or engagements added by Jamin. Jamin‘s case fits squarely into the employment situation just quoted. necessary and indispensable to the usual business or trade of the employer. then the employee must be deemed a regular employee. the Court held that once a project or work pool employee has been: (1) continuously. His employment ceased to be coterminous with specific projects when he was repeatedly re-hired due to the demands of petitioner‘s business. Page 63 . Consunji. it is vital in determining if the employee was hired for a specific undertaking or tasked to perform functions vital. He might not have been a member of a work pool as DMCI insisted that it does not maintain a work pool. 1980 (the supposed completion date of the Midtown Plaza project) and June 13. length of time is not the controlling test for project employment. Jr. NLRC. Here. repeated and successive rehiring in the company‘s construction projects. Jamin accuses the company of suppressing vital evidence that supports his contention that he rendered service in the company‘s construction projects continuously and repeatedly for more than three decades. In Maraguinot. . higher either in rank or salary. U.LABOR RELATIONS Atty. level or salary. on the other hand. of equivalent rank. and his compensation would be upgraded and the payroll accordingly adjusted. Promotion. Inc. 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.. his status as an employee of the company ceased on the close of business and the company therefore considers his letter to be a resignation without notice. 1975. Page 64 . considering the length of service that petitioner has rendered for eleven (11) fruitful and loyal years. U. promotion denotes a scalar ascent of a senior officer or employee to another position. which a person has a right to refuse. When petitioner refused to accept his promotion to Director of International Sales. was the resident Manager of Northwest Airlines.L. "it is more in the nature of a promotion that a transfer. L-48235-36. prefer to remain in his position. The right of an employer to freely select or discharge his employee is limited by the paramount police power for the relations between capital and labor are not merely contractual but impressed with public interest (Article 1700. 92 SCRA 412 emphasized should not only be secundum rationem but also secundum caritatem. Inc. Petitioner tried to resume his duties as Manager after an authorized vacation but the Vice-President for the Orient Region of Northwest advised petitioner that in view of his letter. a strong and vital factor that must be taken into account in labor law determinations which this Court.B. Jenkins was basically a transfer. under the particular and peculiar facts obtaining in the case at bar. distinguished between transfer and promotion as follows: "A transfer is a movement from one position to another of equivalent rank. The communication informed the petitioner that effective August 18. Jenkins was basically a transfer. New Civil Code). he is unable to accept a transfer from the Philippines and that he would.S. level or salary. as a promotion is in the nature of a gift or a reward. Issues: Does the employer‘s letter constitute a transfer as a valid exercise of a management prerogative? Assuming arguendo that the communication or letter of Mr. Dosch in his letter. No.S. He who uses his own legal right injures no one. There can be no dispute that the constitutional guarantee of security of tenure mandated under Section 9. And neither capital nor labor shall act oppressively against each other (Article 1701. speaking thru Acting Chief Justice J. promoting him to the position of Director of International Sales and transferring him to Northwest's General Office in Minneapolis. In the Millares case above. and usually accompanied by an increase in salary. petitioner's inability or his refusal to be transferred was not a valid cause for dismissal. New Civil Code). July 30. including nine (9) years as Northwest Manager with station at Manila.A. effective immediately. Even a manager in a private concern has the right to be secure in his position. expressed appreciation for the promotion and at the same time regretted that "for personal reasons and reasons involving his family. Dosch vs. whether in the government service or in the private sector. It is not merely a transfer order alone but as the Solicitor General correctly observes. 123 SCRA 296 [1983] Facts: Helmut Dosch. in the Philippines. NLRC. speaking thru Chief Justice Fernando in Meracap vs. It has been held that promotion denotes a scalar ascent of an officer or an employee to another position. does Dosch's inability or refusal to be transferred a valid cause for dismissal? Rulings: No.C. to wit: "It would imply at the very least that where a penalty less punitive would suffice. therefore. He received an inter-office communication from R. transfer refers to lateral movement from one position to another. he was to be promoted to the position of Director of International Sales. is the advancement from one position to another with an increase in duties and responsibilities as authorized by law. he was exercising a right and he cannot be punished for it as qui jure suo utitur neminem laedit. Indeed." The inter-office communication of Vice President Jenkins is captioned "Transfer" but it is basically and essentially a promotion for the nature of an instrument is characterized not by the title given to it but by its body and contents. such right is not absolute. 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. Petitioner was. advanced to a higher position and rank and his salary was increased and that is a promotion. 1973 Constitution applies to all employees and laborers. Jenkins‘ letter is a letter directing the promotion of Dosch from his position as Philippine manager to Director of International Sales in Minneapolis.. Northwest's Vice President for Orient Region based in Tokyo. married to a Filipina. therefore. an American citizen. Jenkins. Reyes. 1979. Jefferson M. assuming for the sake of argument that the communication or letter of Mr. to decline a promotion where. of Manager-Philippines until such time that his services in that capacity are no longer required by the company. under the particular and peculiar facts obtaining in the case at bar." There is no law that compels an employee to accept a promotion. While it may be true that the right to transfer or reassign an employee is an employer's exclusive right and the prerogative of management. Whereas. the latter being merely incidental to such promotion. International Ceramics Manufacturing Co. Marquez MANAGEMENT PREROGATIVE 1. He has to his credit eleven (11) years of continuous service with the company. Article 2.A. without break in the service. higher either in rank or salary. the outright dismissal of petitioner from his position as ManagerPhilippines of Northwest Airlines is much too severe. the Supreme Court. Such an order constitutes removal without just cause and is illegal. 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. For all this while.LABOR RELATIONS Atty. Issue: WON the transfer was tantamount to a promotion. In their position paper. to follow Davis in his masterly work. For all this to condone what had been done by them. It is not only because of the law's concern for the workingman. Their main concern is the proximity of their transfer. to quote from Bultmann. the petitioner adverted that when the private respondents were transferred. It employed various employees. the petitioner came up with a Relocation and Restructuring Program designed to (a) sustain its (PT&T‘s) retail operations. 131. September 23. Subsequently. 1997. In its position with the labor arbiter. There is. the private respondents and other petitioner‘s employees were directed to ―relocate‖ to their new PT&T Branches. Thereafter. in addition his family to consider. the transfer was indeed in a nature of a promotion. The affected employees were directed to report to their respective relocation assignments in a Letter dated September 16. Thus. private respondents received separate letters from the petitioner. Finally. And if it is. On August 11. Sometime in 1997.F.) 2. WON private respondents committed insubordination in refusing such promotion/transfer which would then justify PT&T‘s act of dismissing them in exercise of management prerogative. the transfer of the complainants is not unreasonable nor does it involve demotion in rank. Hence. No. thus unreasonable. to promote efficiency and productivity. the petitioner (respondent therein) alleged that the private respondent‘s transfers were made in the lawful exercise of its management prerogative and were done in good faith. after conducting a series of studies regarding the profitability of its retail operations. there can be no valid justification in dismissing the private respondents. that where a decision may be made to rest on informed judgment rather than rigid rules. that it would be burdensome for them to leave their families and relocate to those areas. giving them the option to choose the branch to which they could be transferred. since private respondent considered them separated from the service. the private respondents were dismissed from work. they were also promoted. as their transfer was prejudicial and inconvenient. They forthwith filed their respective complaints against the petitioner before the appropriate sub-regional branches of the NLRC. the private respondents‘ bargaining agent. filed a complaint against the petitioner for illegal dismissal and unfair labor practice before the arbitration branch of the NLRC. Court of Appeals. The misery and pain attendant on the loss of jobs then could be avoided if there be acceptance of the view that under all the circumstances of this case. They are being moved to branches where the complainants will function with maximum benefit to the company and they were in fact promoted not demoted from a lower job-grade to a higher job-grade and receive even higher salaries than before. there can be no insubordination in refusing such promotion and subsequently. YES. Unemployment brings untold hardships and sorrows on those dependent on the wage-earner. thus: Clearly. B. Dissatisfied with this explanation. 1997. its existing branches and the number of employees. petitioners should not be deprived of their means of livelihood. For the strictly juridical standpoint. The petitioner offered benefits/allowances to those employees who would agree to be transferred under its new program. For its part. Discretionary Justice. and (d) avoid retrenchment of employees occupying redundant positions. Goodrich Philippines. Nor is this to condone what had been done by them. 58 SCRA 120. PT&T v. the petitioner considered the private respondents‘ refusal as insubordination and willful disobedience to a lawful order. Ruling: The petition is denied due course. Jefferson M. (b) decongest surplus workforce in some branches. they had not been paid. all the equities of the case must be accorded their due weight. 2003 Facts: The petitioner is a domestic corporation engaged in the business of providing telegraph and communication services thru its branches all over the country. The transfers were aimed at decongesting surplus employees and detailing them to a more demanding branch. should be not only secundum rationem but also secundum caritatem. Marquez whatever missteps may be committed by labor ought not to be visited with a consequence so severe. The private respondents rejected the petitioner‘s offer. G. Inc. (c) lower expenses incidental to hiring and training new personnel.." (This excerpt was cited in Almira vs.R. 152057. among whom were herein private respondents. it cannot be too strongly stressed. labor law determinations. hence. PT&T Workers Union-NAFLU-KMU. transfer of the complainants would not also result in diminution in pay benefit and privilege since the salaries of the complainant would be receiving a bigger salary if not the same salary plus additional special relocation Page 65 . The admissions of the petitioner are conclusive on it. 1999 petitioner filed a Complaint for illegal dismissal. is ―the advancement from one position to another with an increase in duties and responsibilities as authorized by law.] all officers and employees are subject to reshuffle of assignments. A transfer that results in promotion or demotion. the increase in the respondents‘ responsibility can be ascertained from the scalar ascent of their job grades. as we defined in Millares v. Although the increase in the pay is not significant this however would be translated into an increase rather than decrease in their salary because the complainants who were transferred from the city to the province would greatly benefit because it is of judicial notice that the cost of living in the province is much lower than in the city. Subido. the Board of Directors of the Rural Bank of Lucban. Inc. Daya replied that it was never the intention (of management) to downgrade petitioner‘s position. there was no valid cause for the private respondents‘ dismissal. Alejo B. v. That it resulted to unfair labor practice. the concomitant elevation to the higher positions…. Indeed.‖ Petitioner Elmer Mendoza expressed his opinion on the reshuffle in an undated letter addressed to Daya. Briccio V. Issue: Page 66 . that the reshuffling deemed to be a demotion without any legal basis and is a blatant harassment on from the employer as a prelude petitioners termination in due time. the Decision of the Court of Appeals dated June 15. the indispensable element for there to be a promotion is that there must be an ―advancement from one position to another‖ or an upward vertical movement of the employee‘s rank or position. without his consent. Daya. separation pay and damages against the Rural Bank of Lucban and/or its president. and usually accompanied by an increase in salary. or willful disobedience of a lawful order of the employer. An employee cannot be promoted. Petitioner availed 30 days in total leave of absence and on June 24. 2001 is hereby AFFIRMED. This can be likened to the upgrading of salaries of government employees without conferring upon the. IN LIGHT OF THE ALL THE FOREGOING.. 3. 99-52 and 99-53.R. following the ruling enunciated in Homeowners Savings and Loan Association. No. underpayment. Moreover. bank board chairman. even if merely as a result of a transfer. Inc. Cada. the exercise by the private respondents of their right cannot be considered in law as insubordination. 155421. With or without a corresponding increase in salary. the NLRC correctly ordered the private respondents‘ reinstatement without loss of seniority rights and the payment of backwages from the time of their dismissal up to their actual reinstatement.‖ Apparently. 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. No. 2004 Facts: On April 25. issued Board Resolution Nos. and that the reshuffle will also afford management an effective tool in providing the bank a sound internal control system/check and balance and a basis in evaluating the performance of each employee. and its Tayabas branch manager. advancement or reduction or a transfer that aims to ‗lure the employee away from his permanent position cannot be done without the employees‘ consent. the respective transfer of the private respondents was in fact promotions. Jefferson M. Marquez package. which a person has a right to refuse.LABOR RELATIONS Atty. G. NLRC: … [P]romotion. Hence. SO ORDERED. July 7. 1999. this resolution does not preclude the transfer of assignment of bank officers and employees from the branch office to the head office and vice-versa. This would mean a higher purchasing power of the same salary previously being received by the complainants. Mendoza vs. Any increase in salary should only be considered incidental but never determinative of whether or not a promotion is bestowed upon an employee. As such. As the questioned dismissal is not based on any of the just or valid grounds under Article 282 of the Labor Code. 99-52 ―‗RESOLVED AS IT IS HEREBY RESOLVED‘ that in line with the policy of the bank to familiarize bank employees with the various phases of bank operations and further strengthen the existing internal control system[. which read: ―Board Res. Rural Bank of Lucban. Petitioner‘s transfer was made in pursuit of respondent‘s policy to ―familiarize bank employees with the various phases of bank operations and further strengthen the existing internal control system‖ of all officers and employees. courts often decline to interfere in legitimate business decisions of employers. For this reason. Glaxo transferred Tecson to Butuan. marketing strategies and other confidential programs and information for competitors. The right to protect its economic interests is recognized by the constitution which recognizes the right of enterprises to adopt and enforce such a policy to protect its right to reasonable returns on investments and for expansion and growth.provided there is no demotion in rank or diminution of salary. manufacturing formulas. In the pursuit of its legitimate business interest. Marquez Whether or not the reshuffling or transfer is deemed to be a demotion on petitioner‘s position. The policy is aimed at restricting a personal prerogative that belongs only to the individual. This privilege is inherent in the right of employers to control and manage their enterprise effectively. 168159. No. Despite repeated warnings. Tecson and Bettsy.R. Petitioner was not singled out. made in bad faith. Jefferson M. Glaxo‘s policy prohibiting an employee from having a relationship is a valid exercise of management prerogatives as relationships of that nature might compromise the interests of the company. that he agrees to disclose existing or future relationship with co-employees and employees of competing companies that should such relationship poses a conflict of interest. Ruling: Management Prerogative to Transfer Employees. 5. G. an employee of a competing company. other employees were also reassigned without their express consent. an employee‘s personal decision does not detract the employer from exercising management prerogatives to ensure maximum profit and business success. 1999 letter of Daya to petitioner. and other privileges.to positions in which they can function with maximum benefit to the company. 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. to resign from the company. However.R. Indeed. Petitioner‘s Transfer Lawful. and the action is not motivated by discrimination. benefits. management has the prerogative to transfer or assign employees from one office or area of operation to another -. and the May 10. got married. The National Conciliation and Mediation board rendered as valid the policy and the right to transfer. the April 30. or any diminution of his salary. 1999 letter of Bank President Daya to Branch Manager Cada. The law also recognized that management has rights which are also entitled to respect and enforcement in the interest of fair play. it does not mean that every labor dispute will be decided in favor of the workers. which stipulates among others. There appears no justification for denying an employer the right to transfer employees to expand their competence and maximize their full potential for the advancement of the establishment. 4. Jurisprudence recognizes the exercise of management prerogatives. August 19. vs. Norkis Trading Co. The challenged company policy does not violate the equal protection clause of the constitution as such clause is addressed only to the state or those acting under color of its authority. An employee of the company remains free to marry anyone of his or her choosing. but he defied such orders and continued acting as medical representative in Camarines area.LABOR RELATIONS Atty. but also the right of employers. 2005 Facts: Page 67 . as medical representative. G. The law must protect not only the welfare of employees. while our laws endeavor to give life to the constitutional policy on social justice and the protection of labor. Neither was there any demotion in the rank of petitioner. This fact is clear in respondent‘s Board Resolutions. 162994 Facts: Petitioner Tecson was hired by respondent Glaxo Wellcome Phils. labor laws discourage interference in employers‘ judgments concerning the conduct of their business. Duncan Assn. Glaxo has a right to guard its trade secrets.. aptitudes and competencies -. Ruling: No. privileges and other benefits. We have previously held that employees may be transferred -. Indeed. or effected as a form of punishment or demotion without sufficient cause.based on their qualifications. of Detailman-PTFWO vs Glaxo Wellcome Phils. Issue: Whether or not the policy constitutes a prohibition against marriage. The policy being questioned is not a policy against marriage. NLRC. Tecson signed a contract of employment. prompting her to formally protest her ―questionable assignment‖ at the Home Office in Mandaluyong City which she insisted is against her appointment as Senior BCO for Bicol Region and Samar. work assignments. time. and competence. As such. particularly on the transfer of employees? What is the test to determine the validity of the transfer of employees? Ruling: Concededly. the company terminated her services effective May 2. however. 2003. initially trained as administration and finance officer assigned to the company‘s branch at Calamba. On April 14. 2003. 2002. The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion. 2003. and moral and exemplary damages. An employee‘s right to security of tenure does not give him such a vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful. employers are allowed. which under existing company policy. For the period March 18-April 1. however. Gnilo on March 8. Petitioner contends that its acts were legitimate exercises of the corporation‘s management prerogative and that the private respondent was guilty of insubordination and willful disobedience justifying her the termination.00. service incentive leave pay. the employer must be able to show that the transfer is not unreasonable. collective bargaining agreements. Arlene C. the employee‘s transfer shall be tantamount to constructive dismissal. The Labor Arbiter found Norkis guilty of illegal dismissal and the NLRC and the Court of Appeals. work supervision. she was instructed by her immediate superior to confirm transactions pertaining to collections and deposits of BCO Marivic Faura at Polangui. 13th month pay.555. private respondent made a written ―Request for Re-assignment‖ to be assigned as Cashier of the Naga Branch which is vacant and considering that she is a resident of Naga City and a mother of three growing kids. Private respondent. however. working regulations. and other privileges. who also worked at Norkis for more than 13 years. nor prejudicial to him.‖ After the hearing of the IAP was concluded. On January 24. carries the penalty of dismissal. and directing her to attend a hearing set on April 16. benefits. inconvenient or prejudicial to the employee. and attorney‘s fees. employed private respondent Ma. 2001. 2003 at the main office. is not absolute as it is subject to limitations imposed by law. there being no written order issued by the management for her to stay in the main office. which she failed to attend because the company did not act on her request to allow her cash advances to defray her travel expenses. affirmed the decision. Thus. privileges and other benefits. Issues: What are the scope and the limitations on the exercise of management prerogatives. it cannot be used as a subterfuge by the employer to rid himself of an undesirable worker. the employee may not complain that it amounts to a constructive dismissal. and general principles of fair play and justice. The management‘s right to transfer or re-assign its personnel. working methods. private respondent received a memo from the IAP for an investigation on the charges of abandonment of work. The company did not accede to her requests and she continued reporting at the main office performing whatever work assigned to her. On April 30. Inc. she had no choice but to stick to her appointment as Senior BCO-Bicol Region and Samar there being no superseding memo changing her assignment. processes to be followed. On July 29. 2003 for the reason that the situation had become unbearable for her tantamount to constructive dismissal. Having the right should not be confused with the manner in which that right is exercised.LABOR RELATIONS Atty. she reiterated this request to be assigned anew in Naga City while waiting for the resolution of her case. aptitudes. Page 68 . maintained her position that she could no longer report to the Home Office after the company withdrew her monthly ―TNT. She wrote a letter to the management criticizing them for wanting to ease her out of the company due to a labor case filed by her husband. Upon returning to Naga City. the company withheld the Transportation and Travel Allowance (TNT) being received by private respondent amounting to P7. lay-off of workers. Her salary then was withheld. It is the employer‘s prerogative.‖ She asserted that considering her difficult situation. Marquez Petitioner Norkis Trading Co. under the broad concept of management prerogative. 1990. nor inconvenient. on appeal. In August and September 2002. She was ordered to report back to the main office and to explain why no disciplinary action should be taken against her for abandonment of work. private respondent also requested to be furnished a copy of the minutes and audit report of the IAP investigation.. supervision of workers. tools to be used. and praying for reinstatement with full back wages. When his transfer is not unreasonable. and it does not involve a demotion in rank or a diminution of his salaries. she was promoted as Acting Senior Branch Control Officer for Bicol Region. private respondent was informed about a recent company audit which disclosed that she had disregarded the detailed instructions of her superior and failed to perform her duties as a Senior Branch Control Officer. Laguna. prompting her to file a case with the NLRC on April 21. Should the employer fail to overcome this burden of proof. nor does it involve a demotion in rank or a diminution of his salaries. and such withdrawal of her travel allowances is calculated to cause suffering on her part. and the dismissal and recall of workers. insubordination and refusal to report back to the place of work. 2002. based on its assessment and perception of its employees‘ qualifications. bearing in mind the basic elements of justice and fair play. private respondent learned that the management instructed to deny her entry to the branch premises and access to company records. Jefferson M. In a memorandum dated May 22. 2003. with claims for nonpayment of salaries. place and manner of work. to move them around in the various areas of its business operations in order to ascertain where they will function with maximum benefit to the company. 2003. to regulate all aspects of personnel administration including hiring. transfer of employees. such as monitoring of collections at Cubao Branch. In particular. She expressed that the situation has become unbearable for her so that she is forced to report back to Naga City effective March 24. An investigation by the company‘s Internal Audit Group ensued and private respondent was formally charged with ―Negligence Resulting to Material Loss. An employer is free to regulate. which is short of insubordination. Neither was it because he was needed in the new post for the new assignment was functionless and it was nothing but a title. Paguio was the Head of the Garnet Exchange who sent a letter to his immediate supervisor and Asst. He was then advised to transfer to any group in the company that may avail of his services. In particular. (PLDT) has 27 Exchanges in its Greater Metro Manila (GMM) Network. the exercise of management prerogative cannot be utilized to circumvent the law and public policy on labor and social justice. It is prejudicial to Paguio because it left him out for a possible promotion as he was assigned to a functionless position with neither office nor staff. 152689. In the same way. and competence. October 12. inconvenient or prejudicial to the employee. 2005 Facts: Petitioner Philippine Long Distance Telephone Company. claiming it was unfair to Garnet Exchange because as the oldest exchange in the East Center. Jefferson M. The employer bears the burden of proving that the transfer of the employee has complied with the foregoing test. it is familiar and fundamental doctrine that it is not the title of the action but the allegations in the pleading that determines the nature of the action. nor does it involve a demotion in rank or a diminution of his salaries. to deploy its employees in the various areas of its business operations in order to ascertain where they will function with maximum benefit to the company. there are limits to the management prerogative. Page 69 . No. Aggrieved. Paguio reiterated his letter to Santos and objected to the performance rating as it was based only on the attainment of objectives.LABOR RELATIONS Atty. There was also no proof that Paguio refused to comply with any management policy. He was then was reassigned as Head for Special Assignment at the Office of the GMM East Center and asked to turn over his functions as Garnet Exchange Head to Tessie Go. aptitudes. Garnet Exchange was doing well and excelled in the performance rating. Likewise. Paguio files a complaint for illegal dismissal with prayer for reinstatement and damages which was later amended to illegal demotion with prayer for reversion to old position. Garnet Exchange. Two years later on June 1996. Paquio. Ruling: PLDT alleges that the NLRC ruling would allow a change of cause of action since the complaint alleged ―illegal demotion‖ while the decision involved ―illegal transfer.‖ Prefatorily. That prerogative accorded management should not defeat the very purpose for which our labor laws exist: to balance the conflicting interests of labor and management. PLDT rebalanced the manpower of the East Center.R. By its very nature. Issue: In brief. we see no credible reason for Paguio‘s transfer except his criticisms of the company‘s performance evaluation methods. it was disallowed to use contractors for new installations and was not made beneficiary of the cut-over bonus. Paguio‘s performance was consistently rated as outstanding. An employee‘s right to security of tenure does not give him such a vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful. Based on the undisputed facts. the employer must be able to show that the transfer is not unreasonable. Moreover. G. transfer was not valid. Paguio‘s transfer could only be caused by the management‘s negative reception of his comments. He also suggested that the criteria failed to recognize that exchanges with new plants could easily meet the objectives of GMM compared to those with old plants. Patently. based on its assessment and perception of its employees‘ qualifications. Paguio requested the first VP for a formal hearing of the charges against him and asked that his reassignment be deferred. PLDT vs. Despite Paguio‘s criticism. his transfer could not be due to poor performance. Nevertheless. we note from the records that there has been no change of cause of action from ―illegal demotion‖ to ―illegal transfer. obtained the top rating in the GMM.‖ Illegal demotion is a type of illegal transfer. without considering other relevant factors. another memo informed Paguio that his transfer was not in the nature of a disciplinary action that required investigation and that he agreed with the reasons of the transfer. the oldest plant in GMM. privileges and other benefits. In the present case. It is the employer‘s prerogative. including the transfer of employees. all aspects of employment. Paguio wrote Santos and requested reconsideration of the manpower rebalancing. Believing that his transfer was a disciplinary action. the petitioner asks this Court to resolve now the legality of Paguio‘s transfer. Marquez 6. Inc. Hence. damages and attorney‘s fees. management prerogative must be exercised always with the principles of fair play and justice. He also filed a complaint against his supervisor for grave abuse of authority and manipulation of the East Center performance. according to his own discretion and judgment. While it may be conceded that management is in the best position to know its operational needs. Findings were that the memo was in order as it was based on the finding that Paguio was not a team player and cannot accept decisions of management. Alfredo S. Nonetheless. VP criticizing the PLDT criteria for performance rating as unfair because they depended on manpower after receiving its appraisal rating. In denying the contention of the petitioner company. After he got her pregnant. (2) that there is a factual basis for believing that all or substantially all persons meeting the qualification would be unable to properly perform the duties of the job. We held that the company policy violates the right against discrimination afforded all women workers under Article 136 of the Labor Code. constructive dismissal. the SC applied the two factors to justify a bona fide occupational qualification: Since the finding of a bona fide occupational qualification justifies an employer‘s no-spouse rule. 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.: A requirement that a woman employee must remain unmarried could be justified as a ―bona fide occupational qualification. viz.R. where the particular requirements of the job would justify the same. or to actually dismiss. she met an accident and was advised by the doctor at the Orthopedic Hospital to recuperate for twenty-one (21) days. vs. Thus. Star Paper Corp. they were compelled to resign in view of an illegal company policy. or to stipulate expressly or tacitly that upon getting married a woman employee shall be deemed resigned or separated. G. she severed her relationship with him to avoid dismissal due to the company policy. The cases of Duncan and PT&T instruct us that the requirement of reasonableness must be clearly established to uphold the questioned employment policy. the employee was dismissed in violation of petitioner‘s policy of disqualifying from work any woman worker who contracts marriage. Respondents later filed a complaint for unfair labor practice. Section 18. but established a permissible exception.. The burden was successfully discharged in Duncan but not in PT&T. Article XIII. In said case. discriminate or otherwise prejudice a woman employee merely by reason of her marriage. Issue: Whether or not the 1995 Policy/Regulation of the company is violative of the Constitutional rights towards marriage and the family of employees and of article 136 of the Labor Code. 164774. The memorandum stated that she was being dismissed for immoral conduct. such as the desirability of spreading work in the workplace. 1999. However. April 12. Page 70 .‖ or BFOQ. She was denied entry. To justify a bona fide occupational qualification. The case at bar involves Article 136 of the Labor Code which provides: Art. Jefferson M. after submission of the explanation. She was directed to proceed to the personnel office where one of the staff handed her a memorandum. The employer has the burden to prove the existence of a reasonable business necessity. The management asked her to write an explanation. separation pay and attorney‘s fees. Ruling: The Supreme Court held that The 1987 Constitution under Article II. There must be a compelling business necessity for which no alternative exists other than the discriminatory practice. No. Simbol and Comia allege that they did not resign voluntarily. but not on the ground of a general principle. NLRC. On November 30. The requirement that a company policy must be reasonable under the circumstances to qualify as a valid exercise of management prerogative was also at issue in the 1997 case of Philippine Telegraph and Telephone Company v. The Civil Code likewise protects labor with the following provisions such as articles 1700 and 1702. 2006 Facts: According to the respondents. As to respondent Estrella. Due to her urgent need for money. the employer must prove two factors: (1) that the employment qualification is reasonably related to the essential operation of the job involved. the exception is interpreted strictly and narrowly. she discovered that he was not separated. she was nonetheless dismissed by the company. Simbol. discharge.LABOR RELATIONS Atty. The SC does not find a reasonable business necessity in the case at bar. she alleges that she had a relationship with co-worker Zuñiga who misrepresented himself as a married but separated man. She returned to work on December 21. A requirement of that nature would be valid provided it reflects an inherent quality reasonably necessary for satisfactory job performance. The Labor Code is the most comprehensive piece of legislation protecting labor. she later submitted a letter of resignation in exchange for her thirteenth month pay. and. They averred that the aforementioned company policy is illegal and contravenes Article 136 of the Labor Code. Section 3 state our policy towards the protection of labor under the following provisions. 136. She refused to sign the memorandum because she was on leave for twenty-one (21) days and has not been given a chance to explain. Marquez 7. 1999 but she found out that her name was on-hold at the gate. entered into Page 71 . Issue: Whether the employment ban incorporated in the Undertaking which petitioner executed upon his retirement is unreasonable.LABOR RELATIONS Atty. at any time. Solidbank required Rivera to sign an undated Release. then a Production Helper in the Selecting Department.28 from respondent. the employer can create policies based on an unproven presumption of a perceived danger at the expense of an employee‘s right to security of tenure. Neither did petitioners explain how this detriment will happen in the case of Wilfreda Comia. directly or indirectly engage in any unlawful activity prejudicial to the interest of Solidbank. Solidbank offered two retirement programs to its employees: (a) the Ordinary Retirement Program (ORP). There is no dispute between the parties that. its plans. 1995. Waiver and Quitclaim. Prior to his retirement. petitioner executed the Release. Petitioners failed to show how the marriage of Simbol. to Alma Dayrit. Jefferson M. officers. If we uphold the questioned rule without valid justification. or data of any kind. foolish or disastrous contract. directors. informing Rivera that he had violated the Undertaking and demanded the return of all the monetary benefits he received in consideration of the SRP within five (5) days from receipt. Rivera and his brother-in-law put up a poultry business in Cavite. 163269. contrary to public policy." He also signed in an Undertaking upon which he promised that "not to seek employment with a competitor bank or financial institution within one (1) year from February 28. Solidbank wrote a letter dated May 18. he became the Manager of the bank‘s Credit Investigation and Appraisal Division of the Consumer's Banking Group. in any manner whatsoever. We agree with petitioner's contention that the issue as to whether the post-retirement competitive employment ban incorporated in the Undertaking is against public policy is a genuine issue of fact. Waiver and Quitclaim. then a helper in the cutter-machine. Petitioners contend that their policy will apply only when one employee marries a co-employee. The policy is premised on the mere fear that employees married to each other will be less efficient. No. That the second paragraph was meant to give teeth to the first paragraph of the questioned rule is evidently not the valid reasonable business necessity required by the law. Rivera vs. its manner or operation. under which a retiring employee would receive 250% of the gross monthly salary multiplied by the number of years in service. 2006 Facts: Rivera started working with Solidbank Corporation as an audit clerk since July 1. assistant accountant. oppressive. However. The questioned policy may not facially violate Article 136 of the Labor Code but it creates a disproportionate effect and under the disparate impact theory. requiring the parties to present evidence to support their respective claims. 8. under which an employee would receive 85% of his monthly basic salary multiplied by the number of years in service. 1995. processes. Rivera decided to devote his time and attention to his poultry business in Cavite and applied for retirement under the SRP. 1995. Waiver and Quitclaim would entitle Solidbank to a cause of action against him before the appropriate courts of law‖. 1995. could be detrimental to its business operations.619. G. But on May 1. effect. Then promoted as credit investigator. It is significant to note that in the case at bar. affiliate or subsidiary companies. and their successors-in-interest and will not disclose any information concerning the business of Solidbank. but were asked to resign when they married a co-employee. 1977. the only way it could pass judicial scrutiny is a showing that it is reasonable despite the discriminatory. and that any breach of the Undertaking or the provisions of the Release. hence. but they are free to marry persons other than coemployees. Solidbank. and (b) the Special Retirement Program (SRP). Rivera got employed with Equitable Banking Corporation (Equitable) as Manager of its Credit Investigation and Appraisal Division of its Consumers' Banking Group. Marquez Petitioners‘ sole contention that ―the company did not just want to have two (2) or more of its employees related between the third degree by affinity and/or consanguinity‖ is lame.R. their stockholders. then an employee of the Repacking Section. agents or employees. The failure of petitioners to prove a legitimate business concern in imposing the questioned policy cannot prejudice the employee‘s right to be free from arbitrary discrimination based upon stereotypes of married persons working together in one company. then a Sheeting Machine Operator. Upon learning this. in consideration for his availment of the SRP. Decision of the CA affirmed. Solidbank approved the application and confirmed his separation from Solidbank on February 25. appropriate legal action would be taken against him. albeit disproportionate. The well-entrenched doctrine is that the law does not relieve a party from the effects of an unwise. senior clerk. In December 1994. and that he received retirement pay amounting to P963. April 19. In the meantime. its parent. otherwise. and finally as assistant manager. He acknowledged receipt of the net proceeds of his separation and retirement benefits and promised that "he would not. respondents were hired after they were found fit for the job. who married Howard Comia. which was notarized on March 1. 1995. and the Undertaking as supplement thereto. Ruling: The petition is meritorious. Platinum Plans sued Tiu for damages before the RTC of Pasig City. by waiver or estoppel. Inc. Tiu was its Division Marketing Director.28 from respondent. morals. retirement plans.. Estoppel cannot give validity to an act that is prohibited by law or one that is against public policy. unenforceable for being repugnant to public policy. A provision on territorial limitation is necessary to guide an employee of what constitutes as violation of a restrictive covenant and whether the geographic scope is co-extensive with that in which the employer is doing business. engage in or be involved with any corporation. engaged in the same business or belonging to the same pre-need industry as the EMPLOYER. Consideration must be given to the employee's right to earn a living and to his ability to determine with certainty the area within which his employment ban is restituted. Any breach of the foregoing provision shall render the EMPLOYEE liable to the EMPLOYER in the amount of One Hundred Thousand Pesos (P100. Branch 261. In considering a territorial restriction. engage in competitive employment. violated the non-involvement clause in her contract of employment: The EMPLOYEE further undertakes that during his/her engagement with EMPLOYER and in case of separation from the Company. We are not impervious of the distinction between restrictive covenants barring an employee to accept a post-employment competitive employment or restraint on trade in employment contracts and restraints on post-retirement competitive employment in pension and retirement plans either incorporated in employment contracts or in collective bargaining agreements between the employer and the union of employees. be denied. Inc. must be liberally construed in favor of the employee. after all. it gives to him who labors the right by every legitimate means to protect the fruits of his labor and secure the enjoyment of them to himself. Public policy does not intend that another than the producer shall reap the fruits of labor. Undeniably. is burdened to establish that a restrictive covenant barring an employee from accepting a competitive employment after retirement or resignation is not an unreasonable or oppressive. petitioner stopped reporting for work. In November 1995. Retirement benefits. The parties executed a contract of employment valid for five years. Platinum Inc. Neither must the right to protect by reasonable restrictions that which a man by industry. whether voluntary or for cause. Tiu v. he/she shall not. she became the Vice-President for Sales of Professional Pension Plans. in light of the constitutional mandate of affording full protection to labor. among others. and are a form of reward for being loyal to the employer. What one creates by his own labor is his. Thus. Such a contract will not be discarded even if there was a mistake of law or fact. alleging. G. from assailing the post-retirement competitive employment ban since under Article 1409 of the New Civil Code. which its employer has built up by his own honest application to every day duty and the faithful performance of the tasks which every day imposes upon the ordinary man. whether directly or indirectly. petitioner Daisy B. From 1987 to 1989. 56 Freedom to contract must not be unreasonably abridged.619. petitioner retired under the SRP and received P963. are intended to help the employee enjoy the remaining years of his life.. Marquez with full awareness of what he was doing and entered into and carried out in good faith. the trial court should consider the following factors: (a) whether the covenant protects a legitimate business interest of the employer. 1995. skill and good judgment has built up. They have no power to relieve parties from obligation voluntarily assailed. public order or public policy are inexistent or void from the beginning. the facts and circumstances surrounding the case must be considered. A post-retirement competitive employment restriction is designed to protect the employer against competition by former employees who may retire and obtain retirement or pension benefits and. Courts should carefully scrutinize all contracts limiting a man's natural right to follow any trade or profession anywhere he pleases and in any lawful manner. February 28. Platinum Plans. releasing him from the burden of worrying for his financial support. a corporation engaged also in the pre-need industry. or separate from said contracts or collective bargaining agreements which provide that an employee who accepts post retirement competitive employment will forfeit retirement and other benefits or will be obliged to restitute the same to the employer. is a domestic corporation engaged in the pre-need industry. 9. No. On the other hand. On September 16. rather. thus. (d) whether the time and territorial limitations contained in the covenant are reasonable. Courts have no jurisdiction to look into the wisdom of the contract entered into by and between the parties or to render a decision different therefrom.00) for and as liquidated damages. as employer.R. simply because their contracts turned out to be disastrous deals. However. Respondent. (c) whether the covenant is injurious to the public welfare.000. Jefferson M. that petitioner‘s employment with Professional Pension Plans. But it is just as important to protect the enjoyment of an establishment in trade or profession. those contracts whose cause. association or entity. at the same time. it being the general rule that pension or retirement plans formulated by the employer are to be construed against it. or in undue or unreasonable restraint of trade.LABOR RELATIONS Atty. object or purpose is contrary to law. (b) whether the covenant creates an undue burden on the employee. for the next TWO (2) years thereafter. 2007 Facts: Platinum Plans Philippines. petitioner is not proscribed. good customs. 163512. Inc. in determining whether the contract is reasonable or not. Page 72 . and (e) whether the restraint is reasonable from the standpoint of public policy. Inc. rehired Tiu as Senior Assistant Vice-President and Territorial Operations Head in charge of its Hongkong and Asean operations. Court of Appeals and trial court ruled against Tiu. 10. To allow her to engage in a rival business soon after she leaves would make respondent‘s trade secrets vulnerable especially in a highly competitive marketing environment. Thus. in this case. issued a Department Order to Mrs. Tenefrancia. dela Cruz. provided they are not contrary to law. the non-involvement clause has a time limit: two years from the time petitioner‘s employment with respondent ends. good customs. It reasoned that petitioner entered into the contract on her own will and volition. the Administrative Investigating Committee found the Department Order appropriate since it was intended to prevent the controversy between petitioner and the Page 73 . Dean Honorato V. terms and conditions as they may deem convenient. which petitioner and respondent freely agreed upon. Aquino of the College of Law informed respondent‘s President. a noninvolvement clause is not necessarily void for being in restraint of trade as long as there are reasonable limitations as to time. morals. In August 1996.000 as liquidated damages.R. Supreme Court held that said that such clause was unreasonable restraint of trade and therefore against public policy.15 Not being contrary to public policy. Leonardo S. Since petitioner was the Senior Assistant Vice-President and Territorial Operations Head in charge of respondent‘s Hongkong and Asean operations. morals. has the force of law between them. The appellate court also ruled that the stipulation prohibiting non-employment for two years was valid and enforceable considering the nature of respondent‘s business. Atty. as held by the trial court and the Court of Appeals. and place. Edilberto B. but also all its consequences that were not against good faith. we cannot do so in this case. Court of Appeals. Ruling: The petition is DENIED for lack of merit. she bound herself to fulfill not only what was expressly stipulated in the contract. On 21 January 1997. she had been privy to confidential and highly sensitive marketing strategies of respondent‘s business. trade. Duldulao was hired by respondent Baguio Colleges Foundation (BCF) as secretary/clerk-typist and assigned to the College of Law sometime in June of 1987. should be complied with in good faith. respondent‘s Vice President for Administration. Duldulao vs. Duldulao informing her of her transfer to the Office of the Principals of the High School and Elementary Departments. a certain law student filed a complaint against petitioner for alleged irregularities in the performance of her work. No. not only because of such failure to answer but also her having admitted fraternizing with students of the College.13 In any event. While we have equitably reduced liquidated damages in certain cases. Thus. we find the non-involvement clause not contrary to public welfare and not greater than is necessary to afford a fair and reasonable protection to respondent. and would run contrary to the function of the courts to give force and effect thereto. Article 115914 of the same Code also provides that obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. It is also limited as to trade. On 1 October 1996. the restraint imposed was much greater than what was necessary to afford respondent a fair and reasonable protection. On the same day. of petitioner‘s failure to file her answer and recommended the assignment of petitioner outside the College of Law. good customs. and thus. and law. Issue: WON the non-involvement clause is valid. Jefferson M. 2007 Facts: Petitioner Constancia P. petitioner had not shown the least intention to fulfill the non-involvement clause in good faith. However. Despite the extensions. Marquez Tiu countered that the non-involvement clause was unenforceable for being against public order or public policy: First. Article 1306 of the Civil Code provides that parties to a contract may establish such stipulations. In sum. Petitioner was told to submit her answer to the complaint and given several extensions within which to do so. since it only prohibits petitioner from engaging in any pre-need business akin to respondent‘s. public order or public policy.LABOR RELATIONS Atty. Petitioner contended that the transfer to a rival company was an accepted practice in the pre-need industry. Nevertheless. public order. the non-involvement clause. clauses. usage. or public policy. she failed to submit her answer. petitioner is bound to pay respondent P100. for to do so would be to alter the real intent of the parties. Courts cannot stipulate for the parties nor amend their agreement where the same does not contravene law. G. 164893. since it appears that even from the start. March 1. proficiency. but after eight months of service. as a Boeing 747 Systems Engineer. for ―personal reasons. After completing the training course. nor inconvenient. refuse to reimburse the costs of training without violating the principle of unjust enrichment.‖ PAL sent Almario a letter informing that his proposed resignation will make him reimburse the training costs plus damages as he is required to render 3 years of service because the company invested heavily on his professional training. or technical competence so that he could efficiently discharge the position of A-300 First Officer. RTC rendered judgment in favor of Almario and CA reversed the decision. Almario (Almario).R. Issue: WON Almario should reimburse the training cost. as an offer involving a demotion in rank and a diminution in pay. (PAL). but rather a preventive measure to avoid further damage to the College of Law. PAL invested for the training of Almario to enable him to acquire a higher level of skill. 2007 Facts: Vicente S. Marquez complaining student from adversely affecting a harmonious relationship within the College of Law among all its constituents. The transfer. due to Almario‘s resignation after only eight months of service following the completion of his training course. The pertinent provision of the CBA and its rationale aside. Ruling: There was no constructive dismissal. On 17 February 1997. he underwent. the employee may not complain that it amounts to a constructive dismissal. or disdain by an employer becomes so unbearable on the part of the employee that it would foreclose any choice by him except to forego his continued employment. benefits. Issue: Whether petitioner‘s transfer as secretary/clerk-typist from the College of Law to the High School and Elementary Departments amounts to constructive dismissal. No. more than five months of training consisting of ground schooling in Manila and flight simulation in Melbourne. Ruling: Yes. Reassignments made by management pending investigation of irregularities allegedly committed by an employee fall within the ambit of management prerogative. based on its assessment and perception of its employees‘ qualifications. while incidental to the pending charges against petitioner. Jefferson M. He cannot. petitioner filed a complaint for constructive dismissal with prayer for moral and exemplary damages and attorney‘s fees before the NLRC Regional Arbitration Branch-Cordillera Administrative Region. Australia. G. When his transfer is not unreasonable. however. was hired by respondent. The transfer of petitioner does not amount to a demotion in rank and status. He successfully bid for the higher position of Airbus 300 (A-300) First Officer. Philippine Airlines. Page 74 . The NLRC dismissed the complaint for lack of merit which decision was affirmed by the Court of Appeals. insensibility. There is constructive dismissal if an act of clear discrimination. It is the employer‘s prerogative. she would only have to perform the same duties in the Office of the Principals of the High School and Elementary Departments. She stated that aside from being tainted with procedural lapses in violation of her right to due process. nor prejudicial to him. 11. and other privileges. September 11. Inc. he tendered his resignation." The factual milieu in this case is different. The purpose of reassignments is no different from that of preventive suspension which management could validly impose as a measure of protection of the company‘s property pending investigation of any malfeasance or misfeasance committed by the employee. PAL expected to recover the training costs by availing of Almario‘s services for at least three years. to move them around in the various areas of its business operations in order to ascertain where they will function with maximum benefit to the company. Philippine Airlines. the transfer also amounted to her demotion in rank. 170928. An employee‘s right to security of tenure does not give him such a vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful. Almario denied the existence of any agreement with PAL and pointed out that the CBA between PAL and Airline‘s Pilot Association carried no such agreement. unreasonable or unlikely. Petitioner was a secretary/clerk-typist of the College of Law. aptitudes. It exists where there is cessation of work because "continued employment is rendered impossible. hence this petition. and it does not involve a demotion in rank or a diminution of his salaries. at PAL‘s expense. Article 22 of the Civil Code applies.LABOR RELATIONS Atty. Since said higher position required additional training. Almario served as A-300 First Officer of PAL. and competence. Petitioner was not denied due process. Almario v. contrary to Almario‘s claim. Given that. therefore. was not meant to be a penalty. The expectation of PAL was not fully realized. As such secretary/clerk-typist. Employer exercises the prerogative to transfer an employee for valid reasons and according to the requirements of its business. The notices allegedly sent to respondent did not indicate any receipt from respondent. The NLRC ruled that respondent was not informed of his transfer from Oro Verde Warehouse to VisMin Logistics Operations. that is. among others. 2008 Facts: On 24 October 1980. or any other means. the transfer of responsibility of the Oro Verde Warehouse to the newly-organized VisMin Logistics Operations effecting the formal transfer of responsibility of the security personnel and equipment in the Oro Verde Warehouse. acquires or comes into possession of something at the expense of the latter without just or legal ground. and attorney's fees. On 19 October 1993. moral and exemplary damages. as well as for recovery of salary differential and backwages. Issue: Legality of respondent's dismissal from employment. characterized by a wrongful and perverse attitude. The NLRC declared that petitioner failed to justify why respondent was not entitled to the full rate of salary increases enjoyed by other security guards. In 1984 respondent became a monthly-paid employee which entitled him to yearly increases in salary. The Labor Arbiter found nothing prejudicial. shall return the same to him. or unreasonable to petitioner's decision to merge the functions of the Materials Management of the Mandaue Brewery and the Physical Distribution Group which resulted to the forming of the VisMin Logistics Operations. respondent filed an action for recovery of damages due to discrimination under Article 100 4 of the Labor Code. Respondent was properly informed of the transfer Page 75 . . Marquez Art. NLRC: Set aside the Labor Arbiter's Decision. Every person who through an act of performance by another. issued a Memorandum ordering. and must pertain to the duties which he had been engaged to discharge. San Miguel Corporation (petitioner) employed Angel C. Jefferson M. In a letter. Petitioner alleged that respondent was properly notified of the transfer but he refused to receive Respondent continued to report at Oro Verde Warehouse. provided the transfer does not result in demotion in rank or diminution of the employee's salary. termination pay. CA: Court of Appeals affirmed with modification the NLRC's Decision. He alleged that he was not properly notified of the transfer and that he did not receive any written order Petitioner alleged that respondent was properly notified of the transfer but he refused to receive Petitioner also alleged that respondent was given notices of Guard Detail separately dated. 22. In this case. May 07. Pontillas (respondent) as a daily wage company guard. unjust. The Labor Arbiter further ruled that petitioner did not violate Article 100 of the Labor Code. an employer may terminate an employment for serious misconduct or willful disobedience by the employee of the lawful orders of his employer or his representative in connection with his work. The Court of Appeals ruled that there was no sufficient evidence that would show that respondent's failure to report to his new superior was willful and characterized by a perverse and wrongful attitude. Labor Arbiter ruled that respondent was accorded due process before his termination from the service. respondent filed an amended complaint against petitioner for illegal dismissal and payment of backwages. Ruling: Respondent was dismissed for a just cause. Manager. San Miguel Corp. He was investigated with the assistance of counsel. Respondent alleged that his yearly salary increases were only a percentage of what the other security guards received.LABOR RELATIONS Atty. the manager gave the same information to his Supervising Security Guards for them to relay the information to the company security guards. Pontillas. 12. Court of Appeals ruled that under Article 282(a) of the Labor Code. but he still refused to report for duty at the VisMin Logistics Operations. Wilful disobedience requires the concurrence of two elements: (1) the employee's assailed conduct must have been wilful. G. lawful. 155178. The Labor Arbiter recognized the management prerogative to transfer its employees from one station to another. NLRC further ruled that respondent was a victim of discrimination. v. and other privileges. No. Simultaneously. as amended. and he was able to confront petitioner's witnesses and present evidence in his favor. made known to the employee. petitioner informed respondent that an administrative investigation would be conducted on relative to his alleged offenses of Insubordination or Wilful Disobedience in Carrying out Reasonable Instructions of his superior. against petitioner.R. and (2) the order violated must have been reasonable. LA: Ruled in favour of the company and against Pontillas. An employer may terminate an employment for serious misconduct or wilful disobedience by the employee of the lawful orders of his employer or representative in connection with his work. benefits. we found that the order of transfer was reasonable and lawful considering the integration of Oro Verde Warehouse with VisMin Logistics Operations. and other privileges. from Monday to Friday considering that the compressed workweek schedule is adopted in lieu of the regular workweek schedule which also consists of 46 hours. it must also protect the right of an employer to exercise what are clearly management prerogatives. according to its own discretion and judgment. The MOA specifically stated that the employee waives the right to claim overtime pay for work rendered after 5:00 p. the consequent transfer of Tryco's personnel. benefits. 1997 which directed petitioners to report to the company's plant site in Bulacan.m. 2008 Facts: Petitioners are employees of Tryco Pharmaceuticals Corporation. 1996. or inconvenient.. Issue: Was there constructive dismissal due to the transfer of the petitioners from Caloocan City to San Rafael Bulacan? Ruling: The petition has no merit. Bulacan. Tryco issued a Memorandum dated April 7. are generally accorded not only respect but even finality. the NLRC and the CA are in absolute agreement. 13. Bisig Manggagawa sa Tryco vs. who are deemed to have acquired expertise in matters within their respective jurisdiction. In this case. Bulacan. Page 76 . inconvenient. In January 1997. such employee shall be entitled to overtime pay. all aspects of employment. 21. Findings of fact of labor officials. BMT declared a strike on May 26. from Monday to Friday. Tryco informed the Bureau of Working Conditions of the Department of Labor and Employment of the implementation of a compressed workweek in the company. G. anchor their objection solely on the ground that it would cause them great inconvenience since they are all residents of Metro Manila and they would incur additional expenses to travel daily from Manila to Bulacan. Guidelines on the Implementation of Compressed Workweek.) No. The MOA was entered into pursuant to Department of Labor and Employment Department Order (D. The employer must show that the transfer is not unreasonable. the Labor Arbiter. in the instant case. generally not constitutive of constructive dismissal. Bulacan. regardless of whether it was made pursuant to the letter of the Bureau of Animal Industry. or prejudicial to the employee. therefore. 8:00 a. Tryco received the Letter dated March 26. and bind us when supported by substantial evidence. This prerogative extends to the management's right to regulate.m. and no overtime pay shall be due and payable to the employee for work rendered during those hours. 151309. No. assigned to the Production Department was well within the scope of its management prerogative. privileges and other benefits. 15. However. the transfer orders do not entail a demotion in rank or diminution of salaries. shall be considered as the regular working hours. the employer has the burden of proving that the transfer of an employee is for valid and legitimate grounds. nor does it involve a demotion in rank or a diminution of his salaries. not in Caloocan City since its operating permit was licensed there.m. As provided in the MOA. was within the scope of its inherent right to control and manage its enterprise effectively. Series of 1990. Marquez but he refused to receive the notices on the pretext that he was wary because of his pending case against petitioner. Meantime. the NLRC. including the freedom to transfer and reassign employees according to the requirements of its business. Indisputably. should an employee be permitted or required to work beyond 6:12 p.LABOR RELATIONS Atty. BMT opposed the transfer of its members to San Rafael. When the transfer is not unreasonable.. 1997. Jefferson M.O. or prejudicial to the employee.m. contending that it constitutes unfair labor practice. However. REINSTATE Decision of the Labor Arbiter. until 6:12 p. Accordingly. and it does not involve a demotion in rank or diminution of salaries. Petitioners.Management's prerogative of transferring and reassigning employees from one area of operation to another in order to meet the requirements of the business is.R. Tryco's decision to transfer its production activities to San Rafael.This is particularly true when the findings of the Labor Arbiter. NLRC. the employee may not complain that it amounts to a constructive dismissal. benefits and other privileges of the petitioners. providing for a compressed workweek schedule to be implemented in the company effective May 20. and the CA uniformly agreed that the petitioners were not constructively dismissed. 1997 from the Bureau of Animal Industry of the Department of Agriculture reminding it that its production should be conducted in San Rafael. In protest. to 6:12 p. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied. BMT and Tryco negotiated for the renewal of their collective bargaining agreement (CBA) but failed to arrive at a new agreement.m. Oct. Tryco and the petitioners signed a Memorandum of Agreement (MOA). therefore. Petitioners then filed their complaints to the labor arbiter alleging that Tryco negotiated in bad faith and unfair labor practice of Tryco by transferring the members of the union in order to paralyze it and that therefore it amounted to constructive dismissal. maker of veterinary medicines and products. Thus. While the law is solicitous of the welfare of employees. Hence petition was denied for lack of merit. 14. at the scheduled preliminary conference before the NLRC Arbitration Branch. The Company reasoned that in appointing Del Villar as the Staff Assistant of the Corporate Purchasing and Materials Control Manager. Labor Arbiter rendered a Decision in Del Villars favor. The Labor Arbiter held that the allegations in Del Villars complaint sufficiently presented a cause of action against the Company. in good faith the Company has initiated a special program called "Project New Start". with a job grade of NS-VII. No. Since the various programs will affect some of its employees. In 1992. Coca-Cola Bottler’s Philippines.R. According to Coca-Cola [Del Villar] was not outrightly dismissed." Del Villar believed that he was demoted by the Company to force him to resign. Jefferson M. utilization of improved operational processes and functional re-organizations. Otherwise.LABOR RELATIONS Atty. Pineda then served as the Executive Assistant in the Business Logistic Directorate in charge of the Refrigeration Services of the Company. They contended that Del Villar had no vested right to the privileges he previously enjoyed as Transportation Services Manager. but his car and other privileges were withdrawn and he spent his time at his new post sitting "at a desk with no meaningful work whatsoever. Objection to a transfer that is 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. 163091. reasoning that:virtualaw Contrary to the Labor Arbiters pronouncement that [the Company] should have rebutted allegations of bad faith and malice. Inc. The Company failed to appear. Del Villar submitted a Report to the Company President. Jr. informing him that (1) he was designated as Staff Assistant to the Corporate Purchasing and Materials Control Manager. the Company was merely exercising its inherent management prerogative to transfer an employee from one position to another. Del Villar continued to receive the same salary as Transportation Services Manager. San Juan (San Juan). Although as the Staff Assistant of the Corporate Purchasing and Materials Control Manager. 2010 Facts: Coca-Cola hired respondent Angel U. as a "Staff Assistant" [Del Villar] should have been given some meaningful or responsible work appurtenant to the job designation. detailing an alleged fraudulent scheme undertaken by certain Company officials in conspiracy with local truck manufacturers. As Transportation Services Manager. under the Business Logistic Directorate. gasoline allowance. he was removed from his former position as Transportation Services Manager. among other benefits. and annual foreign travel. Unable to endure any further the harassment. aside from the use of a company car. instead. This program is intended to assist employees whose positions will be declared redundant with the implementation of new distribution systems. he ceased to be entitled to the benefits accruing to an S-7 position under existing company rules and policies.000. Seven months after the submission of his Report on the fraudulent scheme of several company officials. (2) with Del Villars new assignment. Del Villar received a Memorandum from San Juan. As a result. headed by Director Edgardo I. Del Villar became the Transportation Services Manager. 1996 a complaint against the Company for illegal demotion and forfeiture of company privileges. we are more inclined to apply the presumption of good faith. del Villar (Del Villar) on May 1. G. Marquez The Court has previously declared that mere incidental inconvenience is not sufficient to warrant a claim of constructive dismissal. and his present isolation can be seen as a punishment for acting in a righteous and forthright manner. Mere conclusions of fact and law should not be used as bases for an automatic finding of bad faith. Del Villar appears to have been singled out or discriminated upon due to his having reported the 1996 truck scam. NLRC reversed the Labor Arbiter. As it Page 77 . Del Villar filed with the Arbitration Branch of the NLRC on November 11. among other Company officials. overpricing the trucks purchased by the Company by as much as P70. Del Villar implicated San Juan and Jose L. as part of the conspiracy. Del Villar. Del Villar prepares the budget for the vehicles of the Company nationwide. and demoted to Staff Assistant to the Corporate Purchasing and Materials Control Manager. Pineda. the functions related to Refrigeration were assigned to the Transportation Services Manager.000. and (3) Del Villar was to turn over the vehicle assigned to him as Transportation Services Manager to Pineda by July 10. October 6.00 each.00.. as part of the reorganization of the Company. from his former position as Transportation Services Manager. The Company embarked on a reorganization of the Business Logistic Directorate. despite due notice. 1990 as Physical Distribution Fleet Manager with a job grade of S-7 and monthly salary of P50. 1996. v. which was renamed the Transportation and Refrigeration Services Manager. or demotion? Whether or not there has been redundancy in the position held by Del Villar that justified the company from the act of taking the position from him? Ruling: In the pursuit of its legitimate business interest. the employer must be able to show that the transfer is not unreasonable. and general principles of fair play and justice. [Del Villar] lacked initiative and had to be constantly reminded of what to do. 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. it cannot be used as a subterfuge by the employer to rid himself of an undesirable worker. 1996 in an alleged fraudulent scheme against the Company. But. as an offer involving a demotion in rank and diminution in pay.LABOR RELATIONS Atty. Jefferson M. [the Company] would not have given grave attention to the disclosure of [Del Villar]. level or salary. the logical consequence of such disclosure is for the president of the company to dismiss the erring employees and officers for their highly irregular acts and not to penalize [Del Villar] for making such disclosure. and other privileges. the latter number being the highest grade We are unconvinced. If indeed the so-called "great grandmother of Coca cola scams of 1996" were true. we agree with the Labor Arbiter and the Court of Appeals that the Company failed to discharge this burden of proof. This is amply supported by the fact that the [the Company] conducted a thorough investigation of the reported scam and even obtained the services of an independent auditor to determine whether the alleged anomalous transactions were actually irregular and/or questionable. requires that he stays in the office during working hours. benefits. it cannot be said that the act of the [Company] was retaliatory or penal in nature nor tainted with bad faith and/or malice. without break in service. Issue: Whether or not Company. however. 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. bearing in mind the basic elements of justice and fair play. He merited a mediocre grade of 2 in a scale of one (1) to five (5). Likewise. be reasonably expected to provide the same benefits to an employee whose position for example. The dismal performance evaluations of Del Villar were prepared by San Juan and Pineda after Del Villar already implicated his two superiors in his Report dated January 4. there are limits thereto. unreasonable or unlikely. A transfer is a movement from one position to another which is of equivalent rank. nor does it involve a demotion in rank or a diminution of his salaries. insensibility or disdain by an employer has become so unbearable to the employee leaving him with no option but to forego with his continued employment. Having the right should not be confused with the manner in which that right is exercised. constructive dismissal exists when an act of clear discrimination. are subject to limitations provided by law. Benefits. More importantly. The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion. demotion involves a situation where an employee is relegated to a subordinate or less Page 78 . Otherwise. [Del Villar] could not even update the records of his office. which has been defined as a quitting because continued employment is rendered impossible. The Company disclosed that: [Del Villar] displayed an utterly woeful performance. Thus. and usually accompanied by an increase in salary. Marquez is. collective bargaining agreements. Promotion. privileges and other benefits. He was unable to submit basic data as to type and brand of vehicles with highest/lowest maintenance cost as requested. validly exercised its management prerogative or committed constructive dismissal. he was evidently demoted. made in bad faith. however. the employees transfer shall be tantamount to constructive dismissal. inconvenient or prejudicial to the employee. or effected as a form of punishment or demotion without sufficient cause. A company cannot. He could not work with minimum or no supervision. privileges and perquisites that attach to a certain position do not provide sufficient bases for determining the superiority or inferiority of the position so held. in transferring Del Villar from the position of Transportation Services Manager to Staff Assistant to the Corporate Purchasing and Materials Control Manager. and the action is not motivated by discrimination. Should the employer fail to overcome this burden of proof. like other rights. we do not even see any disclosure of the scam and his alleged demotion.uallawlibrary After a careful scrutiny of the records. we give weight to the following instances establishing that Del Villar was not merely transferred from the position of Transportation Services Manager to the position of Staff Assistant to the Corporate Purchasing and Materials Control Manager. This manifests that [Del Villars] disclosure was taken seriously contrary to his claims of discrimination. is the advancement from one position to another with an increase in duties and responsibilities as authorized by law. on the other hand. The Company and its officials attempt to justify the transfer of Del Villar by alleging his unsatisfactory performance as Transportation Services Manager. Conversely. Accordingly.virtuallawlibrary Managerial prerogatives. His activities needed to be closely and constantly monitored by his superiors. In particular. and Pineda. and annual foreign travel. Del Villar could no longer enjoy the use of a company car. whichever is higher. the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service. Jefferson M. as his position was no longer necessary or was considered redundant due to the reorganization of the Business Logistic Directorate. It is not too difficult to imagine that the working relations between Del Villar. Del Villar contended that he was not assigned any meaningful work at all. therefore. separation Page 79 . and not because the employee unsatisfactorily performed the duties and responsibilities required by his position. whichever is higher. or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise. The Labor Arbiter was correct in his observation that had Del Villar resigned immediately after his "transfer. Coca Cola presented no other evidence . the accused. Succinctly put. As Staff Assistant of the Corporate Purchasing and Materials Control Manager. A fraction of at least six (6) months shall be considered one (1) whole year. which reads: ART. exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. which Del Villar previously enjoyed as Transportation Services Manager. Pineda was one of the Company officials who Del Villar accused of defrauding the Company in his Report dated January 4. a position is redundant where it is superfluous. The wisdom or soundness of this judgment is not subject to discretionary review of the Labor Arbiter and the NLRC. Formerly. gasoline allowance. The employer may also terminate the employment of any employee due to the installation of labor-saving devices. 1996. he being in charge of preparing the budget for all of the vehicles of the Company nationwide. with a corresponding decrease in duties and responsibilities. There is constructive dismissal when there is a demotion in rank and/or diminution in pay. and usually accompanied by a decrease in salary. 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. Second. An employee who is illegally dismissed is entitled to the twin reliefs of full backwages and reinstatement. there was a diminution in his benefits. such as overhiring of workers. properly terminable for being redundant is an exercise of business judgment of the employer. In other words. and superfluity of a position or positions may be the outcome of a number of factors. Marquez important position constituting a reduction to a lower grade or rank. Eventually. If reinstatement is not viable. In case of termination due to the installation of labor-saving devices or redundancy. all the foregoing caused Del Villar inconvenience and prejudice. Redundancy. it is not enough for a company to merely declare that it has become overmanned. Del Villars demotion is readily apparent in his new designation. so unbearable for him that he was constrained to seek remedy from the NLRC. the Company actually terminated Del Villars services effective May 31. Del Villars position as Transportation Services Manager involved a high degree of responsibility. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses. Closure of establishment and reduction of personnel. while Del Villars transfer did not result in the reduction of his salary. it was not bad enough that Del Villar was demoted.LABOR RELATIONS Atty. insensibility or disdain by an employer becomes unbearable to the employee. the Corporate Purchasing and Materials Control Manager. had been strained and hostile. The situation would be more oppressive for Del Villar because of his subordinate position vis-à-vis Pineda. the separation pay shall be equivalent to one (1) month pay or to at least one-half (1/2) month pay for every year of service. Third. Fifth. redundancy. but he was even placed by the Company under the control and supervision of Pineda as the latters Staff Assistant. 283. Redundancy is one of the authorized causes for the dismissal of an employee. To recall. 1998. provided there is no violation of law and no showing that it was prompted by an arbitrary or malicious act. Del Villars poor employee performance is irrelevant as regards the issue on redundancy. Fourth. 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 the provisions of this Title. the two posts are not of the same weight in terms of duties and responsibilities. the accuser. The Company admits that as Staff Assistant of the Corporate Purchasing and Materials Control Manager. however. The determination that the employee's services are no longer necessary or sustainable and. 1998." he could be said to have been constructively dismissed. decreased volume of business. or when a clear discrimination. It must produce adequate proof of such redundancy to justify the dismissal of the affected employees. It is governed by Article 283 of the Labor Code. for purposes of the Labor Code. then he was made a Staff Assistant a subordinate to another manager. particularly. he was the Transportation Services Manager. Redundancy arises because there is no more need for the employees position in relation to the whole business organization. Neither did the Company present proof that it had complied with the procedural requirement in Article 283 of prior notice to the Department of Labor and Employment (DOLE) of the termination of Del Villars employment due to redundancy one month prior to May 31. 2011 Facts: Page 80 . Respondent is essentially questioning the transfer of her place of work by her employer and the terms and conditions of her employment which arise from an employer-employee relationship over which the NLRC and the Labor Arbiters under Article 217 of the Labor Code have jurisdiction. No. Manila Electric Co. . Under Republic Act No. Jurisdiction over such concerns is inarguably lodged by law with the NLRC and the Labor Arbiters. Lim. LUMAYAS KA RITO. 2010 Facts: Rosario G. RTC has jurisdiction. Vice-President and Head of MERALCO's Human Resource Administration. . By respondent's allegation. Bello vs. In awarding separation pay to an illegally dismissed employee. 2008 addressed to petitioner Ruben A. computed from the time their actual compensation was withheld from them up to the time of their actual reinstatement but if reinstatement is no longer possible. 184769. Bulacan Sector. Respondent filed a petition for the issuance of a writ of habeas data against petitioners before the Regional Trial Court (RTC) of Bulacan. 15. Citing the grueling travel from her residence in Pampanga to Alabang and back entails. It is evident that respondent's reservations on the real reasons for her transfer — a legitimate concern respecting the terms and conditions of one's employment — are what prompted her to adopt the extraordinary remedy of habeas data.LABOR RELATIONS Atty. Marquez pay is awarded to the employee. in lieu of reinstatement. does not fall within the province of a writ of habeas data. appealed her transfer and requested for a dialogue so she could voice her concerns and misgivings on the matter. Lim (respondent). G. We note that Del Villars reinstatement is no longer possible because the position he previously occupied no longer exists. 1998. at which respondent is assigned. 6715.R.R. the backwages shall be computed from the time of their illegal termination up to the finality of the decision. inter alia. October 5. resort to a petition for writ of habeas data was not in order. by letter of July 10. claiming that the "punitive" nature of the transfer amounted to a denial of due process. KAPAL NG MUKHA MO. liberty and security. G. 2008. August 3. and the RTC lacked jurisdiction over the case which properly belongs to the National Labor Relations Commission (NLRC). directed the transfer of respondent to MERALCO's Alabang Sector in Muntinlupa as "A/F OTMS Clerk. the amount to be awarded shall be equivalent to one month salary for every year of service. On June 4. vs. also known as Cherry Lim. under the guise of a quest for information or data allegedly in possession of petitioners. inclusive of allowances and other benefits or their monetary equivalent. is an administrative clerk at the Manila Electric Company (MERALCO). 2008 in light of the receipt of ". The letter reads: Cherry Lim: MATAPOS MONG LAMUNIN LAHAT NG BIYAYA NG MERALCO. denouncing respondent. Ruling: Respondent's plea that she be spared from complying with MERALCO's Memorandum directing her reassignment to the Alabang Sector. Also. Jefferson M. 188086. and violation of the provisions on job security of their Collective Bargaining Agreement (CBA). reports that there were accusations and threats directed against her from unknown individuals and which could possibly compromise her safety and security. Bonifacio Security Services. Issue: Whether or not. WALANG UTANG NA LOOB Resource Staffing. Petitioners moved for the dismissal of the petition and recall of the TRO on the grounds that." Respondent. Del Villar had already received his separation pay sometime in October 1998. per San Juans Affidavit dated October 15. correctible by habeas data. petitioners' unlawful act and omission consisting of their continued failure and refusal to provide her with details or information about the alleged report which MERALCO purportedly received concerning threats to her safety and security amount to a violation of her right to privacy in life. Sapitula." effective July 18. employees who are illegally dismissed are entitled to full backwages. NGAYON NAMAN AY GUSTO MONG PALAMON ANG BUONG KUMPANYA SA MGA BUWAYA NG GOBYERNO. 16. No. an anonymous letter was posted at the door of the Metering Office of the Administration building of MERALCO Plaridel. Bello's designation as assistant detachment commander or detachment commander was not an employment position but a duty-related assignment. North Harbor. respectively. Labor Arbiter Cresencio G. 2008 resolution. During his six-month probationary period of employment. In July 2001. The CA nullified the NLRC resolutions. it is highly improbable that Bello would be promoted after just a month of employment. In June 2002. and assigned at the Department of Science and Technology (DOST) pursuant to a security service contract between the DOST and Alert Security.00 pesos a day as regular employees. 2002. from traffic marshal to supervisor. Pasawilan. and three months later to assistant detachment commander and to detachment commander in November 2001. to supervise sectoral operations. resulting in the reorganization of posts. September 14. respondent Samuel Tomas. unreasonable. to assistant detachment commander. At most. Jr. the BSSI hired a new operations manager. and to detachment commander. with the National Labor Relations Commission (NLRC). North Harbor as assistant detachment commander. The CA denied the BSSI's motion for reconsideration. Bello abandoned his job when he went on an indefinite leave of absence and did not report for work. In August 2002.R. the BSSI merely changed his assignment or transferred him to the post where his service would be most beneficial to its clients. paving the way for the present petition. Wilfredo Verceles and Melchor Bulusan were all employed by petitioner Alert Security and Investigation Agency. noting that the BSSI failed to adduce evidence that Bello abandoned his employment. he filed an indefinite leave of absence when his new assignment took effect. Bello was posted at the Negros Navigation Company in Pier 2. Inc. 2002. January 14. or unlikely. 2011 Facts: Respondents Saidali Pasawilan. (Alert Security) as security guards beginning March 31. On November 5. claiming that he had been constructively dismissed when he was demoted from a detachment commander to a mere traffic marshal. or both. It noted that Bello offered no evidence to prove that there was a series of promotions that would justify his claim of subsequent demotion.LABOR RELATIONS Atty. finding that Bello had been constructively dismissed when he was demoted to the rank-and-file position of traffic marshal after occupying the supervisory position of assistant detachment commander and detachment commander. 182397. or disdain by an employer becomes unbearable to the employee. Other than his bare and self-serving allegations. as when there is a demotion in rank or diminution in pay. After a week. the NLRC affirmed the labor arbiter's decision. insensibility. Alert Security and Investigation Agency vs. Issue: Whether or not. but later reassigned to BGC. from a traffic marshal in July 2001 to supervisor in August 2001. No. Bello has not offered any evidence that he was promoted in a span of four months since his employment as traffic marshal in July 2001 to a detachment commander in November 2001. or when a clear discrimination. Ruling: We find no reason to disturb the CA conclusion that there was no constructive dismissal. In its March 26. On October 25. (BSSI) is a domestic private corporation engaged in the business of providing security services. Page 81 . 1997. Ramos. found that Bello was illegally dismissed. He alleged that he received a series of promotions from 2001 to 2002. The management's prerogative of transferring and reassigning employees from one area of operation to another in order to meet the requirements of the business is generally not constitutive of constructive dismissal. In November 2001. Bello was illegally dismissed. In October 2002. 1997. arguing that no promotion took place. Inc. We see this to be the case in the present dispute so that the consequent reassignment of Bello to a traffic marshal post was well within the scope of the BSSI's management prerogative. Case law defines constructive dismissal as a cessation of work because continued employment has been rendered impossible. They were paid 165. the BSSI hired Bello as a roving traffic marshal to manage traffic and to conduct security and safety-related operations in the Bonifacio Global City (BGC). Marquez Respondent Bonifacio Security Services. and January 24. The BSSI denied Bello's claim of constructive dismissal. he was transferred to Pacific Plaza Towers as assistant detachment commander and later as detachment commander. 17. Jefferson M. Bello filed a complaint against the BSSI and its General Manager. Bello was assigned as roving traffic marshal at the BGC. he was assigned at Pier 2. 1996. In August 2001. he was assigned at BGC as assistant detachment commander. finding the records bereft of evidence substantiating the labor arbiter's and the NLRC's conclusions that Bello had been constructively dismissed. G. Respondents. Such stroke of retribution has no place in Philippine Labor Laws.R. it cannot be used as a subterfuge by the employer to rid himself of an undesirable worker. Having the right should not be confused with the manner in which that right is exercised. employers are barred from arbitrarily removing their workers whenever and however they want. there should be proper and effective notice to the employee concerned. However. Dismissing an employee on this ground amounts to retaliation by management for an employee‘s legitimate grievance without due process. The employer cannot simply conclude that an employee is ipso facto notified of a transfer when there is no evidence to indicate that the employee had knowledge of the transfer order. The law sets the valid grounds for termination as well as the proper procedure to take when terminating the services of an employee. there are limitations to the right to transfer employees. an employer cannot reasonably expect an employee to report for work in a new location without first informing said employee of the transfer. As a result of their complaint. this management prerogative must not curtail the basic right of employees to security of tenure. Delada. NLRC: x x x The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion. Manila Pavilion Hotel vs. Verily. 1998. This exercise is a management prerogative which is a lawful right of an employer. Dasig. In particular. Thus.LABOR RELATIONS Atty. bearing in mind the basic elements of justice and fair play. enumerates several just and authorized causes for a valid termination of employment. Hence. inconvenient or prejudicial to the employee. On January 26. As a rule. Marquez Respondents aver that because they were underpaid. the employer must be able to show that the transfer is not unreasonable. We acknowledge and recognize the right of an employer to transfer employees in the interest of the service. it is illegal and would be dealt with by the courts accordingly. Santos. Issue: Whether respondents were illegally dismissed Rulings: We rule in the affirmative. nor does it involve a demotion in rank or a diminution of his salaries. they served no purpose unless the intended recipients of the orders are informed of such. failed to report at the LRTA and instead kept loitering at the DOST and tried to convince other security guards to file complaints against Alert Security. G. Granting that the "Duty Detail Orders" were indeed issued. No. they were relieved from their posts in the DOST and were not given new assignments despite the lapse of six months. before Labor Arbiter Ariel C. privileges and other benefits. A careful review of the records reveals that there is no showing that respondents were notified of their new assignments. Petitioners. January 25. The Labor Code. Although we recognize the right of employers to shape their own work force. the failure of an employee to report for work at the new location cannot be taken against him as an element of abandonment. There must be a valid and lawful reason for terminating the employment of a worker. employment cannot be terminated by an employer without any just or authorized cause. Jefferson M. Petitioners‘ insistence on the sufficiency of mere issuance of the transfer order is indicative of bad faith on their part. Hence. on the other hand. an employee may only be terminated for just or authorized causes that must comply with the due process requirements mandated by law. deny that they dismissed the respondents. like all rights. as amended. As ruled in the case of Blue Dairy Corporation v. x x x In addition to these tests for a valid transfer. they filed a joint complaint for illegal dismissal against petitioners. No less than the 1987 Constitution in Section 3. 2012 Facts: Delada was the Union President of the Manila Pavilion Supervisors Association at MPH. they filed a complaint for money claims against Alert Security and its president and general manager. however. Petitioners presented "Duty Detail Orders" that Alert Security issued to show that respondents were in fact assigned to LRTA. Otherwise. It is the employer‘s burden to show that the employee was duly notified of the transfer. An employee asserting his right and asking for minimum wage is not among those causes. On the element of the failure of the employee to report for work. He was originally assigned as Head Waiter of Page 82 . we also cannot accept the allegations of petitioners that respondents unjustifiably refused to report for duty in their new posts. Article 13 guarantees security of tenure for workers and because of this. 1999. petitioner Manuel D. 18. 189947. on August 3. Alert Security filed a "termination report" with the Department of Labor and Employment relative to the termination of the respondents. Thus. citations omitted). gross and habitual neglect of duties. Allied Bank insisted that he report to his new assignment. we hereby reverse the Decision and the Resolution of the CA affirming the Decision of the PVA in this respect. Marquez Rotisserie. Respondent declined the inter-outlet transfer and instead asked for a grievance meeting on the matter. It is important to note what the PVA said on Delada‘s defiance of the transfer order: In fact. on 9 May 2007. Delada is expected to comply first with the said lawful directive while awaiting the results of the decision in the grievance proceedings. Delada cannot hide under the legal cloak of the grievance machinery of the CBA or the voluntary arbitration proceedings to disobey a valid order of transfer from the management of the hotel. another restaurant operated by petitioner at the same hotel. (Emphasis supplied. the employees ignore or disobey them at their peril. his transfer must be held in abeyance. According to him. MPH replied and told respondent to report to his new assignment for the time being. He refused to follow the transfer order and instead filed a Complaint before the Labor Arbiter for constructive dismissal. MPH initiated administrative proceedings against him. without prejudice to the resolution of the grievance involving the transfer. Since the PVA eventually ruled that the transfer order was a valid exercise of management prerogative. While it is true that Delada‘s transfer to Seasons is the subject of the grievance machinery in accordance with the provisions of their CBA. employer Allied Bank reassigned respondent Galanida from its Cebu City branch to its Bacolod and Tagbilaran branches. Allied Bank eventually terminated his services. He also requested his retention as Head Waiter of Rotisserie while the grievance procedure was ongoing. When he continued to refuse. Court of Appeals x x x. Despite the notices from MPH. pursuant to their Collective Bargaining Agreement (CBA). we rule in this case that MPH did not lose its authority to discipline respondent for his continued refusal to report to his new assignment. As a consequence. This issue falls squarely in the case of Allied Banking Corporation vs. Galanida is thus not entitled to reinstatement or to separation pay. In relation to this point. In Allied Banking Corporation. unless the order of MPH is rendered invalid. and willful breach of trust. Issue: Whether MPH retained the authority to continue with the administrative case against Delada for insubordination and willful disobedience of the transfer order.LABOR RELATIONS Atty. we hold that the bank dismissed Galanida for just cause in accordance with Article 282(a) of the Labor Code. Page 83 . it directed him to explain in writing why no disciplinary action should be meted out to him. Pursuant to Allied Banking. While the case was pending. a fine-dining restaurant operated by petitioner. negotiate and seek redress against employers for rules or orders that they regard as unjust or illegal. Pursuant to a supervisory personnel reorganization program. we recall our Decision in Allied Banking Corporation v. Court of Appeals. MPH reassigned him as Head Waiter of Seasons Coffee Shop. Employees may object to. petitioner is not liable to pay back wages and other benefits for the period corresponding to the penalty of 90-day suspension. Rulings: Accordingly. When the issue of whether he could validly refuse to obey the transfer orders was brought before this Court. For Galanida‘s continued refusal to obey Allied Bank's transfer orders. Thus. Thus. until and unless these rules or orders are declared illegal or improper by competent authority. we ruled thus: The refusal to obey a valid transfer order constitutes willful disobedience of a lawful order of an employer. since the grievance machinery under their CBA had already been initiated. However. willful disobedience of the lawful orders of the employer. there is a presumption of the validity of that order. gross insubordination. He adamantly refused to assume his new post at the Seasons Coffee Shop and instead continued to report to his previous assignment at Rotisserie. requiring him to explain in writing why he should not be penalized for the following offenses: serious misconduct. Delada persistently rebuffed orders for him to report to his new assignment. MPH had the authority to continue with the administrative proceedings for insubordination and willful disobedience against Delada and to impose on him the penalty of suspension. Jefferson M. Due to his continued refusal to report to his new assignment. MPH sent him several memoranda on various dates. as penalty for their illegal dismissal. X.. petitioners should be awarded back wages in accordance with Bustamante v. Retuya v. citing Bustamante Facts: Private respondent. While litigating. Insular Builders." They were not given any prior written notice. Furthermore. rendering the same services..R. 13th month pay. 2003. and assumed control of the company. they lost their former work status and benefits in a manner violative of the law. They became new employees of the latter firm and. Petitioners were however made to continue their work. Furthermore. Thus. On August 3. The fact that they worked for a sister company immediately after being dismissed from Insular Builders. Inc. the Queen City Builders. Jefferson M. Under the circumstances. should not preclude such award. the CA was correct in upholding the labor arbiter's finding that they had been illegally dismissed. petitioners were dismissed because of a "change of management. In the present case. and his son. Bustamante v. the CA was correct in upholding the labor arbiter's finding that they had been illegally dismissed. managed and controlled by private respondent Rodolfo Murillo. employees must still earn a living. Davao City. Later. were Page 84 . and Queen City Builders. as penalty for their illegal dismissal. is a family-owned corporation managed and operated principally by Antonio Murillo. August 5. private respondent Antonio Murillo dismissed petitioners and reported the matter to the Department of Labor and Employment (DOLE). This rule has been uniformly applied in subsequent cases. should not preclude such award. Petitioners. namely Mindanao Integrated Builders. Rodolfo Murillo. Issue: Whether petitioners are entitled to full back wages and separation pay in accordance with Article 279 of the Labor Code HELD Bustamante v.LABOR RELATIONS Atty. a complaint for illegal dismissal. NLRC held that illegally dismissed employees were entitled to full back wages that should not be diminished or reduced by the amount they had earned from another employment during the period of their illegal dismissal. their employers must pay them full back wages. Inc.. Having been illegally dismissed. and retirement pay as regards petitioner Abdon Dayson. their employment was changed. the former discharged the latter from his position as manager of Insular Builders. It is engaged in the construction business. Inc. Inc. as such. Inc. in the same place. 148848. Inc. it is equally true that they had in fact been illegally dismissed by their previous employer. father. petitioners should be awarded back wages in accordance with Bustamante v. Inc. were workers who have rendered services in various corporations of private respondents. G. Inc. Inc. Sta." They were not given any prior written notice. employees must still earn a living. Marquez TERMINATION OF EMPLOYMENT 1. This rule has been uniformly applied in subsequent cases. They alleged that their termination was an off-shoot of the supposed personal rift and disagreements between private respondents Antonio Murillo and Rodolfo Murillo. or on July 26. While litigating. 1993. petitioners were dismissed because of a "change of management. The fact that they worked for a sister company immediately after being dismissed from Insular Builders. 1993 without prior notice and also in absence of any valid cause. non-payment of wages. on the other hand. NLRC held that illegally dismissed employees were entitled to full back wages that should not be diminished or reduced by the amount they had earned from another employment during the period of their illegal dismissal. but simply told that their services were terminated on the day they stopped working for Insular Builders. NLRC. Inc. their employers must pay them full back wages.. Clara Plywood. Petitioners averred that they were terminated from employment on July 26. Having been illegally dismissed. Inc. Early 1993. Under the circumstances. Be it noted that. Petitioners found themselves in the middle of the crossfire and were told to temporarily stop working. NLRC. locality and at the same office but under a different company. Insular Builders. but simply told that their services were terminated on the day they stopped working for Insular Builders. NLRC. without their consent. petitioners filed with the NLRC. In the present case. Regional Arbitration Branch No. at the height of the feud between private respondents Antonio Murillo and Rodolfo Murillo. No. 1993. While it may be true that petitioners continued to work in the same place and office as in their previous employment. (b) gross and habitual neglect by the employee of his duties. Petitioners then filed a complaint for illegal dismissal and payment of money claims and on December 28. hence. The record of an employee is a relevant consideration in determining the penalty that should be meted out to him. 1999 when they were dismissed for abandonment of work. (d) commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative. CA: reversed the decision of the NLRC. with the second as the more determinative factor which is manifested by overt acts from which it may be deduced that the employees has no more intention to work. petitioners were frequently absent having subcontracted for an installation work for another company. ―In February 1999. Hence this petition. 2. is given opportunity to respond to the charge. the following standards of due process shall be substantially observed: I. G. the law requires not only the existence of a just and valid cause but also enjoins the employer to give the employee the opportunity to be heard and to defend himself. (c) fraud or willful breach by the employee of the trust reposed in him by his employer or his duly authorized representative. Petitioners disregarded the warning and exhibited a clear intention to sever their employer-employee relationship.LABOR RELATIONS Atty. grounds have been Page 85 . observance of the procedural requirements of notice and hearing in the termination of employment. Jefferson M. Issue: Whether petitioners were illegally dismissed. The other money claims awarded by the Labor Arbiter were also denied for lack of evidence. and (c) A written notice of termination served on the employee indicating that upon due consideration of all the circumstances. The intent to discontinue the employment must be shown by clear proof that it was deliberate and unjustified. 2004 Facts: Riviera Home Improvements. ―After establishing that the terminations were for a just and valid cause. we now determine if the procedures for dismissal were observed. In January 1996. This was not the first time they did this. ―Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. and (e) other causes analogous to the foregoing. these two factors should be present: (1) the failure to report for work or absence without valid or justifiable reason. ―To dismiss an employee. For a valid finding of abandonment. The Labor Arbiter: declared the dismissals illegal and ordered private respondent to pay the monetary claims. present his evidence or rebut the evidence presented against him. The employer may not be compelled to continue to employ such persons whose continuance in the service will patently be inimical to his interests. Agabon vs. ―The law imposes many obligations on the employer such as providing just compensation to workers. 1992 until February 23. It is a form of neglect of duty.R. is engaged in the business of selling and installing ornamental and construction materials. November 17. a just cause for termination of employment by the employer. 158693. and (2) a clear intention to sever employer-employee relationship. with the assistance of counsel if the employee so desires. – In all cases of termination of employment. On the other hand. they did not report for work because they were working for another company. Ruling: Negative. but also good conduct and loyalty. 1999. Marquez deprived of seniority and other employment benefits they had when they were still with their former employer. ―The procedure for terminating an employee is found in Book VI. (b) A hearing or conference during which the employee concerned. the law also recognizes the right of the employer to expect from its workers not only good performance. Subcontracting for another company clearly showed the intention to sever the employer-employee relationship with private respondent. Article 282 of the Labor Code enumerates the just causes for termination by the employer: (a) serious misconduct or willful disobedience by the employee of the lawful orders of his employer or the latter‘s representative in connection with the employee‘s work. NLRC: reversed the Labor Arbiter because it found that the petitioners had abandoned their work. Section 2(d) of the Omnibus Rules Implementing the Labor Code: Standards of due process: requirements of notice. and giving to said employee reasonable opportunity within which to explain his side. Private respondent at that time warned petitioners that they would be dismissed if this happened again. No. It employed petitioners Virgilio Agabon and Jenny Agabon as gypsum board and cornice installers on January 2. NLRC. adequate work and diligence. and were not entitled to backwages and separation pay. Inc. Rule I. For termination of employment based on just causes as defined in Article 282 of the Code: (a) A written notice served on the employee specifying the ground or grounds for termination. remittances and other similar documents – which will show that overtime. 9 and 10. Unfortunately for the private respondent. When the termination of employment is declared illegal. other than being self-serving. (3) the dismissal is without just or authorized cause and there was no due process. Thus. separation pay may be granted. ―In the second and third situations where the dismissals are illegal. Rule I. But it did not. the dismissal is undoubtedly valid and the employer will not suffer any liability. Allegations by private respondent that it does not operate during holidays and that it allows its employees 10 days leave with pay. and quiet of all persons.e. While the procedural infirmity cannot be cured.e. the manner of dismissal. should be used only to correct an injustice. as amended.D. service incentive leave pay and 13th month pay without deductions. records. the dismissal should be upheld. (1) if the dismissal is based on a just cause under Article 282. The law protecting the rights of the laborer authorizes neither oppression nor self-destruction of the employer. (2) the dismissal is without just or authorized cause but due process was observed. the foregoing notices shall be served on the employee‘s last known address. did not follow the notice requirements and instead argued that sending notices to the last known addresses would have been useless because they did not reside there anymore. otherwise known as the Labor Code of the Philippines in Book VI. service incentive leave pay and 13th month pay. and (4) the dismissal is for just or authorized cause but due process was not observed. this is not a valid excuse because the law mandates the twin notice requirements to the employee‘s last known address. and (2) if the dismissal is based on authorized causes under Articles 283 and 284. ―It must be stressed that in the present case. Jefferson M. ―From the foregoing rules four possible situations may be derived: (1) the dismissal is for a just cause under Article 282 of the Labor Code. and of bringing about ―the greatest good to the greatest number. A termination for an authorized cause requires payment of separation pay. as amended by Department Order Nos. the petitioners committed a grave offense. Procedural due process requirements for dismissal are found in the Implementing Rules of P. as the term suggests. Consequently. Article 279 mandates that the employee is entitled to reinstatement without loss of seniority rights and other privileges and full backwages. It is a constitutional restraint on the legislative as well as on the executive and judicial powers of the government provided by the Bill of Rights. rather than on the employee to prove non-payment. Private respondent is liable for petitioners‘ holiday pay. a notice of the decision to dismiss. ―Procedurally. Therefore statutory due process should be differentiated from failure to comply with constitutional due process. civil or administrative proceedings.‖ ―Private respondent claims that the Court of Appeals erred in holding that it failed to pay petitioners‘ holiday pay. service incentive leave and other claims of workers have been paid – are not in the possession of the worker but in the custody and absolute control of the employer. If reinstatement is no longer possible where the dismissal was unjust. ―To be sure. comfort. i. Laurel observed.LABOR RELATIONS Atty. differentials. abandonment. the employer must give the employee two written notices and a hearing or opportunity to be heard if requested by the employee before terminating the employment: a notice specifying the grounds for which dismissal is sought a hearing or an opportunity to be heard and after hearing or opportunity to be heard. In case of termination. reinstatement and full backwages are mandated under Article 279. do not constitute proof of payment. while statutory due process found in the Labor Code and Implementing Rules protects employees from being unjustly terminated without just cause after notice and hearing. ―The employer should not be compelled to continue employing a person who is admittedly guilty of misfeasance or malfeasance and whose continued employment is patently inimical to the employer. ―Due process under the Labor Code. if the requirements of due process were complied with. ―We affirm the ruling of the appellate court on petitioners‘ money claims. would undoubtedly result in a valid dismissal. the valid and authorized causes of employment termination under the Labor Code. Private respondent.. ―An employee who is clearly guilty of conduct violative of Article 282 should not be protected by the Social Justice Clause of the Constitution. ―Constitutional due process protects the individual from the government and assures him of his rights in criminal. and other benefits or their monetary equivalent computed from the time the compensation was not paid up to the time of actual reinstatement.. the employer must give the employee and the Department of Labor and Employment written notices 30 days prior to the effectivity of his separation. Page 86 . consistent with the fundamental and paramount objective of the state of promoting the health. however. has two aspects: substantive. i. Section 1 of the Constitution embodies a system of rights based on moral principles so deeply imbedded in the traditions and feelings of our people as to be deemed fundamental to a civilized society as conceived by our entire history. As the eminent Justice Jose P. Social justice. 442. it failed to discharge the onus probandi thereby making it liable for such claims to the petitioners. Even where the employee must allege non-payment. it should not invalidate the dismissal.. Breaches of these due process requirements violate the Labor Code. Sec. ―In the case at bar. ―In the first situation. like Constitutional due process. and procedural. social justice must be founded on the recognition of the necessity of interdependence among diverse units of a society and of the protection that should be equally and evenly extended to all groups as a combined force in our social and economic life.e. and due process was observed. if private respondent indeed paid petitioners‘ holiday pay and service incentive leave pay. one who pleads payment has the burden of proving it. the employer should be held liable for non-compliance with the procedural requirements of due process. ―Dismissals based on just causes contemplate acts or omissions attributable to the employee while dismissals based on authorized causes involve grounds under the Labor Code which allow the employer to terminate employees. i. However. 2. for an authorized cause under Article 283. The dismissal should be upheld because it was established that the petitioners abandoned their jobs to work for another company. payrolls. the Due Process Clause in Article III. except with respect to the 13th month pay wherein it presented cash vouchers showing payments of the benefit in the years disputed. The reason for the rule is that the pertinent personnel files. the general rule is that the burden rests on the employer to prove payment. inclusive of allowances. ―We are not persuaded. Due process is that which comports with the deepest notions of what is fair and right and just. which. it should be held liable for non-compliance with the procedural requirements of due process. it could have easily presented documentary proofs of such monetary benefits to disprove the claims of the petitioners. or for health reasons under Article 284. ―In the fourth situation. Marquez established to justify his termination. ―The present case squarely falls under the fourth situation. ―As a general rule. ‖ Clearly. or commission basis. the sanction to be imposed upon him should be tempered because the dismissal process was. service incentive leave pay for the same period in the amount of P3. it is wise to hold that: (1) if the dismissal is based on a just cause under Article 282 but the employer failed to comply with the notice requirement. there ought to be a difference in treatment when the ground for dismissal is one of the just causes under Article 282. or other method of calculating the same. Marlon Domingo. Pacot. we find the same to be unauthorized. i. as in this case. Jefferson M. and (2) if the dismissal is based on an authorized cause under Page 87 . In the instant case. the dismissal process is initiated by the employer‘s exercise of his management prerogative. The lack of authority to deduct is further bolstered by the fact that petitioner Virgilio Agabon included the same as one of his money claims against private respondent. the Labor Arbiter rendered a decision declaring the termination illegal and ordering JAKA and its HRD Manager to reinstate respondents with full backwages. 1997 because the corporation was ―in dire financial straits‖. or for services rendered or to be rendered and includes the fair and reasonable value. some violation against the employer. G. and separation pay if reinstatement is not possible. Issues: Does the absence of the notice of hearing in dismissal due to authorize cause amounts to illegal dismissal? Are the dismissed employees. After due proceedings. David Bisnar. Instead. The clear-cut distinction between a dismissal for just cause under Article 282 and a dismissal for authorized cause under Article 283 is further reinforced by the fact that in the first. On another breath.R.e. when he decides to cease business operations or when. underpayment of wages and nonpayment of service incentive leave and 13th month pay against JAKA and its HRD Manager. is guilty of some fraud against the employer.520. for short) until the latter terminated their employment on August 29. respondents separately filed with the regional Arbitration Branch of the National Labor Relations Commission (NLRC) complaints for illegal dismissal. capable of being expressed in terms of money whether fixed or ascertained on a time. More specifically the decision dispositively reads: In time. Robert Parohinog. in effect. and when based on one of the authorized causes under Article 283. that the termination was effected without JAKA complying with the requirement under Article 283 of the Labor Code regarding the service of a written notice upon the employees and the Department of Labor and Employment at least one (1) month before the intended date of termination. After due proceedings.LABOR RELATIONS Atty.00.150. March 28. the employee has committed some serious misconduct. Thus. task. the law requires payment of separation pay. the Labor Arbiter rendered a decision declaring the termination illegal and ordering JAKA and its HRD Manager to reinstate respondents with full backwages. Jaka Food Processing vs.00 and the balance of Virgilio Agabon‘s thirteenth month pay for 1998 in the amount of P2. Rosana Castelo. a dismissal for an authorized cause under Article 283 does not necessarily imply delinquency or culpability on the part of the employee. he undertakes to implement a retrenchment program. because of company‘s serious losses. i. ―The Court of Appeals properly reinstated the monetary claims awarded by the Labor Arbiter ordering the private respondent to pay each of the petitioners holiday pay for four regular holidays from 1996 to 1998. piece . is not required. The evident intention of Presidential Decree No. in the amount of P6. private respondent failed to show that the deduction of the SSS loan and the value of the shoes from petitioner Virgilio Agabon‘s 13th month pay was authorized by the latter. he has neglected his duties. when the employer opts to install labor saving devices. Accordingly. lodging. or is guilty of. For these reasons. to wit: (f) ―Wage‖ paid to any employee shall mean the remuneration or earnings. underpayment of wages and nonpayment of service incentive leave and 13th month pay against JAKA and its HRD Manager. respondents separately filed with the regional Arbitration Branch of the National Labor Relations Commission (NLRC) complaints for illegal dismissal. Rhoel Lescano and Jonathan Cagabcab were earlier hired by petitioner JAKA Foods Processing Corporation (JAKA. Rosana Castelo. It is not disputed. it can be said that the employee himself initiated the dismissal process. of board. or. which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done. payment of separation pay. however designated. and separation pay if reinstatement is not possible. initiated by an act imputable to the employee. No.00. as additional income. as in Agabon.255. 151378. as a rule.e. 2005 Facts: Respondents Darwin Pacot. entitled to separation pay? Ruling: A dismissal for just cause under Article 282 implies that the employee concerned has committed. while in the second. or other facilities customarily furnished by the employer to the employee…‖ from which an employer is prohibited under Article 113 of the same Code from making any deductions without the employee‘s knowledge and consent. Marquez ―Anent the deduction of SSS loan and the value of the shoes from petitioner Virgilio Agabon‘s 13th month pay. the 13th month pay is included in the definition of wage under Article 97(f) of the Labor Code. however. In time. 851 is to grant an additional income in the form of the 13th month pay to employees not already receiving the same so as ―to further protect the level of real wages from the ravages of world-wide inflation. 3. as determined by the Secretary of Labor. two reference letters. the sanction should be stiffer because the dismissal process was initiated by the employer‘s exercise of his management prerogative. the bank denied petitioner's request on the ground that the submission of the pre-employment requirements. 2. by letter of December 28. a sister company of the bank. the bank directed the submission by petitioner of. 164635. November 17.e. NLRC we made the following declaration: ―The rule. 2005 Facts: 1. 7. therefore.000. duly proved. among other things. informed the bank that she could not secure a clearance from her previous employer. established that there was ground for respondents‘ dismissal. Petitioner Mauricio. By reply memorandum. This is consistent with the state policy of treating labor as a primary social economic force. started working as an Administrative Assistant in the Legal Department of the Manila Banking Corporation on July 1. NLRC. 5. The bank gave her up to December 15. Issue: W/N Mauricio‘s probationary employment was validly terminated by Manila Banking Corporation Ruling: Yes. the Manila Bankers Life Insurance Corporation. unpaid salary. 3. the bank was still open in the event that petitioner will secure the required clearance form (sic) Manila Bankers Life and would consider her future employment with Manilabank. We likewise find the Court of Appeals to have been in error when it ordered JAKA to pay respondents separation pay equivalent to one (1) month salary for every year of service. No. 1999 as a probationary employee.R. and informing that her failure to do so would cause the termination of her employment effective December 29. Jefferson M. To quote: ―The submission of clearance from a previous employer is a reasonable requirement to qualify as a regular employee upon the expiration of the six months probationary employment. it is established that JAKA failed to comply with the notice requirement under the same Article. This reasonable regulation is mandatory in the sense that it speaks of the employee's character before he Page 88 . is a standing policy of Manilabank applicable especially to bank officers. She thus requested that any action relative to her employment be held in abeyance as she was still following up the early resolution of the case. is that in all cases of business closure or cessation of operation or undertaking of the employer. Considering the factual circumstances in the instant case and the above ratiocination..LABOR RELATIONS Atty. retrenchment. 4. to allow an exemption to the rule that the same should be submitted prior to the expiration of the 6month probationary employment will create a precedent which will prejudice an established hiring policy. and moral and exemplary damages against the bank.00. It is. Petitioner. The exception is when the closure of business or cessation of operations is due to serious business losses or financial reverses. not to mention the legal implication of waiver on the part of the bank to further require submission of the clearance after the lapse of the probationary employment. affording full protection to its rights as well as its welfare. the affected employee is entitled to separation pay. This is because in Reahs Corporation vs. As a pre-employment requirement. Mauricio v. Petitioner filed on January 21. a 1x1 ID picture. 1999 to comply. Likewise. 1999. deem it proper to fix the indemnity at P50. one of which is a clearance from the previous employer if one is previously employed. and clearance from the employee's previous employment. 2 x 2 ID picture. Despite the deadline given her. Marquez Article 283 but the employer failed to comply with the notice requirement. In denying Muricio‘s petition. 1999. 4. Petitioner failed to submit the required documents. G. as she had a pending case with it. xxx‖. However. the right of affected employees to separation pay is lost for obvious reasons. petitioner still failed to comply with the requirements. SC affirmed the Labor Arbiter‘s decision. i. Mauricio‘s probationary employment was validly terminated by the bank. therefore. 1999 to submit the requirements. 2000 a complaint for illegal dismissal. we. therefore. in which case. drawing the bank to send her a Memorandum giving her until December 29. 6. and advised her that the processing of her regularization as employee would be held in abeyance. which is one of the authorized causes enumerated under Article 283 of the Labor Code. The bank further reasoned that. They alleged. The fact that complainant's previous employer cannot issue a clearance because of pending questionable transaction in which complainant is involved. complainant was directed to submit the documents required for regularization but she dilly-dallied. 1990. respondent ITC actually underwent ‗no plant operation‘ since 19 March 1990 due to lack of log supply. complainant was given a six month period to produce the clearance requirement and as early as November 26. On October 15. vs. Ababon. unfair labor practice and damages.‖ In the case of San Miguel Brewery Sales Force Union vs. and whether they are entitled to separation pay. were illegally dismissed due to the closure of ITC‘s business. 1990 it will undergo a ―no plant operation‖ due to lack of raw materials and will resume only after it can secure logs for milling. As borne out from the records. the Honorable Supreme Court ruled that: ―Except as limited by special laws. et al. and the lease contract on the plywood plant. On March 16. Thereafter. an employer is free to regulate according to his own discretion and judgment. Without the raw materials respondent ITC has nothing to produce. Marquez or she becomes a regular employee. and other monetary awards. three requirements are necessary for a valid cessation of business operations: (a) service of a written notice to the employees and to the DOLE at least one month before the intended date thereof. This fact is admitted by complainants (Minutes of hearing. by the Department of Environment and Natural Resources (DENR) coincidentally on the same day the ITC ceased operation of the plant. the conclusion is inevitable that said closure is Page 89 . no employer in his right mind would engage the regular service of an employee unless he is certain of the moral character of a probationary employee applying as regular employee.g. Industrial Timber Corp. among others. This fact and the alleged lack of logs for milling constrained ITC to lay off all its workers until further notice. the clearance cannot be issued before the expiration of the six months probationary period. whichever is higher. And without the contract of lease respondent ITC has no option but to cease operation and turn over the plant to the lessor. et al. This was followed by a final notice of closure or cessation of business operations on August 17. that the cessation of ITC‘s operation was intended to bust the union and that both corporations are one and the same entity being controlled by one owner. Without the permits it cannot lawfully operate the plant. IPGC notified ITC of the expiration of the lease contract in August 1990 and its intention not to renew the same. 1990 with an advice for all the workers to collect the benefits due them under the law and CBA. including hiring. ITC notified the Department of Labor and Employment (DOLE) and its workers that effective March 19. It was only on December 28.R.LABOR RELATIONS Atty. 1999.‖ The pre-employment requirements of respondent bank which was made known to complainant upon the inception of her employment were not shown to be unreasonable so as to render ineffectual complainant's denial as regular employee. expiration and non-renewal of the wood processing plant permit. 1990. Ruling: Under Article 283 of the Labor Code. 164518. 1990. This prompted Virgilio Ababon. Ople (170 SCRA 25). ITC commenced operation of the plywood plant and hired 387 workers. and (c) payment to the employees of termination pay amounting to one month pay or at least one-half month pay for every year of service. In fact. anti-pollution permit. 28 October 1991). Janury 25. No. 1985 for a period of five years. For sure. On June 26. 1999 or a day before the deadline that complainant wrote her previous employer about the issuance of the clearance requirement but considering that complainant has a pending questionably petty cash liquidation problem upon audit. 5. Since then several subsequent incidents prevented respondent ITC to resume its business operations e. it is within the province of respondents to deny the regularization of complainant. which included the antipollution permit. Butuan City. to file a complaint against ITC and IPGC for illegal dismissal. Having established that ITC‘s closure of the plywood plant was done in good faith and that it was due to causes beyond its control. 2006 and March 28. 2007 Facts: Industrial Plywood Group Corporation (IPGC) is the owner of a plywood plant located at Agusan. IPGC took over the plywood plant after it was issued a Wood Processing Plant Permit No. backwages. Issue: Whether or not Ababon. (b) the cessation of business must be bona fide in character. Meanwhile. G. To say that the requirement is a mere formality is an oversimplification of the long standing policy in the bank industry. leased to Industrial Timber Corporation (ITC) on August 30. all aspects of employment. WPR-1004-081791-042. Jefferson M. ITC notified the DOLE and its workers of the plant‘s shutdown due to the non-renewal of anti-pollution permit that expired in April 1990. Pequeño. under the rules of client and lawyer relationship. neglect of duty and retrenchment. 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. despite non-compliance with the statutory requirement of notice and hearing. While an employer is under no obligation to conduct hearings before effecting termination of employment due to authorized cause. The controversy in the present case arises on the computation of backwages wherein respondent Sadac included the general salary increases in said computation while petitioner Bank insists that the general salary increases should not be included in the computation of backwages but rather the computation should be based on the wage rate at the time of dismissal. Marquez valid. respondent Sadac was held to be entitled to backwages from termination of employment until turning sixty (60) years of age (in 1995) and. In Agabon v. Salary increases are not akin to allowances or benefits. in a letter-petition to the Chairman of the Board of Directors." as indirect or contingent remuneration. 1990 due to lack of raw materials. NLRC. National Labor Relations Commission and Jaka Food Processing Corporation v. Equitable Bank vs Sadac. they are entitled to separation pay equivalent to one month pay or at least one-half month pay for every year of service. The Supreme Court find that ITC did not comply with the notice requirement.LABOR RELATIONS Atty. Pacot. the ITC sent its employees a final notice of closure or cessation of business operations to take effect on the same day it was released. however. On 26 June 1989. Allowances and benefits are Page 90 . 102467. namely.R. whichever is higher. on 10 August 1989. Ruling: General salary increases are not included in the base figure to be used in the computation of backwages. In said case.00. Consequently. Thus. wherein it was held that there was employer-employee relationship between petitioner Bank and respondent Sadac and that Sadac's dismissal was illegal. We find that this falls short of the notice requirement for termination of employment due to authorized cause considering that the DOLE was not furnished and the notice should have been furnished both the employees and the DOLE at least one month before the intended date of closure. A salary increase cannot be interpreted as either an allowance or a benefit. which may or may not be earned. his dismissal not being grounded on any of the causes stated in Article 282 of the Labor Code and there being disregard of the procedural requirements in terminating Sadac's employment. respondent Sadac requested for a full hearing and formal investigation but the same remained unheeded. He shall also be paid an additional amount of P5. In the case at bar. 2006 Facts: Respondent Sadac was appointed Vice President of the Legal Department of petitioner Bank effective 1 August 1981. respectively. On the ground of lack of confidence in respondent Sadac. The issues on the existence of employer-employee relationship as well as the legality of the dismissal were decided by the Court in the case of Equitable Banking Corporation vs. In reaction thereto. 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. This was followed by a ‗shut down‘ notice dated June 26. 1997. Article 279 mandates that an employee‘s full backwages shall be inclusive of allowances and other benefits or their monetary equivalent. No.R. we find it no longer necessary to discuss the issue regarding the computation of their backwages.000. Finally. G. et al. in effect. Ababon. this shutdown was only temporary as ITC assured its employees that they could return to work once the renewal is acted upon by the DENR. June 13. respondent Sadac was removed from his office and ordered disentitled to any compensation and other benefits. Although the closure was done in good faith and for valid reasons. but which is sometimes in the nature of compensation. the Court sustained the dismissals for just cause under Article 282 and for authorized cause under Article 283 of the Labor Code. On August 17. and subsequently General Counsel thereof on 8 December 1981. could not have been illegally dismissed to be entitled to full backwages. remained valid because the non-compliance with the notice and hearing requirement in the Labor Code did not undermine the validity of the grounds for the dismissals. initiated by an act imputable to the employee. After learning of the filing of the complaint. and cannot be confused with either. G. petitioner Bank instructed respondent Sadac to deliver all materials in his custody in all cases in which the latter was appearing as its counsel of record. Issue: Whether or not general salary increases should be included in the base figure to be used in the computation of backwages. 6. the sanction should be stiff as the dismissal process was initiated by the employer‘s exercise of his management prerogative. However. respondent Sadac filed a complaint for illegal dismissal with damages against petitioner Bank and individual members of the Board of Directors thereof. thereupon. Jefferson M. The term "allowances" is sometimes used synonymously with "emoluments. the law requires that it must notify the DOLE and its employees at least one month before the intended date of closure. to invalidate a dismissal merely because of a procedural defect creates absurdity and runs counter to public interest. However. accused respondent Sadac of abusive conduct and petitioned for a change in leadership of the department. 1990. June 8. ITC notified its employees and the DOLE of the ‗no plant operation‘ on March 16. petitioner Bank terminated the services of respondent Sadac. No. to retirement benefits in accordance with law. 164772. On 9 November 1989. The grounds for the dismissals in those cases. and sometimes in the nature of reimbursement. Indeed. 1990 due to the expiration of the anti-pollution permit. nine lawyers of petitioner Bank‘s Legal Department. These dealers. will open the floodgates to various interpretations. the act complained of must be ―work-related. in the case of supervisors or personnel occupying positions of responsibility. the plain conclusion is that respondent Sadac‘s computation of his full backwages which includes his prospective salary increases cannot be permitted. From the foregoing.or 52-day ―rolling due date‖ of each of its IBMs and IGSs. through its various outlets nationwide. On August 25. respondent filed her Complaint for illegal dismissal. management undertook an audit of the Cagayan de Oro City and Butuan City branches. the petitioner engages and contracts with dealers to sell the aforementioned merchandise. the NLRC rendered its decision dismissing the appeal. the base figure to be used in the computation of backwages is pegged at the wage rate at the time of the employee‘s dismissal. This situation applies where a person is entrusted with confidence on delicate matters. Law and jurisprudence have long recognized the right of employers to dismiss employees by reason of loss of trust and confidence. The duties of the respondent included the strict monitoring of the 38. formally dismissed the respondent for breach of trust and confidence.‖ As a consequence of the discovery of the foregoing alleged ―anomalous practice‖ of extending the credit terms of certain IBMs. the alleged voluntary admissions of respondent. On September 24. 1996. perfumes. handling. the respondent is not an ordinary rank-and-file employee. To extend the coverage of an allowance or a benefit to include salary increases would be to strain both the imagination of the Court and the language of law. 1499013. including the company‘s fiscal situation and even the employee‘s future performance on the job. ready to wear clothes and other novelty items. respondent occupied a highly sensitive and critical position and may thus be dismissed on the ground of loss of trust and confidence. Loss of confidence as a just cause for dismissal is premised on the fact that an employee concerned holds a position of trust and confidence. Magi Caroline Mendoza. 1998. with the Labor Arbiter. a certain Ms. the same should have been explicitly stated in the same manner that the law used clear and unambiguous terms in expressly providing for the inclusion of allowances and other benefits.LABOR RELATIONS Atty. 7. Heirs of Sara Lee vs. salary increases are a mere expectancy. 1996. Jefferson M. That respondent Sadac may have received salary increases in the past only proves fact of receipt but does not establish a degree of assuredness that is inherent in backwages. at the time of her dismissal from employment. On the basis of the hearing. 1998. Rey. and in addition to the wage or salary. the Labor Arbiter rendered a decision in favor of the respondent. to change the credit term of one of the IBMs of the petitioner. Issue: Is the respondent dismissed for a just cause? Ruling: Contrary to the findings of the NLRC and the CA. On October 29. They are. Salary increases are not separate grants by themselves but once granted. intimate apparels.R. The nature of her work requires a substantial amount of trust and confidence on the part of the employer. Cynthia Rey (respondent). or the employee‘s continued stay in a position subject to management prerogative to transfer him to another position where his services are needed. the Court holds that respondent was dismissed for a just cause. 2006 Facts: The House of Sara Lee (petitioner) is engaged in the direct selling of a variety of product lines for men and women. In contrast. salary increases are amounts which are added to the employee‘s salary as an increment thereto for varied reasons deemed appropriate by the employer. The petitioner appealed to the CA under Rule 65. 2000. loss of trust justifies termination. who happens to be respondent‘s sister-in-law. depending on whether they sell individually or through their own group. Sometime in June 1995. and the findings of the auditor‘s report. Furthermore. she allegedly instructed the Accounts Receivable Clerk of the Cagayan de Oro outlet. Aggrieved. including cosmetics. a certain Ms. 1996. Thus. by its nature volatile and are dependent on numerous variables. while respondent was still working in Butuan City. No. as stated above. in order to constitute a just cause for dismissal. But. shows that the award of backwages therein is unqualified. they are deemed part of the employee‘s salary. as well as the Page 91 . inclusive of regular allowances that the employee had been receiving such as the emergency living allowances and the 13th month pay mandated under the law. No. on June 25. As observed by the NLRC. the CA dismissed the Petition on the sole ground that factual issues are not proper subjects for a special civil action of certiorari. a cursory reading of the dispositive portion of the Court‘s Decision of 13 June 1997 in G. would obtain at discounted rates the merchandise from the petitioner on credit and then sell the same products to their own customers at fixed prices also determined by the petitioner. "to otherwise give the meaning other than what the law speaks for by itself. backwages and damages. the petitioner. there is no vested right to salary increases. In the present case. . Mariam Rey-Petilla. G. 102467." Indeed. Marquez granted to the employee apart or separate from. In short. In the pursuit of its business. or care and protection of the employer‘s property. Being the Credit Administration Supervisor of the Cagayan de Oro and Butuan City branches of the petitioner. such as the custody. or on June 25. In addition.R. held the position of Credit Administration Supervisor or CAS at the Cagayan de Oro City branch of the petitioner. from the 52-day limit to an ―unauthorized‖ term of 60 days. known either as ―Independent Business Managers‖ (IBMs) or ―Independent Group Supervisors‖ (IGSs). awarding backwages to respondent Sadac. More so. On April 30. the petitioner appealed to the NLRC.‖ such that the employee concerned is unfit to continue working for the employer. if the intent were to include salary increases as basis in the computation of backwages. August 31. Judicial precedents tell us that an unqualified award of backwages means that the employee is paid at the wage rate at the time of his dismissal. the present petition for review. unfair labor practice.00. And it reversed too the award for separation pay. Hence. No. and of the various demand notices of payments from creditor banks. the closure of Galaxie‘s business being due to serious business losses. as long as they are supported by substantial evidence from which an independent evaluation of the facts may be made.65 in 1997. The computation of these commissions depends on whether the dealer concerned was able to remit the sales proceeds within the 38-day or 52-day rolling deadline. There can be no doubt continuance in the sensitive fiduciary position of Credit Administration Supervisor would be patently inimical to the interests of the petitioner. a rule which applies with greater force in labor cases where the findings of fact of the NLRC are accorded respect and even finality. Galaxie thus filed on July 30. Ruling: Petitioners contend that the Court of Appeals erred in not finding that Galaxie‘s closure of business operations was motivated not by serious business losses but by their anti-union stance. On account of serious business losses which occurred in 1997 up to mid-1999 totaling around P127. CA upheld the NLRC decision. and not because of any alleged anti-union position. the NLRC directed Galaxie to grant petitioners.97 in 1999. it having merely posted a notice on the company bulletin board. the Labor Arbiter. As aptly found by the Court of Appeals: The NLRC‘s finding on the legality of the closure should be upheld for it is supported by substantial evidence consisting of the audited financial statements showing that Galaxie continuously incurred losses from 1997 up to mid-1999.R. The position carried with it the duty to observe proper company procedures in the fulfillment of her job. nor did they establish that the closure was motivated by Galaxie‘s anti-union stance. Employers.753.389. Indeed. but that. generally. petitioners contend that Galaxie did not serve written notices of the closure of business operations upon its employees. 165757. in protecting the rights of the employee.000. as it relates closely to the financial interests of the company. and vacation and sick leave credits. Jefferson M. without more. Nevertheless. October 17. More importantly. NLRC.480. 1999 a written notice with the DOLE informing the latter of its intended closure and the consequent termination of its employees effective August 31. Petitioners Galaxie Steel Workers Union and Galaxie employees filed a complaint for illegal dismissal. And it posted the notice of closure on the corporate bulletin board. It would be oppressive and unjust to order the petitioner to take her back. Upon the other hand. Respondent‘s unauthorized extensions of the credit periods of the dealers are prejudicial to the interest of the petitioner and bear serious financial implications.89 in 1998. In any event. 8. The Court finds no reason to modify such finding. the NLRC. Galaxi Steel Workers Union vs.429. authorizes neither oppression nor self-destruction of the employer. and in deleting the award of separation pay. In this case. Marquez supervision of the credit and collection of payments and outstanding accounts due to the petitioner from its dealers. and are defined in Articles 248 and Page 92 . Issues: Whether or not Galaxie is guilty of unfair labor practice in closing its business operations shortly after petitioner union filed for certification election.000. Whether or not petitioners are entitled to separation pay. Galaxie‘s documentary evidence shows that it had been experiencing serious financial losses at the time it closed business operations. are allowed a wider latitude of discretion in terminating the employment of managerial personnel or those of similar rank performing functions which by their nature require the employer‘s trust and confidence. pro-rata 13th month pay. than in the case of ordinary rankand-file employees. The NLRC upheld the Labor Arbiter‘s decision but reversed the award of pro-rata 13th month pay and vacation and sick leave credits. to wit: P65. and the CA were unanimous in ruling that Galaxie‘s closure or cessation of business operations was due to serious business losses or financial reverses. P48. Galaxie decided to close down its business operations. Whether or not the written notice posted by Galaxie on the company bulletin board sufficiently complies with the notice requirement under Article 283 of the Labor Code. The Labor Arbiter declared valid Galaxie‘s closure of business but nevertheless ordered it to pay the employees separation pay. Besides. respondent has a direct hand in the preparation and computation of the Service Fees or sales commissions accruing to each dealer. Unfair labor practice refers to acts that violate the workers‘ right to organize. G.204. 1999. True. Clearly. respondent‘s position involves a high degree of responsibility requiring trust and confidence. the union was seeking the holding of a certification election at the time that Galaxie closed its business operation.LABOR RELATIONS Atty. was not sufficient to attribute anti-unionism against Galaxie. for the law.785. Their motion for reconsideration having been denied. by way of financial assistance. 2006. and P13. petitioners failed to present concrete evidence supporting their claim of unfair labor practice. citing North Davao Mining Facts: Galaxie is a corporation engaged in the business of manufacturing and sale of re-bars and steel billets which are used primarily in the construction of high-rise buildings. It is settled that SC is not a trier of facts. the same amount given to the employees who had executed quitclaims. petitioners filed a petition for certiorari with the Court of Appeals. arguing that the NLRC acted with grave abuse of discretion in not finding Galaxie guilty of unfair labor practice and of violating petitioners‘ right to notice of closure. the same not being among petitioners‘ causes of action as in fact they were not even mentioned in their pleadings. the petitioners had not presented evidence to the contrary. and money claims against Galaxie. notified Sy of other violations of company policies. he opted to accept the bank‘s offer of extending his employment for another year with a corresponding salary increase." Where. The denial of petitioners‘ claim for separation pay was thus in order. this Court held that Article 283 governs the grant of separation benefits "in case of closures or cessation of operation" of business establishments "NOT due to serious business losses or financial reverses . Respecting petitioners‘ claim for separation pay. With regard to the notice requirement.R. the better rule is to declare that the dismissal was for cause but imposing sanctions on the employer. the validity of termination of services can exist independently of the procedural infirmity in the dismissal. that the written notice of closure or cessation of Galaxie‘s business operations was posted on the company bulletin board one month prior to its effectivity. However. Unconvinced of Sy explanation. Court of Appeals. 2000. in North Davao Mining Corporation v. No. with a corresponding salary increase effective August 16. but without observance of statutory due process. Such act is a clear breach of the trust in him by the Page 93 . he had never retired. 1999 under the bank‘s retirement plan. wherein he requested the timely release of his retirement pay and other benefits. Indeed. November 2. Sy would have rendered 30 years of service by August 18. he would have qualified for compulsory retirement under the bank‘s Retirement Plan. the Court held that in cases involving dismissals for cause. the bank reappointed him as branch manager for a term of one year from August 18. Unfortunately for him. 1999. Inc. are not deemed unfair labor practices. would he still be entitled to retirement benefits? Ruling: No.LABOR RELATIONS Atty. 1999. In November 1999. he authorized ―kiting‖ or drawing of checks against uncollected funds in wanton violation of the bank‘s policies. His premise is absurd. where breach of trust as a ground for valid dismissal requires proof of involvement in the alleged anomaly and where mere uncorroborated accusation by the employer will not suffice. the closure then is due to serious business losses. the labor arbiter‘s decision was reinstated. the Labor Arbiter found. Unlike a rank-and-file worker. on November 15. Petitioner. the NLRC deemed Sy compulsorily retired. Issues: Was Sy illegally terminated? If his dismissal was valid. not satisfied with his answer. which was dismissed by the labor arbiter for lack of merit. By so doing. 1999. It was sufficient basis for the bank to lose trust in him. Sy was validly dismissed on the ground of fraud and willful breach of trust under Article 282 of the Labor Code. and it was upheld by the NLRC and the Court of Appeals. however. National Labor Relations Commission. . while serving such extended term. In order to meet the foregoing purpose. which reiterated the ruling in Agabon v. no matter how unfair. which provides that an employee must retire upon reaching 55 years of age or after rendering 30 years of service. Nevertheless. On appeal. Davao City of respondent Metropolitan Bank and Trust Company. v. for the violation of his right to statutory due process. 1999 until August 18. meet the requirement under Article 283 of "serving a written notice on the workers. the employer should indemnify the employee. theorizes that having been compulsorily retired. or render it illegal." The purpose of the written notice is to inform the employees of the specific date of termination or closure of business operations. 9. in the form of nominal damages. Sy responded that he only made a wrong credit judgment. the bank released the results of the audit conducted. However. service of the written notice must be made individually upon each and every employee of the company. the bank discovered his unauthorized grant of accommodation to accounts engaged in ―kiting‖ activity. tendered an irrevocable letter of retirement. the bank dismissed Sy. the lack of statutory due process should not nullify the dismissal. 2006 Facts: Petitioner Dennis Sy was the branch manager in Bajada. on February 5. When brought up to the Court of Appeals. National Labor Relations Commission. and must be served upon them at least one month before the date of effectivity to give them sufficient time to make the necessary arrangements. G. Records show that as bank manager. In Business Services of the Future Today. Jefferson M. the Labor Code does not impose any obligation upon the employer to pay separation benefits. this Court held that where the dismissal is for an authorized cause. he could no longer be dismissed by the bank. The bank placed Sy on preventive suspension. dispensing justice not just to employees but to employers as well is achieved. The prohibited acts relate to the workers‘ right to self-organization and to the observance of Collective Bargaining Agreement without which relation the acts. however. His request was denied. The bank. . or ineffectual. Metro Bank. whichever comes earlier. Marquez 261 of the Labor Code. After analyzing the consequences of the divergent doctrines on employment termination. The mere posting on the company bulletin board does not. the sheer existence of a basis for believing that the employer‘s trust has been breach is enough for the dismissal of a managerial employee. Sy then filed a case for illegal dismissal. Sy. a few months before he was supposed to retire. Thus. The bank averred that Sy has allowed client-Spouses Ong to conduct ―kiting‖ activities in their account. in effect. 160618. However. Sy vs. Under the Labor Code. he got confused in making the trip report.LABOR RELATIONS Atty. procedural — the manner of dismissal. respondent said that the erroneous declaration in his October 28. he is not entitled to any retirement benefit. In his letter. 2001 irregularity was an act of fraud against the company. substantive — the valid and authorized causes of termination of employment under the Labor Code. That decision shall be stated on said Irregularity Report and will be furnished to the employee. Any decision taken by the employer shall be Page 94 . June 29. the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. He explained that during that day's trip. As a background. 10. the windshield of the bus assigned to them was smashed. (b)Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause without prejudice to the requirement of notice under Article 283 of this Code. 2001. only unjustly dismissed employees are entitled to retirement benefits and other privileges including reinstatement and backwages. indicating the nature and details of the irregularity. the company then makes a determination of whether to accept the explanation or impose upon the employee a penalty for committing an infraction. It discovered that respondent declared several sold tickets as returned tickets causing KKTI to lose an income of eight hundred and ninety pesos. 277 of the Labor Code provides the manner of termination of employment. The dismissal letter alleged that the October 28. 277. it averred that it had observed due process in dismissing respondent and maintained that respondent was not entitled to his money claims such as service incentive leave and 13th-month pay because he was paid on commission or percentage basis. Also. and separation pay. Respondent was required to accomplish a "Conductor's Trip Report" and submit it to the company after each trip. After submission. Miscellaneous Provisions. 1999. the company issues an "Irregularity Report" against the employee. 2001 incident. respondent received a letter terminating his employment effective November 29. It claimed that respondent had violated the trust and confidence reposed upon him by KKTI. He denied committing any infraction and alleged that his dismissal was intended to bust union activities. KKTI contended that respondent was legally dismissed after his commission of a series of misconducts and misdeeds. this report indicates the ticket opening and closing for the particular day of duty. While no irregularity report was prepared on the October 28. and they had to cut short the trip in order to immediately report the matter to the police. NLRC. he claimed that his dismissal was effected without due process. Thereafter. Upon audit of the October 28. Respondent filed a Complaint for illegal dismissal.R. the concerned employee is asked to explain the incident by making a written statement or counter-affidavit at the back of the same Irregularity Report. KKTI nevertheless asked respondent to explain the discrepancy. 2001. . Moreover. KKTI noted an irregularity. KKTI also cited as basis for respondent's dismissal the other offenses he allegedly committed since 1999. Non-compliance with the Due Process Requirements Art. No. . 2007 Facts: Respondent Mamac was hired as bus conductor of Don Mariano Transit Corporation (DMTC) on April 29. thus: Art. — . 2001 Conductor's Report of respondent. He cannot now elude dismissal for a just cause by claiming he was already retired compulsorily. After considering the explanation of the employee. Jefferson M. Ruling: Due process under the Labor Code involves two aspects: first. the company audits the reports. nonpayment of 13th-month pay. and second. 166208. illegal deductions. Once an irregularity is discovered. service incentive leave. As a result of the incident. King of Kings Transport vs. No. On November 26. Marquez bank. 2001 Trip Report was unintentional. G. Issue: Whether or not procedural requirements were complied with. Since petitioner‘s dismissal was for a just cause. First. During the hearing or conference. To clarify. the notice should contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the employees. Lastly. this conference or hearing could be used by the parties as an opportunity to come to an amicable settlement. (c)A written notice of termination served on the employee. consult a union official or lawyer. Sanction for Non-compliance with Due Process Requirements Page 95 . the employers should schedule and conduct a hearing or conference wherein the employees will be given the opportunity to: (1) explain and clarify their defenses to the charge against them. the Court observed the irregularity reports against respondent for his other offenses that such contained merely a general description of the charges against him.LABOR RELATIONS Atty. no hearing was conducted. (2)After serving the first notice. the following should be considered in terminating the services of employees: (1)The first written notice to be served on the employees should contain the specific causes or grounds for termination against them. respondent was not issued a written notice charging him of committing an infraction. "Reasonable opportunity" under the Omnibus Rules means every kind of assistance that management must accord to the employees to enable them to prepare adequately for their defense. and (3) rebut the evidence presented against them by the management. In case of termination. the foregoing notices shall be served on the employee's last known address. v. are violated and/or which among the grounds under Art. A verbal appraisal of the charges against an employee does not comply with the first notice requirement. Third. 2. KKTI admits that it had failed to provide respondent with a "charge sheet. (3)After determining that termination of employment is justified. if any.For termination of employment based on just causes as defined in Article 282 of the Code: (a)A written notice served on the employee specifying the ground or grounds for termination. and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period. the notice should specifically mention which company rules. (2) present evidence in support of their defenses. the following standards of due process shall be substantially observed: I. with the assistance of a representative or counsel of their choice. the implementing rule of the aforesaid provision states: SEC. present his evidence. 282 of the Labor Code." We are not convinced. with the assistance of counsel if he so desires is given opportunity to respond to the charge. Accordingly. grounds have been established to justify his termination. there is no mention of any of the grounds for termination of employment under Art. Moreover. Regardless of respondent's written explanation. and decide on the defenses they will raise against the complaint. This should be construed as a period of at least five (5) calendar days from receipt of the notice to give the employees an opportunity to study the accusation against them. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. a hearing was still necessary in order for him to clarify and present evidence in support of his defense. Jefferson M.Standards of due process. 282 is being charged against the employees. or rebut the evidence presented against him. Marquez without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. and (2) grounds have been established to justify the severance of their employment. In the instant case. requirements of notice. — In all cases of termination of employment. Moreover. claiming that "respondent would not have issued a written explanation had he not been informed of the charges against him. KKTI's "standard" charge sheet is not sufficient notice to the employee. The law is clear on the matter." However. Thus. A general description of the charge will not suffice. indicating that upon due consideration of all the circumstances. NLRC. He was unaware that a dismissal proceeding was already being effected. In Pepsi Cola Bottling Co. the employees are given the chance to defend themselves personally. gather data and evidence. it maintains that it had substantially complied with the rules. The reports did not even state a company rule or policy that the employee had allegedly violated. Likewise. Second. the Court held that consultations or conferences are not a substitute for the actual observance of notice and hearing. (b)A hearing or conference during which the employee concerned. in order to enable the employees to intelligently prepare their explanation and defenses. respondent made the letter merely to explain the circumstances relating to the irregularity. the employers shall serve the employees a written notice of termination indicating that: (1) all circumstances involving the charge against the employees have been considered. Moreover. and giving said employee reasonable opportunity within which to explain his side. petitioner filed a Manifestation and Motion. to pay them separation pay Ruling: The petition has no merit. respondents were entitled to reinstatement. who are legally obliged to implement the ruling. as where reinstatement would only exacerbate the tension and strained relations between the parties. 31 March 2004 At a conference held. The Labor Arbiter dismissed the complaint. Jesusa Bonsol and Rizalinda Hirondo against petitioners Johnson & Johnson (Phils. petitioner Johnson and Johnson reiterated their intention to satisfy respondents monetary award but the latter refused and insisted on their reinstatement. 11. Johnson and Johnson contends that the intent of the 14 December 2001 Resolution was to grant them the option to reinstate respondents to their former positions without the payment of backwages. The NLRC ruled that the violations of company procedure committed by respondents did not constitute serious misconduct or willful disobedience warranting their dismissal. or where the relationship between the employer and employee has been unduly strained by reason of Page 96 . has the option to reinstate respondents to their former positions without the payment of backwages. Over the years. for non-compliance with the due process requirements in the termination of respondent's employment. NLRC. which directed the reinstatement of respondents pursuant to the 14 December 2001 Resolution. after a finding that petitioners failed to comply with the due process requirements.LABOR RELATIONS Atty. Johnson & Johnson v. The Resolution dated 14 December 2001 became final and executory. Johnson and Johnson sought partial reconsideration but the NLRC denied the motion in a Resolution dated 11 February 2002. Well-entrenched is the rule that an illegally dismissed employee is entitled to reinstatement as a matter of right. Thus in a petitioner for certiorari before the SC. the NLRC erred and modified the Resolution dated 14 December 2001. 18 June 2004 the NLRC issued a Resolution. modifying the decision of the Labor Arbiter. G. when it stated in its 18 June 2004 Resolution that respondents have the right to choose between their reinstatement and getting paid the monetary award when no such categorical pronouncement can be gathered from the 14 December 2001 Resolution. Thereafter. NLRC by ruling that if the dismissal is done without due process. petitioner KKTI is sanctioned to pay respondent the amount of thirty thousand pesos (PhP30. to pay them separation pay. Petitioners motion for reconsideration was denied in the Resolution dated 28 July 2004. one of the former‘s divisions. prompting respondents to elevate the matter to the NLRC. 172799. or in the alternative. On 14 December 2001. Inc. or in the alternative. the CA awarded full backwages in favor of respondent in accordance with the doctrine in Serrano v. The Court of Appeals affirmed the resolutions of the NLRC dated 18 June 2004 and 8 July 2004. hence. Marquez As stated earlier. No. respondents were not entirely faultless as they did not follow the exact procedure in the performance of their duties. as the employer. The NLRC recognized respondents right to choose between reinstatement and separation pay and disregarded petitioners claim of strained relations. the NLRC rendered a Resolution.). however. the employer should indemnify the employee with nominal damages. because the dispositive portion of the Resolution was directed toward or addressed to them (Johnson and Johnson). July 6. Johnson Office & Sales Union. which had become final and executory. Neither party appealed from the resolution decision of the NLRC within the reglementary period. the doctrine in Serrano had already been abandoned in Agabon v. and Janssen Pharmaceutica. arguing that the 14 December 2001 Resolution granted them the right to choose between the payment of separation pay and the reinstatement of respondents based on the finding that while their termination was illegal. However.R. Petitioners also claimed that reinstatement was no longer feasible in view of the strained relations between the parties. Issue: Whether or not Johnson and Johnson. expedient or practical. Thus. 2007 Facts: A complaint for illegal dismissal was filed by respondents Ma. According to petitioners.000) as damages. Jefferson M. case law developed that where reinstatement is not feasible. 2005 Facts: Romeo Labrague (respondent) was a stevedore antigo employed with Asian Terminals. the payment of backwages as a primary relief. Inc. To justify the dismissal of respondent for abandonment.. and unanimously at that. as it should. 1994. It cannot be gainsaid that respondent was in detention during the entire period of his absence from work and. The foregoing arguments of petitioners are specious. to the common finding of the NLRC and Court of Appeals since the issue of the existence of strained relations between the parties is factual in nature. G. at his last known address at Area H. 1995. separation pay. petitioners never questioned the truth about respondent's detention. The NLRC Resolution dated 14 December 2001 expressly recognized respondents right to reinstatement in view of the illegality of their termination. the dispositive portion of said resolution ordered respondents reinstatement without. 2007. In other words. petitioner sent respondent another notice of similar tenor. dated December 27. damages and attorney's fees. it would be more prudent to order payment of separation pay instead of reinstatement. Thus. No. on February 8. The Court defers. 166111. December 19. The following month. requiring him to explain within 72 hours why he should not suffer disciplinary penalty for his prolonged absence.‖ It clearly indicates that petitioners knew early on of the situation of respondent. the payment of separation compensation in lieu of the reinstatement of an employee who was illegally dismissed from work shall be allowed if and only if the employer can prove the existence of circumstances showing that reinstatement will no longer be for the mutual benefit of the employer and employee. more importantly. and refused to report for work despite several notices. Rodolfo G. citing Standard Electric Mfg. The question is whether the CA erred in holding that such absences did not amount to abandonment as to furnish petitioners cause to dismiss respondent..Thus. 1996 but was advised by petitioners to file a new application so that he may be rehired.LABOR RELATIONS Atty. however. which bars reappraisal of facts not disputed before the lower courts or already settled in their proceedings. Inc.R. Standard Electric Employees Union. that his situation was known to petitioners. your employment is hereby terminated for cause effective IMMEDIATELY. where it categorically ordered the reinstatement of respondents to their former positions. Corvite. respondent failed to report for work allegedly because he was arrested and placed in detention for reasons not related to his work. the NLRC has the authority to execute its judgment and to settle any issue that may arise pertaining to the manner or details of implementing its judgment. and therefore did not constitute abandonment. although the opposing parties yielded to the judgment of the NLRC and did not anymore elevate the labor dispute to the appellate court. respondent reported for work on July 3. It is beyond dispute then that the underlying reason for respondent's absences was his detention. Thus. for it was brought about by his detention for almost three years for a criminal charge that was later declared baseless. petitioners should Page 97 . Marquez their irreconcilable differences. It is of record that in the February 8. August 25. G. They held that his prolonged absence was not coupled with an intention to relinquish his employment. Petitioners argue that they were justified in dismissing respondent after the latter incurred a three-year absence without leave. Asian Terminals. Petitioners are mistaken in holding that they have the prerogative to choose whether to reinstate respondents to their former positions or to just pay their monetary award. Manila. Tondo. the concurrent view of the CA. respondent filed with the NLRC a complaint for illegal dismissal. vs.R. Finally. In the instant case. Jefferson M. Ultimately. particularly where the illegally dismissed employee held a managerial or key position in the company. they are now at odds as to how the 14 December 2001 Resolution should be implemented. Ruling: In declaring the dismissal of respondent illegal. 158458. Parola. Jr. 1993. Neither party can claim that it has the categorical right to choose between reinstatement and the payment of the monetary award. the NLRC properly exercised its authority to resolve the controversy when it issued the Resolution dated 18 June 2004. petitioner issued a memorandum stating: For having incurred absence without official leave (AWOL) from 03 September 1993 up to the present after you were put behind bars due to your involvement in a killing incident. which remained a mere allegation that was never quite substantiated by any form of official documentation. petitioners expressly acknowledged that respondent began incurring absences without leave ―after [he was] put behind bars due to [his] involvement in a killing incident. Following his acquittal and release from detention. It also explains why in its reply before the LA. in consonance with its earlier ruling. through Atty. 1995 termination notice it issued. since the 1980's. non-payment of labor standard benefits. Asian Terminal vs. Beginning September 9. (petitioners) sent him (respondent) a letter. Effectively. the NLRC and the Court of Appeals disregarded petitioners claim that the relation between the parties was so strained that only the payment of the monetary award was feasible under the circumstances. 12. Petitioners' skepticism about respondent's detention is a mere afterthought not proper for consideration in a petition for review under Rule 45. NLRC and LA is that the latter's prolonged absence was excusable. The NLRC upheld the continuing primacy of reinstatement as the available relief and made short shrift of petitioners avowal that separation pay should be awarded in lieu of reinstatement. Petitioners argue that respondent's prolonged absence was not justified or excused by his so-called detention. No. appeal before the NLRC and petition for certiorari before CA. After respondent had been absent for more than one year. NLRC. Astorga. effective April 3. correctly held that the dismissal of respondent was illegal. Astorga received it on March 16. Similarly. To constitute as such. but were refused admission by their employer.R. viz. January 28.LABOR RELATIONS Atty. SMART entered into a joint venture agreement with NTT of Japan. Respondent Javier‘s absence from August 9. and unjustified refusal of the employee to resume his employment. and proof that respondent Javier‘s arrest and detention were without factual and legal basis in the first place. and second. Marquez have established by concrete evidence the concurrence of two elements: first. Mere absence or failure to report for work. SMART. even after notice to return. made the absences he incurred as a consequence thereof not only involuntary but also excusable. especially when we take into account that the latter incurred said absences unwillingly and without fault. non-payment of salaries and other benefits with prayer for moral and exemplary damages against SMART and Ann Margaret V. Santiago (Santiago). she was not recommended by SMART. Castro. Petitioners failed to discharge such burden of proof. The termination of her employment prompted Astorga to file a Complaint for illegal dismissal. Astorga landed last in the performance evaluation. for the absences he incurred by reason of his unwarranted detention did not amount to abandonment. G. they reported back to work. Standard Electric Employees Union-NAFLU-KMU. In no way may the absences he incurred under such circumstances be likened to abandonment. The petitioners therein were arrested and detained by the military authorities by virtue of a Presidential Commitment Order allegedly for the commission of Conspiracy to Commit Rebellion under Article 136 of the RPC. and held the dismissal of the employee-detainee invalid. but she refused the offer because the position carried lower salary rank and rate. Incorporated (SNMI). Astorga‘s division. with the second element being the more determinative factor. or his fault that he was detained on an erroneous charge. 1995 cannot be deemed as an abandonment of his work. But on March 3. in that the criminal charge against him is not at all supported by sufficient evidence. we declared such absences as not constitutive of abandonment. As a result. is not tantamount to abandonment. two requisites must concur: first. respondent Javier‘s acquittal for rape makes it more compelling to view the illegality of his dismissal. and second. She also posited that it was illegal for an Page 98 .: The facts in Pedroso v. willful. The trial court dismissed the case for ―insufficiency of evidence. Abandonment is a matter of intention and cannot lightly be inferred or legally presumed from certain equivocal acts. 2008 Facts: Regina M. No. that respondent had the intention to deliberately and without justification abandon his employment or refuse to resume his work. thus. They were released when the charges against them were not proven. Nevertheless. therefore. there must have been a clear intention on the part of the employee to sever the employer-employee relationship as manifested by some overt acts. illegal. even after notice to return to work. this Court again held that the dismissed employees should be reinstated to their former positions. Abandonment as a just ground for dismissal requires clear. In February 1998. their employer hired substitute workers to avoid disruption of work and business operations. as the criminal charge upon which said detention was ordered was later dismissed for lack of evidence. consequently. 1998. In Magtoto v. The CA. SMART then conducted a performance evaluation of CSMG personnel and those who garnered the highest ratings were favorably recommended to SNMI. hence. National Labor Relations Commission as well as Pedroso v. Despite the abolition of the CSMG/FSD. since their separation from employment was founded on a false or non-existent cause. We recently reiterated this ruling in Standard Electric Manufacturing Corporation v. cannot be equated with abandonment. Castro are similar to the set of facts in the present case. and formed SMART-NTT Multimedia. 1998.‖ and such ruling is tantamount to an acquittal of the crime charged. that respondent performed overt acts from which it may be deduced that he no longer intended to work. Absences incurred by an employee who is prevented from reporting for work due to his detention to answer some criminal charge is excusable if his detention is baseless. Smart Communications v. the employee must have failed to report for work or must have been absent without valid or justifiable reason. 1997 as District Sales Manager of the Corporate Sales Marketing Group/ Fixed Services Division (CSMG/FSD). SMART issued a memorandum advising Astorga of the termination of her employment on ground of redundancy. deliberate. Thus. It was certainly not the intention of respondent to absent himself. SMART launched an organizational realignment to achieve more efficient operations. offered her a supervisory position in the Customer Care Department. The Labor Arbiter and the NLRC sustained the validity of their dismissal. Respondent's absences. Jefferson M. 1998. Astorga continued reporting for work. Part of the reorganization was the outsourcing of the marketing and sales force. terminating her employment was illegal for it violated her right to security of tenure. This was made known to the employees. After incarceration. Since SNMI was formed to do the sales and marketing work. That his detention turned out to be without basis. Astorga (Astorga) was employed by respondent SMART on May 8. 148142. nonetheless. respondent herein was prevented from reporting for work by reason of his detention. SNMI agreed to absorb the CSMG personnel who would be recommended by SMART. 13. To soften the blow of the realignment. She claimed that abolishing CSMG and. Moreover. SMART abolished the CSMG/FSD. decreased volume of business. viz: x x x redundancy in an employers personnel force necessarily or even ordinarily refers to duplication of work. Astorga‘s dismissal is founded upon authorized cause. Jefferson M. that a violation of law or arbitrary or malicious action is not shown. That no other person was holding the same position that private respondent held prior to termination of his services does not show that his position had not become redundant. such as Astorga. for purposes of the Labor Code. especially if the contractor is an in-house agency.. Indeed. time and money-needed in maintaining the CSMG/FSD. a joint venture company of SMART and NTT of Japan. Astorga never denied that SMART offered her a supervisory position in the Customer Care Department. efficiently and flexibly to its customers requirement. properly terminable. National Labor Relations Commission. SMART. Astorga was terminated due to redundancy. it would not have offered her a position in any department in the enterprise. this Court finds no fault in SMARTs decision to outsource the corporate sales market to SNMI in order to attain greater productivity. Marquez employer. Issue: WON the dismissal of Astorga is valid. a distinct sales force of SMART in charge of selling SMARTs telecommunications services to the corporate market. But contrary to her claim. or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise. to Our mind. We believe that redundancy. We agree with the CA that the organizational realignment introduced by SMART. Ruling: YES. SMART has created a more competent and specialized organization to perform the work required for corporate accounts. no convincing evidence was offered to prove it. this Court has inclined towards the worker and upheld his cause in most of his Page 99 . like SMART. it would be surprising to find duplication of work and two (2) or more people doing the work of one person. Astorga also states that the justification advanced by SMART is not true because there was no compelling economic reason for redundancy. to ensure it can respond quickly. It argued that Astorga was dismissed by reason of redundancy. which is an authorized cause for termination of employment. v. Indeed. The redundancy of Astorgas position was the result of the abolition of CSMG and the creation of a specialized and more technically equipped SNMI. By transferring the duties of CSMG/FSD to SNMI. But except for her barefaced allegation. an employer is not precluded from adopting a new policy conducive to a more economical and effective management even if it is not experiencing economic reverses. If indeed SMART simply wanted to get rid of her. which culminated in the abolition of CSMG/FSD and termination of Astorgas employment was an honest effort to make SMARTs sales and marketing departments more efficient and competitive. This Court finds it extremely difficult to believe that SMART would enter into a joint venture agreement with NTT. a sound business judgment based on relevant criteria and is therefore a legitimate exercise of management prerogative. The determination to outsource the duties of the CSMG/FSD to SNMI was. Moreover. SMART responded that there was valid termination. The characterization of an employees services as superfluous or no longer necessary and. but she refused the offer because the position carried a lower salary rank and rate. such as overhiring of workers. Inc. Succinctly put. [Astorga] belonged to the Sales Marketing Group under the Fixed Services Division (CSMG/FSD). The nature of redundancy as an authorized cause for dismissal is explained in the leading case of Wiltshire File Co. a position is redundant where it is superfluous.LABOR RELATIONS Atty. which is one of the authorized causes for the dismissal of an employee. of course. to contract out services which will displace the employees. Astorga claims that the termination of her employment was illegal and tainted with bad faith. in any well organized business enterprise. therefore. Indeed. It is also relieved SMART of all administrative costs management. for the reason that CSMG/FSD does not have the necessary technical expertise required for the value added services. which is a valid and legitimate exercise of management prerogative. abolished CSMG/FSD and shortly thereafter assigned its functions to newly-created SNMI Multimedia Incorporated. is an exercise of business judgment on the part of the employer. exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. and superfluity of a position or positions may be the outcome of a number of factors. out of our concern for those lesser circumstanced in life. and the dismissal was effected in accordance with the requirements of the Labor Code. She asserts that the reorganization was done in order to get rid of her. The wisdom and soundness of such characterization or decision is not subject to discretionary review provided. form SNMI and abolish CSMG/FSD simply for the sole purpose of easing out a particular employee. As the CA had taken pains to elucidate: x x x a careful and assiduous review of the records will yield no other conclusion than that the reorganization undertaken by SMART is for no purpose other than its declared objective as a labor and cost savings device. Neither does the law require that the employer should suffer financial losses before he can terminate the services of the employee on the ground of redundancy. by increasing. we sustain the reorganization and redundancy program undertaken by SMART.: [I]f the dismissal is based on a just cause under Article 282 but the employer failed to comply with the notice requirement. However. therefore. the fundamental law also guarantees the right of the employer to reasonable returns for his investment. the employees are informed of the specific date of the termination. respectively. The CAs award of backwages is totally inconsistent with its finding of valid dismissal. by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof x x x. G. redundancy. Enriquez v. of the BPI-Bacolod Singcang Branch. Thus. the award of backwages to Astorga by the CA should be deleted for lack of basis. This favored treatment is consonant with the social justice policy of the Constitution. Likewise. awarding indemnity for violation of Astorga's statutory rights. In this case. entitled to separation pay equivalent to at least one (1) month salary or to at least one (1) months pay for every year of service. She is. No. But such notice was received by Astorga barely two (2) weeks before the effective date of termination. the sanction should be stiffer because the dismissal process was initiated by the employers exercise of his management prerogative. the indemnity awarded by the CA to Astorga. As provided in Article 283 of the Labor Code. Jefferson M. a period very much shorter than that required by law. Accordingly. and (2) if the dismissal is based on an authorized cause under Article 283 but the employer failed to comply with the notice requirement. Astorga is. we find the need to modify. in light of our ruling in Jaka Food Processing Corporation v. notwithstanding Astorgas knowledge of the reorganization. to give them sufficient time to find other suitable employment or to make whatever arrangements are needed to cushion the impact of termination. as aptly found by the CA. she is not entitled to backwages. Be that as it may. 172812. also entitled to separation pay equivalent to one (1) month pay. 2008 Facts: Enriquez and Sia were the branch manager and assistant branch manager. in effect. 1998. The CA. 14. 283. as a sanction on SMART for non-compliance with the one-month mandatory notice requirement. However. Enriquez was first employed by BPI in 1971 and had been an employee thereof for 32 years at the time of her termination. In the written notice.LABOR RELATIONS Atty. she remained uncertain about the status of her employment until SMART gave her formal notice of termination. We deem it proper to increase the amount of the penalty on SMART to P50. there must be a finding of unjust or illegal dismissal from work. Pacot. However.00. The validity of termination can exist independently of the procedural infirmity of the dismissal. 1998 or less than a month prior to its effectivity on April 3. the Department of Labor and Employment was notified of the redundancy program only on March 6. reduce overhead costs and enhance prospects of economic gains. Backwages is a relief given to an illegally dismissed employee. initiated by an act imputable to the employee. therefore. whichever is higher. viz. Article 283 of the Labor Code clearly provides: Art. or for a total of 29 years at the time of his dismissal. before backwages may be granted. 1998.000. at least a month prior to the effectivity of such termination. Puentevella (Puentevella) is one of respondents principal officers and Page 100 . But while tilting the scales of justice in favor of workers. Respondent Luis A. The employer may also terminate the employment of any employee due to the installation of labor saving devices. Since Astorgas dismissal is for an authorized cause. The records show that Astorgas length of service is less than a year. Bank of the Philippine Islands. The record is clear that Astorga received the notice of termination only on March 16. 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 the provisions of this Title. whereas Sia had been with since 1974. SMARTs assertion that Astorga cannot complain of lack of notice because the organizational realignment was made known to all the employees as early as February 1998 fails to persuade. Marquez conflicts with his employer. this procedural infirmity would not render the termination of Astorgas employment illegal. Astorgas actual knowledge of the reorganization cannot replace the formal and written notice required by the law. likewise. February 12. the sanction to be imposed upon him should be tempered because the dismissal process was. albeit always within the framework of existing laws. Closure of establishment and reduction of personnel. SMART failed to comply with the mandated one (1) month notice prior to termination. committed no reversible error in sustaining Astorgas dismissal and at the same time. In this light. we must acknowledge the prerogative of the employer to adopt such measures as will promote greater efficiency.R. Sia began to wind up his affairs as 27 December 2002 was his last working day with the bank before going on terminal leave prior to his optional retirement. On 3 September 2003. Thus.00 against the joint account of her parents-in-law.m. It is the position of petitioners that as there was neither shortage nor loss to the bank because the initial discrepancy was accounted for and that it was due to a mere oversight. respondent Puentevella initiated further investigation on the incident. petitioners were instructed to report to the BPI head office for polygraph testing. petitioners objected to the polygraph test. informed Enriquez of the problem and was directed to review the days transactions to trace its cause.000.. the transaction was regularized before the end of the day. Sia.LABOR RELATIONS Atty. on 3 March 2003. Ruling: BPI had just cause to terminate their employment. Remedios Descartin (Remedios). Hence. With that explanation. Later. BPI‘s version: BPI has a different version of what transpired on 27 December 2002. Thus. teller Descartin posted the unsigned withdrawal slip for the amount of P36. they put the matter to rest. On14 July 2003. Thus. at 5:21 p. As the amount exceeded the floor limit for tellers which would require the approval of a superior officer. The independent audit conducted by the auditing division of BPI notably supports her claim that the wrongdoing was concealed by petitioners from respondent bank.m.00 earlier that day. Marquez was impleaded in his personal capacity. Issue: Whether or not there were valid grounds for termination of employment. petitioners were dismissed from employment on grounds of breach of trust and confidence and dishonesty. as reflected on the account records. teller Geraldine Descartin (Descartin) purportedly discovered that she had a cash shortage of P36. According to them. with the signed withdrawal slip. teller Fregil retracted her original statement and instead executed another letter claiming that there was a cover-up of the shortage on the day in question. There is no denying that loss of trust and confidence is a valid ground for termination of employment. teller Descartins shortage of P36.m. On 27 June 2003. Petitioners submitted their respective replies in which they denied the charges against them. it must be shown that the employee is a managerial employee. Teller Fregil reported the matter to Sia and Enriquez. Descartin was permitted to leave the bank to look for Remedios so that the latter could sign the withdrawal slip. petitioners aver. Petitioner‘s version of the facts: Petitioners maintain that on 27 December 2002. a committee of respondent bank conducted a hearing of the case and as part of the investigation. separately interviewed petitioners and tellers Descartin and Fregil. either Enriquez or Sia approved the transaction at 5:22 p. At around 7:00 p. their branch experienced a heavy volume of transactions owing to the fact that it was the last banking day of the year.00 and informed Sia about it. to sign the withdrawal slip when the latter withdrew P36. Descartin claimed that the discrepancy was due to an innocent oversight and recalled that the unaccounted shortage was due to the failure of her mother-in-law. she returned to the bank with the signed withdrawal slip and debited the amount from the clients account. the basic requisite for dismissal on the ground of loss of confidence is that the employee concerned holds a position of trust and confidence or is routinely charged with the care and custody of the employers money or property. in turn. The SC found sufficient basis in evidence to accord full probative value to Teller Fregils retraction letter which she later affirmed through subsequent affidavits.m. While they expressed their willingness to be interviewed. Moreover. Respondents assert that the investigation conducted by the Auditing Division of BPI bolstered teller Fregils claims of irregularity as the audit report disclosed that petitioners failed to make the necessary report on the shortage and instead assisted in covering-up teller Descartins wrongdoing. When banking hours came to a close. petitioners received show-cause memos directing them to explain in writing why they should not be sanctioned for conflict of interest and breach of trust. sometime in February 2003.000. both of whom suggested that teller Descartin fill the shortage with a loan from her family. Moreover. a review of the tellers transaction summary of teller Descartin reinforces the conclusion that the shortage in her pico box was due to a temporary borrowing. On 25 April 2003..000. In the meantime. was incurred because she had temporarily borrowed the money that week to pay her financial obligations but intended to return the same on the first week of January. which she confided to her co-teller Fregil. she instead borrowed the amount from her in-laws.00. Teller Descartin thereafter left the bank to secure the signature of her mother-in-law Remedios and returned at past 7:00 p. since the term trust and confidence is restricted to said class of employees. Jefferson M. Teller Descartin replied that her family did not have the money. Enriquez directed Descartin and her co-teller Evelyn Fregil (Fregil) to submit their written memorandum of the incident.000. the breach must be related to the performance of the employees function. the cover-up of which was sanctioned by petitioners. Page 101 . Also. failure to report a shortage is not a ground to terminate employment. 1999. An employer cannot be expected to retain an employee whose lack of morals. the failure of petitioners to report the cash shortage of teller Descartin. 153510. even if done in good faith. Their participation in the cover-up of the misconduct of teller Descartin makes them unworthy of the trust and confidence demanded by their positions. and was absent without leave for a total of nine and a half days. respondent reported for work but petitioner Escobia told him not to work. the same must be reported by the branch head to the designated bank officers and departments not later than the second banking day from the date of booking. a copy of an Office Memorandum was served on him. as follows: To:Mr. Even assuming the version of petitioners as the truth. The expectation of trust is more so magnified in the instant case in light of the nature of respondent banks business.m. Marquez It is likewise asserted by petitioners that under BPIs bank policy. if it is to be considered at all. Under the personnel policies of BPI.R.B. respondent bank had every right to dismiss petitioners for breach of trust. are entitled to respect and enforcement in the interest of simple fair play. as a measure of self-preservation against acts patently inimical to its interests. nonetheless resulted in their abetting the dishonesty committed by the latter. Indeed. Michael Press as an offset machine operator. The argument is short-sighted. whose work schedule was from 8:00 a. BPIs policy on tellers shortages is unambiguous. 2008 Facts: Respondent was employed by petitioner R. it should not be supposed that every labor dispute will be automatically decided in favor of labor. When he returned. The following day. It is well-settled that the power to dismiss an employee is a recognized prerogative that is inherent in the employers right to freely manage and regulate his business. the fact that petitioners had been employees of BPI for a long time. should be taken against them. and he was paid PhP230 a day. Their manifest condonation and even concealment of an offense prejudicial to their employers interest committed by a subordinate under their supervision reflect a regrettable lack of loyalty which they should have reinforced. disrespect in addressing superiors (3)failure to work overtime after having been instructed to do so (4)Insubordination — willfully disobeying. loss of confidence and dishonesty. The banking industry is imbued with public interest and is mandated by law to serve its clients with extraordinary care and diligence. No. Jefferson M.m. and to return later in the afternoon for a hearing. to compel respondent bank to keep petitioners in its employ after the latter have betrayed the confidence given to them would be unjust to respondent bank. to 5:00 p. the fact remains that they willfully decided against reporting the shortage that occurred. respect and loyalty to his employer or regard for his employers rules and appreciation of the dignity and responsibility of his office has so plainly and completely been bared. It requires that all shortages be declared properly and booked accordingly on the same day they are incurred.LABOR RELATIONS Atty. this act of petitioners justifies their dismissal even on the first offense. On February 22. in either situation. You were given verbal warnings Page 102 . Thus. petitioners acts have caused respondents to have a legitimate reason to lose the trust reposed in them as senior managerial employees. Furthermore. While the Constitution is committed to the policy of social justice and the protection of the working class.117 minutes. G. NOTICE OF HEARING This warning for dismissal is being issued for the following offenses: (1)habitual and excessive tardiness (2)committing acts of discourtesy. Galit was tardy for a total of 190 times. During his employment. in cases of this nature. RB Michael Press vs. defying or disregarding company authority The offenses you've committed are just causes for termination of employment as provided by the Labor Code. February 13.. As a result. 15. but he refused to do so. totaling to 6. instead of betrayed. Mondays to Saturdays. respondent was ordered to render overtime service in order to comply with a job order deadline. it in turn must rely on the honesty and loyalty of its employees. Nicasio Galit From:ANNALENE REYES-ESCOBIA Re:WARNING FOR DISMISSAL. Management also has its own rights which. Galit. as such. To be able to fulfill this duty. Taken together with the attending circumstances of the case. Clearly. petitioners' business is a printing press whose production schedule is sometimes flexible and varying. In the present case. Habitual and excessive tardiness is inimical to the general productivity and business of the employer. no further printing can be had. or equipment. Issues: (1) WON there was just cause to terminate the employment of respondent. and whether due process was observed in the dismissal process. defiance to. therefore. made known to the employee. the management prerogative to discipline employees and impose punishment is a legal right which cannot. diligence. willful disobedience of. but there had been no improvement on your conduct. as a general rule. the offset machine operator." The fact that respondent refused to provide overtime work despite his knowledge that there is a production deadline that needs to be met. shows his wrongful and perverse mental attitude. these two elements must concur: (1) the employee's assailed conduct must have been willful. respondent was terminated from employment. gave him his two-day salary and a termination letter averring that Galit was dismissed due to the following offenses: (1) habitual and excessive tardiness. Insubordination or willful disobedience For willful disobedience to be a valid cause for dismissal.. Thus it is incumbent upon the employee to adduce substantial evidence to demonstrate condonation or waiver on the part of management to forego the exercise of its right to impose sanctions for breach of company rules. you are summoned to a hearing at 4:00 p. A waiver is a voluntary and intentional relinquishment or abandonment of a known legal right or privilege. and must pertain to the duties which he had been engaged to discharge." Hence. be impliedly waived. Art. there is no question that petitioners' order for respondent to render overtime service to meet a production deadline complies with the second requisite. and discipline to come to work on time everyday exhibit the employee's deportment towards work. (2) WON respondent is entitled to backwages and other benefits despite his refusal to be reinstated. Belga. characterized by a wrongful and perverse attitude. respondent did not adduce any evidence to show waiver or condonation on the part of petitioners. This is especially true when the tardiness and/or absenteeism occurred frequently and repeatedly within an extensive period of time. today. and (4) insubordination. Page 103 . through petitioner Escobia. Marquez before. willfulness was described as "characterized by a wrongful and perverse mental attitude rendering the employee's act inconsistent with proper subordination.LABOR RELATIONS Atty. installations. (SGD) ANNALENE REYES-ESCOBIA Manager On February 24. thus. 1999. Ruling: Respondent's tardiness cannot be considered condoned by petitioners Habitual tardiness is a form of neglect of duty. Lack of initiative. It has been ruled that "a waiver to be valid and effective must be couched in clear and unequivocal terms which leave no doubt as to the intention of a party to give up a right or benefit which legally pertains to him. whether such refusal or failure was characterized by a wrongful and perverse attitude. The employer. 89. Respondent subsequently filed a complaint for illegal dismissal and money claims before the National Labor Relations Commission (NLRC).m. and that without him. The issue now is. or disregard of company authority. that is. that is. xxx xxx xxx In the present case. In the case at bar. lawful. v. and (2) the order violated must have been reasonable.EMERGENCY OVERTIME WORK Any employee may be required by the employer to perform overtime work in any of the following cases: xxx xxx xxx (c)When there is urgent work to be performed on machines. that is. there is willfulness. In Lakpue Drug Inc. The hearing will determine your employment status with this company. The mere fact that the numerous infractions of respondent have not been immediately subjected to sanctions cannot be interpreted as condonation of the offenses or waiver of the company to enforce company rules. (3) failure to render overtime work despite instruction to do so. 89 of the Labor Code empowers the employer to legally compel his employees to perform overtime work against their will to prevent serious loss or damage: Art. Jefferson M. Further investigation of this matter is required. whether respondent's refusal or failure to render overtime work was willful. It is only reasonable that workers are sometimes asked to render overtime work in order to meet production deadlines. (2) commission of discourteous acts and disrespectful conduct when addressing superiors. in order to avoid serious loss or damage to the employer or some other cause of similar nature. Respondent was instructed to attend the seminar to be held on September 27-30. he first secured permission from the plant controller. to conduct training seminars to acquaint petitioner‘s personnel on the operations of the water treatment plant. the employer must give the employee two written notices and a hearing or opportunity to be heard if requested by the employee before terminating the employment: a notice specifying the grounds for which dismissal is sought a hearing or an opportunity to be heard and after hearing or opportunity to be heard. Josephine D. a hearing was even scheduled and held. with his gross and habitual tardiness and absences. Not to be taken lightly of course is the hearing or opportunity for the employee to defend himself personally or by counsel of his choice. he was not given any opportunity at all to consult a union official or lawyer. Inc. In a letter by his immediate supervisor. it is plain to see that there was merely a general description of the claimed offenses of respondent. Jefferson M. he was elected by the local union as chief shop steward. 1996. he is obligated to attend to the problems of his fellow union members. NLRC: Procedurally.B. Michael Press shows that he was a difficult employee. The totality of his offenses against petitioner R. Therefore.R. The undue haste in effecting respondent's termination shows that the termination process was a mere simulation — the required notices were given. we rule that respondent unjustifiably refused to render overtime work despite a valid order to do so. We held in Agabon v. would merit dismissal from service. His refusal to render overtime work was the final straw that broke the camel's back. to prepare for his defense. A scrutiny of the disciplinary process undertaken by petitioners leads us to conclude that they only paid lip service to the due process requirements. a notice of the decision to dismiss. Petitioner hired Clean Flow Philippines. Isabela. 2008 Facts: Respondent Pablo Nagrama. Cosmos Bottling Corporation v. 16. was initially employed by petitioner as a maintenance mechanic on June 24. 1999 — the day respondent received the first notice. He contended that he had to attend to an administrative hearing for fellow unionists which were held at Santiago. the employees must be given two (2) notices before his employment could be terminated: (1) a first notice to apprise the employees of their fault. (1) if the dismissal is based on a just cause under Article 282. We are not persuaded. and. dated September 29. On September 17. even before the first notice had been given. and (2) a second notice to communicate to the employees that their employment is being terminated. Anent the written notice of charges and hearing. respondent was informed that charges of abandonment of duty and gross insubordination had been lodged against him. but respondent was not really given a real opportunity to defend himself. 1999. He was required to submit his written explanation. the employer must give the employee and the Department of Labor and Employment written notices 30 days prior to the effectivity of his separation Under the twin notice requirement. Due process: twin notice and hearing requirement On the issue of due process. and it seems that petitioners had already decided to dismiss respondent from service. and (2) if the dismissal is based on authorized causes under Articles 283 and 284. G. Issue: Is the dismissal based on the grounds of abandonment and gross insubordination valid? Ruling: Page 104 . Respondent filed his explanation on September 30. and. No 164403. Marquez After a re-examination of the facts. Jr. He averred that as a union official. He failed to attend the first two (2) days of the seminar. 1993 at the Cosmos Plant in Cauayan. 1999. Nagrama. that before he went. Calacien. 1999. 1999. March 4. worse. The hearing was immediately set in the afternoon of February 23. Petitioners maintain that they had observed due process when they gave respondent two notices and that they had even scheduled a hearing where he could have had explained his side and defended himself. Respondent was designated by petitioner as waste water treatment operator effective September 27. petitioners claim that they had afforded respondent due process.LABOR RELATIONS Atty. Isabela. Likewise. However. Chiara Mae drowned. while respondent was away. The child was still alive when respondent rushed her to the General Malvar Hospital where she was pronounced dead on arrival.htm . or the entire absence of care. Taguiam was the Class Adviser of Grade 5-Esmeralda of the petitioner. Taguiam admitted that Chiara Mae Federico's permit form was unsigned. Moreover. Nevertheless. Habitual neglect implies repeated failure to perform one's duties for a period of time. The principal authorized the activity and allowed the pupils to use the swimming pool. Jefferson M. No. Respondent went after them to verify where they were going. respondent filed a complaint for illegal dismissal.LABOR RELATIONS Atty. there is no gross insubordination. We are not convinced that respondent intended to sever the employer-employee relationship with Cosmos. He immediately complied with the memo requiring him to explain his absence.C. respondent distributed the parent's/guardian's permit forms to the pupils. Petitioner does not contest this fact. she concluded that Chiara Mae was allowed by her mother to join the activity since her mother personally brought her to the school with her packed lunch and swimsuit. As to the second requisite. Two (2) elements must be satisfied for an employee to be guilty of abandonment._ftn83 There is no question that orders to attend the seminar are lawful instructions by petitioner. Unfortunately. Taguiam. the class president. and made known to the employee and should pertain to the duties which he has been engaged to discharge. Corazon P. The purpose of a permit form is precisely to ensure that the parents have allowed their child to join the school activity involved. The second element is the more determinative factor and must be evinced by overt acts. he had a valid reason to attend the hearing of his union brothers. Permission negates any possibility of respondent abandoning his job. July 14. depending upon the circumstances. In this connection. The first is the failure to report for work or absence without valid or justifiable reason. 17.‖ to lie. He also asked for and was given permission as can be seen from the minutes of his hearing. it is undisputed that Chiara Mae's permit form was unsigned. 2000. 165565. School of the Holy Spirit of Quezon City.http://sc. two (2) requisites are also necessary. wrote a letter to the grade school principal requesting permission to hold a year-end celebration at the school grounds. G. On March 10. vs. Respondent had been grossly negligent. A review of the records shows that respondent‘s failure to report to his quality assurance supervisor and failure to fully attend the seminar was in no way tainted by a wrongful or perverse attitude. the order violated must have been reasonable. First.] A complaint for illegal dismissal shows a desire to continue work. When she returned. Gross negligence implies a want or absence of or a failure to exercise slight care or diligence. Marquez There is no abandonment and gross insubordination. As an officer.ph/jurisprudence/2008/march2008/164403. Yet. is lacking. School of the Holy Spirit of Q.gov. a review of the evidence shows that both elements of abandonment are lacking. Taguiam was dismissed for gross negligence resulting to loss of confidence.judiciary. First . gross and habitual neglect of duties is a valid ground for an employer to terminate an employee. the burden of proof is on the employer to show the employee‘s clear and deliberate intent to discontinue his employment without any intention of returning. while the pupils were swimming. He was a shop steward.R. 2008 Facts: Corazon P. the assailed conduct must have been intentional and characterized by a wrongful and perverse attitude. His failure to report directly to his Quality Assurance Supervisor and Analyst can be dismissed as failure to properly understand the instructions he was given. Verily. she warned the pupils who did not know how to swim to avoid the deeper area. mere absence is not sufficient. also called ―willful disobedience of a lawful order. respondent‘s absence was justified under the circumstances. which recent jurisprudence qualifies as a union officer. The first element of gross insubordination. First.] Second. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. lawful. Corazon P. the maintenance man was already administering cardiopulmonary resuscitation on Chiara Mae. Under Article 282 of the Labor Code. Before the activity started. The second is a clear intention to sever the employer-employee relationship. two of them sneaked out. For gross insubordination. respondent allowed her to join the activity because she assumed that Chiara Mae's mother has allowed her to join it by personally bringing her to the school with her packed lunch and swimsuit. Issue: Was the dismissal based on the ground as stated valid? Ruling: Yes the dismissal was valid. Hence. His failure to secure a clearance from Clean Flow was due to his attendance to his union duties. however. Respondent cannot simply ignore this by resorting to Page 105 . Thus. it was respondent's responsibility as Class Adviser to supervise her class in all activities sanctioned by the school.R. Morales (Morales) applied for and was hired as receptionist by petitioner Universal Staffing Services. Second. Marquez assumptions. Notably. as distinguished from an act done carelessly. nor should it appear as a mere afterthought to justify earlier action taken in bad faith or a subterfuge for causes which are improper. Otherwise stated. be an actual breach of duty committed by the employee which must be established by substantial evidence. whims. such as adequate first aid and sufficient adult personnel. 2008 Facts: Respondent Grace M. 2003. the cause is sufficient to dismiss respondent. In another case. In that case. 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.00 as full and final settlement of all her claims on January 1. (USSI) in behalf of its principal Jin Xiang International Labour Supply of United Arab Emirates (U. National Labor Relations Commission. heedlessly or inadvertently.). A breach is willful if it is done intentionally. we ruled that 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. but the NLRC and the CA reversed the Arbiter‘s findings. July 21. Claiming that she was illegally terminated.00.A. She should have been mindful of the fact that with the number of pupils involved. we noted that a mere delay on PAL's flight schedule due to aircraft damage entails problems like hotel accommodations for its passengers. petitioners lost its trust and confidence in respondent. we held that it would be unfair to compel Philippine Banking Corporation to continue employing its bank teller. Under Article 282 of the Labor Code. "poor performance" is equivalent to inefficiency and incompetence in the performance of official duties. Inc. G. Morales‘ employment was terminated allegedly due to her poor work performance. 2003. her dismissal was valid and legal.LABOR RELATIONS Atty. 100. it must rest on substantial grounds and not on the employer's arbitrariness. Gross negligence implies a want or absence of or failure to exercise slight care or diligence. caprices or suspicion. All told. it would be impossible for her by herself alone to keep an eye on each one of them.E. there being a clear showing that respondent was culpable for gross negligence resulting to loss of trust and confidence. In view of the considerable resultant damage. Jefferson M. however. re-booking. thoughtlessly. she should have coordinated with the school to ensure that proper safeguards. Loss of trust and confidence to be a valid ground for dismissal must be based on a willful breach of trust and founded on clearly established facts. She could have requested the mother to sign the permit form before she left the school or at least called her up to obtain her conformity. v. Morales filed a complaint for illegal dismissal and non-payment of overtime and vacation pay against USSI and Al Sandos Hotel Management with the Labor Arbiter. the fact that an employee's performance is found to be poor or unsatisfactory does not necessarily mean that the employee is grossly and habitually negligent of his duties. we observed that although the teller's infraction was not habitual. This is not the first time that the SC have departed from the requirements laid down by the law that neglect of duties must be both gross and habitual. 177576. In Philippine Airlines. In this case. Fuentes v. was not habitual. provided for an employment term of two (2) years with a monthly salary of Dhs1. The Labor Arbiter lent credence to USSI‘s posture and dismissed Morales‘ complaint. It evinces a thoughtless disregard of consequences Page 106 . therefore. NLRC. Morales received Dhs1. v.300. respondent's negligence. a substantial amount of money was lost. were present during their activity. It has never been intended to afford an occasion for abuse because of its subjective nature. otherwise. although gross. It should be genuine and not simulated. 18. As a result of gross negligence in the present case. Inc. the sufficiency of the evidence as well as the resultant damage to the employer should be considered in the dismissal of the employee. No. In that case. As a general concept. the employee would eternally remain at the mercy of the employer. Universal Staffing Services Inc. Respondent admitted that she was around when Chiara Mae and her mother arrived. the possibility of law suits. knowingly and purposely. Issue: Whether or not Morales is illegally dismissed Ruling: USSI insists that Morales‘ dismissal was based on a valid and legal ground. an unsatisfactory rating can be a just cause for dismissal only if it amounts to gross and habitual neglect of duties. and was repatriated on January 7. Indeed. The contract duly approved by the Philippine Overseas Employment Administration (POEA). Morales was dismissed for her alleged poor performance. After Ten (10) months of work in Al Sandos Suites (Al Sandos) Abu Dhabi.A. NLRC. U. and payment of special landing fees not to mention the soaring costs of replacing aircraft parts. There must.E. illegal or unjustified. without justifiable excuse. the damage went as far as claiming the life of a child. or the entire absence of care. Thus. Morales was not accorded due process. Under Article 277(b) of the Labor Code. 1998 mass dismissal of its cabin crew personnel. Jefferson M. there can be no other conclusion than that Morales was illegally dismissed and her employment contract was illegally terminated. the petition is PARTIALLY GRANTED. PAL admits that the retrenchment is wholly premised upon such reduction in fleet. in November 1998 and up to March 1999 several of those retrenched were called back to service. no convincing proof was offered to substantiate Morales‘ alleged poor performance. USSI failed to cite particular acts or instances that would validate its claim of Morales‘ poor performance. or its peso equivalent. Morales is declared illegally dismissed. Petitioner Universal Staffing Services.LABOR RELATIONS Atty. or collectively known as PAL cabin crew personnel. PAL adopted the retrenchment scheme allegedly to cut costs and mitigate huge financial losses as a result of a downturn in the airline industry brought about by the Asian financial crisis. 1998. Certainly.000 of its employees. 178083. PAL claims that the scheme resulted in savings x x x amounting to approximately P24 million per month savings that would greatly alleviate PALs financial crisis. With this finding. the employer must send the employee who is about to be terminated. allowances and backwages of affected FASAP members. The principle echoed and reechoed in jurisprudence is that the onus of proving that the employee was dismissed for a just cause rests on the employer. WHEREFORE. On June 15. Furthermore. actual. 1998. it is imperative that Morales be granted the monetary benefits due her. and to the strike staged by PAL pilots since this action also translated into a reduction of flights.00. to take effect on July 15.400 of its cabin crew personnel. No substantial evidence was presented to substantiate the cause of Morales‘ dismissal. thus requiring the services of only 654 cabin crew personnel. First. Ruling: Page 107 . To date. PAL adopted its so-called Plan 14 whereby PALs fleet of aircraft would be reduced from 54 to 14.R. 2008 Facts: Petitioner FASAP is the duly certified collective bargaining representative of PAL flight attendants and stewards. 19. are DELETED. G. Meanwhile. There was no showing that Al Sandos warned Morales of her alleged poor performance. On June 22. PAL retrenched 5. 2002 informing her that she was already terminated.R. moral and exemplary damages with a prayer to enjoin the retrenchment program then being implemented. illegal retrenchment with claims for reinstatement and payment of salaries. as well as attorney‘s fees. Thus. Respondent PAL is a domestic corporation organized and existing under the laws of the Republic of the Philippines. Issue: Whether PALs retrenchment scheme was justified. Marquez without exerting any effort to avoid them. Inc. PAL claims to have incurred P90 billion in liabilities. July 22. 178083. Philippine Airlines. 1998. G.300. is ordered to pay Morales‘ three (3) months‘ salary or Dhs3. claims that only 80 were recalled as of January 2001. The only notice given to Morales was the letter dated December 14. In implementing the retrenchment scheme. including more than 1. months after the June 15. FASAP. No. and the latter‘s failure to discharge that burden would result in a finding that the dismissal is unjustified. a written notice stating the cause/s for termination and must give the employee the opportunity to be heard and to defend himself. Chiong (Chiong) for unfair labor practice. Grace M. PAL began recalling to service those it had previously retrenched. The awards of overtime and holiday pay. Second. while its assets stood at P85 billion. Morales was not served the first notice apprising her of the particular acts or omissions on which her dismissal was based together with the opportunity to explain her side. however. During said period. Flight Attendants and Steward Association of the Philippines (FASAP) v. PAL claims to have recalled 820 of the retrenched cabin crew personnel. No. FASAP filed a Complaint against PAL and Patria T. operating as a common carrier transporting passengers and cargo through aircraft. Likewise. In case of termination due to the installation of laborsaving devices or redundancy. Put simply. or that it expected no abatement of its losses in the coming years. but substantial. efficiency. In view of the facts and the issues raised. Its failure to prove these reverses or losses necessarily means that the employees dismissal was not justified. and. The law speaks of serious business losses or financial reverses. taking to mind that the burden of proof in retrenchment cases lies with the employer in showing valid cause for dismissal: that legitimate business reasons exist to justify retrenchment. much less serious business losses within the meaning of the law. 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. before any reduction of personnel becomes legal. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses. Sliding incomes or decreasing gross revenues are not necessarily losses. Jefferson M.The employer may also terminate the employment of any employee due to the installation of labor-saving devices. are not merely de minimis. age. whichever is higher. as well as compliance therewith by PAL. while it is true that the exercise of this right is a prerogative of management. such loss.LABOR RELATIONS Atty. whichever is higher. (3) That the employer pays the retrenched employees separation pay equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service. when other less drastic means have been tried and found to be inadequate. whichever is higher. 283. Retrenchment is only a measure of last resort. all of which must concur. The fact that an employer may have sustained a net loss. the lifeblood upon which he and his family owe their survival. 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 the provisions of this Title. Closure of establishment and reduction of personnel. These are: (1) That retrenchment is reasonably necessary and likely to prevent business losses which. retrenchment or reduction of employees is authorized as follows: ART. The burden clearly falls upon the employer to prove economic or business losses with sufficient supporting evidence. seniority. there must be faithful compliance with substantive and procedural requirements of the law and jurisprudence. redundancy. the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service. Page 108 . actual and real. . the Court has authorized valid reductions in the work force to forestall business losses. A fraction of at least six (6) months shall be considered one (1) whole year. and financial hardship for certain workers. fourth and the fifth elements set forth above. Marquez No. Where appropriate and where conditions are in accord with law and jurisprudence. (5) That the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees. may not amount to serious business losses mentioned in the law. The law recognizes the right of every business entity to reduce its work force if the same is made necessary by compelling economic factors which would endanger its existence or stability. or if only expected. (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. for retrenchment strikes at the very heart of the workers employment. nor on expected losses that would have been incurred had operations been continued. serious. absent any other evidence on its impact on the business. per se. FIRST ELEMENT: The employers prerogative to layoff employees is subject to certain limitations. if already incurred. or even to recognize an obvious reduction in the volume of business which has rendered certain employees redundant. The employer must 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. such as status. not every loss incurred or expected to be incurred by a company will justify retrenchment. Any claim of actual or potential business losses must satisfy certain established standards. are reasonably imminent as perceived objectively and in good faith by the employer. the resolution of the instant petition hinges on a determination of the existence of the first. (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. Under the Labor Code. physical fitness. Nevertheless. by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. the hemorrhaging of capital. Although the Philippine economy was gravely affected by the Asian financial crisis. that the failure of the employer to resort to other less drastic measures than retrenchment seriously belies its claim that retrenchment was done in good faith to avoid losses. these are not the financial statements that would have shown PALs alleged precarious position at the time it implemented the massive retrenchment scheme in 1998. or the threeday-work-per-employee-per-week schedule. demoted). improvement of manufacturing efficiency. It offered no satisfactory explanation why it abandoned Plan 14. such as cost reduction. and the expected imminent losses sought to be forestalled. only to be recalled but assigned to lower positions (i. In sum. however. On the requirement that the prerogative to retrench must be exercised in good faith. it justified its actions of subsequently recalling to duty retrenched employees by making it appear that it was a show of good faith. The truth. and yet proceeded to terminate the services of its permanent cabin crew personnel. not to mention its bad faith. The irregularity of PALs implementation of Plan 14 becomes more apparent when it rehired 140 probationary cabin attendants whose services it had previously terminated. scheming employers might be merely feigning business losses or reverses in order to ease out employees. Page 109 . lesser investment on raw materials. reduction of the bonuses and salaries of both management and rankand-file. financial statements audited by independent external auditors constitute the normal method of proof of profit and loss performance of a company. and trimming of marketing and advertising costs. To prove that PAL was financially distressed. Likewise. instead. without due regard for their long years of service with the airline. Marquez The employer must also exhaust all other means to avoid further losses without retrenching its employees. worse. and that the demonstrated arbitrariness in the selection of which of its employees to retrench is further proof of the illegality of the employers retrenchment program. it could have submitted its audited financial statements but it failed to present the same with the Labor Arbiter. retrenchment to prevent losses is an authorized cause for terminating employment and the decision whether to resort to such move or not is a management prerogative.e. the claim that retrenchment was done in good faith to avoid losses is belied. However. it cannot be assumed that it has likewise brought PAL to the brink of bankruptcy. and not for the years 2002 up to 2004 because these financial statements cover a period markedly distant to the years in question. is that it was unfair for PAL to have made such a move. FOURTH ELEMENT: Concededly. which make them irrelevant and unacceptable. Even assuming that the employer has actually incurred losses by reason of the Asian economic crisis.LABOR RELATIONS Atty. it was capricious and arbitrary. A Statement of Profit and Loss submitted to prove alleged losses. Retrenchment is a means of last resort.400 of its cabin crew personnel. PAL should have submitted its financial statements for the years 1997 up to 1999. we find that PAL had implemented its retrenchment program in an arbitrary manner and with evident bad faith. which prejudiced the tenurial rights of the cabin crew personnel. without the accompanying signature of a certified public accountant or audited by an independent auditor. the fact that PAL underwent corporate rehabilitation does not automatically justify the retrenchment of its cabin crew personnel. instead of Plan 14. When PAL implemented Plan 22. must be proved by sufficient and convincing evidence. however. that it was due to its good corporate nature that the decision to consider recalling employees was made. Interestingly.. adjustment of the work routine to avoid scheduled power failure. PAL submitted its audited financial statements only when the case was the subject of certiorari proceedings in the Court of Appeals by attaching in its Comment a copy of its consolidated audited financial statements for the years 2002. it could not be said that it acted in a manner compatible with good faith. In the instant case. Where the only less drastic measure that the employer undertook was the rotation work scheme. it narrated a litany of woes without offering any evidence to show that they translated into specific and substantial losses that would necessitate retrenchment. the right of an employer to dismiss an employee differs from and should not be confused with the manner in which such right is exercised. and it did not endeavor at other measures. Alleged losses if already realized. 2003 and 2004. It must not be oppressive and abusive since it affects one's person and property. the retrenchment is not completely justified if there is no showing that the retrenchment was the last recourse resorted to. is nothing but a self-serving document which ought to be treated as a mere scrap of paper devoid of any probative value. it is justified only when all other less drastic means have been tried and found insufficient. In establishing a unilateral claim of actual or potential losses. Jefferson M. Instead. which was what it had originally made known to its employees. considering that several thousand employees who had long been working for PAL had lost their jobs. and. However. The reason for requiring this is readily apparent: any less exacting standard of proof would render too easy the abuse of this ground for termination of services of employees. we have ruled that the hiring of new employees and subsequent rehiring of retrenched employees constitute bad faith. some as new hires. PAL failed to substantiate its claim of actual and imminent substantial losses which would justify the retrenchment of more than 1. Page 110 .552 Total -.61 Number of employees who were retrenched due to other reasons -. 5. It failed to take into account each cabin attendants respective service record. PALs retrenchment program is illegal because it was based on wrongful premise (Plan 14. Jefferson M. the NLRC made a detailed listing of the retrenchment scheme based on the ICCD Masterank and Seniority 1997 Ratings. thereby disregarding seniority and loyalty in the evaluation of overall employee performance. Suspension (-20).1. In the implementation of its retrenchment scheme. 3. Passenger Complaints (-30). Appearance (-10) ATTENDANCE 35% Perfect Attendance +2 Missed Assignment -30 Sick Leaves in excess of allotment and other leaves in excess of allotment -20 Tardiness -10 1[93] C. Indeed. By discarding the cabin crew personnels previous years of service and taking into consideration only one years worth of job performance for evaluation. in assessing the overall performance of each cabin crew personnel.LABOR RELATIONS Atty. 4. However.4 Prominent from the above data is the retrenchment of cabin crew personnel due to other reasons which. temporary employee). Moreover. The appellate court held that there was no need for PAL to consult with FASAP regarding standards or criteria that the airline would utilize in the implementation of the retrenchment program.473. PAL evaluated the cabin crew personnels performance during the year preceding the retrenchment (1997). however. It found the following: 1. Marquez FIFTH ELEMENT: In selecting employees to be dismissed. In sum. and that the criteria actually used which was unilaterally formulated by PAL using its Performance Evaluation Form in its Grooming and Appearance Handbook was reasonable and fair. Number of employees retrenched due to inverse seniority rule and other reasons -.. loyalty and past efficiency. This is not allowed because it has no basis in fact and in law. are not specifically stated and shown to be for a valid cause. INFLIGHT PROFICIENCY EVALUATION 30% JOB PERFORMANCE 35% Special Award +5 Commendations +2 Appreciation +1 Disciplinary Actions Reminder (-3). fair and reasonable criteria must be used.107 Number of employees who were demoted -. the criteria utilized by PAL in the actual retrenchment were not reasonable and fair. such as but not limited to: (a) less preferred status (e. Warning/Admonition & Reprimands (-5). (b) efficiency and (c) seniority. PAL virtually did away with the concept of seniority. Indeed. B. based on the following set of criteria or rating variables found in the Performance Evaluation Form of the cabin crew personnels Grooming and Appearance Handbook: A. which in reality turned out to be Plan 22. 2.454 Number of employees retrenched due to excess sick leaves -. with no one more senior than the other.299 Number of employees who were retrenched due to excess sick leave and other reasons -. PAL only considered the year 1997.g. This makes the evaluation of each cabin attendants efficiency rating capricious and prejudicial to PAL employees covered by it. and treated all cabin attendants as if they were on equal footing. resulting in retrenchment of more cabin attendants than was necessary) and in a set of criteria or rating variables that is unfair and unreasonable when implemented. PAL was not obligated to consult FASAP regarding the standards it would use in evaluating the performance of the each cabin crew. Issue: Whether or not petitioner substantially proved the presence of valid cause for respondent's termination. Inc. Costs against respondent PAL. Yuseco and other witnesses positively identified the person in the video as Davis NBI and Yuseco filed a complaint for qualified theft against Davis but because the affidavits presented by the NBI (identifying respondent as the culprit) were not properly verified. Because loss of personal property among its employees had become rampant in its office.LABOR RELATIONS Atty. The assailed Decision of the Court of Appeals in CA-G. G. 2005 granted the petition holding that the labor arbiter and NLRC merely adopted the findings of the NBI regarding respondent's culpability. CA on July 4. this petition where petitioner argues that the ground for an employee's dismissal need only be proven by substantial evidence. petitioner sought the assistance of NBI. Jefferson M. NLRC affirmed the labor arbiter in July 31. obtained a security video from Abenson's showing the person who used Yuseco's credit cards. to pay attorneys fees equivalent to ten percent (10%) of the total monetary award. inclusive of allowances and other monetary benefits computed from the time of their separation up to the time of their actual reinstatement. On October 18. No. separation pay equal to one (1) month pay for every year of service. 2007 denying the motion for reconsideration. without loss of seniority rights and other privileges. Because the affidavits of the witnesses were not verified. vs. SP No. Inc. Marquez DISPOSITION: WHEREFORE. Petitioner moved for reconsideration but it was denied. — An employer may terminate an employment for any of the following causes: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or his representatives in connection with his work. She immediately reported the loss of her credit cards to AIG and BPI Express. the complaint was dismissed for lack of merit. the amounts of payments shall be deducted from their backwages. Inc. 2003. ORDERING Philippine Airlines. 2. petitioner placed Davis under preventive suspension and instructed her to cooperate with its ongoing investigation. ORDERING Philippine Air Lines. respondent Corporation shall pay backwages plus. Sept. 87956 dated August 23. Ruling: Supreme Court granted the petition and ruled that petitioner validly dismissed Davis for cause analogous to serious misconduct. 1998. Thus. the city prosecutor dismissed the complaint due to insufficiency of evidence. Hence. JHLIC‘s corporate affairs manager. the instant petition is GRANTED. John Hancock Life Insurance Corp. the dropping of charges against an employee (especially on a technicality such as lack of proper verification) or his subsequent acquittal does not preclude an employer from dismissing him due to serious misconduct. provided that with respect to those who had received their respective separation pay. 1998 made effective on July 15. 20. in May 21. in lieu of reinstatement.R. Patricia Yuseco. 3. There was a valid cause for her dismissal. The labor arbiter. 2006. 2008 Facts: Joanna Cantre Davis was agency administration officer of John Hancock Life Insurance Corporation. The labor arbiter and NLRC should have assessed evidence independently as "unsubstantiated suspicions. Page 111 . Upon petition for certiorari filed with the CA. 2003 and denied her motion for reconsideration in October 30. discovered that her wallet was missing. and to pay them full backwages. Where reinstatement is no longer feasible because the positions previously held no longer exist. (e) Other causes analogous to the foregoing. to reinstate the cabin crew personnel who were covered by the retrenchment and demotion scheme of June 15. Davis filed a complaint for illegal dismissal alleging that petitioner terminated her employment without cause. The NBI. are REVERSED and SET ASIDE and a new one is rendered: 1.R. Davis. 3. 2000. Meanwhile. FINDING respondent Philippine Airlines. accusations and conclusions of employers (did) not provide legal justification for dismissing an employee". 2002. they did not constitute substantial evidence. which affirmed the Decision of the NLRC setting aside the Labor Arbiters findings of illegal retrenchment and its Resolution of May 29. She was also told that a proposed transaction in Abenson's-Robinsons Place was disapproved because "she" gave the wrong information upon verification. Thus. GUILTY of illegal dismissal. she was informed that "Patricia Yuseco" had just made substantial purchases using her credit cards in various stores in the City of Manila. To her surprise. Article 282 of the Labor Code provides: Termination by Employer. found that Davis committed serious misconduct (she was the principal suspect for qualified theft committed inside petitioner's office during work hours). Upon appeal. 169549. Merin vs. For misconduct to be serious and therefore a valid ground for dismissal. it averred that it had observed due process in dismissing respondent and maintained that respondent was not entitled to his money claims such as service incentive leave and 13th-month pay because he was paid on commission or percentage basis. Also. petitioner dismissed Davis based on the NBI's finding that the latter stole and used Yuseco's credit cards. nonpayment of 13th-month pay. indicating the nature and details of the irregularity. and second. Article 282 (e) of the Labor Code talks of other analogous causes or those which are susceptible of comparison to another in general or in specific detail. respondent's misconduct was not work-related and therefore. Issue: Whether or not procedural requirements were complied with. substantive — the valid and authorized causes of termination of employment under the Labor Code. he claimed that his dismissal was effected without due process. Thereafter. In his letter. willful in character. He explained that during that day's trip. and separation pay. a dereliction of duty. For an employee to be validly dismissed for a cause analogous to those enumerated in Article 282. the cause must involve a voluntary and/or willful act or omission of the employee. He denied committing any infraction and alleged that his dismissal was intended to bust union activities. Respondent was required to accomplish a "Conductor's Trip Report" and submit it to the company after each trip. Nonetheless. and they had to cut short the trip in order to immediately report the matter to the police. 21. the company then makes a determination of whether to accept the explanation or impose upon the employee a penalty for committing an infraction. 2001. KKTI nevertheless asked respondent to explain the discrepancy. It claimed that respondent had violated the trust and confidence reposed upon him by KKTI. the windshield of the bus assigned to them was smashed. 2001 incident. Did petitioner substantially prove the existence of valid cause for respondent's separation? Yes. 2001 irregularity was an act of fraud against the company. she could not be dismissed for serious misconduct. forbidden act. No. After considering the explanation of the employee. 1999. Upon audit of the October 28. On November 26. October 17. 2001 Trip Report was unintentional. the company issues an "Irregularity Report" against the employee. They likewise considered petitioner's own investigative findings. But since the theft was not committed against petitioner itself but against one of its employees. In this case.R. procedural — the manner of dismissal. Moreover. service incentive leave. he got confused in making the trip report.LABOR RELATIONS Atty. 2001 Conductor's Report of respondent. Clearly. Page 112 . 2001. The labor arbiter and the NLRC relied not only on the affidavits of the NBI's witnesses but also on that of respondent. Their conclusion (that there was valid cause for respondent's separation from employment) was therefore supported by substantial evidence. It discovered that respondent declared several sold tickets as returned tickets causing KKTI to lose an income of eight hundred and ninety pesos. this report indicates the ticket opening and closing for the particular day of duty. Ruling: Due process under the Labor Code involves two aspects: first. Once an irregularity is discovered. if proven by substantial evidence. illegal deductions. KKTI noted an irregularity. G. 2008 Facts: Respondent Mamac was hired as bus conductor of Don Mariano Transit Corporation (DMTC) on April 29. Respondent filed a Complaint for illegal dismissal. While no irregularity report was prepared on the October 28. 171790. respondent said that the erroneous declaration in his October 28. After submission. KKTI also cited as basis for respondent's dismissal the other offenses he allegedly committed since 1999. the concerned employee is asked to explain the incident by making a written statement or counter-affidavit at the back of the same Irregularity Report. KKTI contended that respondent was legally dismissed after his commission of a series of misconducts and misdeeds. is a cause analogous to serious misconduct. they did not merely adopt the findings of the NBI but independently assessed evidence presented by the parties. it must be: of grave and aggravated character and not merely trivial or unimportant and connected with the work of the employee. The dismissal letter alleged that the October 28. As a background. That decision shall be stated on said Irregularity Report and will be furnished to the employee. As a result of the incident. NLRC. and implies wrongful intent and not mere error in judgment". A cause analogous to serious misconduct is a voluntary and/or willful act or omission attesting to an employee's moral depravity. respondent received a letter terminating his employment effective November 29. Jefferson M. the company audits the reports. Theft committed by an employee against a person other than his employer. Marquez Misconduct involves "the transgression of some established and definite rule of action. A general description of the charge will not suffice. First. The law is clear on the matter. the following standards of due process shall be substantially observed: I.Standards of due process. or rebut the evidence presented against him. In the instant case. (b)A hearing or conference during which the employee concerned. with the assistance of a representative or counsel of their choice. Lastly. Marquez Non-compliance with the Due Process Requirements Art." However. Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. 277 of the Labor Code provides the manner of termination of employment.LABOR RELATIONS Atty. In case of termination. indicating that upon due consideration of all the circumstances. and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period. the implementing rule of the aforesaid provision states: SEC. (c)A written notice of termination served on the employee. NLRC. the foregoing notices shall be served on the employee's last known address. Jefferson M. — . and giving said employee reasonable opportunity within which to explain his side. and (2) grounds have been established to justify the severance of their employment. the Court held that consultations or conferences are not a substitute for the actual observance of notice and hearing. present his evidence. if any. the employers should schedule and conduct a hearing or conference wherein the employees will be given the opportunity to: (1) explain and clarify their defenses to the charge against them. thus: Art. Page 113 . . (2)After serving the first notice. in order to enable the employees to intelligently prepare their explanation and defenses. 282 is being charged against the employees. Miscellaneous Provisions. (b)Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause without prejudice to the requirement of notice under Article 283 of this Code. gather data and evidence. This should be construed as a period of at least five (5) calendar days from receipt of the notice to give the employees an opportunity to study the accusation against them. KKTI admits that it had failed to provide respondent with a "charge sheet. 277. the following should be considered in terminating the services of employees: (1)The first written notice to be served on the employees should contain the specific causes or grounds for termination against them. it maintains that it had substantially complied with the rules. During the hearing or conference. (2) present evidence in support of their defenses. with the assistance of counsel if he so desires is given opportunity to respond to the charge." We are not convinced. grounds have been established to justify his termination. . "Reasonable opportunity" under the Omnibus Rules means every kind of assistance that management must accord to the employees to enable them to prepare adequately for their defense. are violated and/or which among the grounds under Art. A verbal appraisal of the charges against an employee does not comply with the first notice requirement. this conference or hearing could be used by the parties as an opportunity to come to an amicable settlement. and decide on the defenses they will raise against the complaint. 2. Moreover. claiming that "respondent would not have issued a written explanation had he not been informed of the charges against him. v. the employees are given the chance to defend themselves personally. Accordingly. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. and (3) rebut the evidence presented against them by the management. the notice should specifically mention which company rules. requirements of notice. — In all cases of termination of employment. Moreover. respondent was not issued a written notice charging him of committing an infraction. In Pepsi Cola Bottling Co.For termination of employment based on just causes as defined in Article 282 of the Code: (a)A written notice served on the employee specifying the ground or grounds for termination. (3)After determining that termination of employment is justified. the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. the employers shall serve the employees a written notice of termination indicating that: (1) all circumstances involving the charge against the employees have been considered. the notice should contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the employees. consult a union official or lawyer. To clarify. respondent made the letter merely to explain the circumstances relating to the irregularity. Third. 2008 Facts: Armando G. 282 of the Labor Code. 217lb. The CA reversed the NLRC. the CA awarded full backwages in favor of respondent in accordance with the doctrine in Serrano v. He met the required weight and was allowed to work but his weight problem recurred. In the meantime his status was ―off-duty. becomes an analogous cause under Article 282(e) of the Labor Code that justifies his dismissal from the service. as mandated by the Cabin and Crew Administration Manual of PAL. 17. Issue: Whether or not petitioner was illegally dismissed. 1985 to address his weight concerns. From 1989 to 1992 his weight fluctuated from 209lb. for non-compliance with the due process requirements in the termination of respondent's employment. Yrasuegui vs. but is nonetheless voluntary. For failure to meet the weight standards another leave without pay from March 5. Sanction for Non-compliance with Due Process Requirements As stated earlier. Yrasuegui was a former international flight steward of Philippine Airlines. and 205. However. In other words. Thus.‖ Finally in 1993. 168081. The reports did not even state a company rule or policy that the employee had allegedly violated. Phil Airlines. Tersely put. 22. During that period he was requested to lose weight and to report for weight checks which he constantly failed to do.‖ By its nature. The Labor Arbiter ruled that he was illegally dismissed and entitles to reinstatement. they were standards that establish continuing qualifications for an employee‘s position.‖ his services were considered terminated ―effective immediately. an employee may be dismissed the moment he is unable to comply with his ideal weight as prescribed by the weight standards. KKTI's "standard" charge sheet is not sufficient notice to the employee. 212lb. x x x We hold that the obesity of petitioner. a hearing was still necessary in order for him to clarify and present evidence in support of his defense. G. The dismissal would fall under Article 282(e) of the Labor Code. As explained by the CA: x x x [T]he standards violated in this case were not mere ―orders‖ of the employer. no hearing was conducted. 1984 to March 4. The NLRC affirmed the LA. the employer should indemnify the employee with nominal damages. the doctrine in Serrano had already been abandoned in Agabon v. The dismissal of petitioner can be predicated on the bona fide occupational qualification defense.LABOR RELATIONS Atty. Moreover. petitioner was formally informed by PAL that due to his inability to attain his ideal weight. 1988 to February 1989. 215lb. … The failure to meet the employer‘s qualifying standards is in fact a ground that does not squarely fall under grounds (a) to (d) and is therefore one that falls under Article 282(e) – the ―other causes analogous to the foregoing. when placed in the context of his work as flight attendant. He was unaware that a dismissal proceeding was already being effected.000) as damages. Oct. the ideal weight being 166 pounds. (PAL). The proper weight for a man of his height and body structure is from 147 to 166 pounds. Regardless of respondent's written explanation. His weight problem dates back to 1984 when PAL advised him to go on an extended vacation leave from December 29. NLRC by ruling that if the dismissal is done without due process. Thus. thus another leave without pay from October 17. NLRC. ―and considering the utmost leniency‖ extended to him ―which spanned a period covering a total of almost five (5) years. Ruling: The obesity of petitioner is a ground for dismissal under Article 282(e) of the Labor Code. Employment in particular jobs may not be Page 114 . Marquez Second. 1985 to November 1985 was imposed.R. Jefferson M. The weight standards of PAL constitute a continuing qualification of an employee in order to keep the job. Likewise. these ―qualifying standards‖ are norms that apply prior to and after an employee is hired. the Court observed the irregularity reports against respondent for his other offenses that such contained merely a general description of the charges against him. Inc. petitioner KKTI is sanctioned to pay respondent the amount of thirty thousand pesos (PhP30. II.‖ He then filed a complaint for illegal dismissal against PAL. No. His obesity may not be unintended. they were the ―prescribed weights‖ that a cabin crew must maintain in order to qualify for and keep his or her position in the company. backwages and attorney‘s fees. after a finding that petitioners failed to comply with the due process requirements. He stands five feet and eight inches (5‘8‖) with a large body frame. there is no mention of any of the grounds for termination of employment under Art. He also alleged that the squid heads were already ―scraps‖ as these were not intended for cooking. Normally. Here. religion. is bound to observe extraordinary diligence for the safety of the passengers it transports. He bought the squid heads so that they could be eaten instead of being thrown away. petitioner presented a receipt. seconds are what cabin attendants are dealing with. or national origin is an actual qualification for performing the job. petitioner was dismissed from service on July 26. He was also receiving service charge of not less than P3. Exceptionally. 2001.‖ Luckily for petitioner. A common carrier.‖ or based on ―equity. Indeed. and narrow aisles and exit doors. petitioner had been under preventive suspension for 1 month. He was paid a basic monthly salary of P9. was not allowed to retire with his honor intact.LABOR RELATIONS Atty. Petitioner was also a consistent recipient of numerous citations for his performance. The job of a cabin attendant during emergencies is to speedily get the passengers out of the aircraft safely. The most important activity of the cabin crew is to care for the safety of passengers and the evacuation of the aircraft when an emergency occurs. Jefferson M. On board an aircraft. Sagales v. It should include regular allowances which he might have been receiving. Petitioner was not able to show any receipt when confronted. Marquez limited to persons of a particular sex. however. Petitioner. overtime pay. and (2) does not reflect on the moral character of the employee. airlines need cabin attendants who have the necessary strength to open emergency doors. the agility to attend to passengers in cramped working conditions. he could have stolen other valuable items instead of scrap. The task of a cabin crew or flight attendant is not limited to serving meals or attending to the whims and caprices of the passengers.000. The qualification is called a bona fide occupational qualification (BFOQ). petitioner filed a complaint for illegal dismissal against respondent. or national origin unless the employer can show that sex. Neither were the squid heads served to customers.R.‖ A formal investigation was conducted by the Legal Department on July 6. 23. as well as moral and exemplary damages. On June 18.335 kilos of squid heads worth P50. petitioner conveyed to respondent his intention of retiring. Thus. November 27. and service charges. Respondent did not find merit in the explanation of petitioner. No. If he intended to steal from respondent. religion. he did not steal them because he actually paid for them. petitioner was brought to the Makati Police Criminal Investigation Division where he was detained. Evacuation might slow down just because a wide-bodied cabin attendant is blocking the narrow aisles. G. 2001. 2001. 2001. this is not an ironclad rule. Security Guard Magtangob apprehended petitioner in the act of taking out from Rustan‘s Supermarket a plastic bag containing 1. not minutes. He also prayed for unpaid salaries/wages. attorney‘s fees. Page 115 . from the nature of its business and for reasons of public policy. when he was terminated. 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.‖ In both instances. Being overweight necessarily impedes mobility. and the stamina to withstand grueling flight schedules. the arguments of respondent that ―[w]hether the airline‘s flight attendants are overweight or not has no direct relation to its mission of transporting passengers to their destination‖.‖ must fail. Petitioner was later ordered released pending further investigation but respondent placed petitioner under preventive suspension. After receiving his latest award. Aircrafts have constricted cabin space. 166554. Thus. Aggrieved. The only fault he committed was his failure to immediately show the purchase receipt when he was accosted because he misplaced it when he changed his clothes. in an emergency situation. Truly. Thus. At that time.00. Petitioner is entitled to separation pay.00 a month and other benefits under the law. Pineda believed the version of petitioner and recommended the dismissal of the case for ―lack of evidence. Passenger safety goes to the core of the job of a cabin attendant. During the inquest proceedings for qualified theft before Assistant Prosecutor Pineda. The primary objective of PAL in the imposition of the weight standards for cabin crew is flight safety.00. the body weight and size of a cabin attendant are important factors to consider in case of emergency. separation pay is granted to a legally dismissed employee as an act ―social justice. Thus. We grant petitioner separation pay equivalent to one-half (1/2) month‘s pay for every year of service. 2008 Facts: Petitioner Julito Sagales was employed by respondent Rustan‘s Commercial Corporation occupying the position of Chief Cook at the Yum Yum Tree Coffee Shop from October 1970 until July 26. Rustans Commercial Corporation. Three lost seconds can translate into three lost lives. after reaching 31 years in service. inclusive of allowances. petitioner contended that although he was in possession of the plastic bag containing the squid heads. As proof. it is only logical to hold that the weight standards of PAL show its effort to comply with the exacting obligations imposed upon it by law by virtue of being a common carrier. it is required that the dismissal (1) was not for serious misconduct. a legally dismissed employee is not entitled to separation pay.880. This may be deduced from the language of Article 279 of the Labor Code that ―[a]n 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. and that the weight standards ―has nothing to do with airworthiness of respondent‘s airlines. A chief cook naturally performs greater functions and has more responsibilities than an assistant cook. The same holds true for supervisory employees occupying positions of responsibility. and thus are bound by more exacting work ethics. Security of tenure is a paramount right of every employee that is held sacred by the Constitution. he was ―Chief Cook. availed of the present remedy. Respondent brought the matter to the CA. Hence. the CA opined that the position of petitioner was supervisory in nature. The position of petitioner is supervisory in nature which is covered by the trust and confidence rule. petitioner breached company policy which justified his dismissal. (2) WON the evidence on record sufficient to conclude that petitioner committed the crime charged. and inspects galley and equipment for cleanliness and proper storage and preparation of food. II. There is no doubt that the position of petitioner as chief cook is supervisory in nature. The CA also held that the evidence presented by respondent clearly established loss of trust and confidence on petitioner.‖ Page 116 . 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.‖[46] However.‖ Per the evidence presented by respondent. inclusive of allowances.00 worth of squid heads. Ang malawak ay laging sumasakop sa maliit. the ruling assumes greater significance if petitioner is the chief cook. Otherwise. although taking note of the long years of service of petitioner and his numerous awards. Jefferson M. an employee who is illegally dismissed ―shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages. Cook. the CA. in the interest of the employer. Marquez Labor Arbiter Pati dismissed the complaint.‖ The ploy is clearly aimed at giving the impression that petitioner is merely a rank-and-file employee. refused to award separation pay in his favor. According to the Labor Arbiter. Naturally.. the nature of the responsibility of petitioner ―was not that of an ordinary employee. It has not escaped Our attention that petitioner changed his stance as far as his actual position is concerned. Indeed.‖ As such. Ruling: I. managerial employees are covered by the trust and confidence rule. a chief cook falls under the definition of a supervisor. petitioner was illegally dismissed as respondent failed to establish a just cause for dismissal. Lastly. one who. As a consequence. Of course. The evidence on record is sufficient to conclude that petitioner committed the crime charged.‖ It then went on to categorize petitioner as a supervisor in ―a position of responsibility where trust and confidence is inherently infused.LABOR RELATIONS Atty. he now claimed that he was an ―Asst. The NLRC did not believe that petitioner would trade off almost 31 years of service for P50. the right of every employee to security of tenure is all the more secured by the Labor Code by providing that ―the employer shall not terminate the services of an employee except for a just cause or when authorized‖ by law.e. In reversing the NLRC. NLRC reversed the decision of the Labor Arbiter. The change in nomenclature does not. In eo quod plus sit simper inest et minimus. The greater always includes the less. he alleged that at the time of his dismissal. help petitioner. The nature of the job of an employee becomes relevant in termination of employment by the employer because the rules on termination of managerial and supervisory employees are different from those on the rank-and-file. i. In his position paper. The NLRC held that the petitioner is a mere rank-and-file employee. On appeal. however. The reason for this is that labor is deemed to be ―property‖ within the meaning of constitutional guarantees. Managerial employees are tasked to perform key and sensitive functions. Indeed. as he would still be covered by the trust and confidence rule. According to the CA. in his memorandum. such right should not be denied on mere speculation of any similar or unclear nebulous basis.‖ Petitioner left with no other recourse. determines timing and sequence of operations required to meet serving times. the claim for damages was denied for lack of evidence. Issue:S: (1) WON petitioner‘s position is supervisory in nature which is covered by the trust and confidence rule. it behooved him ―to be more knowledgeable if not the most knowledgeable in company policies on employee purchases of food scrap items in the kitchen. effectively recommends managerial actions which would require the use of independent judgment and is not merely routinary or clerical. as it is the policy of the State to guarantee the right of every worker to security of tenure as an act of social justice. ―the award of separation pay cannot be sustained under the social justice theory‖ because the instant case ―involves theft of the employer‘s property. However. A chief cook directs and participates in the preparation and serving of meals. (3) WON the penalty of dismissal is proper. The evidence is also wanting that petitioner committed the crime charged. In the case at bar. It is well settled that the conviction of an employee in a criminal case is not indispensable to the exercise of the employer‘s disciplinary authority. to believe. PAL dismissed petitioners prompting the latter to file a complaint for illegal dismissal which was resolved by the Labor Arbiter in their favor ordering inter alia their reinstatement. Garcia vs. while the employer has the inherent right to discipline. 24.335 kilos of squid heads amounting to fifty pesos (P50. It is also of no moment that the criminal complaint for qualified theft against petitioner was dismissed. had not been paid for. (6) the ignominy and shame undergone by petitioner in being imprisoned. herein petitioners after allegedly being caught in the act of sniffing shabu in the workplace. cashier of petitioner corporation‘s supermarket. En Banc. the period where backwages are awarded must be included. G. a writ of execution as regards the reinstatement was issued by the Labor Arbiter. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied. The penalty of dismissal is too harsh under the circumstances. We quote with approval the observation of the CA in this regard: On this matter.00 is negligible. it would be useless to order the reinstatement of petitioner. attested to the fact of private respondent seeking apology for the commission of the act. store manager of petitioner corporation who is in charge of all personnel. Respondent then filed an urgent petition for injunction on the ground that it cannot Page 117 . (2) his tireless and faithful service is attested by the numerous awards he has received from respondent. 142732-33. the verified statement of Samson. No. Subsequently. it is undisputed that: (1) petitioner has worked for respondent for almost thirty-one (31) years. the statement of security guard Magtangob attested to the commission by private respondent of the offense charged. including that of dismissing its employees. is punishment in itself. Aranas positively saw the private in the act of bringing out the purloined squid heads. this prerogative is subject to the regulation by the State in the exercise of its police power. respondent appealed to NLRC which reversed said decision. The only condition is that the exercise of management prerogatives should not be done in bad faith or with abuse of discretion. in lieu of reinstatement. G. Makati City. 164856. Thus. (3) the incident on June 18.R. respondent has discharged its onus of proving that petitioner committed the crime charged. Makati Branch. We stress that the quantum of proof required for the application of the loss of trust and confidence rule is not proof beyond reasonable doubt. 2009. which is already a commensurate punishment for the infraction committed. In the case at bar. conduct or omission imputed to the employee and must be imposed in connection with the disciplinary authority of the employer. III. it is a hornbook doctrine that infractions committed by an employee should merit only the corresponding penalty demanded by the circumstance. 2007 Facts: This case stemmed from an administrative charge filed by PAL against employees. At the end of the day. Jan. From the Labor Arbiter. confirmed that indeed the 1. In the computation of separation pay.R. (4) the value of the squid heads worth P50.00)per kilo. however momentary. Later. if not impossible. citing Genuino vs. including employees of the Yum Yum Tree Coffee Shop of which private respondent was a former assistant cook. Truly. Further. The contention of petitioner that respondent merely imputed the crime against him because he was set to retire is difficult. NLRC. (5) respondent practically did not lose anything as the squid heads were considered scrap goods and usually thrown away in the wastebasket. Likewise. Truly. and (7) petitioner was preventively suspended for one month. In this regard. considering that he would have been retired by now. it is but proper to award petitioner separation pay computed at one-month salary for every year of service. respondent company was placed under corporate rehabilitation. Worth noting is the fact that petitioner failed to impute any ill will or motive on the part of the witnesses against him. It is sufficient that there must only be some basis for the loss of trust and confidence or that there is reasonable ground to believe. The penalty must be commensurate with the act. a fraction of at least six (6) months considered as one whole year. PAL. After due notice. Marquez Necessarily then. Jefferson M. if not to entertain the moral conviction. 20. Ayala Center. petitioner has more than paid his due. In any case. that the employee concerned is responsible for the misconduct and that his participation in the misconduct rendered him absolutely unworthy of trust and confidence. No.LABOR RELATIONS Atty. petitioner presents as evidence the verified statement of security guard Aranas. the statement of Zenaida Castro (Castro). petitioner deserves compassion more than condemnation. 2001 was his first offense in his long years of service. the employer bears the burden of proof to show the basis of the termination of the employee. Similarly. December 4. it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court. only to end up having to refund the sum in case of a final unfavorable decision. the dearth of authority supporting Genuino renders inutile the rationale of reinstatement pending appeal.‖ However. 174621.R. The suspension of claims partakes of the nature of a restraining order that constitutes legal justification for respondent‘s non-compliance with the reinstatement order. Pursuant to police power. even pending appeal. making it difficult to establish that the employer actually refused to comply.. Issues: 1. It is settled that upon appointment by SEC of a rehabilitation receiver. all actions for claims before any tribunal against the corporation shall ipso jure be suspended. Whether respondent company is justified in refusing to comply with such reinstatement order in view of its corporate rehabilitation? Ruling: On the first issue. Prior to 1994. respondent company had been utilizing the "wet process technology" in its operations. Jefferson M. to make both ends meet. the ―Refund Doctrine‖ easily demonstrates how a favorable decision by the Labor Arbiter could harm more than help a dismissed employee. now known as Holcim Philippines. January 30. xxx. and her dismissal is based on a just cause. In Genuino. The employee need not file a motion for the issuance of a writ of execution since the labor arbiter shall thereafter motu proprio issues the writ. 25. respondent company introduced the "dry process technology" as part of its modernization program. The provision of Art. to make an award of reinstatement immediately enforceable. the implementation of the order of reinstatement is ministerial and mandatory. 2009 Facts: Private respondent Bacnotan Cement Corporation (respondent company).LABOR RELATIONS Atty. 223 is clear that an award by the Labor Arbiter for reinstatement shall be immediately executory even pending appeal and the posting of a bond by the employer shall not stay the execution for reinstatement. although temporarily since the appeal may be decided in favor of the appellant. If the delay is due to employer‘s unjustified refusal. In 1995. the State may authorize an immediate implementation. The petition is denied. would necessarily have to use up the salaries received during the pendency of the appeal. 2006 now require the employer to submit a report of compliance within 10 calendar days from receipt of the labor arbiter‘s decision.. then the employer has the right to require the dismissed employee on payroll reinstatement to refund the salaries he or she received while the case was pending appeal. Thus. then she is not entitled to be paid the salaries xxx. Sometime in 1992. Respondent‘s failure to exercise the alternative options of actual reinstatement and payroll reinstatement was thus justified. The Court reaffirms such prevailing principle that even if the order of reinstatement is reversed on appeal. The opposite view is articulated in Genuino vs NLRC which states: ―If the decision of the Labor Arbiter is later reversed on appeal upon the finding that the ground for dismissal is valid. the former NLRC Rules of Procedure was still applied in which it did not lay down a mechanism to promptly effectuate the self-executory order of reinstatement. After the labor arbiter‘s decision is reversed by a higher court. G. the employer may still be required to pay the salaries notwithstanding the reversal of the labor arbiter‘s decision. the employee may be barred from collecting the accrued wages if it is shown that the delay in enforcing the reinstatement was without fault of the employer. The employee. No. The new NLRC Rules of Procedure which took effect on Jan. The test is two-fold: a) there must be actual delay or the fact that the order of reinstatement pending appeal was not executed prior to its reversal and b) the delay must not be due to the employer‘s unjustified act or omission.e. Whether a subsequent finding of a valid dismissal by NLRC removes the basis for implementing the reinstatement aspect of the Labor Arbiter‘s decision? 2. it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court. The employee is not required to reimburse whatever salary he may have received for he is entitled to such. La Union Cement Workers Union et al. Considering that Genuino was not reinstated to work or placed on payroll reinstatement. the new "dry process technology" became fully Page 118 . Inc. 7. Marquez comply with the reinstatement order due to its corporate rehabilitation. The CA decision annulling the NLRC resolutions affirming the validity of the Writ of Execution and Notice of Garnishment is affirmed.. a continuing threat or danger to the survival or even the life of the dismissed or separated employee and his family. is engaged in the manufacture of cement. jurisprudential trend has maintained that even if the order of reinstatement of the Labor Arbiter is reversed on appeal. pending appeal of a decision reinstating a dismissed or separated employee since that saving act is designed to stop. The legislative intent is quite obvious i. Case law recognizes that unless there is a restraining order. vs NLRC et al. As explained by the NLRC. the termination of petitioner Almoite was a necessary consequence of the partial closure of operations of respondent company. Thus. On the contrary. a number of the affected employees signed individual Release Waiver and Quitclaim. It held that the appeal was brought by petitioner Union and not by its members who were the real parties-in-interest and. respondent company sent notices of termination to more or less 200 employees including petitioner Almoite.LABOR RELATIONS Atty. The Court quotes with approval the following conclusions of the NLRC: x x x There is no dispute as to the fact that there was a partial closure or cessation of operations with the mothballing of the old wet-process production line of the company – a situation which falls among the authorized causes for termination allowed under Article 283 of the Labor Code. SP No. Albarracin. the Court finds no cogent reason to disturb the judgment of the Court of Appeals affirming the Labor Arbiter and NLRC rulings that the termination of petitioner Almoite and the other employees of respondent company. Regional Director of the Department of Labor and Employment (DOLE). the determination of whether to maintain or phase out an entire department or section or to reduce personnel lies with the management. it stands to reason that there was already an excess of employees performing support services. It concluded that the scaling down of activities requiring support services was a consequence of the closure of the wet line. fallacious and totally untenable. must be dismissed outright. The instant petition raises two issues: namely. Labor Arbiter Irenarco R. Obviously enough.. Rimando rendered a Decision on 19 March 1999 dismissing the complaints. Page 119 . Ruling: In a Resolution dated 13 December 2006. The question of petitioner Union‘s capacity to sue on behalf of its members has become moot and academic in view of the judgment of dismissal of the instant petition which has already become final and executory with respect to petitioner Union. Public respondent NLRC affirmed in toto the decision of Labor Arbiter Rimando.00 to employees who would be terminated as a result of the closure of the wet line. Therefore. as only the president of petitioner Union signed the same in violation of Sections 4 and 5. Jr. among the employees terminated were operating the dry line or performing support services for both wet and dry lines. After submission of the parties‘ position papers and pleadings. By and large. Petitioner Almoite‘s work as an oiler for both the wet line and dry line has become redundant or superfluous following the closure of the wet line. Respondent had therefore all the reason to include such employees among those whom it considered redundant. 90597 are AFFIRMED. WHEREFORE. with the closure of the wet line and the consequent scaling down of activities requiring support services. informing him about respondent company‘s decision to shut down the wet line and furnishing him the list of affected employees. They further alleged that after the closure of the wet line. Labor Arbiter Rimando ruled that the employer had the prerogative to utilize its remaining workforce to the maximum. his termination on the ground of redundancy is an authorized cause for termination under Article 283 of the Labor Code. In an open letter dated 11 August 1997. the respondent company‘s Senior Executive Vice President. The NLRC held that the retrenchment on the ground of redundancy was valid in any case. In any event. certain activities were rendered either excess or no longer necessary. Jefferson M. respondent company contracted out the services performed by the employees who were terminated. To implement the closure of the wet line. Sometime in November 1997. Thus. Labor Arbiter Rimando found that respondent company complied with the requisite notice and severance pay mandated under Article 283 of the Labor Code. La Union. The judgment of dismissal has become final and executory with respect to petitioner Union on 08 February 2007. As regards the claim that the services performed by the complainants were eventually assumed by employees who were retained or were contracted out. The petitioners alleged that while the closure affected only the wet line. Rule 7 of the Rules of Court. x x x Neither is there any dispute that the logical and consequence [sic]of such partial cessation of operations was to render certain employees redundant. On 15 August 1997. hence. arguing that respondent company failed to prove with substantial evidence that the retrenchment was absolutely necessary and unavoidable mainly because the affected employees were also performing support services in the wet line. the instant petition for review on certiorari is DENIED and the decision and resolution of the Court of Appeals in CA-G. It proceeds from the erroneous premise that only those exclusively assigned to the wet line can be declared redundant. This line of argument is non sequitur. the Court dismissed the petition with respect to petitioner Union for insufficiency or defective verification and certification of non-forum shopping. notified the employees of the its decision to mothball the wet line and the termination of those whose employment would become unnecessary as a result of the closure. whether petitioner Union is the real party-in-interest in this case and whether petitioner Almoite‘s termination was valid. Only 31 of the 80 employees pursued the complaints before the Labor Arbiter. respondent company sent a letter to the office of Ricardo S. Martinez. thus. Upon the receipt of the separation pay. respondent company discovered that the "dry process technology" or the dry line proved to be more efficient as the cost was minimized by P15. petitioner Union and some 80 of its members including petitioner Almoite filed complaints for unfair labor practice. whereby respondent company committed to grant separation pay equivalent to 150% of the monthly basic pay for every year of service plus the additional fixed amount of P27. After a comparative study of the two production lines. redundant. On 16 August 1997. Petitioner Almoite‘s claim is clearly a factual question which is beyond the province of a Rule 45 petition. they argue that they could not be declared redundant by virtue of the closure of the wet line alone. the termination of the excess employees performing such support services followed as a matter of course. Magdaleno B. illegal lay-off and illegal dismissal against respondent company before the NLRC Regional Arbitration Branch 1 in San Fernando. hence. since there was a curtailment in operations. Petitioners appealed to the NLRC.000. The only ostensible argument presented by appellant is the bare allegation that most of them were not exclusively assigned to the wet process line but were performing support services for both the wet line and the dry line. Marquez operational. The mere fact that an employee was performing support services for both the wet and the dry line does not in any way exclude him from being declared as redundant. respondent company and petitioner La Union Cement Workers Union (petitioner Union) entered into a Memorandum of Agreement on 19 July 1997.00 per cement bag while the "wet process technology" or the wet line consumed more fuel and had to undergo frequent repairs and shutdowns due to its obsolescence. the remaining issue to be resolved in this petition pertains to petitioner Almoite‘s claim that petitioner Union has failed to prove that his work as an oiler for both the wet and dry lines has become redundant with the closure of the wet line.R. separation of casuals and trainees. An employer who lays off substantial numbers of workers while continuing to dispense fat executive bonuses and perquisites or so-called ―golden parachutes‖. or only if expected.—have been tried and found wanting.242 billion for its two-year operation.‖ The phrase necessarily implies that retrenchment may be effected even in the event only of imminent. Mitsubishi Motors Phils Corp. In Feb 1998. later promoted to assembler major in the company‘s manufacturing division. The losses expected should be substantial and not merely de minimis in extent. and that it uses fair and reasonable criteria in ascertaining who would be retrenched or retained. 2009 Facts: MMPC hired Mendros in 1994 as regular body repman. 283 of the Code uses the phrase ―retrenchment to prevent losses. It then launched a temporary lay-off program of 170 hourly employees.R. including Mendros. etc. 1999. 16. If the loss purportedly sought to be forestalled by retrenchment is clearly shown to be insubstantial and inconsequential in character. and reduced work week for managerial and other monthly salaried personnel. must be proved by sufficient and convincing evidence. i.g. The Labor Arbiter decided in favor of MMPC. or expected losses. and real. alleged losses if already realized. it must. that the employer exercises its prerogative to retrench in good faith. the bonafide nature of the retrenchment would appear to be seriously in question.. Jefferson M. Due to severe drastic slump of its vehicle sales brought about by the financial crisis in 1997. 283 of the LC. after less drastic means—e. and attached its financial statements for 1997-1996 and 1998-1997 prepared by SGV & Co. Marquez 26. MMPC as per audited financial statements. cut other costs than labor costs. The CA decided in favor of MMPC. In its position papers. thus nullifying the retrenchment. 169780. and reinstated the LA‘s ruling. going on reduced time. the substantial loss apprehended must be reasonably imminent. The requirements for a valid retrenchment are: that the retrenchment is reasonably necessary and likely to prevent business losses which. The reason for requiring this quantum of proof is readily apparent: any less exacting standard of proof would render too easy the abuse of this ground for termination of services of employees. Lastly. No. Feb.. It bears to state that Art. can scarcely claim to be retrenching in good faith to avoid losses. and the expected imminent losses sought to be forestalled. MMPC defined the criteria used in considering employees for retrenchment. There can hardly be any dispute that MMPC suffered substantial and heavy losses in FY 1997 and continued to bleed in 1998. As shown in its AFS for those fiscal years. thirdly. MMPC notified DOLE that the temporary lay-off is being made permanent effective July 2. reduction of both management and rank-and-file bonuses and salaries. if already incurred. and PhP 771 million in 1998. manpower services reduction. that the employer serves written notice both to the employees concerned and the DOLE at least a month before the intended date of retrenchment. Secondly.. which is after all a drastic recourse with serious consequences. being against the CBA. the CBA listed only ―seniority‖ and ―needs of the company‖ as determinative factors. G. are not merely de minimis. 1999 due to continuing adverse market conditions. be reasonably necessary and likely to effectively prevent the expected losses. To impart operational meaning to the constitutional policy of providing ―full protection‖ to labor. costs. Because of the consequential nature of retrenchment. sustained a loss of PhP 470 million in 1997. In June 1. MMPC implemented various cost-cutting measures. but substantial. 1999. There should be a certain degree of urgency for the retrenchment. he was updated of the business conditions by MMPC. According to the NLRC. The NLRC said that MMPC had not notified Mendros of the additional criterion and of the findings of the merit evaluation. that the employer pays the retrenched employee separation pay in an amount prescribed by the Code. The employer should have taken other measures prior or parallel to retrenchment to forestall losses. it incurred an aggregate loss of PhP 1. it instituted the first stage of its retrenchment program affecting 531 hourly manufacturing employees. Mendros. serious. the employer‘s prerogative to bring down labor costs by retrenching must be exercised essentially as a measure of last resort. which proved in adequate. In the interim. Issue: Whether or not the temporary lay-off and eventual retrenchment was valid. Any suggestion that a billion peso plus loss is de minimis in extent has to be dismissed for sheer absurdity. Upon appeal. Ruling: The retrenchment was valid. Mendros filed for a case of illegal dismissal. The right or management to retrench workers to meet clear and continuing economic threats or during periods of economic recession to prevent losses is recognized by Art. impending. as such imminence can be perceived objectively and in good faith by the employer. vs. The employer Page 120 . some of which are employment-hiring freezing. are reasonably imminent as perceived objectively and in good faith by the employer.LABOR RELATIONS Atty. the NLRC reversed said decision and declared that the dismissal was illegal stating that the merit rating system adopted by MMPC as additional criterion for retrenchment was erroneous and arbitrary.e. plant shutdowns. The latter received a letter informing him of the temporary suspension of his employment for six months from Jan 4 to July 2. Jr. which affirmed the labor arbiter‘s ruling with the modification that five of the complainants. Sec. well within the contemplation of the parties‘ CBA.‖ meaning that the company is accorded a reasonable latitude to assign a corresponding weight to each factor. 5(c) ―needs of the company‖ factor. if not unreasonable. 2009 Facts: Petitioners file a complaint with the Department of Labor and Employment-NCR which prompted an inspection of the hotel‘s premises by a labor inspector. Abandonment is a matter of intention and cannot lightly be inferred or legally Page 121 . Any other measure would be senseless in the business viewpoint. Respecting the appellate court‘s ruling that petitioners ―simply disappeared‖ from their work. All other things being equal. Lorena L. the NLRC modified its decision by. The Court is not persuaded. 2001 and that with respect to the four other petitioners. among other things. if viewed by its self without linking it to the Sec. first-out) and (2) the needs of the company. Gilbert Ongjoco. in the same section. Barcenilla. to be considered in retrenching MMPC employees. Hildao. Marquez need not wait for substantial losses to materialize before exercising ultimate and drastic option to prevent such losses. Criminal cases for estafa were likewise allegedly filed against several of the employees involved. arbitrary and unfounded adoption of the two-day work scheme which greatly reduced petitioners‘ salaries renders it liable for constructive dismissal. This purportedly angered respondent‘s management which retaliated by suspending and/or constructively dismissing them by drastically reducing their work days through the adoption of a work reduction/rotation scheme. they were constructively dismissed on April 15. hence. is given the discretion to ―exercise just and fair evaluation of such factors. provides seniority. insensibility. Issue: Whether or not petitioners ―simply disappeared‖ from their work constitute abandonment? Ruling: Case law holds that constructive dismissal occurs when there is cessation of work because continued employment is rendered impossible. Chan guilty of illegal dismissal and ordered them to pay petitioners‘ separation pay at ½ month for every year of service with full backwages. No. V. at the time he was notified of his lay-off cannot be accorded tenability. to be sure. Respondent‘s sudden. as well as the finding of the merit evaluation rating. and 10% of the monetary award as attorney‘s fees. Mendro‘s lament about not being furnished a copy of the 1997-1996 and 1998-1997 AFS and other financial documents. when there is a demotion in rank or diminution in pay or both. 2002 by virtue of respondent‘s memorandum of even date. would be a meaningless. in the exercise of its customary management functions and prerogatives on matters of promotions. efficiency and attitude. and recall. March 13. Mendros argues that since Art. Sec. to stress. 27. and potential hew with company standards. some of which cases were eventually dismissed by the prosecutor‘s office for lack of merit. the NLRC held that Edgar de Leon was ―actually dismissed but illegally‖ on November 7. transfer. 5(c) should be understood in the light of Sec. and. Rosa vs. the latter relief has been foreclosed. as it was done to save its business from bankruptcy due to economic reverses. respondent was found to have been violating labor standards laws and was thus ordered to pay them some money claims. 1 criteria qualify the factors of ―seniority and needs of the company‖ in Sec. unreasonable or unlikely.R. or disdain by an employer becomes unbearable to the employee. V of the CBA. therefore.LABOR RELATIONS Atty. The labor arbiter found respondent and its manager Yolanda L. MMPC was already financially hemorrhaging before finally resorting to retrenchment. to consider as guiding norms the following factors or criteria: ―Seniority. standard. 5 in conjunction with and as qualified by the factors provided under Sec. they are guilty of abandonment. (1) seniority (last-in. a company would necessarily need to retain those who had rendered dedicated and highly efficient service and whose knowledge. Job Knowledge and Potential. Sec 5(c) of the CBA provides for only two factors. Chan of any personal liability. hence. and respondent was directed to accept them without having to pay them backwages. the company. The appellate court reversed the NLRC decision and dismissed petitioners‘ complaints holding that there was no constructive dismissal because petitioners ―simply disappeared from work‖ upon learning of the work reduction/rotation scheme. and Attendance. Respondent appealed to the NLRC. The proper view. the same does not lie. 1 criteria. layoff. Jefferson M. 177059. Absence must be accompanied by overt acts unerringly pointing to the fact that the employee simply does not want to work anymore. The appropriate forum for an employee to contest the reality or good faith character of the retrenchment asserted as ground for dismissal from employment is before the DOLE. The Sec. or when a clear discrimination. attendance. Efficiency and Attitude. were directed to report back to work. the company is bereft of authority to arbitrarily impose other factors or criteria in effecting his retrenchment. 5(c). is that the Sec. Salvador So and Ma. 1 which. and that in their position paper submitted before the NLRC. allows MMPC. job knowledge and potential. Respondent appealed and maintained that its act of reducing the number of work days per week was valid. And the burden of proof to show that there was unjustified refusal to go back to work rests on the employer. On respondent‘s motion for reconsideration. petitioners only prayed for separation pay and not for reinstatement. Ambassador Hotel. Castillo. 1 is fair and reasonable. Pilar A. Accordingly. G. With respect to petitioners. In the case at bench. 1. Art. following settled jurisprudence. the merit rating used by MMPC based on Sec.‖ And to complement this prerogative. There is no law or rule that requires an employer to furnish an employee to be retrenched copies of its AFS and other documents. absolving respondent‘s manager Yolanda L. and attendance as among the factors that should guide the company in choosing the employees to be laid-off or kept. namely Diana P. " (Emphasis supplied) Separation pay has been defined as the amount that an employee receives at the time of his severance and is designed to provide the employee with the wherewithal during the period he is looking for another employment. there must have been a clear intention on the part of the employee to sever the employer-employee relationship as manifested by some overt acts. MPI alleged that the applicable retirement plan was not Sec. willful.16and is recoverable only in the instances enumerated under Articles 283 and 284 of the Labor Code.R. Abandonment as a just ground for dismissal thus requires clear. NLRC however has a reversed ruling holding that the benefits received by respondents for involuntary separation under MPI‘s retirement plan included the service pay benefits under either Sec. the company shall provide a separation pay equivalent to one (1) month‘s pay per year of service. however. Ambrocio. which provides that In case of voluntary separation from the company due to Labor Saving devices or redundancy. Ruling: Petition granted. alleging that they were entitled thereto under Sec. two requisites must concur: first. In case of termination due to the installation of labor-saving devices or redundancy. the same having been included in the cash component of the separation/redundancy package. as amended. v. For abandonment to exist. LA ruled in favor of the respondents. Cavite plant. Issue: WON respondent-employees are entitled to their claim of another separate one-month pay per year of service in pursuant to Sec. negates respondent‘s claim of abandonment. paid to them. redundancy. Mere absence or failure to report for work. decided to close its Parañaque plant in order to consolidate its operations at its Carmona. 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 the provisions of this Title. Out of about 900 employees who availed of the package and were consequently separated from employment. and second. 236 employees including respondents herein. the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service. G. Motorola Phils. CA reversed NLRC's decision. III-B of the Retirement Plan or Policy 1215 which both grant exactly the same benefit in case of involuntary separation – one month‘s pay for every year of service. (MPI). and since none of respondents retired but were actually involuntarily separated due to redundancy. March 30. Page 122 . deliberate. retrenchment program initiated by the Company as a result of a merger or to prevent losses or other similar causes. the employee must have failed to report for work or must have been absent without valid or justifiable reason. 173279.LABOR RELATIONS Atty. Marquez presumed from certain equivocal acts. even after notice to return. Respondents have no cause of action as against petitioners with respect to their claim for additional retirement benefits. No. inclusive of any service benefit eligibility under the Retirement Plan. Motorola Philippines. 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. provides: ART. Article 283 of the Labor Code. which consisted of two-months pay per year of service. An employee who takes steps to protest his dismissal cannot by logic be said to have abandoned his work. Jefferson M. which has the onus of proving that petitioners abandoned their work. 283. or in illegal dismissal cases when reinstatement is no longer possible. III-B. whichever is higher. which scheme was adopted soon after petitioners‘ complaints against respondent for violation of labor standards laws were found meritorious. is not tantamount to abandonment. A fraction of at least six (6) months shall be considered one (1) whole year. The second element is the more determinative factor. 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. as amended. 2009 Facts: Sometime in 1997. Closure of establishment and reduction of personnel. Inc. offering to its affected employees a redundancy/separation package consisting benefits and emoluments. Upon the other hand. for payment of retirement pay equivalent to one month salary per year of service. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses. Respondent. 28. whichever is higher. but Policy 1215. filed two separate complaints against MPI. III-B of MPI‘s Retirement Plan. then they cannot avail of such pay. – The employer may also terminate the employment of any employee due to the installation of labor saving devices. petitioners‘ immediate filing of complaints for illegal suspension and illegal dismissal after the implementation of the questioned work scheme. MPI thus insisted that respondents had already received such one-month pay. and unjustified refusal of the employee to resume employment. III-B of MPI‘s Retirement Plan. failed to discharge the same. alleging that they were dismissed on the date they received the memorandum. due process was not observed because of the violation of the twin – notice requirement. 152048. they were entitled to a separation pay of one month salary per year of service. It was discovered that the Shipping Section jacked up the value of the freight costs for goods shipped and that the duplicates of the shipping documents allegedly showed traces of tampering. — x x x (b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code. mandatory or exclusive avenue of due process. respondents are entitled to a separation pay of one month salary per year of service. 29. PT&T did not observe due process when it failed to comply with the two-notice requirement for terminating employees. Perez and Amante G. Article 279 of the Labor Code. An employee‘s right to be heard in termination cases is satisfied not only by a formal face to face confrontation but by any meaningful opportunity to controvert the charges against him and to submit evidence in support thereof. vs. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. However. Issue: Whether or not the dismissal of Perez and Doria was legal. or in the absence thereof. 277. PT&T formed a special audit team to investigate the matter. in PT&T‘s Shipping Section. Marquez Retirement pay. the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. and other benefits or their monetary equivalent computed from the time the compensation was not paid up to the time of actual reinstatement. Ruling: The dismissal is illegal. the absence of a hearing does not always result to a denial of due process. reinstatement is no longer possible because of the length of time that has passed from the date of the incident to final resolution. when respondents were paid a separation pay of two months salary for every year of service under the Redundancy Package. Perez and Doria filed a complaint for illegal suspension and illegal dismissal. No.. Where the dismissal was without just or authorized cause and there was no due process. mandates that the employee is entitled to reinstatement without loss of seniority rights and other privileges and full backwages. in Republic Act No. the employment contract or company policy. A memorandum was issued by PT&T dismissing them from service for having falsified company documents. However. ART. Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. inclusive of allowances. Perez et al. respectively. it is not an absolute. They likewise contended that due process was not observed in the absence of a hearing in which they could have explained their side and refuted the evidence against them. *** In this case. Perez and Doria were placed on preventive suspension for 30 days for their alleged involvement in the anomaly. It is admitted that respondents were terminated pursuant to a redundancy. Thus. Acting on an alleged unsigned letter regarding anomalous transactions at the Shipping Section.. Perez and Doria were neither apprised of the charges against them nor given a chance to defend themselves. Their suspension was extended for 15 days twice. 2009 Facts: Felix B. alteration and superimposition. Doria were employed by Philippine Telegraph and Telephone Company (PT&T) as shipping clerk and supervisor. The court had the following to say: While a formal hearing or conference is ideal. Jefferson M. they already received what was due them under the law and in accordance with MPI‘s plan. on the other hand. Phil Telegraph & Telephone Company et al. Materials Management Group. "To be heard" does not mean verbal argumentation alone inasmuch as one may be heard Page 123 . They were simply and arbitrarily separated from work and served notices of termination in total disregard of their rights to due process and security of tenure. Miscellaneous provisions. hence.LABOR RELATIONS Atty. G. presupposes that the employee entitled to it has reached the compulsory retirement age or has rendered the required number of years as provided for in the collective bargaining agreement (CBA). April 7.R. by whatever version of MPI‘s Retirement Plan would be made applicable. 7641 or the Retirement Law. As correctly ruled by the NLRC. and not due to retirement program. et al. It is satisfied not only by a formal face to face confrontation but by any meaningful opportunity to controvert the charges against him and to submit evidence in support thereof. on one hand. vs. Garriel was then given a notice to explain why he violated company rules and procedures. Garriel denies all the accusations before him. the existence of an actual. provides that an employer must provide the employee ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires: Nonetheless. G. 30. The "ample opportunity to be heard" standard is neither synonymous nor similar to a formal hearing. formal "trial-type" hearing. Petitioners likewise contended that due process was not observed in the absence of a hearing in which they could have explained their side and refuted the evidence against them. citing 2009 Perez Facts: Raymund Garriel was a Customer Service Assistant (CSA) working at Telecommunications Distributors Specialists Inc. This is a recognition that while a formal hearing or conference is ideal. Rule I of the Implementing Rules of Book VI of the Labor Code itself provides that the so-called standards of due process outlined therein shall be observed "substantially. 174981. The second incident was similar to the first. (b) a formal hearing or conference becomes mandatory only when requested by the employee in writing or substantial evidentiary disputes exist or a company rule or practice requires it. submissions or pleadings. The employer may provide an employee with ample opportunity to be heard and defend himself with the assistance of a representative or counsel in ways other than a formal hearing.. when she forgot to sign the coverage waiver in her application. We note a marked difference in the standards of due process to be followed as prescribed in the Labor Code and its implementing rules. During these various transactions.R. Garriel forged her signature on her coverage waiver. formal "trial-type" hearing. whether in a hearing. Was Garriel illegally dismissed? 2.LABOR RELATIONS Atty. Thereafter. There is no need for a hearing or conference. it is not limited to a formal hearing only. These incidents were brought to the attention of the human resource department by these three customers. Was due process observed in dismissing Garriel? Ruling: Page 124 . submissions or pleadings. The first was when he forged the signature of a subscriber. An investigation ensued. adduce his evidence or rebut the evidence against him through a wide array of methods. involving one Mila Huilar." Significantly.(TDSI). He was in charge of selling cellphones to customers as well as cellphone line accounts to subscribers from which he collected cash payments for. The "very nature of due process negates any concept of inflexible procedures universally applicable to every imaginable situation. although preferred. The test for the fair procedure guaranteed under Article 277(b) cannot be whether there has been a formal pretermination confrontation between the employer and the employee. Garriel. while the phrase "ample opportunity to be heard" may in fact include an actual hearing. "To be heard" does not mean verbal argumentation alone inasmuch as one may be heard just as effectively through written explanations. In other words. 2009. such an exclusivist and absolutist interpretation is overly restrictive. In other words. Section 2(d). The following are the guiding principles in connection with the hearing requirement in dismissal cases: (a) "ample opportunity to be heard" means any meaningful opportunity (verbal or written) given to the employee to answer the charges against him and submit evidence in support of his defense. three notable incidents occurred. Ms. it is not limited to a formal hearing only. it is not an absolute. No. Garriel was dismissed on grounds of serious misconduct and loss of trust and confidence. He did not issue any official receipt for the transaction." not strictly. The third incident involved Garriel in selling a defective cellphone personally owned by him to a subscriber named Helcon Mabesa. Rule I of the Implementing Rules of Book VI of the Labor Code should not be taken to mean that holding an actual hearing or conference is a condition sine qua non for compliance with the due process requirement in termination of employment. Therefore. while the phrase "ample opportunity to be heard" may in fact include an actual hearing. Telecommunications Distributors Specialists Inc. Garriel files an illegal dismissal case against the company. A hearing means that a party should be given a chance to adduce his evidence to support his side of the case and that the evidence should be taken into account in the adjudication of the controversy. Jefferson M. is not absolutely necessary to satisfy the employee‘s right to be heard. mandatory or exclusive avenue of due process. An employee‘s right to be heard in termination cases under Article 277(b) as implemented by Section 2(d). conference or some other fair. The Labor Code. Marquez just as effectively through written explanations. Ratcliffe. It deprives him of other equally effective forms of adducing evidence in his defense. verbal or written. Section 2(d). Rule I of the Implementing Rules of Book VI of the Labor Code should be interpreted in broad strokes. just and reasonable way. Issue: 1. is not absolutely necessary to satisfy the employee‘s right to be heard. Certainly. May 25. where again. the existence of an actual. although preferred. or when similar circumstances justify it. (c) the "ample opportunity to be heard" standard in the Labor Code prevails over the "hearing or conference" requirement in the implementing rules and regulations. The employee can be fully afforded a chance to respond to the charges against him. To confine the employee‘s right to be heard to a solitary form narrows down that right. Therefore. After being heard. 2009 Facts: Respondent Apostol was hired as assistant manager by petitioner Triumph International (Phils. similar circumstances justify it. and was terminated by TIPI on 21 January 2000. e. xxx Those who invoke social justice may do so only if their hands are clean and their motives blameless and not simply because they happen to be poor. Grounds for Loss of Trust and Confidence apply only to employees occupying positions of trust and confidence or those who are routinely charged with the care and custody of the employer‘s money or property. or 4. On the other hand. 2. whether in a hearing. On 14 and 15 August 1999. Jefferson M.R. ample opportunity to be heard means any meaningful opportunity. On 28 January 2000. B. (Ha Yuan Restaurant v. while Opulencia was found to have committed Offense No. The company had complied with the twin due process requirement in terminating an employee. b. and conniving with co-employees in creating a cash shortage on the report to pay for his own cellphone constitute serious misconduct as well as loss of trust and confidence as grounds for a valid dismissal.LABOR RELATIONS Atty. it must be genuine. and. Triumph International Philippines v. Apostol. derogatory and/or indecorous words or language against the employer or supervisor). the Court of Appeals rendered judgment. Apostol and Opulencia filed with the Labor Arbiter a complaint for illegal dismissal and non-payment of salaries and other benefits against TIPI. 3 (Fraud or willful breach by an employee of the trust reposed in him by the Company) and Offense No. TIPI conducted an inventory cycle count of its direct and retail sales in its Muñoz warehouse. Issues: Page 125 . a formal hearing or conference becomes MANDATORY only when: 1. G. On 21 January 2000. 25 (Using. Comment on Social Justice: The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. NLRC) 31. Principles: 1. (TIPI) in March 1991. c. C. or 3. Apostol was the immediate superior of Opulencia. respondent Opulencia was hired as a warehouse helper by TIPI sometime in 1990. Apostol was found to have committed Offense No. This great policy of our Constitution is not meant for the protection of those who have proved they are not worthy of it. reversing and setting aside the NLRC Decision. June 16. like the workers who have tainted the cause of labor with the blemishes of their own character. An employee entrusted with the company‘s goods and properties. The notice of dismissal was effected thereafter. requiring him to explain in writing the negative variance based on the inventory cycle count. Guiding principles in connection with the hearing requirement in dismissal cases: A. indecent. uttering or saying profane. and was the company‘s warehouse supervisor at the time of the termination of his employment on 21 January 2000. TIPI‘s Assistant Manager-Warehouse and Distribution. TIPI. Labor Arbiter rendered a Decision dismissing the Complaint for lack of merit. a company rule or practice requires it. just and reasonable way. it should not be used as a subterfuge for causes which are illegal. an investigation was conducted to determine the veracity of the facts alleged on both sides. through Sugue. given to the employee to answer the charges against him and submit evidence in support of his defense. Requisites: a. stating that their employment had been terminated for committing infractions of the company‘s rules and regulations. The essence of due process is simply the opportunity to be heard. to justify earlier action taken in bad faith. Specifically. who thereafter violates company policies with regard to the making fictitious documentation. abusive. 3 only. On 20 February 2004. The inventory cycle count yielded discrepancies between its result and the stock list balance Sugue (TIPI‘s Marketing Services Manager) sent a ―show-cause letter‖ to Apostol. the amply opportunity to be heard standards in the Labor Code PREVAILS over the hearing or conference requirement in the IRR. Inc. d. 164423. requested by the employee in writing or 2. He was given a notice to explain coupled with the list of violations of its company policy. the NLRC affirmed the Decision of the Labor Arbiter. No. served notices to Apostol and Opulencia. conference or some other fair. improper or unjustified. 3. not a mere afterthought. At best it may mitigate the penalty but it certainly will not condone the offense.). the employee involved holds a position of trust and confidence. willfully and knowingly selling defective products. the loss of confidence must not be simulated. it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary. On appeal. Marquez There was a valid dismissal. verbal or written. substantial evidentiary disputes exist. requires proof of involvement in the alleged events in question. proof beyond reasonable doubt is not required. to wit: x x x (i) A written notice served on the employee specifying the ground or grounds for termination. due consideration of all the circumstances. and (c) the notices of termination dated January 21. the discrepancy on the cycle count conducted on the Muñoz warehouse on August 14-15. such as care and protection. Apostol and Opulencia were dismissed mainly on ground of fraud or willful breach of trust. Ruling: NO. Page 126 . 1999 and placing both of them on leave with pay until further notice pending investigation on the matter. We find the appeal meritorious.R were dismissed for valid and just cause Thus. Dismissals of employees have two facets: first. As previously mentioned. We quote the pertinent portion of the Court of Appeals‘ decision. Substantive Due Process. Thus. handling or custody of the employer‘s property. which constitutes substantive due process. such as when the employer has reasonable ground to believe that the employee concerned is responsible for the purported misconduct. present his evidence or rebut the evidence presented against him. 2(d). in the case of managerial employees. Rule 1. the legality in the manner of dismissal. which constitutes procedural due process. the evidence shows that the private respondent [TIPI] had substantially complied with the requirements of procedural due process. Termination of employment based on Article 282 mandates that the employer substantially comply with the requirements of due process under the rules implementing the Labor Code (Sec. a situation which exists where such employee is entrusted by the employer with confidence on delicate matters. In cases of termination of employees. indicating that upon. and giving said employee reasonable opportunity within which to explain his side. we are left with the question on whether the alleged causes for dismissal of respondents Apostol and Opulencia are supported by substantial evidence. and (iii) a written notice of termination served on the employee. complied with the above requirements of procedural due process.LABOR RELATIONS Atty. Book VI of the Omnibus Rules). Marquez WON respondents were illegally dismissed. TIPI complied with the Procedural Due Process The grounds to which respondents were held liable are among the just causes for termination of employment under Article 282 of the Labor Code. This provision is premised on the fact that the employee concerned holds a position of trust and confidence. 2000. Recent decisions of this Court have distinguished the treatment of managerial employees from that of the rank-and-file personnel. as ground for valid dismissal. The Court of Appeals even pointed out in its decision some of the documentary proofs of such compliance. and the nature of his participation therein renders him unworthy of the trust and confidence demanded of his position. But. with respect to rank-and-file personnel. the mere existence of a basis for believing that such employee has breached the trust of his employer would suffice for his dismissal. loss of trust and confidence. fraud or willful breach of the employer‘s trust is a just cause for termination of employment under Article 282(c) of the Labor Code. The private respondent sent the following to the petitioners: (a) show cause letters addressed to the petitioners [Apostol and Opulencia] requiring them to explain in writing within 48 hours upon receipt. in order to constitute a just cause for dismissal. requiring him to explain within 24 hours from receipt why he should not be terminated from his employment for loss of confidence. It is sufficient that there is some basis for the employer‘s loss of trust and confidence. in dismissing Apostol and Opulencia. grounds have been established to justify his termination. (b) memorandum dated October 22. the well-entrenched policy is that no worker shall be dismissed except for just or authorized cause provided by law and after due process. insofar as the application of the doctrine of loss of trust and confidence is concerned. But as regards a managerial employee. x x x There is no question that TIPI. Hence. Jefferson M. with the assistance of counsel if he so desires is given opportunity to respond to the charge. (ii) A hearing or conference during which the employee concerned. Nonetheless. and second. viz: x x x In the present case. the act complained of must be ―work-related‖ such as would show the employee concerned to be unfit to continue working for the employer. and that mere uncorroborated assertions and accusations by the employer will not be sufficient. the legality of the act of dismissal. 1999 addressed to petitioner Apostol showing the findings after the investigation was conducted by the private respondent. No. Court of Appeals. uttering indecent. Whether or not Salon is guilty of violating TIP‘s Memorandum No. Salon (Salon) was a College Instructor 3 of the Humanities and Social Science Department (HSSD) of respondent Technological Institute of the Philippines (TIP) and a member of the Technological Institute of the Philippines Teachers and Employees Organization (TIPTEO).LABOR RELATIONS Atty. But what is really determinative is TIP Memorandum No. The question. a complaint was filed against her for anomalously changing the grade of a particular student who was at the same time a son of a co-faculty member from 5. Salon believed that a ―dropped‖ grade is better than a ―failed‖ mark. but granted separation pay. Salon answered that she only collected P0.. 158703.R.0 (failed) to 6. Whether or not Salon is guilty of serious misconduct for falsifying Manalo‘s (the son a co-faculty member) grade and violating the grading rules under the Manual of Regulations for Private Schools Ruling: Page 127 . 2009 Facts: Petitioner Magdalena T. these test papers were not returned to the students after the test. that such act of an employee. is whether respondents Apostol and Opulencia. Respondents do not deny making adjustment entries to the stocklist. i. the employee may be validly dismissed from service.e. P-66. geared towards avoidance of unduly burdening the students from unreasonable finances. necessarily involves trust and confidence. However. Apostol was TIPI‘s assistant manager for warehouse and distribution. whims.. violated TIPI internal control procedures. for unauthorized selling of examination papers 2. which resulted to the loss of the company‘s trust and confidence in the respondents. Finding the dismissal of respondents Apostol and Opulencia. the cost shall be within the rate prescribed by the school. based on willful breach of employer‘s trust. we are convinced that the respondents made unauthorized adjustments in TIPI‘s stocklist. Thus. the TIP received complaints from students claiming that Salon was collecting P1. On appeal under Rule 43. without prior authorization by management. The relationship of employer and employee. therefore. may be considered as serious misconduct which would warrant the termination of his employment. G.50 per page to reimburse herself from personal expenses. in making such adjustments. both admitted making such adjustments in the office memoranda and affidavits submitted as evidence in this case. Jefferson M. and without preparation of formal reports indicating the parties responsible for the adjustments and those who approved the same. Marquez the evidence must be substantial and must establish clearly and convincingly the facts on which the loss of confidence rests and not on the employer‘s arbitrariness. et al. CA reversed itself. ruling in favor of TIP and against Salon. In this case. is a clear violation of the company‘s internal control procedures. Further. The Voluntary Arbitrator ruled in favor of Salon. They were entrusted with the management and handling of the company‘s warehouse goods. however. on motion for reconsideration. Technological Institute of the Phils Teachers and Employees Organization vs.50 per page for the test paper used in the subject she was teaching at the time. respondents were found by TIPI to have made unauthorized and unreported adjusting entries to the stocklist without proper investigation and reconciliation with the Accounting Department. according to TIPI. Considering the foregoing. in violation of the company‘s internal control procedures. This. and caprices or suspicion. Issue: 1. they were managerial and supervisory employees. valid. June 26. especially where the employee has access to the employer‘s property. if substantially proven. She reportedly asked her students not to write on the test papers. she admitted of having changed the grade in order to vindicate the student from the wrath of his father. In fact. usually for reimbursement. while Opulencia was a warehouse supervisor. we find that respondents Apostol and Opulencia were dismissed by TIPI for a valid and just cause. 32. Apostol and Opulencia were not ordinary rank and file employees.0 (dropped). we deem it unnecessary to further rule on TIPI‘s other ground for Apostol‘s dismissal. provided. abusive and derogatory words against his supervisor. P-66. There were enumerated TIP Memoranda in the case. Sometime in year 2000. which requires a prior permission from the proper school authority should the teacher directly sell his/her examination papers to students. said decision was affirmed by CA. In addition. Note. This act warrants respondents‘ dismissal for willful breach of employer‘s trust. After a careful evaluation of the evidence on record. Where the rules laid down by the employer to protect its property are violated by the very employee who is entrusted and expected to follow and implement the rules. but DELETE the award of separation pay. As noted by respondent. Clearly. and requiring her to submit a written explanation why she should not be penalized or dismissed from employment but OMGG found the explanation unsatisfactory Issues: WON the dismissal was for a just cause WON due process was observed Ruling: THE DISMISSAL WAS FOR A JUST CAUSE. despite repeated demands. not to mention the employees/members‘ contributions being unupdated. Jefferson M. WHEREFORE. premises considered.. Gross negligence is characterized by want of even slight care. Marquez Salon is guilty of the two valid causes. Ocean Gateway Maritime and Management Services Inc.R. In the present case. We hereby AFFIRM the amended decision of the Court of Appeals promulgated on May 22. Macaraig sent a memorandum to petitioner charging her with gross and habitual neglect of duty and/or misconduct or willful disobedience and insubordination. Moreover. Llamas v. Knowing fully what Manalo deserved. acting or omitting to act in a situation where there is a duty to act. to accomplish the long overdue monthly and annual company financial reports and to remit the company‘s contributions to the SSS and PhilHealth. Basis for Grading. falsified – her own records by changing the submitted record and the supporting documents. the company had been in operation for less than three (3) months at the time the negligence and delays were committed. and a just cause for termination of employment. it cannot be denied that Salon did not first obtain the prior permission of the proper school authority. August 14. this is Serious Misconduct under Article 282(a) of the Labor Code. not inadvertently but willfully and intentionally with a conscious indifference to consequences insofar as other persons may be affected. resulting in respondent‘s incurring of penalties totaling P18. detailing therein the bases of the charges. OGMM's Chief Executive Officer Macaraig called petitioner‘s attention because of her failure. or she has served for 10 years in TIP. she changed – in short.LABOR RELATIONS Atty. Thus. P-66. Malaysian Merchant Marine Bhd. and the allegation that there was no malice or bad intention on her part are misplaced arguments. On grade tampering: It is a violation against the Manual of Regulation for Private Schools whose Section 79 provides: Sec. However. hired Eden Llamas as an accounting manager. The present violation involves elements of falsification and dishonesty. 2009 Facts: Ocean Gateway Maritime and Management. But Llamas failed to comply with the instruction as money for the purpose was not credited to the company‘s account at the bank. with only a few transactions and only with one principal. as claimed by respondent Page 128 . its financial and accounting books should not have been difficult to prepare. failed to discharge her important duty of remitting SSS/PhilHealth contributions not once but quadruple times.580. 79. we hereby DENY the petition for lack of merit. The fact that Salon committed an offense for the first time. Her claim of being overworked and undermanned does not persuade. On the sale of Papers: The cost of the sale of test papers by Salon to her students was within the prescribed parameters of the school. as respondent‘s Accounting Manager.0 instead of a failing grade. a condition precedent required by TIP Memorandum no. Salon gave him a grade of 6. Llamas. Inc (OGMM). No. The final grade or rating given to a pupil or student in a subject should be based on his scholastic record..41. Costs against the petitioners. 33. hence. Any addition or diminution to the grade x x x shall not be allowed. In the process. Viewed in any light. 2003. 179293. separation pay is not proper. G. The violation constituted serious misconduct or a cause relating to the employee‘s moral character. negligence must be both gross and habitual to justify the dismissal of an employee. she transgressed the school regulation. On separation pay: CA erred on this matter. Under Article 282 (b) of the Labor Code. Both Lowe and Mutuc filed petitions for certiorari before the Court of Appeals. submit her explanation on why she should not be disciplined or dismissed. for misconduct or improper behavior to be a just cause for dismissal. v. 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 interest. Labor Arbiter dismissed Mutuc‘s complaint NLRC reversed the decision. August 14. which to her warped mind. the termination of her services was effected after she was afforded the opportunity to. which petitioner claims to be due to the fact that the money intended for payment was not yet credited as of February 20. (a) it must be serious. 2002 due to hypertension.000 a month and Mutuc became a regular employee. As to the delay in the remittance of SSS/PhilHealth contributions for January 2002. for as correctly ruled by the appellate court. while Raul M. It partakes of serious misconduct. as she did. In response to the situation. (b) must relate to the performance of the employee‘s duties. x x x Misconduct has been defined as improper or wrong conduct. Lowe Inc. Indeed. The Court of Appeals modified the NLRC‘s decision rendered in favor of Mutuc. Such misconduct. she had already been in delay in the performance of her duties. the Court is not persuaded.. on-the-job trainees were still with the company. it bears reiteration. It was not merely a violation of company policy. a forbidden act. Castro (Castro) is the Executive Creative Director . Lowe hired Mutuc as a Creative Director to help out the four other Creative Directors of Lowe. however. her claim of being undermanned behind such failure does not lie. 34. Thus.‖ the Court finds the same as betraying a streak of dishonesty in her. an employer cannot be compelled to retain in its employ someone whose services is inimical to its interests. and Maria Elizabeth "Mariles" L.LABOR RELATIONS Atty. A year after. found unsatisfactory. At the height of the influx of advertising projects. but of the law itself. the Court rules in the affirmative. it warrants her dismissal from employment as respondent‘s Accounting Manager. however serious. 164813 & 174590. which explanation. Mutuc filed a complaint for illegal dismissal. Jefferson M. As to the second issue of whether due process was accorded petitioner. as well as to her absence the following day or on February 21. must nevertheless be in connection with the employee‘s work to constitute just cause for his separation. given that at that time. The misconduct to be serious must be of such grave and aggravated character and not merely trivial and unimportant. was supposed to benefit respondent.[12] (Emphasis supplied) For her act of understating the company‘s profits or financial position was willful and not a mere error of judgment. hence this petition. and implies wrongful intent and not mere error of judgment. On petitioner‘s declaration that ―I believe that I did something good for our office when our declaration of gross income submitted to City Hall for the renewal of our municipal license was lower than our actual gross income for which the office had paid a lower amount. and (c) must show that the employee has become unfit to continue working for the employer. was. It is the transgression of some established and definite rule of action. most of Lowe‘s clients reduced their advertising budget. willful in character. 2009 Facts: Lowe is an advertising agency. Far from being arbitrary. nonpayment of 13th month pay with prayer for the award of moral and exemplary damages plus attorney‘s fees against Lowe. Lowe implemented cost-cutting measures including a redundancy program and Lowe terminated Mutuc‘s services because her position was declared redundant. she failed to remit the contributions as early as November 2001 during which time. Issues: 1. Gustilo (Gustilo) 9 is the Chief Executive Officer and President of Lowe.R. a dereliction of duty. Mutuc was given a salary of P100. however. Verily. WON Mutuc is entitled only to separation pay and proportionate 13th month pay Ruling: Page 129 . Marquez which was not refuted by petitioner. and put respondent at risk of being made legally liable. Both were included in the complaint for illegal dismissal in their capacity as officers of Lowe. WON Mutuc was validly dismissed by reason of redundancy 2. hence. G. 2002 to respondent‘s bank account. 2. CA. committed as it was in order to ―save‖ costs. and registered pursuant to Presidential Decree No. Unsatisfied with petitioner Estacios explanation. Estacio amounting to One Hundred Twenty Three Thousand Eight Hundred Seven and 14/100 (P123.2[5] Respondent Engr. Indeed. while petitioner Manliclic had been working for respondent PELCO I as a bill collector since June 1992. and (4) fair and reasonable criteria in ascertaining what positions are to be declared redundant. For a valid implementation of a redundancy program. did not deny that she was the most junior of all the executices of Lowe. Lorenzo (Lorenzo). (2) payment of separation pay equivalent to at least one month pay or at least one month pay for every year of service. Jefferson M. Respondent PELCO I is an electric cooperative duly organized. A formal investigation/hearing then ensued. and directing her to explain in writing. Mutuc. Among the accepted criteria in implementing a redundancy program are: (1) preferred status. In her written explanation. On 22 August 2002. whichever is higher. 2002. submitted her Audit Findings: Evaluation of the results of physical inventory of bills through reconciliation of records such as aging schedule of consumer accounts receivable balance.750. respondent Engr.807. Redundancy exists when the service of an employee is in excess of what is reasonably demanded by the actual requirements of the business. (2) efficiency. who was hired only on 23 June 2000. August 19. the employer must comply with the following requisites: (1) written notice served on both the employee and the DOLE at least one month prior to the intended date of termination. Lowe employed fair and reasonable criteria in declaring Mutuc‘s position redundant. Estacio v. The Court recognizes that a host of relevant factors comes into play in determining who among the employees should be retained or separated. and (3) seniority. (See Art. No. Nelia D. why no disciplinary action should be imposed upon her for Gross Negligence of Duty.93) remained unremitted as of August 20.R. collection reports and other related documents revealed 87 bills amounting to One Hundred Twenty Six Thousand Seven Hundred Fifty and 93/100 (P126. Page 130 . incorporated. 283) The controversy lies on whether Lowe used any fair and reasonable criteria in declaring Mutuc‘s position redundant and whether there was bad faith in the abolition of her position. 269. Pampanga I Electric Cooperative. petitioner Estacio averred that she had no control over and should not be held answerable for the failure of the bill collectors at the San Luis Area Office to remit their daily collections. and the courts will not interfere unless arbitrary or malicious action on the part of management is shown. Marquez Yes. Respondent Engr. Allas is the General Manager Petitioner Estacio had been employed at respondent PELCO I as a bill custodian since 1977. (3) good faith in abolishing the redundant position. 2009 Facts: This is a Petition for Review on Certiorari. 183196. The determination of the continuing necessity of a particular officer or position in a business corporation is a management prerogative. an employer has no legal obligation to keep more employees than are necessary for the operation of its business. Accounting of which includes the accountability of Ms. the Internal Auditor of respondent PELCO I. Allas issued a Memorandum to petitioner Estacio informing her of the audit findings. Allas issued a Memorandum charging Estacio with gross negligence of duty. within 72 hours upon receipt thereof. Yes 35.LABOR RELATIONS Atty. G. Mutuc also did not present contrary evidence to disprove that she was the least efficient and least competent among all the Creative Directors. during which petitioner Estacio was duly represented by counsel.14) representing 86 bills. August 24. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. and conduct prejudicial to the best interest of the bank. No. Gross negligence connotes want or absence of or failure to exercise even slight care or diligence. Maralit (Maralit) worked for respondent Philippine National Bank (PNB) from 27 August 1968 to 31 December 1998(30 years). respondent PELCO I. or the total absence of care. did not offer any satisfactory explanation or evidence in her defense.950. payment of their benefits shall be made only after the resolution of their cases and only if they are not disqualified from receiving such benefits. PNB stated: By giving undue and unwarranted preference. (6) on 28 July 1998. Through the Memoranda issued by respondent Engr. (9) in its 29 September 1998 memorandum. Vice President Florencio C. G. It is undisputed that petitioners were accorded due process. gross violation of bank rules and regulations. which were unfavorable to petitioners.R. Special Separation Incentive Plan (SSIP). that personnel with pending administrative cases or who are under preliminary investigation may avail of the SSIP. More than the resulting material damage or prejudice.000 drawings against uncollected deposits. Marquez Respondent Engr. Allas rendered a Decision which adopted the recommendation of the investigation committee dismissing petitioner Estacio from service. as such. despite the opportunities given to her. (5) on 15 July 1998. NLRC disagreed with the Labor Arbiter. Alano reported Maralit‘s irregular transactions. but also habitual. Lat of Branch Operations and Consumer Banking Division for Southern Luzon and Bicol referred Maralit‘s irregular transactions to the IAG for immediate investigation. 163788. Maralit v. PNB. with forfeiture of her benefits. Vice President Milagros Pastrana of Branch Administrative Office for Southern Luzon and Bicol recommended that Maralit be temporarily assigned to the Naga Branch. To warrant removal from service. Court rules that there is valid cause for petitioner Manliclic dismissal from service. (8) on 15 September 1998. PNB. (2) in a memorandum dated 9 July 1998. PNB stated. The amount misappropriated by petitioner Manliclic is irrelevant. with the modification deleting the charge of dishonesty. he has in his absolute control and possession -. She began as a casual clerk and climbed her way to become branch manager. Petitioner Estacio‘s failure to make a complete accounting and reporting of the bill collections plainly demonstrated her disregard for one of her fundamental duties as a bill custodian. a certain Gay Ophelia T.000 and recommended that Maralit be required to submit her written answer under oath. 2009 Facts: Ester B. (3) Maralit submitted a memorandum dated 9 July 1998 admitting the irregular transactions. Jefferson M. ―Attached is Page 131 . Allas. (7) in a memorandum dated 8 September 1998. it is petitioner Manliclic‘s very act of misappropriation that is offensive to respondent PELCO petitioner Manliclic committed a breach of the trust reposed in him by his employer. However.prior to remittance -. offered its personnel an early retirement plan known as . The Court also finds that there was valid cause for petitioner Estacios dismissal. the IAG found that Maralit violated bank policies which resulted in the return of unfunded checks amounting to P54. advantage or benefit to a private party through manifest partiality and evident bad faith committed by you while performing the duties as Manager as follows: (1) in a memorandum dated 8 July 1998. the guidelines for the availment of the SSIP. Maralit assumed her new assignment at the Naga Branch. (4) on 9 July 1998. Petitioner Estacio.a highly essential property of the cooperative. petitioners were duly informed of the results of the audit conducted by Internal Auditor Lazaro. Petitioner Manliclics honesty and integrity are the primary considerations for his position as a bill collector because. Issue: WON Estacio and Manliclic were legally dismissed? Ruling: Yes. This constitutes valid cause for his dismissal from service Court of Appeals is AFFIRMED 36. PNB reported to the BSP the P54. There was a legal dismissal of petitioner Estacio. Allas. PNB charged Maralit with serious misconduct.950. Labor Arbiter ruled in favor of respondents. Her only reason for failing to comply with the requisite daily accounting and reporting of the bill collections was the terrible weather condition.LABOR RELATIONS Atty. the negligence should not merely be gross. Maralit filed her application for early retirement. Petitioner Estacio sought a reconsideration of the said decision but it was denied by respondent Engr. (2) had Maralit known that she would be administratively charged.086. PNB conditionally approved Maralit‘s application for early retirement effective at the close of business hours on 31 December 1998. Willful Breach of Trust and Gross Violation of Bank Rules and Regulations under Article 282 of the Labor Code that will forfeit her retirement benefits? Ruling: The evidence shows that Maralit was afforded due process.02 retirement benefits.000 exemplary damages. NLRC affirmed with modification the Labor Arbiter‘s 22 January 2001 Decision. The NLRC deleted the award of P200.‖ Internal Audit Group (IAG) asks Maralit for a written answer under oath to the above charges together with whatever affidavits and other documentary evidence you may wish to submit within five (5) days from receipt of this memorandum why she should not be penalized for Serious Misconduct. The essence of due process is an opportunity to be heard or. The NLRC held that (1) there was no grave abuse of discretion on the part of the Labor Arbiter. the Administrative Adjudication Panel had not decided the administrative case against her. In its 16 October 1998 memorandum. PNB stated that.908. A formal or trial-type hearing is not essential.60 attorney‘s fees. gross violation of bank rules and regulations. PNB placed Maralit under preventive suspension. and (3) Maralit was not entitled to attorney‘s fees. PNB claimed that the NLRC committed grave abuse of discretion when it affirmed the Labor Arbiter‘s 22 January 2001 Decision because (1) Maralit was not entitled to retirement benefits. The Court of Appeals held that the NLRC committed grave abuse of discretion when it affirmed the Labor Arbiter‘s 22 January 2001 Decision. and for damages against PNB. an opportunity to explain one‘s side. She stated that ―The favorable accommodations granted. as applied to administrative proceedings. she would not have availed of the SSIP so that she could continue receiving her monthly salary. The Labor Arbiter found that (1) Maralit was not under preliminary investigation when she filed her application for early retirement. and (5) PNB illegally dismissed Maralit and committed an act oppressive to labor. 1998‖.‖ Under the SSIP. claiming that were made in good faith and intended for the higher interests of the Bank. Maralit filed with the arbitration branch of the NLRC a complaint for non-payment of retirement benefits and separation pay. In its 29 September 1998 memorandum. She admitted that the accommodations were ―deviations from Bank‘s policies.000 exemplary damages. PNB stated: Maralit placed under preventive suspension for thirty (30) days effective upon receipt hereof pursuant to Section 3. Issues: Whether or not Ester Maralit has retired or was dismissed from the service effective December 31.359.359. The Court of Appeals found that Maralit was under preliminary investigation when she filed her application for early retirement and that she was afforded due process. and PNB‘s interest was unreasonably put at risk. claiming that the Labor Arbiter gravely abused his discretion and erred in his factual findings. and (10) in its 16 October 1998 memorandum. and P155. uncollected deposits were a wanton violation of the policy of the Bangko Sentral ng Pilipinas (BSP) and PNB. ―Payment of Special Separation Incentive and other Benefits shall be made only upon final resolution of the administrative case against you. Jefferson M. Marquez the Internal Audit report dated September 8. (3) when PNB approved Maralit‘s application for early retirement. 1998.02 retirement benefits.LABOR RELATIONS Atty. In 2000 PNB found Maralit. On 20 November 1998. finding her guilty of serious misconduct. She had no discretion to do prohibited acts. Maralit was entitled to P1.086. PNB directed Maralit to submit her written answer under oath together Page 132 . 1998? Whether or not she has committed Serious Misconduct. PNB gave Maralit ample opportunity to explain her side.P200. (4) there was no hearing or conference held where Maralit could respond to the charge. (2) the material facts as found by the Labor Arbiter were consistent with the evidence. Rule XIV of the Omnibus Rules Implementing the Labor Code. The Labor Arbiter held that Maralit was entitled to P1. (2) Maralit was afforded due process. and (3) the award of exemplary damages lacked basis. Maralit submitted her answer dated 11 January 1999. provided that the decision in said investigation does not disqualify you from the enjoyment of said benefits. PNB stated. or rebut the evidence presented against her. and conduct prejudicial to the best interest of the bank. PNB dismissed Maralit from the service with forfeiture of her retirement benefits effective at the close of business hours on 31 December 1998. present her evidence. PNB appealed to the NLRC. Willful Breach of Trust and Gross Violation of Bank Rules and Regulations under Article 282 of the Labor Code. ―In connection with the Special Audit report of Internal Audit Group dated September 8. that an employer who accepts or approves the retirement of an employee loses the right to dismiss such employee in a subsequent action. Incorporated (BENECO). Issue: Whether or not petitioners were illegally dismissed from their employment by the respondent Ruling: There was no illegal dismissal. BENECO started automating its operations. Having been dismissed for a just cause. While termination of employment and retirement from service are common modes of ending employment. Nearly four months after their severance from their employment however. Article 287 of the Labor Code gives leeway to the parties to stipulate above a floor of benefits. in a petition for certiorari made by herein respondent. or a dereliction of duty.R. It is inappropriate to discuss whether the requirements for terminating an employee had been complied with since the petition is focused on whether the retirement was made voluntarily. Maralit invoking the principle on estoppel. As to whether the retirement in this case was done voluntarily. The Labor Abiter dismissed their claims for lack of merit. depending on the cause. based on the bilateral agreement of the employer and employee). Maralit is not entitled to her retirement benefits. The benefits resulting from termination vary. upon reaching the NLRC. Consequently.5 million. which is a position of trust and confidence. Three investigative bodies are separate and independent from each other. including serious misconduct. and has its own legal effects in our jurisdiction. Jefferson M.e. Petitioner was a bank accountant. PNB consistently stated that payment of Maralit‘s retirement benefits shall be paid only after final resolution of the administrative case against her. BENECO offered them an option to retire under a newly created optional retirement program which would provide them with more benefits than what is statutorily required. Retirement from service is contractual (i. Quevedo v. Instead however of terminating outright petitioners and paying them statutory benefits under the Labor Code. PNB may rightfully terminate Maralit‘s services for a just cause. Marquez with affidavits and other documentary evidence: The administrative investigation in PNB undergoes a three-tiered process which commences with an audit report made by the Internal Audit Division (IAD). Benguet Electric Cooperative. while termination of employment is statutory (i. benefits and procedure). almost P4. September 11. There is substantial evidence showing that there was valid cause for the bank to dismiss petitioner‘s employment for loss of trust and confidence. reversed NLRC decision which prompted petitioner to file the instant case. However.LABOR RELATIONS Atty. They also questioned the validity of BENECO‘s downsizing measure. involuntary retirement amounts to a discharge. No. they were forced to do so because BENECO would have them terminated had they insisted otherwise. The Court of Appeals. They claimed that notwithstanding the fact that they had no intention of retiring. with varying juridical bases and resulting benefits. Each is a distinct and separate mode of extinguishing an employer-employee relationship. The Court is unimpressed.e. the line between voluntary and involuntary retirement is thin but it is one which this Court has drawn. The amount involved is significant. Page 133 . Voluntary retirement cuts employment ties leaving no residual employer liability. a forbidden act. including petitioners. The evidence shows that Maralit was under preliminary investigation when she filed her application for early retirement. G. petitioners filed a complaint for illegal termination of employment against BENECO. Petitioners accepted respondent‘s offer and thereby received benefits. provided that she is not disqualified to receive such benefits. they are mutually exclusive. they cannot be taken together for the purpose of terminating employment relation. 168927. Serious misconduct is improper conduct. For retirement. governed by the Labor Code and other related laws as to its grounds. rendering redundant the functions performed by some employees. said court found for them and ordered BENECO to reinstate them. a transgression of some established and definite rule of action. and they proceed without influence from the other bodies having their own respective mandates and processes. 37. 2009 Facts: Petitioners are former employees of respondent Benguet Electric Cooperative. ―Retirement‖ and ―Dismissal‖ are entirely different and incompatible from each other. PLDT inspector and security guard. Petitioners submitted a joint explanation denying the charges against them. G. between two equally valid options. will not efface such privilege if only to protect the person holding that office. hence. PLDT recovered the cables bearing the "PLDT" marking. and this Court. Petitioners nevertheless argue that their inevitable termination forced their hands. Petitioners were seen stripping and burning cables inside the compound of the house which turned out to belong to Caragay‘s mother. The records presented show sufficient compliance with the criteria. Nor were petitioners here denied the stipulated benefits. albeit without success as BENECO stood pat on its management decision. the manner by which BENECO arrived at its decision to downsize and at the same time spare petitioners the lesser benefits under Article 283 of the Labor Code by creating a more generous retirement package was regular. It does not rise to that level of intimidation or coercion sufficient to vitiate consent. Fianza : [T]he abolition of a position deemed no longer necessary is a management prerogative. the exit route offering bigger benefits. True. PLDT had been receiving reports of theft and destruction of its cables. With the assistance of police and barangay officials. however. the payment of stipulated benefits. proceeded to the said area where they saw petitioners‘ service vehicle parked infront of the house. PLDT filed an Information for Qualified Theft against petitioners. v. Their request for a copy of the Security Investigation was denied. Issue: WON petitioners were denied due process and were illegally dismissed Ruling: No. they were presumed to be owned by PLDT.R. they simply chose. NLRC. Although superficially appealing. and the absence of badges of intimidation or coercion are relevant parameters. petitioners accepted BENECO‘s offer without reservation and received payments without protest. on the ground that they are only entitled to "be informed of the charges. Labor Arbiter held that petitioners were illegally dismissed which was reversed by the NLRC. Petitioners were afforded opportunity to seek reconsideration of BENECO‘s decision to downsize. Placido et al. As already decided by this Court in Benguet Electric Cooperative v. but predictably biased. leaving them no choice but to retire from service. Jefferson M. Pettitioners appealed to CA which affirmed the NLRC Decision holding that since the cables bore the "PLDT" marking. No. but they failed. PLDT sent notices of termination to petitioners. A third time request for another hearing was likewise denied. PLDT also required petitioners to explain within 72 hours why no severe disciplinary action should be taken against them for Serious Misconduct and Dishonesty. petitioners requested BENECO to reconsider its decision to abolish their positions but this is a natural inclination to keep one‘s livelihood. The employee‘s intent is the focal point of analysis. a formal hearing was scheduled. Furthermore. they were on their way back from the house of one Quezada from whom they were inquiring about a vehicle when they were detained by the PLDT investigator. this argument rests on an unfair. but the same was denied. the burden of evidence shifted on petitioners to prove that they were no longer owned by PLDT. Article 277 of the Labor Code provides: (b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just or authorized cause and without prejudice to the requirement of notice under Article 283 of this Code. petitioners were not denied due process. September 18. Finally. and they cannot demand for the report as it is still on the confidential stage. prompting them to file a complaint for illegal dismissal before the Labor Arbiter. petitioners were not compelled to retire. responding to a report that cables were being stripped and burned in one of the residences. The records show that on average. the employer shall furnish the workers whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample Page 134 . transparent and fully documented. Marquez rendering the employer liable for termination without cause. The marked difference between these two bundles of benefits not only factored in petitioners‘ decision to retire under the EVR program but also explained the lapse of nearly four months before petitioners sued BENECO. By their claim. In determining such intent. absent any findings of malice and arbitrariness on the part of management. assumption. Petitioners‘ counsel later reiterated the request for a setting of a hearing and an audiotape of the June 25. 2001 hearing. the fairness of the process governing the retirement decision. 180888. They were legally dismissed.LABOR RELATIONS Atty. 2009 Facts: Petitioners Placido and Caragay had been employed as cable splicers by PLDT. 38. On petitioners‘ request. the benefits each of the petitioners received were more than twice their statutory counterpart under Article 183. petitioner discovered that his name had been removed from the company logbook and was prevented from logging in. The burden of evidence thus lay on petitioners to prove that they acquired the cables lawfully but this they failed to discharge. G. As cashier. For the test for the fair procedure guaranteed under the above-quoted Article 277(b) of the Labor Code is not whether there has been a formal pretermination confrontation between the employer and the employee. an opportunity to explain one's side or an opportunity to seek a reconsideration of the action or ruling complained of. B&B Fish Broker. provides: Section 2. take a leave the following day. hence. filed a complaint against B&B Fish Broker and/or Lucinario. What the law prohibits is absolute absence of the opportunity to be heard. September 18. After a few days. The following day petitioner. 39. To confine the employee‘s right to be heard to a solitary form narrows down that right. a party cannot feign denial of due process where he had been afforded the opportunity to present his side. And he was informed that his application for a four-day leave of absence had been denied. A hearing was conducted where petitioners attended along with their union MKP representatives during which the principal witnesses to the incident were presented. for illegal dismissal. underpayment and non-payment of wages with prayer for Page 135 . Petitioners were thus afforded the opportunity to confront those witnesses and present evidence in their behalf. with the assistance of counsel if he so desires. the following standards of due process shall be substantially observed: For termination of employment based on just causes as defined in Article 282 of the Labor Code: (i) A written notice served on the employee specifying the ground or grounds for termination. petitioner‘s duties consisted of issuing receipts on items taken and bought and balancing of the cash on hand and receipts issued at the close of the business day. petitioner filed an application for a four-day leave effective on even date due to an inflamed jaw.R. Thus Rule I. given several written invitations to submit themselves to PLDT‘s Investigation Unit to explain their side. present his evidence or rebut the evidence presented against him. but they failed to do so. Section 2(d). the requirements of which are satisfied where the parties are afforded fair and reasonable opportunity to explain their side of the controversy. that holding an actual hearing or conference is a condition sine qua non for compliance with the due process requirement in case of termination of employment. a partnership owned and managed by respondent Norberto M. (ii) A hearing or conference during which the employee concerned. petitioners were. tried to confer with Lucinario but to no avail. SC found that as the cables bore the "PLDT" marking. and giving said employee reasonable opportunity within which to explain his side. The abovequoted provision of Section 2(d) should not be taken to mean. Marquez opportunity to be heard and defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to the guidelines set by the Department of Labor and Employment. and present his evidence or rebut the evidence presented against him.LABOR RELATIONS Atty. as he did. 2009 Facts: Odilon L. indicating that upon due consideration of all the circumstances. grounds have been established to justify his termination. is given opportunity to respond to the charge. he was relieved of his position and reassigned as company custodian. Lucinario called petitioner‘s attention to his alleged shortages in his cash collections and ordered him to. In the present case. 179985. His application. as applied to administrative proceedings. hence. The essence of due process is simply an opportunity to be heard or. A formal or trial type hearing is not at all times and in all instances essential to due process. Jefferson M. Martinez v.1avvphi1 (iii) A written notice of termination served on the employee. When petitioner reported back for work. Security of Tenure. the presumption is that PLDT owned them. but they failed to heed them. among other things. The "ample opportunity to be heard" standard is neither synonymous nor similar to a formal hearing. Lucinario (Lucinario) and Jose Suico. — (d) In all cases of termination of employment. having understood that the removal of his name from the logbook amounted to the termination of his employment. Subsequently. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. addressed to Lucinario. And the Omnibus Rules Implementing the Labor Code require a hearing and conference during which the employee concerned is given the opportunity to respond to the charge. Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. Martinez (petitioner) was employed as a cashier by B&B Fish Broker. was received by a co-employee. however. No. Arielle Penaranda. which could lend light on petitioner‘s performance. He later applied for a 4-day leave of absence.000 of its employees. The NLRC found otherwise – that petitioner was illegally dismissed. main decision Facts: Petitioner FASAP is the duly certified collective bargaining representative of PAL flight attendants and stewards. in effect. 2009. the concurrence of petitioner‘s failure to report for work for no valid reason and his categorical intention to discontinue employment. Marquez reinstatement. or collectively known as PAL cabin crew personnel. The rule admits of certain exceptions. On to Lucinario‘s claim that petitioner abandoned his employment: It is axiomatic that in a petition for review on certiorari. This constrains the Court to reassess the evidence of the parties. allowances and backwages of affected FASAP Page 136 .LABOR RELATIONS Atty. before the Arbitration Branch of the National Labor Relations Commission. However. was refused entry into the company premises. petitioner. FASAP and PAL conducted a series of consultations and meetings and explored all possibilities of cushioning the impact of the impending reduction in cabin crew personnel. On appeal. Respondent PAL is a domestic corporation organized and existing under the laws of the Republic of the Philippines. that retrenchment shall be based on the individual employee‘s efficiency rating and seniority. Lucinario claimed. see July 22. To the Court. one of the just causes for an employer to terminate an employee. No. Lucinario must prove. yet she ordered petitioner‘s reinstatement. the bulk of his (Lucinario‘s) evidence relates to petitioner‘s incurring of shortages in his collections to justify the transfer of petitioner‘s assignment from cashier to company custodian and his alleged previous suspension. the Labor Arbiter ruled that there is no illegal dismissal. only questions of law may be raised. Parenthetically. Denying petitioner‘s charge that his services were illegally terminated. that petitioner immediately filed the illegal dismissal complaint with prayer for reinstatement should dissipate any doubts that he wanted to return to work. Thus PAL unilaterally resolved to utilize the criteria set forth in the Collective Bargaining Agreement in retrenching cabin crew personnel: that is. While Lucinario contends that petitioner abandoned his job. including more than 1. Phil Airlines. still reported for work. however. the parties failed to agree on how the scheme would be implemented. was not presented. 178083. On June 1998. the employer bears the burden of proof. October 2. PAL adopted the retrenchment scheme allegedly to cut costs and mitigate huge financial losses as a result of a downturn in the airline industry brought about by the Asian financial crisis. Finally. however. G. one of which is when there is variance on the appreciation of facts of the case. documentary evidence relating thereto. He thereupon exerted efforts to communicate with Lucinario on the status of his employment. but to no avail. Abandonment is a form of neglect of duty. operating as a common carrier transporting passengers and cargo through aircraft. In the present case. these circumstances do not indicate abandonment. As reflected above. 40. On June 1998. and learned that his application for a 4-day leave was not approved. Lucinario. What thus surfaces is that petitioner was constructively dismissed. 2008. he discovered that his name was erased from the logbook. petitioner having been placed in a position where continued employment was rendered impossible and unreasonable by the circumstances indicated above. It is a hornbook precept that in illegal dismissal cases. after being informed of his alleged shortages in collections and despite his relegation to that of company custodian. On his return. that petitioner abandoned his job. Flight Attendants and Steward Association of the Phils vs.R. by substantial evidence. but there was constructive dismissal.400 of its cabin crew personnel. Issue: Whether or not Petitioner was illegally dismissed? Ruling: The petition is impressed with merit. illegal retrenchment with claims for reinstatement and payment of salaries. Jefferson M. FASAP filed a Complaint against PAL for unfair labor practice. the appellate court reversed the findings of the NLRC. failed to establish any overt act on the part of petitioner to show his intention to abandon employment. PAL retrenched 5. No actual dismissal might have occurred in the sense that petitioner was not served with a notice of termination. For a valid termination of employment on the ground of abandonment. Prior to the full implementation of the assailed retrenchment program. Clarissa Reduca (Reduca). Espadero decided to file a complaint for illegal dismissal before the NLRC. PAL only considered the year 1997. PAL had implemented its retrenchment program in an arbitrary manner and with evident bad faith. Petitioners maintained that – the company rules and regulations. Issues: whether Espadero was afforded her right to due process prior to being dismissed from her job. as well as the corresponding penalties in case of violation thereof. serious. (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 financial hardship for certain workers. were made known to Espadero before and upon her actual employment as cashier. Espadero contended that she was dismissed outright without being given ample opportunity to explain her side. Jefferson M. 2002. Eats-Cetera Food Services Outlet v. Any claim of actual or potential business losses must satisfy certain established standards. The appellate court also observed that the punishment of dismissal was too harsh and unjustified. For this reason. G. the NLRC reversed the Labor Arbiter‘s findings. 2001 as cashier. Greta dela Hostria. Aggrieved. (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. 179507. The burden falls upon the employer to prove economic or business losses with sufficient supporting evidence. or if only expected. whichever is higher. actual and real. WHEREFORE. respondents filed a petition for certiorari before the CA. This makes the evaluation of each cabin attendant‘s efficiency rating capricious and prejudicial to PAL employees covered by it. petitioners decided to terminate her. the company issued a Memorandum terminating her for violation of Rule 24 of the company rules and regulations. efficiency. October 2. Espadero. petitioners called her and asked her to make a letter of admission as a condition for her reemployment. (3) That the employer pays the retrenched employees separation pay equivalent to one (1) month pay or at least one-half (½) month pay for every year of service. but substantial. Because of this. moral and exemplary damages with a prayer to enjoin the retrenchment program then being implemented. Espadero was told to wait for an assignment. Marquez members. She claimed that on November 21. Upon appeal. 2009 Facts: Espadero had been employed by Eats-cetera Food Services Outlet since June 30. are reasonably imminent as perceived objectively and in good faith by the employer. who rendered a ruling affirming the Labor Arbiter‘s pronouncement that Espadero was not afforded due process.400 of its cabin crew personnel. seniority. and. there must be faithful compliance with substantive and procedural requirements of the law and jurisprudence. Page 137 . on November 22. When she reported for duty. such as status. Issue: Whether or not PAL‘s retrenchment scheme was justified Ruling: While it is true that the exercise of this right is a prerogative of management. which prejudiced the tenurial rights of the cabin crew personnel. the instant petition is GRANTED. PAL failed to comply with the first requirement as in the instant case. and presented the affidavit of supervisor Reduca [containing the incident report]. physical fitness. After writing a letter [of apology about not being able to report the incident immediately]. As to the fourth requirement. they conducted an impartial investigation of the incident and found substantial evidence that Espadero was in cahoots with a co-worker in punching in her time card. before any reduction of personnel becomes legal. petitioners gave Espadero ample opportunity to explain her side. all of which must concur. (5) That the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees. if already incurred. in assessing the overall performance of each cabin crew personnel. No.R.LABOR RELATIONS Atty. Letran. 2002. As to the fifth requirement. These are: (1) That retrenchment is reasonably necessary and likely to prevent business losses which. Espadero discovered that her time card was already punched in. age. 41. that contrary to her claim. Labor Arbiter declared petitioners liable for illegally terminating Espadero. failed to report the incident to her supervisor. actual. are not merely de minimis. PAL failed to substantiate its claim of actual and imminent substantial losses which would justify the retrenchment of more than 1. however. she found out that a certain Joselito Cahayagan was the one who punched in her time card. After asking around. who reported the incident to the personnel manager. The following day. In one case.as a ground for dismissal – does not entail proof beyond reasonable doubt of the employee‘s misconduct.a position of trust and confidence . handling. Petitioners. the fact remains that . or rebut the evidence presented against him. but the dismissal must be for a just or authorized cause as provided by law. Page 138 . Petitioners complied with the second notice requirement. as personnel manager. therefore.has been defined as one – where a person is entrusted with confidence on delicate matters.which requires utmost fidelity to her employers. and whether Espadero was or was not . is that . x x x. the employer must satisfy both substantive and procedural due process. As an employee occupying a job . or that his employer . cannot be blamed for losing their trust in Espadero. A POSITION OF TRUST AND CONFIDENCE .has ample reason to distrust him. Rule I of the Implementing Rules of Book VI of the Labor Code.to the personnel manager. A hearing or conference during which the employee concerned. issued a Memorandum stating with clarity the reason for Espadero‘s dismissal. One such position is that of a cashier. present his evidence. In the instant case.the authority to dismiss such employee.the tampering of her time card. or with the custody. very likely. Jefferson M. at least. the following standards of due process shall be substantially observed: For termination of employment based on just causes as defined in Article 282 of the Labor Code: A written notice served on the employee specifying the ground or grounds for termination. A cashier is a highly sensitive position which requires absolute trust and honesty on the part of the employee. fraud and willful breach of trust among the just causes for termination. Not only must the employee be afforded a reasonable opportunity to be heard and to submit any evidence he may have in support of his defense. x x x x (d) In all cases of termination of employment.is one that requires a high degree of trust and confidence. could have been discovered at a much later period. Greta dela Hostria. or care and protection of the employer‘s property and/or funds. Security of Tenure. petitioners cannot be faulted for losing their trust in Espadero.is guilty of a breach of trust.if there is sufficient evidence to show that – the employee occupying . indicating that upon due consideration of all the circumstances. we explained: LOSS OF CONFIDENCE .the tampering was not promptly reported and could.] 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. It is for this reason that the Court has sustained the dismissal of cashiers who have been found to have breached the trust and confidence of their employers. if it had not been reported by Espadero‘s supervisor . A written notice of termination served on the employee. she failed to report to her immediate supervisor . therefore. we also sustain petitioners‘ reasoning that – Espadero‘s position as a cashier . The rule. Marquez whether Espadero‘s infraction was serious enough to warrant the penalty of dismissal.in cahoots with a co-worker. Ruling: Article 282 of the Labor Code includes – serious misconduct. if not to entertain the moral conviction[. It is enough that there be ―some basis‖ for such loss of confidence or that ―the employer has reasonable grounds to believe.LABOR RELATIONS Atty. In Metro Drug Corporation v. Whether her failure was deliberate . and giving said employee reasonable opportunity within which to explain his side. THE PROCEDURAL REQUIREMENTS are set forth in Section 2(d). or. grounds have been established to justify his termination. and that her infraction reasonably taints such trust and confidence reposed upon her by her employer. the Court upheld the validity of the dismissal of a school cashier despite her 19 years of service after evidence showed that – there was a discrepancy in the amount she was entrusted to deposit with a bank. the labor tribunal cannot justly deny the employer . But prior to termination on such grounds.or due to sheer negligence. not have been known by petitioners. National Labor Relations Commission. with the assistance of counsel if he so desires is given opportunity to respond to the charge. to wit: SEC. 2. SUBSTANTIVELY. With the degree of trust expected of Espadero. Technical rules of procedure are not strictly adhered to in labor cases consistent with the Constitutional mandate to afford protection to labor. MISCONDUCT has been defined as improper or wrong conduct. G. must be of such a grave character and not merely trivial or unimportant. by giving the opposing party sufficient opportunity to meet and rebut the new or additional evidence introduced. et al. Godfrey Ngujo and Julius Villaflor were among 21 employees found positive for use of methamphetamine hydrochloride (shabu). Drug and Martell. the transgression of some established or definite rule of action. The misconduct. which Plantation Bay found unsatisfactory hence.m. The burden is on the employer to prove that the termination was for a valid and legal cause. ―The NLRC did not err in considering the issue of the veracity of the confirmatory tests even if the same was raised only in respondents‘ Motion for Reconsideration of its Decision.employees.R. .m. Additionally. Page 139 . the peculiar nature of Espadero‘s position aggravates her misconduct. the law considers the case a matter of illegal dismissal. Dubrico. NLRC reversed saying there was illegal dismissal and that respondents were not really using drugs! CA affirmed NLRC decision based on evidence which showed a discrepancy between the tests conducted by Phil. 42. they should not be made liable therefor.m. Marquez Moreover. Her failure to promptly report the incident reflects a cavalier regard for the responsibility required of her in the discharge of the duties of her position. Illegal dismissal. provided due process is observed. willful in character. Respondents Romel Dubrico. Plantation Bay Resort and Spa. Urine sample received on 09/29/04 at 5:24 p. a dereliction of duty. they relied on the results of the random drug tests undertaken by an accredited and licensed drug testing facility. Plantation Bay failed to prove that employees used drugs based on the doubtful test results. In the interest of substantial justice. 2. it must be in connection with the employee‘s work. Petition likewise fails on the merits. 2009 Facts: In compliance with RA 9165 (Comprehensive Dangerous Drugs Act). and if the results turned out to be questionable or erroneous. Whether or not the NLRC erred in considering the new issue on the veracity of the tests conducted. vs.m. they maintain that in terminating the services of respondents. Issue: 1. December 4. Ruling: Petition is bereft of merit. Confirmatory Test Issued on 09/29/04 at 3:57 p. they were dismissed. Plantation Bay objected to the employees‘ questioning the veracity of the tests only in the NLRC Motion for Recon. 182216. Issued on 09/29/04 at 3:57 p. The tests were done with the assistance of PNP SOCO (scene of the crime operations) with 2 labs conducting the tests: (1) MARTELL drug lab administered the initial tests and (2) PHIL. Technical rules of procedure are not strictly adhered to in labor cases. Where there is no showing of a clear. Jefferson M. Labor Arbiter found them guilty of serious misconduct and ruled that there was no illegal dismissal. DRUG SCREENING LAB conducted the confirmatory tests. an issue not raised during the proceedings. it being crucial in determining the validity of respondents‘ dismissal from their employment.errr.‖ (b)Yes.m. such infraction can hardly be classified as one that is trivial or unimportant.m. Issued on 09/29/04 at 4:15 p. and implies wrongful intent and not mere error in judgment. to be serious. WHEREFORE. valid and legal cause for termination. To constitute just cause for termination. Urine sample received on 09/29/04 at 5:32 p. the Petition is DENIED. as was the case here. Such move is proper. they submitted their explanations on the results of the tests. In compliance with several memoranda. (a) NLRC did not err. .LABOR RELATIONS Atty. a forbidden act. Whether or not there was illegal dismissal on the part of Plantation Bay. . new or additional evidence may be introduced on appeal before the NLRC. No. Exhibit A (Note that the confirmatory test showed earlier results that the initial test LOL) Name Romel Dubrico Godfrey Ngujo Julius Villaflor Drug Test Urine sample received on 09/29/04 at 5:14 p. Plantation Bay conducted surprise random drug tests on 122 unsuspecting victims. regular employees.LABOR RELATIONS Atty. it between the petitioners and ABS-CBN as the company exercised found that petitioners had been illegally dismissed and awarded them control over the petitioners in the performance of their work. petitioners were regular employees because they were engaged to perform activities usually necessary or desirable in ABS-CBN's trade or business.R. NLRC stood by the ruling that the petitioners were regular employees entitled to the benefits and privileges of regular employees. wardrobe and security services for both the had already rendered more than a year of service in the company and. they were dismissed because they belonged regular employees. and several money claims. editors. It then decided to from its coverage as ABS-CBN considered them temporary and not course through legitimate service contractors all driving. capacities. in violation of the Labor Code. make-up. it had already The petitioners alleged that ABS-CBN and the ABS-CBN Rank-and. the petitioners. should have been recognized as regular employees entitled make them more economically viable. an authorized various dates by its Cebu station as independent contractors/off cause under the law. Petitioners were not singled out to security of tenure and to the privileges and benefits enjoyed by for dismissal. ABSCBN appealed the above decision to the NLRC. night shift to a job category that had already been contracted out. and rest day and service incentive leave pay. not independent contractors. Metro Manila and provincial stations. No. Page 140 . Labor Arbiter upheld the validity of ABS-CBN's contracting out of They also prayed for an award of moral damages and attorney‘s fees. but on a monthly basis and were required to do their work in accordance with the company‘s schedule. petitioners regularization. ABS-CBN alleged that even before the labor arbiter assistants. to improve its operations and to therefore. were dismissed by ABSCBN. NLRC ruled that there was an employer-employee relationship NLRC reversed the labor arbiter‘s ruling in the illegal dismissal case. and they were not entitled to regularization in these one (1) month‘s salary for every year of service. rendered his decision in the regularization case. Fulache v. Jefferson M. personal In defense. and VTR editors. They asked that they be paid overtime. Petitioners and ABSCBN both filed for a MOTION FOR RECONSIDERATION of the above decision before the NLRC. Issue:/S: Whether or not petitioners were regular employees of ABSCBN? Whether or not petitioners were illegally dismissed by ABSCBN? Ruling: On the illegal dismissal case. January 21. unfair labor practice. Petitioners were drivers. cameraman. they cannot be considered contractual employees since they were not paid for the result of their work. the backwages and separation pay in lieu of reinstatement. certain work or services in its operations. and are entitled to the benefits and privileges of regular employees. were declared legally dismissed due to redundancy. teleprompters. holiday. Marquez 43. as drivers. messengerial. The labor arbiter found that ABS-CBN alleged that the petitioners‘ services were contracted on petitioners had been dismissed due to redundancy.undertaken a comprehensive review of its existing organizational File Employees Union executed a CBA where they had been excluded structure to address its operational requirements. The first one is with regards to the regularization of the petitioners while the second one is with regards to the illegal dismissal of such petitioners REGULARIZATION CASE ILLEGAL DISMISSAL CASE Petitioners filed two separate complaints against ABSCBN for While the appeal of ABSCBN to the NLRC was PENDING. utility. ABS-CBN Broadcasting Corporation. 183810. Labor Arbiter awarded them separation pay of camera talents. G. 2010 Facts: Involved in this case are two separate cases. They claimed they janitorial. differential. NLRC made a JOINT DECISION regarding the regularization and the illegal dismissal case. ABSCBN appealed such decision to the NLRC. while recognized as regular employees. Labor Arbiter rendered a decision holding that the petitioners were regular employees of ABS-CBN. a pre-need insurance company. On April 28. The records show that the regularization case was in fact the root of the resulting bad faith as this case gave rise and led to the dismissal case. 16. and the operations director of the company. On February 13. payment of 13th month pay. moral and exemplary damages. ILLEGAL DISMISSAL CASE The termination of employment of the four drivers occurred under highly questionable circumstances and with plain and unadulterated bad faith. Issue: Whether petitioner‘s employment was validly terminated because of loss of confidence. On February 17. 2004.LABOR RELATIONS Atty. petitioner submitted his letter of explanation to respondent company. with prayer for reinstatement. et al. ABS-CBN fell into a downward spiral of irreconcilable legal positions. 2010 Facts: On December 1. the regularization case was filed leading to the labor arbiter‘s decision declaring the petitioners to be regular employees. respondent Bartolome made several announcements. can only be terminated for the just and authorized causes defined under the Labor Code. the company cited redundancy as its authorized cause but offered no justificatory supporting evidence. No. petitioner filed before the Labor Arbiter a complaint for illegal dismissal. the petitioners fall within the coverage of the bargaining unit and are therefore entitled to CBA benefits as a matter of law and contract. the Labor Arbiter rendered a Decision in favor of petitioner Ancheta. First. As regular employees. Present at the meeting were petitioner. On February 11. 2004. respondent Bartolome announced that petitioner was to resign from the respondent company. as well as moral damages for the attendance of bad faith in such dismissal. ABS-CBN appealed the decision and maintained its position that the petitioners were independent contractors. Ancheta vs. backwages.000. petitioner filed a petition for certiorari under Rule 65 of the Rules of Court before the CA. Petitioners were likewise illegally dismissed and are thus entitled to reinstatement. PETITION GRANTED. hired petitioner as Head of its Marketing Group. 2002. the CA rendered a Decision. to the surprise of petitioner. On April 19. The dismissal was clearly attended by bad faith. 2005. ABS-CBN forgot labor law and its realities. and attorney‘s fees. 2004. 2004. affirming with modification the decision of the NLRC. various leaders of the marketing team. it impliedly admitted that the petitioners were regular employees whose services. Jefferson M. respondent Bartolome. During the meeting. 2007. G. a Marketing Committee meeting was called by respondent Arsenio Bartolome (Bartolome) at the conference room of respondent company. petitioner received a letter from respondent company. 2004. 179702. Destiny Financial Plans Inc. Marquez REGULARIZATION CASE Supreme Court agreed with the earlier decisions that petitioners were indeed regular employees of ABSCBN. It forgot that by claiming redundancy as authorized cause for dismissal. with a compensation package of Ninety Thousand Pesos (P90. Inc. It similarly forgot that an exercise of management prerogative can be valid only if it is undertaken in good faith and with no intent to defeat or circumvent the rights of its employees under the laws or under valid agreements. respondent Destiny Financial Plans. Aggrieved. 44. asking him to explain within forty-eight (48) hours why his services should not be terminated for loss of confidence in his ability to perform the functions of Marketing Director of the company. However. ABS-CBN took matters into its own hands and terminated the petitioners‘ services. Thus. the board of directors of respondent company terminated petitioner‘s services on the ground of loss of confidence. To justify the termination of service. payment of full backwages. by law. on March 16. clearly disregarding its own appeal then pending with the NLRC.00) a month. In the course of this appeal. Petitioners are regular employees of ABSCBN and they are thus entitled to the benefits under the CBA.. It merely claimed that it was contracting out the petitioners‘ activities in the exercise of its management prerogative.R. against respondent. Ruling: Page 141 . On February 2. attorney‘s fees. Feb.. National Labor Relations Commission (NLRC) reversed the decision of the Labor Arbiter. stockholders. the company could have collapsed. (3) it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary. and the public in general.R. The violation of petitioner‘s right to statutory due process warrants the payment of nominal damages. but picked up feeds or delivered livestock only on rare occasions when the farm driver and vehicle were unavailable.m.00. as admitted by petitioner. or unjustified. Jefferson M." The doctrine of loss of confidence requires the concurrence of the following: (1) loss of confidence should not be simulated. but as family driver. that he hired petitioner Belen in 1995. he was in charge. Issue: Page 142 . Belen decided to go home and get some more sleep. Petition Denied. The power to dismiss an employee is a recognized prerogative inherent in the employer‘s right to freely manage and regulate his business. Nos. care. Belen intentionally failed to report for work on August 20. such as the custody. 45.. But after just three hours of sleep. The SC agrees to CA that private respondents did not strictly comply with the ―two notice‖ requirement in dismissing petitioner Ancheta. Petitioner Belen further alleged that his long and arduous day finally ended at 4:30 a. is premised on the fact that the employee concerned holds a position of responsibility. Deeply worried that he might not soon get another job. It is thus apparent that private respondents did not comply with the procedural requirements of due process in dismissing petitioner Ancheta.m. he did not accept it. Talisay. taking into account the relevant circumstances. In this case. even as petitioner Ancheta had yet to answer and air his side. While private respondents sent a show cause letter to petitioner Ancheta. and (5) the employee involved holds a position of trust and confidence. the amount of which is addressed to the sound discretion of the court. 1999 Javellana gave him instructions to (a) pick up lime stones in Tayabas. as a just cause for termination of employment.e. illegal. of the over-all production and sales performance of the company. (c) have the delivery truck repaired. the same letter precipitately implemented termination procedures. of the following day. 1999 and this warranted his dismissal.000. Bulacan. Jr. Respondents‘ failure to observe due process in the termination of employment of petitioner for a just cause does not invalidate the dismissal but makes respondent company liable for non-compliance with the procedural requirements of due process. he was hired because of his expertise in the pre-need industry. In order to constitute a just cause for dismissal. The law. as aptly pointed out by the CA. Batangas. Javellana claimed. respondent Javellana insisted that he did it for a reason. (2) it should not be used as a subterfuge for causes which are improper. (4) it must be genuine. The position held by petitioner required the highest degree of trust and confidence of his employer in the former‘s exercise of managerial discretion insofar as the conduct of the latter‘s business was concerned. Belen did not do work for his farm on a regular basis. Petitioner was a managerial employee of respondent company. demanded the return of the Executive elevator key which allows petitioner Ancheta access to the office premises and the surrender of the company car assigned to him. March 5. to the detriment of its policy holders. feeds. respondent Javellana summoned him to the office. Belen asked for a separation pay. 181913 & 182158. 1999. On August 19. Petitioner‘s inability to perform the functions of his office to the satisfaction of his employer and the former‘s poor judgment as marketing head caused the company huge financial losses. the act complained of must be "work-related" such as would show the employee concerned to be unfit to continue working for the employer. Regarding petitioner Belen's dismissal from work. Petitioner Belen was promptly at the office at 4:00 p.. 2010 Facts: Belen was hired by Javellana as company driver and assigned him the tasks of picking up and delivering live hogs. trust and confidence. His competence and satisfactory performance as head of the marketing group assumed primordial importance for his continued employment in the company. which he used to head. and protection of the employer's property and/or funds. Belen. After being told that the latter would not be back until 4:00 p. because its earnings depended on the sales of the marketing group. When he arrived at 8:20 a. namely: (1) the dismissal must be for any of the causes expressed in Article 282 of the Labor Code. thus. Loss of confidence. i. but respondent Javellana suddenly blurted out that he was firing Belen from work. (b) deliver live hogs at Barrio Quiling. When Javellana offered him only P5. employees. Javellana had left. If these were not timely addressed and corrected. an employer can terminate the employment of the employee concerned for "fraud or willful breach by an employee of the trust reposed in him by his employer or duly authorized representative. it was not wise for the company to continue his services. Marquez Two requisites must concur in order that there be a valid dismissal from employment. and (d) pick up a boar at Joliza Farms in Norzagaray. holding a highly sensitive position. and (2) the employee must be given an opportunity to be heard and to defend himself. Under Article 282(c) of the Labor Code. on the other hand. an employer cannot be compelled to continue with the employment of workers when continued employment will prove inimical to the employer‘s interest.m. The worker's right to security of tenure is not an absolute right. Javellana. not a mere afterthought to justify an earlier action taken in bad faith. authorizes neither oppression nor self-destruction of the employer. not as a company driver. his performance was practically the lifeblood of the corporation. and lime stones used for cleaning the pigpens. To be sure. for the law provides that he may be dismissed for cause. Such betrays the fact that the said show cause letter was but a formality and petitioner Ancheta‘s dismissal is a foregone conclusion. His dismal performance was causing the company financial losses. among others. He must be invested with confidence on delicate matters.. Being the Head of the Marketing Group of respondent company. G. Thus. vs.m. handling. Quezon.LABOR RELATIONS Atty. in protecting the rights of the laborers. August 20. On 3 January 2001. et al. Galera. when he was dismissed. As it happens. (WPP).. We agree with Galera. Further. 2000. 279. Jefferson M. this Court has consistently ruled that backwages shall be computed from the time of illegal dismissal until the date the decision becomes final. 182158. . to September 22. 181913 became final.. But. since the monetary awards remained unpaid even after it became final on September 22. Whether WPP illegally dismissed Galera. filed by petitioner Belen. 2008 because of issues raised respecting the correct computation of such awards. 181913. On December 14. is equivalent to one month pay for every year of service. reinstatement is no longer possible. The Labor Arbiter's Ruling for illegal dismissal and damages in favor of GALERA. Galera filed a complaint for illegal dismissal. the computation of his separation pay should also end on that date. But if. March 25. Separation pay. Inc. WPP Page 143 . 13th month pay. 1999 when he supposedly ceased to render service and his wages ended. Security of Tenure. 2008. Clearly. WPP Marketing Communications Inc. vs. incentive plan. 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. G. 2008. questioned the CA's finding of illegality of dismissal while the petition in G. Issue: Whether Galera is an Employee or a Corporate Officer. The petition in G. Co. actual and moral damages. Galera's appointment as a corporate officer (Vice-President with the operational title of Managing Director of Mindshare) during a special meeting of WPP's Board of Directors is an appointment to a non-existent corporate office. WPP. hence. service incentive leave pay. when the judgment for unjust dismissal in G. China. challenged the amounts of money claims awarded to him. Steedman. since Belen was entitled to collect backwages until the judgment for illegal dismissal in his favor became final. What is decisive is that the issue of illegal dismissal from which the order to pay monetary awards to petitioner Belen stemmed had been long terminated.R. as in this case. The First Division of the NLRC reversed the ruling of Arbiter Madriaga. 1999. it is but fair that respondent Javellana be required to pay 12% interest per annum on those awards from September 22. and attorney's fees against WPP and/or John Steedman (Steedman). No. a fraction of six months to be considered as one whole year. Ruling: Employee.R. on the belief that she is an employee. holiday pay. 2008 until they are paid. 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. Yet it was reversed again by CA. Corporate officers are given such character either by the Corporation Code or by the corporation's by-laws. Technically the computation of his separation pay would end on the day he was dismissed on August 20. The Court denied the first with finality in its resolution of September 22. as amended by Section 34 of Republic Act 6715 instructs: Art. leaving room for increase up to the date the decision in the case becomes final? Ruling: Article 279 of the Labor Code. On the other hand. to work in the Philippines for private respondent WPP Marketing Communications. Webster and Lansang contend that Galera is a corporate officer. Belen should be entitled to backwages from August 20. 46. an American citizen who was recruited from the US by private respondent John Steedman. The 12% interest is proper because the Court treats monetary claims in labor cases the equivalent of a forbearance of credit. 2008. Marquez Does the amount that the Labor Arbiter awarded petitioner Belen represent all that he will get when the decision in his case becomes final or does it represent only the amount that he was entitled to at the time the Labor Arbiter rendered his decision. any controversy regarding her dismissal is under the jurisdiction of the Regional Trial Court. on the other hand.In cases of regular employment. the law intends the award of backwages and similar benefits to accumulate past the date of the Labor Arbiter's decision until the dismissed employee is actually reinstated. a corporation based in Hong Kong. the second is the subject of the present case. filed her complaint before the Labor Arbiter. It matters not that the amounts of the claims were still in question on September 22. inclusive of allowances. here on September 22. A termination letter followed the next day. Consequently. 2008. 1994 when petitioner Belen began his service. Mark Webster (Webster) and Nominada Lansang (Lansang). the parties filed separate petitions before this Court. Galera. Chairman-WPP Worldwide and Chief Executive Officer of Mindshare. Here that would begin from January 31.R. GALERA alleged she was verbally notified by private STEEDMAN that her services had been terminated from private respondent WPP.R.LABOR RELATIONS Atty. 169207. 2010 Facts: Petitioner is Jocelyn Galera. the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. At the time of Galera's appointment.. filed by respondent Javellana. Steedman's letter to Galera reads: The operations are currently in a shamble. Another indicator that she was a regular employee and not a corporate officer is Section 14 of the contract. not Article 281 of the Labor Code (which prescribes a probationary period of six months) as the LA ruled. Marquez already had one Vice-President in the person of Webster and all five directorship positions provided in the by-laws are already occupied. I believe your priorities are mismanaged. Steedman. In addition. failed to substantiate the allegations in Steedman's letter.R. and (2) the subsequent notice which informs the employee of the employer's decision to dismiss him. those involved sort (sic) Minda's input. Failure to comply with the requirements taints the dismissal with illegality. The quality output is still not to an acceptable standard. WPP failed to prove any just or authorized cause for Galera's dismissal. Apart from Steedman's letter dated 15 December 2000 to Galera. which clearly states that she is a permanent employee — not a Vice-President or a member of the Board of Directors. Issue: Whether or not the dismissal is valid. including one from Steedman. then they cannot acquire permanent status. Another convincing indication that she was only a regular employee and not a corporate officer is the disciplinary procedure. April 13. six regular semesters or nine consecutive trimesters of satisfactory service) and were still within their probationary period. and (3) such service must be satisfactory before he or she can acquire permanent status. presented documentary evidence 22 in the form of congratulatory letters. that is just not acceptable. my directive was for you to lead and review all business pitches. Ruling: AMACC failed to prove by substantial evidence that there was just cause for the non-renewal of the petitioners‘ contracts. Thus. however. Consequently. WPP's dismissal of Galera lacked both substantive and procedural due process. a teaching personnel in a private educational institution (1) must be a full time teacher. AMA Computer College. Most of the staff I spoke with felt they got more guidance and direction from Minda than yourself. G. which states that her right of redress is through Mindshare's Chief Executive Officer for the Asia-Pacific. 183572. This implies that she was not under the disciplinary control of private respondent WPP's Board of Directors (BOD). Jefferson M. WPP. Since they had not completed three (3) consecutive years of service (i. when AMACC implemented new faculty screening guidelines. it observed that the applicable law is Section 92 of the Manual of Regulations for Private Schools (which mandates a probationary period of nine consecutive trimesters of satisfactory service for academic personnel in the tertiary level where collegiate courses are offered on a trimester basis).LABOR RELATIONS Atty. they were dismissed as their contracts have expired & were not renewed. In both cases. The recent situation where you felt an internal strategy meeting was more important than a new business pitch is a good example. The law further requires that the employer must furnish the worker sought to be dismissed with two written notices before termination of employment can be legally effected: (1) notice which apprises the employee of the particular acts or omissions for which his dismissal is sought. and Lansang. AMACC did not give them any salary increase. The NLRC affirmed the LA‘s decision. You failed to lead and advise on the two new business pitches. Page 144 . Despite this. There is lack of leadership and confidence in your abilities from within. however. The non-renewal of contract is a valid management prerogative. Due to this. As I discussed with you back in July. The CA dismissed the action for illegal dismissal ruling that under the Manual for Regulations for Private Schools. which should have been the case if in fact she was a corporate officer because only the Board of Directors could appoint and terminate such a corporate officer. For the school year 2000-2001. 2010 Facts: Five former faculty members of AMA Computer College in Parañaque City executed individual Teacher‘s Contracts for each of the trimesters they were engaged to teach. on the other hand. 47. Galera. they filed a complaint for underpayment of wages. the NLRC still affirmed the LA‘s finding of illegal dismissal on the basis of standards that were only introduced near the end of their probationary period and not at the time of engagement. the petitioners failed to obtain a passing rating based on the performance standards. The Labor Arbiter ruled that they had been illegally dismissed. (2) must have rendered three consecutive years of service. which contents are diametrically opposed to the 15 December 2000 letter. Mercado v. Webster. which was also part of my directive that you needed to focus on back in July. 23 WPP's acts clearly show that Galera's dismissal did not comply with the two-notice rule. I do not believe you understand the basic skills and industry knowledge required to run a media special operation. It is obvious [that] confusion existed internally right up until the day of the pitch.e. In your role as Managing Director. our agency partners and some clients. No. primarily on the basis of the employee having met the reasonable standards of competence and efficiency set by the employer. presenting in evidence Paper Mill Personnel Schedule for Mill No.4 due to financial difficulties brought about by the low volume of sales and orders for industrial paper products. Issue: Page 145 . Marquez The Labor Code is supplemented with respect to the period of probation by special rules found in the Manual of Regulations for Private Schools. however. 2010 Facts: SCA Hygiene Products Corp. But Pantoja (and some others offered with transfers ) refused to be transferred of which his services were terminated by reason of redundancy of position. the probationary employment continues. NLRC remain unpersuaded.4). 5 under the same terms and conditions of employment for an anticipated shutdown of Paper Mill No. While we can grant that the standards were duly communicated to the petitioners and could be applied beginning the 1st trimester of the school year 2000-2001. the employer may now decide whether to extend a permanent appointment to the employee.LABOR RELATIONS Atty. Upon the expiration of his contract of employment. 48. he cannot automatically claim security of tenure and compel the employer to renew his employment contract. Hence. was in bad faith trying to circumvent his tenurial security when no substantial reason exist. Probationary Period. being simply on probation. Pantoja interposed that no permanent shutdown of Paper Mill No. this second renewal of the contract for another school year would then be the last year – since it would be the third school year – of probationary employment. and nine (9) consecutive trimesters of satisfactory service for those in the tertiary level where collegiate courses are offered on a trimester basis. However. effective for one school year. CA reinstated Labor Arbiter‘s decision. neither does the evidence show how these standards were applied to the petitioners. 163554. Pantoja received a Notice of Transfer offering him a position at Paper Mill No. a corporation engaged in sale.On March 1999. the following quoted portion of Article 281 of the Labor Code still fully applies: The services of an employee who has been engaged on a probationary basis may be terminated for a just cause when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. G. Section 92 of these regulations provides: Section 92. the dismissal was illegal. there was a necessity to occasionally run from time to time the machines only for the purpose of maintaining and preserving the same and does not mean that Paper Mill No. the employment relationship terminates. 4 continued to be operational. Jefferson M. At the end of the school year. at the end of that period. An employee who is allowed to work after a probationary period shall be considered a regular employee. Pantoja then received separation pay (which was handsomely over and above what was provided by law) and executed a release and quitclaim in the corp‘s favor. ( SCA Hygiene for short). usually for another school year. Again. The school. Labor Arbiter dismissed Pantoja‘s complaint stating his rejection of transfer and receipt of the separation pay belie Pantoja‘s illegal dismissal. If renewed. For the entire duration of this three-year period. Pantoja vs. the teacher remains under probation.R. particularly considering the teacher‘s performance. hired Pantoja on March 1987 as back tender taking charge of operations in one of SCA Hygiene‘s mill ( Paper Mill No. thus. If the contract is not renewed. On reconsideration by SCA Hygiene asseverating that on 1999 when Mill No. the parties may opt to renew or not to renew the contract. At the end of this third year. making and distribution of tissue products and industrial paper. The common practice is for the employer and the teacher to enter into a contract. Article 281 should assume primacy and the fixed-period character of the contract must give way.4 was shut down due to low production output. Yet.4 to streamline and phase out the company‘s industrial paper manufacturing operations in Paper Mill No. 4 due to its continuous operation since his termination. Other than on the period. cannot forget that its system of fixed-term contract is a system that operates during the probationary period and for this reason is subject to the terms of Article 281 of the Labor Code. On the matter of probationary period. SCA Hygiene Products Corp. glaring and very basic gaps in the school‘s evidence still exist. – Subject in all instances to compliance with the Department and school requirements. On appeal by SCA Hygiene. On appeal by Pantoja. we cannot but conclude that in a situation where the probationary status overlaps with a fixed-term contract not specifically used for the fixed term it offers. The exact terms of the standards were never introduced as evidence. corp. No. the employer has the option not to renew the contract. the probationary period for academic personnel shall not be more than three (3) consecutive years of satisfactory service for those in the elementary and secondary levels. Pantoja filed a complaint for illegal dismissal against SCA Hygiene for lack of valid cause.. six (6) consecutive regular semesters of satisfactory service for those in the tertiary level.4 for June. Given the clear constitutional and statutory intents. NLRC reversed the Arbiter‘s decision stating the redundancy program is legally infirm on feigned shutdown of operations. If the contract is renewed. July and August 2000. April 23. on June 2000. 000. 4 was a business judgment arrived at due to low demand for the production of industrial paper at the time.R. Laguna Branch in 1996. v. did not outrightly dismiss the workers affected by the closure of Paper Mill No. She argued that the posting is done by the teller and only amounts over P150. June 18. Giving the workers an option to be transferred without any diminution in rank and pay specifically belie petitioner‘s allegation that the alleged streamlining scheme was implemented as a ploy to ease out employees.the abolishment of Paper Mill No. She denied any knowledge with regard to the unfunded checks of Mr. is an indication of good faith on respondent‘s part as it exhausted other possible measures other than retrenchment. Vicente Amante (Mr. thus. the determination of the need to phase out a particular department and consequent reduction of personnel and reorganization as a labor and cost saving device is a recognized management prerogative which the courts will not generally interfere with. SCA Hygiene did not proceed directly to retrench. after less drastic means have been tried and found wanting. 4 resumed its operation in 2000 due to a more favorable business climate. Marquez Whether or not Pantoja was illegally dismissed Ruling: Pantoja is not illegally dismissed.000. the abolishment of Paper Mill No. She later became Lead Teller. Amante) totalingP700. Arambulo. 2003. the wisdom of a business judgment to implement a cost saving device is beyond this court‘s determination. still Pantoja refused the transfer and instead. The assistant branch manager of the said branch also imputed fault to Arambulo. She was transferred to BPI Family Bank in Los Baños. In her written response. Jefferson M.00 pass through her. Hence. Her balance reflected an amount less than the actual amount deposited. in that the latter. Intermediate Appellate Court.LABOR RELATIONS Atty. even gave Pantoja a separation pay more than what the law requires from respondent. Azucena implicated respondent. No evidence. Laguna Branch requested for a certification of her savings account. NLRC. Amante that were supposedly deposited to other depositor‘s account. 4 but gave them an option to be transferred to posts of equal rank and pay. BPI conducted an investigation and discovered that its bank teller. Arambulo was served with notice of termination on the ground of LOSS OF TRUST AND Page 146 . On 26 April 2002. No. again. a client of BPI-San Pablo. This. Circumstances pointing good faith on SCA Hygiene‘s part . accepted the separation pay voluntarily. the employer‘s prerogative to bring down labor costs by retrenching must be exercised essentially as a measure of last resort. Laguna on 21 November 2001. As can be seen. On 4 October 2001. the absence of bad faith. Even though the transfer would not involve any diminution of rank and pay. Arambulo admitted that she prepared the unsigned withdrawal slips on the account of Mr. was presented to prove that there was continuous operation after the shutdown in the year 1999. which eventually merged with the Bank of Philippine Islands (BPI). 49. SCA Hygiene. Despite an apparent reason to implement a retrenchment program as a cost-cutting measure. with the latter signing later on. on many occasions. No force and duress attended in its execution. On record. Laguna. to expedite his transaction with the bank. Azucena added that the same practice was continued by her son. 179801. would make temporary cash borrowings and would return the money at the end of the day through withdrawals from her own or other clients‘ accounts. Emeterio Dikitan. the waiver represents a valid and binding undertaking. There were times when respondent would fail to return the money withdrawn resulting in shortages on the part of Azucena. was initially employed as Clerk in 1972 at Citytrust Banking Corporation. Work reassignment of an employee as a genuine business necessity is a valid management prerogative. Inc. to our mind. A show cause memorandum was served to Azucena asking her to explain the unauthorized withdrawals. and subsequently. Teotima Helen Azucena (Azucena) was making unauthorized withdrawals. retrenchment was utilized by respondent only as an available option in case the affected employee would not want to be transferred. When respondent was transferred to Los Baños. In International Harvester Macleod. then as Sales Manager. Artie Arambulo. BPI v. The corp. BPI conducted a thorough investigation and discovered that respondent had approved several withdrawals from various accounts of clients whose signatures were forged. The resumption of its industrial paper manufacturing operations does not. 2010 Facts: Records show that respondent. as Bank Manager in BPI-San Pablo. SCA Hygiene‘s right of management prerogative was exercised in good faith. however. As long as no arbitrary or malicious action on the part of an employer is shown. however. G. make respondent‘s streamlining/reorganization plan illegal because. 4 in 1999 was a business judgment arrived at to prevent a possible financial drain at that time. Besides. she was reprimanded for the improper handling and retention of a client‘s account. The consideration for the quitclaim is credible and reasonable. Paper Mill No.00 upon request of the latter. She also explained that she processed the withdrawal slips of Mr. BPI conducted a hearing and on January 13. Pulgar. It was established that respondent had approved withdrawals which were later proven to be forged but ordered the payment of separation pay. Ruling: NO. In the instant case. 2010 Facts: Pulgar was the manager of PRRM's branch office — the Tayabas Bay Field Office (TBFO) — in Quezon Province. Invoking the pronouncement in Toyota. together with a memorandum.R. Phil. PRRM. Verily. In said case. Issue: WON ARAMBULO IS ENTITLED TO SEPARATION PAY. Rural Reconstruction Movement vs. it may not be amiss to emphasize that if an employee has been dismissed for a just cause under Article 282 of the Labor Code. In granting separation pay to respondent. Page 147 . through Goyena Solis (Solis). It is significant to stress that for there to be a valid dismissal based on loss of trust and confidence: the breach of trust must be willful. without justifiable excuse. respondent was dismissed on the ground of loss of trust and confidence. These five grounds are just causes for dismissal as provided in Article 282 of the Labor Code. Corp. v. willful disobedience. Arambulo filed a complaint for illegal dismissal. Jefferson M. NLRC is in all fours. the NLRC and Court of Appeals both adhered to this jurisprudential precept and cleared respondent of bad faith. he is not entitled to separation pay. July 5. The PRRM management sent Pulgar a copy of the report. Solis stated that part of the funds allotted to the TBFO was missing or not properly accounted for. an employee who has been dismissed for any of the just causes enumerated under Article 282 of the Labor Code is not entitled to separation pay. asking him to explain these findings. When Pulgar was reassigned to PRRM's central office. However. knowingly. the succeeding case of Toyota Motor Phils. commission of a crime against the employer or his family. No. In the leading case of Philippine Long Distance Telephone Co. NLRC. Marquez CONFIDENCE for gross violation of policies and procedures. NLRC reaffirmed the general rule that 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. and purposely. The case of Aromin v. conducted an investigation into alleged financial anomalies committed at the TBFO. meaning it must be done intentionally. the Court stated that 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. fraud or willful breach of trust. Aromin was the assistant vice-president of BPI when he was validly dismissed for loss of trust and confidence. a serious offense akin to dishonesty. the Court disallowed the payment of separation pay on the ground that Aromin was found guilty of willful betrayal of trust.LABOR RELATIONS Atty. (Court applied its ruling in Toyota vs NLRC) While as a general rule. 50. In her investigation report. the Court has allowed in numerous cases the grant of separation pay or some other financial assistance to an employee dismissed for just causes on the basis of equity. The NLRC and CA ruled that respondent‘s dismissal for cause in accordance with the law. or those reflecting on his moral character. The basic premise for dismissal on the ground of loss of confidence is that the employees concerned hold a position of trust and confidence. The report also stated that some of the receipts that the TBFO submitted to liquidate the organization's financial transactions were fictitious and manufactured. gross and habitual neglect of duty. 169227. It is the breach of this trust that results in the employer‘s loss of confidence in the employee. G. Workers Association v. placed in boxes and put in storage. there is nothing in the photographs that proves that the boxes in the storage room even contain Pulgar's personal things. Thus. According to him. opened a separate bank account at the Capitol Bank 6 for TBFO's savings. Marquez In a letter dated February 24. otherwise the release of TBFO's subsequent funds would be delayed. 1997.50. Lastly. Primarily. while not indicative of Pulgar's intention to sever his employment. 1997. imply Pulgar's active efforts to evade the organization's ongoing investigation. placed them in boxes and kept them in storage. the account had a remaining balance of P206. the CA relied on two main factors: (a) Pulgar's claim that he was barred from entering the premises on March 31. In concluding that Pulgar was constructively dismissed from employment. then on March 20-25. the CA's decision appears correct. 1997. The timing and frequency of these leaves. 1997. But the only thing seen in these photographs is a storage room with sealed boxes on the floor.958. March 20-25. at the very least. he attached three photographs. he was not allowed to enter the premises of the organization. Pulgar claims that he was forced to file an illegal dismissal complaint against PRRM while he was on leave because he was not allowed to enter the office premises on March 31. but his letter went unanswered. while Pulgar claims he was constructively dismissed when he was barred from the premises on March 31. and (b) the fact that Pulgar immediately filed a complaint for illegal dismissal against PRRM. 1997 for illegal dismissal. Significantly. But aside from making this allegation. specifically on March 3-10. he still filed his Page 148 . Pulgar asserts that his personal things were taken from his office. PRRM was therefore surprised to learn that Pulgar had filed an illegal dismissal case on April 3. he submitted a letter to PRRM to complain that he was not given the right to confront and question Solis. scheduled on February 28. Pulgar was still its employee when he filed the illegal dismissal case against the organization. on March 31. He explained that as field manager. 1997. Was he physically prevented from entering the premises by a security guard? Did the senior officers of PRRM refuse to let him into the office when he reported to work? We are left to guess the particulars of how PRRM prevented Pulgar from entering the premises. In other words. Pulgar went on a number of leaves. and finally on April 1-15. and April 1-15. illegal suspension. there were instances when he used the funds intended for one project to sustain the activities of other projects. he claimed that he had to produce fake receipts to comply with the central office's requirements and deadlines. At first glance. moral damages.LABOR RELATIONS Atty. Pulgar no longer reported to work. Pulgar also alleges that PRRM's representatives removed his personal properties and records from his office. 1997. Thereafter. After the lapse of his last leave on April 15. But the facts are not as simple as they appear to be. Issue: Whether or not Pulgar was illegally dismissed from employment. 1997. Pulgar admitted that TBFO's reported expenses did not reflect its actual expenses. Pulgar manifested his willingness to attend a meeting with the senior officers. To support this allegation. Pulgar also asked for actual damages. and attorney's fees. 1997. 1997. we cannot use these pictures to prove that Pulgar was constructively dismissed from employment. The CA observed that PRRM presented no evidence to prove that Pulgar abandoned his job. he was still on leave from the organization. on March 17. he presumed he had the discretion to determine when and how the funds would be used. on his own initiative. and nonpayment of service incentive leave pay and 13th month pay. we underscore the fact that when Pulgar filed an illegal dismissal complaint on April 3. Pulgar tells another tale. leaving us to doubt the veracity of this allegation. 1997. Jefferson M. Pulgar filed a complaint against PRRM on April 3. Pulgar went on leave on March 3-10. Pulgar failed to provide any other details on how he was prevented from entering the premises. Pulgar also disclosed that he had. Absent such proof. Pulgar further admitted that some of the receipts he submitted to liquidate TBFO's expenses were not genuine. To bolster his contention that he was constructively dismissed. leading PRRM to believe that Pulgar had abandoned his work to evade any liability arising from the investigation. Reasoning that filing an illegal dismissal complaint is inconsistent with the charge of abandonment. 1997. Believing he was constructively dismissed by PRRM's actions. 1997. Taken at face value. as long as the use was devoted to the implementation of TBFO projects. to further explain his side. 1997. PRRM maintains that while the investigation was ongoing. 1997. Ruling: No. from PRRM's standpoint. the appellate court concluded that Pulgar had been illegally dismissed. We further note that at the time PRRM was conducting an investigation into the alleged anomalies committed in the liquidation and use of PRRM funds at the TBFO during Pulgar's management. 51. The receipt printed at 10:40 p. In view of the discrepancy between the order slip and the receipt issued. the employee must first establish by substantial evidence the fact of his dismissal from service. July 20. Logically. then there can be no question as to its legality or illegality. taken together. in the present case. we simply cannot use that one act to conclude that Pulgar did not terminate his employment with PRRM. he admitted that he altered the order slip by cancelling six (6) set dinners. cannot be given credence. 1997 raises doubt as to his purported ban from the premises. On the contrary. the facts and the evidence do not establish a prima facie case that the employee was dismissed from employment. he gave a signal to Mission to give the bill. These circumstances. During the clarificatory hearing. He was terminated per memorandum dated 22 January 2005. He claims that .00 was remitted by cashier Dual corresponding to six (6) sets of dinner. an employee's act of filing an illegal dismissal complaint against his employer is inconsistent with abandonment. Before the employer must bear the burden of proving that the dismissal was legal. a group of Japanese guests and their companions dined at Allegro. kahibaw na" (yes. in the present case. While the Constitution is committed to the policy of social justice and the protection of the working class. Dual. requiring respondent Dual. 1997.036. what appears from the evidence is that it was Pulgar himself who terminated his employment with PRRM when he filed an illegal dismissal complaint against the organization while he was on leave.he saw the cancelled food orders at the waiter's station but insists that . Alcoseba was also terminated for dishonesty based on his admission that he altered the order slip..he did not have any part in the alteration of the order slip. substantial evidence presented by PRRM that proves otherwise. lead us to conclude that PRRM did not terminate Pulgar's employment. arising out of the employer-employee relationship.1 (dishonesty in any nature). 113. however. At around 9:45 p. or the date of his alleged constructive dismissal. Alvin Hiyas. and in the process ignore the clear. when uncorroborated by the evidence on record. the guests asked for their bill.m. petitioner Maribago. Since Hiyas was attending to other guests. Jr. and another two (2) sets to their guides free of charge (total of 14 sets of dinner). the employer bears the burden of proving that the termination was for a valid or authorized cause. Page 149 . Although under normal circumstances. Hiyas forwarded one copy of the order slip to the kitchen and another copy to respondent. Management also has its rights which are entitled to respect and enforcement in the interest of simple fair play. Captain waiter Hiyas took their dinner orders comprising of six (6) sets of lamb and six (6) sets of fish. The guests paid the amount indicated on the receipt and thereafter left in a hurry. if there is no dismissal. Pursuant to the order slip. In fact. Mission asked respondent Dual for the sales transaction receipt and presented this to the guests. butcher Alegrado testified that – waiter Alcoseba went to the butchery looking for the order slip for table no. Hiyas and waiter Genaro Mission. fourteen (14) sets of dinner were prepared by the chef. After dinner. While we recognize the rule that in illegal dismissal cases. respondent Dual was found guilty of dishonesty for his fabricated statements and for asking one of the waiters (Mission) to corroborate his allegations. shows that – only P3. Pulgar received his salary up until April 15. to which the latter answered "oo. Bare allegations of constructive dismissal. through its Human Resource Development (HRD) manager. 180660. Also worth mentioning is the fact that Pulgar continued to receive his salary from PRRM even after March 31.m.R. Lapu-Lapu City. The fact alone that Pulgar was able to return to the office to file his application for leave for April 1-15. when his vacation and sick leaves had been consumed. Ernesto Avenido and Basilio Alcoseba to explain why they should not be penalized for violating House Rule 4. 2010 Facts: Petitioner Maribago is a corporation operating a resort hotel and restaurant in Barangay Maribago. Alcoseba stated that – he was not privy to the cancellation of orders since he was busy attending to his room service duty. 1997. Marquez application for leave for April 1-15. As per company procedure. Jefferson M. After the investigation. In 19953. Alegrado allegedly asked Alcoseba if the cook was already aware of the cancellation. waiter Alcoseba caused the alteration of the order slip to reflect that six (6) orders were cancelled. he is already aware). however. No. including those of the employer. served twelve (12) set dinners to the guests. During the clarificatory hearing. it should not be supposed that every labor dispute will be automatically decided in favor of labor. We have previously ruled on the Labor Arbiter's jurisdiction to rule on all money claims. 1997. Sometime in 2005. G. it hired respondent Dual as waiter and promoted him later as outlet cashier of its Poolbar/Allegro Restaurant.LABOR RELATIONS Atty. issued memoranda. Maribago Bluewater Beach Resort v. Falsification of commercial documents as a means to malverse company funds constitutes fraud against the company. illegal dismissal. Page 150 .six (6) dinner sets were indeed cancelled as evidenced by the dishes he allegedly saw in the utensil station is negated by the testimonies of the kitchen staff (Chef Armand Galica. Otherwise. In essence. Butcher Alegrado and Dessert-in-charge John Marollano) that twelve (12) set meals were served and consumed.violation of the employee's statutory right to due process makes the employer liable to pay indemnity in the form of nominal damages. Marquez Dual filed a complaint for unfair labor practice. Ruling: The law requires that – an employer shall not terminate the services of an employee except for a just or authorized cause. the amount indicated in the receipt does not coincide with Dual's contention that only four (4) dishes were cancelled and two (2) dishes were given free of charge.to observe due process in termination cases. Respondent. It is clearly indicated in the altered order slip that six (6) out of the twelve (12) sets of dinner were cancelled. on the other hand. The serving of food eliminates the argument of cancellation.) or 1 hour and 40 minutes after the guests had left at 9:00 p. non-payment of 13th month and separation pay. If such were the case. Two other receipts were issued for the same amount at "22:39:55" and "22:40:01".00 as payment and he returned P64. respondent cashier only reported P3. then the amount charged to the guests should have been for eight (8) sets of dinner and not six (6) sets. an employee unjustly dismissed from work is entitled to reinstatement and full backwages. The allegation of Dual that .he received P3.100.036. and damages. Instead of reporting P10. twelve (12) sets of dinner were served to guests and two (2) dinner sets were given to the tour guides free of charge. Moreover. saying that complainant's act of depriving respondent of its lawful revenue is tantamount to fraud against the company which warrants dismissal from the service. up to the finality of [its] decision and separation pay of one month salary for every year of service. The NLRC set aside the Labor Arbiter's decision and dismissed the complaint for lack of merit. Petitioner places . Jefferson M. that Mission gave him P3. Finding no sufficient valid cause to justify respondent's dismissal.cra35 In this case.34cralaw we ruled that. The Labor Arbiter found that respondent's termination was without valid cause and ruled that respondent is entitled to separation pay.m. w In Agabon v.100. reiterates his story that – the order slip was already altered when Mission gave it to him. In addition.m. As established during the clarificatory hearing. These testimonies coincide with the claim of waiters Hiyas and Mission that fourteen (14) sets of dinner were served. the issue is – whether the Court of Appeals erred in ruling that respondent was illegally dismissed. The issued receipt does not show that – change was given. that the receipt he printed was based on the order slip for six (6) sets of dinner.the crux of the controversy .on the proven tampering of the transaction receipt which happened in respondent's workstation. The receipt which bears his name "NITO" was printed at "22:40" (10:40 p.00 as payment by the guests for their dinner. we are in agreement that petitioner's evidence proved that respondent is guilty of DISHONESTY and of stealing money entrusted to him as cashier. that he was able to confirm the cancellation of some orders from Alcoseba and Hiyas. National Labor Relations Commission. The Court of Appeals reversed the decision and resolution of the NLRC.100.00 only and gave Mission P64.00 as shown by the receipt which he admitted to have issued.00 as change is not shown by the receipt that he issued.00 as change. respondent's claim that . the Court of Appeals ordered petitioner to pay respondent full backwages and separation pay. The law also requires – the employer . The law further requires that – the burden of proving the cause for termination rests with the employer.LABOR RELATIONS Atty. Issue: Whether or not the court of appeals committed a grave and reversible error in reversing the national labor relations commission and directing petitioner to pay respondent full backwages from the time he was illegally dismissed. and (2) their absence without leave for more than a month. The NLRC affirmed the ruling of the Labor Arbiter.m. Lopez. petitioner New Puerto Commercial hired respondents Felix Gavan and Rodel Lopez as a delivery panel driver and as a roving salesman. On November 20. are entitled to respect and enforcement in the interest of simple fair play. the Supreme Court has inclined more often than not . the order slip . They even asked Mission to take the fall by asking him to admit that he altered the order slip from twelve (12) sets of dinner to six (6) sets.in the handling of company property. Marquez The alibi of cancellation has no leg to stand on.) was done. 2000. the legality of the dismissal. Such fact led us to the conclusion that . In 2000. petitioners assigned respondents to sell goods stocked in a van on cash or credit to the sari-sari stores of far-flung barangays and municipalities outside Puerto Princesa City. On December 18. a conciliation conference was held but the parties failed to reach an amicable settlement. has not blinded the Court to the rule that – justice is in every case for the deserving. 2000 to give their side with regard to the foregoing charges. The Labor Arbiter dismissed the complaint for illegal dismissal. 2000. Procedural due process requires that the employee be given a notice of the charge against him.has to be countersigned by the attending waiter (which in this case should have been Chief Waiter Hiyas) but such was not so in this case. The standard operating procedure of Maribago dictates that in cases of cancellation. The receipt was issued long after the guests had left (9:00 p. are a different matter.) and after the alteration of the order slip (9:45 p.R.toward the worker and upheld his cause . Withal. 169999. the complaint was endorsed for compulsory arbitration at the RAB of the NLRC. will be upheld provided that the employer is able to show that compliance with these requirements was not a mere afterthought. petitioners sent respondents notices to explain why they should not be dismissed for gross misconduct based on (1) the alleged misappropriation of their sales collections. an ample opportunity to be heard. 2000. Such favoritism.is the receipt which he admittedly issued. It ruled that damages cannot Page 151 . as to its procedural aspect. Palawan. The foregoing facts . Jefferson M. G. ACTS OF DISHONESTY . petitioners served notices of termination on respondents on the grounds of gross misconduct and absence without leave for more than one month. respondents filed a Complaint for illegal dismissal and non-payment of monetary benefits against petitioners with the Regional Office of the DOLE in Puerto Princesa City.LABOR RELATIONS Atty. No. it should not be supposed that every labor dispute will be automatically decided in favor of labor. July 26. Respondent's acts constitute SERIOUS MISCONDUCT – which is a just cause for termination under the law. Out of its concern for those with less privileges in life.he consented to and participated in the anomaly. THEFT committed by an employee is a valid reason for his dismissal by the employer. 52. In fine. New Puerto Commercial vs. in protecting the rights of the laborers. Although as a rule this Court leans over backwards to help workers and employees continue with their employment or to mitigate the penalties imposed on them. As a result. however. he must be accorded both substantive and procedural due process by the employer. The notice also required respondents to appear before petitioners' lawyer on December 2.m. and a notice of termination.‖ Facts: In 1999. While the Constitution is committed to the policy of social justice and the protection of the working class. Under a rolling store scheme. respectively. Respondents were duty-bound to collect the accounts receivables and remit the same upon their return to petitioners' store on a weekly basis. petitioner's income in this case. to be dispensed in the light of the established facts and applicable law and doctrine. as such. Even if the aforesaid procedure is conducted after the filing of the illegal dismissal case. authorizes neither oppression nor self-destruction of the employer. Respondents refused to attend said hearing.in his conflicts with the employer. what is damning to the cause of Dual . the law.explain why Dual and Alcoseba tried twice to convince Mission to cover up their crime. Previously or on November 28. The management also has its own rights. 2010 ―In order to validly dismiss an employee. 2000 but respondents again refused to attend. respondents failed to give their side despite receipt of said notices. When the requirements of procedural due process are satisfied. As can be seen. in the route being serviced by respondents. 2000 to attend a hearing on December 15. submissions or pleadings. July 26. starting from October 22.03 in sales collections. NLRC.000. and (2) the second informs the employee of the employer's decision to dismiss him. To prevent a possible cover up. Marquez be awarded in favor of respondents because their dismissal was for just causes. termination proceedings were commenced against respondents by sending notices to explain with a notice of hearing scheduled on December 2. It was duly established. Rule I of the Implementing Rules of Book VI of the Labor Code should be interpreted in broad strokes. the award of nominal damages by the appellate court is improper. and not necessarily that an actual hearing was conducted. respondents filed the subject illegal dismissal case to pre-empt the outcome of the ongoing investigation. On November 18. while the phrase "ample opportunity to be heard" [in Article 277 of the Labor Code] may in fact include an actual hearing. respondents were temporarily reassigned to a new route to service.R. 2000. The mere fact that the notices were sent to respondents after the filing of the labor complaint does not. on November 28. Issue: Whether the respondents were denied procedural due process justifying the award of nominal damages in accordance with the ruling in Agabon v. 2000 for respondent Lopez and October 28. it awarded nominal damages of P30. As narrated earlier. respondents stopped reporting for work (i. is not absolutely necessary to satisfy the employee's right to be heard. formal "trial-type" hearing. 2010 Page 152 . thus. Bagasala returned from his month-long investigation in the far-flung areas previously serviced by respondents and reported that respondents indeed failed to remit P2. 2000.257. It is satisfied not only by a formal face to face confrontation but by any meaningful opportunity to controvert the charges against him and to submit evidence in support thereof. 2000. The surrounding circumstances of this case adequately explain why the requirements of procedural due process were satisfied only after the filing of the labor complaint. In other words.LABOR RELATIONS Atty. 2000. No. no necessity to comply with the twin requirements of notice and hearing. Therefore. National Labor Relations Commission Ruling: The petition is meritorious.. petitioners initiated an investigation by sending one of their trusted salesmen. then at the time of the filing of the complaint with the labor office on November 3. Philippine Telegraph and Telephone Company: An employee's right to be heard in termination cases under Article 277 (b) as implemented by Section 2 (d). on December 18. Artificio vs. G. "To be heard" does not mean verbal argumentation alone inasmuch as one may be heard just as effectively through written explanations. The employer must furnish the employee with two written notices before the termination of employment can be effected: (1) the first apprises the employee of the particular acts or omissions for which his dismissal is sought. the existence of an actual. Thus. Subsequently. Sometime in the third week of October 2000. For this reason. there was. that respondents failed to report for work starting from October 22. respondents were not yet dismissed from employment. A hearing means that a party should be given a chance to adduce his evidence to support his side of the case and that the evidence should be taken into account in the adjudication of the controversy. it cannot be concluded that the sending of the notices and setting of hearings were a mere afterthought because petitioners were still awaiting the report from Bagasala when respondents pre-empted the results of the ongoing investigation by filing the subject labor complaint. 2000. the award of nominal damages is improper. it is not limited to a formal hearing only. 2000 for respondent Gavan) after they got wind of the fact that they were being investigated for misappropriation of their sales collection. there was sufficient compliance with the twin requirements of notice and hearing even if the notices were sent and the hearing conducted after the filing of the labor complaint. petitioners received information that respondents were not remitting their sales collections to the company. on November 3.e. Thereafter. 53. by itself. In termination proceedings of employees. 2000 for respondent Lopez and October 28. Thus. Petitioners sent another set of notices to respondents on December 7. Jefferson M. The CA affirmed with modification the ruling of the NLRC. Bagasala. 2000. under the peculiar circumstances of this case. 2000 for respondent Gavan. Prior to this point in time. although preferred. to wit. and. as affirmed by the appellate court itself. The requirement of a hearing is complied with as long as there was an opportunity to be heard. 172988. As we explained in Perez v.00 each to petitioners because they were denied due process. petitioners served notices of termination on respondents for gross misconduct in misappropriating their sales collections and absence without leave for more than a month. establish that the same was a mere afterthought. procedural due process consists of the twin requirements of notice and hearing. As a result. light threats and irregularities in the observance of proper relieving time. In fact. non-payment of overtime pay. Artificio preempted the investigation that could have afforded him the due process of which he would then say he was denied. Sections 8 and 9 of Rule XXIII. set aside the decision of the Labor Arbiter ruling that the Labor Arbiter erred in considering preventive suspension as a penalty. Marquez Facts: Petitioner Jose P. Artificio regrettably chose not to present his side at the administrative hearing scheduled to look into the factual issues that accompanied the accusation against him. holiday pay. He. Administration & Operations Manager. and submit his written answer immediately upon receipt of the memorandum. Inc. 20 Significantly. Jefferson M. On even date. on 25 June 2002. On 25 July 2002. such as. Artificio filed a motion for reconsideration which the Court of Appeals again denied. Merlino B. In this case. requesting that Artificio be investigated for maliciously machinating Edu's hasty relief from his post and for leaving his post during night shift duty to see his girlfriend at a nearby beerhouse. another security guard. He also prayed for payment of separation pay in lieu of reinstatement. The motion for reconsideration filed by Artificio was denied for lack of merit Artificio next filed a petition for certiorari before the Court of Appeals which rendered a decision affirming the NLRC decision. Gutierrez Err (Err). light threats and irregularities in the observance of proper relieving time. On appeal. Andres issued a Memorandum temporarily relieving Artificio from his post and placing him under preventive suspension pending investigation for conduct unbecoming a security guard. 2. Artificio had a heated argument with a fellow security guard. a corporation duly organized and existing under Philippine Laws and likewise duly licensed to engage in the security agency business. Page 153 . 13th month pay. Without this kind of threat. Andres informed Artificio that a hearing will be held on 12 August 2002. It was also held that Artificio should have been allowed to confront Edu and Err before he was preventively suspended. Artificio would even reject reinstatement revealing his bent to have his own way through his own means. Management has the prerogative to discipline its employees and to impose appropriate penalties on erring workers pursuant to company rules and regulations. His continued presence in respondents' or its client's premises poses a serious threat to respondents. Implementing Book V of the Omnibus Rules Implementing the Labor Code provides that preventive suspension is justified where the employee's continued employment poses a serious and imminent threat to the life or property of the employer or of the employee's co-workers. Yes. Edu (Edu). 10 Labor Arbiter rendered a decision dated 6 October 2003. Without waiting for the hearing to be held. Artificio filed on 5 August 2002. premium pay for holiday and rest days. he badmouthed the employees of RP Guardians Security Agency. No for separation pay. On 29 July 2002. Since the complainant does not seek reinstatement. illegal suspension. When Artificio learned that no salaries would be given that day.LABOR RELATIONS Atty. Inc. Edu submitted a confidential report 5 to Antonio A. sent a report 6 to Andres stating that Artificio arrived at the office of RP Guardians Security Agency. Issues: 1. abandonment of post during night shift duty. Inc. and threatened to "arson" their office. on his own decided that his preventive suspension was in fact illegal dismissal and that he is entitled to backwages and separation pay. the NLRC.. he is entitled to backwages and separation pay Ruling: 1. He also directed Artificio to report to the office of RP Guardians Security Agency. Inc. In another memorandum. finding respondents guilty of illegal suspension and dismissal. Indeed. As aptly noted by the NLRC. Besides. Yes for Backwages. its employees and client in light of the serious allegation of conduct unbecoming a security guard such as abandonment of post during night shift duty. a complaint for illegal dismissal. he avoided the investigation into the charges by filing his illegal dismissal complaint ahead of the scheduled investigation. Whether or not. he is entitled to limited backwages and separation pay. Wether or not Petitioner Artificio's preventive suspension was justified 2. Sometime in June 2002. This Court has upheld a company's management prerogatives so long as they are exercised in good faith for the advancement of the employer's interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements. and damages. Artificio's preventive suspension was justified since he was employed as a security guard tasked precisely to safeguard respondents' client. preventive suspension is not proper. Andres (Andres). Artificio was employed as security guard by respondent RP Guardians Security Agency. under the influence of liquor. They simply insisted that they did not report for work. for work performed on Sundays.m. It was further alleged that in May 1998. 26 Calipay and the other complainants also failed to present evidence to prove their allegation that they were forced to sign blank forms of their DTRs and Salary Page 154 . On the other hand. and ending at 6:00 p. 1999. because they were already terminated. they were not given any duly accomplished payslips. instead. No. as held by the Labor Arbiter. Aggrieved. NLRC. As a consequence. Nonetheless. private respondents were able to present the DTRs and Salary Vouchers of Calipay and the other complainants showing that they indeed reported for work even after their alleged termination from employment. they were not given any specific work assignment. Appealed to CA which rendered its Decision dismissing the petition. However. Labor Arbiter handling the case rendered a Decision dismissing the Complaint for lack of merit./Jose Lee to reinstatement.m. given the attendant circumstances in this case. Calipay vs. this incident later led to their dismissal in the same month. Calipay and the other complainants moved for the reconsideration. but the CA denied Hence. together with Alfredo Mission and Ernesto Dimalanta against herein private respondents Triangle Ace Corporation (Triangle) and Jose Lee. Calipay and the other complainants alleged in their Position Paper that in the course of their employment. 54. Lee confronted Calipay and Mission regarding their alleged participation and assistance in Dimalanta's claim for disability benefits with the Social Security System. Calipay and the other complainants filed an appeal with the National Labor Relations Commission (NLRC) modifying the Labor Arbiter's decision and ordering respondents Triangle Ace Corporation Inc. overtime pay. August 3. they were forced to sign a blank form of their daily time records and salary vouchers. unfair labor practice. we next proceed to the benefits due Artificio. Artificio himself has never. premium pay for holiday. in receiving their wages. underpayment of wages and 13th month pay. at anytime after the notice of preventive suspension intended to remain in the employ of private respondents.00 even during holidays. private respondents filed a Motion for Reconsideration was Given due course and the decision of the Labor Arbiter was reinstated and affirmed. but the same was denied by the NLRC. G.R. a Complaint 3 for illegal dismissal. despite their denials. namely. non-payment of service incentive leave pay. the instant petition of Calipay raising the following issues: Issue: Whether or not there was abandonment of work a just ground for dismissal Held: Calipay and the other complainants failed to sufficiently refute these findings of the Labor Arbiter in their appeal filed with the NLRC. they were not paid any wage due to the policy of Lee that his workers must provide work without pay at least a day in the week under his so-called "bayanihan system". Lee scolded Calipay and Mission. Marquez That resolved. they performed various kinds of work imposed upon them by Lee. 2010 Facts: On July 16. they were paid a uniform daily wage in the amount of P140. in discharging their functions. Calipay filed a Motion for Reconsideration. with a break of one hour at 12:00 noon. that Artificio had been working with the company for a period of sixteen (16) years and without any previous derogatory record. they did not present any evidence to prove their allegation. for work rendered from Mondays to Saturdays beyond the normal eight (8) working hours in a day. beginning from 7:00 a. they were also required to report from Monday to Sunday. Having determined that the imposition on Artificio of preventive suspension was proper and that such suspension did not amount to illegal dismissal.LABOR RELATIONS Atty. night shift allowances and separation pay was filed by herein petitioner Elpidio Calipay. Jefferson M. 166411. we see no basis for the grant of backwages. the ends of social and compassionate justice would be served if Artificio be given some equitable relief in the form of separation pay. they were required by Lee to work for nine (9) hours a day. rest day. 22 Artificio is entitled to separation pay considering that while reinstatement is an option. Feeling aggrieved. Nacague filed a complaint for illegal suspension. On the basis of the foregoing. Ruling: Nacague maintains that the S. Private respondents' compliance with said requirements. including your explanation. They did not ask for reinstatement. Inc. 2010 Facts: On 15 June 1995. Lazo Medical Clinic (S. On the other hand. Sulpicio Lines. 27 In the present case. Sulpicio Lines subjected Nacague to a formal investigation. When the ship docked in the port of Manila on 18 February 2003. with a warning that their failure would be construed as abandonment of work. Sulpicio Lines sent a memorandum to Nacague terminating him from the service. However. only proves petitioner and the other complainants' abandonment of their work. Sulpicio Lines. March 7. 172589. 55. No. 2003. In fact. private respondents served on petitioner and the other complainants a notice of termination as required by law. petitioner filed his complaint more than one year after his alleged termination from employment. however. on 7 March 2003. Marquez Vouchers.M.M. Sulpicio Lines also argues that since Nacague knew that the residue of the drug would no longer be detectable in his body Page 155 . together with Nacague. there is no evidence to prove that petitioner and his former co-employees ever attempted to return to work after they were dismissed from employment. Nacague maintains that.R.M. Nacague went to Chong Hua Hospital in Cebu City to undergo a voluntary drug test. Nacague v. August 8. Jurisprudence has held time and again that abandonment is totally inconsistent with the immediate filing of a complaint for illegal dismissal. Moreover. 9165) and the Department of Labor and Employment Order No. they only asked for payment of separation pay and other monetary claims. Lazo Clinic) and were required to submit urine samples.LABOR RELATIONS Atty. They were taken to S. 53-03 (Department Order No. The memorandum reads: After a careful consideration of your case with the evidence available. Nacague adds that Republic Act No. LAIssue: WON the termination is valid. were subjected to a random drug test. Lazo Clinic did not ask Nacague if he was taking any medication that might alter the results of the drug test.M. Lazo Clinic is an authorized drug testing center.M. The result of the random drug test revealed that Nacague was positive for methamphetamine hydrochloride or shabu.M. No. petitioner and the other complainants' inconsistency in their stand is also shown by the fact that in the complaint form which they personally filled up and filed with the NLRC. a housekeeper on the ship. Chico. more so if the same is accompanied by a prayer for reinstatement. On 23 February 2003. Nacague argues that Sulpicio Lines failed to discharge its burden of proving that the termination of his employment was legal. the company is constrained to terminate your employment effective today. the Court arrives at the conclusion that the filing of the complaint for illegal dismissal appears only as a convenient afterthought on the part of petitioner and the other complainants after they were dismissed in accordance with law. Nacague denied using illegal drugs. On the other hand. Sulpicio Lines questions the belated attempt of Nacague to question the credibility of S. 53-03) require two drug tests — a screening test and a confirmatory test. Jefferson M. On 14 February 2003. On 15 February 2003. This is an indication that petitioner and the other complainants never had the intention or desire to return to their jobs. Lazo Clinic drug test was not credible because Sulpicio Lines failed to show that S. Lazo Clinic. taken together with the other circumstances above-discussed. Sulpicio Lines sent a notice of investigation to Nacague informing him of the charges against him for use of illegal drugs and threatening a co-employee. private respondents were able to present memoranda or show-cause letters served on petitioner and the other complainants at their last known address requiring them to explain their absence. management finds you culpable of grave misconduct and loss of trust and confidence. In view thereof.A. submitted a report regarding the drug paraphernalia found inside the Mopalla Suite Room and the threat on his life made by Nacague and Chief Mate Reynaldo Doroon after he found the drug paraphernalia. Nacague submitted this test result to Sulpicio Lines. G. (Sulpicio Lines) hired Nacague as ―hepe de viaje‖ or the representative of Sulpicio Lines on board its vessel M/V Princess of the World (the ship). some crew members of the ship. The drug test with Chong Hua Hospital yielded a negative result. Also. illegal dismissal and for reinstatement with backwages. It is only in their Position Paper later prepared by their counsel that they asked for reinstatement. On 20 February 2003. he was illegally dismissed based on an incomplete drug test. Ceasar T. 9165 (R. and with the positive drug test result. since only a screening test was conducted. Nacague also alleges that the urine samples were gathered carelessly without proper labels to identify their owners and that S. Sulpicio Lines failed to prove that S. for loss of trust and confidence.LABOR RELATIONS Atty. Sulpicio Lines failed to indubitably prove that Nacague was guilty of using illegal drugs amounting to serious misconduct and loss of trust and confidence. x x x (Emphasis supplied) Department Order No. • Drug testing shall consist of both the screening test and the confirmatory test.gov. Only drug testing centers accredited by the DOH shall be utilized. The DOH shall take steps in setting the price of the drug test with DOH accredited drug testing centers to further reduce the cost of such drug test. LA dismissed the complaint for lack of merit.dole. due to the urgency of purchasing badly needed equipment. the latter to be carried out should the screening test turn positive. 36. Century Canning Corp. Sulpicio Lines failed to clearly show that it had a valid and legal cause for terminating Nacague‘s employment. as in this case.M. as appearing in the form. No. respondent was asked to explain in writing the events surrounding the incident. ACcHIa Suspecting him to have committed forgery. Po. Sulpicio Lines insists that the most accurate drug test is the random drug test conducted by S. Nacague underwent another drug test with the Chong Hua Hospital. Respondent was. which was immediately transmitted to the Purchasing Department. Sulpicio Lines did not confirm the positive result of the screening test with a confirmatory test. vs. under Article 277(b) of the Labor Code. The drug testing shall employ. Consequently. Section 36 of R.gov. Paz processed the paper and found that some details in the CAPEX form were left blank. on May 20.oshc.ph). The following day. 56. an employer may terminate the services of an employee for just causes or for authorized causes. Thus. Lazo Clinic and that the test with Chong Hua Hospital was a ―planned‖ test. Jr. Respondent filed a case for illegal dismissal.M. G. he received a Notice of Termination from Armando C. two (2) testing methods. No. Moreover. however. did not have the complete details 3 and some required signatures. Also. 53-03 further provides: Drug Testing Program for Officers and Employees • Drug testing shall conform with the procedures as prescribed by the Department of Health (DOH) (www. with the form apparently signed by Po. The CAPEX form. Lazo Clinic is an accredited drug testing center. reinstatement is no longer feasible due to strained relations between Nacague and Sulpicio Lines and that Nacague should instead be granted separation pay. respondent transmitted it to Purchasing Officer Lorena Paz in Taguig Main Office. a written notice stating the causes for termination and must give the employee the opportunity to be heard and to defend himself. Secretary of Executive Vice-President Ricardo T. for the latter's signature. 1999. to constitute valid dismissal from employment. Section 36 also prescribes that drug testing shall consist of both the screening test and the confirmatory test. Authorized Drug Testing. suspended on April 21. respondent was ordered to make another CAPEX form. However.ph). Sulpicio Lines did not even deny Nacague‘s allegation that S. the request for the equipment was put on hold due to Po's forged signature.M.A. 9165 provides that drug tests shall be performed only by authorized drug testing centers. The employee concerned must be informed of the test results whether positive or negative. No. 9165 reads: SEC. He vehemently denied any participation in the alleged forgery. among others. NLRC reversed itself and rendered a new Decision upholding Page 156 . NLRC found in favor of respondent. and (2) the employee must be afforded an opportunity to be heard and to defend himself. Furthermore. Lazo Clinic was not accredited.doh. and endorsed it to Marivic Villanueva. (Emphasis supplied) The law is clear that drug tests shall be performed only by authorized drug testing centers. However. Authorized drug testing shall be done by any government forensic laboratories or by any of the drug testing laboratories accredited and monitored by the DOH to safeguard the quality of test results. Subsequently. Marquez after five days. Ramil. Under Article 279 of the Labor Code. Section 36 of R. the law considers the matter a case of illegal dismissal. Ronquillo. the employer must send the employee who is about to be terminated. A list of accredited centers may be accessed through the OSHC website (www.R. Jefferson M. thereafter. two requisites must concur: (1) the dismissal must be for a just or authorized cause. August 8. March 4.A. the screening test which will determine the positive result as well as the type of drug used and the confirmatory test which will confirm a positive screening test. 1999. only a screening test was conducted to determine if Nacague was guilty of using illegal drugs. She also doubted the genuineness of the signature of Po. Paz then transmitted the CAPEX form to Purchasing Manager Virgie Garcia and informed her of the questionable signature of Po. 1999. 2010 Facts: On March 3. 171630. When the alleged valid cause for the termination of employment is not clearly proven. respondent prepared a CAPEX form for external fax modems and terminal server. In this case. 1999. per order of Technical Operations Manager Jaime Garcia. However. accusations. In view of the foregoing. Petitioner never controverted these allegations in the proceedings before the NLRC and the CA despite its opportunity to do so. Loss of trust and confidence. such payment liberates the employee from what could be a highly oppressive work environment. 1999. but proof beyond reasonable doubt is not necessary. an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges. respondent had already been sanctioned for his prior infractions. in view of the strained relations between petitioner and respondent. and other benefits or their monetary equivalent. Unsubstantiated suspicions. as they cannot be raised for the first time at that late stage. Jefferson M. and separation pay in lieu of reinstatement Page 157 . otherwise. Respondent's illegal dismissal carries the legal consequences defined under Article 279 of the Labor Code. this does not mean that the said basis may be arbitrary and unfounded. respondent received the CAPEX form containing the signature of Po. that is. issues and arguments not brought to the attention of the lower court. administrative agency or quasi-judicial body need not be considered by a reviewing court. respondent is entitled to the payment of full backwages. To consider these offenses as justification for his dismissal would be penalizing respondent twice for the same offense. to be a valid cause for dismissal. When a party deliberately adopts a certain theory and the case is decided upon that theory in the court below. Issue: Whether or not the dismissal was valid. In case of doubt. therefore. pursuant to the social justice policy of labor laws and the Constitution. and to his other benefits or their monetary equivalent. Under the doctrine of strained relations. Po. inclusive of allowances. inclusive of allowances. His previous offenses were entirely separate and distinct from his latest alleged infraction of forgery. the payment releases the employer from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer trust. rendered judgment in favor of respondent and reinstated the earlier decision of the NLRC. and to the payment of his full backwages.LABOR RELATIONS Atty. Points of law. The law mandates that the burden of proving the validity of the termination of employment rests with the employer. Failure to discharge this evidentiary burden would necessarily mean that the dismissal was not justified and. 1999. the same could no longer be utilized as an added justification for his dismissal. Petitioner's reliance on respondent's previous tardiness in reporting for work as a ground for his dismissal is likewise not meritorious. Respondent was dismissed due to loss of trust and confidence and it would be impractical to reinstate an employee whom the employer does not trust. Ruling: Respondent alleged in his position paper that after preparing the CAPEX form on March 3. The right of an employer to dismiss an employee on the ground that it has lost its trust and confidence in him must not be exercised arbitrarily and without just cause. March 4. The CA. On the one hand. Petitioner's belated allegations in its reply filed before this Court that Marivic Villanueva denied having seen the CAPEX form cannot be given credit. Hence. and conclusions of employers do not provide for legal justification for dismissing employees. whim. such cases should be resolved in favor of labor. caprice or suspicion. We have previously held that employers are allowed a wider latitude of discretion in terminating the services of employees who perform functions which by their nature require the employers' full trust and confidence and the mere existence of basis for believing that the employee has breached the trust of the employer is sufficient. he had the motive to commit the forgery. he will not be permitted to change the same on appeal. computed from the date of his dismissal on May 20. must be based on a willful breach of trust and founded on clearly established facts. and whose task is to handle and prepare delicate documents. On the other hand. theories. computed from the time his compensation was withheld from him up to the time of his actual reinstatement. the employee would eternally remain at the mercy of the employer. he endorsed it to Marivic Villanueva for the signature of the Executive Vice-President Ricardo T. the Court finds that it would be best to award separation pay instead of reinstatement. 1999 up to the finality of this decision. Marquez LA decision. The basis for the dismissal must be clearly and convincingly established. It must rest on substantial grounds and not on the employer's arbitrariness. illegal. because to permit him to do so would be unfair to the adverse party. the payment of separation pay has been considered an acceptable alternative to reinstatement when the latter option is no longer desirable or viable. The next day. Petitioner based respondent's dismissal on its unsubstantiated suspicions and conclusion that since respondent was the custodian and the one who prepared the CAPEX forms. The correct rule has always been that such previous offense may be used as valid justification for dismissal from work only if the infractions are related to the subsequent offense upon which the basis of termination is decreed. Besides. and due to the completion of the phases of work respondents were engaged for. — In all cases of termination of employment. Consunji. Page 158 . as evidenced by bank remittances. 2010 Facts: Respondents Antonio Gobres. 19. Book V of the Omnibus Rules Implementing the Labor Code. on several occasions and/or at various times. unless the dismissal is for just or authorized cause subject to the requirements of due process or prior notice. NLRC affirmed the decision of the Labor Arbiter. Consunji for illegal dismissal. respondents saw their names included in the Notice of Termination posted on the bulletin board at the project premises. Moreover. respondents' termination is governed by Section 1 (c) and Section 2 (III). Emilio Aleta and Generoso Melo worked as carpenters in the construction projects of petitioner D. Issue: Whether or not notice (procedural due process) is required in termination of project employees Ruling: No. 1 . D.M Consunji vs. Godofredo Paragsa.. No. Their termination from employment for each project was reported to the Department of Labor and Employment (DOLE). no employee shall be dismissedprior to the completion of the project or phase thereof for which the employee was engaged. A project employee is defined under Article 280 of the Labor Code as one whose "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 services to be performed is seasonal in nature and the employment is for the duration of the season. and subject to the requirements of due process. G. and David M. or is brought about by the completion of the phase of the project or contract for which the employee was engaged. Rule XXIII. Inc. 20. their termination was warranted and legal. On October 14. Respondents filed a Complaint with the Arbitration Branch of the National Labor Relations Commission (NLRC) against petitioner D. the following standards of due process shall be substantially observed. 1998. Rule XXIII.Security of tenure. Section 2 (III). and Court of Appeals affirmed the decision of NLRC but awarded damages for the failure of the company to observe procedural due process. Petitioner contended that since respondents were terminated by reason of the completion of their respective phases of work in the construction project. or prior to the expiration of the contract between the principal and contractor. in accordance with Policy Instruction No.M. which was later superseded by Department Order No. Book V of the Omnibus Rules Implementing the Labor Code provides: Section 2.For termination of employment based on just causes as defined in Article 282 of the Code: (a)A written notice served on the employee specifying the ground or grounds for termination. August 8. Labor Arbiter ruled that the employees were project employees. Hence. a construction company. damages and attorney's fees.M. five (5) days service incentive leave pay. 169170. computed from the time of his engagement by petitioner on August 1993 up to the finality of the decision." As project employees.Standard of due process: requirements of notice. the cited provision's requirements of due process or prior notice when an employee is dismissed for just or authorized cause (under Articles 282 and 283 of the Labor Code) prior to the completion of the project or phase thereof for which the employee was engaged do not apply to this case. 57. — (a) In cases of regular employment. and giving to said employee reasonable opportunity within which to explain his side.R. Rule XXIII (Termination of Employment).LABOR RELATIONS Atty. Marquez equivalent to one month salary for every year of service. Records show that respondents were dismissed after the expiration of their respective project employment contracts. Book V of the Omnibus Rules Implementing the Labor Code states: Section 1. petitioner claimed that respondents have been duly paid their service incentive leave pay and 13th month pay through their respective bank accounts. AECDHS Further. Inc. Gobres. Section 1 (c). xxx xxx xxx (c)In cases of project employment or employment covered by legitimate contracting or sub-contracting arrangements. series of 1993. Jefferson M. Magellan Dalisay. Consunji. the employer shall not terminate the services of an employee except for just or authorized causes as provided by law. and nonpayment of 13th month pay. grounds have been established to justify his termination. Penalty: D (dismissal). If the termination is brought about by the failure of an employee to meet the standards of the employer in the case of probationary employment. Construction Corporation explained that this is because completion of the work or project automatically terminates the employment. "Any act constituting theft or robbery.If the termination is brought about by the completion of the contract or phase thereof. petitioners filed a complaintagainst respondent for illegal dismissal. Misconduct is defined as "the transgression of some established and definite rule of action. the NLRC and the Court of Appeals all found that respondents were validly terminated due to the completion of the phases of work for which respondents' services were engaged. In case of termination. 2010 Facts: Petitioner Helen Valenzuela (Helen) was a production associate in respondent Keihin Philippines Corporation (Keihin).E. as well as moral and exemplary damages. 2003. while Helen was about to leave the company premises. "If the termination is brought about by the completion of the contract or phase thereof. present his evidence or rebut the evidence presented against him. however. II.For termination of employment as based on authorized causes defined in Article 283 of the Code.R. v. 58. Issues: Whether or not the dismissal was illegal Ruling: I. August 9. it was Helen‘s honest belief that the tape she took was of no use or value and that she did not hide the same. no prior notice is required. Jefferson M. No. Jr. Keihin Phils. the Labor Arbiter. On October 15. the requirements of due process shall be deemed complied with upon service of a written notice to the employee and the appropriate Regional Office of the Department at least thirty (30) days before the effectivity of the termination. 2003. with the assistance of counsel if the employee so desires. The following day. Helen‘s supervisor. III. in which case." Paul Cupon. thus. is given opportunity to respond to the charge. non-payment of 13th month pay. Marquez (b)A hearing or conference during which the employee concerned. In this case. a company engaged in the production of intake manifold and throttle body used in motor vehicles manufactured by Honda. Helen admitted the offense and even manifested that she would accept whatever penalty would be imposed upon her. On September 26.2 of the company‘s Code of Conduct. C. Helen received a notice of disciplinary action informing her that Keihin has decided to terminate her services on the ground of serious misconduct. she saw a packing tape near her work area and placed it inside her bag because it would be useful in her transfer of residence. or any attempt to commit theft or robbery. no prior notice is required. under the law. specifying the ground or grounds for termination. the employer is. with a prayer for reinstatement and payment of full back wages." Cioco. it shall be sufficient that a written notice is served the employee within a reasonable time from the effective date of termination. The above rule clearly states. and (c)A written notice [of] termination served on the employee indicating that upon due consideration of all the circumstance. willful in Page 159 .LABOR RELATIONS Atty. Hence. did not reckon that respondent company would terminate her services for her admitted offense. she found the packing tape inside her bag. On September 5. the foregoing notices shall be served on the employee's last known address. 171115. of any company property or other associate‘s property. She. called her to his office and directed her to explain in writing why no disciplinary action should be taken against her. therefore. did not violate any requirement of procedural due process by failing to give respondents advance notice of their termination. Petitioner. Corp. Nagkaka-sang Lakas ng Manggagawa sa Keihin vs. 2003. only obliged to render a report to the DOLE on the termination of the employment. SHE WAS GUILTY OF SERIOUS MISCONDUCT The petitioners argue that serious misconduct under existing law and jurisprudence could not be attributed to Helen because she was not motivated by malicious intent. G.respondent company issued a show cause notice7 to Helen accusing her of violating F. When the lady guard on duty inspected Helen‘s bag. prior or advance notice of termination is not part of procedural due process if the termination is brought about by the completion of the contract or phase thereof for which the employee was engaged. a forbidden act. which says. there is no basis for the payment of nominal damages. a dereliction of duty.. the CSC considered the issue moot and academic considering that the period had lapsed and respondents had been allowed to resume their specific functions. were committed in open betrayal of the confidential nature of their positions and in outright defiance of the Rules and Regulations on Public Sector Unionism. Molina. In Metropolitan Bank and Trust Company v. These acts." For serious misconduct to justify dismissal under the law. supreme court says that the case at bar is different from the Caltex case for two reasons: (1) In the Caltex case. a committee was constituted to investigate the charges against respondents. the CSC failed to resolve respondents‘ motions to lift preventive suspension order and to transfer the case from the GSIS to the CSC.R. 2002 during office hours within the GSIS compound. In addition to the charge for grave misconduct for performing the same acts as Molina. "the essence of due process lies simply in an opportunity to be heard. In the meantime. No. respondents filed with the CSC a Petition to Transfer Investigation to This Commission. National Labor Relations Commission which involved the theft a bottle of lighter fluid. Respondents filed with the Civil Service Commission (CSC) an Urgent Petition to Lift Preventive Suspension Order. Consistent with their stand that petitioner could not act as the complainant. received two separate Memoranda from petitioner charging them with grave misconduct. Velasco was accused of performing acts in violation of the Rules on Office Decorum for leaving his office without informing his supervisor of his whereabouts. and 3) continuously performing said activities despite warning from his immediate superiors. This notwithstanding." 59. (b) must relate to the performance of the employee‘s duties. 2010 Facts: Respondents Molina and Velasco. Without making a definitive conclusion as to the effect thereof in the case against respondents. Petitioners cite the case of Caltex Refinery Employees Association v. the essence of due process lies in an opportunity to be heard. and loss of company and employees‘ property when the incident involving Helen transpired. Barrientos. The petitioners also argue that the penalty of dismissal is too harsh and disproportionate to the offense committed since the value of the thing taken is very minimal. They contended that the acts they allegedly committed were arbitrarily characterized as grave misconduct. It is noteworthy that prior to this incident.‖ Aggrieved. Marquez character. Jefferson M. Respondents sought the annulment and setting aside of petitioner‘s order directing the former to submit to the jurisdiction of the committee created to hear and investigate the administrative case filed against them. and implies wrongful intent and not mere error in judgment. Such opportunity was afforded the petitioner when she was asked to explain her side of the story. This was due to some problems of vandalism and loss in the company. Considering the gravity of the charges against them. Despite their urgent motions. G. The supreme court then refrained from imposing the supreme penalty of dismissal since the employee had no violations "in his eight years of service and the value of the lighter fluid is very minimal compared to his salary. Garcia v. respondents appealed to the CA Page 160 . As to the lifting of the order of preventive suspension. the requirement of due process had been met since he was accorded a chance to explain his side of the controversy. and gross insubordination for persistently disregarding petitioner‘s instructions that Velasco should report to the petitioner‘s office. Specifically. effective immediately. and (c) must show that the employee has become unfit to continue working for the employer. according to petitioner. "[e]ven if no hearing or conference was conducted. the CSC opted to discuss the matter by way of obiter dictum. the CSC declared that a preliminary investigation is a pre-requisite condition to the issuance of a formal charge. and not that an actual hearing should always and indispensably be held. the CSC resolved respondents‘ Petition to Lift Order of Preventive Suspension and Petition to Transfer Investigation to the Commission. 157383. Molina was charged for allegedly committing the following acts: 1) directly and continuously helping some alleged disgruntled employees to conduct concerted protest actions and/or illegal assemblies against the management and the GSIS President and General Manager. without prejudice to pursuing the same with the Civil Service Commission or any other agency of government as may be allowed for (sic) by law. The following day. "(a) it must be serious. Aggrieved. we held that. vandalism. 2) leading the concerted protest activities held in the morning of May 22. August 18. petitioner comes before the Court in this petition for review on certiorari under Rule 45 of the Rules of Court. Petition is Denied FINAL NOTE: Supreme Court very briefly dealt with the defense of absence of due process which the court brushed aside by saying: ―With regard to the requirement of a hearing. Edpan.LABOR RELATIONS Atty. the employee had been employed for eight years without incident and (2) is that respondent company was dealing with several cases of theft. Respondents filed with the CA a special civil action for certiotari and prohibition with prayer for Temporary Restraining Order (TRO). The CA rendered a decision in favor of respondents: ―Public respondents are hereby PERPETUALLY RESTRAINED from hearing and investigating the administrative case against petitioners. both Attorney V of the GSIS. we held that." Similarly in Philippine Pasay Chung Hua Academy v. However. petitioner ordered the preventive suspension of respondents for ninety (90) days without pay. prosecutor and judge at the same time. respondent issued two memoranda implementing an intensive inspection procedure and reminding all employees that those who will be caught stealing and performing acts of vandalism will be dealt with in accordance with the company‘s Code of Conduct. (2) a real opportunity to be heard personally or with the assistance of counsel. PINA‘s personnel manager. PINA preventively suspended all officers of the Union because of the March 13. and that all the Union‘s officers. Consequently. Consequently. such as the right to due process in investigations and hearings. Ruling: The petitions are without merit. and the officers and members of the Union all returned to work thereafter. due process in administrative proceedings has been recognized to include the following: (1) the right to actual or constructive notice to the institution of proceedings which may affect a respondent's legal rights. respondents should be awarded their salaries during the period of their unjustified suspension. Lastly. the formal charges are void ab initio and may be assailed directly or indirectly at anytime. Manor‘s secretary. no delinquency or misconduct may be imputed to respondents and the preventive suspension meted them is baseless. respondents were preventively suspended in the same formal charges issued by the former without the latter knowing that there were pending administrative cases against them. and (4) a finding by said tribunal which is supported by substantial evidence submitted for consideration during the hearing or contained in the records or made known to the parties affected.R. it concluded that the same is likewise void having emanated from the void formal charges. 1993. It appears that the proceedings in the barangay resulted in a settlement. we can do so only by restoring to them that which is physically feasible to do under the circumstances. 174137) It is likewise undisputed that the formal charges were issued without preliminary or fact-finding investigation. As a result of the walkout.LABOR RELATIONS Atty. September 27. Escario v. a corporation engaged in manufacturing and selling food seasoning. and to defend one's rights. well-founded and duly recognized by law. the CA committed no reversible error in ordering the payment of back salaries during the period of respondents‘ preventive suspension. Issue: Whether the preventive suspension orders issued against respondents Molina and Velasco are valid. the CA disagreed with the CSC that the question on the propriety of the preventive suspension order had become moot and academic. no pay" does not apply where the employee himself was unlawfully forced out of job. then their preventive suspension is likewise null and void. 157383)/DISMISSED (G. Page 161 . The CA rendered a Decision in favor of respondents.42 In granting their back salaries. and unless we can turn back the hands of time. No. No. As the administrative proceedings involved in this case are void. 37 In particular. and Yolanda Fabella. who ruled in his decision dated July 13. On April 14. 160302. 2010 Facts: The petitioners were among the regular employees of respondent Pinakamasarap Corporation (PINA). DENIED (G. In view thereof. we are simply repairing the damage that was unduly caused respondents. to present witnesses and evidence in one's favor. The complaint was assigned to then Labor Arbiter Raul Aquino. 60. all the officers and some 200 members of the Union walked out of PINA‘s premises and proceeded to the barangay office to show support for Juanito Cañete. 1993 incident was an illegal walkout constituting ULP. administrative proceedings are not exempt from basic and fundamental procedural principles. Jefferson M. 1994 that the March 13. (3) a tribunal vested with competent jurisdiction and so constituted as to afford a person charged administratively a reasonable guarantee of honesty as well as impartiality. The CA declared null and void respondents‘ formal charges for lack of the requisite preliminary investigation. an officer of the Union charged with oral defamation by Aurora Manor. had thereby lost their employment. G. It is true that prior notice and hearing are not required in the issuance of a preventive suspension order. except Cañete. The filing by petitioner of formal charges against the respondents without complying with the mandated preliminary investigation or at least give the respondents the opportunity to comment violated the latter's right to due process. At 8:30 in the morning of March 13. considering that respondents were preventively suspended in the same formal charges that we now declare null and void. PINA filed a complaint for unfair labor practice (ULP) and damages. Marquez through a Petition for Review under Rule 43 of the Rules of Court. Hence.41 However. PINA terminated the officers of the Union after a month. Rather.43 The principle of "no work. NLRC. They were members of petitioner Malayang Samahan ng mga Manggagawa sa Balanced Foods (Union). 1993 incident.R.38 In the procedure adopted by petitioner.R. No. Although administrative procedural rules are less stringent and often applied more liberally. 1993. the CA found that respondents were entitled to back salaries during the time of their illegal preventive suspension. a situation that does not obtain in the case at bar. In denying the petitioners‘ claim for full backwages. the principle of a "fair day‘s wage for a fair day‘s labor" remains as the basic factor in determining the award thereof. They insist that the CA decided the question in a manner contrary to law and jurisprudence. viz: However. as affirmed in Philippine Diamond Hotel and Resort v. Considering that an illegally dismissed employee is not deemed to have left his employment. Manila Diamond Hotel Employees Union. claiming that PINA was guilty of union busting through the constructive dismissal of its officers. The petitioners argue that the finding of no abandonment equated to a finding of illegal dismissal in their favor. Hence. That backwages are not granted to employees participating in an illegal strike simply accords with the reality that they do not render work for the employer during the period of the illegal strike. judgment is hereby rendered declaring the subject strike to be illegal. all the foregoing premises being considered. Compañia Maritima. (b) decreased production output by slowdown. they did not suffer any loss of earnings during their absence from work. backwages are granted to indemnify a dismissed employee for his loss of earnings during the whole period that he is out of his job. suspended or dismissed or otherwise illegally prevented from working. suppliers. of course. The grant of backwages to him is in furtherance and effectuation of the public objectives of the Labor Code. On appeal. and customers. the CA applied the third paragraph of Article 264(a) instead of Article 279 of the Labor Code. Their reinstatement sans backwages is in order. If there is no work performed by the employee there can be no wage or pay unless. the Court stressed that for this exception to apply. employees. 1998. 1993. the NLRC sustained the finding that the strike was illegal. to have lost their employment status. the Union held a strike vote. They were thus entitled only to reinstatement. it is required that the strike be legal. and willful disobedience and insubordination to the orders of the Management and its representatives. he is entitled to all the rights and privileges that accrue to him from the employment. (emphasis supplied) The petitioners herein do not deny their participation in the June 15. regardless of whether or not the strike was the consequence of the employer‘s ULP. they were entitled to full backwages. 1993. considering that a strike was not a renunciation of the employment relation. According to G&S Transport Corporation v. Page 162 . stating that they had violated provisions on strike of the collective bargaining agreement (CBA). explaining that the only instance under Article 264 when a dismissed employee would be reinstated with full backwages was when he was dismissed by reason of an illegal lockout. As such. as striking employees.LABOR RELATIONS Atty. we disagree with the conclusion that respondents‘ union members should be considered to have abandoned their employment. to conform to the policy of a fair day‘s wage for a fair day‘s labor. de Vera (LA) rendered a decision. and that a reinstatement with full backwages would be granted only when the dismissal of the petitioners was not done in accordance with Article 282 (dismissals with just causes) and Article 283 (dismissals with authorized causes) of the Labor Code. 1993 that effectively barred with the use of threat and intimidation the ingress and egress of PINA‘s officials. (d) disruption of the work place by invading the premises and perpetrating commotion and disorder. the CA affirmed the NLRC. As a general rule. Jefferson M. Issue: The petitioners posit that they are entitled to full backwages from the date of dismissal until the date of actual reinstatement due to their not being found to have abandoned their jobs. at which a majority of 190 members of the Union voted to strike. the Union filed a notice of strike. (e) abandonment of work since June 28. On May 9. 1993 strike. 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. (c) serious misconduct. and by causing fear and apprehension. and (f) picketing within the company premises on June 15. that Article 264 was silent on the award of backwages to employees participating in a lawful strike. On August 18. The strike was held in the afternoon of June 15. However. 1993 despite notices to return to work individually sent to them. such as: (a) sabotage by the insertion of foreign matter in the bottling of company products. xxx In Philippine Marine Officers‘ Guild v. willing and ready to work but was illegally locked out. Marquez On April 28. The petitioners‘ participation in the illegal strike was precisely what prompted PINA to file a complaint to declare them. the laborer was able. Ruling: The petitioners‘ argument cannot be sustained. 2003. to wit: WHEREFORE. the NLRC ultimately ordered their reinstatement after finding that they had not abandoned their work by joining the illegal strike. PINA retaliated by charging the petitioners with ULP and abandonment of work. On August 18. Labor Arbiter Jose G. but reversed the LA‘s ruling that there was abandonment. 1993. Infante: With respect to backwages. it was neither fair nor just that the dismissed employees should litigate against their employer on the latter‘s time. that petitioner offered respondent his separation pay. petitioner‘s failure to produce evidence raises the presumption that such evidence will be adverse to it. Also. Virgilio Callanta was informed that his services will be terminated effective July 9. a corporation engaged in the construction business. To prove its financial deficit. he was the only one dismissed out of 333 employees.. the Court deleted the award of backwages and held that the striking workers were entitled only to reinstatement in Philippine Diamond Hotel and Resort. there was already substantial compliance with the requirement. In the termination report submitted to DOLE. Callanta claimed that Shimizu failed to comply with the requirements called for by law before implementing a retrenchment program thereby rendering it legally infirmed. petitioner offered respondent his separation pay which the latter refused to accept and instead filed an illegal dismissal complaint. The CA opined that Shimizu failed to prove that there were employees other than respondent who were similarly dismissed due to retrenchment and that respondent‘s alleged replacements held much higher ranks and were more deserving employees. Shimizu alleged that in order not to jeopardize the completion of its projects. Verily. 2010 Facts: Shimizu Phils. the notice sent to the Department of Labor and Employment (DOLE) did not conform to the 30-day prior notice requirement.LABOR RELATIONS Atty. The NLRC found that petitioner failed to comply with the 30-day prior notice to the DOLE and that there is no proof that petitioner used fair and reasonable criteria in the selection of employees to be retrenched. Labor Arbiter rendered a decision holding that Mr. held respondent to have been illegally dismissed. Callanta his separation pay equivalent to one (1) month pay for every year of service. Thus. NLRC upheld the ruling that there was valid ground for respondent‘s termination but modified the Labor Arbiter‘s Decision by holding that petitioner violated respondent‘s right to procedural due process. Shimizu Philippine Contractor. For want of due notice. Manila Diamond Hotel Employees Union. When respondent‘s Honda Project was completed. 1997 due to the lack of any vacancy in other projects and the need to re-align the company‘s personnel requirements brought about by the imperatives of maximum financial commitments. considering that the striking employees did not render work for the employer during the strike. Issue: Page 163 . He pointed out that the notice sent to him never mentioned retrenchment but only project completion as the cause of termination. 1994 as Safety Officer assigned at Yutaka-Giken Project and eventually as Project Administrator of petitioner‘s Structural Steel Division (SSD) in 1995. Jefferson M. Worse. and ordered respondent‘s reinstatement and payment of backwages.000. He found that sufficient evidence was presented to establish company losses. Shimizu advanced that respondent‘s services was terminated in accordance with a valid retrenchment program being implemented by the company since 1996 due to financial crisis that plague the construction industry. respondent is further directed to pay complainant an indemnity equivalent to one (1) month salary. September 29. He then filed an illegal dismissal complaint against petitioner assailing his dismissal as without any valid cause. the petitioners were not entitled to the wages during the period of the strike (even if the strike might be legal). First. CA reversed and set aside the NLRC‘s ruling. No. the abolition of several departments and the concomitant termination of some employees were implemented as each project is completed. Consequently.R. petitioner presented financial statements for the years 1995 to 1997 as well as the Securities and Exchange Commission‘s approval of petitioner‘s application for a new paidin capital amounting to P330. Inc. Inc. because they performed no work during the strike. (Manila Diamond Hotel) v. 61. junior and inexperienced employees were appointed/assigned in his stead to new projects thus also ignoring seniority in hiring and firing employees. 165923. Simizu Phils Contractors v. and that petitioner duly notified DOLE about the retrenchment. there were no proofs to sustain that petitioner used fair and reasonable criteria in determining which employees to retrench. petitioner failed to use fair and reasonable criteria in determining which employees shall be retrenched or retained. it did not comply with the provision of the Labor Code mandating the service of notice of retrenchment. Second. Mr. Shimizu argued that when it submitted the retrenchment notice/termination report to DOLE. Callanta. According to the CA.000. G. the CA invalidated the retrenchment. The Labor Arbiter further relied on petitioner‘s factual version relating to respondent‘s employment background with regard to his position and behavioral conduct. is ordered to pay complainant-appellant Virgilio P. Moreover. employed Virgilio Callanta on August 23. Callanta was validly retrenched. Marquez Under the principle of a fair day‘s wage for a fair day‘s labor. age. Marquez Whether or not Shimizu has failed to obeserve fair and reasonable standards or criteria in effecting the dismissal or Mr.00. However. in the case of the second notice. In other words. all of the employees of the Structural Steel Division were severed from employment. The CA. Standing alone. respectively. limiting the grant of additional monetary benefits to managerial employees and cutting down expenses. that separation pay was offered to respondent. or if only expected. Callanta argued that that he was singled out for termination as allegedly shown in petitioner‘s monthly termination report for the month of July 1997 filed with the DOLE does not persuade this Court.LABOR RELATIONS Atty. and lastly. are not merely de minimis. thus. whichever is higher. the indemnity in the form of nominal damages should be fixed in the amount of P50. to wit. As an authorized cause for separation from service under Article 283 of the Labor Code. Jefferson M. Consequently. if already incurred. Thus. the NLRC modified the Decision of the Labor Arbiter by granting respondent indemnity since the notice to DOLE was served short of the 30-day notice requirement and that there is no proof of the use of fair and reasonable criteria in the selection of employees to be retrenched or retained. several departments like the Civil Works Division. reversed the Decision of the NLRC by ruling that the absence of fair and reasonable criteria in implementing the retrenchment invalidates altogether the retrenchment. It merely serves as notice to DOLE of the names of employees terminated/ retrenched only for the month of July. However. serious. (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. Noncompliance with this rule clearly violates the employee‘s right to statutory due process. and 16 days. Callanta? Ruling: There was substantial compliance for a valid retrenchment. actual and real. Shimizu implemented its retrenchment program in good faith because it undertook several measures in cutting down its costs. and (5) That the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees. and that notices of termination of service were furnished respondent and DOLE. Thus we cannot conclude that no other employees were previously retrenched. Respondent did not attempt to refute that petitioner adopted these measures before implementing its retrenchment program. The termination notice sent to DOLE did not comply with the 30-day notice requirement.000. (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. Both the Labor Arbiter and the NLRC found sufficient compliance with these substantive requirements. Electromechanical Works Division and the Territorial Project Management Offices. the petition is GRANTED. it cannot be deemed as an evidence of the number of employees affected by the retrenchment program. whichever is higher. In implementing its retrenchment scheme. there being enough evidence to prove that petitioner was sustaining business losses. are reasonably imminent as perceived objectively and in good faith by the employer. that the criteria or standard used in selecting the employees to be retrenched was work efficiency which passed the test of fairness and reasonableness. before the intended date of respondent‘s dismissal. petitioner admitted that the reports were submitted 21 days. Mr. selling of company vehicles. among others. efficiency. upholding the legality of respondent‘s dismissal and awarding him separation pay equivalent to one (1) month pay or one-half (1/2) month pay for every year of service. respondent is entitled to indemnity for violation of due process. then. we affirm the NLRC‘s award of indemnity to respondent for want of sufficient due notice. Shimizu used fair and reasonable criteria in effecting retrenchment. physical fitness. Shimizu was able to prove that it incurred substantial business losses. petitioner was constrained to streamline its operations and to downsize its complements in a progressive manner in order not to jeopardize the completion of its projects. Page 164 . such as status. The purpose of the one month prior notice rule is to give DOLE an opportunity to ascertain the veracity of the cause of termination. and infusing fresh capital into the company. withdrawing certain privileges of petitioner‘s executives and expatriates. But to be consistent with our ruling in Jaka Food Processing Corporation v. but substantial. Pacot. (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.. this document is not proof of the total number of retrenched employees or that respondent was the only one retrenched. that it offered to pay respondent his separation pay. were abolished in the early part of 1996 and thereafter the Structural Steel Division. retrenchment is a valid exercise of management prerogative subject to the strict requirements set by jurisprudence: (1) That the retrenchment is reasonably necessary and likely to prevent business losses which. of which respondent was an Administrator. that the retrenchment scheme was arrived at in good faith. Respondent was among the last batch of employees who were retrenched and by the end of year 1997. WHERFORE. and financial hardship for certain workers. seniority. in the case of the first notice. as amended. the Union officers and members decided to protest the same by holding a rally infront of the Office of the Secretary of Labor and Employment in Intramuros. from April 3 to 5. Vistan issued another memorandum. Solidbank‘s business operations were paralyzed. SO ORDERED. Issue: Whether the respondents were validly terminated? Ruling: The Court has consistently ruled that once the Secretary of Labor assumes jurisdiction over a labor dispute. During the collective bargaining negotiations. 1999 and filed a Notice of Strike on December 29. On the same day. Thus. Condevillamar. as main players in an illegal strike. Arriola and De Guzman filed complaints for illegal dismissal. 2000 Order. Gamier. the Union declared a deadlock on December 22. 2000. Vistan.R. 2000 "provided these employees were/are not part of those who led or instigated or coerced their co-employees into participating in this illegal act. 1999. this time declaring that the bank is prepared to take back employees who will report for work starting April 6. an overwhelming majority of employees. 2010 Facts: Sometime in October 1999. Deogracias N. However. then President of Solidbank. 2000. then Secretary of Labor and Employment Bienvenido E. Gamier. 2000. Laguesma assumed jurisdiction over the labor dispute. therefore. and reminding them that they have put their jobs at risk as they will be asked to show cause why they should not be terminated for participating in the union-instigated concerted action. pursuant to Article 263 (g) of the Labor Code. respondents knowingly violated the aforesaid provision by holding a strike in the guise of mass demonstration simultaneous with concerted work abandonment/boycott. Manila. 2000. In view of the impending actual strike. De Guzman. Negotiations commenced on November 17. on April 3. Dissatisfied with the Secretary‘s ruling. as amended. The employees‘ work abandonment/boycott lasted for three days. also considers it a prohibited activity to declare a strike "during the pendency of cases involving the same grounds for the same strike. No. A strike that is undertaken despite the issuance by the Secretary of Labor of an assumption order and/or certification is a prohibited activity and thus illegal. Solidbank Corporation v. and Paseo de Roxas branch on April 7.LABOR RELATIONS Atty. Clearly. Janice L. Bacolod and Naga followed suit and "boycotted regular work. 1999 but seeing that an agreement was unlikely. For their failure to return to work. The assumption order dated January 18. the said 199 employees were each issued a show-cause memo directing them to submit a written explanation within twenty-four (24) hours why they should not be dismissed for the "illegal strike in defiance of the Assumption Order of the Secretary of Labor resulting to grave and irreparable damage to the Bank". Arriola and Ophelia C." There is no dispute that when respondents conducted their mass actions on April 3 to 6. some Union members staged a series of mass actions. Elena R. such jurisdiction should not be interfered with by the application of the coercive processes of a strike or lockout. 2000 Order. Article 264 (a) of the Labor Code.‖ The union members also picketed the bank‘s Head Office in Binondo on April 6. which included herein respondents Ernesto U. joined the "mass leave" and "protest action" at the Department of Labor and Employment (DOLE) office while the bank‘s provincial branches in Cebu. The Court have held that the responsibility of union officers. On the third day of the concerted work boycott (April 5. 2000. petitioner Solidbank and respondent Solidbank Employees‘ Union (Union) were set to renegotiate the economic provisions of their 1997-2001 Collective Bargaining Agreement (CBA) to cover the remaining two years thereof. G. simultaneous with the filing of their motion for reconsideration of the March 24. issued a memorandum addressed to all employees calling their absence from work and demonstration infront of the DOLE office as an illegal act. It is only when he commits illegal acts during a strike that he may be declared to have lost employment status. limiting the penalty of dismissal only for the former for participation in an Page 165 ." Out of the 712 employees who took part in the three-day work boycott. Gamier. 2000 directed the parties "to cease and desist from committing any and all acts that might exacerbate the situation. November 15. and placing them under preventive suspension.000. 2000). a worker merely participating in an illegal strike may not be terminated from employment. As a result of the employees‘ concerted actions. the proceedings before the Secretary of Labor were still pending as both parties filed motions for reconsideration of the March 24. 62. Marquez are REINSTATED and AFFIRMED with MODIFICATION that the indemnity to be awarded to respondent is fixed in the amount of P50. a total of 513 returned to work and were accepted by the bank.00 as nominal damages. The remaining 199 employees insisted on defying Vistan‘s directive. 159461. including the individual respondents. Iloilo. Jefferson M. Condevillamar. moral and exemplary damages and attorney‘s fees. is greater than that of the members and. Marquez illegal strike is in order. 2010 Facts: 1. Rule I. Coca-Cola Export Corp. the striker must be identified. against petitioner. The award of backwages is a legal consequence of a finding of illegal dismissal. v. Instead. She held the position of Senior Financial Accountant. National Labor Relations Commission. 3. Under the circumstances. in lieu of reinstatement. the award of separation pay of one (1) month salary for each year of service. Assuming that respondent-union members have indeed reported back to work at the end of the concerted mass actions. It is important to note that the term ―trust and confidence‖ is restricted to managerial employees. Petitioners have not adduced evidence on such illegal acts committed by each of the individual respondents who are union members. G. given the lapse of considerable time from the occurrence of the strike. is in order. 2. which may justify the imposition of the penalty of dismissal. For the respondents who are union members. 6. The dismissal of herein respondent-union members are therefore unjustified in the absence of a clear showing that they committed specific illegal acts during the mass actions and concerted work boycott. No. Book III of the Omnibus Rules Implementing the Labor Page 166 . But proof beyond reasonable doubt is not required. Jefferson M. No. being in violation of the Secretary‘s assumption order.R. Issue: WON termination of Gacayan was valid Ruling: No. The Labor Arbiter and NLRC ruled that the termination was valid but CA ruled that the penalty of dismissal imposed on respondent was too harsh and directed petitioner to immediately reinstate her. paragraph (d) of the company‘s rules and regulations which punishes with dismissal the submission of any fraudulent item of expense. There must be proof that he or she committed illegal acts during a strike. The date of issuance of the Mdonald‘s receipt was altered. Gacayan. the Court. But since reinstatement is no longer possible. giving cause for the termination of her employment. She was dismissed for fraudulently submitting tampered and/or altered receipts in support of her petty cash reimbursements in gross violation of the company‘s rules and regulations. She filed a complaint for illegal dismissal. may suffice. thus. 5. payment of backwages as well as for damages and attorney‘s fees. Her employment was terminated for alleged loss of trust and confidence on the ground of fraudulently altering three receipts (1 Mdonald‘s receipt and 3 Shakey‘s Pizza receipts) which she submitted to support her claim for reimbursement of meal expenses. Liability for prohibited acts is to be determined on an individual basis. 15. In Samson v. citing Section 2(b). Respondent Gacayan worked with petitioner for 9 ½ years. the rule is that an ordinary striking worker cannot be terminated for mere participation in an illegal strike. In her orders in Shakeys‘ Pizza it was discovered that the receipt was actually for three orders of Bunch of Lunch. but were soon terminated by petitioners who found their explanation unsatisfactory. 4. Substantial evidence available under the attendant circumstances. her termination was invalid. respondents‘ reinstatement without backwages suffices for the appropriate relief.LABOR RELATIONS Atty. Respondent allegedly violated Section II. they are not entitled to backwages in view of the illegality of the said strike. 149433. sick leave and vacation leave with prayer for reinstatement. Also. 63. petitioners simply point to their admitted participation in the mass actions which they knew to be illegal. December 15. SC did not agree with petitioner‘s contention that respondent‘s repeated submission of altered or tampered receipts to support her claim for reimbursement constitutes a betrayal of the employer‘s trust and confidence and a serious misconduct. not to mention the fact that Solidbank had long ceased its banking operations. Respondent‘s dismissal from employment was not grounded on any of the just causes enumerated under Article 282 of the Labor Code. In all cases. and not for Buddy Pack. non-payment of service incentive leave. (2) They customarily and regularly direct the work of two or more employees therein. not only from petitioner. that of serious misconduct. (b) It should not be used as a subterfuge for causes which are improper. Neither was there any explanation nor discussion of the alleged sensitive and delicate position of respondent requiring the utmost trust of petitioner. According to respondent. when she submitted altered or tampered receipts to support her claim for reimbursement. illegal or unjustified. Page 167 . She did not claim more than what was allowed as meal expense for the days that she rendered overtime work. Jefferson M. when the breach of trust or loss of confidence theorized upon is not borne by clearly established facts. but also from petitioner‘s counterparts in Poland and Thailand. such dismissal on the ground of loss and confidence cannot be countenanced. However. In the instant case. (c) It may not be arbitrarily asserted in the face of overwhelming evidence to the contrary. enumerated the conditions for one to be properly considered a managerial employee: (1) Their primary duty consists of the management of the establishment in which they are employed or of a department or sub-division thereof.‖ In Nokom v. as specified in the termination letter. it is not sufficient that the act or conduct complained of has violated some established rules or policies. in the actual imposition of penalties upon the erring employee. this would have been her first offense. Respondent. Because of its subjective nature. petitioner‘s rules cannot preclude the State from inquiring whether the strict and rigid application or interpretation thereof would be harsh to the employee. however. [and] (3) They have the authority to hire or fire other employees of lower rank. In the instant case. the basis for terminating the employment of respondent was for gross violation of the company‘s rules and regulations. this Court set the guidelines for the application of the doctrine of loss of confidence – (a) Loss of confidence should not be simulated. and (d) It must be genuine. No mention was made regarding petitioner‘s alleged loss of trust and confidence in respondent. not a mere afterthought. In the instant case. It is equally important and required that the act or conduct must have been done with wrongful intent. that petitioner made mention of another ground for the dismissal of respondent. as in the instant case. or their suggestions and recommendations as to the hiring and firing and as to the promotion or any other change of status of other employees are given particular weight. liaises with the Bottler to comply with Corporate Bottler financial reporting requirements and to ensure Bottler‘s plans are aligned with TCCEC‘s. this Court holds that the penalty of dismissal imposed on respondent is unduly oppressive and disproportionate to the infraction which she committed. Such allegation appears to be a mere afterthought.LABOR RELATIONS Atty. it must be genuine. Such is. For loss of trust and confidence to be a valid ground for dismissal. Marquez Code. and assists management on various initiatives on ad hoc basis. Respondent had no previous record in her 9½ years of service. National Labor Relations Commission. She believed that the submission of receipts was simply for records-keeping. this Court has been very scrutinizing in cases of dismissal based on loss of trust and confidence because the same can easily be concocted by an abusive employer. Respondent also countered that she acted in good faith and with no wrongful intent when she submitted the receipts in support of her claim for reimbursement of meal allowance. not a mere afterthought to justify earlier action taken in bad faith. to justify earlier action taken in bad faith. among others. respondent‘s submission of fraudulent items of expense is punishable by dismissal. It is well to stress that in order to constitute serious misconduct which will warrant the dismissal of an employee. due consideration must still be given to his length of service and the number of violations committed during his employ. Loss of confidence must not be used as a subterfuge for causes which are improper. respondent was the Senior Financial Accountant with the Job Description of a Financial Project Analyst. lacking in the instant case. illegal or unjustified. A lighter penalty would have been more just. it was only in the Reply to Respondent‘s Comment. it must be substantial and founded on clearly established facts. since she actually rendered overtime work on the dates that she claimed for meal allowance. All told. Respondent had also been a recipient of various commendations attesting to her competence and diligence in the performance of her duties. Even when an employee is found to have transgressed the employer‘s rules. ―provides support in the form of financial analyses and evaluation of alternative strategies or action plans to assist management in strategic and operational decision-making. being tardily raised only in the Reply. The alleged infractions of respondent could hardly be considered serious misconduct. only the dates or items were altered on the receipts. petitioner alleged that under its rules and regulations. In the instant case. Thus. like a regular employee. G.R. The criminal aspect of the case is considered independent of the administrative aspect. and instantly reported her to the police as the suspected thief. i. an information for Qualified Theft was filed. However. whose employment is sought to be terminated. Thus. Thus. Subsequently.00) which she had placed inside the company locker. the probationary employee may also be terminated for failure to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of the engagement. Issue: Whether respondent was illegally terminated from employment by petitioners? Ruling: There is probationary employment when the employee upon his engagement is made to undergo a trial period during which the employer determines his fitness to qualify for regular employment based on reasonable standards made known to him at the time of engagement. Marquez Under Article 279 of the Labor Code. Petitioner Manuel likewise requested the Quezon City Prosecutor‘s Office for an inquest. based on the facts on record. ordered that respondent be strip-searched by the company guards. A probationary employee. Ranchez. the employer shall furnish the worker. However. enjoys security of tenure. left respondent with no choice but to cry foul. in cases of probationary employment. On the same day that the missing money was reported by respondent to her immediate superior. employers Page 168 .299. respondent reported to her supervisor the loss of cash amounting to Twenty Thousand Two Hundred NinetyNine Pesos (P20. and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of a representative if he so desires. the services of an employee who has been engaged on probationary basis may be terminated for any of the following: (1) a just or (2) an authorized cause. respondent filed a complaint for illegal dismissal and damages. except for just and authorized cause and without prejudice to the requirement of notice under Article 283 of the same Code. The haphazard manner in the investigation of the missing cash. 64. 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 and not from the date of her dismissal from the service up to the date of finality of this decision as the CA ruled.e. In the instant case. SC ruled in favor of Gacayan. which resulted in her languishing in jail for two weeks. Robinsons Galleria/Robinsons Supermarket v. aside from just or authorized causes of termination. 177937. Administrative investigation was not conducted by petitioner Supermarket. petitioner Manuel did not heed her request and instead reported the matter to the police. and (3) when he fails to qualify as a regular employee in accordance with reasonable standards prescribed by the employer.LABOR RELATIONS Atty. Respondent acknowledged her responsibility and requested that she be allowed to settle and pay the lost amount. She underwent six (6) weeks of training as a cashier before she was hired as such on October 15. inclusive of allowances. the company already pre-judged her guilt without proper investigation. petitioners failed to accord respondent substantive and procedural due process. 1997.. 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. the Operations Manager of petitioner Supermarket. in accordance with company rules and regulations pursuant to the guidelines set by the Department of Labor and Employment. which was left to the determination of the police authorities and the Prosecutor‘s Office. January 19. a written notice containing a statement of the causes of termination. As correctly pointed out by the NLRC. an additional ground is provided under Article 281 of the Labor Code. 2011 Facts: Respondent was a probationary employee of petitioner Robinsons Galleria/Robinsons Supermarket Corporation (petitioner Supermarket) for a period of five (5) months. Petitioner was ordered to reinstate her. the search on her and her personal belongings yielded nothing. Thus. No. Article 277(b) of the Labor Code mandates that subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal. Jefferson M. However. the due process requirements under the Labor Code are mandatory and may not be supplanted by police investigation or court proceedings. Two weeks after she was hired. Petitioner Jess Manuel (petitioner Manuel). Abaya-Morido. Marquez should not rely solely on the findings of the Prosecutor‘s Office. De Castro explained that at around 2:30 a. of March 23. 65. G. Thus. Calixijan. They are mandated to conduct their own separate investigation. he shall be deemed a regular employee. Janette A. respondent is entitled to: (1) either reinstatement. Between 2:00 a. The three other nurses for the shift were not at the nurse station.m. In this case.R. because of this. HMSI-Medical Center Manila Employees Asso. upon respondent De Castro. the niece of patient Causaren staying in the room was awakened and she sought assistance from the nurse station.m. the legal counsel of petitioner hospital directed respondent De Castro and three other nurses on duty. 2011 Facts: Respondent De Castro started working as a staff nurse at petitioner hospital since September 28. Reinstatement of respondent is no longer viable considering the circumstances. Instead of personally seeing the patient. to 11:30 a. cook.m. to full backwages. the backwages that should be awarded to respondent shall be reckoned from the time of her constructive dismissal until the date of the termination of her employment. In all cases involving employees engaged on probationary basis. the physician on duty and the nursing staff on duty for the next shift again attended to patient Causaren. These two reliefs are separate and distinct from each other and are awarded conjunctively. and in the preliminary investigation before the Prosecutor‘s Office.m. and to other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. one Rufina Causaren. about the incident and requested for a formal investigation. if reinstatement is no longer viable. Because of what happened. Paderes and Nursing Assistants Marilou Respicio and Bertilla T. As for Staff Nurse Paderes and Nursing Assistants Respicio and Tatad. if viable. of March 24. respondent De Castro directed ward-clerk orientee Guillergan to check the patient. or messenger. No. 1999. when the latter option is no longer desirable or viable. Staff Nurse Paderes was then in another nurse station encoding the medicines for the current admissions of patients. 1999. an 81-year-old patient confined at Room 724-1 of petitioner hospital for ―gangrenous wound on her right anterior leg and right forefoot‖ and scheduled for operation on March 26. although they did not have any knowledge of the incident. Later. driver. On July 5. while Nursing Assistant Respicio was making the door name tags of admitted patients and Nursing Assistant Tatad delivered some specimens to the laboratory. When the two arrived at the room. fell from the right side of the bed as she was trying to reach for the bedpan. as an illegally or constructively dismissed employee. 1999. respondent De Castro should be terminated from employment for her lapse in responding to the incident and for trying to manipulate and influence her staff to cover-up the incident. Chief Nurse Josefina M. The vital signs of the patient were normal. or separation pay. duly noted by Dr. of March 23. with the right arm on the bed and the left hand holding on to a chair. Villanueva informed Dr. president and hospital director. Tatad. 1999 to 6:00 a. of March 24. while respondent De Castro and ward-clerk orientee Gina Guillergan were at the nurse station on night duty (from 10:00 p. and to accord the employee every opportunity to defend himself. to 3:00 a. until she was dismissed on July 20. January 31. like maid. Asuncion Abaya-Morido. she is entitled to separation pay and backwages. The committee recommended that despite her more than seven years of service. the patient was in a squatting position. In the Investigation Report.. Furthermore. the employer shall make known to its employees the standards under which they will qualify as regular employees at the time of their engagement.m. Hospital Management Services v. 1999.LABOR RELATIONS Atty. to 3:00 a. However. due to the strained relations of the parties. effective at the close of office hours of July 20. the payment of separation pay has been considered an acceptable alternative to reinstatement. respondent was not represented by counsel when she was strip-searched inside the company premises or during the police investigation. Article 279 of the Labor Code provides that an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges.. 1999). 1999. On May 11.m. they should be reminded not to succumb to pressure from their superiors in distorting the facts. particularly Page 169 . with ward-clerk orientee Guillergan accompanying the latter. 176287. she instructed Nursing Assistant Tatad to check the vital signs of patient Causaren. 1990. to appear before the Investigation Committee. and (2) backwages. Jefferson M. inclusive of allowances. the committee recommended that they be issued warning notices for failure to note the incident and endorse it to the next duty shift and. issued a notice of termination. Where no standards are made known to an employee at the time. As to respondent‘s monetary claims. for alleged violation of company rules and regulations. However. the Investigation Committee found that the subject incident happened between 11:00 a.m. unless the job is self-descriptive. 1999. she was attending to a newly-admitted patient at Room 710 and. since respondent was a probationary employee at the time she was constructively dismissed by petitioners. HRD Officer of petitioner hospital. Staff Nurse Janith V. 1999.m. filed a Complaint[7] for illegal dismissal against petitioners with prayer for reinstatement and payment of full backwages without loss of seniority rights. or their monetary equivalent.-Medical Center Manila Employees Association-AFW. refer the matter to the patient's attending physician or any physician-on-duty. (3) deliberately instructing the staff to follow her version of the incident in order to cover up the lapse. check her vital signs and examine if she sustained any injury. Marquez paragraph 16 (a). request the physician-on-duty to diagnose her further. Petitioners anchor respondent De Castro‘s termination of employment on the ground of serious misconduct for failure to personally attend to patient Causaren who fell from the bed as she was trying to reach for the bedpan. It is incumbent upon respondent De Castro to ensure that patients. The Labor Arbiter rendered a Decision.duty and] allow[ing] a significant lapse of time before reporting the incident. such misconduct could not be categorized as serious or grave that would warrant the extreme penalty of termination from the service after having been employed for almost 9 years. (2) failure to record and refer the incident to the physician-[on. The NLRC denied respondent De Castro's Motion for Reconsideration. also.LABOR RELATIONS Atty. More importantly. On July 21. She surmised that the incident was not of a magnitude that would require medical intervention as even the patient and her niece did not press charges against her by reason of the subject incident. P10. The Labor Arbiter concluded that although respondent De Castro committed the act complained of. respondent De Castro should make everything of record in the patient‘s chart as there might be a possibility that while the patient may appear to Page 170 . covered by the nurse station to which she was assigned. instead of personally checking on the condition of patient Causaren after she fell from the bed. The CA reversed and set aside the Decision of the NLRC and reinstated the Decision of the Labor Arbiter. Based on her evaluation of the situation. but merely 7 to 14 days suspension as the same was classified as a less serious offense under the Employee‘s Handbook. paragraph 3 (B). she merely sent ward-clerk orientee Guillergan to do the same in her behalf and for influencing her staff to conceal the incident. computed from the expiration of the 14day-suspension period up to actual reinstatement. directing petitioners to notify her to report to work. The CA ruled that per the Employee‘s Handbook of petitioner hospital. and note the incident in the report sheet for endorsement to the next shift for proper monitoring constitute serious misconduct that warrants her termination of employment. without loss of seniority rights. being her first offense. Article 282 (b) of the Labor Code provides that an employer may terminate an employment for gross and habitual neglect by the employee of his duties. and (4) negligence and carelessness in carrying out her duty as staff nurse-on-duty when the incident happened. Chapter XI of the Employee's Handbook and Policy Manual of 1996 (Employee's Handbook) (1) negligence to follow company policy on what to do with patient Rufina Causaren who fell from a hospital bed.000. but without backwages and. Jefferson M. 1999. Issue: Was De Castro guilty of serious misconduct? Was the penalty of termination reasonable? Ruling: The hospital is guilty of illegal dismissal. if necessary. respondent De Castro. respondent De Castro should have immediately proceeded to check the health condition of patient Causaren and. paragraph 3 (B) of Chapter XI[10] thereof. with modification that respondent De Castro should be entitled to payment of full backwages and other benefits. the penalty to be meted should not be dismissal from the service. Respondent De Castro‘s failure to personally assist patient Causaren. The CA ruled that while respondent De Castro's failure to personally attend to patient Causeran amounted to misconduct. Chapter XI [on the Rules on Discipline] of the Employee's Handbook[9] of petitioner hospital. however. It observed that respondent De Castro lacked diligence and prudence in carrying out her duty when.00 moral damages.00 exemplary damages. respondent De Castro saw no necessity to record in the chart of patient Causaren the fact that she fell from the bed as the patient did not suffer any injury and her vital signs were normal. Item 3. After attending to the toxic patients under her area of responsibility. It added that the subject infraction was a less serious offense classified under ―commission of negligent or careless acts during working time or on company property that resulted in the personal injury or property damage causing expenses to be incurred by the company‖ stated in subparagraph 11. the NLRC rendered a Decision reversing the findings of the Labor Arbiter and dismissing the complaint against the petitioners. respondent De Castro‘s infraction is classified as a less serious offense for ―commission of negligent acts during working time‖ as set forth in subparagraph 11.000. be accorded utmost health care at all times without any qualification or distinction. The CA denied the hospital‘s MR. being her first offense. at the option of the former. with the assistance of respondent Hospital Management Services Inc. and 10% of the total monetary award as attorney's fees. On appeal by respondent De Castro. P20.[8] ordering the hospital to reinstate respondent De Castro to her former position or by payroll reinstatement. petitioners‘ allegation. The Court emphasizes that the nature of the business of a hospital requires a higher degree of caution and exacting standard of diligence in patient management and health care as what is involved are lives of patients who seek urgent medical assistance. Considering that this was the first offense of respondent De Castro in her nine (9) years of employment with petitioner hospital as a staff nurse without any previous derogatory record and. A single or isolated act of negligence does not constitute a just cause for the dismissal of the employee. in some cases. however. Also. Among the departments abolished was the Service Quality Department. as she deemed it best. the Court of Appeals found that Culili‘s position was validly abolished due to redundancy. albeit an error of judgment. Ruling: There was a valid dismissal on the ground of redundancy. computed from the expiration of her suspension of six (6) months up to the time of actual reinstatement. petitioner hospital should reinstate respondent Edna R. further. ETPI cannot be held guilty of unfair labor practice as mere contracting out of services being performed by union members does not per se amount to unfair labor practice unless it interferes with the employees‘ right to self-organization. Despite our finding of culpability against respondent De Castro. being the staff nurse with presumably more work experience and better learning curve. Thereafter. February 9. No. as she was then attending to a newly-admitted patient at Room 710. G. the Court deems it appropriate that. merger. absorption or abolition of certain departments of ETPI. Being her first offense. inclusive of the suspension for a period of 14 days which she had earlier served. Neglect of duty. Issue: Whether or not there was an illegal dismissal. respondent De Castro should have recorded the subject incident in the chart of patient Causaren so that any subsequent discomfort or injury of the patient arising from the incident may be accorded proper medical treatment. she would be suspended for a period of six (6) months without pay. due to business losses. or bad faith on her part when. Habitual neglect implies repeated failure to perform one's duties for a period of time. Gross negligence connotes want of care in the performance of one's duties. instead of the harsh penalty of dismissal. to be a ground for dismissal. the second phase entailed a company-wide reorganization which would result in the transfer.R. an injury as a consequence of her fall may become manifest only in the succeeding days of her confinement. 165381. must be both gross and habitual. As a result. Eastern Telecommunications Phils. Jefferson M. Culili‘s position was abolished due to redundancy. It was her judgment call. However. It was highly unlikely that ETPI would effect a company-wide reorganization simply for the purpose of getting rid of Culili. which was affirmed by the NLRC. respondent De Castro cannot be said to be grossly negligent so as to justify her termination of employment. There is redundancy when the service capability of the workforce is greater than what is reasonably required to meet the demands of the Page 171 . as her lapse was not characterized by any wrongful motive or deceitful conduct. De Castro to her former position without loss of seniority rights. Culili v. we do not see any wrongful intent. The patient‘s chart is a repository of one‘s medical history and. Negligence is defined as the failure to exercise the standard of care that a reasonably prudent person would have exercised in a similar situation. ETPI was compelled to implement 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. full backwages. to send Nursing Assistant Tatad and ward-clerk orientee Guillergan to check on the health condition of the patient. Moreover. to attend to a newly-admitted patient who had more concerns that needed to be addressed accordingly.. 2011 Facts: Nelson Culili was employed by Eastern Telecommunications a Senior Technician. In 1998. Marquez be normal at the time she was initially examined. or their monetary equivalent. that respondent De Castro exerted undue pressure upon her co-nurses to alter the actual time of the incident so as to exculpate her from any liability. was not clearly substantiated. depending upon the circumstances. 66. instead of personally attending to patient Causaren. the Labor Arbiter rendered a decision finding ETPI guilty of illegal dismissal and unfair labor practice. under the given situation. the Court had ruled that sanctioning an erring employee with suspension would suffice as the extreme penalty of dismissal would be too harsh. Upon filing a complaint. she requested Nursing Assistant Tatad and ward-clerk orientee Guillergan to see the patient. in this regard.LABOR RELATIONS Atty. inclusive of allowances and other benefits. An act or omission that falls short of the required degree of care and diligence amounts to serious misconduct which constitutes a sufficient ground for dismissal. However. deliberate refusal. In illegal dismissal cases. however.000. is ordered to pay petitioner Nelson A. What ETPI did was to abolish the position itself for being too specialized and limited. Culili the amount of P50.R. or dropping a particular product line. Petitioners countered that the retrenchment was a management prerogative and that respondents got their retrenchment or separation pay even before the effective date of their separation from service. With regard to the impleaded corporate officers. and (2) fair and reasonable criteria in ascertaining what positions are to be declared redundant such as but not limited to: preferred status. moral and exemplary damages and attorney‘s fees. including respondents. entered into a Memorandum of Agreement (MOA) relative to the terms and conditions that would govern the retrenchment of the affected employees. and that Plastimer failed to establish the causes/valid reasons for the retrenchment and to comply with the one-month notice to the DOLE as well as the standard prescribed under the Collective Bargaining Agreement between Plastimer and the employees. stockholders. A position becomes redundant when it is rendered superfluous by any number of factors such as over-hiring of workers. To pierce this fictional veil. v. the dismissal is declared valid but Eastern Telecommunications Philippines. efficiency. they cannot be held liable for acts done in his official capacity because a corporation.LABOR RELATIONS Atty. The affected employees. In Mayon Hotel & Restaurant v. or to evade an existing obligation. 2011 Facts: The Personnel and Administration Manager of Plastimer issued a Memorandum informing all its employees of the decision of the Board of Directors to downsize and reorganize its business operations due to withdrawal of investments and shares of stocks which resulted in the change of its corporate structure. Marquez business enterprise. No. Among the requisites of a valid redundancy program are: (1) the good faith of the employer in abolishing the redundant position. in addition to the mandatory separation pay required under Article 283 of the Labor Code. The Labor Arbiter ruled in favor of petitioners. Hence. decrease in volume of business. signed individual ―Release Waiver and Quitclaim. that notice to the affected employees were given on 14 May 2004. Adana. On 26 May 2004. February 16. was remiss in its duty to observe procedural due process in effecting the termination of Culili. but also the existence of redundancy in the position of a Senior Technician. in the judgment of ETPI management. It is inconceivable that ETPI would effect a company-wide reorganization of this scale for the mere purpose of singling out Culili and terminating him. The records show that ETPI had sufficiently established not only its need to reduce its workforce and streamline its organization. that respondents claimed their separation pay in Page 172 . 183390. Inc. and it was only the notice to the DOLE that was filed short of the 30-day period. the incumbent sole and exclusive collective bargaining representative of all rank and file employees. ETPI. On 14 May 2004. by legal fiction. Gopo. SC observed that the requirement of law mandating the giving of notices was intended: not only to enable the employees to look for another employment and therefore ease the impact of the loss of their jobs and the corresponding income. Plastimer submitted to the DOLE an Establishment Termination Report containing the list of the employees affected by the reorganization and downsizing. corporate officers may be held solidarily liable with the corporation if the termination was done with malice or bad faith. It was decided that. SC finds Culili‘s dismissal was for a lawful cause and not an act of unfair labor practice. Culili has failed to prove that his dismissal was orchestrated by the individual respondents herein for the mere purpose of getting rid of him. to give the Department of Labor and Employment (DOLE) the opportunity to ascertain the verity of the alleged authorized cause of termination.00 as nominal damages for non-compliance with statutory due process. 30 days before its effective date on 14 June 2004. or to confuse a legitimate issue. Jefferson M. Respondents alleged that they did not voluntarily relinquish their jobs and that they were required to sign the waivers and quitclaims without giving them an opportunity to read them and without explaining their contents. and members. underpayment of separation pay. 67.‖ Thereafter. the specialized functions of a Senior Technician whose sole function was essentially the repair and servicing of ETPI‘s telecommunications equipment was no longer needed since the Business and Consumer [Accounts] Department had to remain economical and focused yet versatile enough to meet all the multifarious needs of its small and medium sized clients. respondents filed a complaint against Plastimer and its President Teo Kee Bin (petitioners) before the Labor Arbiter for illegal dismissal with prayer for reinstatement and full backwages. It held that petitioners were able to prove that there was a substantial withdrawal of stocks that led to the downsizing of the workforce. and seniority. but more importantly. Plastimer and Plastimer Industrial Corporation Christian Brotherhood (PICCB). it must be shown that the corporate personality was used to perpetuate fraud or an illegal act. G. the employees of Plastimer. including respondent Gopo and other employees were served written notices of their termination effective 13 June 2004. has a personality separate and distinct from its officers. Plastimer Industrial Corp. the affected employees were sufficiently informed of their retrenchment 30 days before its effectivity. xxx In this case.LABOR RELATIONS Atty. One-Month Notice of Termination of Employment Article 283 of the Labor Code provides: ART. Jefferson M. PICCB President. that Plastimer failed to use a reasonable and fair standard or criteria in ascertaining who would be dismissed and who would be retained among its employees. In this case. and Atty. that the MOA between Plastimer and PICCB only recognized the need for partial retrenchment and the computation of retrenchment pay without disclosing the criteria in the selection of the employees to be retrenched. and that the one accomplishing it has done so voluntarily and with a full understanding of its import. provided that it constitutes a credible and reasonable settlement. While notice to the DOLE was short of the one-month notice requirement. Petitioners‘ failure to comply with the one-month notice to the DOLE is only a procedural infirmity and does not render the retrenchment illegal. Each document contained the signatures of Marcaida. Validity of Waivers and Quitclaims The Court has ruled that a waiver or quitclaim is a valid and binding agreement between the parties.904. We agree with the Labor Arbiter and the NLRC that respondents were sufficiently apprised of their rights under the waivers and quitclaims that they signed. There is no need for the employer to wait for substantial losses to materialize before exercising ultimate and drastic option to prevent such losses. Records showed that the net income of P6. records showed an improvement of its finances in 2003. The Court of Appeals ruled that there was no valid cause for retrenchment. the petition before this Court.707. On appeal. Issue: WON respondents were illegally retrenched by petitioners.The employer may also terminate the employment of any employee due to the installation of labor-saving devices. Plastimer submitted the notice of termination of employment to the DOLE on 26 May 2004. . notice to the affected employees were given to them on 14 May 2004 or 30 days before the effectivity of their termination from employment on 13 June 2004. This Court is not precluded from reviewing the factual issues when there are conflicting findings by the Labor Arbiter. The Court of Appeals reversed the NLRC decision and found that petitioners have been illegally dismissed. and that the union President and the PICCB‘s counsel were not present when the retrenched employees were made to sign the waivers and quitclaims. the absence of proper notice should not nullify the dismissal or render it illegal or ineffectual. Instead. Here. the NLRC affirmed the Labor Arbiter‘s decision. we ruled that when the dismissal is for a just cause.88 loss in 2002. Marquez accordance with the MOA. Closure of establishment and reduction of personnel. NLRC. 283. Diwa. which proved Page 173 .05 for 2003 was not even enough for petitioners to recover from the P52. Hence.185. 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. 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 the provisions of this Title. Validity of Retrenchment The fact that there was a net income in 2003 does not justify the Court of Appeals‘ ruling that there was no valid reason for the retrenchment. However. and that respondents could not claim ignorance of the contents of the waivers and quitclaims because they were assisted by the union President and their counsel in signing them. the counsel for the union. the failure to fully comply with the one-month notice of termination of employment did not render the retrenchment illegal but it entitles respondents to nominal damages. we find that the findings of the Labor Arbiter and the NLRC are more in accord with the evidence on record. Article 283 of the Labor Code recognizes retrenchment to prevent losses as a right of the management to meet clear and continuing economic threats or during periods of economic recession to prevent losses. that while Plastimer claimed financial losses from 2001 to 2004.297. redundancy. the employer should indemnify the employee for the violation of his statutory rights. Ruling: The petition has merit. the NLRC and the Court of Appeals. In Agabon v. As respondents are categorized as those not qualified to register without examination. Further. Laquio. S. 2010 Facts: On different dates in the late 1990‘s. and Marlynn Palacio. petitioner informed them that their reapplication for school year 2000-2001 could not be accepted because they failed to pass the Licensure Examination for Teachers (LET). despite being unregistered and unlicensed. 68. respondents. "Under the policy of social justice. by setting a deadline for registration as professional teachers. it was established the petitioner retained other teachers who did not also possess the required eligibility. petitioner hired respondents Calibod. as guidance counselor. while we take cognizance of the employer‘s right to protect its interest. Saile and Montederamos. In separate letters dated March 31. Together with four other classroom teachers namely Gail Josephine Padilla (Padilla).LABOR RELATIONS Atty. however. Marquez that respondents were duly assisted when they signed the waivers and quitclaims. in the case at bar. It is incumbent upon this Court to afford full protection to labor. we SET ASIDE the Decision and Resolution of the Court of Appeals. Santander. Laquio. and hereby REINSTATE the Decision of the Labor Arbiter and the Resolution of the NLRC upholding the validity of respondents‘ retrenchment with MODIFICATION that petitioners pay each of the respondents the amount of P30. some of them possessed civil service eligibilities and special permits to teach. Santander. The DECS Memorandum. effective September 20. Calibod. No. the law requires them to register by taking and passing the licensure examination. Petitioner claims that it terminated respondents‘ employment as early as March 2000 because it would be highly difficult to hire professional teachers in the middle of the school year as replacements for respondents without compromising the operation of the school and education of the students. Jefferson M. petitioner did not dispute that it hired and retained other teachers who do not likewise possess the qualification and eligibility and even allowed them to teach during the school year 2000-2001. Petitioner‘s intention and desire not to put the students‘ education and school operation in jeopardy is neither a decisive consideration for respondents‘ termination prior to the deadline set by law. as classroom teachers. 164913. According to petitioner. WHEREFORE. its resolution and subsequent memorandum. proved that proper assistance was extended upon respondents. 600. 1997 fixed the deadline for teachers to register on September 19. Culture and Sports (DECS) Memorandum No. who were similarly dismissed by petitioner on the same ground. had until September 19. Palacio. the law has allowed incumbent teachers to practice their teaching profession until September 19. 2000. and respondent Palacio. Alma Decipulo (Decipulo). pursuant to PRC Resolution No. Again. Hence. G. Marcaida‘s letter to Teo Kee Bin. dated 28 May 2004. the same should be exercised in a manner which does not infringe on the workers‘ right to security of tenure. valid professional licenses and valid special/temporary permits can engage in teaching in both public and private schools. 2000 because it would be prejudicial to the school if their services will be terminated in the middle of the school year. Incidentally.000 as nominal damages for non-compliance with statutory due process. S. 10. St. Also. otherwise known as the Philippine Teachers Professionalization Act of 1994. Further. Petitioner claimed that it decided to terminate their services as early as March 31. as the aforesaid law provides for exceptions to the taking of examination. Virgilio Andalahao (Andalahao). 2000. only holders of valid certificates of registration. This indicates petitioner‘s ulterior motive in hastily dismissing respondents. The prejudice that respondents‘ retention would cause to the school‘s operation is only trivial if not speculative as compared to the consequences of respondents‘ unemployment. the Page 174 . September 8. and Montederamos was premature and defeated their right to security of tenure. as non-board passers. respondents filed a complaint contesting their termination as highly irregular and premature. we rule that the waivers and quitclaims that respondents signed were valid. respondents could not continue practicing their teaching profession pursuant to the Department of Education. 7836. Saile‘s dismissal has legal basis for lack of the required qualification needed for continued practice of teaching Pursuant to RA7836. 2000 to comply with the mandatory requirement to register as professional teachers. Mary’s Academy of Dipolog City vs.R. 1998 7 which requires incumbent teachers to register as professional teachers pursuant to Section 27of Republic Act (RA) No. Thus. Issue: Whether or not there was illegal dismissal Ruling: The dismissal of Teresita Palacio.24 Clearly. 2000. 2000. should not merit the penalty of dismissal. However. Marquez law bends over backward to accommodate the interests of the working class on the humane justification that those with less privilege in life should have more in law. Thus. He further stated that he realized that what he did was wrong and only worsened his situation and asked for another chance. Even assuming that respondent's absenteeism constitutes willful disobedience. respondent failed to report for work from February 11 to February 19. Petitioner terminated respondent through an Inter-Office Memorandum dated May 29. although found to be unauthorized. such offense does not warrant respondent's dismissal. 1992. pursuant to company rules and regulations.R. Issue: Whether or not there is sufficient ground for the termination of respondent. with his wife's medical certificate attached. and that while his absence from February 11 to 19. PLDT vs. Respondent called up through a third party to inform petitioner that he would go on an extended leave. respondent was suspended without pay for 45 days. No. Petition DENIED. petitioner required respondent to submit further explanation which the latter did reiterating his previous explanation. 143511. in an Inter-Office Memorandum dated May 29. the latter was terminated from service effective June 1. 1992 due to his third unauthorized absence within a three-year period. Not every case of insubordination or willful disobedience by an employee reasonably deserves the penalty of dismissal.LABOR RELATIONS Atty. respondent availed of a seven-day leave of absence and extended such leave to complete his annual vacation leave. there was no valid cause for respondent's dismissal. Held: We find that respondent's termination for committing three unauthorized absences within a three-year period had no basis. Respondent's absence from August 23 to September 3. While management has the prerogative to discipline its employees and to impose appropriate penalties on erring workers. However. Thus. 1990 as his wife gave birth and suffered complications. Jefferson M. 2010 Facts: Respondent was employed by petitioner Philippine Long Distance Telephone Company in 1981 as Clerk II until his termination from service on June 1. 1990 was justified and not unauthorized as there was prior notice. 1991 his eldest and youngest daughters getting sick and had to be confined in the hospital. Respondent was absent from May 29 to June 12. Teves. Respondent was absent from August 23 to September 3. November 15. being the only unauthorized and unjustified absence and his second unauthorized absence. however. The LA found that respondent‘s dismissal was legal. There must be a reasonable proportionality between the offense and the penalty. His absence from May 29 to June 12. However. 69. was not at all unjustified. Further. G. thus. notify or request petitioner for such leave and suspended respondent from work without pay for 20 days. Upon his reporting for work. the NLRC found that the two previous incidents of respondent‘s alleged unauthorized absences were justified. which would merit dismissal. 1992 was unacceptable and unreasonable. 1992 on account of his three (3) unauthorized leaves of absence committed within three (3) years in violation of petitioner‘s rules and regulations. he should have been penalized therefor accordingly. 1991. Petitioner found respondent‘s explanation insufficient. and it did not merit the harsh penalty of dismissal. 1992 which was made to prolong payment of his demandable financial obligations in the office. Petitioner found such explanation totally unacceptable. The CA affirmed the NLRC‘s findings and concluded that respondent‘s absences from February 11 to 19. finds no application in this case. but not with dismissal from service. 1992 addressed to respondent. 1992 was his first and only unauthorized absences during his 11 years of stay. Petitioner's claim that the alleged previous infractions may be used as supporting justification to a subsequent similar offense. Eight months thereafter. Dissatisfied. his absence during the period from February 11 to 19. such management prerogatives must be exercised in good faith for the advancement of the employer‘s interest Page 175 . respondent alleged that he had relayed said message to an officemate who unfortunately did not also report for work. 1991. it found respondent‘s explanation to be unacceptable and unmeritorious for the latter's failure to call. he wrote petitioner a letter confirming his leave of absence without pay for that period and stating the reasons thereof. Axalan had already returned to her teaching job at the university on 1 October 2004. Its implementation should be tempered with compassion and understanding. However. She was convinced that she cannot be considered absent and opted not to write the letter of apology requested of her by the University President to avoid any administrative charge. In this case however. or unlikely as when there is a demotion in rank or diminution in pay or when a clear discrimination. 2011 Facts: Teodora C. January 26. On the first instance. The university. Constructive dismissal occurs when there is cessation of work because continued employment is rendered impossible. There being no constructive dismissal. acted well within the bounds of labor laws in imposing the penalty of six-month suspension without pay for each incidence of AWOL. Thus. and attorney‘s fees. or disdain by an employer becomes unbearable to the employee leaving the latter with no other option but to quit. 1992. 1997. unreasonable. The Labor Arbiter‘s Decision ordering the reinstatement of Axalan. G. insensibility. She was dismissed due to 2 instances wherein she was allegedly absent without leave. it may terminate an employee for a just cause. attending seminars in Quezon City and Baguio City. should be deducted from the backwages to be awarded to him. the ad hoc grievance committee found Axalan to have incurred AWOL on both instances and recommended that Axalan be suspended without pay for six months on each AWOL charge. Held: NO. Significantly. his very breadbasket. In other words. The Court recognizes the right of employers to discipline its employees for serious violations of company rules after affording the latter due process and if the evidence warrants. a crucial element in a finding of constructive dismissal. Hence. It is unrefuted that Axalan promptly resumed teaching at the university right after the expiration of the suspension period.R. Considering that respondent was illegally dismissed from service. After conducting hearings and receiving evidence. The Court is wont to reiterate that while an employer has its own interest to protect. respectively. but his very livelihood. his suspension for thirty days would be in order. damages.LABOR RELATIONS Atty. and pursuant thereto. The university president approved the committee‘s recommendation and wrote Axalan a letter informing her of her absences and of her total penalty of one-year suspension without pay for both AWOL charges effective immediately. salary differentials. the amount equivalent to the thirty-day suspension. such prerogative to dismiss or lay off an employee must be exercised without abuse of discretion. is thus absurd. Thus. University of the Immaculate Concepcion vs. there was no cessation of employment relations between the parties. Jefferson M. Axalan cannot claim that she was left with no choice but to quit. Page 176 . Axalan is a regular faculty member holding the position of Associate Professor II in the University of the Immaculate Conception in Davao. at the time the Labor Arbiter rendered his Decision on 11 October 2004. he is entitled to be reinstated. there is no legal basis for the Labor Arbiter‘s order of reinstatement as well as payment of backwages. 181146. Axalan claimed that she asked permission from the VP for Academics who denied giving the same. Axalan claimed that she held online classes. The employer should bear in mind that. the third issue raised in the petition is now moot. On the second instance. since we find that respondent's absence from February 11 to 19. No. Axalan cannot be deemed to have been constructively dismissed. after affording Axalan due process and finding her guilty of incurring AWOL on two separate occasions. in the execution of said prerogative. thus. who at the time had already returned to work. 1992 was unjustified and unauthorized. which respondent should have served for his absence on February 11 to 19. without loss of seniority rights and the payment of backwages from the time respondent‘s compensation was withheld from him until his reinstatement on November 12. Hence. 70. NLRC. Axalan never quit. Axalan having been validly validly suspended for cause and in accord with procedural due process. there was no constructive dismissal. Issue: Whether or not there was constructive dismissal. Marquez and not for the purpose of defeating or circumventing the rights of the employees under special laws and valid agreements. what is at stake is not only the employee‘s position. the notice sent to the Department of Labor and Employment (DOLE) did not conform to the 30-day prior notice requirement. Consequently. held respondent to have been illegally dismissed. it did not comply with the provision of the Labor Code mandating the service of notice of retrenchment. For want of due notice. 1994 as Safety Officer assigned at Yutaka-Giken Project and eventually as Project Administrator of petitioner‘s Structural Steel Division (SSD) in 1995. Labor Arbiter rendered a decision holding that Mr. he was the only one dismissed out of 333 employees. First. Second. Shimizu argued that when it submitted the retrenchment notice/termination report to DOLE. the university cannot be expected to take lightly absences without official leave among its employees. The law protects both the welfare of employees and the prerogatives of management. To do so would send the wrong signal to the studentry and the rest of its teaching staff that irresponsibility is widely tolerated in the academe. is ordered to pay complainant-appellant Virgilio P. Virgilio Callanta was informed that his services will be terminated effective July 9. He pointed out that the notice sent to him never mentioned retrenchment but only project completion as the cause of termination. CA reversed and set aside the NLRC‘s ruling. The NLRC found that petitioner failed to comply with the 30-day prior notice to the DOLE and that there is no proof that petitioner used fair and reasonable criteria in the selection of employees to be retrenched. In the termination report submitted to DOLE. Simizu Phils Contractors v. that petitioner offered respondent his separation pay. The Labor Arbiter further relied on petitioner‘s factual version relating to respondent‘s employment background with regard to his position and behavioral conduct. He then filed an illegal dismissal complaint against petitioner assailing his dismissal as without any valid cause. there was already substantial compliance with the requirement. 71. No. and general principles of fairness and justice.R. respondent is further directed to pay complainant an indemnity equivalent to one (1) month salary. When respondent‘s Honda Project was completed.000. more so among its faculty members even if they happen to be union officers. September 29. Marquez As a learning institution. 165923. Callanta claimed that Shimizu failed to comply with the requirements called for by law before implementing a retrenchment program thereby rendering it legally infirmed. Shimizu advanced that respondent‘s services was terminated in accordance with a valid retrenchment program being implemented by the company since 1996 due to financial crisis that plague the construction industry. and that petitioner duly notified DOLE about the retrenchment. and ordered respondent‘s reinstatement and payment of backwages. According to the CA. Callanta his separation pay equivalent to one (1) month pay for every year of service. petitioner‘s failure to produce evidence raises the presumption that such evidence will be adverse to it. 2010 Facts: Shimizu Phils. the abolition of several departments and the concomitant termination of some employees were implemented as each project is completed. Callanta was validly retrenched. Inc. He found that sufficient evidence was presented to establish company losses. NLRC upheld the ruling that there was valid ground for respondent‘s termination but modified the Labor Arbiter‘s Decision by holding that petitioner violated respondent‘s right to procedural due process. the CA invalidated the retrenchment. a corporation engaged in the construction business. Moreover. Also. Shimizu Philippine Contractor. there were no proofs to sustain that petitioner used fair and reasonable criteria in determining which employees to retrench. petitioner presented financial statements for the years 1995 to 1997 as well as the Securities and Exchange Commission‘s approval of petitioner‘s application for a new paidin capital amounting to P330. 1997 due to the lack of any vacancy in other projects and the need to re-align the company‘s personnel requirements brought about by the imperatives of maximum financial commitments. Mr. Callanta. collective bargaining agreements if any. To prove its financial deficit. Page 177 . junior and inexperienced employees were appointed/assigned in his stead to new projects thus also ignoring seniority in hiring and firing employees. Courts will not interfere with prerogatives of management on the discipline of employees. as long as they do not violate labor laws. G. Shimizu alleged that in order not to jeopardize the completion of its projects. Jefferson M. employed Virgilio Callanta on August 23. Worse. petitioner failed to use fair and reasonable criteria in determining which employees shall be retrenched or retained.LABOR RELATIONS Atty..000. The CA opined that Shimizu failed to prove that there were employees other than respondent who were similarly dismissed due to retrenchment and that respondent‘s alleged replacements held much higher ranks and were more deserving employees. petitioner offered respondent his separation pay which the latter refused to accept and instead filed an illegal dismissal complaint. are not merely de minimis. if already incurred.00.LABOR RELATIONS Atty. (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. all of the employees of the Structural Steel Division were severed from employment. In implementing its retrenchment scheme. Electromechanical Works Division and the Territorial Project Management Offices. of which respondent was an Administrator. The purpose of the one month prior notice rule is to give DOLE an opportunity to ascertain the veracity of the cause of termination. Jefferson M. serious. Marquez Issue: Whether or not Shimizu has failed to obeserve fair and reasonable standards or criteria in effecting the dismissal or Mr. Callanta argued that that he was singled out for termination as allegedly shown in petitioner‘s monthly termination report for the month of July 1997 filed with the DOLE does not persuade this Court. In other words. the NLRC modified the Decision of the Labor Arbiter by granting respondent indemnity since the notice to DOLE was served short of the 30-day notice requirement and that there is no proof of the use of fair and reasonable criteria in the selection of employees to be retrenched or retained. Shimizu used fair and reasonable criteria in effecting retrenchment. and financial hardship for certain workers. Pacot. several departments like the Civil Works Division. that separation pay was offered to respondent. that the retrenchment scheme was arrived at in good faith. the indemnity in the form of nominal damages should be fixed in the amount of P50. physical fitness. limiting the grant of additional monetary benefits to managerial employees and cutting down expenses. and lastly. to wit. Noncompliance with this rule clearly violates the employee‘s right to statutory due process. age. in the case of the second notice. or if only expected. Thus. are reasonably imminent as perceived objectively and in good faith by the employer. and 16 days. Consequently. withdrawing certain privileges of petitioner‘s executives and expatriates. such as status. but substantial. and (5) That the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees. whichever is higher. The CA. there being enough evidence to prove that petitioner was sustaining business losses. But to be consistent with our ruling in Jaka Food Processing Corporation v. Respondent was among the last batch of employees who were retrenched and by the end of year 1997. efficiency. Shimizu implemented its retrenchment program in good faith because it undertook several measures in cutting down its costs. Callanta? Ruling: There was substantial compliance for a valid retrenchment. that it offered to pay respondent his separation pay. petitioner was constrained to streamline its operations and to downsize its complements in a progressive manner in order not to jeopardize the completion of its projects.000. The termination notice sent to DOLE did not comply with the 30-day notice requirement. actual and real. petitioner admitted that the reports were submitted 21 days. among others. It merely serves as notice to DOLE of the names of employees terminated/ retrenched only for the month of July. that the criteria or standard used in selecting the employees to be retrenched was work efficiency which passed the test of fairness and reasonableness. Standing alone. seniority. Shimizu was able to prove that it incurred substantial business losses. before the intended date of respondent‘s dismissal. Respondent did not attempt to refute that petitioner adopted these measures before implementing its retrenchment program. were abolished in the early part of 1996 and thereafter the Structural Steel Division. in the case of the first notice. As an authorized cause for separation from service under Article 283 of the Labor Code. (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. retrenchment is a valid exercise of management prerogative subject to the strict requirements set by jurisprudence: (1) That the retrenchment is reasonably necessary and likely to prevent business losses which. and infusing fresh capital into the company. and that notices of termination of service were furnished respondent and DOLE. Mr. it cannot be deemed as an evidence of the number of employees affected by the retrenchment program. thus. Thus we cannot conclude that no other employees were previously retrenched. reversed the Decision of the NLRC by ruling that the absence of fair and reasonable criteria in implementing the retrenchment invalidates altogether the retrenchment. selling of company vehicles. However. However. (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. Page 178 . respondent is entitled to indemnity for violation of due process. then. we affirm the NLRC‘s award of indemnity to respondent for want of sufficient due notice. Both the Labor Arbiter and the NLRC found sufficient compliance with these substantive requirements. this document is not proof of the total number of retrenched employees or that respondent was the only one retrenched. Edmundo Galvez. as well as the temporary lay-off of the employees. or public policy causing social humiliation. MMC called for the suspension of negotiations on the CBA with the Union until resumption of mining operations. September 29. The labor arbiter ruled in favor of MMC and held that the temporary shutdown of the mining operation.. Consequently. 2010 Facts: Respondent Manila Mining Corporation (MMC) is a publicly-listed corporation engaged in large-scale mining for gold and copper ore. complainants challenged the validity of their lay-off on the averment that MMC was not suffering from business losses. 7 to operate. It ratiocinated that the temporary lay-off. complainants Samuel Zuñiga. In their Position Paper. Gerardo Opena. Agusan del Norte. is valid. Doroteo Torre. Despite all efforts exerted by MMC. which was constructed in 1993 and was operated under a permit issued by the Department of Environment and Natural Resources (DENR). recognition of the Union as the sole and exclusive representative of its rank-andfile employees. through its Environmental Management Bureau (EMB) in Butuan City. the National Labor Relations Commission (NLRC) modified the judgment of the labor arbiter and ordered the payment of separation pay equivalent to one month pay for every year of service. Arsenio Mark Perez. which MMC failed to obtain. Respondents justified the temporary lay-off as bona fide in character and a valid management prerogative pending the issuance of the permit to continuously operate TP No. 178222-23. Myrna Maquio. Petitioners questioned the timing of their lay-off. had the effect of severance of the employer-employee relationship. Diana Ruth Rellores. Reynaldo Anzures. MMC decided to terminate all union officers and active members. the individuals laid-off were those who signed the attendance sheet of the union organizational meeting. Among the employees laid-off. Jonathan Araneta. it was compelled to temporarily shut down its mining operations. and alleged that first. wounded feelings or grave anxiety. and Edwin Tuazon. Jefferson M. For a charge of unfair labor practice to prosper. together with the Union filed a complaint before the labor arbiter on even date praying for reinstatement. resulting in the temporary lay-off of more than 400 employees in the mine site. 7. An essential component of an ECC is social acceptability or the consent of the residents in the community to allow TP No. MMC is required by law to maintain a tailings containment facility to store the waste material generated by its mining operations.R.LABOR RELATIONS Atty. so that instead of submitting their counterproposal to the CBA. 7). Petitioners likewise claimed that they were denied due process because they were not given a 30-day notice informing them of the lay-off. such compulsion does not include the commitment to precipitately accept or agree to the proposals of the other. it did not succeed in obtaining the consent of the residents of the community where the tailings pond would operate. No. DENR-EMB did not issue a permanent permit due to the inability of MMC to secure an Environmental Compliance Certificate (ECC). second. Marquez 72. MMC constructed several tailings dams to treat and store its waste materials. as mandated by law. good customs. The employer must have acted in a manner contrary to morals. which exceeded more than six (6) months. Upon expiration of the tailings permit on 25 July 2001. All it contemplates is that both parties Page 179 . It is precisely MMC‘s faultless failure to secure a permit which caused the temporary shutdown of its mining operations. Manila Mining Corp. Hence. Issue: WON there was bad faith on the part of MMC in implementing the temporary lay-off resulting in the complainants‘ constructive dismissal Held: The lay-off is neither illegal nor can it be considered as unfair labor practice. one of the conditions imposed by DENR-EMB in granting its application for a permanent permit. On appeal. or was oppressive to labor. While the law makes it an obligation for the employer and the employees to bargain collectively with each other. and third. Employees Association-FFW vs. 7 (TP No. no criteria were employed in choosing which employees to lay-off. Teresita Lagman. One of these dams was Tailings Pond No. bad faith or fraud. Manila Mining Corp. On 30 July 2001. it must be shown that the employer was motivated by ill-will. G. and payment of moral and exemplary damages and attorney‘s fees. They alleged that MMC did not want to bargain collectively with the Union. there was no showing that cost-cutting measures were taken by MMC. Neither was the DOLE informed of this layoff. petitioner advanced that there was no sufficient cause to terminate him as such ground was only a mere subterfuge of the respondent so as for him not to lodge a complaint of underpayment of wages. the Court finds that respondent company‘s loss of trust and confidence arising from petitioner‘s smuggling out of the scrap iron. MMC‘s failure had the effect of making the awards final so that MMC could no longer seek any other affirmative relief. 191008. and purposely. G. such as the handling or care and protection of the property and assets of the employer. loss of confidence as a just cause for termination of employment is premised on the fact that the employee concerned holds a position of responsibility. It is. as distinguished from an act done carelessly. the non-issuance of a permit forced MMC to permanently cease its business operations. Alturas Group of Companies. the employer can lawfully close shop anytime as long as cessation of or withdrawal from business operations is bona fide in character and not impelled by a motive to defeat or circumvent the tenurial rights of employees. April 11. Thus is bred the issue regarding the responsibility of MMC toward its employees. The Page 180 . The cessation of operations. trust and confidence or that the employee concerned is entrusted with confidence with respect to delicate matters. in order to constitute a just cause for dismissal. During the suspension. conpounded by his past acts of unauthorized selling cartons belonging to respondent company. knowingly. as confirmed by the Court of Appeals. without justifiable excuse. thoughtlessly. Loss of trust and confidence as a ground for dismissal of employees covers employees occupying a position of trust who are proven to have breached the trust and confidence reposed on them The language of Article 282(c) of the Labor Code states that the loss of trust and confidence must be based on willful breach of the trust reposed in the employee by his employer. No. Such breach is willful if it is done intentionally. The Court finds that it was error for the NLRC to opine that petitioner should have been afforded counsel or advised of the right to counsel. heedlessly. which constitutes substantive due process. As to substantive due process. As the case was appealed. the employee is entitled to be reinstated once the employer resumes operations within the 6-month period. and as long as he pays his employees their termination pay in the amount corresponding to their length of service. He was given a notice to the effect that he would be terminated by the respondent on the ground that he was caught by the security guard stealing scrap irons by smuggling them out from the company premises. In the first place. the dismissal is not illegal. It was proven that MMC stopped its operations precisely due to failure to secure permit to operate a tailings pond. constituted just cause for terminating his services. the respondent filed a criminal case of qualified theft against the respondent. however. And. Lopez vs. In the second place. we cannot say that MMC has no obligation at all to the laid-off employees. MMC did not appeal the decision of the Court of Appeals which affirmed the NLRC‘s award of separation pay to complainants.R. The Court is not impressed with the claim that actual severe financial losses exempt MMC from paying separation benefits to complainants. Separation pay must nonetheless be given to the separated employees. The betrayal of this trust is the essence of the offense for which an employee is penalized. Even as we declare the validity of the lay-off. Petitioner then filed an illegal dismissal case against the respondent on the ground that he was dismissed by the respondent without just cause and that he was not afforded due process as he was not given a counsel and an opportunity to confront witnesses. with respect to the appellate court‘s finding that petitioner was not afforded procedural due process that the Court deviates from. Later on. Dismissals have two facets: the legality of the act of dismissal. Under Article 283. 2011 Facts: Petitioner Lopez is the truck driver of the respondent. in the case at bar is of such nature. an employee is not deemed terminated. However. 73. The validity of its act of suspending its operations does not excuse it from paying separation pay. As a matter of fact. the NLRC ruled that there was a violation of due process in dismissing the petitioner as he was not afforded ample opportunity to refute the allegations lodged against him. Jefferson M. Issue: Whether or not the dismissal is illegal Ruling: No. Article 286 of the Labor Code allows the bona fide suspension of operations for a period not exceeding six (6) months. the act complained of must be work-related and shows that the employee concerned is unfit to continue working for the employer.LABOR RELATIONS Atty. Furthermore. In addition. Article 286 is silent with respect to the rights of the employee if the suspension of operations lasts for more than 6 months. and the legality of the manner of dismissal which constitutes procedural due process. Marquez should approach the negotiation with an open mind and make reasonable effort to reach a common ground of agreement. Procedural due process has been defined as giving an opportunity to be heard before judgment is rendered. On November 4. availment of an early retirement package worth P40. Separation pay is only warranted when the cause for termination is not attributable to the employee's fault. She rose from the ranks to become Assistant Area Sales Manager for Cebu Operations. she "lacked good faith. and could not thus refuse "another valid reassignment by treating it as an imposition and burden. A week later. Reno Foods. Jefferson M. petitioner requested that she be given her daily work assignment in Cebu. however. 2003. Apacible vs. from the start. 2003. On October 6. v. 29 and September 1. or transfer to Pasig City. however. xxx xxx xxx Page 181 . she was given four options: resignation. and another until September 27. contrary to the NLRC's finding. Petitioner requested that her transfer be made effective in October or November 2003 and that she be given time to discuss it with her husband and daughter. She instead filed an application for sick leave until September 11. termination. prompting petitioner to file a complaint for illegal dismissal. In such a case. 2003. such as serious misconduct. 74. service incentive leave pay. petitioner took a leave of absence on August 28. 2003.000. The Court of Appeals ruled that petitioner was not entitled to separation pay because. G. separation pay. 2003." It noted that petitioner. 2003. On October 7. Multimed Industries Inc. as well as in cases of illegal dismissal in which reinstatement is no longer feasible. petitioner was informed by respondent Marlene Orozco (Marlene). she was placed under investigation for the delayed released of BCRs (cash budget for customer representation in sealed envelopes which are given to loyal clients) which she received for distribution earlier in July 2003. No. or on August 11. petitioner was informed that her transfer would be effective August 18. He may also ask the employer to provide him copy of records material to his defense. that she would be transferred to the company's main office in Pasig City on account of the ongoing reorganization.LABOR RELATIONS Atty. which request was later to be denied by Olga by letter dated October 8. On September 3. 2003. Finding that the delay in releasing the BCRs amounted to loss of trust and confidence. His written explanation may also include a request that a formal hearing or conference be held. 13th month pay. 2002. On even date. non-payment of overtime pay.R. respondent company sent petitioner a memorandum-directive for her to immediately report to the head office in Pasig City and to return the company vehicle assigned to her to the Cebu Office within 24 hours. Marquez right to counsel and the assistance of one in investigations involving termination cases is personally or with the assistance of a representative or counsel. damages and attorney's fees before the Labor Arbiter. 2003. May 30. 2003. 2011 Facts: Petitioner Juliet Apacible was hired sometime in 1994 by respondent. the position she held at the time she was separated from the service in 2003. 178903.. 2003. just as it is where there exist substantial evidentiary disputes or where company rules or practice requires an actual hearing as part of employment pretermination procedure. Nagkakaisang Lakas ng Manggagawa (NLM)-Katipunan 16 explains the propriety of granting separation pay in termination cases in this wise: The law is clear. RULING: NO. such as those provided in Articles 283 and 284 of the Labor Code. petitioner was given a show cause notice for her to explain in writing why she should not be sanctioned for insubordination for failure to comply with the transfer order. On August 4. knew and accepted the company policy on transfers whenever so required. the conduct of a formal hearing or conference becomes mandatory. respondent company sent petitioner a notice of termination effective November 7. Without availing of any option. petitioner claims that in a meeting with the respondents. Petitioner did not heed the directive. Inc." ISSUE: Whether petitioner is entitled separation pay by way of financial assistance. her immediate superior. It is not allowed when an employee is dismissed for just cause. 2003 for insubordination. LABOR RELATIONS Atty. Jefferson M. Marquez It is true that there have been instances when the Court awarded financial assistance to employees who were terminated for just causes, on grounds of equity and social justice. The same, however, has been curbed and rationalized in Philippine Long Distance Telephone Company v. National Labor Relations Commission. In that case, we recognized the harsh realities faced by employees that forced them, despite their good intentions, to violate company policies, for which the employer can rightly terminate their employment. For these instances, the award of financial assistance was allowed. But, in clear and unmistakable language, we also held that the award of financial assistance shall not be given to validly terminated employees, whose offenses are iniquitous or reflective of some depravity in their moral character. When the employee commits an act of dishonesty, depravity, or iniquity, the grant of financial assistance is misplaced compassion. It is tantamount not only to condoning a patently illegal or dishonest act, but an endorsement thereof. It will be an insult to all the laborers who despite their economic difficulties, strive to maintain good values and moral conduct. In fact, in the recent case of Toyota Motors Philippines, Corp. Workers Association (TMPCWA) v. National Labor Relations Commission, we ruled that separation pay shall not be granted to all employees who are dismissed on any of the four grounds provided in Article 282 of the Labor Code. Such ruling was reiterated and further explained in Central Philippines Bandag Retreaders, Inc. v. Diasnes: To reiterate our ruling in Toyota, labor adjudicatory officials and the CA must demur the award of separation pay based on social justice when an employee's dismissal is based on serious misconduct or wilful disobedience; gross and habitual neglect of duty; fraud or wilful breach of trust; or commission of a crime against the person of the employer or his immediate family — grounds under Art. 282 of the Labor Code that sanction dismissals of employees. They must be most judicious and circumspect in awarding separation pay or financial assistance as the constitutional policy to provide full protection to labor is not meant to be an instrument to oppress the employers. The commitment of the Court to the cause of labor should not embarrass us from sustaining the employers when they are right, as assistance to the undeserving and those who are unworthy of the liberality of the law. (italics in the original, emphasis and underscoring supplied) ASTIED Petitioner was, it bears reiteration, dismissed for wilfully disobeying the lawful order of her employer to transfer from Cebu to Pasig City. As correctly noted by the appellate court, petitioner knew and accepted respondent company's policy on transfers when she was hired and was in fact even transferred many times from one area of operations to another — Bacolod City, Iloilo City and Cebu. Clearly, petitioner's adamant refusal to transfer, coupled with her failure to heed the order for her return the company vehicle assigned to her and, more importantly, allowing her counsel to write letters couched in harsh language to her superiors unquestionably show that she was guilty of insubordination, hence, not entitled to the award of separation pay. 75. Barroga vs. Data Center College, G.R. No. 174158, June 27, 2011 Facts: On November 11, 1991, petitioner was employed as an Instructor in Data Center College Laoag City branch in Ilocos Norte. In a Memorandum dated June 6, 1992, respondents transferred him to University of Northern Philippines (UNP) in Vigan, Ilocos Sur where the school had a tie-up program. Petitioner was informed through a letter dated June 6, 1992 that he would be receiving, in addition to his monthly salary, a P1,200.00 allowance for board and lodging during his stint as instructor in UNP-Vigan. In 1994, he was recalled to Laoag campus. On October 3, 2003, petitioner received a Memorandum transferring him to Data Center College Bangued, Abra branch as Head for Education/Instructor due to an urgent need for an experienced officer and computer instructor thereat. However, petitioner declined to accept his transfer to Abra citing the deteriorating health condition of his father and the absence of additional remuneration to defray expenses for board and lodging which constitutes implicit diminution of his salary. On November 10, 2003, petitioner filed a Complaint for constructive dismissal against respondents. Petitioner alleged that his proposed transfer to Abra constitutes a demotion in rank and diminution in pay and would cause personal inconvenience and hardship. For their part, respondents claimed that they were merely exercising their management prerogative to transfer employees for the purpose of advancing the school‘s interests. They argued that petitioner‘s refusal to be transferred to Abra constitutes insubordination. Ruling: Petitioner‘s transfer is not tantamount to constructive dismissal. Petitioner was originally appointed as instructor in 1991 and was given additional administrative functions as Head for Education during his stint in Laoag branch. He did not deny having been designated as Head for Education in a temporary capacity for which he cannot invoke any tenurial security. Hence, being temporary in character, such designation is terminable at the pleasure of respondents who made such appointment. Moreover, respondents‘ right to transfer petitioner rests not only on contractual stipulation but also on jurisprudential authorities. The Labor Arbiter and the NLRC both relied on the condition laid down in petitioner‘s employment contract that respondents have the prerogative to assign Page 182 LABOR RELATIONS Atty. Jefferson M. Marquez petitioner in any of its branches or tie-up schools as the necessity demands. In any event, it is management prerogative for employers to transfer employees on just and valid grounds such as genuine business necessity. It is also important to stress at this point that respondents have shown that it was experiencing some financial constraints. Because of this, respondents opted to temporarily suspend the post-graduate studies of petitioner and some other employees who were given scholarship grants in order to prioritize more important expenditures. 76. Lopez vs. Keppel Bank Phils., G.R. No. 176800, September 5, 2011 Facts: Petitioner Elmer Lopez was the Branch Manager of the respondent Keppel Bank Philippines, Inc. (bank) in Iloilo City. Allegedly, through his efforts, Hertz Exclusive Cars, Inc. (Hertz) became a client of the bank. By a notice, the bank asked Lopez to explain in writing why he should not be disciplined for issuing, without authority, two purchase orders (POs) for the Hertz account amounting to a total of P6,493,000.00, representing the purchase price of 13 Suzuki Bravo and two Nissan Exalta vehicles. Lopez submitted his written explanation on the same day, but the bank refused to give it credit. Through respondents Manuel Bosano III (Vice-President and Head of Retail Banking Division/Consumer Banking Division) and Stefan Tong Wai Mun (VicePresident/Comptroller), the bank terminated Lopez‘s employment effective immediately. Lopez filed a complaint for illegal dismissal and money claims against the bank, Bosano and Tong. Lopez alleged before the labor arbiter that he issued the POs as part of his strategy to enhance the bank's business, in line with his duty as branch manager to promote the growth of the bank. For its part, the bank denied approving the first PO, arguing that Lopez did not have the authority to issue the POs for the Hertz account as there was a standing advice that no Hertz loan application was to be approved. It stressed that Lopez committed a serious violation of company rules when he issued the POs. Issue: Whether or not petitioner was illegally dismissed Held: The right of an employer to freely select or discharge his employee is a recognized prerogative of management; an employer cannot be compelled to continue employing one who has been guilty of acts inimical to its interests. When this happens, the employer can dismiss the employee for loss of confidence. At the same time, loss of confidence as a just cause of dismissal was never intended to provide employers with a blank check for terminating employment. Loss of confidence should ideally apply only (1) to cases involving employees occupying positions of trust and confidence, or (2) to situations where the employee is routinely charged with the care and custody of the employer's money or property. To the first class belong managerial employees, i.e., those vested with the powers and prerogatives to lay down management polices and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or effectively recommend such managerial actions. To the second class belong cashiers, auditors, property custodians, or those who, in the normal and routine exercise of their functions, regularly handle significant amounts of money or property. As branch manager, Lopez clearly occupies a "position of trust." His hold on his position and his stay in the service depend on the employer's trust and confidence in him and on his managerial services. According to the bank, Lopez betrayed this trust and confidence when he issued the subject POs without authority and despite the express directive to put the client's application on hold. In response, Lopez insists that he had sufficient authority to act as he did, as this authority is inherent in his position as bank manager. He points to his record in the past when he issued POs which were honored and paid by the bank and which constituted the arbiter's "overwhelming evidence" in support of the finding that "complainant's dismissal from work was without just cause, hence, illegal." As a bank official, the petitioner must have been aware that it is basic in every sound management that people under one's supervision and direction are bound to follow instructions or to inform their superior of what is going on in their respective areas of concern, especially regarding matters of vital interest to the enterprise. Under these facts, we find it undisputed that Lopez disobeyed the bank's directive to put the Hertz loan application on hold, and did not wait until its negative credit rating was cleared before proceeding to act. That he might have been proven right is immaterial. Neither does the submission that the bank honored and paid the first PO and even realized a profit from the transaction, mitigate the gravity of Lopez's defiance of the directive of higher authority on a business judgment. What appears clear is that the bank cannot in the future trust the petitioner as a manager who would follow directives from higher authorities on business policy and directions. The bank can be placed at risk if this kind of managerial attitude will be repeated, especially if it becomes an accepted rule among lower managers. Page 183 LABOR RELATIONS Atty. Jefferson M. Marquez Under the circumstances of this case, we are convinced that the bank was justified in terminating Lopez's employment by reason of loss of trust and confidence. He admitted issuing the two POs, claiming merely that he had the requisite authority. He could not present any proof in this regard, however, except to say that it was part of his inherent duty as bank manager. He also claimed that the bank acquiesced to the issuance of the POs as it paid the first PO and the POs he issued in the past. This submission flies in the face of the bank's directive for him not to proceed unless matters are cleared with the bank's credit committee. The bank had a genuine concern over the issue as it found through its credit committee that Hertz was a credit risk. Whether the credit committee was correct or not is immaterial as the bank's direct order left Lopez without any authority to clear the loan application on his own. After this defiance, we cannot blame the bank for losing its confidence in Lopez and in separating him from the service. 77. St. Paul College Quezon City vs. Ancheta II, G.R. No. 169905, September 7, 2011 Facts: Respondent Remigio Michael Ancheta II and his wife, respondent Cynthia was hired by the same school as a part time teacher of the Mass Communication Department. A letter was sent to petitioner Sr. Bernadette and signed by some of the teachers of SPCQC, including the respondent spouses. The said letter contained the teachers' sentiments regarding two school policies, namely: first, the policy of penalizing the delay in encoding final grades and, second, the policy of withholding salaries of the teachers. The letter enumerated the departmental and instructional policies that respondent Remigio Michael failed to comply with, such as the late submission of final grades, failure to submit final test questions to the Program Coordinator, the giving of tests in the essay form instead of the multiple choice format as mandated by the school and the high number of students with failing grades in the classes that he handled. Mr. Ancheta failed 27 in a class of 44 students, and had a total number of 56 failures in his sections of Philippine History. Mrs. Ancheta failed 11 students in a class of 37, and had a total number of 16 failures in her 2 classes of Communication Theories. Subsequently, the respondent spouses received their respective letters of termination. Respondent spouses sent a letter for reconsideration to petitioner Sr. Lilia, but was eventually denied. Thus, respondent spouses filed a complaint for illegal dismissal with the NLRC but the Labor Arbiter dismissed the complaint. Issue: Whether or not the respondent spouses were validly dismissed Held: It is not disputed that respondent Remigio Michael was a full-time probationary employee and his wife, a part-time teacher of the petitioner school. A reality we have to face in the consideration of employment on probationary status of teaching personnel is that they are not governed purely by the Labor Code. The Labor Code is supplemented with respect to the period of probation by special rules found in the Manual of Regulations for Private Schools. On the matter of probationary period, Section 92 of these regulations provides: Section 92.Probationary Period. — Subject in all instances to compliance with the Department and school requirements, the probationary period for academic personnel shall not be more than three (3) consecutive years of satisfactory service for those in the elementary and secondary levels, six (6) consecutive regular semesters of satisfactory service for those in the tertiary level, and nine (9) consecutive trimesters of satisfactory service for those in the tertiary level where collegiate courses are offered on a trimester basis. A probationary employee or probationer is one who is on trial for an employer, during which the latter determines whether or not he is qualified for permanent employment. The probationary employment is intended to afford the employer an opportunity to observe the fitness of a probationary employee while at work, and to ascertain whether he will become an efficient and productive employee. While the employer observes the fitness, propriety and efficiency of a probationer to ascertain whether he is qualified for permanent employment, the probationer, on the other hand, seeks to prove to the employer that he has the qualifications to meet the reasonable standards for permanent employment. Thus, the word probationary, as used to describe the period of employment, implies the purpose of the term or period, not its length. The common practice is for the employer and the teacher to enter into a contract, effective for one school year. At the end of the school year, the employer has the option not to renew the contract, particularly considering the teacher's performance. If the contract is not renewed, the employment relationship terminates. If the contract is renewed, usually for another school year, the probationary employment continues. Again, at the end of that period, the parties may opt to renew or not to renew the contract. If renewed, this second renewal of the contract for another school year would then be the last year — since it would be the third school year — of probationary employment. At the end of this third year, Page 184 LABOR RELATIONS Atty. Jefferson M. Marquez the employer may now decide whether to extend a permanent appointment to the employee, primarily on the basis of the employee having met the reasonable standards of competence and efficiency set by the employer. For the entire duration of this three-year period, the teacher remains under probation. Upon the expiration of his contract of employment, being simply on probation, he cannot automatically claim security of tenure and compel the employer to renew his employment contract. Petitioner school contends that it did not extend the contracts of respondent spouses. It claims that, although, it has sent letters to the spouses informing them that the school is extending to them new contracts for the coming school year, the letters do not constitute as actual employment contracts but merely offers to teach on the said school year. Section 91 of the Manual of Regulations for Private Schools, states that: Section 91.Employment Contract. — Every contract of employment shall specify the designation, qualification, salary rate, the period and nature of service and its date of effectivity, and such other terms and condition of employment as may be consistent with laws and rules, regulations and standards of the school. A copy of the contract shall be furnished the personnel concerned. It is important that the contract of probationary employment specify the period or term of its effectivity. The failure to stipulate its precise duration could lead to the inference that the contract is binding for the full three-year probationary period. Therefore, the letters sent by petitioner Sr. Racadio, which were void of any specifics cannot be considered as contracts. The closest they can resemble to are that of informal correspondence among the said individuals. As such, petitioner school has the right not to renew the contracts of the respondents, the old ones having been expired at the end of their terms. Assuming, arguendo, that the employment contracts between the petitioner school and the respondent spouses were renewed, this Court finds that there was a valid and just cause for their dismissal. The Labor Code commands that before an employer may legally dismiss an employee from the service, the requirement of substantial and procedural due process must be complied with. Under the requirement of substantial due process, the grounds for termination of employment must be based on just or authorized causes. The plain admissions of the charges against them were the considerations taken into account by the petitioner school in their decision not to renew the respondent spouses' employment contracts. This is a right of the school that is mandated by law and jurisprudence. It is the prerogative of the school to set high standards of efficiency for its teachers since quality education is a mandate of the Constitution. As long as the standards fixed are reasonable and not arbitrary, courts are not at liberty to set them aside. Schools cannot be required to adopt standards which barely satisfy criteria set for government recognition. The same academic freedom grants the school the autonomy to decide for itself the terms and conditions for hiring its teacher, subject of course to the overarching limitations under the Labor Code. The authority to hire is likewise covered and protected by its management prerogative — the right of an employer to regulate all aspects of employment, such as hiring, the freedom to prescribe work assignments, working methods, process to be followed, regulation regarding transfer of employees, supervision of their work, lay-off and discipline, and dismissal and recall of workers. 78. Jumuad vs. Hi-Flyer Food, G.R. No. 187887, September 7, 2011 Facts: Petitioner Pamela Florentina P. Jumuad began her employment with respondent Hi-Flyer Food, Inc. as management trainee. Based on her performance through the years, Jumuad received several promotions until she became the area manager for the entire Visayas-Mindanao 1 region. Sometime on October 2004, Hi-Flyer conducted a food safety, service and sanitation audit and revealed several sanitation violations, such as the presence of rodents and the use of a defective chiller for the storage of food. When asked to explain, Jumuad first pointed out that she had already taken steps to prevent the further infestation of the branch. As to why the branch became infested with rodents, Jumuad faulted management's decision to terminate the services of the branch's pest control program and to rely solely on the pest control program of the mall. Hi-Flyer audited the account of one of its branches and found out irregularities of cash shortages. Another sanitation audit was made and signs of rodent gnawing/infestation were found. This time, Jumuad explained to management that she had been busy conducting management team meetings and that, at the date the audit was conducted, she had no scheduled visit. Hi-Flyer sent Jumuad an Irregularities Report and Notice of Charges. Jumuad submitted her written explanation. Hi-Flyer held an administrative hearing where Jumuad appeared with counsel. Apparently not satisfied with her explanations, Hi-Flyer served her a Notice of Dismissal. This prompted Jumuad to file a complaint against Hi-Flyer for illegal dismissal. Issue:: Page 185 LABOR RELATIONS Atty. Jefferson M. Marquez Whether Jumuad was illegally dismissed HELD: The Court is convinced that Jumuad cannot be dismissed on the ground of gross and habitual neglect of duty. The Court notes the apparent neglect of Jumuad of her duty in ensuring that her subordinates were properly monitored and that she had dutifully done all that was expected of her to ensure the safety of the consuming public. The nature of the anomalies uncovered were each of a different nature, the Court finds that her acts or lack of action in the performance of her duties is not born of habit. Despite saying this, it cannot be denied that Jumuad willfully breached her duties as to be unworthy of the trust and confidence of Hi-Flyer. Based on established facts, the mere existence of the grounds for the loss of trust and confidence justifies petitioner's dismissal. In the present case, the reports of Hi-Flyer show that there were anomalies committed in the branches managed by Jumuad. On the principle of respondeat superior or command responsibility alone, Jumuad may be held liable for negligence in the performance of her managerial duties. She may not have been directly involved in causing the cash shortages but her involvement in not performing her duty monitoring and supporting the day to day operations of the branches and ensure that all the facilities and equipment at the restaurant were properly maintained and serviced, could have truly prevented the whole debacle from ever occurring. Moreover, it is observed that rather than taking proactive steps to prevent the anomalies at her branches, Jumuad merely effected remedial measures. In the restaurant business where the health and well-being of the consuming public is at stake, this does not suffice. Thus, there is reasonable basis for Hi-Flyer to withdraw its trust in her and dismissing her from its service. 79. Nissan Motor Phils. Angelo, G.R. No. 164181, September 14, 2011 Facts: Respondent Victorino Angelo was employed by Nissan as one of its payroll staff. Respondent was not able to prepare the payroll for the said period as he was on sick leave. On his approved vacation leave, he was not again able to prepare the payroll for that particular period. Respondent received a Memorandum from the petitioner stating that the company is considering his dismissal from employment on the grounds of serious misconduct, willful disobedience and gross neglect of duties. It was stated in the memorandum that the supposed cut-off date for payroll purposes, the respondent went home early without finishing his work. The following day, he did not report for work, without any notice to the company or to any of his immediate superior section head. As a result, the company was doing the payroll thru IT and that the amount released to the employees were not accurate. Consequently, many employees got angry the deductions from salaries was not finished, the salaries of contractuals, apprentices were also not finished. Since the bank only reads account numbers of employees, the company experienced delay in the payroll processing. As a consequence of all these, the manufacturing employees, numbering about 350 people or about 65% of [Nissan's total population], have started to decline rendering overtime work, saying after their 15 days of work they received only less than P200 while some even received only P80. In sum, the company has suffered massive loss of opportunity to sell because of failure to produce in the production area due to non-availability of workers rendering overtime, high absenteeism rate among plant direct workers primarily due to the payroll problem. Finding that respondent's explanation was untrue and insufficient, petitioner issued a Notice of Termination. Respondent filed a complaint for illegal dismissal. Issue: Whether respondent was illegally dismissed Ruling: Going through the records, this Court found evidence to support the allegation of serious misconduct or insubordination. The language used by respondent in his Letter-Explanation is akin to a manifest refusal to cooperate with company officers, and resorted to conduct which smacks of outright disrespect and willful defiance of authority or insubordination. Accusatory and inflammatory language used by an employee to the employer or superior can be a ground for dismissal or termination. Another just cause cited by the petitioner is willful disobedience. Disobedience, to be a just cause for termination, must be willful or intentional, willfulness being characterized by a wrongful and perverse mental attitude rendering the employee's act inconsistent with proper subordination. This allegation of willful disobedience can still be adduced and proven from the same Letter-Explanation. Petitioner also dismissed respondent because of gross or habitual negligence. Neglect of duty, to be a ground for dismissal, must be both gross and habitual. In finding that petitioner was able to adduce evidence that would justify its dismissal of respondent, the NLRC correctly ruled that the latter's failure to turn over his functions to someone capable of performing the vital tasks which he could not effectively perform or undertake because of his heart ailment or condition constitutes gross neglect. Page 186 (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative. Such just causes for which an employer may terminate an employee are enumerated in Article 282 of the Labor Code: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work. and Loans and Senior Credit Investigator Primitivo Virtudazo (Virtudazo). Padao was hired by PNB as a clerk at its Dipolog City Branch. The questionable loans were reportedly being extended to select bank clients. Padao was dismissed by PNB for gross and habitual neglect of duties under Article 282 (b) of the Labor Code. The case against Padao was grounded on his having allegedly presented a deceptively positive status of the business. No. On March 23. The exposé triggered the conduct of separate investigations by the COA and PNB‘s Internal Audit Department (IAD) from January to August 1995. The credit standing of the loan applicants was also fabricated. and was ultimately promoted to the position of Loan and Credit Officer IV. the spouses Ibaba. 2011 Facts: On August 21. after due investigation. Danilo Dangcalan. PNB became embroiled in a scandal involving ―behest loans. 180849. and Virgie Pango. Both investigations confirmed that the collateral provided in numerous loan accommodations were grossly over-appraised. Sometime in 1994. Grave Misconduct. 1981. These borrowers eventually defaulted on the payment of their loans. he was appointed regular Credit Investigator III. although the dismissal was legal. 1995. 3019. in cases of regular employment. allowing them to obtain larger loan portfolios from PNB. Issue: Won the court of appeals erred in treating the act of falsifying the credit and appraisal reports and that of merely affixing one‘s signature in a false report prepared by another as one and the same degree of misconduct which warrants legal dismissal. Jefferson M. Assistant Department Manager and Cashier Olson Sala (Sala). (b) Gross and habitual neglect by the employee of his duties. considering his length of service and his poor physical condition which was one of the reasons he filed a leave of absence. an employee who has been dismissed for any of the just causes enumerated under Article 282 29 of the Labor Code is not entitled to separation pay. the grant of separation pay or some other financial assistance may be allowed to an employee dismissed for just causes on the basis of equity. the employer is prohibited from terminating the services of an employee except for a just or authorized cause. On January 10. causing PNB to suffer millions in losses. Marquez However. PNB found Padao guilty of gross and habitual neglect of duty and ordered him dismissed from the bank.‖ A certain Sih Wat Kai complained to the Provincial Office of the Commission on Audit (COA) of Zamboanga del Norte that anomalous loans were being granted by its officers: Assistant Vice President (AVP) and Branch Manager Aurelio De Guzman (AVP de Guzman). On June 14. It was later found that either said borrowers‘ businesses were inadequate to meet their loan obligations. Held: In this case. As a general rule. G.R. Catherine Opulentisima. He was later designated as a credit investigator in an acting capacity on November 9. Although by way of exception. 1993. November 16. credit standing/rating and financial capability of loan applicants Reynaldo and Luzvilla Baluma and eleven (11) others. and Rolly Pango. and violation of R. Jacinto Salac. No. respondent is still entitled to a separation pay as a measure of financial assistance. 1997. (d) Commission of a crime or offense by the employee against the person of his employer or any immediate family member of his family or his Page 187 . 1996. Padao. among them Joseph Liong. 80. Padao was also accused of having over-appraised the collateral of the spouses Gardito and Alma Ajero. or that the projects they sought to be financed did not exist.LABOR RELATIONS Atty.A. Conduct Prejudicial to the Best Interest of the Service. National Bank vs. Gross Neglect of Duty. Phil. Thus. Padao was administratively charged with Dishonesty. However. and Lilibeth Ong (Ong) and Johnson Ng (Ng). Lee had nice comments about her good work experience and educational background. She was asked to sign a letter of resignation and quitclaim. depending on the circumstances. These five grounds are just causes for dismissal as provided in Article 282 of the Labor Code. She was told not to report for work anymore because her services were no longer needed. The petitioners did not show her any evaluation or appraisal report regarding her alleged inefficient performance. she was deprived of the opportunity to be regularly part of the company and to be entitled to the benefits and privileges of a regular employee. No. National Capital Region. CA. She was unceremoniously terminated to prevent her from becoming a regular employee and be entitled to the benefits as such. (Tamson‘s). they informed Sy that her services would be terminated due to inefficiency. 81. vs. As she was terminated without an evaluation on her performance. she was directed to act as payroll officer. Despite the title. or the entire absence of care. During her pre-employment interview. against petitioners Tamson‘s Enterprises. Her dismissal was highly suspicious as it took place barely four (4) days prior to the completion of her six-month probationary period. Sy was hired by Tamson‘s as Assistant to the President. On February 24. Padao is not entitled to financial assistance. and would often work overtime just to finish her work. G. she earnestly performed her duties. In this case. PNB acted within the bounds of the law by meting out the penalty of dismissal. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. willful disobedience. fraud or willful breach of trust. no proof was shown as to her alleged poor work performance. On September 1. Gross negligence connotes want of care in the performance of one‘s duties. gross and habitual neglect of duty. 2006.R. She further claimed was illegally terminated from service and insists that the petitioners cannot invoke her failure to qualify as she was not informed of the standards or criteria which she should have met for regular employment. Jefferson M. worked even during brownouts and typhoons. had a perfect attendance record. Sy claimed that the remarks of her superiors about her alleged inefficiency were ill-motivated and made without any basis. Worse. 192881. her co-employees. Workers Association v. NLRC. four days before she completed her sixth month of working in Tamson‘s. ISSUE: Page 188 . 2007. Nelson Lee (Lee). Marquez duly authorized representative. while habitual neglect implies repeated failure to perform one‘s duties for a period of time. During the meeting. the Court reaffirmed the general rule that 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. but also did so repetitively and habitually. commission of a crime against the employer or his family. or those reflecting on his moral character. NLRC. In Toyota Motor Phils. Gross negligence has been defined as the want or absence of or failure to exercise slight care or diligence. Tamsons Enterprises Inc. November 16. per instruction of Lee. the company President. she did not act as such because. the Sales Project Manager. Corp. Sy (Sy) before the Arbitration Branch. He not only failed to perform what he was employed to do. called her to a meeting with him and Lee. Inc.LABOR RELATIONS Atty. Moreover. Padao‘s repeated failure to discharge his duties as a credit investigator of the bank amounted to gross and habitual neglect of duties under Article 282 (b) of the Labor Code. On her last day of work. Ng. Padao was dismissed by PNB for gross and habitual neglect of duties under Article 282 (b) of the Labor Code. and (e) Other causes analogous to the foregoing. She was assured of a long-term employment with benefits. which it deemed appropriate given the circumstances. She had been rendering services for almost six (6) months before she was arbitrarily and summarily dismissed. Throughout her employment. Ong humiliated her in front of her officemates by shouting at her and preventing her from getting her personal things or any other document from the office. 2011 Facts: This case stemmed from a complaint for illegal dismissal with money claims filed by respondent Rosemarie L. causing millions of pesos in damage to PNB. Thus. though she actually worked as a payroll clerk. she was deprived of her only means of livelihood. explaining how she and her salesgirls had placed the wrapped amount at the bottom of the cabinet the night before. this Court shares the view of the CA that Sy‘s employment was unjustly terminated to prevent her from acquiring a regular status in circumvention of the law on security of tenure. these standards should be made known to the [employees] on probationary status at the start of their probationary period. Being a regular employee whose termination was illegal. As held by this Court in the very recent case of Hacienda Primera Development Corporation v. Jefferson M. while the petitioner was giving a detailed statement on the theft to the security investigator of Harrison Plaza. 281. Security of tenure. Minex Import Corp. or xxx during which the probationary standards are to be applied. The Court can not permit such a subterfuge. Later. Under the terms of the Labor Code. Sy is entitled to the twin relief of reinstatement and backwages granted by the Labor Code. Working under her supervision were salesgirls Cristina Calung and Lida Baquilar. Where no standards are made known to the employee at that time. to her full backwages. Vina and Sylvia Mariano. Article 279 provides that an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges. (Underscoring supplied) It is settled that even if probationary employees do not enjoy permanent status. a probationary employee. Concepcion vs. G. The law is clear that in all cases of probationary employment. this is a common and convenient practice of unscrupulous employers to circumvent the law on security of tenure. The pertinent law governing the present case is Article 281 of the Labor Code which provides as follows: Art. unless it is covered by an apprenticeship agreement stipulating a longer period. This means they may only be terminated for a 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. the employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his engagement. inclusive of allowances. An employee who is allowed to work after a probationary period shall be considered a regular employee. Sy qualified as a regular employee. Villegas. 82. No. As the Court previously stated. if it is to be true to the law and social justice. he shall be deemed a regular employee. Probationary employment. 2012 Facts: Respondent is engaged in the retail of semi-precious stones. 153569. was valid or not. and how she had found upon reporting to work that morning that the contents of the cabinet were in disarray and the money. and to her other benefits or their monetary equivalent computed from the time her compensation was withheld from her up to the time of actual reinstatement. is that the [employer] should show – as a matter of due process – how these standards have been applied.R. At the close of business that day.912. — Probationary employment shall not exceed six months from the date the employee started working. they conducted a cashcount of their sales proceeds.LABOR RELATIONS Atty. Of critical importance in invoking a failure to meet the probationary standards. It employed the petitioner initially as a salesgirl then later on as supervisor..00.912. One day the petitioner and her salesgirls had sales of crystal items totaling P39. The standards under which she would qualify as a regular employee not having been communicated to her at the start of her probationary period.194. For failure of the petitioners to support their claim of unsatisfactory performance by Sy. HELD: The Court finds the petition devoid of merit. including those from the previous two days and determined their total for the three days to be P50. the award of attorney‘s fees is in order. Marquez WON the termination of Sy. should not be denied to the workers by such a stratagem.00 was missing. January 24. her Page 189 . Likewise. The services of an employee who has been engaged in a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. they are accorded the constitutional protection of security of tenure. which is a right of paramount value guaranteed by the Constitution. The petitioner wrapped the amount in a plastic bag and deposited it in the drawer of the locked wooden cabinet of the kiosk. The following day petitioner phoned respondent Vina Mariano to report that the P50. having been compelled to come to court and to incur expenses to protect her rights and interests. selling them in kiosks or stalls installed in various shopping centers.50. LABOR RELATIONS Atty. the finality being confirmed by no less than Sylvia Mariano herself telling the petitioner during their phone conversation following the latter‘s release from police custody that she (Sylvia) ―no longer wanted to see‖ her. 174208. (ii) A hearing or conference during which the employee concerned. respondent however failed to comply with the requirements of due process prior to the termination under the implementing rules and regulations of the Labor Code. their decision to dismiss her was already final even before the police authority commenced an investigation of the theft. grounds have been established to justify his termination In this case the respondents immediately had her arrested and investigated by the police authorities for qualified theft which constitutes a denial of her right to due process of law. The fact that the petitioner was the only person suspected of being responsible for the theft aggravated the denial of due process. One of the salesgirls however averred that she had left the petitioner alone because the latter had still to change her clothes. The petitioner argued that there was no evidence at all upon which Minex could validly dismiss her considering that she had not yet been found guilty beyond reasonable doubt of the crime of qualified theft. The Labor Tribunal need not have gone further as to require private respondent‘s conviction of the crime charged. For termination of employment based on just causes as defined in Article 282 of the Labor Code: (i) A written notice served on the employee specifying the ground or grounds for termination. or inferred innocence on their part from their release from detention. Subsequently petitioner filed a case for illegal dismissal against respondent and two days later respondent filed a criminal case for qualified theft against petitioner. with the assistance of counsel if he so desires is given opportunity to respond to the charge. the following standards of due process shall be substantially observed. (iii) A written notice of termination served on the employee. It has been raised and rejected many times before on the basis that neither conviction beyond reasonable doubt for a crime against the employer nor acquittal after criminal prosecution was indispensable. reiterating that on the time the alleged crime took place she.194. indicating that upon due consideration of all the circumstances. the fiscal rendered a resolution finding probable cause for qualified theft and recommending the filing of an information against the petitioner. Nor was a formal charge in court for the acts prejudicial to the interest of the employer a pre-requisite for a valid dismissal. 83.. present his evidence. No. In fact.00 to be reported for pick-up if the amount could not be deposited in the bank. or rebut the evidence presented against him. After the preliminary investigation. Issues: Whether or not there was valid ground to terminate the petitioner. Thus. Marquez superiors.R. consisting in the opportunity to be heard and to defend herself. While there is a valid ground to terminate petitioner.000. and giving said employee reasonable opportunity within which to explain his side. January 25. Morales vs.50 cash sales on that faithful day in violation of the standard operating procedure (SOP) requiring cash proceeds exceeding P10. had first counted the cash before placing it in a plastic bag that she deposited inside the drawer of the cabinet with the knowledge of the other salesgirls. Ruling: The petitioner‘s argument is not novel. 2012 Facts: Page 190 . Harbour Centre Port Terminal Inc. and that that was the first time that the petitioner had ever asked to be left behind. In all cases of termination of employment. together with her two salesgirls. for they had previously left the kiosk together. The petitioner insisted on her innocence. Jefferson M. she was charged with qualified theft before the Regional Trial Court. Respondent Vina declared that the petitioner did not call the office of Minex for the pick-up of the P39. The criminal charges initiated by the company against private respondents and the finding after preliminary investigation of their prima facie guilt of the offense charged constitute substantial evidence sufficient to warrant a finding by the Labor Tribunal of the existence of a just cause for their termination based on loss of trust and confidence. arrived with a policeman who immediately placed the petitioner under arrest and brought her to a police station where she was investigated her and detained for a day. which was mainly due to their posting of bail. G. LABOR RELATIONS Atty. Jefferson M. Marquez Petitioner was hired by respondent Harbour Centre Port Terminal, Inc. (HCPTI) as an Accountant and Acting Finance Officer, with a monthly salary of P18,000. Morales was later on promoted to Division Manager of the Accounting Department, for which he was compensated a monthly salary of P33,700.00, plus allowances . Subsequent to HCPTI‘s transfer to its new offices at Vitas, Tondo, Manila Morales received an interoffice memorandum reassigning him to Operations Cost Accounting, tasked with the duty of ―monitoring and evaluating all consumables requests, gears and equipment‖ related to the corporation‘s operations and of interacting with its sub-contractor, Bulk Fleet Marine Corporation. Morales wrote Singson, protesting that his reassignment was a clear demotion since the position to which he was transferred was not even included in HCPTI‘s plantilla. In response to Morales‘ grievance Singson issued an inter-office memorandum to the effect that ―transfer of employees is a management prerogative‖ and that HCPTI had ―the right and responsibility to find the perfect balance between the skills and abilities of employees to the needs of the business. For the whole of the ensuing month Morales was absent from work and/or tardy. Singson issued to Morales a memorandum denominated as a First Warning reminding Morales that, as an employee of HCPTI, he was subject to its rules and regulations and could be disciplinarily dealt with pursuant to its Code of Conduct. In view of the absences Morales continued to incur, HCPTI issued a Second Warning and a Notice to Report for Work and Final Warning. In the meantime, Morales filed a complaint against HCPTI, Filart and Singson, for constructive dismissal. Respondent filed their position paper, arguing that Morales abandoned his employment and was not constructively dismissed. Issue: WON petitioner was constructively dismissed. Held: Constructive dismissal exists where there is cessation of work because "continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank or a diminution in pay and other benefits. In cases of a transfer of an employee, the rule is settled that the employer is charged with the burden of proving that its conduct and action are for valid and legitimate grounds such as genuine business necessity and that the transfer is not unreasonable, inconvenient or prejudicial to the employee. If the employer cannot overcome this burden of proof, the employee‘s transfer shall be tantamount to unlawful constructive dismissal. Petitioner was constructively dismissed. He was already occupying the position of Division Manager at HCPTI‘s Accounting Department and as a consequence of his promotion to said position. That the reassignment was a demotion is evident from Morales‘ new duties which, far from being managerial in nature, were very simply and vaguely described as inclusive of ―monitoring and evaluating all consumables requests, gears and equipments related to [HCPTI‘s] operations‖ as well as ―close interaction with its sub-contractor Bulk Fleet Marine Corporation. Morales‘ demotion is evident from the fact that his reassignment entailed a transfer from a managerial position to one which was not even included in the corporation‘s plantilla. While ordinarily management prerogative is not interfered with, it is also not absolute and is subject to limitations imposed by law, collective bargaining agreement, and general principles of fair play and justice. 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. Respondent however failed to justify the demotion of petitioner on the ground that it was reorganizing its business structure, this was evidenced by the fact that Morales was able to prove that HCPTI‘s existing plantilla did not include an Operations Cost Accounting Department and/or an Operations Cost Accountant. As the party belatedly seeking to justify the reassignment due to the supposed reorganization of its corporate structure, HCPTI, in contrast, did not even bother to show that it had implemented a corporate reorganization and/or approved a new plantilla of positions which included the one to which Morales was being transferred. On the allegation of abandonment on the part of petitioner As a just and valid ground for dismissal, at any rate, abandonment requires the deliberate, unjustified refusal of the employee to resume his employment, without any intention of returning. Since an employee like Morales who takes steps to protest his dismissal cannot logically be said to have abandoned his work, it is a settled doctrine that the filing of a complaint for illegal dismissal is inconsistent with abandonment of employment. 84. Mansion Printing Center vs. Bitara, G.R. No. 168120, January 25, 2012 Facts: Petitioner Mansion Printing Center is a single proprietorship registered under the name of its president and co-petitioner Clement Cheng. It is engaged in the printing of quality self-adhesive labels, brochures, posters, stickers, packaging and the like. Petitioners engaged the services of respondent as a helper (kargador), who was later as the company's sole driver tasked to pick-up raw materials for the printing business, collect account receivables and deliver the products to the clients within the delivery schedules. Page 191 LABOR RELATIONS Atty. Jefferson M. Marquez Petitioners aver that the timely delivery of the products to the clients is one of the foremost considerations material to the operation of the business. It being so, they closely monitored the attendance of respondent. They noted his habitual tardiness and absenteeism. Thus, as early as 23 June 1999, petitioners issued a Memorandum requiring respondent to submit a written explanation why no administrative sanction should be imposed on him for his habitual tardiness. Despite having sent petitioners a letter stating his apologies and resolution to correct his tardiness and constant unauthorized absences, respondent still did not do what he had committed to do. Because of this, Davis Cheng, General Manager of the company and son of petitioner Cheng, issued another Memorandum (Notice to Explain) requiring respondent to explain why his services should not be terminated. He personally handed the Notice to Explain to respondent but the latter, after reading the directive, refused to acknowledge receipt thereof. He did not submit any explanation and, thereafter, never reported for work. Due to the actions of respondent, petitioner was urged to serve upon him another Memorandum, this time a Notice of Termination upon informing him that he was found grossly negligent of his duties. Respondent met with management, requesting that his termination from service would be reconsidered. After hearing the respondent, management still decided to implement the Memorandum, but out of the generosity of the management, respondent was offered financial assistance equivalent to P6,110.00 equivalent to his one month salary. Respondent demanded that he be given the amount equivalent to two (2) months' salary but the management declined as it believed it would, in effect, reward respondent for being negligent of his duties. Respondent filed a complaint illegal dismissal against petitioners before the LA, praying for reinstatement and payment of full backwages, legal holiday pay, SIL pay, damages and attorney‘s fees. LA dismissed the complaint for lack of merit. NLRC affirmed such decision and denied the motion for reconsideration. After raising the issue that NLRC rendered its decision with grave abuse of discretion and/or without or in excess of jurisdiction, the CA reversed the decision and found for the respondent. Hence, this petition. Issue: Whether or not respondent‘s dismissal was illegal. Ruling: The Supreme Court rendered judgment for petitioners. In order to validly dismiss an employee, the employer is required to observe both substantive and procedural aspects — the termination of employment must be based on a just or authorized cause of dismissal and the dismissal must be effected after due notice and hearing. Petitioners complied with substantive due process considering that his termination was not only due to his recent absences but this was because of his previous infractions capped by his recent unauthorized absences. Petitioners were even able to satisfactorily establish that respondent‘s absences were indeed unauthorized. And they were able to establish that respondent was gross negligent of his duties as he was habitually tardy evidenced by his admission in his apology, and yet even after such apology, he continued to be tardy. Clearly, petitioners also complied with procedural due process since they served him with notice, before having terminated him. We said that procedural due process called for two requisites: (1) the employer must inform the employee of the specific acts or omissions for which his dismissal is sought; and (2) after the employee has been given the opportunity to be heard, the employer must inform him of the decision to terminate his employment Petitioners have repeatedly called the attention of respondent concerning his habitual tardiness, and the first Memorandum given to him required him to explain his tardiness. Having received this Memorandum, he submitted a letter offering an apology and undertook to henceforth report for duty on time, but afterward proved unavailing. The Supreme Court cited a previous jurisprudence defining gross negligence as "want of care in the performance of one's duties" 50 and habitual neglect as "repeated failure to perform one's duties for a period of time, depending upon the circumstances." 51 These are not overly technical terms, which, in the first place, are expressly sanctioned by the Labor Code of the Philippines. Bearing in mind that the tardiness and absences of respondent were not isolated incidents, but manifested a pattern of habituality, then petitioners were correct with their remedy of terminating him after having properly served him with a Notice of Termination that he refused to accept. 85. Manila Electric Co. vs. Beltran, G.R. No. 173774, January 30, 2012 Page 192 LABOR RELATIONS Atty. Jefferson M. Marquez Facts: Beltran was employed by MERALCO and at the time material to this case, she was holding the position of Senior Branch Clerk at MERALCO‘s Pasig branch. While rendering overtime work on September 28, 1996, a Saturday, Beltran accepted P15,164.48 from Collection Route Supervisor Berlin Marcos (Marcos), which the latter received from customer Andy Chang (Chang). The cash payment was being made in lieu of a returned check earlier issued as payment for Chang‘s electric bill.Beltran received the payment and issued Auxiliary Receipt No. 87964 which she dated September 30, 1996, a Monday, instead of September 28, 1996. This was done to show that it was an accommodation, an accepted practice in the office. She thereafter placed the money and the original auxiliary receipt and other documents pertinent to the returned check underneath her other files inside the drawer of her table. Beltran, however, was only able to remit Chang‘s payment on January 13, 1997. Thus, in a Memorandum dated January 16, 1997, she was placed under preventive suspension effective January 20, 1997 pending completion of an investigation. MERALCO considered as misappropriation or withholding of company funds her failure to immediately remit said payment in violation of its Code on Employee Discipline. Garcia, the Administrative Supervisor of MERALCO‘s Pasig branch, on the other hand, testified that while doing an accounting of all outstanding returned checks sometime in December 1996, she noticed that Chang‘s returned check was missing. Upon further inquiry, she discovered that Chang had already redeemed the returned check after paying P15,164.48 to Beltran, who in turn issued an Auxiliary Receipt dated September 30, 1996. It was also discovered that the payment has not yet been remitted. This prompted her to inquire from Beltran on January 7, 1997 about the supposed payment and immediately ordered the remittance of the same. Beltran, however, failed to do so on that day and even on the next day when she reported for work. Beltran subsequently went on leave of absence on January 9 and 10, 1997. It was only on January 13, 1997 that the money with the pertinent documents was handed over. In a memorandum dated February 25, 1997, the investigator found Beltran guilty of misappropriating and withholding Chang‘s payment of P15,164.48 and recommended her dismissal from service. Beltran filed a complaint for illegal dismissal against MERALCO. She argued that she had no intention to withhold company funds. Besides, it was not her customary duty to collect and remit payments from customers. She claimed good faith, believing that her acceptance of Chang‘s payment is considered goodwill in favor of both MERALCO and its customer. If at all, her only violation was a simple delay in remitting the payment, which caused no considerable harm to the company. In a Decision of the Labor Arbiter regarded the penalty of dismissal as not commensurate to the degree of infraction committed as there was no adequate proof of misappropriation on the part of Beltran. If there was delay in Beltran‘s remittance of Chang‘s payment, it was unintentional and same cannot serve as sufficient basis to conclude that there was misappropriation of company funds. In fact, Beltran did not even attempt to deny possession of, or refuse to hand in, the money. The Labor Arbiter thus gave compassionate consideration for the neglect to remit the money promptly, stating that it is excusable for Beltran to commit lapses in her work due to serious family difficulties. Upon appeal, the NLRC reversed the Labor Arbiter‘s Decision and dismissed Beltran‘s complaint against MERALCO in its Decision. It found that Beltran withheld company funds by failing to remit it for almost four months. The NLRC thus ruled that MERALCO validly dismissed Beltran from the service in the exercise of its inherent right to discipline its employees. When Beltran brought the case to the CA the NLRC‘s ruling was reversed. The CA instead agreed with the findings of the Labor Arbiter that there were no serious grounds to warrant Beltran‘s dismissal. The CA held that the penalty of dismissal is harsh considering the infraction committed and Beltran‘s nine years of unblemished service with MERALCO. Issue: Whether or not Beltran dismissal is valid finding that she is guilty of withholding company funds. Ruling: Supreme Court support the CA‘s finding that there are no sufficient grounds to warrant Beltran‘s dismissal. For loss of trust and confidence to be a valid ground for dismissal, it must be based on a willful breach of trust and founded on clearly established facts. 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. In addition, loss of trust and confidence must rest on substantial grounds and not on the employer‘s arbitrariness, whims, caprices or suspicion. In the case at bench, Beltran attributed her delay in turning over Chang‘s payment to her difficult family situation as she and her husband were having marital problems and her child was suffering from an illness. Admittedly, she was reminded of Chang‘s payment by her supervisor on January 7, 1997 but denied having been ordered to remit the money on that day. She then reasoned that her continued delay was caused by an inevitable need to take a leave of absence for her to attend to the needs of her child who was suffering from asthma. MERALCO cannot claim or conclude that Beltran misappropriated the money based on mere suspicion. And even if Beltran delayed handing over the funds to the company, MERALCO still has the burden of proof to show clearly that such act of negligence is sufficient to justify termination from employment. Beltran was Page 193 LABOR RELATIONS Atty. Jefferson M. Marquez remiss in her duties for her failure to immediately turn over Chang‘s payment to the company. Such negligence, however, is not sufficient to warrant separation from employment. To justify removal from service, the negligence should be gross and habitual. ―Gross negligence x x x is the want of even slight care, acting or omitting to act in a situation where there is duty to act, not inadvertently but willfully and intentionally, with a conscious indifference to consequences insofar as other persons may be affected.‖ Habitual neglect, on the other hand, connotes repeated failure to perform one‘s duties for a period of time, depending upon the circumstances. No concrete evidence was presented by MERALCO to show that Beltran‘s delay in remitting the funds was done intentionally. Neither was it shown that same is willful, unlawful and felonious contrary to MERALCO‘s finging as stated in the letter of termination it sent to Beltran. Surely, Beltran‘s single and isolated act of negligence cannot justify her dismissal from service. 86. Bank of Lubao vs. Manabat, G.R. No. 188722, February 1, 2012 Facts: Sometime in 2001, Rommel J. Manabat (respondent) was hired by petitioner Bank of Lubao, a rural bank, as a Market Collector. Subsequently, the respondent was assigned as an encoder at the Bank of Lubao‘s Sta. Cruz Extension Office, which he manned together with two other employees, teller Susan P. Lingad (Lingad) and May O. Manasan. As an encoder, the respondent‘s primary duty is to encode the clients‘ deposits on the bank‘s computer after the same are received by Lingad. In November 2004, an initial audit on the Bank of Lubao‘s Sta. Cruz Extension Office conducted by the petitioner revealed that there was a misappropriation of funds in the amount of P3,000,000.00, more or less. Apparently, there were transactions entered and posted in the passbooks of the clients but were not entered in the bank‘s book of accounts. Further audit showed that there were various deposits which were entered in the bank‘s computer but were subsequently reversed and marked as ―error in posting‖. The respondent, through a memorandum sent by the petitioner, was asked to explain in writing the discrepancies that were discovered during the audit. Respondent submitted to the petitioner his letter-explanation which, in essence, asserted that there were times when Lingad used the bank‘s computer while he was out on errands. Administrative hearing was conducted by the bank‘s investigating committee where the respondent was further made to explain his side. Subsequently, the investigating committee concluded that the respondent conspired with Lingad in making fraudulent entries disguised as error corrections in the bank‘s computer.That‘s why the petitioner filed several criminal complaints for qualified theft against Lingad and the respondent with the Municipal Trial Court (MTC) of Lubao, Pampanga. Thereafter, citing serious misconduct tantamount to willful breach of trust as ground, it terminated the respondent‘s employment. But respondent filed a Complaint for illegal dismissal with the Regional Arbitration Branch of the National Labor Relations Commission (NLRC) in San Fernando City, Pampanga. In the said complaint, the respondent, to bolster his claim that there was no valid ground for his dismissal, averred that the charge against him for qualified theft was dismissed for lack of sufficient basis to conclude that he conspired with Lingad. The respondent sought an award for separation pay, full backwages, 13thmonth pay for 2004 and moral and exemplary damages. The Labor Arbiter (LA) rendered a decision sustaining the respondent‘s claim of illegal dismissal thus ordering the petitioner to reinstate the respondent to his former position and awarding the latter backwages. The LA opined that the petitioner failed to adduce substantial evidence that there was a valid ground for the respondent‘s dismissal. The NLRC rendered a Decision affirming the Decision of the LA. The NLRC held that it was sufficiently established that only Lingad was the one responsible for the said misappropriations However, the CA held that the respondent is entitled to separation pay equivalent to one-month salary for every year of service in lieu of reinstatement and backwages to be computed from the time of his illegal dismissal until the finality of the said decision. The CA agreed with the LA and the NLRC that the petitioner failed to establish by substantial evidence that there was indeed a valid ground for the respondent‘s dismissal. Nevertheless, the CA held that the petitioner should pay the respondent separation pay since the latter did not pray for reinstatement before the LA and that the same would be in the best interest of the parties considering the animosity and antagonism that exist between them. Issues: Whether or not Rommel J. Manabat was illegally dismissed and will be entitled to separation pay in lieu of reinstatement and payment of backwages. Ruling: This Court notes that the LA, the NLRC and the CA unanimously ruled that the respondent was illegally dismissed. Factual findings of quasi- Page 194 LABOR RELATIONS Atty. Jefferson M. Marquez judicial bodies like the NLRC, if supported by substantial evidence, are accorded respect and even finality by this Court, more so when they coincide with those of the LA. Such factual findings are given more weight when the same are affirmed by the CA. We find no reason to depart from the foregoing rule. Here, Court agree with the CA that the relations between the parties had been already strained thereby justifying the grant of separation pay in lieu of reinstatement in favor of the respondent. Undoubtedly, the petitioner‘s filing of various criminal complaints against the respondent for qualified theft and the subsequent filing by the latter of the complaint for illegal dismissal against the latter, taken together with the pendency of the instant case for more than six years, had caused strained relations between the parties. considering that the respondent‘s former position as bank encoder involves the handling of accounts of the depositors of the Bank of Lubao, it would not be equitable on the part of the petitioner to be ordered to maintain the former in its employ since it may only inspire vindictiveness on the part of the respondent. Then the refusal of the respondent to be re-admitted to work is in itself indicative of the existence of strained relations between him and the petitioner. The backwages that should be awarded to the respondent should be modified. Employees who are illegally dismissed are entitled to full backwages, inclusive of allowances and other benefits or their monetary equivalent, computed from the time their actual compensation was withheld from them up to the time of their actual reinstatement. But if reinstatement is no longer possible, the backwages shall be computed from the time of their illegal termination up to the finality of the decision. Thus, it is but fair that the backwages that should be awarded to the respondent be computed from the time that the respondent was illegally dismissed until the time when he was required to report for work, i.e. from September 1, 2005 until May 4, 2007. It is only during the said period that the respondent is deemed to be entitled to the payment of backwages. 87. Canadian Opportunities Unlimited vs. Dalangin, G.R. No. 172223, February 6, 2012 Facts: Dalangin was hired by Canadian Opportunities Unlimited Inc. on October 2001 as Immigration and Legal Manager. He was placed on probation for six months. His tasks involved principally the review of the clients' applications for immigration to Canada to ensure that they are in accordance with Canadian and Philippine laws. Barely a month later, on October 27, 2001, the company terminated Dalangin's employment, declaring him "unfit" and "unqualified" to continue his work. They alleged that during his brief employment in the company, Dalangin showed lack of enthusiasm towards his work and was indifferent towards his co-employees and the company clients. Dalangin refused to comply with the company's policies and procedures, routinely taking long lunch breaks, exceeding the one hour allotted to employees, and leaving the company premises without informing his immediate superior, only to call the office later and say that he would be unable to return because he had some personal matters to attend to. He also showed lack of interpersonal skills and initiative. Dalangin's lack of interest in the company was further manifested when he refused to attend company-sponsored seminars designed to acquaint or update the employees with the company's policies and objectives. Dalangin alleged that the company required its employees to attend a "Values Formation Seminar" scheduled for October 27, 2001 (a Saturday) at 2:00 p.m. onwards. He inquired from Abad, the Chief Operating Officer, about the subject and purpose of the seminar and when he learned that it bore no relation to his duties, he told Abad that he would not attend the seminar as he would have to leave at 2:00 p.m. in order to be with his family in the province. Dalangin claimed that Abad insisted that he attend the seminar. On October 26, 2001, Abad required him to explain why he could not attend the seminar scheduled for October 27, 2001 and the other forthcoming seminars. The following day, October 27, 2001, Abad informed him that Mr. Yadi N. Sichani, the company's Managing Director, wanted to meet with him regarding the matter. At that meeting, Sichani told him that his services were being terminated because Sichani could not keep in his company "people who are hard-headed and who refuse to follow orders from management." The Labor Arbiter declared Dalangin's dismissal illegal. He found that the charges against Dalangin were not established by clear and substantial proof. The NLRC reversed the labor arbiter's ruling. It found Dalangin's dismissal to be a valid exercise of the company's management prerogative because Dalangin failed to meet the standards for regular employment. The CA held that the NLRC erred when it ruled that Dalangin was not illegally dismissed. As the labor arbiter did, the CA found that the company failed to support, with substantial evidence, its claim that Dalangin failed to meet the standards to qualify as a regular employee. Issues: Whether Dalangin was illegally dismissed. Whether the requirements of notice and hearing in employee dismissals are applicable to Dalangin's case, being a probationary employee. Page 195 and to ascertain whether he would be a proper and efficient employee. A probationary employee. barely four months on the job. the latter seeks to prove to the former that he has the qualifications to meet the reasonable standards for permanent employment. as required by the rules. giving him the impression that they knew him. Gala was dismissed for alleged complicity in pilferages of Meralco‘s electrical supplies. On July 27. the notice served on Dalangin did not give him a reasonable time. we find the company not liable for illegal dismissal. In this light. the latter determines whether or not he is qualified for permanent employment. Book VI of the Labor Code's Implementing Rules and Regulations provides: If the termination is brought about by the completion of a contract or phase thereof. Section 2. No. Gala. in the form of nominal damages of P10. there is no need for a hearing. we are convinced that the company had seen enough from Dalangin's actuations. On that day. as understood under Article 281 of the Labor Code. As for the second issue.00. He appeared to be known to the Meralco foremen as they were seen conversing with him. However. Although we cannot invalidate his dismissal in light of the valid cause for his separation. he had been complaining that he was not able to explain his side. Llanes boarded the trucks. March 7. (2) he did not have an inkling that an illegal activity was taking place since his supervisors were conversing with Llanes.000. it is puzzling that Dalangin chose to be silent about the charges. While the Meralco crew was at work. He maintained that his mere Page 196 . The essence of a probationary period of employment fundamentally lies in the purpose or objective of both the employer and the employee during the period. 2006. Jefferson M. Aside from Gala." Thus. the company's non-compliance with the notice requirement entitles Dalangin to indemnity. All along. as well as those of his co-employees. implies the purpose of the term or period. he had no participation in what they did. Gala and other Meralco workers were instructed to replace a worn-out electrical pole at the Pacheco Subdivision in Valenzuela City. coupled with Dalangin's adamant refusal to attend the company's "Values Formation Seminar" and a similar program scheduled earlier. or on October 27. Gala denied involvement in the pilferage. arrived. Manila Electric Co.' as used to describe the period of employment. propriety and efficiency of a probationer to ascertain whether he is qualified for permanent employment. He claimed that: (1) he was at some distance away from the trucks when the pilferage happened. yet from the labor arbiter's level. It highlights his lack of interest in familiarizing himself with the company's objectives and policies. for the incident which took place on May 25. a non-Meralco employee. Marquez Held: The SC disagreed with the CA. 191288 & 191304. G. but not its length. four weeks was enough for the company to assess Dalangin's fitness for the job and he was found wanting. without being stopped. 88. While the employer observes the fitness. 2012 Facts: Respondent Jan Carlo Gala was hired by petitioner Meralco as a probationary lineman on March 2. 2006. Unknown to them. Dalangin‘s refusal to attend the seminar brings into focus and validates what was wrong with him. contending that even if his superiors might have committed a wrongdoing. during which. is one who is on trial by an employer. from the effective date of his separation. He was dismissed on the very day the notice was given to him.R. A probationary appointment gives the employer an opportunity to observe the fitness of a probationer while at work. or by failure of an employee to meet the standards of the employer in the case of probationary employment. it shall be sufficient that a written notice is served the employee within a reasonable time from the effective date of termination. all the way to this Court. other than saying that the company could not cite any policy he violated. as Abad narrated in her affidavit and as reflected in the termination of employment memorandum. The word 'probationary. (3) he did not call the attention of his superiors because he was not in a position to do so as he was a mere lineman. The company is not liable for illegal dismissal. vs. Rule I. one Noberto Llanes. we find credence in the company's submission that Dalangin was unfit to continue as its Immigration and Legal Manager. To our mind. behavior and deportment during a four-week period to realize that Dalangin would be a liability rather than an asset to its operations. the fact that Dalangin was separated from the service after only about four weeks does not necessarily mean that his separation from the service is without basis. particularly. the foremen and the other linemen who were at the worksite when the pilferage happened were later charged with misconduct and dishonesty for their involvement in the incident. a Meralco surveillance task force was monitoring their activities and recording everything with a video camera. and (4) he was just following instructions in connection with his work and had no control in the disposition of company supplies and materials. 2001. In the face of Abad's direct statements.LABOR RELATIONS Atty. 2006. and took out what were later found as electrical supplies. he offered no satisfactory explanation of the charges. In separating Dalangin from the service before the situation got worse. As we stressed earlier. private respondent filed a petition for certiorari with the CA. Meralco terminated his employment. On the whole. He violated his probationary employment agreement. 2006.. the totality of the circumstances obtaining in the case convinces us that Gala could not but have knowledge of the pilferage of company electrical supplies on May 25. The NLRC.940. including the petitioners herein. Thereafter. No. Under paragraph 8 of the agreement. especially the requirement for him ―to observe at all times the highest degree of transparency. in the pilferage activities done by their group. to have failed to meet the standards expected of him to become a regular employee and this failure was mainly due to his ―undeniable knowledge. Jefferson M. G. V-000399-98. Thus. after an administrative investigation. rules and regulations and existing policies. certainly. we find substantial evidence to support the conclusion that Gala does not deserve to remain in Meralco‘s employ as a regular employee. It found that Gala had been illegally dismissed. 89. Issue: Whether or not the CA gravely abused its discretion in declaring petitioners as project employees. Page 197 . 1999. The CA granted the petition. selflessness and integrity in the performance of his duties and responsibilities. he was subject to strict compliance with. his overall job performance and his behavior were being monitored and measured in accordance with the standards (i. including the petitioners. with the modification that private respondent pay backwages computed from the respective dates of dismissal until finality of the decision. 174792. if not participation. On appeal. all to the prejudice of the Company‘s interests. Private respondent. Held: We find merit in the petition. appealed from the said decision. there is substantial evidence supporting Meralco‘s position that Gala had become unfit to continue his employment with the company. the NLRC reversed the labor arbiter‘s ruling. Aro vs. The CA denied Meralco‘s petition for lack of merit and partially granted Gala‘s petition. annulling and setting aside the decision and resolution of the NLRC as to the award for backwages and remanded the case to the same public respondent for the proper computation of the backwages due to each of the petitioners herein. Paragraph 10 required him to observe at all times the highest degree of transparency. in NLRC Case No. if not by direct participation. therefore. the terms and conditions) laid down in his probationary employment agreement. March 7. The Labor Arbiter dismissed the complaint for lack of merit. he was complicit in its commission. such that the petitioners-employees are entitled to payment of backwages until the date of the completion of the project. The NLRC.LABOR RELATIONS Atty. affirmed the decision of Labor Arbiter Carreon in its Decision dated January 12. filed a Complaint for illegal dismissal with various money claims and prayer for damages against the latter. Marquez presence at the scene of the incident was not sufficient to hold him liable as a conspirator. Gala responded by filing an illegal dismissal complaint against Meralco. The employees.00 as separation pay. 07-09-1222-97/12-1609-97. NLRC. Gala was found. 2012 Facts: Several employees of private respondent Benthel Development Corporation. She held that Gala‘s participation in the pilferage of Meralco‘s property rendered him unqualified to become a regular employee. free from any form of conflict or contradicting with his own personal interest.‖ He failed to qualify as a regular employee. since it has been found by the Labor Arbiter and affirmed in the assailed decision that the employees were project employees. It concurred with the NLRC that Gala had been illegally dismissed. selflessness and integrity in the performance of their duties and responsibilities. Despite Gala‘s explanation. the computation of backwages should be limited to the date of the completion of the project and not to the finality of the decision.e. Issue: Whether or not Gala was illegally dismissed. since there was ―no concrete showing of complicity with the alleged misconduct/dishonesty. in the NLRC Arbitration Branch No. Safety Code. It opined that nothing in the records show Gala‘s knowledge of or complicity in the pilferage.‖ As probationary employee. by his inaction while it was being perpetrated and by not reporting the incident to company authorities. denied the motion ruling that private respondent failed to establish the date of the completion of the project. As a recourse. however. and non-violation of the Company Code on Employee Discipline.R. filed a motion for reconsideration with the contention that. VII in Cebu City and docketed as RAB Case No. Labor Arbiter Ernesto F. alleging that public respondent committed grave abuse of discretion in promulgating its assailed decision and denying its motion for reconsideration. Carreon rendered a decision finding private respondent guilty of illegal dismissal and ordering it to pay its thirty-six (36) employees P446. unsatisfied with the modification made by the NLRC. Contrary to the conclusions of the CA and the NLRC. Otherwise. For this particular reason. ABS-CBN Broadcasting Corp. Like Ymbong. 90. G. Illegally dismissed workers are entitled to the payment of their salaries corresponding to the unexpired portion of their employment where the employment is for a definite period.g. must file his/her letter of resignation. His stint in ABS-CBN later extended to radio when ABS-CBN Cebu launched its AM station DYAB in 1995 where he worked as drama and voice talent. 1998 SUBJECT:AS STATED Please be informed that per company policy. the Cordova Reef Village Resort project had been completed in October 1996 and private respondent herein had signified its willingness. On January 1. any employee/talent who wants to run for any position in the coming election will have to file a leave Page 198 .Any employee who intends to run for any public office position. March 7. However.. Because of the impending May 1998 elections and based on his immediate recollection of the policy at that time. By the nature of the contract alone. Dante Luzon. the employment of project employees cannot be terminated prior to expiration. recruiting campaign workers. 2012 Facts: Petitioner Ernesto G. Marquez Rulings: It is not disputed that petitioners were hired for the construction of the Cordova Reef Village Resort in Cordova. as found by the CA. Assistant Station Manager of DYAB issued the following memorandum: TO:ALL CONCERNED FROM:DANTE LUZON DATE:MARCH 25. 184885. by way of concession to petitioners. being project employees. the ABS-CBN Head Office in Manila issued Policy No. it constitutes grave abuse of discretion on the part of the public respondent for not determining for itself the date of said completion instead of merely ordering payment of backwages until finality of its decision. In this case. HR-ER-016 or the "Policy on Employees Seeking Public Office. xxx xxx xxx 3. Ymbong started working for ABS-CBN Broadcasting Corporation (ABS-CBN) in 1993 at its regional station in Cebu as a television talent. Starting 1995. petitioners are only entitled to full backwages. computed from the date of the termination of their employment until the actual completion of the work. the employee should file the leave request at least thirty (30) days prior to the start of the planned leave period. if the project or work is completed during the pendency of the ensuing suit for illegal dismissal. Leandro Patalinghug also worked for ABS-CBN Cebu.R. the employees shall be entitled only to full backwages from the date of the termination of their employment until the actual completion of the work. director and scriptwriter for various radio programs aired over DYAB. any employee who intends to join a political group/party or even with no political affiliation but who intends to openly and aggressively campaign for a candidate or group of candidates (e.Further. 1996. spinner.. Cebu. it is clear that petitioners' employment was to carry out a specific project. they shall be entitled to reinstatement with full backwages. Hence.LABOR RELATIONS Atty. hence. co-anchoring Hoy Gising and TV Patrol Cebu. to set the date of completion of the project as March 18." The pertinent portions read: 1. While it may be true that in the proceedings below the date of completion of the project for which the private respondents were hired had not been clearly established. Ymbong vs. at least thirty (30) days prior to the official filing of the certificate of candidacy either for national or local election. he worked as talent. publicly speaking/endorsing candidate. Therefore. the CA did not commit grave abuse of discretion when it affirmed the findings of the Labor Arbiter It is settled that. etc. 1997.) must file a request for leave of absence subject to management's approval. without a valid cause. No. Jefferson M. the latter date should be considered as the date of completion of the project for purposes of computing the full backwages of petitioners. scriptwriter and public affairs program anchor. Ymbong and Patalinghug both tried to come back to ABS-CBN Cebu. Ymbong most likely than not. Rulings: Policy No. HR-ER-016 is valid. Thus. the March 25. Page 199 . In addition. HR-ER-016 is the subsisting company policy and not Luzon's March 25. (2) Whether the March 25. According to Luzon. Issues: (1) Whether Policy No. As a result. Luzon claims that Ymbong approached him and told him that he would leave radio for a couple of months because he will campaign for the administration ticket. According to Luzon. Ymbong. he only told the latter that he will only campaign for the administration ticket and not actually run for an elective post. of any employee who intends to run for public office. he informed them that they cannot work there anymore because of company policy. 1998 since he was running for councilor of Lapu-Lapu City. ABS-CBN validly justified the implementation of Policy No. 1998 Memorandum. has policy-making powers in relation to his principal task of administering the network's radio station in the Cebu region. Ymbong got in touch with Luzon. ABS-CBN is not duty-bound to ask him to explain why he did not tender his resignation before he ran for public office as mandated by the subject company policy. and (3) Whether Ymbong. the March 25. it must also protect the right of an employer to exercise what are clearly management prerogatives. not only the filing of a leave of absence. Ymbong's overt act of running for councilor of Lapu-Lapu City is tantamount to resignation on his part. on the other hand. 1998 Memorandum and it was for this reason that. as stated by Luzon in his Sworn Statement. this Court will uphold them. 1998 Memorandum The CA correctly ruled that though Luzon. is deemed to have resigned and not dismissed by ABS-CBN. He was separated from ABS-CBN not because he was dismissed but because he resigned. Having been issued beyond the scope of his authority. We have consistently held that so long as a company's management prerogatives are exercised in good faith for the advancement of the employer's interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements. As regards Patalinghug. 1998 Memorandum issued by Luzon which only requires employees to go on leave if they intend to run for any elective position is in absolute contradiction with Policy No. 1998 Memorandum. Cebu. as Assistant Station Manager for Radio of ABS-CBN. Clearly. is fully aware that the subsisting policy is Policy No. Policy No. 1998 to May 18. Ymbong is deemed resigned when he ran for councilor. HR-ER-016. 1998 Memorandum issued by Luzon superseded Policy No. claims that in accordance with the March 25. HR-ER-016 issued by the ABS-CBN Head Office in Manila which requires the resignation. As Policy No. Patalinghug approached Luzon and advised him that he will run as councilor for Naga. 1998 Memorandum. The services rendered by the concerned employee/talent to this company will then be temporarily suspended for the entire campaign/election period. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied. After the issuance of the March 25. by seeking an elective post. the exercise of such power should be in accord with the general rules and regulations imposed by the ABS-CBN Head Office to its employees. In the instant case. Marquez of absence the moment he/she files his/her certificate of candidacy. we do not subscribe to Ymbong's claim that he was not in a position to know which of the two issuances was correct. HR-ER-016 is valid. Ymbong is deemed resigned when he ran for councilor. It is well within its rights to ensure that it maintains its objectivity and credibility and freeing itself from any appearance of impartiality so that the confidence of the viewing and listening public in it will not be in any way eroded.LABOR RELATIONS Atty. he clarified to Patalinghug that he will be considered resigned and not just on leave once he files a certificate of candidacy Later. HR-ER-016 and not the March 25. It was only after the elections that they found out that Ymbong actually ran for public office himself at the eleventh hour. the requirement of due process in dismissal cases cannot be applied to Ymbong. Even as the law is solicitous of the welfare of the employees. Since there was no termination to speak of. Jefferson M. HR-ER-016. he informed Luzon through a letter that he would take a few months leave of absence from March 8. HR-ER-016 was not superseded by the March 25. HR-ER-016. they filed as illegal dismissal suit against ABS-CBN. 1998 Memorandum is therefore void and did not supersede Policy No. R. and later. Jayde and Wilfredo notices of dismissal for cause stating therein that evidence that they had conspired with each other to commit theft against company property was too glaring to ignore. Blue Sky had lost its trust and confidence on them and as an act of self-preservation. Marquez 91. On February 5. Silvano (Joseph) were regular employees of Blue Sky and they respectively held the positions of stock clerk and warehouse helper before they were dismissed from service on February 5. De La Paz (Jean). Joseph. Jefferson M. Their second decision on the other hand reversed the previous one which in turn reinstated the Labor Arbiter‘s dismissal of the complaint saying that respondents were holding positions of trust and that the loss of the company‘s property are substantially proven. The Labor Arbiter denied the claims of the respondents of illegal suspension and dismissal since they failed in their duties to exercise utmost protection. Blue Sky Trading Co. Arlene. Inc. care. The petitioners also argue that if Arlene and Joseph had not been grossly negligent in the performance of their duties.LABOR RELATIONS Atty. 190559. informing them of their dismissal from service. first charging them with theft. Joseph. Jayde and Wilfredo filed with the National Labor Relations Commission (NLRC) a complaint for illegal dismissal and suspension. The first decision of the NLRC ruled that respondents were not holding positions of trust and must therefore be reinstated and be paid their backwages. (Blue Sky) is a duly registered domestic corporation engaged in the importation and sale of medical supplies and equipment. Jean issued to Arlene. Blas. their termination from service was in order. Jayde and Helario executed affidavits of desistance stating that their dismissal was for cause. The notices informed them that they were being accused of gross dishonesty in connection with their alleged participation in and conspiracy with other employees in committing theft against company property. Helario. The respondents Arlene P. underpayment of overtime pay. Often described as more than a mere scintilla. Hence. Blue Sky would not have incurred the loss. in illegal dismissal cases like the one at bench. March 7. even if other equally reasonable minds might conceivably opine otherwise. or custody of respondent's property. Failure of the employer to discharge the foregoing onus would mean that the dismissal is not justified and therefore illegal. Arlene and Joseph could not have defended themselves against the charge of gross negligence. We note that the parties disagree as to what tasks were actually and regularly performed by Arlene and Joseph. An incident occurred where six pairs of intensifying screens were missing. They cannot be dismissed on that ground lest due process be violated. their dismissal from the service is warranted. We find no error in the CA's findings that the petitioners had not adequately proven by substantial evidence that Arlene and Joseph indeed participated or cooperated in the commission of theft relative to the six missing intensifying screens so as to justify the latter's termination from employment on the ground of loss of trust and confidence. to establish their claims relative to the actual nature of Arlene and Joseph's daily tasks. G. On February 3. The employer's case succeeds or fails on the strength of its evidence and not on the weakness of that adduced by the employee.00 belonging to Blue Sky. 2005. 2005. in keeping with the principle that the scales of justice should be tilted in favor of the latter in case of doubt in the evidence presented by them. with prayers for reinstatement and payment of full backwages. the burden of proof is upon the employer to show that the employee's termination from service is for a just and valid cause. petitioner in this case failed to sufficiently establish the charge against respondents which was the basis for its loss of trust and confidence that warranted their dismissal. Meanwhile. such as employment contracts. Jean B. Issue: Whether or not respondents Blas and Silvano committed a breach of trust Ruling: The rule is long and well settled that. Page 200 . 2012 Facts: Petitioner Blue Sky Trading Company. the quantum of proof is substantial evidence which is understood as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. an entrapment operation was conducted by the police during which Jayde and Helario were caught allegedly attempting to sell to an operative an ultrasound probe worth around P400. specifically relative to the loss of the six intensifying screens. 2005. and non-payment of emergency cost of living allowance (ECOLA). We observe though that neither of the parties presented any documentary evidence. They are at odds as to the issue of whether or not Arlene and Joseph had custody of the missing screens. No. Hence.000. gross negligence was not stated therein as a ground. Joseph. On February 8. 2005. Though eventually. delivery personnel Jayde Tano-an (Jayde) and maintenance personnel/driver Wilfredo Fasonilao (Wilfredo). Blas (Arlene) and Joseph D. vs. though found respondents to have positions of trust and confidence. The CA on the other hand found merit on their claims. Human Resource Department Head issued notices to explain/preventive suspension to Arlene. We observe though that in the notices sent to Arlene and Joseph. 1998.00 based on the rate at the time of actual payment. The CA likewise dismissed the petition and affirmed the NLRC decision. Petrocon gave respondent a written notice informing the latter that due to the lack of project works related to his expertise. In illegal dismissal cases. on June 1. separation pay If reinstatement proves impracticable. The NLRC on appeal affirmed the Labor Arbiter‘s decision but reduced the award to only US$4. including his ticket back to the Philippines. by legal fiction. and the respondents' express prayer for the payment of separation pay on the other. to wit.R. Logarta to work for Petrocon Arabia Limited (Petrocon) in Alkhobar. Saudi Aramco notified Petrocon that due to changes in the general engineering services work forecast for 1998. 92. International Management Services (IMS). Kingdom of Saudi Arabia. 1998. Further. Marquez Other Matters: (For Discussion Purposes) Impropriety of the Preventive Suspension The purpose of the suspension is to prevent an employee from causing harm or injury to his colleagues and to the employer. stockholders. While we do not agree with Blue Sky's subsequent decision to terminate them from service. In the case at bar. Thus. April 18. Before his departure from Saudi Arabia. respondent received his final paycheck from Petrocon amounting SR7. or if the employee decides not to be reinstated. he is given a 30-day notice of termination. the petitioners' insistence that dismissal was valid on one hand. Respondent was employed for a period of two (2) years. 1997. a corporate officer cannot be held liable for acts done in his official capacity because a corporation. Cebu City. 163657. and that his last day of work with Petrocon will be on July 1.800. G. the latter should be awarded separation pay in lieu of reinstatement. National Labor Relations Commission (NLRC). Ruling: No. corporate officers may only be held solidarily liable with the corporation if the termination was done with malice or bad faith. commencing on October 2. Jefferson M. we find that reinstatement would no longer be in the best interest of the contending parties. The Labor Arbiter rendered judgment in favor of the respondent and ordered petitioner to pay the peso equivalent of US$5. Pascual. owned and operated by Marilyn C.488. respondent sought to recover his unearned salaries covering the unexpired portion of his employment contract with Petrocon on the ground that he was illegally dismissed.00 or its peso equivalent at the time of payment. Liability of Corporate Officers As a general rule. On April 29. Arlene and Joseph were dismissed from service on February 5. Retrenchment is the reduction of work personnel usually due to poor financial returns. against petitioner as the recruitment agency which employed him for employment abroad. with a monthly salary of eight hundred US Dollars (US$800. 2005. in connection with general engineering services of Petrocon for the Saudi Arabian Oil Company (Saudi Aramco). aimed to cut down costs for operation particularly on Page 201 . and members. has a personality separate and distinct from its officers. 1998. the manhours that were formerly allotted to Petrocon is going to be reduced by 40% which constrained Petrocon to reduce its personnel. We find that the aforementioned circumstance did not obtain in the case of Jose (vice-president) and Linda (secretary) relative to Arlene and Joseph's dismissal from service. beyond which the employee should either be reinstated or be paid wages and benefits due to him.57. Upon his return. Issue: Whether or not respondents dismissal through retrenchment illegal.00). The maximum period of suspension is 30 days. 2012 Facts: Recruitment agency. No. from the stubborn stances of the parties. Petrocon also informed respondent that all due benefits in accordance with the terms and conditions of his employment contract will be paid to respondent. Internation management Services vs. We find that the lapse of more than seven years already renders their reinstatement impracticable. perhaps due to the lapse of time since the employee's dismissal. respondent filed a complaint with the Regional Arbitration Branch VII. deployed respondent Roel P. In lieu of reinstatement. and hardly in the best interest of the parties.LABOR RELATIONS Atty. In filing the complaint. Logarta. we find no impropriety in its act of imposing preventive suspension upon the respondents since the period did not exceed the maximum imposed by law and there was a valid purpose for the same.600. as payment of his wages for the unexpired portion of his contract of employment. As for the notice requirement. contrary to petitioner's contention. Marquez salaries and wages. 8042 that is controlling. are reasonably imminent as perceived objectively and in good faith by the employer. it is only a procedural infirmity which does not render the retrenchment illegal. that respondent should be paid his separation pay in accordance with the provision of Section 10 of R. and (5)That the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees. Thus.000. 28 Applying the above-stated requisites for a valid retrenchment in the case at bar. As aptly found by the NLRC and justly sustained by the CA. and financial hardship for certain workers. It is a valid management prerogative. he is entitled to receive one (1) month pay as separation pay. actual and real. Consequently. (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.LABOR RELATIONS Atty. whichever is higher. such as status. Thus. respondent is entitled to payment of separation pay equivalent to one (1) month pay. however. No.…efficiency. to wit: (1)That the retrenchment is reasonably necessary and likely to prevent business losses which. or if only expected. Instead. having not complied with the notice requirement. this requirement of the law was not complied with. To stress.00. Philippine Law recognizes retrenchment as a valid cause for the dismissal of a migrant or overseas Filipino worker under Article 283 of the Labor Code. In addition. still both he and his employer are subject to the provisions of the Labor Code when applicable. conversion of the plant for a new production program.A. if already incurred. nevertheless the same remains to be for a just. the employer should indemnify the employee for violation of his statutory rights. provided it is done in good faith and the employer faithfully complies with the substantive and procedural requirements laid down by law and jurisprudence. Petrocon exercised its prerogative to retrench its employees in good faith and the considerable reduction of work allotments of Petrocon by Saudi Aramco was sufficient basis for Petrocon to reduce the number of its personnel. are not merely de minimis. Retrenchment programs are purely business decisions within the purview of a valid and reasonable exercise of management prerogative. Thus. The basic policy in this jurisdiction is that all Filipino workers. and during lulls in production occasioned by lack of orders. 8042. A plain reading of the said provision clearly reveals that it applies only to an illegally dismissed overseas contract worker or a worker dismissed from overseas employment without just. valid or authorized cause. notwithstanding the fact that respondent's termination from his employment was procedurally infirm. retrenchment as a valid exercise of management prerogative. enjoy the protective mantle of Philippine labor and social legislations. the absence of proper notice should not nullify the dismissal or render it illegal or ineffectual. industrial depression. Also. or at least one-half (1/2) month pay for every year of service. the second and third requisites were absent when Petrocon terminated the services of respondent. (3)That the employer pays the retrenched employees separation pay equivalent to one month pay or at least 1/2 month pay for every year of service. respondent is entitled to the payment of his separation pay. physical fitness. NLRC. i. It is one of the economic grounds to dismiss employees and is resorted by an employer primarily to avoid or minimize business losses. valid and authorized cause. In the case at bar. seniority. whichever is higher. proper notice to the DOLE within 30 days prior to the intended date of retrenchment is necessary and must be complied with despite the fact that respondent is an overseas Filipino worker. fourth and fifth requirements were complied with by respondent's employer. Considering that respondent was employed by Petrocon for a period of eight (8) months. or introduction of new methods or more efficient machinery or automation. despite the employer's failure to comply with the one-month notice to the DOLE prior to respondent's termination. pursuant to current jurisprudence.A. However. It is one way of downsizing an employer's workforce and is often resorted to by the employer during periods of business recession. the NLRC and the CA. No. shortage of materials. although respondent was duly notified of his termination by Petrocon 30 days before its effectivity.. or seasonal fluctuations. serious. despite the fact that respondent was employed by Petrocon as an OFW in Saudi Arabia. it is apparent that the first.e. However. for failure to fully comply with the statutory due process of sufficient notice. retrenchment is a valid exercise of management prerogative subject to the strict requirements set by jurisprudence. age. but substantial. (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. Jefferson M. whether employed locally or overseas. Page 202 . In the case at bar. respondent is entitled to nominal damages in the amount P50. In the present case. this Court disagrees with the conclusion of the Labor Arbiter. In Agabon v. it is Article 283 of the Labor Code and not Section 10 of R. no allegation or proof was advanced by petitioner to establish that Petrocon ever sent a notice to the DOLE 30 days before the respondent was terminated. this Court ruled that when the dismissal is for a just cause. Any employee who has reached the compulsory retirement age of 60 years. namely. or for any authorized cause under the law such as redundancy. They also claimed that they were defrauded into signing the same without full knowledge of its legal implications. 2012 Facts: The petitioners were regular employees of the Philippine Banking Corporation (Philbank). Marquez 93. The petitioners further argued that the quitclaims they signed should not bar them from claiming their full entitlement under the law. Subsequently. The Old Plan provided: 1. the New Gratuity Plan stated thus: x x x An Employee who is involuntarily separated from the service by reason of death. G.3[7] In February 2000. In particular. signed acceptance letters and executed quitclaims in Globalbank‘s favor in consideration of their receipt of separation pay equivalent to 150% of their monthly salaries for every year of service. shall be entitled to either one hundred percent (100%) of his accrued gratuity benefit or the actual benefit due him under the Plan. Philbank merged with Global Business Bank. Philbank established a Gratuity Pay Plan (Old Plan) for its employees. Jefferson M. As a result of the merger. No.LABOR RELATIONS Atty. whichever is greater. but the bank operated under the name Global Business Bank. with the former as the surviving corporation and the latter as the absorbed corporation. Before the petitioners could avail of this program. Quitclaim (quitclaim). In holding that the benefits under the Special Separation Program legally replaced not only the gratuity pay plan to which [the] petitioners were entitled under the old and new Gratuity Pay Plans but also all other benefits including separation pay under the law. April 18. A Special Separation Program (SSP) was implemented and the petitioners were granted a separation package equivalent to one and a half month‘s pay (or 150% of one month‘s salary) for every year of service based on their current salary. sickness or other causes beyond his/her control shall for himself or thru his/her heirs file with the personnel office an application for the payment of benefits under the plan On March 8. NLRC. 1970. 182331. an Acceptance Letter and a Release. misconduct or voluntary resignation. They insisted that 100% of the 150% rightfully belongs to them as their separation pay. Issues: The petitioners are now before this Court raising the following errors supposedly committed by the CA: In holding that ―the bank had abandoned the old plan‖ (referring to the old Gratuity Pay Plan) and replaced it with a Special Separation Program under which [the] petitioners ―would be receiving more than the rate in the old plan and higher than the legal rate for redundant employees. the petitioners filed separate complaints for non-payment of separation pay with prayer for damages and attorney‘s fees before the National Labor Relations Commission (NLRC) The petitioners asserted that. Waiver. (Globalbank). As their positions were included in the redundancy declaration. or other causes not due to his own fault. Philbank implemented a new Gratuity Pay Plan (New Gratuity Plan). In not holding that when [the] petitioners were separated due to redundancy they were entitled per provision of Article 283 of the Labor Code to separation pay equivalent to one month pay for every year of service. or who wishes to retire or resign prior to the attainment of such age or who is separated from service by reason of death. Jiao vs.R. the petitioners availed of the SSP. they were entitled to an additional 50% of their gratuity pay on top of 150% of one month‘s salary for every year of service they had already received. Inc. the remaining 50% was only half of the gratuity pay that they are entitled to under the Old Plan. each with at least ten years of service in the company. sickness or physical disability. Thus. under the Old Plan. they were required to sign two documents. complainants‘ respective positions became redundant. Pursuant to its Memorandum dated August 28. 1991. Page 203 . Inc. Globalbank‘s right to replace the Old Plan and the New Gratuity Plan is within legal bounds as the terms thereof are in accordance with the provisions of the Labor Code and complies with the minimum requirements thereof. Contrary to the petitioners‘ claim. when the merger and the redundancy program were implemented.000. Issues: WoN the dismissal based on the grounds cited constituted just causes.R. as a consequence. public policy. and are not contrary to morals. insist on the provisions of the Old Plan which is no longer existent. Ruling: The petitioners‘ receipt of separation pay equivalent to their one and a half months salary for every year of service as provided in the SSP and the New Gratuity Plan more than sufficiently complies with the Labor Code. providing for separation pay in an amount over and above what is imposed by Article 283. Employers. have the right to create plans. or from entering into agreements on employee benefits.LABOR RELATIONS Atty. so long as they do not violate the Labor Code or any other law. what was in effect were the New Gratuity Plan and the SSP. New Age Graphics Inc. and to improve such benefits by increasing or rounding it up to an amount equivalent to the affected employees‘ one and a half monthly salary for every year of service. including the petitioners. Marquez In holding that [the] petitioners are bound under the Acceptance and Release. thus. The SSP did not revoke or supersede the New Gratuity Plan. Jefferson M. Realda vs. There is nothing therein that prohibits employers and employees from contracting on the terms of employment. G. Considering that the New Gratuity Plan still stands and has not been revoked by the SSP. and WoN the amount awarded as Nominal Damages of P5. the SSP was issued to make the benefits under the New Gratuity Plan available to employees whose positions had become redundant because of the merger between Philbank and Globalbank. In the absence of proof that any of the vices of consent are present. Article 283 of the Labor Code provides only the required minimum amount of separation pay. the appellate court found that the respondent failed to observe the procedural requirements of due process and. are the benefits under the New Gratuity Plan.. The Court. which employees dismissed for any of the authorized causes are entitled to receive. public order. and (4) the contract is not contrary to law. On the contrary. thus. therefore. does this mean that the petitioners can claim the benefits thereunder in addition to or on top of what is required under the Article 283 of the Labor Code? For as long as the minimum requirements of the Labor Code are met. unexplained failure to observe prescribed work standards. hence they [cannot] claim benefits in addition to those they had received from the bank. good customs. they had no vested right over the benefits under the Old Plan considering that none of the events contemplated thereunder occurred prior to the repeal thereof by the adoption of the New Gratuity Plan.00 was valid Page 204 . barring them from claiming additional separation pay. April 25. 2012 Facts: Petitioner Realda was dismissed by Respondent New Age Graphics Inc. subject to compliance with certain requirements such as age and length of service. (3) the consideration of the quitclaim is credible and reasonable. for unjustified refusal to render overtime work. In other words. 192190. awarded the petitioner P5. public order. the benefits to which the redundated employees are entitled to. it is within the management prerogatives of employers to come up with separation packages that will be given in lieu of what is provided under the Labor Code. morals or good customs or prejudicial to a third person with a right recognized by law. The Court of Appeals recognized the existence of just causes for petitioner‘s dismissal. which only requires the payment of separation pay at the rate of one month salary for every year of service. or public policy. in other cases. the petitioners‘ acceptance letters and quitclaims are valid. Such right accrues only upon their separation from service for causes contemplated under the Old Plan and the petitioners can only avail the benefits under the plan that is effective at the time of their dismissal. Waiver and Quitclaim that they had executed and [cannot] question the same.000. however. We hold that Metrobank cannot be held liable for the petitioners‘ claims. 94. has upheld quitclaims if found to comply with the following requisites: (1) the employee executes a deed of quitclaim voluntarily. habitual tardiness and chronic absenteeism despite warning and non-compliance with the directive for him to explain his numerous unauthorized absences. No. albeit increased by the SSP. (2) there is no fraud or deceit on the part of any of the parties. The SSP was not intended to supersede the New Gratuity Plan. the petitioners cannot. In this case.00 as Nominal Damages. Such inefficiency is understood to mean failure to attain work goals or work quotas. Jefferson M. a sole proprietorship under the name of Co which is engaged in the business of transporting goods. the principle of ―totality of infractions‖ sanctions the act of Graphics.‘s part. Marquez Ruling: First. Kingspoint Express issued to them separate yet uniformly worded notices on January 20. in addition to his refusal to render overtime work and conform to the prescribed work standards. Inc. The CA initially reversed the NLRC‘s ruling but on an MR. refusal to undergo the company's general drug test. dishonesty. As the operator of Graphics. Inc. and their allegedly unwarranted refusal to undergo drug testing. Also. the CA correctly ruled that the petitioner is indeed utterly defiant of the lawful orders and the reasonable work standards prescribed by his employer. petitioner Dacara was dismissed for consummating his sexual relations with Co‘s helper inside her residence and thus impregnating the help. Inc. The Labor Arbiter ruled in favor of the petitioners as the charges are purportedly mere unsubstantiated allegations. A complaint for illegal dismissal was subsequently filed. Thus.R. or by producing unsatisfactory results. Taking this in conjunction with his inclination to absent himself and to report late for work despite being previously penalized. Nonetheless. 2006. Inc. this Court finds the CA to have erred in fixing the amount that the Company is liable to pay. serious misconduct and loss of confidence by filing with the NLRC false. or to fulfill reasonable work assignments due to inefficiency may constitute just cause for dismissal. G. This was affirmed by the NLRC on appeal but the latter reversed itself on a subsequent MR filed by Kingspoint. Inc. and additional costs on Graphics. Page 205 . Kingspoint Express & Logistics.00 if the dismissal was for a just cause. While a penalty in the form of suspension had already been imposed on the petitioner for his habitual tardiness and repeated absenteeism. No. either by failing to complete the same within the alloted reasonable period. This Court cannot likewise agree to the petitioner‘s attempt to brush aside his refusal to render overtime work as inconsequential when Graphics. he is mandated to check whether the colors that would be printed are in accordance with the client‘s specifications and for him to do so. Petitioners failed to submit their written explanation within the stated period. They were dismissed from service on January 20. Failure to observe prescribed standards of work.000. and extorting money from co-workers to fund activities that they were never fully informed of. alleging that the charges against them were fabricated and that their dismissal was prompted by Kingspoint Express' aversion to their union activities. Unfortunately.‘s order for him to do so is justified by Graphics. They were required to submit their answer to the charges within forty-eight (48) hours from receipt of the notices with a warning that failure to do so would mean waiver of their answer. Inc. he must consult the General Manager and the color guide used by Graphics. before making a full run. while the CA finding that the petitioner is entitled to nominal damages as his right to procedural due process was not respected despite the presence of just causes for his dismissal is affirmed.‘s contractual commitments to its clients. Kakampi and Its Members Panuelos vs.‘s printer. 194813. 2006 the charges of dishonesty. Kingspoint Express issued separate notices to explain to the individual petitioners on January 16. April 25.‘s work standards constitutes inefficiency that is a valid cause for dismissal. 2006 on the grounds of serious misconduct. he failed to observe this simple procedure and proceeded to print without making sure that the colors were at par with the client‘s demands. 95. The CA should have taken cognizance of the numerous cases decided by this Court where the amount of nominal damages was fixed at P30. client dissatisfaction. malicious and fabricated cases against the company. Subsequently.‘s order for him to render overtime work constitutes willful disobedience. of considering such previous infractions in decreeing dismissal as the proper penalty for his tardiness and unauthorized absences incurred afterwards. they too reversed their earlier ruling and favored Kingspoint. misleading fellow co-workers to sign the malicious complaint for money claims against the company. Inc. Such an order is legal under Article 89 of the Labor Code and the petitioner‘s unexplained refusal to obey is insubordination that merits dismissal from service. loss of trust and confidence and commission of acts inimical to the interest of Kingspoint Express. the petitioner‘s arbitrary defiance to Graphics. Second.LABOR RELATIONS Atty. They were also placed under preventive suspension in the meantime. 2012 Facts: Petitioners were former drivers of the respondent Kingspoint Express. This resulted to delays in the delivery of output. the petitioner‘s failure to observe Graphics. this petition for certiorari before the SC. informing them of their dismissal for the abovementioned charges based on the following acts: fabrication of baseless money claims against the company. Inc. while Kingspoint Express had reason to sever their employment relations. An employer may terminate an employment on the ground of serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work. the dismissal was valid. hence. Nonetheless. While Kingspoint Express required the dismissed employees to explain their refusal to submit to a drug test. the employees' refusal to submit themselves to drug test is a just cause for their dismissal.000. The utter lack of reason or justification for their insubordination indicates that it was prompted by mere obstinacy. Thus. Marquez Issue: WON the dismissal was valid. with the exception of Panuelos. Jefferson M. with nominal damages in the amount of P30. which the Court construed in King of Kings Transport. made known to the employee. As to the second element. Kingspoint Express is still liable to indemnify the dismissed employees. drivers are indispensable to Kingspoint Express' primary business of rendering door-to-door delivery services. Ruling: Yes. Willful disobedience requires the concurrence of two elements: (1) the employee's assailed conduct must have been willful.LABOR RELATIONS Atty. and must pertain to the duties which he had been engaged to discharge. that is. As the NLRC correctly pointed out. the two (2) days afforded to them to do so cannot qualify as "reasonable opportunity". willful and warranting of dismissal. It is common knowledge that the use of dangerous drugs has adverse effects on driving abilities that may render the dismissed employees incapable of performing their duties to Kingspoint Express and acting against its interests. who did not appeal the dismissal of their complaints. Dizon and Dimabayao. and. Both elements are present in this case. v. characterized by a wrongful and perverse attitude. Page 206 . the employer is required to observe both substantive and procedural due process — the termination of employment must be based on a just or authorized cause and the dismissal must be effected after due notice and hearing. The existence of a single just cause is enough to order their dismissal and it is now inconsequential if the other charges against them do not merit their dismissal from service. this Court finds its supposed observance of the requirements of procedural due process pretentious. the dismissed employees did not deny their refusal to undergo drug testing nor did they explain their refusal. Mamac as a period of at least five (5) calendar days from receipt of the notice.00. even if Kingspoint Express' defective attempt to comply with procedural due process does not negate the existence of a just cause for their dismissal. As to the first element. As to the substantive requirements of due process. the subject order is relevant in the performance of their functions as drivers of Kingspoint Express. in addition to the threat they pose to the public. It is fundamental that in order to validly dismiss an employee. lawful. (2) the order violated must have been reasonable. Inc. On 13 August 1996. Court of Appeals.. There we ruled that an employer is liable to pay indemnity in the form of nominal damages to a dismissed employee if. private respondents are not entitled to the payment of damages considering that there was no violation of due process in this case. Marquez SUSPENSION OF BUSINESS OPERATIONS 1. Aggrieved. petitioner was under the operational control and supervision of the Ayala Security Force (ASF) of the Ayala Group of Companies. 2007 Facts: Federito B. thus.38 caliber revolver service firearm and duty detail order had already expired. 2000. petitioner filed a petition for certiorari under Rule 65 of the Rules of Court with the Court of Appeals. Pido was employed by Cherubim Security and General Services. Private respondents appealed to the NLRC which agreed with the Labor Arbiter's finding that when private respondents filed their complaints. July 8. are being displayed. In the instant case. The Court of Appeals dismissed the petition and affirmed in toto the NLRC resolution. Abesa and Aninipot. 2000 during which petitioner echoed his tale in his January 21. the three got employed with some other employer. Like the other guards deployed by respondent at the Ayala Center. The three are assigned as attendants in various firms where the products of California Marketing Corp. petitioner issued a memorandum to the three employees informing them that CMC would stop its direct merchandising activity after two days. on 17 October 1996. Without waiting for six months. February 23. 2. 13th month pay. Issue: Were the private respondents illegally dismissed which would entitle them to claim separation pay? Ruling: The common denominator of the instances where payment of separation pay is warranted is that the employee was dismissed by the employer. Respondent thus conducted an investigation on January 25. National Labor Relations Commission. More importantly. 2000 information report. there was no dismissal to speak of. but a memo informing them of the termination of CMC's contract with petitioner. recommended that petitioner be relieved from his post. service incentive leave pay and 13th month pay. one of petitioner‘s clients. Abesa and Gonzales filed before the National Labor Relations Commission Regional Arbitration Branch (NLRC) complaints for illegal dismissal. they were advised that they were to be reassigned. Petitioner then advised them to wait for further notice as they would be transferred to other clients.R. Page 207 . JPL Marketing Promotion vs. imputing grave abuse of discretion on the part of the NLRC. and that CMC's decision to stop its operations in the areas was beyond the control of petitioner. No. praying for separation pay. Jefferson M. as a security guard. service incentive leave pay and payment for moral damages. 169812. there was no illegal dismissal committed by petitioner. However. whether legally or illegally. 151966. and that immediate disciplinary action against him be taken. Inc. Aninipot filed a similar case thereafter. G. Private respondents were simply not dismissed at all.LABOR RELATIONS Atty. On January 21. in effecting such dismissal.R. Pido vs NLRC. the six-month period had not yet expired. the employer failed to comply with the requirements of due process. At that time. arising from a statement of Alcantara that petitioner‘s security license for his . It claimed that private respondents are not by law entitled to separation pay. the doctrine enunciated in the case of Serrano 37 cited by private respondents has already been abandoned by our ruling in Agabon v. He was assigned at the Ayala Museum. What they received from petitioner was not a notice of termination of employment. 2005 Facts: Petitioner is the employer of private respondents Gonzales. petitioner had an altercation with Richard Alcantara of the ASF. G. In addition. However. there was no severance of employment to speak of. but was later transferred to the Tower and Exchange Plaza of Ayala Center where he worked as a computer operator at the Console Room. The Labor Arbiter dismissed the complaint. No. Alcantara filed a complaint for Gross Misconduct. illegal suspension. it offered petitioner another assignment which he declined. . 3. hence the petition with the Supreme Court.No preventive suspension shall last longer than thirty (30) days. The employer shall thereafter reinstate the worker in his former or in a substantially equivalent position or the employer may extend the period of suspension provided that during the period of extension. Whether the petitioner‘s nine-month suspension is tantamount to constructive dismissal. Respondent merely chose to dawdle with the investigation. on appeal. Marquez Petitioner was later to claim that he was suspended by respondent following his argument with Alcantara. 2000 a complaint for illegal constructive dismissal. 13th month pay. Respondent is ordered to reinstate petitioner together with the payment of the corresponding backwages. Issue: 1. The Supreme Court ruled that the preventive suspension which lasted for nine months amounted to constructive dismissal. Megaforce Security & Allied Services vs. attorney‘s fees and other money claims. in absolute disregard of petitioner‘s welfare. Preventive suspension. Lactao. The Court also ruled that there exists no exception to the general rule that award of separation pay would be proper in lieu of reinstatement. respondent denied that it dismissed petitioner from the service. Ruling: it is gathered that respondent intended to put petitioner under preventive suspension for an indefinite period of time pending the investigation of the complaint against him. and non-payment and underpayment of salaries. . Whether the petitioner should be paid his backwages aside from his separation pay. 3. 279. As more than nine months had elapsed since the investigation was conducted by respondent with no categorical findings thereon made. petitioner had already been placed under preventive suspension for nine months. memorandum or detail order for him to assume his post or another post.LABOR RELATIONS Atty. Petitioner.The employer may place the worker concerned under preventive suspension if his continued employment poses a serious and imminent threat to the life or property of the employer or of his co-workers. he pays the wages and other benefits due to the worker. In such case. 9. July 21. petitioner filed on October 23. Neither did respondent issue an order lifting petitioner‘s suspension. service incentive leave. rest day. Period of suspension." The Labor Arbiter ruled for separation pay. the worker shall not be bound to reimburse the amount paid to him during the extension if the employer decides. it claiming that while it was still in the process of investigating the January 21. or any official assignment. Whether the payment of separation pay is more viable than the order of reinstatement. In its position paper. holiday pay. The NLRC. ruled reinstatement without granting the other monetary claims. Petitioner likewise prayed for reinstatement and payment of full backwages. No. nor did it pay him his wages and other benefits after the lapse of the 30-day period of suspension. meal and travel allowance and night shift differential against respondent. following Sections 8 and 9 of Rule XXIII. G. Balais who was allegedly responsible for running the day to day affairs of respondent‘s business. SEC. 2000 incident. 2008 Facts: Page 208 . Book V of the Omnibus Rules Implementing the Labor Code (Implementing Rules). after completion of the hearing. 8. The allowable period of suspension in such a case is not six months but only 30 days. 2. to dismiss the worker. who is a regular employee of respondent. 2000. is entitled to reinstatement without loss of seniority and payment of backwages from the time his compensation was withheld up to the time of his actual reinstatement by virtue of Art. saying "pahinga muna ako [I will in the meantime take a rest]. At the time petitioner filed the complaint for illegal suspension and/or constructive dismissal on October 23. 160940.R. along with its employee Rosario K. Respondent did not inform petitioner that it was extending its investigation. Jefferson M. SEC. The ruling of the NLRC was affirmed by the Court of Appeals. Inc. a relief and transfer order in itself does not sever employment relationship between a security guard and his agency. it is a settled doctrine that the filing of a complaint for illegal dismissal is inconsistent with abandonment of employment. plus moral and exemplary damages and attorney's fees. Lactao is entitled to reinstatement and backwages as a necessary consequence. Inc. while the charge of illegal dismissal may have been premature because Lactao has not been given a new assignment or temporary "off-detail" for a period of seven days only when he amended his complaint. 16 An employee has the right to security of tenure.LABOR RELATIONS Atty. Jefferson M. Believing he was terminated. Issue: WHETHER OR NOT LACTAO WAS CONSTRUCTIVELY DISMISSED MAKING THE DISMISSAL ILLEGAL. The Labor Arbiter dismissed the complaint for lack of merit. Marquez On April 28. Lactao claims that in retaliation to his filing of the complaint Megaforce constructively dismissed him by relieving him from his post and not giving him a new assignment. in Sucat. When Lactao reported to the Headquarters but he was not given a new assignment. an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges. Ruling: Megaforce contends that it is not guilty of illegal dismissal because Lactao was merely recalled from his post and the failure to give him a new assignment within seven days from his recall is not constructive dismissal because a security guard may be placed on "floating status" for a period not exceeding six months under prevailing jurisprudence. will be most beneficial to the client. service incentive leave pay and 13th month pay. Hence. However. the Court has repeatedly recognized that "off-detailing" is not equivalent to dismissal. as amended. the NLRC set aside the LA‘s decision. to his full backwages. as an offer involving a demotion in rank and a diminution in pay. The filing of such complaint is proof enough of his desire to return to work. when such a "floating status" lasts for more than six months. service incentive leave pay and 13th month pay. or disdain by an employer becomes so unbearable on the part of the employee that it would foreclose any choice by him except to forego his continued employment. in the present case. the employee may be considered to have been constructively dismissed. and to other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. Temporary "off-detail" or the period of time security guards are made to wait until they are transferred or assigned to a new post or client does not constitute constructive dismissal as their assignments primarily depend on the contracts entered into by the security agencies with third parties. the present petition. but this does not give him such a vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him where his service. Thus. he filed with the Arbitration Branch of the NLRC a complaint against Megaforce for underpayment of wages. YES. 2000. Lactao never reported back for reassignment and his refusal to report back to work should not be taken against it. It exists where there is cessation of work because continued employment is rendered impossible. without being informed that he was being placed on "floating status" or given a new assignment. The Court cannot accept the contention of Megaforce that Lactao did not report to work after his recall and had abandoned his job since it failed to present credible proof of any act on the part of Lactao to abandon his employment. Megaforce denied the illegal dismissal charge. Lactao was reassigned to ABB Industry. On May 3. Parañaque City but wasa recalled by Megaforce directing him to report to the Headquarters for proper disposition and new assignment. insensibility. inclusive of allowances. In cases involving security guards. Moreover. Page 209 . Lactao insists that he was constructively dismissed when he was recalled from his post at ABB Industry. On appeal. unreasonable or unlikely. He was detailed at Merville Park Subdivision in Parañaque City. In its Position Paper . Under Article 279 of the Labor Code. 1998. Lactao amended his complaint on June 7. Megaforce hired Lactao as a security guard. 18 Indeed. non-payment of overtime pay. An employee who takes steps to protest his dismissal cannot logically be said to have abandoned his work. non-payment of overtime pay. the continued failure of Megaforce to offer him a new assignment during the proceedings of the case before the LA and beyond the reasonable six-month period makes it liable for constructive dismissal. as security guard. 2000 to one for illegal dismissal with prayer for reinstatement with the same prayer for underpayment of wages. thus negating any suggestion of abandonment. 2000. On April 4. There is constructive dismissal if an act of clear discrimination. so long as such status does not continue beyond a reasonable time. ruling that Lactao was constructively dismissed. 2002 and the order dated April 16. it also moved that it be allowed not to post an appeal bond for 615 NAMAWU members . it nullified the NLRC resolution of February 28. posted the required bond for three non-striking employees. 1996 to October 12. and ordered the NLRC to give due course to MARCOPPER's appeal. 174641. the temporary suspension of operations that started on April 12. Thereafter.. 1995 as a result of their failure to return to work after their strike of February 27. 1995 due to an earlier illegal strike. On the Second Issue The suspension of MARCOPPER's operations was decreed in an Ex-Parte Order dated April 1. in violation of its Environmental Compliance Certificate. the CA conclusions should lead to the dismissal of NAMAWU's complaint with respect to its 615 previously dismissed members. Labor Arbiter Pedro C.e. 1996. as of that date (June 21. 1996 issued by the Pollution Adjudication Board of the DENR. No. MARCOPPER. 1995. contending that NAMAWU had not been authorized by the individual employees . and for lack of factual and legal basis. for the pendency of another action between the same parties. 2000 appeal to the NLRC that it should be excused from filing an appeal bond with respect to the NAMAWU members who were no longer company employees. MARCOPPER denied liability. resulting in a decision by the NLRC on November 11. The CA granted MARCOPPER's petition in the currently assailed decision promulgated on October 14. NAMAWU was the exclusive bargaining representative of the rank-and-file workers of MARCOPPER. WON there is necessity for the filing of an appeal bond considering that the employment of petitioner NAMAWU's members was terminated even before the issuance by the DENR of its order on April 1."NAMAWU claimed that due to the indefinite suspension of MARCOPPER's operations. 1996). Pursued to its logical end. filed a complaint with the Regional Arbitration Branch against MARCOPPER for nonpayment of wages. the termination of employment of these NAMAWU members was already a settled matter that the NLRC was in no position to disregard. 2002. the case is hereinafter referred to as the "environmental incident case. however. 1996 the cancellation of MARCOPPER's ECC without which MARCOPPER could not continue to undertake its mining operations. National Mines and Allied Workers Union vs. damages. 2004. Thus.former MARCOPPER employees who had been dismissed effective March 7. 2004 decision. In this light. Marcopper Mining Corp. We subsequently ruled on the same issue during the time the environmental incident case was pending before the NLRC. The NLRC dismissed MARCOPPER's appeal. It further claimed that its members are also entitled to be paid their separation pay pursuant to their collective bargaining agreement with MARCOPPER. In this appeal. MARCOPPER appealed the decision to the NLRC. MARCOPPER thus sought relief from the CA through a petition for certiorari under Rule 65 of the Rules of Court. and that the complaint should be dismissed for lack of certification of non-forum shopping. Ramos ruled in NAMAWU's favor. separation pay.LABOR RELATIONS Atty.. when the NLRC dismissed MARCOPPER's appeal for failure to file the requisite appeal bond corresponding to the 615 NAMAWU members. The CA's denial of NAMAWU's motion for the reconsideration of the CA's October 14. 2008 Facts: Department of Environment and Natural Resources (DENR) ordered the indefinite suspension of MARCOPPER's operations for causing damage to the environment of the Province of Marinduque by spilling the company's mine waste or tailings from an old underground impounding area into the Boac River. 1996). and attorney's fees. Issue:S: 1. Nov. 1996 became permanent so that MARCOPPER did not have to wait for the end of the six-month suspension Page 210 . MARCOPPER had every reason to claim in its April 10. 11. 1995. WON the employees are entitled to their wages due them for six months? WON they are entitled to separation pay? Ruling: On the First Issue The employment of the NAMAWU officers and members had been declared terminated on March 7.the real parties-in-interest . Marquez 4.R. The CA found the non-filing of the appeal bond for the 615 NAMAWU members covered by the Labor Arbiter's award to be justified since their employment had been terminated as early as March 7. the DENR Secretary ordered on June 21. Separately from this Order. the CA was correct in reversing the dismissal of MARCOPPER's appeal for failure to file an appeal bond. the illegal strike litigation commenced. Thus. its members were not paid the wages due them for six months (from April 12. prior to the suspension of operations for which wages and separation pay were being claimed. i. The CA decision decreeing the termination of employment of those involved in the illegal strike case had already been issued at that time.to file the complaint. Jefferson M. 2. The NLRC subsequently denied MARCOPPER's motion for reconsideration. G. Accordingly. 1996 declaring the strike illegal. at whose initiative a suspension of operation must originate for the above-quoted provision to apply . The termination of employment date. Jefferson M. Mirando et al. 2006.As respondent was thereafter no longer asked to report for duty. 1996 suspension of operation date). No. There is no proof that petitioner‘s representative Reynaldo G. by law. ceased to have any authority to conduct its mining operations. there was no ruling or directive from the DOLE that the environmental incident was a workplace health and safety concern that required a suspension of operation. 179512. Mirando. Inc. that speak of the consequences of a DENR-ordered suspension of operations on employment relationships. for separation pay purposes. Because the initial suspension of operations that the DENR imposed eventually turned into an involuntary closure as discussed above. particularly its employees." Page 211 . Neither does the CBA between MARCOPPER and NAMAWU provide for the consequences of a suspension of operation due to environmental causes. Marquez of operations before the services of the three employees were deemed terminated. In the absence of any showing that NAMAWU could represent "other similarly situated employees" who are not its members. we cannot consider these other employees (whose circumstances have never been discussed and who all remain unnamed) to be covered by the terms of this Decision. (Endencio). Article 283 of the Labor Code comes into play entitling the three remaining employees the payment of separation pay computed under the terms of that Article. While the mine tailing leakage and pollution of the Boac River cannot but affect the health and safety of those in the MARCOPPER vicinity. petitioner alleged that respondent went on absence without official leave (AWOL) on December 16. Specifically. 1996 must be the closure date as it is from this date that MARCOPPER. 1586 and their implementing rules. Ruling: The petition must be denied. but he failed to respond thereto. In Labor Code terms. should be computed from June 21. as a security guard on July 29. shift and a daily wage of P250. we find that the Department of Labor and Employment (DOLE) Regional Director . who was hired by Eagle Star Security Services..m. drawing it to send him a notice on December 26. not to report for duty per instruction of the head office. vs. specifically.D. No. 2001 and had not since reported for work. 1996 (or six months from the April 12. On December 14. Eagle Star Security Services Inc. 2001 to explain his absence. 5. 984 and P.R.00. subject to existing CBA terms on leave credits and similar benefits of employees. he was told by the detachment commander. petitioner‘s operations manager. Respondent thus called up the head office and was that he was removed from duty by (Agodilla). 1996 amounted to a company closure governed by Article 283 of the Labor Code . no pay" rule should prevail with respect to employees' wages during the suspension period. Tauro was authorized to file the petition on its behalf. versus Eagle Star Security Services.did not act as envisioned by the above rule. 039872-04 entitled "Bonifacio L. respondent. G. Under the circumstances. was posted at the Heroes Hill Branch of Equitable-PCI Bank (now Banco de Oro-EPCI Bank) with a 9:00 a. 2001. P.. we can only conclude that the general "no work.-to-5:00 p. complainant. 2002 to include a prayer for reinstatement and payment of full backwages.m. 2001. When he reported for work on December 15.The Board Resolution which was adopted during petitioner‘s Special Board Meeting of May 20.D.LABOR RELATIONS Atty. There is likewise nothing in the laws applicable to pollution. 1997. damages and attorney‘s fees." Issues: Whether or not the person who signed the present petition was duly authorized. 1996 and not from October 12. Responding to the complaint. states: RESOLVED as it is hereby resolved that the corporation shall elevate on Certiorari before the Court of Appeals NLRC NCR Case No. 2001 a complaint for illegal dismissal. respondent was made to sign a duty schedule for December 15 (a Saturday). He later amended his complaint on February 1. Respondent argues that the present petition must be treated as a "mere scrap of paper" since the one who signed it was "not properly authorized by the [p]etitioner to file [it] before this [Court]. the cancellation of the ECC on June 21.the provision that governs the relationship of employers and employees in closure situations. 2009 Facts: Mirando. he filed on December 18. No. Whether or not he was illegally dismissed. Inc. June 21. July 30. and since petitioner‘s business is primarily dependent on contracts entered into with third parties. it was adopted for the purpose of authorizing Tauro to file petitioner‘s petition for "Certiorari before the Court of Appeals. G. the certification against forum shopping should be signed by its duly authorized director or representative …[I]f the real party-in-interest is a corporate body. there is no showing that there was lack of available posts at petitioner‘s clients or that there was a request from the clientbank. If. Jefferson M. explains: The reason for this is that the principal party has actual knowledge whether a petition has previously been filed involving the same case or substantially the same issues. resulting in a situation where the available posts under its existing contracts are less than the number of guards in its roster. the petition is DENIED. . there is no termination of employment but only a temporary displacement of employees. petitioner and respondent presented two different sides of the story. A certification without the proper authorization is defective and constitutes a valid cause for the dismissal of the petition. Petitioner‘s citation of Article 286 of the Labor Code reading: ART. should dissipate any doubt that he did not abandon his job. an officer of the corporation can sign the certification against forum shopping as long as he is authorized by a resolution of its board of directors. albeit the displacement should not exceed six (6) months. In all such cases. The persistence of respondent to resume his duties. not to mention his immediate filing of the illegal dismissal complaint. . The paramount consideration should be the dire exigency of the business of the employer that compels it to put some of its employees temporarily out of work. 186614. . shall be appointed as authorized representative of the Corporation.LABOR RELATIONS Atty.R. the temporary "off-detail" of guards takes place when the security agency‘s clients decide not to renew their contracts with the security agency. WHEREFORE. 6. following Art. or the fulfillment by the employee of a military or civic duty shall not terminate employment. 286 of the Labor Code. it failed even to belatedly file the requisite authority. Fuentebella and Rolling Hills Memorial Park v. Petitioner suddenly prevented him from reporting on his tour of duty at the bank on December 15. to replace respondent with another. Valderama. to represent and sign in behalf of the corporation the Verification and Certification of the petition for afore-mentioned case. In the present case. Dapiton teaches: We stress that Article 286 applies only when there is a bonafide suspension of the employer‘s operation of a business or undertaking for a period not exceeding six (6) months. petitioner argues that respondent was on temporary "off-detail. Marquez RESOLVED further as it is hereby resolved that Mr. February 23. REYNALDO G. In security services. the one signing on his behalf must have been duly authorized. on the merits. the temporary "off-detail" of respondent does not amount to dismissal as long as the period does not exceed 6 months. (Emphasis in the original. Philippine Industrial Security Agency v. Clutching at straws. the employer shall reinstate the employee to his former position without loss of seniority rights if he indicates his desire to resume his work not later than one (1) month from the resumption of operations of his employer or from his relief from the military or civic duty. Where the petitioner is a corporation." the period of time a security guard is made to wait until he is transferred or assigned to a new post or client. Castro.on the requirement of a certification against forum shopping. AT ALL EVENTS. RESPONDENT VALDERAMA‘S SIDE OF THE STORY PETITIONER‘S SIDE OF THE STORY Page 212 . When employment not deemed terminated. for any reason. 2001 and had not thereafter asked him to report for duty. ─ The bona fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months. where respondent was last posted and which continued to hire petitioner‘s services. Nationwide Security & Allied Services v. TAURO." Despite petitioner‘s awareness in its Reply to respondents‘ Comment filed before this Court of the defect in Tauro‘ authority to sign for and in its behalf the Verification and Certification against Non-Forum Shopping. underscoring supplied) is misplaced. there is no such circumstance or reason in the present case which warrants the liberal application of technical rules. 286. In such a case. the appellate court did not commit any reversible error in affirming the congruent findings of the Labor Arbiter and the NLRC that respondent was illegally dismissed. No. Clearly. While there have been instances when the Court dispensed with technicalities on the basis of special circumstances or compelling reasons. (Petitioner‘s discourse on relaxation of technical rules of procedure in the interest of substantial justice does not impress. 2011 Facts: In this case. the principal party cannot sign the petition. Due to the grim economic consequences to the employee. Furthermore. sabihin mo lang kung ano gusto mo. Datiles recommended the relief of Valderama. An employee has the right to security of tenure. Respondent went to the CA via certiorari. Detachment Commander. Marquez Valderama was hired by petitioner as security guard at the Philippine Heart Center. Besides. Thus. For this. As such. he was charged with conduct unbecoming which he was required to explain. Respondent displayed his discourteous and rude attitude upon his superior. To constitute abandonment. the fact that respondent filed the instant complaint negates any intention on his part to forsake his work. After he was relived from his job. with prayer for damages against petitioner. It said that the petitioner‘s defense is unsubstantiated. In gist. In this case." he does not receive any salary or financial benefit provided by law. for an employee who takes steps to protest his dismissal cannot by logic be said to have abandoned his work. Petitioner claims that respondent abandoned his job. the employer should bear the burden of proving that there are no posts available to which the employee temporarily out of work can be assigned.LABOR RELATIONS Atty. petitioner failed to establish clear evidence of respondent's intention to abandon his employment. Respondent violated security rules of the work place. he was relieved from his post at the Philippine Heart Center. manifested through overt acts. including Valderama were made to explain their failure to report for duty without informing the office despite the instruction during their formation day which was held a day before. The Labor Arbiter rendered a decision saying that Valderama was constructively dismissed. he filed a complaint for constructive dismissal and nonpayment of 13th month pay. It declared that respondent was neither constructively terminated nor did he voluntarily resign. Seven security guards. He was then directed to report to the office where he got his cash bond and firearm deposit. When a security guard is placed on a "floating status. to sever the employer-employee relationship. Temporary "offdetail" or the period of time security guards are made to wait until they are transferred or assigned to a new post or client does not constitute constructive dismissal. no further assignment was given to him. On appeal. the NLRC modified the LA decision. respondent remained an employee of petitioner. the CA sustained respondent's claim of constructive dismissal. two elements must concur: (1) The failure to report for work or absence without valid or justifiable reason (2) A clear intent. petitioner sent him a letter through registered mail to report for the office and give information on whether or not he was still interested for report for duty or not. It is a matter of intention and cannot lightly be presumed from certain equivocal acts. will be most beneficial to the client. Valderama was not constructively or illegally dismissed. a relief and transfer order in itself does not sever employment relationship between a security guard and his agency. Despite his voluntary resignation. By order of the Operations Manager. CA rendered a Decision setting aside the resolutions of the NLRC and reinstating that of the LA. Issue: Whether or not the respondent was constructively dismissed? Ruling: In cases involving security guards. reported that Valderama confronted and challenged him in a high pitch and on top of his voice rudely showing discourtesy and rudeness. The jurisprudential rule on abandonment is constant. It is a settled doctrine that the filing of a complaint for illegal dismissal is inconsistent with the charge of abandonment. Being his superior. Jefferson M. Except for petitioner's bare assertion that respondent did not report to the office for reassignment. Roy Datiles. Valderama did not bother to reply. so long as such status does not continue beyond six months. no proof was offered to prove that respondent intended to sever the employer-employee relationship. The onus of proving that there is no post available to which the security guard can be assigned rests on the employer." Petitioner required him to explain why no disciplinary action should be meted against him. personalan ba ito. but had voluntarily resigned. The NLRC thus ordered respondent to immediately report to petitioner and assume his duty. Neither did he report to the office. he was suspended for 7 days. but this does not give him a vested right to his position as would deprive the company of its prerogative to change his assignment or transfer him where his service. as security guard. He said to him in a high pitch "ano ba sir. Page 213 . LABOR RELATIONS Atty. Jefferson M. Marquez Similarly, we cannot accept petitioner's argument that respondent voluntarily resigned. Resignation is the voluntary act of an employee who is in a situation where one believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and one has no other choice but to dissociate oneself from employment. It is a formal pronouncement or relinquishment of an office, with the intention of relinquishing the office accompanied by the act of relinquishment. As the intent to relinquish must concur with the overt act of relinquishment, the acts of the employee before and after the alleged resignation must be considered in determining whether, he or she, in fact, intended to sever his or her employment. In this case, petitioner was firm in asserting that respondent voluntarily resigned. Oddly, it failed to present the alleged resignation letter of respondent. Jurisprudence is trite with pronouncements that the temporary inactivity or "floating status" of security guards should continue only for six months. Otherwise, the security agency concerned could be liable for constructive dismissal.[24] The failure of petitioner to give respondent a work assignment beyond the reasonable six-month period makes it liable for constructive dismissal. If there is a surplus of security guards caused by lack of clients or projects, the security agency may resort to retrenchment upon compliance with the requirements set forth in the Labor Code. In this way, the security agency will not to be held liable for constructive dismissal and be burdened with the payment of backwages. Under Article 279 of the Labor Code, an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges; to his full backwages, inclusive of allowances; and to other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. PETITION DENIED. RESPONDENT WAS ILLEGALLY DISMISSED BY PETITIONER. 7. Nippon Housing Phils. vs. Leynes, G.R. No. 177816, August 3, 2011 Facts: Petitioner, originally engaged in the business of providing building maintenance From its original ventured into building management and gained Bay Gardens Condominium Project (the Project) of the Bay Gardens Condominium Corporation (BGCC) as its first and only building maintenance client. In this regard, petitioner hired respondent Maiah Angela Leynes on 26 March 2001 for the position of Property Manager, with a salary of P40,000.00 per month. Her responsibilities include surveying the requirements of the government and the client for said project, the formulation of house rules and regulations, the preparation of the annual operating and capital expenditure budget, hiring and deployment of manpower, salary and position determination as well as the assignment of the schedules and responsibilities of employees. Leynes had a misunderstanding with the building engineer of the project (Cantuba) and barred the latter‘s entry to the site. The Engr. also accused the former of conceit, pride and poor managerial skills. Takada, the NHPI's Vice President issued a memorandum attributing the incident to "simple personal differences" and directing Leynes to allow Engr. Cantuba to report back for work. Disappointed with this management decision, she submitted a letter to NHPI‘s President (Ota) asking for an emergency leave of absence for the supposed purpose of coordinating with her lawyer regarding her resignation letter. NHPI offered the Property Manager position to Engr. Carlos Jose as a consequence Leynes' signification of her intention to resign. However, she sent another letter expressing her intention to return to work and to call off her planned resignation. However, she received a letter from the management to report instead to the main office as one in a ―floating status‖ because someone already occupies her post. Aggrieved, Leynes filed a complaint against petitioner for illegal dismissal, unpaid salaries, benefits, damages and attorney's fees. The Labor arbiter found that the petitioner‘s act of putting Leynes on a floating status was equivalent to termination without just cause. The NLRC ruled that NHPI's placement of Leynes on floating status was necessitated by the client's contractually guaranteed right to request for her relief. However, this was later on reversed by the CA, hence, this present petition before the SC. Issue: WON petitioners' decision to place respondent on floating status is tantamount to constructive dismissal. (Alternative: what is the effect of withdrawn resignation?) Ruling: No, the placement of Leynes on a floating status due to redundancy is valid. There is no constructive dismissal. The factual antecedents suggest that NHPI's immediate hiring of Engr. Jose as the new Property Manager for the Project was brought about by Leynes' own rash announcement of her intention to resign from her position. Although she subsequently changed her mind and sent Reyes a letter by telefax announcing the reconsideration of her planned resignation and her intention to return to work, Leynes evidently had only herself to blame for precipitately setting in motion the events which led to NHPI's hiring of her own replacement. Page 214 LABOR RELATIONS Atty. Jefferson M. Marquez The record, moreover, shows that NHPI simply placed her on floating status "until such time that another project could be secured" for her. Traditionally invoked by security agencies when guards are temporarily sidelined from duty while waiting to be transferred or assigned to a new post or client, Article 286 of the Labor Code has been applied to other industries when, as a consequence of the bona fide suspension of the operation of a business or undertaking, an employer is constrained to put employees on floating status for a period not exceeding six months. In brushing aside respondents' reliance on said provision to justify the act of putting Leynes on floating status, the CA ruled that no evidence was adduced to show that there was a bona fide suspension of NHPI's business. What said court clearly overlooked, however, is the fact that NHPI had belatedly ventured into building management and, with BGCC as its only client in said undertaking, had no other Property Manager position available to Leynes. The rule is settled, however, that "off-detailing" is not equivalent to dismissal, so long as such status does not continue beyond a reasonable time and that it is only when such a "floating status" lasts for more than six months that the employee may be considered to have been constructively dismissed. A complaint for illegal dismissal filed prior to the lapse of said six-month and/or the actual dismissal of the employee is generally considered as prematurely filed. Since the petitioner has no other client for the building management side of its business, it acted within its prerogatives when it eventually terminated Leynes' services on the ground of redundancy. One of the recognized authorized causes for the termination of employment, redundancy exists when the service capability of the workforce is in excess of what is reasonably needed to meet the demands of the business enterprise. A redundant position is one rendered superfluous by any number of factors, such as overhiring of workers, decreased volume of business, dropping of a particular product line previously manufactured by the company or phasing out of service activity priorly undertaken by the business An employer has no legal obligation to keep more employees than are necessary for the operation of its business. Considering that Leynes was terminated from service upon an authorized cause, we find that the CA likewise erred in faulting NHPI for supposedly failing to notify said employee of the particular act or omission leveled against her and the ground/s for which she was dismissed from employment. Where dismissal, however, is for an authorized cause like redundancy, the employer is, instead, required to serve a written notice of termination on the worker concerned and the DOLE, at least one month from the intended date thereof. For its failure to comply strictly with the 30-day minimum requirement for said notice and effectively violating Leynes' right to due process, NHPI should be held liable to pay nominal damages in the sum of P50,000.00. Page 215 LABOR RELATIONS Atty. Jefferson M. Marquez DISEASE AS A GROUND FOR TERMINATION 1. Sy vs. Court of Appeals, G.R. No. 142293, February 27, 2003 Facts: Private respondent Jaime Sahot has been working for petitioners‘ family-owned trucking business named Vicente Sy Trucking starting in 1958. Since that time, the family business has changed names, first from T. Paulino Trucking Service, then to 6B‘s Trucking Corporation, and finally to SBT Trucking Corporation. Throughout all these changes and for 36 years, Sahot remained with the business. When Sahot was already 59 years old, he had recurring absences due to his suffering various ailments. His left thigh, in particular, has been causing him pain, which greatly affected his performance as a driver. After inquiring with the SSS regarding his medical and retirement benefits, he found that his premium payments had not been remitted by his employer. Later, he filed a week-long leave during which time he was medically examined and treated for several illnesses. Upon the advice of SBT Trucking Service management, he filed a formal request for extension of his leave. It was at this time that Sahot was first threatened of termination from work, with his employers later carrying out this threat by dismissing him. Issue: Whether or not there was valid dismissal Ruling: Article 277(b) of the Labor Code puts the burden of proving that the dismissal of an employee was for a valid or authorized cause on the employer, without distinction whether the employer admits or does not admit the dismissal. For an employee‘s dismissal to be valid, (a) the dismissal must be for a valid cause and (b) the employee must be afforded due process. Article 284 of the Labor Code authorizes an employer to terminate an employee on the ground of disease. However, in order to validly terminate employment on this ground, Book VI, Rule I, Section 8 of the Omnibus Implementing Rules of the Labor Code requires a medical certificate. This requirement cannot be dispensed with; otherwise, it would sanction the unilateral and arbitrary determination by the employer of the gravity or extent of the employee‘s illness and thus defeat the public policy in the protection of labor. In the case at bar, the employer clearly did not comply with the medical certificate requirement before Sahot‘s dismissal was effected. In addition, there is likewise the determination if the procedural aspect of due process had been complied with by the employer. From the records, it clearly appears that procedural due process was not observed in the separation of private respondent by the management of the trucking company. The employer is required to furnish an employee with two written notices before the latter is dismissed: (1) the notice to apprise the employee of the particular acts or omissions for which his dismissal is sought, which is the equivalent of a charge; and (2) the notice informing the employee of his dismissal, to be issued after the employee has been given reasonable opportunity to answer and to be heard on his defense. These, the petitioners failed to do, even only for record purposes. What management did was to threaten the employee with dismissal, then actually implement the threat when the occasion presented itself because of private respondent‘s painful left thigh. All told, both the substantive and procedural aspects of due process were violated. Clearly, therefore, Sahot‘s dismissal is tainted with invalidity. 2. Manly Express vs. Payong, G.R. No. 167462, October 25, 2005 Facts: Sometime in December 1999, Romualdo Payong, Jr., was complaining of eyesight problems. He was brought to an eye specialist by private respondent Manly Express, Inc. and/or Siy Eng T. Ching, he was diagnosed to be suffering from eye cataract. Despite having the cataract removed in January of 2000, he was disallowed to return to his work by Ching. Much later, on August 1, 2000, he was given a letter of Page 216 LABOR RELATIONS Atty. Jefferson M. Marquez termination of employment. Thus, a complaint for illegal dismissal with money claims was filed against Manly. Issue: Whether or not the dismissal on the ground of disease was valid. Ruling: In order to validly terminate employment on this ground, Section 8, Rule I, Book VI of the Omnibus Rules Implementing the Labor Code requires: Sec. 8. Disease as a ground for dismissal. – 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. The rule is explicit. For a dismissal on the ground of disease to be considered valid, two requisites must concur: (a) the employee suffers from a disease which cannot be cured within six months and his continued employment is prohibited by law or prejudicial to his health or to the health of his co-employees, and (b) a certification to that effect must be issued by a competent public health authority. In the present case, there was no proof that Payong‘s continued employment was prohibited by law or prejudicial to his health and that of his coemployees. No medical certificate by a competent public health authority was submitted that Payong was suffering from a disease that cannot be cured within a period of six months. In the absence of such certification, Payong‘s dismissal must necessarily be declared illegal. The burden of proving the validity of the dismissal rests on the employer. As such, the employer must prove that the requisites for a valid dismissal due to a disease have been complied with. In the absence of the required certification by a competent public health authority, this Court has ruled against the validity of the employee‘s dismissal. The Supreme Court also note that Manly failed to comply with the procedure for terminating an employee. In dismissing an employee, the employer has the burden of proving that the employee has been served two notices: (1) one to apprise him of the particular acts or omissions for which his dismissal is sought, and (2) the other to inform him of his employer‘s decision to dismiss him. The first notice must state that dismissal is sought for the act or omission charged against the employee, otherwise, the notice cannot be considered sufficient compliance with the rules. Payong‘s dismissal did not comply with both the substantive and procedural aspects of due process. Clearly, his dismissal is tainted with invalidity. 3. Duterte vs. Kingswood Trading Co., G.R. No. 160325, October 4, 2007 Facts: Petitioner was hired as truck/trailer driver by respondent Kingswood Trading Company, Inc. (KTC) of which co-respondent Filemon Lim is the President. Petitioner was on the 6:00 a.m. – 6:00 p.m. shift. He averaged 21 trips per month, getting P700 per trip. When not driving, petitioner was assigned to clean and maintain respondent KTC‘s equipment and vehicles for which he was paid P125 per day. Regularly, petitioner would be seconded by respondent Filemon Lim to drive for one of KTC‘s clients, the Philippine National Oil Corporation, but always subject to respondents‘ convenience. On November 8, 1998, petitioner had his first heart attack and was confined for two weeks at the Philippine Heart Center (PHC). This was confirmed by respondent KTC which admitted that petitioner was declared on sick leave with corresponding notification. A month later, petitioner returned to work armed with a medical certificate signed by his attending physician at the PHC, attesting to petitioner‘s fitness to work. However, said certificate was not honored by the respondents who refused to allow petitioner to work. In February 1999, petitioner suffered a second heart attack and was again confined at the PHC. Upon release, he stayed home and spent time to recuperate. Petitioner attempted to report back to work but was told to look for another job because he was unfit. Respondents refused to declare petitioner fit to work unless physically examined by the company physician. Respondents‘ promise to pay petitioner his separation pay turned out to be an empty one. Instead, petitioner was presented, for his signature, a document as proof of his receipt of the amount of P14,375.00 as first installment of his Social Security System (SSS) benefits. Having received no such amount, petitioner refused to affix his signature thereon and instead requested for the necessary documents from respondents to enable him to claim his SSS benefits, but the latter did not heed his request. Page 217 LABOR RELATIONS Atty. Jefferson M. Marquez Ruling: The law is unequivocal: 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. Here, the record does not contain the required certification. And when the respondents asked the petitioner to look for another job because he was unfit to work, such unilateral declaration, even if backed up by the findings of its company doctors, did not meet the quantum requirement mandated by the law, i.e., there must be a certification by a competent public authority. The requirement for a medical certificate under Article 284 of the Labor Code cannot be dispensed with; otherwise, it would sanction the unilateral and arbitrary determination by the employer of the gravity or extent of the employee‘s illness and thus defeat the public policy on the protection of labor. All told, we rule and so hold that petitioner‘s dismissal did not comply with both the substantive and procedural aspects of due process. Clearly, his dismissal is tainted with invalidity. WHEREFORE, the assailed decision of the CA is REVERSED and SET ASIDE. SO ORDERED. 4. Villaruel vs. Yeo Han Guan, G.R. No. 169191, June 1, 2011 Facts: Petitioner alleged that in June 1963, he was employed as a machine operator by Ribonette Manufacturing Company, an enterprise engaged in the business of manufacturing and selling PVC pipes and is owned and managed by herein respondent Yeo Han Guan. Over a period of almost twenty (20) years, the company changed its name four times. Starting in 1993 up to the time of the filing of petitioner's complaint in 1999, the company was operating under the name of Yuhans Enterprises. Despite the changes in the company's name, petitioner remained in the employ of respondent. Petitioner further alleged that on October 5, 1998, he got sick and was confined in a hospital; on December 12, 1998, he reported for work but was no longer permitted to go back because of his illness; he asked that respondent allow him to continue working but be assigned a lighter kind of work but his request was denied; instead, he was offered a sum of P15,000.00 as his separation pay; however, the said amount corresponds only to the period between 1993 and 1999; petitioner prayed that he be granted separation pay computed from his first day of employment in June 1963, but respondent refused. Aside from separation pay, petitioner prayed for the payment of service incentive leave for three years as well as attorney's fees. The Labor Arbiter found for the respondent, granting him separation pay from the June 1963 up to the time of separation, and service incentive leave equivalent to 15 days. The NLRC affirmed. On appeal, the CA reversed the NLRC on the issue of separation pay. Issue: The assigned errors in the instant petition essentially boil down to the question of whether petitioner is entitled to separation pay under the provisions of the Labor Code, particularly Article 284 thereof, which reads as follows: An employer may terminate the services of an employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees: Provided, That he is paid separation pay equivalent to at least one (1) month salary or to one-half (½) month salary for every year of service whichever is greater, a fraction of at least six months being considered as one (1) whole year. Held: A plain reading of the abovequoted provision clearly presupposes that it is the employer who terminates the services of the employee found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his coemployees. It does not contemplate a situation where it is the employee who severs his or her employment ties. This is precisely the reason why Section 8, Rule 1, Book VI of the Omnibus Rules Implementing the Labor Code, directs that an employer shall not terminate the services of the employee 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. On the other hand, the Court agrees with the CA in its observation of the following circumstances as proof that respondent did not terminate petitioner's employment: first, the only cause of action in petitioner's original complaint is that he was ―offered a very low separation pay‖; second, there was no allegation of illegal dismissal, both in petitioner's original and amended complaints and position paper; and, third, there was no prayer for reinstatement. In consonance with the above findings, the Court finds that petitioner was the one who initiated the severance of his employment relations with Page 218 the award of separation pay is also authorized in the situations dealt with in Article 283[16] of the same Code and under Section 4 (b). Resignation is defined as the voluntary act of an employee who finds himself in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the service and he has no other choice but to disassociate himself from his employment. It is evident from the various pleadings filed by petitioner that he never intended to return to his employment with respondent on the ground that his health is failing. Rule I. In the absence of a substantial refutation on the part of respondent. except when it is stipulated in the employment contract or CBA. Since petitioner was not terminated from his employment and.00 to petitioner as financial assistance is deemed equitable under the circumstances. [19] In the present case. merely continued the operation of the latter under the same owners and the same business venture. his employer. In fact. in fact. the Court finds that petitioner is entitled to this kind of assistance.LABOR RELATIONS Atty. Book VI of the Implementing Rules and Regulations of the said Code[17] where there is illegal dismissal and reinstatement is no longer feasible. By way of exception. Add to this the willingness of respondent to give him financial assistance. This is tantamount to resignation. The Court further notes that there is no evidence on record to show that petitioner has any derogatory record during his long years of service with respondent and that his employment was severed not by reason of any infraction on his part but because of his failing physical condition.[18] However. the rule is that an employee who voluntarily resigns from employment is not entitled to separation pay. this Court. Indeed. It may not be amiss to point out at this juncture that aside from Article 284 of the Labor Code. The foregoing notwithstanding. Taking into consideration the factual circumstances obtaining in the present case. he is not entitled to separation pay under the provisions of the Labor Code. Page 219 .000. or it is sanctioned by established employer practice or policy. Jefferson M. Hence. instead. the Court finds credence in petitioner's contention that he is in the employ of respondent for more than 35 years. In this regard. petitioner did not ask for reinstatement. Marquez respondent. is deemed to have resigned therefrom. this Court has allowed grants of separation pay to stand as ―a measure of social justice‖ where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. he rejected respondent's offer for him to return to work. there is no provision in the Labor Code which grants separation pay to voluntarily resigning employees. based on the foregoing. In fact. the Court agrees with the findings of the Labor Arbiter and the NLRC that respondent company is not distinct from its predecessors but. neither the abovementioned provisions of the Labor Code and its implementing rules and regulations nor the exceptions apply because petitioner was not dismissed from his employment and there is no evidence to show that payment of separation pay is stipulated in his employment contract or sanctioned by established practice or policy of herein respondent. in a number of cases. the Court finds that the award of P50. has granted financial assistance to separated employees as a measure of social and compassionate justice and as an equitable concession. when said employee.. Moreover. and the employee shall be compulsory retired and paid the retirement benefits herein provided. The complaint was consolidated with two other cases of illegal dismissal having similar facts and issues. i. In almost all countries today. being a union member. can early on be put to productive and profitable uses by way of income-generating investments. filed by other employees. when he was retired at the age of 52 after having rendered twenty five year‘s service. He continued in petitioner‘s employ until August 12. 287 of the Labor Code as worded permits employers and employees to fix the applicable retirement age at below 60 years. The COMPANY shall formulate a retirement plan with the following main features: xxx xxx xxx (e) The COMPANY agrees to grant the retirement benefits herein provided to regular employees who may be separated from the COMPANY for any of the following reasons: xxx xxx xxx Upon reaching the age of sixty (60) years or upon completing twenty-five (25) years of service to the COMPANY. may be in keeping with good faith. NLRC. Private respondent received P49. non union members. The parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which according to their nature. It binds not only the union but also its members. 1989. Pantranco North Express vs. He eventually joined the Pantranco Employees Association. 300. is considered a reward for services rendered since it enables an employee to reap the fruits of his labor — particularly retirement benefits. before age 60. PTGWO. Thus we are now seeing many CBAs with such early retirement provisions." Art. had to contend with life's vicissitudes within the parameters of his fortnightly or weekly wages. Issue: Is a Collective Bargaining Agreement provision allowing compulsory retirement before age 60 but after twenty five years of service legal and enforceable? Who has jurisdiction over a case involving such a question -. the Solicitor General said: "Private respondent cannot therefore claim illegal dismissal when he was compulsory retired after rendering twenty-five (25) years of service since his retirement is in accordance with the CBA. A CBA is not an ordinary contract. Thus. early retirement." A CBA incorporates the agreement reached after negotiations between employer and bargaining agent with respect to terms and conditions of employment. Marquez OTHER CAUSES OF SEVERANCE OF EMPLOYMENT RELATION 1. It is also further argued that. one of the advantages of early retirement is that the corresponding retirement benefits. Jefferson M. Article XI. And the same cannot be considered a diminution of employment benefits. 259 SCRA 161 [1996] Facts: Private respondent was hired by petitioner in 1964 as a bus conductor. Private respondent filed a complaint for illegal dismissal against petitioner with the Sub-Regional Arbitration Branch of the respondent Commission in Dagupan City. "(A)s a labor contract within the contemplation of Article 1700 of the Civil Code of the Page 220 .the labor arbiter or arbitrators authorized by such CBA? Ruling: On the first issue: The bone of contention in this case is the provision on compulsory retirement after 25 years of service. can enjoy them better and longer. whether lump-sum or otherwise — at an earlier age. The basis of his retirement was the compulsory retirement provision of the collective bargaining agreement between the petitioner and the aforenamed union. whichever comes first.LABOR RELATIONS Atty.e. Section 1 (e) (5) of the May 2. up till then. As a matter of fact. thereby affording a more significant measure of financial security and independence for the retiree who. in presumably better physical and mental condition. private respondent is bound by the CBA because its terms and conditions constitute the law between the parties. usually consisting of a substantial cash windfall.00 as retirement pay. providing for early retirement does not constitute diminution of benefits. usage and law. 1989 Collective Bargaining Agreement between petitioner company and the union states: "Section 1. a case cited by the petitioner. Airlines vs. both the union and the company are united or have come to an agreement regarding the dismissal of private respondents. The problem or dispute in the present case is between the union and the company on the one hand and some union and non-union members who were dismissed. Base on his decision. Jefferson M. It gives the pilot concerned an undue prerogative to assail the decision of management. on the other hand. he resolved a question which was outside of the issues raised. No grievance between them exists which could be brought to a grievance machinery. only disputes involving the union and the company shall be referred to the grievance machinery or voluntary arbitrators. (it) is not merely contractual in nature but impressed with public interest. Marquez Philippines which governs the relations between labor and capital. Airline Pilots Asso. The grievance machinery with members designated by the union and the company cannot be expected to be impartial against the dismissed employees. the matter falls within the jurisdiction of the Labor Arbiter. Surely. the Secretary of Labor overstepped the boundaries of reason and fairness when he imposed on petitioner the additional requirement of consulting each pilot prior to retiring him. G. Phil. 2006 citing 1996 Pantranco North Express Facts: Page 221 . 151021. that the retirement of Captain Collantes constituted illegal dismissal and union busting. Furthermore. inter alia. 2002 Facts: This case was stemmed from petitioner's act of unilaterally retiring airline pilot Captain Albino Collantes own Retirement Plan.R." Being a product of negotiation. G. this Court ruled: ―x x x Hence.LABOR RELATIONS Atty. Issue: Is the decision of the Secretary of DOLE correct in saying that in the exercise of retiring their employees. the CBA between the petitioner and the union intended the provision on compulsory retirement to be beneficial to the employees-union members. Cainta Catholic School Employees Union. May 4. and the courts must place a practical and realistic construction upon it. Due process only requires that notice be given to the pilot of petitioner's decision to retire him. 143686. Also. The retirement of an employee may be done upon initiative and option of the management. thereby depriving petitioner an opportunity to be heard on this point. Cañizares. it cannot be said that he was illegally dismissed when the CBA provision on compulsory retirement was applied to his case. Cainta Catholic School vs. it must be construed liberally rather than narrowly and technically. As such. the requirement to consult the pilots prior to their retirement defeats the exercise by management of its option to retire the said employees. he not only agreed to the CBA but also agreed to conform to and abide by its provisions. No. it was only private respondent on his own who questioned the compulsory retirement. The Secretary of the DOLE assumed jurisdiction over the labor dispute. Since there has already been an actual termination. On the second issue: In Sanyo Philippines Workers Union — PSSLU vs. the case is properly denominated as a "termination dispute" which comes under the jurisdiction of labor arbiters. 2. thus it must yield to the common good. the employer should first consult their employee concerned before implementing the retirement? Ruling: NO. Due process demands that the dismissed workers‘ grievances be ventilated before an impartial body. PAL should first consult the pilot concerned before implementing his retirement." Applying the same rationale to the case at bar. Of Phils. it cannot be said that the "dispute" is between the union and petitioner company because both have previously agreed upon the provision on "compulsory retirement" as embodied in the CBA. When private respondent ratified the CBA with the union. No.. Hence. 3. Thus. Contending. The dispute has to be settled before an impartial body. when the Secretary of Labor and Employment imposed the added requirement that petitioner should consult its pilots prior to retirement. January 15. In the instant case. giving due consideration to the context in which it is negotiated and purpose which it is intended to serve. Thus. including herein private respondent.R. In those two instances. Retirement. upon reaching the age of sixty (60) or after having rendered at least twenty (20) years of service to the School the last three (3) years of which must be continuous. an employee upon reaching the age of sixty (60) years or more. arising as it did from a management prerogative granted by the mutually-negotiated CBA between the School and the Union. governs retirement of employees. The CBA in the case at bar established 60 as the compulsory retirement age. who has served at least five (5) years in the said establishment. however. a fraction of at least six (6) months being considered as one whole year. Furthermore. Retirement. the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining agreement and other agreements: Provided. the Court of Appeals construed the retirement of Llagas and Javier as an act amounting to unfair labor practice when viewed against the backdrop of the relevant circumstances obtaining in the case. the Union struck and picketed the School‘s entrances. to wit: ―An employee may be retired. but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age. Ruling: We are impelled to reverse the Court of Appeals and affirm the validity of the termination of employment of Llagas and Javier. While in all three cases. Undoubtedly. The NLRC dismissed the unfair labor practice charge against the School for insufficiency of evidence. In reversing the decision of the NLRC. pursuant to Section 2. Jefferson M. Three (3) issues were passed upon by the NLRC. However. who had rendered more than twenty (20) years of continuous service. On 27 July 1994. on the other hand. and (3) whether the strike is legal. and the ruling on whether the strike was legal is highly dependent on whether the retirement was valid. but instead that they had rendered at least 20 years of service in the School. provided that he/she had rendered 20 years of service. the last three (3) years of which must be continuous. Retirement is a different specie of termination of employment from dismissal for just or authorized causes under Articles 282 and 283 of the Labor Code. Pursuant to the existing CBA. 287. the Union filed a notice of strike with the National Conciliation and Mediation Board (NCMB). stating: ART. it is indispensable that the employer establish the existence of just or authorized causes for dismissal as spelled out in the Labor Code. the School has the option to retire an employee upon reaching the age limit of sixty (60) or after having rendered at least twenty (20) years of service to the School. namely: (1) whether the retirement of Llagas and Javier is legal. is the result of a bilateral act of the parties. In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment. either upon application by the employee himself or by the decision of the Director of the School. Article X of the CBA. it was found that the strike declared by the Union from 8 to 12 November 1993 is illegal. there are eminently higher standards to be met by the employer validly exercising the prerogative to dismiss for just or authorized causes. Issue: The key issue remains whether the forced retirement of Llagas and Javier was a valid exercise of management prerogative. The NLRC ruled that the retirement of Llagas and Javier is legal as the School was merely exercising an option given to it under the CBA. a voluntary agreement between the employer and the employee whereby the latter after reaching a certain age agrees and/or consents to sever his employment with the former. the School retired Llagas and Javier. Would such a stipulation be valid? Jurisprudence affirms the position of the School. the retirement of the two (2) union officers triggered the declaration of strike by the Union. the CBA provision allows the employee to be retired by the School even before reaching the age of 60. Marquez On 6 March 1986. the employee to be terminated may be unwilling to part from service. On 15 October 1993. That an employee‘s retirement benefits under any collective bargaining agreement and other agreements shall not be less than those provided herein. thereby declaring all union officers to have lost their employment status. In case of retirement. it is not alleged that either Javier or Llagas had reached the compulsory retirement age of 60 years. On 8 November 1993.‖ Three (3) days later.LABOR RELATIONS Atty. – Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract. Page 222 . (2) whether the School is guilty of unfair labor practice. Article 287 of the Labor Code. may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service. the last three (3) years continuous. as amended. a Collective Bargaining Agreement (CBA) was entered into between Cainta Catholic School (School) and the Cainta Catholic School Employees Union (Union) effective 1 January 1986 to 31 May 1989. Clearly. the Union filed a complaint9 for unfair labor practice before the NLRC. Certainly. even if guised under ostensibly legal premises. The law and this Court frowns upon unfair labor practices by management. perhaps less vital members of the union. Jaculbe vs. it more clearly emerges in the case of retirement that management would anyway have the right to retire an employee. or if none. March 16. A CBA. the detriment is ultimately to the union itself. In fact. pursuant to Article 287 of the Labor Code. A ruling in its favor is tantamount to a concession that a validly drawn management prerogative to retire its employees can be judicially interfered on a showing that the employee in question is highly valuable to the union. attached to the concepts of just or authorized cause than retirement which normally contemplates merely the attainment of a certain age or a certain number of years in the service. For one. Indeed. and if separation from service is effected through the exercise of a duly accorded management prerogative to retire an employee. It would be easier for management desirous to eliminate pesky union members to abuse the prerogative of termination for such purpose since the determination of just or authorized cause is rarely a simplistic question. somehow exempted from the normal standards of retirement applicable to the other. Silliman University. the question of the amount of retirement benefits is more likely to be questioned than the retirement itself. the Union and its members are obliged to abide by the commitments and limitations they had agreed to cede to management. This was pursuant to respondent‘s retirement plan for its employees which provided that its members could be automatically retired "upon reaching the age of 65 or Page 223 . There is another point that militates against the Union. through its Human Resources Development Office. Such a rule would be a source of mischief. On the other hand. Twenty years is a more than ideal length of service an employee can render to one employer.R. 1993. the exercise by management of its retirement prerogative is less susceptible to dubitability as to the question whether an employee could be validly retired. is not merely contractual in nature but impressed with public interest. there is a greater subjectivity. But with respect to an active unionized employee who claims having lost his/her job for union activities. The questioned retirement provisions cannot be deemed as an imposition foisted on the Union. If the retirement provisions in the CBA run contrary to law. There is perhaps a greater imperative to recognize the management prerogative on retirement than the prerogative to dismiss employees for just or authorized causes. The only factual matter to consider then is whether the employee concerned had attained the requisite age or number of years in service pursuant to the CBA or employment agreement. There is no essential difference between the CBA provision in this case and those we affirmed in Pantranco and Progressive. 34 that the exercise by the employer of a valid and duly established prerogative to retire an employee does not constitute unfair labor practice. no matter the degree of involvement of said employee in union activities. 4. Yet the CBA in the case at bar contains no such infirmities which must be stricken down. We can thus can comfortably uphold the principle. in presumably better physical and mental condition. Jefferson M. It should not be taken to mean that retirement provisions agreed upon in the CBA are absolutely beyond the ambit of judicial review and nullification. when said employee. including so-called union-busting.LABOR RELATIONS Atty. which very well had the right to have refused to agree to allowing management to retire retire employees with at least 20 years of service. there are different considerations presented if the termination is justified under just or authorized cause under the Labor Code. such provisions may very well be voided. G. Under ordinary contemplation. pursuant to the provision‘s express proviso thereto in the provision. not to mention factual dispute. a CBA provision or employment contract that would allow management to subvert security of tenure and allow it to unilaterally ―retire‖ employees after one month of service cannot be upheld. Neither will the Court sustain a retirement clause that entitles the retiring employee to benefits less than what is guaranteed under Article 287 of the Labor Code. Marquez By their acceptance of the CBA. No. even if narrowly carved out by the Court. a CBA provision entitling an employee to retire after 20 years of service and accordingly collect retirement benefits is ―reward for services rendered since it enables an employee to reap the fruits of his labor — particularly retirement benefits. public morals. or public policy. by reason of his/her importance to the union. for it would imply that an active union member or officer may be. our law‘s protection of the right to organize labor does not translate into perpetual job security for union leaders by reason of their leadership role alone.‖ Nonetheless. but involves facts highly prone to dispute and subjective interpretation. Such illegal practices will not be sustained by the Court. at which time she would be 57 years old. promoting as it would a stagnating entrenched leadership. 2007 Facts: Respondent. 156934. informed petitioner that she was approaching her 35th year of service with the university and was due for automatic retirement on November 18. can enjoy them better and longer. Evidently. the premise warrants considering whether management may be precluded from retiring an employee whom it is entitled to retire upon a determination that the true cause for compulsory retirement is the employee‘s union activities. Should we entertain such a notion. as reiterated in Philippine Airlines. whether lump-sum or otherwise — at an earlier age. as a labor contract. A member who continues to serve the University cannot withdraw from the Plan. provided. The CA. CA: affirmed the NLRC. stated: SECTION 1 – MEMBERSHIP All full-time Filipino employees of the University will automatically become members of the Plan. The records disclose that the private respondent‘s Retirement Plan has been in effect for more than 30 years. even if rehired. But respondent stood pat on its decision to retire her. the private respondent compulsorily retired the petitioner not based on a CBA but on the retirement scheme provided for in the private respondent‘s retirement plan. this argument must fail. Nonetheless. Rule III of the plan.Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract. petitioner filed a complaint in the National Labor Relations Commission (NLRC) for "termination of service with preliminary injunction and/or restraining order. premised its decision to uphold the retirement plan on her voluntary participation therein: The petitioner in this case may. The said plan is deemed integrated into the employment contract between private respondent and its employees as evidenced by the latter‘s voluntary contribution through monthly salary deductions." Respondent required certain documents in connection with petitioner‘s impending retirement. The said provision explicitly allows. the Labor Code permits employers and employees to fix the applicable retirement age at below 60 years. that those who have retired from the University. and ever since the said plan was effected. citing "company policy.LABOR RELATIONS Atty. Retirement . respondent compulsorily retired petitioner. Retirement plans allowing employers to retire employees who are less than the compulsory retirement age of 65 are not per se repugnant to the constitutional guaranty of security of tenure. 1993. Ruling: AFFIRMATIVE. 1993. other applicable employment contract to fix retirement age. Page 224 . Petitioner emphatically insisted that the compulsory retirement under the plan was tantamount to a dismissal and pleaded with respondent to be allowed to work until the age of 60 because this was the minimum age at which she could qualify for SSS pension. Hence this petition. on membership. Previous retirees have already enjoyed the benefits of the retirement plan. Xxx By its express language. 287. we find that the plan runs afoul of the constitutional guaranty of security of tenure contained in Article XIII. also known as the provision on Social Justice and Human Rights. NLRC: reversed the labor arbiter‘s decision and dismissed the complaint for lack of merit and likewise denied petitioner‘s motion for reconsideration. whereas in the present case." On November 18. however. Article 287 of the Labor Code provides: ART. Jefferson M. Issue:S 1) did respondent‘s retirement plan imposing automatic retirement after 35 years of service contravene the security of tenure clause in the 1987 Constitution and the Labor Code? 2) did respondent commit illegal dismissal by retiring petitioner solely by reason of such provision in its retirement plan? Labor Arbiter: found respondent guilty of illegal dismissal and ordered that petitioner be reinstated and paid full backwages. however. in ruling against petitioner. as well. until the same was made to apply to the petitioner. The problem with this line of reasoning is that a perusal of the rules and regulations of the plan shows that participation therein was not voluntary at all. after reviewing the assailed decision together with the rules and regulations of respondent‘s retirement plan. However. Marquez after 35 years of uninterrupted service to the university." On November 15. argue that the Pantranco case is not applicable in the case at bar as the controversy in the said case involves a compulsory retirement on the basis of the length of service rendered by the employee as agreed in an existing CBA. The contract fixing for retirement age as allowed under Article 287 of the Labor Code does not exclusively refer to CBA which provides for an agreed retirement age. no questions or disagreement have been raised. are no longer eligible for membership in the Plan. the only way she could have ceased to be a member thereof was if she stopped working for respondent altogether. The University shall set aside an amount equivalent to 3½% of the basic salaries of the faculty and staff. From the language of the foregoing retirement plan rules. 1993 up to her compulsory retirement age. However. as the CA would have us believe. It is axiomatic that employer and employee do not stand on equal footing. NLRC. At this point. This was clearly just such an instance. respondent was guilty of illegal dismissal. his leave without pay should pay his contributions to the Plan. the imposition of a retirement age below the compulsory age of 65 was deemed acceptable because this was part of the CBA between the employer and the employees. neither the CA nor the respondent cited any agreement. In fact. v. Thus. opting instead to harp on petitioner‘s alleged "voluntary" contributions to the plan. Page 225 . a member.] further that if a member has no sufficient source of income while on leave may pay within six months after his reinstatement. Retirement is the result of a bilateral act of the parties. having terminated petitioner solely on the basis of a provision of a retirement plan which was not freely assented to by her. employees are free to accept the employer‘s offer to lower the retirement age if they feel they can get a better deal with the retirement plan presented by the employer. In Pantranco North Express. respondent‘s retirement plan "ha(d) been in effect for more than 30 years. we grant her separation pay in lieu of reinstatement. Marquez xxx xxx xxx SECTION 2 – EFFECTIVITY OF MEMBERSHIP Membership in the Plan starts on the day a person is hired on a full-time basis by the University. an employer is free to impose a retirement age less than 65 for as long as it has the employees‘ consent. Provided[. as represented by their bargaining unit. the repeated use of the word "shall" ineluctably pointed to the conclusion that employees had no choice but to contribute to the plan (even when they were on leave). To this shall be added a 5% deduction from the basic salaries of the faculty and staff. Furthermore. For this reason. to justify the latter‘s imposition of the early retirement age in its retirement plan. It is also for this reason that we modify the award of backwages in her favor. to be retired even before the statutory retirement age of 65 was laid out clearly in black and white and was therefore in accord with Article 287. after reaching a certain age agrees to sever his or her employment with the former. in the rule on contributions. Not only was petitioner still a good eight years away from the compulsory retirement age but she was also still fully capable of discharging her duties as shown by the fact that respondent‘s board of trustees seriously considered rehiring her after the effectivity of her "compulsory retirement. given that the only way she could refrain from doing so was to resign or lose her job. In short. The truth was that petitioner had no choice but to participate in the plan. In this case. a voluntary agreement between the employer and the employee whereby the latter. A member on leave with the University approval shall continue paying." What was not pointed out. who has been on leave without pay should pay his contributions based on his salary plus the University‘s contributions while on leave or the full amount within one month immediately after the date of his reinstatement. based on his pay while on leave. the compulsory nature of both membership in and contribution to the plan debunked the CA‘s theory that petitioner‘s "voluntary contributions" were evidence of her willing participation therein. the petition is hereby GRANTED." As already stated. resignation or termination of employee‘s contract by the University. The consent of the employees. which was simply untrue.LABOR RELATIONS Atty. It was through no voluntary act of her own that petitioner became a member of the plan. however. Petitioner is now 71 years old and therefore well over the statutory compulsory retirement age. to be computed from the time of her illegal dismissal on November 18. Stated conversely. WHEREFORE. it was not part of the terms of employment to which petitioner agreed when she started working for respondent. According to the assailed decision. Rule IV. Jefferson M. collective or otherwise. a situation which often causes an employee to act out of need instead of any genuine acquiescence to the employer. to which both the CA and respondent refer. reinstatement is out of the question. SECTION 3 – TERMINATION OF MEMBERSHIP Termination of membership in the Plan shall be upon the death of the member. stated: The Plan is contributory. was that the retirement plan came into being in 1970 or 12 years after petitioner started working for respondent. Neither did it become part of those terms shortly thereafter. Inc. on contributions. or retirement from the University. [16] She also confided that she resigned only because the e-mail damaged her name and reputation.[24] According to respondent.[9] On the same day. August 10. I hereby undertake to turn over all my pending work to other lawyers until said effective date of my termination. as quoted above.[6] Her tasks included negotiating.[25] She was neither furnished a copy of the e-mail nor allowed to confront the person(s) who circulated it.[48] Respondent‘s resignation letter without doubt proved petitioners‘ assertion that she voluntarily resigned from her job. Caridad Gonzales.[7] On April 5. petitioners presented her resignation letter dated April 12. Jefferson M.[12] In the course of their conversation. respondent called on her immediate supervisor. respondent sent petitioner Gonzales a letter complaining of her ―ill-treatment‖ by the company after she submitted her resignation letter. she should have been familiar with the company's standard operating procedure with regard to former employees.[11] Globe accepted her resignation. 2002. concise and categorical language.[20] Meanwhile. she tendered her resignation letter explaining that she was advised by her doctor to rest for the duration of her pregnancy. contended that respondent‘s clear and unequivocal resignation letter showed her unconditional desire to resign.[17] For that reason. misconduct or transgression.[22] Petitioner Gonzales informed respondent that she had to settle her obligations to Globe first before it could issue the requested clearance. on the other hand. 2002[46]: This is to inform you that as per my doctor‘s advice.[26] Furthermore. She insinuated that petitioners forced her to resign and reiterated her demand that Globe clear her name.[14] Because the e-mail was not forwarded to her (being its subject). No. joined Globe Telecom (Globe) on November 3. 17644. 2002.R. as a former executive. All employees basically undergo the same procedure upon separation from the company. 1998 to May 30. G. Globe Telecom vs.[23] Believing that Globe would not comply with her demands. respondent requested a copy and an opportunity to confront the person(s) responsible. Furthermore. Page 226 . 2002. 2002. 2002. An employee of respondent‘s accomplished educational background and professional standing will not easily relinquish her legal rights unless she intends to. Crisologo. a lawyer.‖[18] Petitioner Gonzales reminded respondent that.[28] Petitioners. Its content. petitioner Ma. 2007 Facts: Respondent Jenette Marie B. respondent reported back to work on April 12. respondent filed a complaint for illegal dismissal against petitioners on July 3. she requested petitioner Gonzales to issue a certification clearing her of ―any wrongdoing. 2002. 1998 as a manager in its corporate legal services department. I have to take a long rest due to a very difficult pregnancy and other health reasons.[29] Ruling: To support their contention that respondent voluntarily resigned. petitioner Gonzales casually informed respondent of an e-mail circulating within the company[13] to the effect that she (respondent) allegedly solicited money from one of the company‘s suppliers. respondent sent petitioners another letter. Crisologo. It was later diagnosed as a possible miscarriage.[10] She also requested permission to exhaust her unused leaves until the effective date of her resignation on May 30. I am therefore tendering my resignation effective 30 May 2002 and would like to request that I be allowed to exhaust all leaves due to me until such date. petitioners fired her on the basis of a rumor whose veracity was never proven. 2002.[21] On May 2. Marquez 5. 2002. respondent (who was then pregnant) was rushed to the Makati Medical Center due to profuse bleeding. On April 30. petitioners failed not only to adduce clear and substantial proof of loss of confidence but also to observe due process[27] as petitioner Gonzales summarily forced her to resign. confirmed her unequivocal intent to resign. Petitioner Gonzales declined as there was no longer any reason to pursue the matter. Globe issued a certification attesting to respondent‘s employment in the company from November 3. Petitioner Gonzales immediately closed the matter with finality without conducting any inquiry.[19] Gonzales also requested respondent to settle her debts and accountabilities to the company.[15] On May 2.LABOR RELATIONS Atty. Thank you very much.[47] (emphasis supplied) Respondent personally drafted her resignation letter in a clear.[8] After a week-long absence. drafting and reviewing the company‘s supply contracts. the respondent did not make good its promise and [instead] did an accounting by themselves in the absence of herein complainant and arrived on a computation that complainant‘s liability per their accounting reached to the staggering amount of P8. Ruling: After careful analysis. protesting the amount of P9. tax refund and financial assistance less the deductions. As a matter of fact.LABOR RELATIONS Atty. Per agreement. Therefore. In her May 2. respondent‘s assertion that she was forced to resign was simply not true. she alleged: That she was illegally dismissed or terminated [from] employment on April 30.000. Marquez Moreover. the complainant was lured. It appeared that she was no longer interested in her job. As her consent was allegedly vitiated. seven (7) months and twenty-eight (28) days when illegally terminated [from] her employment xxx. 2002 letter. NLRC. descendants or ascendants. et al. that before said date[. a proportion of the 13th month pay.[55] we held that expressions of gratitude cannot possibly come from an employee who is just forced to resign as they belie allegations of coercion. Aparecio also obtained the same yet refused to sign the release and quitclaim. if something untoward really took place in the course of that conversation. That herein complainant was under respondent‘s employ for seven (7) years. Indeed. vs. She was adamant but BMG stood by the previous agreement. Mutya.[51] No such situation existed in this case. No. which were accepted.00. That after executing said resignation letter. Aparecio. In a nutshell. BMG made it clear that. and/or mistake were attendant upon her resignation from BMG. that since they offered to pay a separation pay of only P12. how could she have been forced to resign on that date when she had already tendered her resignation more than two weeks earlier? Respondent Could Not Have Been Coerced or Intimidated.). the three employees tendered their resignations.[5] In her Position Paper. intimidation. Inc. as a company policy. an employee who resigns from service is not entitled to financial assistance. Page 227 . the act of resigning became involuntary. For working from Monday to Sunday.00.] even without proper accounting of any accountability. NLRC. Jr. overtime and holiday pay. This fact alone completely negated her claim that petitioners coerced her to resign on April 30. rest day.. respondent‘s resignation letter[52] and May 2. Jose Yap. 153290. Coercion exists when there is a reasonable or well-grounded fear of an imminent evil upon a person or his property or upon the person or property of his spouse.00 per day. she told petitioner Gonzales: I wish to express my appreciation for the training you readily gave me while I was under your supervision.000. minus complainant‘s alleged accountability of P8. 13th month. September 5. (BMG) is engaged in the business of selling various audio records nationwide. 2002 letter was sent after respondent‘s April 30.] however. Jovelina V. Michael Academy v. 2002 letter[53] both contained expressions of gratitude. for illegal dismissal and non-payment of overtime pay. petitioners are guilty of illegal dismissal. service incentive leave and separation pay – and to [execute] a letter of resignation. Aparecio (Aparecio) as one of the promo girls in its Cebu branch. Aparecio and two other promo girls. hence. In April 1998. Thus. citing Phil Today vs. Petitioners. Except for the financial assistance. undue influence. On May 25. Indeed. Soco and Veronica P. and separation pay. intimated to their supervisor that they were intending to resign and were requesting for some financial assistance. 2007. however. 2002 conversation with petitioner Gonzales. it hired private respondent Aida C. the May 2.[54] In St. and they executed their releases and quitclaims. When they processed the required individual clearance. Aparecio submits that fraud. induced and compelled to submit a letter of resignation believing on respondent‘s promise and assurance to pay all the benefits due her as aforesaid. 267 SCRA 202 [1996] Facts: Petitioner BMG Records (Phils. holiday pay.170. co-petitioner herein. 1998. Aparecio filed a complaint against BMG and its Branch Manager. but considering the length of their service and due to humanitarian consideration it would accede to the request after they secure their respective clearances. experience dictates that respondent would not have bothered to thank petitioner Gonzales. G. premium pay for rest day. 6. 13th month pay. this Court finds and so holds that the submissions of Aparecio in all her pleadings failed to substantiate the allegation that her consent was vitiated at the time she tendered her resignation and that petitioners are guilty of illegal dismissal. 1990.R. it was found out that they had incurred some shortages after inventory. service incentive leave.00..[56] Moreover. On September 2.000. payment of services rendered. Forthwith. 2002. she received a salary of P181. That in view of respondent‘s insistence to prepare and [execute] a letter-resignation[. proffer a different version of the facts. Soco and Mutya received their last salary. said shortages were deducted from the amounts due them.12 deducted from the financial assistance. she was asked by respondent to resign and will be paid (sic) all her benefits due – like a one-month pay for every year of service. Jefferson M. 1998. they are ready to pay the balance thereof any time. 2002. BMG Records Phils et al. the resignation letter was submitted by respondent and was accepted by Globe on April 12. They narrate that Aparecio was initially performing well as an employee but as years passed by she seemed to be complacent in the performance of her job and had been comparing the salaries of promo girls in other companies.. It is a formal pronouncement or relinquishment of an office. is to encroach upon the right of employers to hire persons who will be of service to them. It will then be up to the employer to determine whether or not his service would be continued. thus. they amended their complaint to include illegal dismissal. Aparecio already communicated to other people that she was about to resign to look for a better paying job since she had been complaining that employees like her in other companies were earning much more. July 28. The NLRC. G. all aspects of employment including hiring. They also alleged receiving only PhP 5. Third. and tax refund but refused to receive the financial assistance less the deductions made.LABOR RELATIONS Atty. Wilson Ciriaco. According to the four guards. Aparecio and two other promo girls. and Mutya submitted their duly signed resignation letters. Eventually. without overtime and premium holiday pay. Quezon City. If the employer accepts said withdrawal. the acceptance by petitioners of Aparecio‘s resignation rendered the same effective. the acceptance of the withdrawal of the resignation being the employer‘s sole prerogative. while still with Blue Angel. It has been held that an employer is free to regulate. Blue Angel deducted PhP 100 as cash bond. this Court agrees with petitioners‘ contention that the circumstances surrounding Aparecio‘s resignation should be given due weight in determining whether she had intended to resign.m. Aparecio. it was already up to the employer to accept the withdrawal of his or her resignation. according to his own discretion and judgment. they were required. a messengerial and security agency. hired private respondents Romel Castillo. Thus. the acts of the employee before and after the alleged resignation must be considered in determining whether in fact. The mere fact that the withdrawal was not accepted does not constitute illegal dismissal. impels neither the oppression nor self-destruction of the employer. NLRC: Once an employee resigns and his resignation is accepted. with the intention of relinquishing the office accompanied by the act of relinquishment. 13th month pay. from this amount. 161196. she was able to receive her last salary. filed a complaint for illegal deductions and other money claims against Blue Angel. Page 228 . and he shall have the status of a stranger who cannot unilaterally demand an appointment. and requested that they be given financial assistance. intimated their desire to resign. to 7:00 p. If the employer does not x x x the employee cannot claim illegal dismissal for the employer has the right to determine who his employees will be. 2008 Facts: Blue Angel. thus. and Fourth. Aparecio already initiated the processing of her clearance. Second. which petitioners granted on the condition that deductions would be made in case of shortage after inventory. The foregoing facts were affirmatively narrated and attested to in the notarized affidavit of Soco and Cinco and have remained incontrovertible as they were never denied by Aparecio.R. Soco. The law. and one has no other choice but to dissociate oneself from employment. A resigned employee who desires to take his job back has to re-apply therefor. the employee retains his job. In this case. later joined by Ciriaco and Garces. They further averred that Blue Angel. v. prior to the submission of her resignation letter. he no longer has any right to the job. Marquez The argument is not tenable. Resignation is the voluntary act of an employee who is in a situation where one believes that personal reasons cannot be sacrificed in favor of the exigency of the service. Now. as if he were re-applying for the job. Blue Angel Manpower and Security Services vs. Upon such acceptance. which were accepted by petitioners. No. it may not be unilaterally withdrawn without the consent of petitioners. Gary Garces. he must ask for approval of the withdrawal of his resignation from his employer. To say that an employee who has resigned is illegally dismissed. such intent is very evident: First. When the employee later signified the intention of continuing his or her work. Such is tantamount to undue oppression of the employer. Inc. If the employee later changes his mind. 7. and Chesterfield Mercader as security guards and detailed them at the National College of Business and Arts (NCBA) in Cubao. He cannot arrogate unto himself the same position which he earlier decided to leave. Castillo and Mercader.m. to work from 7:00 a. approached their supervisor. To allow him to do so would be to deprive the employer of his basic right to choose whom to employ. in protecting the rights of the laborer. As held in Intertrod Maritime. Jefferson M.000 a month or PhP 166 per day and. Soco and Mutya. As the intent to relinquish must concur with the overt act of relinquishment. he or she intended to sever from his or her employment. erred when it did not give probative weight to their testimonies even if belatedly presented in petitioners‘ motion for reconsideration. CA. among other benefits. Jefferson M. To streamline operations. We agree with the labor arbiter when he pointed out that the undated. For this reason. basic pay plus all allowances). petitioners filed a complaint for illegal dismissal and payment of separation pay. and to other benefits or their monetary equivalent computed from the time private respondents' compensation was withheld from them up to the time of their actual reinstatement as provided for in Article 279 of the Labor Code. and that they eventually tendered their pro-forma resignation letters followed by their own handwritten resignation letters. premium and overtime pay for holidays. and with blank spaces filled in with the effectivity dates of the resignations. As the labor arbiter noted. (2) reimbursement of their cash bond. Guerzon was PII's export/import manager for 21 years. G. he awarded backwages. Our review of the circumstances surrounding these resignation letters does not support Blue Angel's contentions that these letters are indications that private respondents had voluntarily resigned. 2008 Facts: Petitioners were employees of respondent Pasig Industries. Cruz was the company's chief accountant for 20 years and Bauyon was a member of PII's accounting staff since 1989. Marquez when apprised of their original complaint. Petitioners decided to resign but requested a recomputation of their respective separation pay based on the monthly gross pay (i. and Castillo and Mercader. 12. Respondents appealed. petitioners were given the option to resign. and (4) damages. 170266. Pasig Industries Inc. in their own hand. Because petitioners filed the complaint two days after they were "terminated. Aggrieved.[5] In their Comment. in which case they would be entitled to a special separation package (SSP) equivalent to one-month basic salary for each year of service.LABOR RELATIONS Atty. respectively. retirement benefits. the element of voluntariness of the resignations is even more suspect considering that the second set of resignation letters were pre-drafted. wage differentials. Despite voluntarily availing of the SSP. Thus. illegally terminated Garces and Ciriaco.. similarly worded resignation letters tended to show that the guards were made to copy the pro-forma letters. the NLRC reversed the decision of the labor arbiter. (3) reinstatement or separation pay." the labor arbiter found respondents guilty of illegal dismissal. Accordingly. (PII) stationed in its Makati office.R. functions performed by the Makati office would be transferred to its facilities in the Bataan Export Processing Zone. No. Page 229 .e. Inc. respondent Yoshikitsu Fujita informed petitioners that PII's parent company had decided to close the Makati office.. separation pay and attorneys' fees to petitioners.. Guerzon Jr et al vs. to make them appear more convincing that the guards had voluntarily resigned. et al. petitioners filed a petition for certiorari in the Court of Appeals (CA) asserting that the NLRC committed grave abuse of discretion in reversing the decision of the labor arbiter. The four guards prayed for (1) payment of backwages. inclusive of allowances. The NLRC found that petitioners voluntarily accepted the terms of the SSP offered by PII. Blue Angel insists that the guards had pleaded to be allowed to resign when they were told of the pending investigation. they are entitled to reinstatement to their positions without loss of their seniority rights and with full backwages. In 1995. and 13th month pay. its president Masahiro Fukada and Fujita in the National Labor Relations Commission (NLRC). With the finding that private respondents were illegally dismissed. It noted that they negotiated to improve PII's offered SSP. similarly worded. private respondents claimed being forced to sign and copy the pro-forma resignation letters and quitclaims on pain that they would not get their remaining compensations. Sept. 8. leave pay and 13th month pay against PII. Issue: Whether or not private respondents were illegally dismissed Ruling: We rule that the resignations were involuntary and the termination of private respondents was illegal. among whom were herein petitioners. Nothing was heard from the retrenched employees. when herein petitioners wrote respondent demanding payment of retirement benefits under the CBA. No. and were precluded from claiming such benefits because of their quitclaims. Employees of their educational backgrounds and professional standing do not easily relinquish their legal rights unless they intend to. Jefferson M. Respondents allegedly failed to prove that PII had been incurring losses to justify its reorganization. on its face. Having been separated from employment due to an authorized cause. They are only entitled to payment of separation pay in accordance with Article 283 of the Labor Code. whether the streamlining of PII's operations constituted an authorized cause for petitioners' termination became immaterial in view of their voluntary resignation. While the CBA. Marquez Hence. the parties may still prove it by means of contemporaneous and subsequent acts of the parties to the agreement. vs. Issue: Whether or not petitioners (retrenched employees) can still recover retirement benefits in addition to their separation pay. including herein petitioners. respondent sent out individual notices to the seven hundred (700) employees affected by the retrenchment. By way of Petition for Certiorari. forcing petitioners to file a complaint for payment of retirement benefits against respondent. Petitioners held responsible positions in PII.LABOR RELATIONS Atty. until about two and half years after their separation from the company. respondent categorically disallows payment of retirement benefits to retrenched employees. They claimed that they were qualified for optional retirement after having rendered services for at least ten (10) years when they were retrenched. including petitioners. The CA committed no error in considering the affidavits as contemporaneous and subsequent acts from which the intention of the parties to the CBA can be inferred. ship building. They claimed they were dismissed without just or authorized cause. petitioners even bargained to improve the terms of the SSP and. the employees. 9. Oct. (3) 13th month pay.R. Sometime in 1994. The notices specifically stated that their services were terminated effective on said date and they will each receive a separation package in accordance with the retrenchment program. The Labor Arbiter dismissed the complaint for lack of merit. after successfully doing so. Issues: Whether or not the petitioners were illegally dismissed. In fact. they attested that under the CBA. After having been paid their separation benefits. With this development. does not contain an express prohibition of payment of retirement benefits to retrenched employees.. 17. an employee who is separated pursuant to a retrenchment Page 230 . Ruling: No. 2008 Facts: National Steel Corporation was engaged in the business of manufacturing steel products needed for pipe making. With the inclusion of such provision in the retirement plan. Upon appeal. and (4) uniform plus rice subsidy differential.. petitioners availed of this recourse contending that the CA erred in affirming the decision of the NLRC. As they voluntarily resigned from PII. et al. voluntarily resigned from PII. (2) leave balance credits. petitioners are barred from receiving retirement benefits pursuant to Article X(E) of respondent's retirement plan. respondent suffered substantial financial losses due to an increase in the volume of steel products manufactured by foreign countries. can-making and production of appliances. 150180. G. The separation package consisted of the following: (1) separation pay equivalent to two (2) months salary for every year of service. In their affidavits. written in English and containing a translation in the Visayan dialect in the same document. each executed and signed a release and quitclaim. CA declared that petitioners were no longer entitled to retirement benefits after having received the separation pay. One month prior to its effectivity. Respondent rejected petitioners' claim. NLRC granted the appeal and reversed the ruling of the Labor Arbiter. such as the execution of the affidavits. petitioners are no longer entitled to recover retirement benefits. National Steel Corp. Suarez Jr. respondent adopted an organizational streamlining program that resulted in the retrenchment of seven hundred (700) employees in its main plant in Iligan City. Is the streamlining an authorized cause for the termination of the petitoners? Ruling: The petitioners were NOT illegally dismissed. Consequently. However. at the time they were signing their Page 231 . public order. Goodrich suffered financial constraints and gave all its employees the option to voluntarily resign from the company. without understanding the implication and consequences thereof. In their Comment19 dated October 1. they believed Goodrich was terminating its business on account of financial hardship. the Court has given effect to quitclaims executed by employees if the employer is able to prove the following requisites. They.LABOR RELATIONS Atty. Not all waivers and quitclaims are invalid as against public policy. respondents themselves admitted that they were not coerced to sign the quitclaims. Ativo et al. Mutually unhappy. 2010 Facts: Emerlina Ativo et al.. maintain that two (2) reasons moved them to sign the said documents: first. al. and 13th month pay. they changed their minds and filed for illegal dismissal against Goorichwith prayer for payment of their full monetary benefits before the NLRC. Issue: W/N the release. Notably. waiver and quitclaim are valid and binding. and (4) the contract is not contrary to law. Jefferson M.. and second. public policy. Ruling: The release. Ativo et al. The NLRC said that the considerations they received are not unreasonable. 1. Requisites of a valid quitclaim It is true that the law looks with disfavor on quitclaims and releases by employees who have been inveigled or pressured into signing them by unscrupulous employers seeking to evade their legal responsibilities and frustrate just claims of employees. but instead only assumed a different company name. clear and unequivocal The records of the case are bereft of any substantial evidence to show that respondents did not know that they were relinquishing their right short of what they had expected to receive and contrary to what they have so declared. both parties appealed to the NLRC which reversed the LA‘s decision. Put differently. are former employees of petitioner Goodrich Manufacturing Corporation (Goodrich) assigned as machine or maintenance operators. (3) the consideration of the quitclaim is credible and reasonable. waiver and quitclaim signed by respondents are valid and binding. Petition for review is denied. SIL. and whether respondents may still receive the deficiency amounts due them.. Marquez program and who received the corresponding separation package is completely proscribed from demanding and claiming payment of retirement benefits. Quitclaims were simple. Feb. 21 Respondents insist that they were deceived into signing the quitclaims when they learned that they were not paid their full monetary benefits and after discovering that the company did not really close shop. and that the separation pay was insufficient. If the agreement was voluntarily entered into and represents a reasonable settlement. executed their waivers and quitclaims. or prejudicial to a third person with a right recognized by law. it is binding on the parties and may not later be disowned simply because of a change of mind. however. No. And so the issue is now before the Supreme Court. The case was brought before the CA which renderred a decision in favor of Ativo et. they thought petitioners will pay them the full amount of their compensation.R. (2) there is no fraud or deceit on the part of any of the parties. 188002. Capital wins this time. We also noted that complainants are not shown to have signed the deeds of waiver and quitclaim involuntarily.. petitioners voluntarily executed and signed a release and quitclaim after receiving their separation package. vis-à-vis the awards granted [to] them in the assailed Decision. holding that they are entitled to receive their unpaid 13th month pay. and ECOLA. G. however. ECOLA. In the last quarter of 2004. acknowledging full and final payment of all benefits that they may be entitled to in relation to their employment. morals or good customs. to wit: (1) the employee executes a deed of quitclaim voluntarily. 10. 2009. In certain cases. The Labor Arbiter held that there was no illegal dismissal but ruled that Goodrich was still liable for the employee‘s SIL. Goodrich Mfg Corp vs. Thus. by respondents‘ proof appear already paid. Respondents were among those who availed of that option and were paid their separation pay. Further. the awards even include the 13th month pays for 2002 and 2003 which. Such contention.92. Respondents were not deceived Ativo and company claim that they were deceived because petitioners did not really terminate their business since Mr. June 16. Korean Air offered its employees an early retirement program (ERP). whereby the agreement included among others the payment of P1.R. as amended. A compromise agreement was entered into between Korean Air and Yuson. v. was not proven during the hearing before the Labor Arbiter and the NLRC. Yuson filed with the arbitration branch of the NLRC a complaint against Korean Air and Suk for payment of benefit under the ERP. Suk (manager) informed Yuson that she was excluded from the ERP because she was retiring on 8 January 2002." Yuson continued to receive the same compensation and exercise the same authority as passenger sales manager. Ruling: No. The NLRC‘s decision is reinstated. such claim is based only on respondents‘ surmises and speculations which. Korean Air Co. Jefferson M. LA denied for lack of merit Yuson's claims and held that the ERP memorandum included only rank-and-file. who has served at least five (5) years in the said establishment. On 28 November 2001. Petition is granted. Third paragraph of Article 287 states that: In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment. Considerations received were not grossly inadequate As correctly pointed out by the NLRC.546. but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age. Yuson claimed that Korean Air was bound by the perfected contract and accused the company of harassment and discrimination.671. In April 2001. however. Yuson requested Korean Air that she be transferred from the passenger sales department to the cargo department. may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service. The difference between the amounts expected from those that were received may. Page 232 . No. and attorney's fees. and so Korean Air temporarily transferred Yuson to the cargo department as "cargo dispatch. representing her retirement benefit pursuant to Article 287 of the Labor Code. exemplary damages. Yuson may no longer claim the benefit under the ERP.LABOR RELATIONS Atty. Marquez quitclaims. Yuson accepted the offer for early retirement. 11. Yuson. 170369. 2010 Facts: Korean Air hired Yuson as reservations agent. Hence. be considered as a fair and reasonable bargain on the part of both parties. CA decision is reversed and set aside. and excluded managerial. and to passenger sales manager in 1999. employees and such memo was reserved to Korean Air discretion in approving applications for the ERP and that approval of applications for the ERP was a valid exercise of Korean Air's management prerogative. unfortunately. Chua Goy had set up another company with the same line of business as Goodrich. moral damages. which have already been received by the respondents prior to the filing of their complaints. NLRC affirmed LA decision. Issue: WON Yuson may still claim benefit under the ERP. respondents honestly believed that the amounts received by them were fair and reasonable settlements of the amounts which they would have received had they refused to voluntarily resign from the said company. a fraction of at least six (6) months being considered as one whole year. In order to cut costs. Korean Air promoted Yuson to assistant manager in 1993. an employee upon reaching the age of sixty (60) years or more. the total awards computed by the Labor Arbiter will definitely even be lesser after deducting the 13th month pay for the years 2002 and 2003. but which the Labor Arbiter still included in his computation. however CA set aside the decision. can never be used as a valid and legal ground to repudiate respondents‘ quitclaims. therefore. Ltd. G. on 14 February 2003. No. In the present case. Cercado refused to accept the check. UNIPROM reserved the option to retire employees who were qualified to retire under the program. and the only way she could have rejected the same was to resign or lose her job. (2) applications for the ERP were forwarded to the head office for approval. Quezon City.671. Marquez On 14 February 2003. Issue:S: Whether UNIPROM has a bona fide retirement plan Whether petitioner was validly retired pursuant thereto Ruling: The assailed retirement plan of UNIPROM is not embodied in a CBA or in any employment contract or agreement assented to by petitioner and her co-employees. Uniprom Inc.92 as retirement benefit under Article 287. petitioner was forced to participate in the plan. "MNLSM Management. this petition.811. UNIPROM implemented a company-wide early retirement program for its 41 employees..982. considering that an employer‘s early retirement age option involves a concession of the former‘s Page 233 . A check of even date in the amount of P100. alleging. on its discretion. that UNIPROM did not have a bona fide retirement plan. Cercado v. and decided to retire Cercado effective at the end of business hours on February 15. the offer is not certain: (1) the 21 August 2001 memorandum clearly states that. UNIPROM instituted an Employees‘ NonContributory Retirement Plan which provides that any participant with twenty (20) years of service. 2010 Facts: Petitioner Lourdes A.90. and further acts on the offeror's part were necessary before the contract could come into existence. Her claim for benefit under the ERP became moot when she availed of the optional retirement under Article 287 and accepted the benefit. Later on. Hence. regardless of age. UNIPROM‘s Employees‘ Non-Contributory Retirement Plan was unilaterally and compulsorily imposed on them. G. there is a valid contract pursuant to the last paragraph of Article 1315 of the New Civil Code.546. Under the revised retirement plan. and that even if there was. Cercado (Cercado) started working for respondent UNIPROM on December 15. 2001. The assailed CA Decision did not really make a finding that petitioner actually accepted and consented to the plan. On the contrary. Any regular employee. among others. Jefferson M." The Court disagrees. was issued to her. the CA set aside the decisions of the LA and the NLRC. Araneta Center. as of the Effective Date." Korean Air could not have intended to ministerially approve all applications for the ERP. may be retired at his option or at the option of the company. Yuson is deemed to have opted to retire under Article 287. However. October 13.R. By her acceptance of the benefit. including herein petitioner. 2001.LABOR RELATIONS Atty.70. and (3) the 21 August 2001 memorandum clearly states Korean Air's intention. UNIPROM nonetheless pursued its decision and Cercado was no longer given any work assignment after February 15. but she rejected the same.A. The law demands more than a passive acquiescence on the part of employees. Yuson accepted P1. with 22 years of continuous service to the company. UNIPROM exercised its option under the retirement plan. hence. 188154. 1978 as a ticket seller assigned at Fiesta Carnival. It amended the retirement plan in compliance with Republic Act (R. at that time. which was. who. she was promoted as cashier and then as clerk typist. "to prevent further losses. she did not consent thereto. was 47 years old. The Court of Appeals held that Yuson may claim benefit under the ERP because "the offer was certain and the acceptance is absolute. provided the Employee was hired below age 60.) No. shall automatically become a Participant in the Plan. The National Labor Relations Commission (NLRC) affirmed the LA‘s decision that Cercado was illegally dismissed. This prompted Cercado to file a complaint for illegal dismissal before the Labor Arbiter (LA). This is evident in the following provisions of the 1980 retirement plan and its amended version in 2000: ARTICLE III ELIGIBILITY FOR PARTICIPATION Section 1. She was offered an early retirement package amounting to P171. 7641. is hereby offering the said early retirement program to its staff". representing her retirement benefits under the regular retirement package. Verily. 12. she opted to resign and relinquish her post by tendering a resignation letter. Bilbao went to the Court of Appeals via a petition for certiorari .‖ [6] In spite of this signed Undertaking. after receiving without protest a generous separation package despite the fact that employees who voluntarily resign are not entitled to any separation pay. and held that the resignation of Bilbao was ―of her own free will and intelligent act.‖ [3] Bilbao was among the 10 flight attendants to be transferred. 2004 from its Jeddah Office regarding the transfer of 10 flight attendants from Manila to Jeddah effective September 1. Saudia filed an appeal before the NLRC . together with co-complainants Centi-Mandanas and Castells. on July 20. having terminated petitioner merely on the basis of a provision in the retirement plan which was not freely assented to by her. Retirement is the result of a bilateral act of the parties. and back. on September 7. intimidation. the NLRC granted Saudia‘s appeal. 2007. after reaching a certain age. Bilbao followed suit and also appealed before the NLRC . While an employer may unilaterally retire an employee earlier than the legally permissible ages under the Labor Code. Upon the other hand. Jefferson M. 2004.LABOR RELATIONS Atty. and uncompelled. when taken together with her educational attainment and the circumstances surrounding the filing of the complaint for illegal dismissal. Bilbao vs. exemplary and actual damages. free. Saudia averred that the resignation letters from Bilbao and her co-complainants were voluntarily made since they were actually hand-written and duly signed. 2007 and October 26. Page 234 . During the course of her employment. having been hired as a Flight Attendant on May 13. Bilbao executed and signed an Undertaking [5] similar to that of a Receipt. On August 25. 2005. comprise substantial proof of Bilbao‘s voluntary resignation. 2007.R. The said memorandum explained that such transfer was made ―due to operational requirements. Hence. 2011 Facts Bilbao was a former employee of respondent Saudia. On August 31. Bilbao was assigned to work at the Manila Office. No. however. 2004. agrees to sever his or her employment with the former. Saudia asserted that Bilbao and her co-complainants were not subjected to any force. On October 28. 2006. a voluntary agreement between the employer and the employee whereby the latter. Marquez constitutional right to security of tenure. the Court of Appeals affirmed the Resolutions of the NLRC dated June 25. the retirement plan containing it must be voluntarily assented to by the employees or at least by a majority of them through a bargaining representative. Issue: Did Ms. UNIPROM is guilty of illegal dismissal. the In-Flight Service Senior Manager of Saudia assigned in Manila received an inter-office Memorandum dated August 17. or coercion when they wrote said resignation letters and even their undertakings. only the implementation and execution of the option may be unilateral. Saudi Arabia. consistent with the Court‘s ruling in Jaculbe case. Saudia also added that the transfer of flight attendants from their Manila Office to the Jeddah Office was a valid exercise of its management prerogative. this prerogative must be exercised pursuant to a mutually instituted early retirement plan. we uphold the findings of the Court of Appeals that Bilbao voluntarily resigned from her employment with Saudia. 183915. Bilbao vountarilty resign from Saudi Arabian Airlines Ruling: After a review of the case. Labor Arbiter Reyes rendered a Decision [7] declaring that Bilbao.‖ Bilbao filed a motion for reconsideration which was denied by the Court of Appeals. but not the adoption and institution of the retirement plan containing such option. 2004. Bilbao filed with the NLRC a complaint for reinstatement and payment of full backwages. 2004. December 14. G. the Motion for Reconsideration of Maria Joy Teresa Bilbao is DENIED. voluntary. Release and Quitclaim wherein she acknowledged receipt of a sum of money as ―full and complete end-of-service award with final settlement and have no further claims whatsoever against Saudi Arabian Airlines. However. Acceptance by the employees of an early retirement age option must be explicit.Bilbao initially complied with the transfer order and proceeded to Jeddah for her new assignment. and attorney‘s fees. Saudi Arabian Airlines. For her part. was illegally dismissed . although the nature of her work as a flight attendant entailed regular flights from Manila to Jeddah. Her resignation letter and undertaking that evidenced her receipt of separation pay. Bilbao maintained that her resignation from Saudia was not voluntary. 1986 until her separation from Saudia in September 2004. On June 25. 13. In other words. For the option to be valid. moral. and reversed and set aside the decision of the Labor Arbiter Likewise. She had been in continuous service in the latter capacity until her severance from the company in February 1998. 153982. had actually vouched for her competence and efficiency on the job. claims that Bilbao‘s resignation was voluntary. Her performance of duties had been reported to be negligent and unsatisfactory. Bilbao expressed her gratitude for the support which Saudia had given her for her eighteen years of service. she could be tricked and forced into doing something she does not intend to do. In the instant case. No. Besides. She claimed she had been kept off from all the meetings of the management committee. respectively. As the intent to relinquish must concur with the overt act of relinquishment. G. Clearly then. Inc. it is binding on the parties and should not later be disowned.LABOR RELATIONS Atty. Bilbao executed an Undertaking in favor of Saudia. Bilbao did not prove the existence of any one of these essential elements. a language she is conversant in. In the said letter. and that she must file for resignation or otherwise face termination. July 18. instead of immediately filing a complaint for illegal dismissal after she was allegedly forced to resign. Bilbao did not adduce any competent evidence to prove that she was forced or threatened by Saudia. It is highly improbable that with her long years in the profession and her educational attainment. because no less than the company's Vice-President for Property Management in a subsequent memorandum. there being evident disproportion between the evil and the resistance which all men can offer. 1998. was promoted in 1994 and 1995. and then of project development manager. Jefferson M. the resignation letter was hand-written by Bilbao on a Saudia form and was in English. Additionally. Bilbao waited for more than 10 months after her separation from Saudia to file a complaint for illegal dismissal. Bilbao maintains that she was forced and coerced into writing the said resignation letter in the form prepared by Saudia. she also sat as a member of the company's management committee. As project development manager. She is an educated individual. [19] In the instant case. the acts of the employee before and after the alleged resignation must be considered in determining whether he or she. Page 235 . It was supposedly the extreme humiliation and alienation that impelled her to submit a signed resignation letter on February 18. civil engineer. What is more. Indeed. 2011 Facts: Respondent Gucaban. her use of words of appreciation and gratitude negates the notion that she was forced and coerced to resign. In her complaint for illegal dismissal. it can hardly be said that Bilbao was coerced into resigning from Saudia. Initially engaged as a construction management specialist.R. there could be no illegal dismissal. and one has no other choice but to dissociate oneself from employment. 1998. not all waivers and quitclaims are invalid as against public policy. intended to sever his or her employment. on the other hand. the following requisites must be present: (1) that the intimidation caused the consent to be given. and (4) that it produces a well-grounded fear from the fact that the person from whom it comes has the necessary means or ability to inflict the threatened injury to his person or property. in fact. she. Despite the foregoing circumstances. to the position of technical services manager. It is a formal pronouncement or relinquishment of an office. Besides. joined the workforce of petitioner San Miguel Properties Philippines. Bilbao is no ordinary employee who may not be able to completely comprehend and realize the consequences of her acts. by her satisfactory performance on the job. (3) that the threat be real or serious. Saudia. She claimed that on January 27. She found said report to be unfounded and unfair. wherein she declared that she received her full and complete endof-service award with final settlement. thus. and that she was left with no other option but to resign. and attorney‘s fees must inevitably fail. Anent the Undertaking signed by Bilbao. leading to the choice of doing the act which is forced on the person to do as the lesser evil. Clearly. 14. There is no showing that the Undertaking and resignation letter were executed by Bilbao under force or intimidation. with the intention of relinquishing the office accompanied by the act of relinquishment. Marquez Resignation is the voluntary act of an employee who is in a situation where one believes that personal reasons cannot be sacrificed in favor of the exigency of the service. Bilbao‘s claims for reinstatement. this Court is not convinced that she was coerced and intimidated into signing it. payment of backwages without loss of seniority rights and with interest. There are legitimate waivers and quitclaims that represent a voluntary and reasonable settlement of workers‘ claims which should be respected by the courts as the law between the parties. she was informed by SMPI's President and Chief Executive Officer that the company was planning to reorganize its manpower in order to cut on costs. Gucaban alleged that her separation from service was practically forced upon her by management. (SMPI) in 1991. Under these circumstances. moral and exemplary damages. Bilbao‘s claim that she was illegally dismissed cannot be sustained. Gucaban complained of the ugly treatment which she had since received from Gonzalez and the management supposedly on account of her refusal to sign the resignation letter. Even assuming that Saudia prepared the form in which Bilbao wrote her resignation letter as claimed. Bilbao tendered her resignation letter a week after her transfer to the Jeddah office. [20] And if such agreement was voluntarily entered into and represented a reasonable settlement. Gucaban. (2) that the threatened act be unjust or unlawful. San Miguel Properties vs. It must be remembered that for intimidation to vitiate consent. this Court is of the opinion that the same was validly and voluntarily executed. fundamental is the rule that when an employer interposes the defense of resignation. hence.R. is material to the determination of whether her resignation was of her own volition as claimed by SMPI. hence. Doza. we agree with the Court of Appeals that with the availing evidence. equivalent to one (1) month salary for every year of service. intimidation or any other circumstance which could otherwise invalidate Gucaban's resignation. finding no proven force. The question of whether or not there was such reorganization plan in place at the time of Gucaban's separation from the company. on him necessarily rests the burden to prove that the employee indeed voluntarily resigned. the latter to be computed from her dismissal up to the time of her actual reinstatement pursuant to Art. In illegal dismissal cases. but modified the monetary award. although the company might have been suffering from losses due to market decline as alleged. Finding that Gucaban has been illegally dismissed. Issue: Whether or not the resignation of Gucaban was tendered voluntarily. 15. inasmuch as the facts of this case tell that Gucaban could not have filed for resignation had Gonzalez not communicated to her the alleged reorganization plan for the company. to opt for resignation instead of suffer termination — a consequence the certainty of which she was made to believe. It is then understandable for Gucaban. 2012 Page 236 . and he has then no other choice but to disassociate himself from employment. on the contrary. Skippers United Pacific vs. G. shortly prior to and at the time of Gucaban's alleged resignation. The Court of Appeals issued the assailed Decision finding partial merit in the petition. Thus. the ruling of the Court of Appeals is modified in this respect. this measure was an implementation of its reorganization plan. It affirmed the NLRC's finding of illegal/constructive dismissal. it ordered her reinstatement without loss of seniority rights and with full backwages. it happened only in the latter part of 1999 — or more than a year after Gucaban's separation from the company and incidentally. He likewise dismissed her claim that SMPI merely feigned the necessity of reorganization in that while the company indeed made new other appointments following Gucaban's resignation. after she filed the instant complaint. while a reorganization of SMPI's corporate structure might have indeed taken place as shown by the notices. coercion. the acts of the employee before and after the alleged resignation must be considered in determining whether he in fact intended to terminate his employment. Marquez Gucaban surmised that she had merely been tricked by SMPI into filing her resignation letter because it never actualized its reorganization and streamlining plan. 175558. In other words. considering the attractive financial package which SMPI admittedly offered to her. True. nevertheless. there was still no concrete plan for a corporate reorganization at the time Gonzalez presented to Gucaban the seemingly last available alternative options of voluntary resignation and termination by abolition of her office. SMPI allegedly expanded its employee population and also made new appointments and promotions to various other positions. It is not difficult to see that. an award of separation pay is in order. prayed for reinstatement and payment of backwages and damages. In lieu of reinstatement. 279 of the Labor Code. She felt that she had been dismissed without cause and.LABOR RELATIONS Atty. still. SMPI was unable to discharge this burden. there was actually no genuine corporate restructuring plan in place as yet. Ruling: Resignation — the formal pronouncement or relinquishment of a position or office — is the voluntary act of an employee who is in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the service. Jefferson M. there is the possibility that Gucaban's rejoining SMPI's workforce would only exacerbate the tension and strained relations which in the first place had given rise to this incident. It elevated the matter to the Court of Appeals via a petition for certiorari. Gucaban appealed to the NLRC which reversed the ruling of the Labor Arbiter. The intent to relinquish must concur with the overt act of relinquishment. the NLRC ruling is correct that she is entitled to reinstatement and backwages. As respondent was dismissed without cause. The Labor Arbiter dismissed the complaint for lack of merit. Guided by these principles. However. as well as ordered the award of damages and attorney's fees. February 8. No. Skippers appeals the case with the Supreme Court. et al. the local manning agency. In addition. 1999. The incident is evidenced by a telex of Cosmoship MV Wisdom to skippers but had conflicting dates.. The NLRC agreed with the LA‘s decision. Aggrieved. et al. et al. went to the cabin of Gabriel Oleszek. the law contemplates the requirement of a written notice of resignation. it must comply with both procedural and substantive due process. This telex was given credibility and weight by the Labor Arbiter and NLRC in deciding that there was pre-termination of the employment contract "akin to resignation" and no illegal dismissal. The CA however reversed the LA‘s and the NLRC‘s decision. threatened that they may become crazy any moment and demanded for all outstanding payments due to them. claiming that De Gracia. Skippers claims that he was rude and shouted noisily to the master. De Gracia. Jefferson M.. 1999. requires that dismissal by the employer be made under a just or authorized cause under Articles 282 to 284 of the Labor Code. voluntarily pre-terminated their contracts. De Gracia. Furthermore. were not even employed yet by the foreign principal. On January 28. It is not necessary that an actual hearing be conducted.. De Gracia. they filed a complaint for illegal dismissal with the LA. et al. as correctly ruled by the CA. then De Gracia." If. The LA dismissed the seafarers‘ complaint as the seafarers‘ demand for immediate repatriation due to the dissatisfaction with the ship is considered a voluntary pre-termination of employment. De Gracia left the master‘s cabin after a few minutes and was heard shouting very loudly somewhere down the corridors. Before the issuance of the second notice. Marquez Facts: Petitioner deployed De Gracia. In this case. Lata and Aprosta to work on board the vessel MV Wisdom Star. on the other hand. the telex message relied upon by the Labor Arbiter and NLRC bore conflicting dates of 22 January 1998 and 22 January 1999. In 22 January 1998. and (2) the second notice informs the employee of the employer's decision to dismiss him. should have submitted their written resignations. De Gracia. Substantive due process.. the requirement of a hearing must be complied with by giving the worker an opportunity to be heard. compelling them to vent their grievances with the Romanian Seafarers Union. or that amount of relevant evidence which a reasonable mind might accept as adequate to justify the conclusion that petitioners indeed voluntarily demanded their immediate repatriation. The employer must furnish the employee with two written notices before the termination of employment can be effected: (1) the first notice apprises the employee of the particular acts or omissions for which his dismissal is sought. et al. indeed. De Gracia claims that Skippers failed to remit their respective allotments. were repatriated because the latter voluntarily pre-terminated their contracts. Skippers also claim that on January 22. The Court deemed the telex message as a self-serving document that does not satisfy the requirement of substantial evidence. Ruling: For a worker's dismissal to be considered valid. The incident was evidenced by the Captain‘s Report sent on said date. MV Wisdom Stars‘ Master. Skippers alleges that De Garcia smelling strongly of alcohol.LABOR RELATIONS Atty. The legality of the manner of dismissal constitutes procedural due process. The LA gave credence to the telex of the master‘s report that the seafarers indeed demanded immediate repatriation. Lata and Daza arrived in the master‘s cabin and demanded immediate repatriation because they were not satisfied with the ship. regarding the cause of their dismissal. Article 285 of the Labor Code recognizes termination by the employee of the employment contract by "serving written notice on the employer at least one (1) month in advance." Given that provision. the Filipino seafarers were unceremoniously discharged and immediately repatriated. Upon arrival in the Philippines. Procedural due process in dismissal cases consists of the twin requirements of notice and hearing. it is safe to presume that the employer terminated the seafarers. Cosmoship furnished a written notice (telex) to Skippers. Aprosta.. Issue: Whether or not the seafarer‘s demand for immediate repatriation can be considered an act of voluntary resignation. In the absence of a written resignation. et al. giving doubt to the veracity and authenticity of the document. Page 237 . there was no written notice furnished to De Gracia. However. On December 3 1998. Such act was deemed akin to resignation recognized under Article 285 of the LC. the telex message is "a biased and self-serving document that does not satisfy the requirement of substantial evidence. while the legality of the act of dismissal constitutes substantive due process. we hold that this contention is without merit. vacation leave and sick leave benefits for the years 1977 to 1987 are already barred by prescription when private respondents filed their case in January 1995. Besides. As regards petitioner‘s contention that the money claim in this case is barred by prescription. the matter was submitted for voluntary arbitration. the amount of which vary according to the length of service rendered by the availing employee. the LUDO Employees Union (LEU). several arrastre workers were deployed by CLAS to perform the services needed by LUDO. which have acquired expertise because their jurisdiction is confined to specific matters.R. Marquez PRESCRIPTION OF CLAIMS CASES: 1. They just wanted the complainants to present some proofs. that it took some time for respondent employees to ventilate their claims because of the repeated assurances made by the petitioner that it would review the company records and determine therefrom the validity of the claims. Jefferson M. Ludo & Luym Corp.e. Voluntary Arbitrator. glucose and related products. 140960. Thereafter. considering the three-year period for the institution of monetary claims. the respondents had not refused to comply with their duty. The complainant‘s cause of action had not therefore accrued yet. Issue: Whether or not benefits consisting of salary increases. Thus. 2003 Facts: Petitioner LUDO & LUYM CORPORATION is engaged in the manufacture of coconut oil. the Voluntary Arbitrator found that prescription has not as yet set in to bar the respondents‘ claims for the monetary benefits awarded to them. is: "The cause of action accrues until the party obligated refuses xxx to comply with his duty. January 20. i. especially since the appellate court affirmed his findings. These arrastre workers were subsequently hired.LABOR RELATIONS Atty. Basic is the rule that findings of fact of administrative and quasi-judicial bodies. The controlling law. [their] causes of action had not accrued" (Citation omitted. in the earlier voluntary arbitration case aforementioned involving exactly the same issue and employees similarly situated as the complainants‘. are generally accorded not only great respect but even finality. Such determination is a question of fact which must be ascertained based on the evidence. sick leave. had already prescribed. vs Saornido. As elucidated by the Voluntary Arbitrator: The respondents had raised prescription as defense. Accordingly. Respondent union entered into a collective bargaining agreement with LUDO which provides certain benefits to the employees. So is petitioner‘s stance that the benefits claimed by the respondents. In this case. without expressing a categorical denial of their claims. the same defense was raised and dismissed by Honorable Thelma Jordan. the Voluntary Arbitrator received the evidence of the parties firsthand. the workers not having decided to assert [their] right[s]. on different dates. as ruled by the High Court. Ruling: No. LUDO failed to act on the request. Here. as regular rank-and-file employees of LUDO every time the latter needed additional manpower services. both oral and documentary. corn starch. Being warded off by promises. Page 238 . Said employees thereafter joined respondent union. It operates a manufacturing plant and a wharf where raw materials and finished products are shipped out.) Since the parties had continued their negotiations even after the matter was raised before the Grievance Procedure and the voluntary arbitration. presented by the parties before the Voluntary Arbitrator. LUDO engaged the arrastre services of Cresencio Lu Arrastre Services (CLAS) for the loading and unloading of its finished products at the wharf. the union requested LUDO to include in its members‘ period of service the time during which they rendered arrastre services to LUDO through the CLAS so that they could get higher benefits. G. which acted as the exclusive bargaining agent of the rank-and-file employees. vacation leave and 13th-month pay.. No compelling reason has been shown for us to diverge from the findings of the Voluntary Arbitrator. No. 3. contrary to what is prescribed in Section 28 of the Philippine Overseas Employment Administration (POEA) Memorandum Circular No. On March 2. 1995. these shall be forever barred. 2001 is beyond the three-year period mandated by the Labor Code. 151407. They add that the institution of the action was beyond the three-year period prescribed in Article 291 of the Labor Code as his employment with the respondents‘ ended on March 4. Arguments: Petitioner. Series of 1996. February 6. Ruling: Yes. 1998. petitioner asked Avantgarde to pay his sickness benefits. He was repatriated to the Philippines on March 4. 55.R. 55. POEA‘s Administrator. A cause of action accrues upon the categorical denial of claim. Sembawang did not reply. petitioner was declared fit to work. We note that POEA Circular No. acting in behalf of its foreign principal. 1997. we held that Article 291 covers all money claims from employer-employee relationship and is broader in scope than claims arising from a specific law.. Avantgarde Shipping corp. the applicable provision in this case is Article 291 of the Labor Code which we shall now discuss. He required surgery and hospitalization. should he wish. Petitioner could not have a cause of action prior to this because his earlier requests were warded off by indefinite promises. The labor arbiter dismissed the case without prejudice. Panganiban. respondent Avantgarde Shipping Corporation. November 22. Respondents counter that the Civil Code provision on extinctive prescription applies only to obligations that are intrinsically civil in nature and is inapplicable to labor cases. Ltd. While working in the vessel‘s engine room. Article 291 provides that all money claims arising from employer-employee relations shall be filed within three years from the time the cause of action accrued. but applies also to claims of overseas contract workers. On September 11. 1997. Avantgarde replied that it could no longer act on petitioner‘s claim as he had deviated from the legal procedure and. petitioner wrote a letter to Sembawang regarding his claim. 1998. On December 24. 2005 Facts: On November 8.. The earlier standard employment contract issued by the POEA did not have a provision on prescription of claims. 2007 Facts: Respondent Ireneo Panganiban was employed as Assistant General Manager of the petitioner Intercontinental Broadcasting Corporation from Page 239 . On March 4. Petitioner was again operated and Avantgarde paid all his hospital bills and promised to work out his sickness benefit with Sembawang as soon as he was declared fit to work. Hence. stating that the action had already prescribed. In Cadalin v. Jefferson M. Respondents assert that petitioner‘s demand was made more than one year from his date of arrival in the Philippines. Marquez 2. Issue: Whether petitioner‘s cause of action had already prescribed. It is not limited to money claims recoverable under the Labor Code. The complaint filed on March 2. 1994. 1998. Degamo vs. Intercontinental Broadcasting Corp. Pte. contends that his cause of action had not prescribed as the running of the prescriptive period was tolled by his extrajudicial demand for unpaid sickness benefits on December 24. On January 6.. hired petitioner Lauro Degamo as Oiler of the vessel Nippon Reefer. 1995 but the complaint was filed only on March 2. he could personally follow-up with Sembawang.LABOR RELATIONS Atty. Petitioner‘s cause of action accrued only on January 6. 2001. vs. 154460. G. 1997. when Avantgarde denied his claim and so breached its obligation to petitioner. No. petitioner lodged a complaint for payment of disability benefits and other money claims against the respondents. citing Article 1155 of the New Civil Code. 1997 while the employment contract between the parties was entered earlier on November 8. On appeal. 1998 and May 5. the National Labor Relations Commission (NLRC) likewise ruled that petitioner‘s cause of action had prescribed. G. 1994. respondent Sembawang Johnson Management. Series of 1996 became effective only on January 1. a spanner dropped and hit petitioner on his right thigh.R. otherwise. 2001. no. on the ground of lack of jurisdiction. On January 24. otherwise they shall be forever barred. leaving respondent in exactly the same position as though no civil case had been filed at all. Even so. the prescription of an action is interrupted by (a) the filing of an action. three years after his cessation of employment on September 2. G. Ruling: Yes. On April 12. had already been barred by prescription. brother of Far East‘s General Manager and petitioner Alexander Uy. Like other causes of action.LABOR RELATIONS Atty. 2000. respondent was elected by the BOA as Vice-President for Marketing in July 1992. 1996 private respondent Jimmy Lebatique as truck driver with a daily wage of P223. Lebatique complained of nonpayment of overtime work particularly on January 22. and damages in July 24. On March 20. That same day. Lebatique explained that he had never been paid for overtime work since he started working for the company. 2000. Jefferson M. suspended Lebatique apparently for illegal use of company vehicle. Respondent resigned from his employment on September 2. 2000. Alexander terminated Lebatique and told him to look for another job. and in the absence of an equivalent Labor Code provision for determining whether the said period may be interrupted. Thus. as respondent's claim was a labor money claim. 162813. He also told Alexander that Manuel had fired him. retirement benefits. Article 1155 of the Civil Code may be applied.50. its dismissal or voluntary abandonment by plaintiff leaves the parties in exactly the same position as though no action had been commenced at all." The term "money claims" covers all money claims arising from an employer-employee relation. retirement benefits. Marquez May 1986 until his preventive suspension on August 26. its consequent dismissal by the CA due to lack of jurisdiction effectively canceled the tolling of the prescriptive period within which to file his money claim. Alexander asked him why he was claiming overtime pay. 2000. but this was denied by the RTC. Santiago filed a petition for certiorari with the CA. which granted Santiago's petition for lack of jurisdiction and set aside the RTC's Orders. Quezon City. Lebatique. the Court ruled that although the commencement of a civil action stops the running of the statute of prescription or limitations. while the filing of the civil could have interrupted the running of the three-year prescriptive period. February 12. Far East Agricultural Supply vs. the prescriptive period for money claims is subject to interruption. On this point. Lebatique sought the assistance of the Department of Labor and Employment (DOLE) Public Assistance and Complaints Unit concerning the nonpayment of his overtime pay. and damages. one of the defendants. A motion to dismiss was filed by Joselito Santiago. separation pay. Page 240 . No. 1988. his claim. Lebatique filed a complaint for illegal dismissal and nonpayment of overtime pay. when respondent filed his complaint for illegal dismissal. Hence. According to Lebatique. Consequently. and (c) a written acknowledgment of the debt by the debtor. among others. Thus.R. 4. when he was required to make a second delivery in Novaliches. he received a telegram from petitioners requiring him to report for work. After talking to Manuel. 2000. 1988. 1996. 1988. Issue: Whether or not respondent's claim for unpaid commissions has already prescribed. The applicable law in this case is Article 291 of the Labor Code which provides that "all money claims arising from employer-employee relations accruing during the effectivity of this Code shall be filed within three (3) years from the time the cause of action accrued. two days later. unpaid commissions. clearly. (b) a written extrajudicial demand by the creditor. separation pay. respondent filed against petitioner a complaint for illegal dismissal. On July 24. Thereafter. He delivered animal feeds to the company‘s clients. He resigned in April 1993. On January 26. non-payment of his unpaid commissions. respondent filed with the trial court a case against the members of the Board of Administrators (BOA) of petitioner alleging. 1996. 1991. January 29. The running of the three-year prescriptive period not having been interrupted by the filing of the civil case. respondent's cause of action had already prescribed on September 2. 2007 Facts: Petitioner Far East hired on March 4. Lebatique reported for work the next day but he was prohibited from entering the company premises. Manuel Uy. 1989. When he did the next day. G. the drivers do not observe regular working hours unlike the other office employees. the bus he was driving was bumped by a Dagupan-bound bus. respondent was employed by the petitioner as a bus driver. Race. Montes told him that he was deemed to have resigned from his work and to accept a consideration of P50. Issue: Whether or not Lebatique is estopped from claiming that he was illegally dismissed since his complaint before the DOLE was only on the nonpayment of his overtime pay. and (6) moral and exemplary damages and attorney‘s fees. Thereafter. Ruling: All money claims arising from an employer-employee relationship shall be filed within three years from the time the cause of action accrued. (4) nonpayment of overtime and holiday premium. the amount pertaining to the period beyond the three-year prescriptive period is therefore barred by prescription. the respondent. otherwise. Respondent.000. medication and hospital expenses of the respondent in the aforestated hospitals. In the case of overtime pay. As a consequence thereof. Issue: Whether or not the cause of action of respondent has already prescribed. considering that in this situation. 2007 Facts: In June 1993. respondent. the prescriptive period commences at the time he was terminated. through his counsel. March 28. Respondent rebuffed the increased offer. Lebatique timely filed his claim for service incentive leave pay. he is entitled to overtime pay and service incentive leave pay. the respondent filed before the Labor Arbiter on 1 September 1999 a complaint for (1) unfair labor practice. On 30 June 1999. vacation and sick leave benefits.00. Petitioner shouldered the doctor‘s professional fee and the operation. Respondent refused to accede and insisted on having a dialogue with the petitioner‘s officer named Yolanda Montes. According to petitioners. before Christmas of 1998. still limping heavily. (5) excessive deduction of withholding tax and SSS premium. 13th month pay.00. petitioner claimed that the respondent‘s cause of action against petitioner had already prescribed because when the former instituted the aforesaid complaint on 1 September 1999. (3) underpayment of wages. depending on the production of animal feeds and the traffic conditions. Page 241 . Petitioners also aver that Lebatique worked for less than eight hours a day. There being no response from the petitioner. on his part claims that he is not a field personnel. In its Position Paper dated 27 March 2000. if it is established that the benefits being claimed have been withheld from the employee for a period longer than three years. Marquez Petitioners maintain that Lebatique. Jefferson M. respondent suffered a fractured left leg and was rushed to the Country Medical and Trauma Center in Tarlac City where he was operated on and confined from 24 August 1994 up to 10 October 1994. they shall be forever barred.LABOR RELATIONS Atty. the respondent was confined again for further treatment of his fractured left leg at the Specialist Group Hospital in Dagupan City. Victory Liner. vs. Further. service incentive leave pay. he can only demand for the overtime pay withheld for the period within three years preceding the filing of the complaint on March 20. His confinement therein lasted a month. 2000. thus.000. The amount that can only be demanded by the aggrieved employee shall be limited to the amount of the benefits withheld within three years before the filing of the complaint. however. more than five years had already lapsed from the accrual of his cause of action on 24 August 1994. 164820. On the night of 24 August 1994. During their meeting. Inc. Respondent rejected the explanation and offer. No. On the other hand. One month after his release from the said hospital. sent a letter to the petitioner demanding employment-related money claims. 5. as a driver. In January 1998. his claim regarding nonpayment of overtime pay since he was hired in March 1996 is a different matter. The drivers may report early in the morning to make their deliveries or in the afternoon. He was. is not entitled to overtime pay since he is field personnel whose time outside the company premises cannot be determined with reasonable certainty. informed by the petitioner that he was considered resigned from his job.R. (2) illegal dismissal. went to the petitioner‘s office to report for work. he again conversed with Montes who reiterated to him that he was regarded as resigned but raised the consideration therein to P100. the petitioner never formally informed the respondent of the fact of his dismissal either through a written notice or hearing. Jefferson M. Thus.LABOR RELATIONS Atty. we shall now discuss and determine when the respondent‘s cause of action accrued in order to ascertain whether the same had already prescribed.00 as a consolation for his dismissal but the latter rejected it. as amended. Proceeding therefrom. The four-year prescriptive period shall commence to run only upon the accrual of a cause of action of the worker. Petitioner argued that herein private respondents‘ right had already prescribed due to their failure to move for the execution of the April 11. respectively. It is error to conclude that the employment of the respondent was unjustly terminated on 10 November 1994 because he was. Region XI. private respondents filed an Urgent Motion for Writ of Execution. On October 7. Marquez Ruling: In illegal dismissal cases. 158084. This is based on Article 1146 of the New Civil Code which states that actions based upon an injury to the rights of the plaintiff must be brought within four years. 1993. The respondent must be considered as unjustly terminated from work in January 1998 since this was the first time he was informed by the petitioner that he was deemed resigned from his work. Indeed. E-95-087 Case No. On January 28. 1998. 1998. No. 1994 of the Regional Tripartite Wages and Productivity Board. or within three (3) years from the finality of the said order. Thus. in fact. August 29. for further treatment of his fractured left leg. 1998 and November 23. it was only at this time that the respondent‘s cause of action accrued. the petitioner. Mercado & Sons Agricultural Enterprises vs. During that same occasion. J. private respondents were not given the benefits due them under Wage Order No.000. the Regional Tripartite Wages and Productivity Board. at that time. 1998. 6. It is settled that in illegal dismissal cases. RTWPB-XI-03. tried to convince the respondent to accept an amount of P50. Likewise. the four-year prescriptive period shall be counted and computed from the date of the employee‘s dismissal up to the date of the filing of complaint for unlawful termination of employment. Page 242 . 1994 Order within the period provided under Article 291 of the Labor Code. was denied by the regional wage board in an Order dated April 11. On November 17. and Writ of Garnishment in RTWPB-XI-03-CBBE-94 NWPBC Case No. Thus. the respondent‘s filing of complaint for illegal dismissal on 1 September 1999 was well within the fouryear prescriptive period. Issue: Whether or not the claim of respondents have already prescribed. the employee concerned is given a period of four years from the time of his dismissal within which to institute a complaint. the cause of action accrues from the time the employment of the worker was unjustly terminated. Notwithstanding the said order. Consequently. the respondent cannot also be deemed as illegally dismissed from work upon his release from the said hospital in December 1994 up to December 1997 since the records show that the respondent still reported for work to the petitioner and was granted sick and disability leave by the petitioner during the same period. petitioner filed an application for exemption from the coverage of the aforesaid wage order. the OIC-Regional Director.R. petitioner filed a Motion to Quash the Writ of Execution and a Supplemental Motion to the Motion to Quash. 1994.K. granting a Cost of Living Allowance (COLA) to covered workers. 2008 Facts: On December 3. however. G. issued a Writ of Execution for the enforcement of the Order dated April 11. RTWPB-XI-03. Tomas. still confined at the Specialist Group Hospital. On July 10. R1100 seeking the enforcement of subject wage order against several entities including herein petitioner. He must be considered as merely on sick leave at such time. Sto. it cannot be gainfully said that respondent was unlawfully dismissed on 10 November 1994 and that the cause of action accrued on that date. 1994. It is also significant to note that from 10 November 1994 up to December 1997. Dagupan City. issued Wage Order No. Region XI. for it is a right clearly granted to him by law -. This is consistent with the rule on statutory construction that a general provision should yield to a specific one and with the mandate of social justice that doubts should be resolved in favor of labor. Here. she has five years to ask for execution of the judgment. 291 of the Labor Code applies to money claims in general and provides for a 3-year prescriptive period to file them. This is based on Article 1146 of the New Civil Code which states that actions based upon an injury to the rights of the plaintiff must be brought within four years. He filed his complaint for illegal dismissal on 14 June 2004. Petitioner‘s employment contract was renewed every five months and he was assigned a different task every time. it must be computed from the date of petitioner‘s illegal dismissal up to the time of actual reinstatement. is not the general one that applies to money claims. Issue: Whether or not respondent‘s claim for backwages has already prescribed. having been exercised within five years. Petitioner was initially assigned to the Mendiola Sales Office of respondent CCBP. the employee concerned is given a period of four years from the time of his illegal dismissal within which to institute the complaint.and for as long as his cause of action has not been barred by prescription. Ruling: The Court was more emphatic in Philippine Industrial Security Agency Corporation v. That petitioner did not immediately file his Complaint should not affect or diminish his right to backwages. Since he already acquired the status of a regular employee. the instant case was filed within the prescriptive period. 7. The statutory intent of this matter is clearly discernible. Stated otherwise. The prescription applicable. In illegal dismissal cases. Jefferson M. Logically. The payment of backwages allows the employee to recover from the employer that which he has lost by way of wages as a result of his dismissal. Such an arrangement continued until petitioner was directly hired by respondent CCBP as a Route Salesman on 15 September 2000. thru Taguibao. he shall be entitled to the full protection of his right to backwages. which has become final and executory. Dapiton. the right to enforce the judgment. therefore. Reyes vs. The four-year prescriptive period shall commence to run only upon the accrual of a cause of action of the worker. and Taguibao is its Human Resource Manager. but the specific one applying to judgments. G. petitioner asserted that his dismissal from employment without the benefit of due process was unlawful. Thus. petitioner was dismissed from service on 15 September 2001. when it ruled that backwages had to be paid by the employer as part of the price or penalty he had to pay for illegally dismissing his employee. respondent CCBP. No. respondent employees‘ money claims in this case had been reduced to a judgment. There can be no gap or interruption. Clearly. The law fixes the period of time within which petitioner could seek remedy for his illegal dismissal and for as long as he filed his Complaint within the prescriptive period. On the other hand. 180551. in the form of a Wage Order. lest we defeat the very reason of the law in granting the same. Once judgment is rendered in her favor. Exactly one year from the time of petitioner‘s employment as a Route Salesman. a claimant has three years to press a money claim. It was to be computed from the time of the employee‘s illegal dismissal (or from the time his compensation was withheld from him) up to the time of his reinstatement. Respondent CCBP is a corporation engaged in the business of production and distribution of carbonated drinks. terminated his services on 15 September 2001. Page 243 .should he be found to have been illegally dismissed -. as a Leadman in February 1988. February 10. One of the natural consequences of a finding that an employee has been illegally dismissed is the payment of backwages corresponding to the period from his dismissal up to actual reinstatement. 2009 Facts: The present Petition arose from a Complaint for illegal dismissal with claims for moral and exemplary damages and attorney‘s fees filed by petitioner against respondents Coca Cola Bottlers Philippines (CCBP) and Rotaida Taguibao (Taguibao) before the Labor Arbiter on 14 June 2004.R. Marquez Ruling: Art.LABOR RELATIONS Atty. through Interserve Manpower Agency (Interserve). then. petitioner alleged that he was first employed by respondent CCBP. has not yet prescribed. In his Complaint. counted from its finality. Nlrc. Whether or not the cause of action has prescribed. 2009 Facts: Petitioner. Dupo. renewable after one year. the severance pay received by the respondent every time each of the 6 contracts of employment comes to an end. 1999 the date he left his work which was also in effect the date of the termination of his contract. thereafter. Petitioner claimed that long service award is the same with severance pay. the employer shall pay to the workman an award for the period of his service to be computed on the basis of half a month‘s pay for each of the first five years and one month‘s pay for each of the subsequent years. Jefferson M. For fractions of a year. ―[w]here a contract specifies the period of its duration.‖ As it is. since. hired respondent Marcelo Dupo as Civil Structural Superintendent to work in Saudi Arabia for its principal. April 14. the workman shall be entitled to an award which is proportionate to his service period during that year.) However. Furthermore. petitioner insists that prescription barred respondent‘s claim for long service award because under Article 13 of the Saudi Labor Law it provides that no case or claim relating to any of the rights provided for under said law shall be heard after the lapse of 12 months from the date of the termination of the contract.33. respondent signed his first overseas employment contract. Page 244 . and CA decided all in favor of the respondent. His service was not cumulative. and he filed the case on December 11. If the workman is leaving the work as a result of a force majeure beyond his control. it shall be considered renewed for an unspecified period. SC said that respondent‘s employment contracts expressly stated that his employment ended upon his departure from work. Issues: Whether or not CA erred in ruling that respondent is entitled to long service pay which is different from severance pay. Respondent‘s sixth contract ended on April 30. petitioner presented two defenses namely payment and prescription. NLRC. If a workman resigns because of marriage or childbirth. 1997. 1999. Article 72 of the Saudi Labor Law is also of similar import. (Emphasis supplied. Ruling: SC said that CA has committed an error in ruling that the long service pay is different from severance pay. Firstly. All were fixed-period contracts for one year. It was renewed five times on the following dates: May 10. and March 26. On July 6. Marquez 8. v. the contract is for a fixed period of time. A contract of employment for a definite period terminates by its own terms at the end of such period. 1998. This is the reason why the formula in computing the severance pay is the same with the computation of the long service award. 1993.LABOR RELATIONS Atty. respondent through a letter resigned from his work and asked MMG to give him his ‗long service award‘ in accordance with the Article 87 of Saudi Law which states that. 1992. If both parties continue to enforce the contract. petitioner said the long service award has already been paid every time each of the contracts of employment of the respondent comes to an end. the workman shall be entitled to the service award provided for at the beginning of this article in the following cases: If he is called to military service. 1996. in Brent School. The labor arbiter. a domestic corporation which recruits Filipino workers. Secondly. The last rate of pay shall be taken as basis for the computation of the award. Mohammad Al-Mojil Group/Establishment (MMG).640. it terminates on the expiration of such period. It reads: A labor contract concluded for a specified period shall terminate upon the expiry of its term. January 22. On February 26. we said that ―a fixed term is an essential and natural appurtenance‖ of overseas employment contracts as in this case. Zamora. Pertinently. On the other hand. G. MMG did not reply to the letter of the respondent Dupo which led to the filing of the case before the labor arbiter for the payment of the long service award in the amount of US$12. Inc. Moreover. Article 87 Where the term of a labor contract concluded for a specified period comes to an end or where the employer cancels a contract of unspecified period.R. According to SC the severance pay received by the respondent at the end of each of the six contracts of employment is equivalent to the long service pay. The sixth and last contract stated that respondent‘s employment starts upon reporting to work and ends when he leaves the work site. 172342. No. LWV Construction Corp. is also the longevity service award. 2. 1999. In effect. July 13. Each year he departed from work and successively new contracts were executed before he reported for work anew. We also said in that case that under American law. 2000 which is 1 year and seven months from the date of the termination of his contract. Respondent then has signed 6 overseas contracts and worked for seven years in Saudi Arabia. vs. Respondent left Saudi Arabia on April 30. 1999 and arrived in the Philippines on May 1. 1994. November 16. In the light of the 1987 Constitution. 1999. among others. 291. G. Pingol filed a Complaint for Constructive Dismissal and Monetary Claims[6] against PLDT. as ruled by the Supreme Court in the case of Callanta vs. for ―paranoid personality disorder‖ due to financial and marital problems. four years later. Petition is Granted. On March 29. 182622. Jefferson M. This point. Issues: Whether or not respondent Pingol filed his complaint for constructive dismissal and money claims within the prescriptive period of four (4) years as provided in Article 1146 of the Civil Code[11][12] respectively and three (3) years as provided in Article 291 of the Labor Code. No. Let the entire records of the case be REMANDED to the Labor Arbiter a quo for further proceedings. 48 of our Code of Civil Procedure which is a borrowing statute provides that ―If by the laws of the state or country where the cause of action arose. To enforce the one-year prescriptive period of the Saudi Law as regards the claims in question would contravene the public policy on the protection to labor. 2000. Respondent‘s complaint was filed well within the three-year prescriptive period under Article 291 of our Labor Code. the action is barred. However. As correctly cited by (PLDT). 2010 Facts: In 1979. PLDT filed a motion to dismiss claiming. has already been mooted by SC‘s finding that respondent‘s service award had been paid. Mandaluyong City. he reported for work but frequently absented himself due to his poor mental condition. PLDT v. Thereafter. 2004. 2006 Resolution reversed the LA‘s resolution and favored Pingol. 9. Pingol was admitted at The Medical City. 2000. September 8. In response. January 1. albeit the payroll termed such payment as severance pay..‖ Section 48 has not been repealed or amended by the Civil Code of the Philippines. 1999. the complaint for illegal dismissal must be filed within four (4) years from and after the date of dismissal. sent him notices with a stern warning that he would be dismissed from employment if he continued to be absent without official leave ―pursuant to PLDT Systems Practice A-007 which provides that ‗Absence without authorized leaves for seven (7) consecutive days is subject to termination from the service. PLDT terminated his services on the grounds of unauthorized absences and abandonment of office. He was discharged from the hospital. The NLRC in its November 15. 1999 to December 31. Money claims. however. an argument can be raised that even if the conflict of laws rule provides that the procedural law of the lex fori must be followed. it is also barred in the Philippine Islands. while still under the employ of PLDT. On April 13. as a maintenance technician. Labor Arbiter (LA) issued an order granting petitioner‘s Motion to Dismiss on the ground of prescription. Section 48 [of the Code of Civil Procedure] cannot be enforced ex proprio vigore insofar as it ordains the application in this jurisdiction of [Article] 156 of the Amiri Decree No.]).R. Carnation Phils. Pingol was absent from work without official leave from September 16. Pingol. Pingol (Pingol) was hired by petitioner PLDT in 1979. otherwise they shall be forever barred. 145 SCRA 268. which is inconsistent with or contradictory to Section 48 of the Code of Civil Procedure (Paras. he alleged that he was hastily dismissed from his employment on January 1. Article 2270 of said Code repealed only those provisions of the Code of Civil Procedure as to which were inconsistent with it. respondent Roberto R. that respondent‘s cause of action had already prescribed as the complaint was filed four (4) years and three (3) months after his dismissal. When is the pivotal date when the cause of action of respondent Pingol accrued? Page 245 . PLDT. There is no provision in the Civil Code of the Philippines. The courts of the forum will not enforce any foreign claim obnoxious to the forum‘s public policy. In his complaint. — All money claims arising from employer-employee relations accruing during the effectivity of this Code shall be filed within three (3) years from the time the cause of action accrued. 104 [7th ed.LABOR RELATIONS Atty. Philippine Conflict of Laws. however. Marquez SC ruled that the claim has not yet prescribed because the law that should be applied on prescription is not the Saudi Law which grants 12 months period of time to file the claim from the time of the termination of contract but it should be the Labor Code particularly ART. The reason is because prescription is a procedural law and under the conflict of laws rules of the Philippines the procedural law of the lex fori or law of the forum (law of the place where the case is filed) must be applied. Sec. 23 of 1976. Article 1150 of the Civil Code states: Article 1150. and (3) an act or omission on the part of such defendant violative of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff. 2004. Panganiban where it was written: Like other causes of action. Further. Judicial admissions made by parties in the pleadings. 2000 because he was not categorically and formally dismissed or his monetary claims categorically denied by petitioner PLDT on said date. on the other hand. and (c) a written acknowledgment of the debt by the debtor. thus. xxx (Emphasis supplied. to wit: (1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created. an action predicated "upon an injury to the rights of the plaintiff. Article 1146 of the New Civil Code provides: Art. The following actions must be instituted within four years: (1) Upon an injury to the rights of the plaintiff. Pingol asserts that his complaint was filed within the prescriptive period of four (4) years. the complaint filed had already prescribed. otherwise they shall be barred forever. 2000 and such fact was even alleged in the complaint he filed before the LA. Guanzon. and in the absence of an equivalent Labor Code provision for determining whether the said period may be interrupted. and when there is any written acknowledgment of the debt by the debtor. he made follow-ups with PLDT management regarding his benefits. As. 1155.] it was written: that the dismissal of the private respondent's complaint was still proper since it is apparent from its face that the action has prescribed. to his mind. The Labor Code has no specific provision on when a claim for illegal dismissal or a monetary claim accrues. in essence. tolled the running of the prescriptive period.[18] In Pepsi Cola Bottling Company v. respondent Pingol posits that the continuous follow-up of his claim with petitioner PLDT from 2001 to 2003 should be considered in the reckoning of the prescriptive period. The Court agrees with petitioner PLDT. Article 1155 of the Civil Code may be applied. Respondent claims that between 2001 and 2003. exactly four (4) years and three (3) months later. 2000 was the date that respondent Pingol was not allowed to perform his usual and regular job as a maintenance technician. Article 291 of the Labor Code states: Article 291. Citations omitted. 1146 of the New Civil Code. These admissions cannot be contradicted unless previously shown to have been made through palpable mistake or that no such admission was made. 2000. 1146.LABOR RELATIONS Atty. He claims that his cause of action did not accrue on January 1. Thus. Page 246 . Carnation. 1984. (b) a written extrajudicial demand by the creditor. Such admitted fact does not require proof. Petitioner PLDT." as contemplated under Art. This. when there is a written extrajudicial demand by the creditors. With regard to the prescriptive period for money claims. contends that respondent Pingol was dismissed from the service on January 1. Its applicability in labor cases was upheld in the case of International Broadcasting Corporation v. shall be counted from the day they may be brought. – All money claims arising from employer-employee relations accruing during the effectivity of this Code shall be filed within three (3) years from the time the cause of action accrued. The rule in this regard is covered by Article 1155 of the Civil Code. or in the course of the trial or other proceedings in the same case are conclusive and so does not require further evidence to prove them. (2) an obligation on the part of the named defendant to respect or not to violate such right.[16] when one is arbitrarily and unjustly deprived of his job or means of livelihood. 2000 as the date of his dismissal in his complaint[20] filed on March 29. The prescription of actions is interrupted when they are filed before the Court. In the present case. Thus. Thus. when there is no special provision which ordains otherwise. He never contradicted his previous admission that he was dismissed on January 1. Private respondent himself alleged in the complaint that he was unlawfully dismissed in 1979 while the complaint was filed only on November 14. to wit: ART. which must be brought within four (4) years. Marquez Ruling: Parties apparently do not dispute the applicable prescriptive period. Jefferson M. In Callanta v. the action instituted to contest the legality of one's dismissal from employment constitutes. the petitioner correctly relied on such allegation in the complaint to move for the dismissal of the case on the ground of prescription. Respondent Pingol cited the same date of dismissal in his complaint before the LA. the general law on prescription applies. correctly ruled by the LA. Money Claims. January 1. the prescriptive period for money claims is subject to interruption.) Pingol himself alleged the date January 1. It is a settled jurisprudence that a cause of action has three (3) elements. Respondent never denied making such admission or raised palpable mistake as the reason therefor. The time for prescription for all kinds of actions. the prescription of an action is interrupted by (a) the filing of an action. (Emphasis supplied) The day the action may be brought is the day a claim starts as a legal possibility. " Section 28 of the POEA SEC states: SECTION 28. to be dispensed in the light of the established facts and applicable law and doctrine. Juliano died. the Labor Code states: ART. his wife Gliceria Roslinda and son Ariel Roslinda.. the claimed ―follow-ups‖ could not have validly tolled the running of the prescriptive period. respondent Pingol has no one but himself to blame for his own predicament. Months after his repatriation. 2001. hired Juliano Roslinda (Juliano) to work on board the vessel MV "Victory. a method of removing waste products such as creatinine and urea. 1998 as an oiler and. It is worthy to note that respondent never presented any proof to substantiate his allegation of follow-ups.LABOR RELATIONS Atty. or on March 6. it does not necessary follow that every labor dispute will be automatically decided in favor of labor. he has barred his remedy and extinguished his right of action. The management also has its own rights. Marquez Pingol never made any written extrajudicial demand. By his own allegations in his complaint. otherwise they shall forever be barred. He complained about abdominal distention which is the medical term for a patient who vomits previously ingested foods. on behalf of its foreign principal. and attorney's fees before the Labor Arbitration Branch of the NLRC. Navarra. 2000. Unfortunately. In Southeastern Shipping v. reimbursement of medical expenses. Ruling: The employment contract signed by Juliano stated that "Upon approval. Pamela R. 2010 Facts: Petitioner Medline Management. Issue: Whether or not the claim is not yet barred by prescription despite the fact that it was filed beyond the one-year prescriptive period provided by the POEA Standard Employment Contract. The applicable provision is Article 291 of the Labor Code. (MMI). His latest contract was approved by the POEA on September 9. Jefferson M.Money claims.R. 168715. Jr. Instead of filing an answer. In accordance with which. Such leaning. does not blind the Court to the rule that justice is in every case for the deserving. This law prevails over Section 28 of the Standard Employment Contract for Seafarers which provides for claims to be brought only within one year from the date of the seafarer's return to the point of hire. the same shall be deemed an integral part of the Standard Employment Contract (SEC) for seafarers. has more often than not inclined. 2003. to uphold the cause of the worker in his conflict with the employer. Roslinda." Page 247 . G. Lloren (Dr." Juliano was previously employed by the petitioners under two successive separate employment contracts of varying durations. Thus. it being more favorable to the seafarers and more in accord with the State's declared policy to afford full protection to labor. 291. as well as freeing water from the blood. this Court. 2000. the employer and the seafarer agree that all claims arising from this contract shall be made within one (1) year from the date of the seafarer's return to the point of hire. 2000. was discharged on January 20. lack of jurisdiction and prematurity. we ruled that "Article 291 is the law governing the prescription of money claims of seafarers. they filed a Motion to Dismiss on the grounds of prescription. On September 4. Juliano has undergone Hemodialysis. No. vs. — All money claims arising from employer-employee relations accruing during the effectivity of this Code shall be filed within three (3) years from the time the cause of action accrued. Medline Management Inc. however." We further declared that "for the guidance of all. Section 28 of the Standard Employment Contract for Seafarers. petitioner Grecomar Shipping Agency (GSA). Out of Its concern for the less privileged in life. 1998 for a duration of nine months. (Emphasis supplied) On the other hand. 10. Although the Constitution is committed to the policy of social justice and the protection of the working class. insofar as it limits the prescriptive period within which the seafarers may file their money claims. is hereby declared null and void. September 15. seven months and 22 days from the time the deceased seafarer reached the point of hire. damages. when the kidneys are in renal failure. The prescriptive period in the present case is thus three years from the time the cause of action accrues. filed a complaint against MMI and GSA for payment of death compensation. Inc. Petitioners contended that the action has already prescribed because it was filed three years. Juliano consulted Dr.JURISDICTION XXX Recognizing the peculiar nature of overseas shipboard employment. Neither did petitioner make any written acknowledgment of its alleged obligation. Lloren) of Metropolitan Hospital. a class of overseas contract workers. he boarded the vessel MV "Victory" on October 25. after several months of extension. From March 8 to August 24. respondents herein. On August 27. The distribution scheme became the subject of an Agreement dated October 18. as amended. as amended. In the said meeting. 451.LABOR RELATIONS Atty. Starting SY 1994-1995.R. 1995. faculty association and respondent. however. It appears from the records that prior to school year (SY) 1983-1984. the claim has not yet prescribed. 1999. Page 248 . 2001 when Juliano died. respondent University of the East Employees' Association (UEEA) is a duly registered labor union of the rank-and-file employees of UE. 1983 signed by the management. prescription had set in. and Republic Act (R.) No.D. 451 (P. Hence. 451). UEEA did not question the manner of its distribution and only on April 27.D. Article 291 of the Labor Code provides that money claims arising from an employer-employee relationship must be filed within three (3) years from the time the cause of action accrued. The Minutes of the June 19. ISSUE: Whether or not prescription has already set in. In the present case. and not anymore on the average number of personnel. No. 1995 meeting was signed and attested to by UEEA officers who attended. September 14. a tripartite meeting was held among the representatives of management. the 70% incremental proceeds from the tuition fee increase was distributed by UE to its covered employees based on a new formula of percentage of salary. UEEA filed a complaint before the NLRC for non-payment/underpayment of the rank-and-file employees' share of the tuition fee increases against UE pursuant to P. Hence.. On June 19. was distributed by UE in proportion to the average number of academic and nonacademic personnel. University of East vs.A. G. 2011 Facts: Petitioner University of the East (UE) is an educational institution duly organized and existing under Philippine laws. 1999 did it file an action based therein. No. the cause of action accrued on August 27. 11. UE asserted that the claim of the UEEA was already barred since it was filed three (3) years from the time its supposed cause of action accrued. Jefferson M. the cause of action accrued when the distribution of the incremental proceeds based on percentage of salary of the covered employees was discussed in the tripartite meeting held on June 19. Marquez In the present case. it was agreed that the distribution of the incremental proceeds would now be based on percentage of salary. since the complaint was filed with the arbitration branch of the NLRC on September 4. On April 27. RULING: The Court agrees with UE and holds that UEEA's right to question the distribution of the incremental proceeds for SY 1994-1995 has already prescribed. 1995. On the other hand. University of East Employees Assoc. 179593. 2003. faculty union and UEEA. 6728 otherwise known as Government Assistance to Students and Teachers in Private Education Act. No. the 70% incremental proceeds from tuition fee increases as mandated by Presidential Decree No.
Report "2012 Labor Relations Case Digests With Table"