CASE DIGESTS: LABOR RELATIONS 2008 1 DANDY V. QUIJANO, COMPLAINANT, VS. GEOBEL A. BARTOLABAC (LABORA R B I T E R , N L R C - N C R S O U T H ) , A N D A L B E R T O R . Q U I M P O ( C O M M I S S I O N E R , NLRC-FIRST DIVISION), RESPONDENTS.

FACTS: On 19 March 2002, complainant Dandy Quijano filed before this C o u r t a v e r i f i e d complaint written in Pilipino against herein respondents A t t y . G e o b e l A . B a r t o l a b a c (Bartolabac), Labor Arbiter of the National Labor Relations Commission (NLRC), andC o m m i s s i o n e r A l b e r t o R . Q u i m p o ( Q u i m p o ) o f t h e s a m e C o m m i s s i o n f o r v i o l a t i n g Canon 1 and Rule 1.01 of the Code of Professional Responsibility.According to complainant, respondents violated his constitutional right to due process infailing to execute the final and executory judgment of this Court in G.R. No. 126561entitled Quijano v. Mercury Drug Corporation.The antecedent facts are as follows:C o m p l a i n a n t w a s d i s m i s s e d f r o m s e r v i c e b y t h e M e r c u r y D r u g C o r p o r a t i o n (corporation). He filed a complaint for illegal dismissal before the NLRC. Eventually, thecase was elevated to this Court. On 8 July 1998, the Court promulgated its Decision inf a v o r o f h e r e i n c o m p l a i n a n t o r d e r i n g , a m o n g o t h e r s , h i s r e i n s t a t e m e n t . T h e corporations motion for reconsideration was denied by this Court in its Resolution dated5 July 1999.Complainant relates that he filed with respondent Labor Arbiter Bartolabac a motion for execution on 9 December 1998 but despite the final resolution of his case, Bartolabacissued an order that in effect changed the tenor of the final judgment. While the decisionof this Court had mandated complainants reinstatement, Bartolabac instead awardedback wages and separation pay.Pursuant to the Resolution of this Court, Bartolabac issued an alias writ of execution on18 February 2000. However, respondent Bartolabac allegedly again unilaterally issueda n o t h e r o r d e r d a t e d 5 A p r i l 2 0 0 0 , a m e n d i n g h i s p r e v i o u s o r d e r a n d a s s i g n i n g t h e complainant to the position of self-service attendant of the corporation instead of hisoriginal position of warehouseman. Subsequently, respondent Commissioner Quimpo Page1 overturned the above order of Bartolabac and directed the payment of separation payrather than reinstatement to a substantially similar position as ordered by this Court. ISSUE: Whether or not respondents are liable for their acts in deviating from the f i n a l a n d executory judgment of this Court in G.R. No. 126561. HELD: The Court is unyielding in its adjudication that complainant must be reinstated to hisformer position as warehouseman or to a substantially equivalent position.Clearly, the Court is unwilling to accept the corporation and respondent labor arbiters reason that reinstatement is no longer feasible because the position of warehousemanh a d a l r e a d y b e e n abolished and there is no substantially equivalent position in

t h e corporation.Both respondents labor arbiter and commissioner do not have any latitude to departfrom the Courts ruling. The Decision in G.R. No. 126561 is final and executory and mayno longer be amended. It is incumbent upon respondents to order the execution of the judgment and implement the same to the letter. Respondents have no discretion on thism a t t e r , m u c h l e s s a n y a u t h o r i t y t o c h a n g e t h e o r d e r o f t h e C o u r t . T h e a c t s o f respondent cannot be regarded as acceptable dis c r e t i o n a r y p e r f o r m a n c e o f t h e i r functions as labor arbiter and commissioner of the NLRC, respectively, for they do nothave any discretion in executing a final decision. The implementation of the final andexecutory decision is mandatory.As held in Siy v. National Labor Relations Commission and Embang:Once the case is decided with finality, the controversy is settled and the matter is laid torest. The prevailing party is entitled to enjoy the fruits of his victory while the other partyi s o b l i g e d t o r e s p e c t t h e c o u r t s v e r d i c t a n d t o c o m p l y w i t h i t . W e r e i t e r a t e o u r pronouncement in Salicdan v. Court of Appeals:Well-settled is the principle that a decision that has acquired finality becomes immutableand unalterable and may no longer be modified in any respect even if the modification ismeant to correct erroneous conclusions of fact or law and whether it will be made by thecourt that rendered it or by the highest court of the land.Again, we are unceasing in emphasizing that the decision in the labor case has becomefinal and executory since 1999. There can be no justification for the overturning of the Page2 Courts reinstatement order by the NLRC First Division and full satisfacti o n o f t h e monetary award of only three (3) years after the finality of the judgment.T h e Court is not wont to compel the corporation to instantly restore the position of w a r e h o u s e m a n i f i t h a s b e e n a l r e a d y a b o l i s h e d . I n d e e d , t h e C o u r t g r a n t e d t h a t complainant could be reinstated to a substantially equivalent or similar position as aviable alternative for the corporation to carry out.WHEREFORE, premises considered, the Court finds respondents liable for violatingCanon 1 and Rule 1.01 of the Code of Professional Responsibility. Respondents Labor A r b i t e r G e o b e l A . B a r t o l a b a c a n d C o m m i s s i o n e r A l b e r t o R . Q u i m p o a r e h e r e b y SUSPENDED from the practice of law for a period of THREE (3) months. 2. REYNALDO CANO CHUA, DOING BUSINESS UNDER THE NAME & STY LEP R I M E M O V E R C O N S T R U C T I O N D E V E L O P M E N T , V S C O U R T O F APPEALS,S O C I A L S E C U R I T Y C O M M I S S I O N , S O C I A L S E C U R I T Y SYSTEM, ANDRESPAGUIO, PABLO CANALE, RUEL PANGA N , A U R E L I O P A G U I O , R O L A N D O TRINIDAD, ROMEO TAPANG AND CARLOS MALIWAT This is a petition for Motion for Reconsideration of the decision of the CA affirming theorder of the SSC which held that the private respondents were regular employees of thep e t i t i o n e r a d o r d e r e d p e t i t i o n e r t o p a y S S S f o r i t s u n p a i d c o n t r i b u t i o n s , a s w e l l a s penalty for the delayed remittance. Facts:

On August 20, 1985 private respondents Paguio, Canale, Pangan, Trinidad, Tapang andMaliwat filed a petition with the SSC for SSS coverage and contributions against Chua,owner of Prime Mover Construction Development, claiming that they were all regular employees of the petitioner in his construction business.T h e y a l s o a l l e g e d t h a t t h e y w e r e d i s m i s s e d w i t h o u t j u s t i f i a b l e g r o u n d s a n d w i t h o u t notice to them with the Ministry of Labor and Employment. They further alleged thatpetitioner did not report them to the SSS for compulsory coverage in flagrant violation of the Social Security Act.Chua in his answer claimed that private respondents had no cause of action against himand assuming that there was any, they were barred by prescription and laches. He alsoc l a i m e d t h a t p r i v a t e r e s p o n d e n t s w e r e n o t r e g u l a r e m p l o y e e s b u t w e r e p r o j e c t e m p l o ye e s w h o s e w o r k h a d b e e n f i x e d f o r a s p e c i f i c p r o j e c t o r u n d e r t a k i n g w h i c h completion is determined at the time of their engagement. He also concluded that thesaid employees were not entitled to coverage under the SSA.The SSS filed a petition in intervention and on February 1, 1995, the SSC issued itsOrder which ruled in favor of private respondents, stating that the petitioner should pay Page3 the SSS and the unpaid SS/EC and contributions plus penalty for t h e d e l a y e d remittance.The SSC denied the Motion for Reconsideration filed by the petitioner for lack of merit.T h e p e t i t i o n e r t h e n f i l e d a M o t i o n f o r R e v i e w t o t h e C A , c l a i m i n g t h e s a m e t h a t t h e private respondents are project employees whose period of employment are terminatedu p o n c o m p l e t i o n o f t h e p r o j e c t a n d t h a t n o e m p l o ye r e m p l o ye e r e l a t i o n s h i p e x i s t e d b e t w e e n t h e m . T h u s , t h e r e n o b e i n g e m p l o ye r e m p l o ye e r e l a t i o n s h i p , t h e p r i v a t e respondents are not entitled to coverage under the SSA and that their length of servicedid not change their status from project employees to regular employees. Petitioner alsoquestioned the failure to apply the rules on prescription of actions and of laches for filingsix to eight later after they were taken in by the petitioner.The CA, citing Article 280 of the Labor Code declared that the private respondents werea l l r e g u l a r e m p l o ye e s i n r e l a t i o n t o c e r t a i n a c t i v i t i e s s i n c e t h e y a l l w o r k e d e i t h e r a s masons, carpenters and fine graders in the petioles various projects for at least oney e a r , a n d t h a t t h e i r w o r k w a s n e c e s s a r y d e s i r a b l e t o p e t i t i o n e r ' s b u s i n e ss whichi n v o l v e d t h e c o n s t r u c t i o n o r r o a d s a n d b r i d g e s . T h e C A r e j e c t e d t h e c l a i m o f prescription stating that the filing of private respondents claim was well within the twentyyear period provided by the SSA.Petitioner then filed with the SC a Motion for Reconsideration. Issue: Whether or not the private respondents are regular employees and thus entitled to claimfor SSS.W h e t h e r o r n o t t h e p r i v a t e r e s p o n d e n t s c l a i m t o b e c o v e r e d b y t h e S S S a l r e a d y prescribed. Held: The SC affirmed the CA's decision and held that there is no d i s p u t e t h a t p r i v a t e r e s p o n d e n t s w e r e e m p l o ye e s o f p e t i t i o n e r w h o b e c a m e r e g u l a r e m p l o ye e s b y t h e i r being repeated re-hiring.There is an employeremployee relationship existing between the parties having controlover the results of the

work done by the private respondents as well as the means andmethods by which the same were accomplished. The private respondents are subjectare subject of the compulsory coverage under the SSS Law.Their claim for the SSS coverage has not prescribed and not guilty of laches, their rightto claim would only prescribe after the period of 20 years. Page4 3. KAPISANAN NG MGA MANGGAGAWA SA G O V E R N M E N T S E R V I C E INSURANCE SYSTEM (KMG), PETITIONER , VS . C O M M I S S I O N O N A U D I T , GUILLERMO N. CARAGUE, IN HIS CAPACITY AS CHAIRMAN, COMMISSION ONA U D I T , R A U L C . F L O R E S , I N H I S C A P A C I T Y A S C O M M I S S I O N E R , C O M M I S S I O N O N A U D I T , A N D T H E R E S I D E N T A U D I T O R O F T H E G OVERNMENT SERVICE INSURANCE SYSTEM, RESPONDENTS . This is a petition for certiorari assailing the decision of the COA which a f f i r m e d t h e disallowance of hazard pay benefits of the SIG personnel of GSIS. Facts: On January 25, 1993, the then Secretary of Health Juan M. Flavier i n f o r m e d D r . Orlando C. Misa, Vice-President and Medical Director of the GSIS--that the MedicalServices Group personnel were public health workers under RA 7305 (Magna Carta for Public Health Workers).O n J a n u a r y 5 , 1 9 9 6 , t h e t h e n S e c r e t a r y o f Health Hilarion Ramiro, Jr. granted ther e q u e s t f o r p a y m e n t o f h a z a r d p a y, s u b s i s t e n c e a n d l a u n d r y a l l o w a n c e o f f i v e departments of the GSIS: the Medical Service Group, the Medical Units of the branchoffices, the Employees Compensation Department and the Office of the Vice-President-Social Insurance III. The GSIS BOT issued Resolution No. 52 granting them hazard pay,subsistence and laundry allowance. Thereafter, the Sec. granted the remaining units of the Social Insurance Group (SIG) for the entitlement to hazard pay.O n J u n e 9 , 1 9 9 9 , G S I S r e s i d e n t a u d i t o r i s s u e d a d i s a l l o w a n c e n o t i c e r e g a r d i n g payment of hazard pay for the SIG personnel on the ground that they are not "healthrelated workers". On September 9, 1999 the resident auditor issue d a notice of d i s a l l o w a n c e f o r t h e p a y m e n t o f h a z a r d p a y from January 1999 to present.Consequently, on Octobe r 2 9 , 1 9 9 9 , G S I S C h i e f L e g a l C o u n s e l r e q u e s t e d reconsiderati on of the latter notice of disallowance. The auditor maintained its position.Petitioner KMG appealed the disallowance to the COA which affirmed the disallowance.Its Motion for Reconsideration having been denied, the petitioner filed a petition for certiorari before the SC. Page5 Issue: Whether or not the SIG are entitled for hazard pay benefits.

Held: The SC dismissed the petition for lack of merit and upheld the COA's d e c i s i o n a n d resolution.Under RA 7305 the term health workers mean--all persons who are engaged in healtha n d h e a l t h - r e l a t e d w o r k , a n d a l l p e r s o n s e m p l o ye d i n a l l h o s p i t a l s , s a n i t a r i a , h e a l t h infirmaries, health centers, rural health units, barangay health stations, clinics and other health-related establishments owned and operated by the Government or its politicals u b d i v i s i o n s w i t h o r i g i n a l c h a r t e r s a n d s h a l l i n c l u d e m e d i c a l a n d , a l l i e d h e a l t h professionals, administrative and support personnel e m p l o ye d r e g a r d l e s s o f t h e i r employment status.The record reveals that the functions of the SIG personnel are not principally related tohealth. The SIG personnel perform tasks for the processing of GSIS members' claimsfor life insurance, retirement, disability and survivorship benefits. These functions arenot similar to those persons working in health-related establishments such as clinics or medical departments of government corporations, medical corps and hospitals of theAFP, and other specific health service units of government agencies. Undoubtedly, theSIG personnel cannot be considered public health workers under RA 7305.Even assuming that the SIG personnel may be considered public health workers, theywould still not be qualified to receive hazard pay benefits because the requirements for t h e g r a n t o f h a z a r d p a y u n d e r R A 7 3 0 5 a r e d u l y c i r c u m s c r i b e d w h i c h i n c l u d e contaminated, strifetorn or isolated areas and the risks brought about their workenvironment t o t h e i r w o r k a r e n o t s o g r a v e a s t o w a r r a n t t h e i r e n t i t l e m e n t t o s u c h benefit. 4. SIME DARBY EMPLOYEES ASSOCIATION, ET AL VS. NLRCFacts: On October 1995, Sime Darby Employees Association submitted its proposal to SimeDarby Pilipinas, Inc. for the remaining two years of their existing CBA. The companyg a v e i t s c o u n t e r p r o p o s a l b u t t h e p a r t i e s f a i l e d t o r e a c h a m u t u a l s e t t l e m e n t . T h e company declared in its letter to the union president a deadlock in negotiations. Thecompany sought intervention from the DOLE by filing a notice of CBA deadlock andrequest for preventive mediation. The Union did not agreed on that thus objecting thed e a d l o c k a n d f i l e d i t s o p p o s i t i o n t o t h e A s s u m p t i o n o f J u r i s d i c t i o n / C e r t i f i c a t i o n t o Arbitration. Page6 The company filed a Notice of Lockout on June 21, 1995 on the ground of deadlock inthe collective bargaining negotiations and sent a Notice of Lockout Vote to the NCMB.On the other hand, the union conducted its Strike Vote Referendum and filed its StrikeV o t e R e s u l t R e p o r t t o N C M B a l s o o n J u l y 2 4 , 1 9 9 5 . T h e c o m p a n y d e c l a r e d a n d implemented a lockout against all the hourly employees of its tire factory on the groundof sabotage and work slowdown. On September 1995, the union filed a complaint for illegal lockout before the DOLENLRC.T h e s t o c k h o l d e r s o f t h e c o m p a n y a p p r o v e d t h e s a l e o f t h e c o m p a n y ' s t i r e manufacturing assets and business operation. They issued a Memorandum informingall its employees of the plan to sell the tire manufacturing assets and operations. Thecompany filed with the DOLE a Closure and Sale of tire manufacturing operation. Thecompany individually served notices

of termination to all the employees, including theindividual petitioners.O n a c c o u n t o f t h e l o c k o u t , t h e e m p l o ye e s w e r e b a r r e d f r o m e n t e r i n g t h e c o m p a n yp r e m i s e s a n d w e r e o n l y a l l o w e d t o e n t e r t o g e t t h e i r p e r s o n a l b e l o n g i n g s a n d t h e i r earned benefits. During that time the employees were to receive their separation payequivalent to 150% of the base rate for every year of credited service; they also signedand executed individual quitclaims and releases. The company filed with the DOLE aNotice of Termination of Employees covering all its employees in the tire manufacturingand support operations effective December 15, 1995.The company sold its tire manufacturing plant and facilities to Goodyear on April 24,1 9 9 6 . U n d e r a Memorandum of Agreement. They filed a Motion to Conduct O c u l a r Inspection of the tire factory premises to establish that it was sold to Goodyear. Themotion was opposed by the union. The company then filed a motion for the return of theseparation pay received by the complainants, pending the resolution of the case.The Labor Arbiter on August 25, 1998 issued an Order directing the parties to file their respective memorandum. The union, without filing the memorandum ordered by theL a b o r A r b i t e r , f i l e d a n A p p e a l M e m o r a n d u m w i t h a P e t i t i o n f o r I n j u n c t i o n a n d / o r Temporary Restraining Order before the NLRC. The Labor Arbiter on October 29, 1998rendered its decision in the consolidated cases, dismissing the same for lack of merit onthe petitioners complaints against the company for illegal lockout, illegal dismissal andU L P T . he Labor Arbiter found the lockout valid and legal and justified by t h e i n c i d e n t s o f continued work slowdown, mass absences and consistent low production output, highr a t e o f w a s t e a n d s c r a p t i r e s a n d m a c h i n e b r e a k d o w n . T h e m a s s t e r m i n a t i o n o f a l l employees was declared valid and authorized termination of employment due to closureof establishment, the company having complied with the requirements in Article 283 of the Labor Code.The claim of ULP, the Labor Arbiter found no evidence to substantiate the same, andthat the record merely showed that the closure of and eventual cessation from business Page7 was justified by the circumstances in order to protect the company's investments andassets. The Labor Arbiter ruled that the quitclaims and receipts signed by the petitionersw e r e v o l u n t a r i l y s i g n e d a n d t h a t s e t t l e m e n t w a s r e a c h e d b y t h e p e t i t i o n e r s a n d t h e company just and reasonable.Petitioners appealed the Labor Arbiter's decision to the NLRC, but was dismissed for lack of merit. The NLRC affirmed the Labor Arbiter's decision. The petitioner's Motion for Reconsideration was also denied, prompting them to file a petition for certiorari with theCA claiming grave abuse of the discretion on the part of the NLRC.The CA denied the petition for lack of merit and affirmed the decision of the NLRC. Thec o u r t d e c l a r e d t h a t t h e L a b o r A r b i t e r w a s n o t d i v e s t e d o f i t s j u r i s d i c t i o n o v e r t h e consolidated cases when petitioners filed their appeal Memorandum Order which theysought to appeal is interlocutory in nature. Thus the Labor Arbiter's decision has thef o r c e a n d e f f e c t o f a v a l i d j u d g m e n t . P e t i t i o n e r s s o u g h t r e c o n s i d e r a t i o n o f t h e C A ' s decision, but their motion was denied for lack of merit.The petitioners, in their instant petition reiterate that they were dismissed right on theday they were handed down their termination letters that as required by law they shouldh a v e b e e n g i v e n a 3 0 - d a y n o t i c e . T h e y a l s o c o n t e n d e d t h a t t h e

L a b o r A r b i t e r l o s t jurisdictional competence to issue its October 29, 1998, making said decision void. Theyalso alleged that the decisions of the CA and the NLRC lack evidentiary report. Issue: Whether or not the holding of formal hearing is discretionary with the Labor Arbiter. Held: The SC denied their petition. The finding of facts and conclusion of the N L R C a r e generally accorded not only with great weight respect but even clothed with finality anddeemed binding on the court as long as they are supported with substantial evidence.An interlocutory order is not appealable until the rendition of the judgment on the meritsfor a contrary rule would delay the administration of justice and duly burden the courts.It did not put an end to the issues of illegal lockout, ULP and illegal dismissal. Beinginterlocutory in nature, said Order could not have been validly appealed such that itwould divest the Labor Arbiter of his jurisdiction over the consolidated cases. This beingthe case the Labor Arbiter still had jurisdiction when it rendered its decision. 5. COMPUTER INNOVATIONS CENTER VS. NATIONAL LABOR REL A T I O N S COMMISSIONFACTS: Page8 P r i v a t e r e s p o n d e n t R e yn a l d o C a r i o ( C a r i o ) w a s h i r e d i n S e p t e m b e r o f 1 9 9 5 b yp e t i t i o n e r C o m p u t e r I n n o v a t i o n s C e n t e r ( C I C ) a s I n s t r u c t o r o f C o m p u t e r T e c h n i c a l Course. He was promoted to Head of the Education Department of CIC in May of 1997.On 26 March 1998, Cario received a call from petitioner Nelson Yu Quilos (Quilos) of CIC, who advised Cario to resign from his position. Two days later, on 28 March 1998,Quilos met Cario at the companys technicians laboratory and informed the latter thath i s s e r v i c e s w i t h t h e c o m p a n y s h o u l d c e a s e b y 3 1 M a r c h 1 9 9 8 . A g g r i e v e d , C a r i o lodged a complaint for illegal dismissal against CIC and Quilos with the National Labor Relations Commission (NLRC) Regional Arbitration Branch in Davao City.According to CIC, it received reports from its employees regarding Carios purportedu n p r o f e s s i o n a l c o n d u c t , a d v e r t i n g t o a g e n e r a l l a c k o f i n t e r p e r s o n a l s k i l l s a n d moonlighting activities which conflicted with the i n t e r e s t o f C I C . I t w a s a l l e g e d t h a t Cario had admitted to his moonlighting activities during the meeting of 28 March 1998,a n d h a d r e f u s e d a p r o m o t i o n o f f e r e d b y C I C c o n d i t i o n e d o n h i s termination of involvement with other computer schools. Instead , a s c l a i m e d b y C I C , C a r i o announced during the said meeting that he would resign from CIC, reporting for workonly until 31 March 1998.On 29 August 1999, Labor Arbiter Newton R. Sancho rendered a Decision concludingthat Cario had been illegally dismissed, and ordering petitioners to pay the amount of Two Hundred Twenty Thousand Six Hundred Sixty Six Pesos and Sixty Six Centavos(P220,666.66) representing back wages, separation pay, and thirteenth (13th) monthpay.A c o p y o f t h e Decision w a s r e c e i v e d b y p e t i t i o n e r s o n 5 N o v e m b e r 1 9 9 9 . O n 1 5 November 1999, they filed a Notice of Appeal

d a t e d 1 2 N o v e m b e r 1 9 9 9 b e f o r e t h e NLRC Regional Arbitration Branch, Davao City, attaching thereto a Memorandum on Appeal . The Memorandum on Appeal was also filed before the NLRC Fifth Division,Cagayan de Oro City. They also posted a bond of Ten Thousand Pesos (P10,000.00), asum that is evidently nowhere near the sum of the award made by the Labor Arbiter.However, in their Memorandum of Appeal , petitioners had requested a reduction of thecash or surety bond to Ten Thousand Pesos (P10,000.00). The cited ground for thereduction of the appeal bond was the purportedly great possibility of the reversal of theLabor Arbiters Decision i n l i g h t o f t h e s e r i o u s e r r o r s i n t h e f i n d i n g s o f f a c t a n d applic ation of law as well as the harshness and unfounded nature of the award.In a Resolution dated 29 June 2000, the NLRC Fifth Division denied the motion f o r reduction of appeal bond and dismissed the appeal on the ground of "nonperfection."T h e N L R C r u l e d t h a t " t h e m e r e p e r c e p t i o n [ t h a t ] t h e a p p e a l e d d e c i s i o n w o u l d b e reversed on appeal [did] not justify the reduction of the required appeal bond." TheNLRC mistakenly noted that petitioners had not even posted the desired reduced bond.Petitioners moved for reconsideration, citing among others, that they had posted thereduced bond of Ten Thousand Pesos (P10,000.00). The NLRC, while acknowledgingthe filing of the reduced bond, still denied the motion for reconsideration, noting that theappeal could only be perfected once petitioners had posted the appeal bond equivalent Page9

to the monetary award. The NLRC pithily noted that "the posting by the [petitioners] of t h e c a s h b o n d o f P 1 0 , 0 0 0 . 0 0 m e a n s n o t h i n g , a s i t i s l e s s e r [ t h a n ] t h a t w h a t w a s required by them."The dismissal of the appeal was elevated to the Court of Appeals by way of petition for certiorari . The Court of Appeals Seventh Division promptly rendered a Decision dated19 September 2001 affirming the NLRC. The appellate court found no fault on the parto f t h e N L R C i n d e n yi n g t h e a p p e a l , a s t h e s t a t u t o r y r e q u i r e m e n t p e r t a i n i n g t o t h e appeal bond had not been met. The appellate court further noted that petitioners couldhave exhibited good faith in attempting to comply with the dictates of the law by filing amotion for leave to admit belated additional bond after the initial resolution denying their appeal, yet this was not done by petitioners. ISSUE: Whether or not an appeal can be deemed perfected notwithstanding the f i l i n g o f a reduced bond. HELD:

No. By explicit provision of law, an appeal is perfected only upon the posting of a cashor surety bond. The requirement for posting the surety bond is jurisdictional and cannotbe trifled with. The word "only" makes it perfectly clear that the lawmakers intended theposting of a cash or surety bond by the employer to be the exclusive means by whichan employers appeal may be perfected. As evinced by the language of Article 223, thep o s t i n g o f s u c h b o n d i s r e q u i r e d b e f o r e t h e N L R C c a n a c q u i r e j u r i s d i c t i o n o v e r t h e employees appeal. Petitioners concede this point, yet in the next breath invoke thedoctrine that "the dismissal of an appeal on purely technical ground is frowned upon."Invocation of this rule as a means of argument against the strict imposition of the cashbond requirement is off-base, considering Article 223.I t i s c l e a r f r o m b o t h t h e L a b o r C o d e a n d t h e N L R C R u l e s o f P r o c e d u r e t h a t t h e r e i s legislative and administrative intent to strictly apply the appeal bond requirement, andt h e C o u r t s h o u l d g i v e u t m o s t r e g a r d t o t h i s i n t e n t i o n . T h e r e i s a c o n c e s s i o n t o t h e employer, in excluding damages and attorneys fees from the computation of the appealbond. Not even the filing of a motion to reduce bond is deemed to stay the period for r e q u i r i n g a n a p p e a l . N o t h i n g i n t h e L a b o r C o d e o r t h e N L R C R u l e s o f P r o c e d u r e authorizes the posting of a bond that is less than the monetary award in the judgment,or would deem such insufficient postage as sufficient to perfect the appeal.On the other hand, Article 223 indubitably requires that the appeal be perfected onlyupon the posting of the cash or surety bond which is equivalent to the monetary awardin the judgment appealed from. The clear intent of both statutory and procedural law is Page10 to require the employer to post a cash or surety bond securing the full amount of themonetary award within the ten (10)-day reglementary period.W e h a v e i n d e e d h e l d t h a t t h e r e q u i r e m e n t f o r p o s t i n g t h e s u r e t y b o n d i s n o t m e r e l y procedural but jurisdictional and cannot be trifled with. Non-compliance with such legalrequirements is fatal and has the effect of rendering the judgment final and executory.The petitioners cannot be allowed to seek refuge in a liberal application of rules for their act of negligence. WHEREFORE , the PETITION is DENIED. 7. SAMEER OVERSEAS PLACEMENT AGENCY, INC., PETIT IONER, VS. NOELEVANTINO, IDG HUMAN RESOURCES, INC., (FORMERLY IDG TRADING ANDGENERAL SERVICES, INC.), RESPONDENTS. Facts:A complaint for illegal dismissal, underpayment of wages, and illegal deductionswas filed by respondent Noe Levantino (Levantino) against the petitioner. He was hiredand deployed by Sameer for and in behalf of its foreign principal, Arabian Fal Co., on 20July 1994,[2] Levantino's contract provided that his office employment was for twelve( 1 2 ) months and fixed his basic monthly salary at Two Hundred Seventy-Seven USD o l l a r s ( U S $ 2 7 7 . 0 0 ) . H o w e v e r , u p o n h i s a r r i v a l a t t h e j o b s i t e o n 2 1 J u l y 1 9 9 4 , Levantino was made to sign another contract of employment, this time with the basicmonthly salary of Six Hundred Seventy-Nine Saudi Rial (SR679.00), plus One HundredE i g h t y S a u d i R i a l ( S R 1 8 0 . 0 0 ) a s f o o d a l l o w a n c e . L e v a n t i n o

w a s t e r m i n a t e d b y t h e foreign employer and subsequently repatriated to the Philippines. He filed complaintwith the POEA. Sameer filed a third-party complaint against IDG Human Resources,I n c . ( I D G ) , a l l e g i n g t h a t I D G s h o u l d b e h e l d liable for the claims of Levantino sinceS a m e e r ' s a c c r e d i t a t i o n f o r f o r e i g n p r i n c i p a l , A r a b i a n F a l C o . , had already beentransferred to IDG pursuant to an affidavit of as s u m p t i o n o f r e s p o n s i b i l i t y a n d quitclaims. The Labor Arbiter ruled that Levantino was terminated for just or authorizedcause, the employee having been unable to rebut the allegations raised against him of poor habits, disobedience of superiors, and low productivity. He concluded, however,that Levantino was not paid his basic salary in accordance with his POEA approvedcontract of employment of Two Hundred Seventy-Seven US Dollars (US$277.00), and Page11 illegal deductions were made by the foreign employer from the basic monthly salary for the food allowance. Thus, the Labor Arbiter held that Levantino was entitled to a wagedifferential of Five Hundred Seventy-Five US Dollars and Sixty Cents (US$575.60), andattorney's fees of Fifty-Seven US Dollars and Fifty-Six Cents (US$57.56). The Labor A r b i t e r l i k e w i s e h e l d t h a t S a m e e r a n d I D G w e r e j o i n t l y a n d severally liable to payLevantino. Petitioner filed its notice of appeal and a m e m o r a n d u m o f a p p e a l o n 2 7 October 1997, along with a motion for extension of time to file a surety-appeal bond,alleging that it was still arranging for the issuance of such with the bonding company. Itwas only on 3 November 1997 that it filed the appeal bond. NLRC dismissed the appealf o r f a i l u r e t o p e r f e c t i t w i t h i n t h e t e n ( 1 0 ) - d a y r e g l e m e n t a r y p e r i o d . C A a f f i r m e d t h e dismissal by the NLRC; hence, the present petition.ISSUE:Whether or not the appeal was perfectedHELD:Section 3. Requisites for Perfection of Appeal. (a) The appeal shall be filed within thereglementary period as provided in Section 1 of this Rule; shall be under oath with proof o f p a ym e n t o f t h e r e q u i r e d a p p e a l f e e a n d t h e p o s t i n g o f a c a s h o r s u r e t y b o n d a s provided in Section 5 of this Rule; shall be accompanied by a memorandum of appealwhich shall state the grounds relied upon and the arguments in support thereof; therelief prayed for; and a statement of the date when the appellant received the appealeddecision, order or award and proof of service on the other party of such appeal. A merenotice of appeal without complying with the other requisite afore stated shall not stopt h e r u n n i n g o f t h e p e r i o d f o r perfecting an appeal. Section 6. Bond. In case thedecision of the Labor A r b i t e r , t h e R e g i o n a l D i r e c t o r o r h i s d u l y a u t h o r i z e d H e a r i n g Officer involves a monetary award, an appeal by the employer shall be perfected onlyupon the posting of a cash or surety bond, which shall be in effect until final dispositionof the case, issued by a reputable bonding company duly accredited by the Commissiono r t h e S u p r e m e Court in an amount equivalent to the monetary award, exclusive of damages and attorney's fees. T h e e m p l o ye r , h i s c o u n s e l , a s w e l l a s t h e b o n d i n g c o m p a n y , s h a l l s u b m i t a j o i n t d e c l a r a t i o n u n d e r o a t h a t t e s t i n g t h a t t h e s u r e t y b o n d posted is genuine. The Commission may, in justifiable cases and upon Motion of theAppellant, reduce the amount of the bond. The filing of the motion to reduce bond shalln o t s t o p t h e r u n n i n g o f the period to perfect appeal. Had Sameer been inclined todiligently

compl y with the requisites of appeal, as plainly stated in the Labor C o d e . There is nothing in the said period that suggests innate difficulty in obtaining the saidbond. In fact, Sameer, who submitted the bond only on 3 November 1998, probablyi n c u r r e d f u r t h e r d e l a y i n s u b m i t t i n g t h e a p p e a l b o n d d u e t o t h e e a r l y N o v e m b e r holidays, though such fact is of no moment considering that these holidays came onlyafter the lapse of the reglementary period. Nor should have there been eminent difficultyin obtaining the said bond, considering that the amount of the monetary judgment, SixH u n d r e d T h i r t y T h r e e U . S . D o l l a r s a n d S i x t e e n C e n t s ( U S $ 6 3 3 . 1 6 ) , i s r e l a t i v e l y mi niscule. It is not even expected that Sameer itself expends from its own funds theentire amount of the monetary judgment for the appeal bond. . . . The mandatory filing Page12 of a bond for the perfection of an appeal is evident from the afore quoted provision thatthe appeal may be perfected only upon the posting of cash or surety bond. It is not anexcuse that the over P2 million award is too much for a small business enterprise, likethe petitioner company, to shoulder. The law does not require its outright payment, butonly the posting of a bond to ensure that the award will be eventually paid should thea p p e a l f a i l . W h a t p e t i t i o n e r s h a v e t o p a y i s a m o d e r a t e a n d r e a s o n a b l e s u m f o r t h e premium for such bond. Cost against the petitioner. 8. OSCAR G. SAPITAN ET AL VS. JOBLINE BICOL EXPRESS Facts:Petitioners are regular employees of the respondent as driver, conductor andmechanics and a member of existing CBA. They alleged that all of them were underpaidand most of them, particularly those who travel the Bicol-Manila-Bicol route were notg i v e n o v e r t i m e a n d n i g h t d i f f e r e n t i a l p a y. S o m e t i m e b e g i n n i n g t h e ye a r 2 0 0 0 , t h e company started constructively dismissing [petitioners]. This was done by not allowing[them] to perform their duties and function or simply by not admitting them to their workb y s t a t i n g t h a t t h e y s h o u l d j u s t r e t u r n s o m e o t h e r t i m e . T i r e d o f b e i n g t r e a t e d i n t h e same manner and for failure on the part of [JB Line] to give them their work despite nocessation of operations and for nonpayment of their salaries, wage adjustments andother benefits, [petitioners were] left with no recourse except to file the instant case tof o r c e r e s p o n d e n t [ J B L i n e ] to reinstate them in their jobs and [pay] their benefits.Respondent claimed that no record will show that letter of suspension were sent t o them. Their claim for alleged constructive dismissal is baseless considering the absenceof any documentary evidence relative thereto and their failure to present testimoniale v i d e n c e t o p r o v e t h a t r e s p o n d e n t [ J B L i n e ] v i o l a t e d t h e e s s e n t i a l e l e m e n t s f o r constructive dismissal. Their failure to work regularly was due to economic crises thatnecessitated the reduction of trips for drivers and conductors and shortened workdaysf o r o f f i c e p e r s o n n e l a n d m a i n t e n a n c e c r e w . T h e m e a s u r e s t a k e n b y r e s p o n d e n t t o prevent losses and possible closure of the business were management prerogative andwere not resorted to as a ploy to constructively dismissed they can also resume dutiesanytime depending on the availability of buses and passengers.Labor Arbiter ruled that there is constructive dismissal and petitioners should ber e i n s t a t e d . R e s p o n d e n t J B L i n e a p p e a l e d the arbiter's decision (accompanied by aP200,000 supersedeas bond) to

t h e N L R C . F i n d i n g t h a t t h e b o n d p o s t e d w a s n o t equivalent to the monetary judgment, the NLRC ordered respondent JB Line to post anadditional bond, otherwise, its appeal would be dismissed for non-perfection. The latter failed, hence, the NLRC denied its appeal. Respondent elevated the same to CA whichreversed the decision. Hence, this petition.Issue Page13 1. Whether or not the filing of supersedeas bond would suffice the p r o c e d u r a l requirement inappeal.2. Whether or not petitioners should be reinstated.HELD:In some cases, the requirement to post a supersedeas bond for the perfection of ana p p e a l w a s r e l a x e d b u t t h i s w a s j u s t i f i e d b y s u b s t a n t i a l c o m p l i a n c e . I n t h i s c a s e , however, no similar reason existed to excuse respondent JB Line from complying withthe requirement. The bond posted by respondent JB Line was not even close to half of the amount required by the NLRC. Petitioners were no longer entitled to separation payo n t h e g r o u n d a l o n e t h a t r e s p o n d e n t J B L i n e h a d c e a s e d t o o p e r a t e d u e t o s e r i o u s losses. Assuming such closure indeed took place, respondent JB Line was still not off the hook. Under the law, in case of closure of business due to serious financial losses, itis imperative for the employer to send a notice of closure to the employees and to theD e p a r t m e n t o f L a b o r a n d E m p l o ym e n t ( D O L E ) . A r t i c l e 2 8 3 o f t h e L a b o r C o d e , a s amended, provides:ARTICLE 283: Closure of establishment and reduction of personnel. The employer may also terminate the employment of any employee due to installation of labor-savingd e v i c e s , r e d u n d a n c y, r e t r e n c h m e n t t o p r e v e n t l o s s e s o r t h e c l o s i n g o r c e s s a t i o n o f operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a notice on the workers and theM i n i s t r y o f L a b o r a n d E m p l o ym e n t a t l e a s t o n e ( 1 ) m o n t h b e f o r e t h e i n t e n d e d d a t e thereof. xxxThe records are devoid of proof that respondent JB Line ever furnished the DOLE or petitioners with such notice. Moreover, even if we were to grant that respondent JB Linew a s o n t h e b r i n k o f c l o s i n g d o w n a t t h a t t i m e , t h e r e d u c t i o n o f p e t i t i o n e r s ' w o r k l o a d and/or the "floating" of their employment were still not warranted. Petitioners' plight hadpersisted for months which only meant that they were already constructively dismissed.An employee is constructively dismissed when his working days are substantially cut for more than six months due to the employer's financial losses.ART. 283 is the only instance wherein reinstatement cannot be warranted due to closureand serious financial losses of the employer. 14. DEL MONTE PHILS., INC. AND WARFREDO BALANDRA, PETITIONERS VSMARIANO SALDIVAR, NENE TIMBAL ET.AL., RESPONDENTS Facts: Page14 The Associated Labor Union (ALU) is the exclusive bargaining agent of t h e plantation workers of petitoner. Respondent Timba, along with four other employeeswere charged by ALU for disloyalty to the Union, particularly for encouraging defectionsto rival Union, National Federation of Labor (NFL). Timbal filed an answer before theDisloyalty Board, denying the allegations in the complaint and the averments in Artajo'saffidavit. She noted that the allegations against her were purportedly committed nearly 2years earlier; and that Artajo's act was motivated by hate and revenge owing

to the filingof the aforementioned civil action. The Disloyalty Board recommended the expulsion of Timbal from membership in ALU and likewise dismissal from DMPI in accordance witht h e U n i o n S e c u r i t y C l a u s e i n t h e e x i s t i n g C B A b e t w e e n A L U a n d D M P I . T h e L a b o r Arbiter affirmed that all five were illegally dismissed and ordered Del Monte to reinstatet h e m t o t h e i r f o r m e r p o s i t i o n a n d t o p a y t h e i r f u l l b a c k w a g e s a n d o t h e r allowances..NLRC reversed the Labor Arbiter's decision. Court of Appeals ruled thatonly Timbal was illegally dismissed and that DMPI failed to observe procedural dueprocess.Issue: Whether or not Timbal was illegally dismissed?Held: In the matter at bar, the Labor Arbiter who is the proximate trier of facts, and theCourt of Appeals oth appreciated that the testimony of Artajo against Timbal could notbe given credence. This is due to the prior animosity between the two engendered bythe pending civil complaint filed by Timbal's husband against Artajo. Considering thatthe civil complaint was filed 6days prior to the execution of Artajo's affidavit, it would beplainly injudicious to presume that Artajo possessed an unbiased state of mind. Suchc i r c u m t a n c e w a s c o n s i d e r e d b y t h e L a b o r A r b i t e r a n d t h e C o u r t o f A p p e a l s , a s t h e y rendered favorably to Timbal. No credible disputation was offered by NLRC to the claimthat Artajo was biased against Timbal; hence, the Supreme Court adjudge the findingsof the Labor Arbiter and the CA as more cogent on that points. The dismissal for causeof employees must be justified by substantial evedence, as appreciated by an impartialtrier of facts. The petition is denied and the decision the Court if Appeals is affirmed. 19. HERMONIAS L. LIGANZA VS. RBL SHIPYARD CORPORATION, ET AL. Facts:Petitioner after working as a carpenter for respondent since August 1991, petitioner'semployment was terminated on 30 October 1999. Petitioner filed a complaint againstthe respondent for illegal dismissal, alleging that on said date he was verbally informedt h a t h e w a s a l r e a d y t e r m i n a t e d f r o m e m p l o y m e n t a n d b a r r e d f r o m e n t e r i n g t h e premises. On the same occasion, he was told to look for another job. Thus, he claimedt h a t h e w a s u n c e r e m o n i o u s l y t e r m i n a t e d f r o m e m p l o y m e n t w i t h o u t a n y v a l i d o r authorized cause. On the other hand, respondent insisted that petitioner was a mereproject employee who was terminated upon completion of the project for which he washired. Page15 Issue: whether or not the petitioner is a project employee and whether his terminationwas illegal.HELD: Decision in favor of the Petitioner.T h e r e a r e d o u b t s i n the pieces of evidence on record that petitioner is a p r o j e c t employee, or that he was terminated for just cause and these doubts shall be resolvedin favor of petitioner, in line with the policy of the law to afford protection to labor andconstrue doubts in favor of labor.The employer must affirmatively show rationally adequate evidence that the dismissalwas for a justifiable cause. The respondent failed to show clear, valid and legal causef o r t h e t e r m i n a t i o n o f e m p l o y m e n t , t h e l a w c o n s i d e r s t h e m a t t e r a c a s e o f i l l e g a l dismissal and the burden is on the employer to prove that the

termination was for a validor authorized cause, the Court has no recourse but to grant the petition.Finally, the Court reiterates that:T h e d e c i s i o n u n d u l y b u r d e n s a n e m p l o ye r b y i m p o s i n g a d u t y t o r e - h i r e a p r o j e c t employee even after completion of the project for which he was hired. The import of thedecision is not to impose a positive and sweeping obligation upon the employer to re-hire project employees. The decision merely accomplishes a judicial recognition of theemployment status of a project or work pool employee in accordance with what is faita c c o m p l i , i . e . , t h e c o n t i n u o u s r e h i r i n g b y t h e e m p l o y e r o f p r o j e c t o r w o r k p o o l employees who perform tasks necessary or desirable to the employer's usual businesso r t r a d e . P e t i t i o n e r , a s c a r p e n t e r , w a s t a s k e d t o " m a k e a n d r e p a i r c a b i n e t , f l o o r i n g , quarters, ceiling, windows, doors, kitchen and other parts of the vessel that needs to ber e p a i r e d . " A s s u c h , p e t i t i o n e r ' s w o r k w a s n e c e s s a r y o r d e s i r a b l e t o r e s p o n d e n t ' s busine ss. However, unlike in Sandoval where the complaining employees were hired for only one project lasting for three (3) months at most; in this case the petitioner wasemployed by respondent continuously from 1991 to 1999. Assuming, without grantingthat petitioner was initially hired for specific projects or undertakings, the repeated reh i r i n g a n d c o n t i n u i n g n e e d f o r h i s s e r v i c e s f o r o v e r e i g h t ( 8 ) ye a r s h a v e u n d e n i a b l y made him a regular employee. 21. LOPEZ ET AL VS. MWSS Page16 FACTS:I n 1 9 9 7 , M W S S e n t e r e d i n t o a C o n c e s s i o n A g r e e m e n t w i t h M a n i l a W a t e r Service, Inc. and Benpress-Lyonnaise, wherein the collection of bills was transferred tosaid private concessionaires, effectively terminating the contracts of service betweenpetitioners and MWSS. Regular employees of the MWSS, except those who had retiredo r o p t e d t o r e m a i n w i t h t h e l a t t e r , w e r e a b s o r b e d b y the concessionaires. Regular e m p l o y e e s o f t h e M W S S w e r e p a i d t h e i r r e t i r e m e n t b e n e f i t s , b u t n o t p e t i t i o n e r s . Instead, they were refused s a i d b e n e f i t s , M W S S r e l yi n g o n a r e s o l u t i o n o f t h e C i v i l Service Commission (CSC) that contract-collectors of the MWSS are not its employeesand therefore not entitled to the benefits due regular government employees.P e t i t i o n e r s f i l e d a c o m p l a i n t w i t h t h e C S C . I n i t s R e s o l u t i o n d a t e d 1 J u l y 1999,the CSC denied their claims, stating that p e t i t i o n e r s w e r e e n g a g e d b y M W S S through a contract of service, which explicitly provides that a bill collector-contractor isnot an MWSS employee. Moreover, it found that petitioners were unable to show thatt h e y h a v e c o n t r a c t u a l a p p o i n t m e n t s d u l y a t t e s t e d b y t h e C S C . I n a d d i t i o n , t h e C S C stated that petitioners, not being permanent employees of MWSS and not included inthe list submitted to the concessionaire, are not entitled to severance pay. Petitionersclaims for retirement benefits and terminal leave pay were likewise denied. Thereafter the petitioner filed for a Motion for Reconsideration which was later on Denied.P e t i t i o n e r s f i l e d a p e t i t i o n f o r w i t h t h e C o u r t o f A p p e a l s . A f f i r m i n g a n d g e n e r a l l y reiterating the ruling of the CSC, the Court of Appeals held that the Agreement enteredinto by petitioners and MWSS was clear and unambiguous, and should be read andinterpreted according to its literal sense. Hence, as per the terms of the agreement,p e t i t i o n e r s w e r e n o t M W S S e m p l o ye e s . T h e C o u r t o f

A p p e a l s h e l d t h a t n o o t h e r evidence was adduced by petitioners to substantiate their claim that their papers wereforwarded to the CSC for attestation and approval. It added that in any event, as earlyas 26 June 1996, the CSC specifically stated that contract collectors are not MWSSemployees and therefore not entitled to severance pay. Thereafter, an appeal was madeto the Supreme Court.ISSUE: Whether or not 1) the petitioner are employees of the MWSS 2) the latter haspower to dismiss the latter 3) if they are entitled to the benefits provided for under theLabor Code of the PhilippinesHELD: Page17 The Court has invariably affirmed that it will not hesitate to tilt the scales of justice to thelabor class for no less than the Constitution dictates that the State . . . shall protect ther i g h t s o f workers and promote their welfare. It is committed to this policy and h a s always been quick to rise to defense in the rights of labor, as in this case.P r o t e c t i o n t o l a b o r , i t h a s b e e n s a i d , e x t e n d s t o a l l o f l a b o r l o c a l a n d overseas,organized and unorganized, in the public and private sectors. Besides, there is nor e a s o n n o t t o a p p l y t h i s p r i n c i p l e i n f a v o r o f w o r k e r s i n t h e g o v e r n m e n t . T h e government, including government-owned and controlled corporations, as employers,should set the example in upholding the rights and interests of the working class.For purposes of determining the existence of employer-employee relationship, the Courthas consistently adhered to the four-fold test, namely: (1) whether the alleged employer has the power of selection and engagement of an employee; (2) whether he has controlo f t h e employee with respect to the means and methods by which work is t o b e accomplished; (3) whether he has the power to dismiss; and (4) whether the employeewas paid wages.Of the four, the control test is the most important element.A r e v i e w o f t h e c i r c u m s t a n c e s s u r r o u n d i n g t h e c a s e r e v e a l s t h a t p e t i t i o n e r s a r e employees of MWSS. Despite the obvious attempt of MWSS to categorize petitionersas mere service providers, not employees, by entering into contracts for services, itsactuations show that they are its employees, pure and simple. MWSS wielded its power of selection when it contracted with the individual petitioners, undertaking separatec o n t r a c t s o r a g r e e m e n t s . T h e s a m e g o e s t r u e f o r t h e p o w e r t o d i s m i s s . A l t h o u g h termed as causes for termination of the Agreement, a review of the same shows that thegrounds indicated therein can similarly be grounds for termination of employment.O n t h e o t h e r h a n d , r e l e v a n t a n d a p p r o p r i a t e i s t h e d e f i n i t i o n o f w a g e s i n t h e L a b o r Code, namely, that it is the remuneration, however designated, for work done or to bedone, or for services rendered or to be rendered. The commissions due petitionersw e r e b a s e d o n t h e b i l l s c o l l e c t e d a s p e r t h e s c h e d u l e i n d i c a t e d i n t h e A g r e e m e n t . Significantly, MWSS granted petitioners benefits usually given to employees, to wit:COLA, meal, emergency, and traveling allowances, hazard pay, cash gift, and other b o n u s e s . I n a n unabashed bid to claim credit for itself, MWSS professes that t h e s e additional benefits were its acts of benevolence and generosity. We are not impressed.Other manifestations of control are evident from the records. The power to transfer or reassign employees is a management prerogative exclusively enjoyed by employers. Inthis case, MWSS had free reign over the transfer of bill collectors from one branch to

Page18 another. MWSS also monitored the performance of the petitioners and determined their efficiency.Even the four-fold test will show that petitioner is the employer of private respondents.The elements to determine the existence of an employment relationship are: (a) theselection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employers power to control the employees conduct. The mostimportant element is the employers control of the employees conduct, not only as tothe result of the work to be done, but also as to the means and methods to accomplishit.P e t i t i o n e r s a r e i n d e e d r e g u l a r e m p l o ye e s o f t h e M W S S . T h e p r i m a r y s t a n d a r d o f determining regular employment is the reasonable connection between the particular a c t i v i t y p e r f o r m e d b y t h e e m p l o ye e i n r e l a t i o n t o t h e u s u a l b u s i n e s s o r t r a d e o f t h e employer. The connection can be determined by considering the nature of the workp e r f o r m e d a n d i t s r e l a t i o n t o t h e s c h e m e o f t h e p a r t i c u l a r b u s i n e s s o r t r a d e i n i t s entirety. Likewise, the repeated and continuing need for the performance of the job hasbeen deemed sufficient evidence of the necessity, if not indispensability of the activity tothe business. Some of the petitioners had rendered more than two decades of serviceto the MWSS. The continuous and repeated rehiring of these bill collectors indicate thenecessity and desirability of their services, as well as the importance of the role of billcollectors in the MWSS.M W S S c o m m i t t e d i t s e l f t o p a y s e v e r a n c e a n d t e r m i n a l l e a v e p a y t o i t s r e g u l a r employees. The guidelines thereof states that regular employees who have rendered atl e a s t a ye a r o f s e r v i c e a n d n o t e l i g i b l e f o r r e t i r e m e n t a r e e n t i t l e d t o s e v e r a n c e p a ye q u i v a l e n t t o o n e ( 1 ) m o n t h b a s i c p a y f o r e v e r y f u l l ye a r o f s e r v i c e . I n v i e w o f t h e Courts finding that petitioners were employees of MWSS, the corresponding severancepay, in accordance with the guidelines, should be given to them. Terminal leave pay arelikewise due petitioners, provided they meet the requirements therefore. 22. NS TRANSPORT EMPLOYEES ASSN. VS. NS TRANSPORT SERVICES, INC. Facts:In April of 1997, NSTEA, the union filed a petition for certification election for ther a n k a n d f i l e e m p l o y e e s o f N S T r a n s p o r t S e r v i c e s I n c . , a p u b l i c u t i l i t y t r a n s p o r t corporation. The petition was denied by the Department o f L a b o r a n d E m p l o ym e n t ( D O L E ) p r o m p t i n g t h e u n i o n t o a p p e a l t o t h e D O L E S e c r e t a r y. T h e u n i o n f i l e d f o r a Notice of Strike before the National Conciliation and Mediation Board (NCMB), alleging Page19 illegal dismissal of its officers and members, as well as discrimination and coercion of employees. However, despite the mediation conducted by the MCMB, the parties failedto amicably settle their differences, thus the union pushed thru with its strike. The DOLES e c r e t a r y, u p o n t h e c o m p a n y s p e t i t i o n , a s s u m e d j u r i s d i c t i o n o v e r t h e d i s p u t e a n d issued a Return- to- Work Order and certified the dispute to the NLRC for compulsoryarbitration. Likewise, upon motion of the company, the DOLE Secretary deputized policea u t h o r i t i e s t o a s s i s t i n t h e p e a c e f u l a n d o r d e r l y enforcement of the DOLEs orders.Thereafter, the company filed a c o m p l a i n t f o r d e c l a r a t i o n o f i l l e g a l i t y o f s t r i k e a n d damages before the NLRC, alleging that while mediation was in progress, the Unionstaged a strike, the

Union members resorted to threats, intimidation and coercion upontheir co-employees. They also allegedly blocked the ingress and egress of the companyand caused damage to company property. On the other hand, the Union sought to holdthe company for contempt for allegedly refusing to accept its returning members. Thecases were then consolidated by the NLRC.T h e N L R C h e l d t h a t t h e s t r i k e s t a g e d b y t h e u n i o n w a s l e g a l a n d o r d e r e d t h e reinstatement of the individual complainants with full back wages. The Court of Appealsr u l e d i n f a v o u r o f t h e c o m p a n y a n d r e m a n d e d t h e c a s e t o t h e N L R C f o r f u r t h e r proceedings.Issue: Whether the companys right to due process was violated.Held:It is well settled that the essence of due process in administrative proceedings isthe opportunity to explain ones side or a chance to seek reconsideration of the action or r u l i n g c o m p l a i n e d o f . I n l a b o r c a s e s , i t h a s b e e n h e l d t h a t d u e p r o c e s s i s s i m p l y a n opportunity to be heard and not that an actual hearing should always and indispensablybe held since a formal type or trial type hearing is not at all times and in all instancesessential to due process the requirements of which are satisfied where the parties areafforded fair and reasonable opportunity to explain their side of controversy.The holding of an adversarial trial is discretionary on the labor arbiter and theparties cannot demand it as a matter of right. Indeed, a formal hearing is not necessaryi n l a b o r c a s e s . H o w e v e r , w h e n s u c h f o r m a l h e a r i n g i s a l l o w e d b u t a p a r t y i s n o t informed thereof, as a consequence of which he is unable to attend the same; suchf a i l u r e t o a t t e n d s h o u l d n o t b e t a k e n a g a i n s t h i m . A s t h e l a b o r a r b i t e r a l l o w e d t h e holding of a formal hearing, he must accord the parties the opportunity to participatetherein and allow the formal hearing to proceed its natural course, if due process andthe elements of fair play are to be observed. In the instant case, the labor arbiter hasgranted his imprimatur on the holding of a formal hearing as agreed upon by the parties.In fact, the hearing has commenced and petitioners were given the chance to exercise Page20 the same privilege, since the case was submitted for decision even before it was able toadduce its evidence during the formal hearing.The law, in protecting the rights of the employee, authorizes neither oppressionnor self-destruction of the employer. Contrary to petitioners claim, remand of the caseto the NLRC is proper since the company has yet to present its evidence during theformal hearing. It is true that both parties have been provided the opportunity to provet h e i r c a s e s t h r o u g h t h e p l e a d i n g s s u b m i t t e d b e f o r e t h e N L R C ; h o w e v e r o n l y t h e petitioners were given the chance to present its side in the formal hearing. The factualissues raised in the consolidated cases could still be affected by the additional evidenceto be presented by the company. Equity demands that the company must be equallyallowed to adduce its evidence, if the NLRC is to come up with a rational and impartialdecision.The petition was denied and the ruling of the Court of Appeals affirmed. 23. GENUINO VS. NLRC Facts:Genuino was employed by Citibank in January 1992 as Treasury Sales DivisionHead with the rank of Assistant Vice- President. On August 23, 1993, Citibank sentGenuino a letter charging her with knowledge and involvement in transactions whi chwere irregular or event fraudulent. In the same letter,

Genuino was informed she wasunder preventive suspension. On September 27, 1993, Citibank informed Genuino of the result of their investigation. It found that Genuino, together with Santos personallyand actively participated through the use of facilities of Genuinos family corporation,Global Pacific in the diversion of bank clients funds to products of other companiesthat yielded higher interests than Citibank offers. And that Genuino and Santos realizedsubstantial financial gains, all in violation of existing company policy and CorporationC o d e u n d e r w h i c h c a r r i e s p e n a l s a n c t i o n . I n v i e w of the foregoing circumstances,G e n u i n o s e m p l o y m e n t w a s t e r m i n a t e d b y C i t i b a n k o n g r o u n d s o f ( 1 ) s e r i o u s misconduct, (2) wilful breach of the trust reposed upon her by the bank, and ( 3 ) commission of a crime against the bank.Genuino filed before the Labor Arbiter a Complaint against Citibank for illegalsuspension and illegal dismissal with damages and prayer for temporary restrainingorder and/or writ of preliminary injunction. The Labor Arbiter rendered a Decision findingthe dismissal of Genuino to be without just cause. The NLRC reversed the decision of Page21 the Labor Arbiter. The Court of Appeals then promulgated its decision d e n yi n g d u e course to and dismissing the petitions.Issue: Whether or not the dismissal of Genuino is for a just cause and in accordancewith due process.Held: The dismissal was for a just cause but lacked due process.The requirements of twin notices must be met. The twonotice requirement of the Labor Code is an essential part of the due process. The first notice informing the employee of the charges should neither be pro-forma nor vague. It should set out clearly what theemployee is being held liable for. The employee should be afforded ample opportunity tob e h e a r d a n d n o t m e r e o p p o r t u n i t y . A m p l e o p p o r t u n i t y t o b e h e a r d i s e s p e c i a l l y accorded the employees sought to be dismissed after they are specifically informed of t h e c h a r g e s i n o r d e r t o g i v e t h e m a n o p p o r t u n i t y t o r e f u t e s u c h a c c u s a t i o n s l e v e l e d against them. Since the notice of charges given to Genuino is inadequate, the dismissalcould not be in accordance with due process. While the Court held that Citibank failedto observe procedural due process, it never the less found Genuinos dismissal justified.W h i l e t h e b a n k g a v e g e n u i n e a n o p p o r t u n i t y t o deny the truth of the allegations inwriting and participate in the a d m i n i s t r a t i v e i n v e s t i g a t i o n , t h e f a c t r e m a i n s t h a t t h e charges were too general to enable Genuino to intelligently and adequately prepare her defense.A r t i c l e 2 8 2 ( c ) o f t h e L a b o r C o d e p r o v i d e s t h a t a n e m p l o y e r m a y t e r m i n a t e a n employment for fraud or willful breach of the trust reposed in him/her employer or dulya u t h o r i z e d r e p r e s e n t a t i v e . I n o r d e r t o constitute as just cause for dismissal, loss of confidence should relate to a c t s i n i m i c a l t o i n t e r e s t s o f t h e e m p l o y e r . A l s o , t h e a c t complained of should have arisen from the performance of the employees duties. For loss of trust and confidence to be a valid ground for an employees dismissal, it must besubstantial and not arbitrary, and must be founded on clearly established facts sufficientt o w a r r a n t t h e e m p l o y e e s s e p a r a t i o n f r o m w o r k . A s A s s i s t a n t V i c e - P r e s i d e n t o f Citibanks Treasury Department, Genuino was tasked to

solicit investments, and pesoand dollar deposits for, and keep them in Citibank; and to sell and push for the sale of Citibanks financial products, such as MBS, for the account and benefit of Citibank. Sheh e l d t h e p o s i t i o n o f t r u s t a n d c o n f i d e n c e . T h e r e i s n o w a y s h e c o u l d d e n y a n y knowledge of the Banks policies nor her understanding of these policies as reflected inthe survey done by the bank. She could not likewise feign ignorance of the businessesof Citibank, and of Global and Torrance. Assuming that Citibank did not engage in the Page22 same securities dealt with by Global and Torrance; nevertheless, it is to the interests of Citibank to retain its clients and continue investing in Citibank. Curiously, Genuino didnot just dissuade the depositors from withdrawing their money from Citibank but waseven instrumental in the transfers of moneys from Citibank to a competing bank throughGlobal and Torrance, the corporations being controlled by her.Ordinarily, the employer is required to reinstate the employee during the pendency of the appeal pursuant to Art.223, par. 3 of the Labor Code. If the decision of the Labor Arbiter is later reversed on appeal upon the finding that the ground for dismissal is validt h e n t h e e m p l o y e r h a s t h e r i g h t t o r e q u i r e t h e d i s m i s s e d e m p l o y e e o n p a y r o l l reinstatement to refund the salaries received while the case was pending appeal, or itcan be deducted from the accrued benefits that the dismissed employee was entitled tor e c e i v e f r o m h i s e m p l o y e r u n d e r e x i s t i n g l a w s , c o l l e c t i v e b a r g a i n i n g a g r e e m e n t provisions, and company practices. However, if the employee was reinstated to workduring the pendency of the appeal, then the employee is entitled to the compensationreceived for actual services rendered without the need of refund.Considering that Genuino was not reinstated to work or placed on payroll reinstatement,a n d h e r d i s m i s s a l i s b a s e d o n a j u s t c a u s e , t h e n s h e i s n o t e n t i t l e d t o b e p a i d t h e salaries stated in item no. 3 of the fallo of the September 3, 1994 NLRC decision. 24. GSIS VS. FONTARES GR NO. 149571 FEB. 21, 2007 Facts:Respondent first joined government service as Storekeeper I at the ArchivesD i v i s i o n o f R e c o r d s M a n a g e m e n t a n d A r c h i v e s O f f i c e , D e p a r t m e n t o f E d u c a t i o n , Culture and Sports in Manila on March 16, 1987. In March 1989, he was promoted tothe position of Archivist I. On December 1, 1994, he transferred to the Maritime IndustryA u t h o r i t y a s M a r i t i m e I n d u s t r y D e v e l o p m e n t S p e c i a l i s t I I . The records of the casefurther reveal that respondent was confined at the C h i n e s e G e n e r a l H o s p i t a l f r o m January 8 to 10, 1998 due to Rheumatic Valvular Disease. On account of his ailment,respondent filed with the petitioner a claim for compensation benefits under PD 626, asamended. Finding his ailment compensable, he was awarded Temporary Total Disability(TTD) benefits from Jan. 8 to 10, 1998. However, respondents claim for compensationbenefits on account of his Rheumatic Heart Disease was denied on the ground that thesaid ailment is not work-connected. Dissatisfied with the decision, respondent requestedfor the elevation of his case to ECC for review, which also denied the claim. The CA setaside the decision and declared the illness Rheumatic Heart Disease compensable anddirecting the payment of the claim therefore.

Page23 Issue: Whether the respondent is entitled to compensation benefits under the existinglaw due to the condition of Rheumatic heart Disease.Held:There is no dispute that Rheumatic Heart Disease is not included under the P.D. 626 asa m e n d e d , a s a n o c c u p a t i o n a l d i s e a s e . H e n c e , u n d e r P . D . 6 2 6 a s a m e n d e d , t h e employee must demonstrate through substantial evidence (1) that the risk of contractingt h e d i s e a s e w a s i n c r e a s e d b y t h e c l a i m a n t s w o r k i n g c o n d i t i o n s , a n d ( 2 ) t h e c a u s a l relation between the ailment and working conditions. The respondent failed that hiswork conditions has predisposing factors that caused Rheumatic Fever which in turn,led to Rheumatic Heart Disease, the subject ailment. Exposure to toxic chemicals andb i o l o g i c a l h a z a r d s d o e s n o t b y i t s e l f c o n s t i t u t e t h e c a u s e o f r e s p o n d e n t s a i l m e n t . Moreover, respondent failed to present evidence that he never contracted RheumaticFever which could have led to Rheumatic Heart Disease.I t i s w e l l s e t t l e d u n d e r t h e E m p l o ye e s C o m p e n s a t i o n L a w t h a t w h e n t h e c l a i m e d con tingency is not the direct result of the covered employees employment, as in thei n s t a n t c a s e , a n d t h e c l a i m a n t f a i l e d t o s h o w p r o o f t h a t t h e r i s k o f contracting thed i s e a s e w a s i n c r e a s e d b y t h e c o v e r e d e m p l o y e e s e m p l o y m e n t a n d w o r k i n g conditions, the claim for compensations benefits cannot prosper. Since there is nocausal relation between the respondents a i l m e n t , V a l v u l a r H e a r t D i s e a s e , a n d h i s employment and working conditions; nor are there indications that the nature of his workh a d i n c r e a s e d t h e r i s k o f c o n t r a c t i n g the said disease, the petitioner is correct ind e n yi n g r e s p o n d e n t s a p p l i c a t i o n f o r c o m p e n s a t i o n b e n e f i t s u n d e r P . D . 6 2 6 , a s amended.The petition was granted. The Decision and Resolution of the Court of Appeals werereversed and set aside. The decision of the Employees Compensation Commission wasaffirmed. 25. PEOPLE OF THE PHILIPPINES VERSUS CHARLIE COMILA ANDAIDA COMILA Facts: Page24 On April 5, 1999, in the Regional Trial Court (RTC) of Bag u i o C i t y , a n Information1 for Illegal Recruitment committed in large scale by a syndicate, as definedand penalized under Article 13(6) in relation to Articles 38(b), 34 and 39 of PresidentialD e c r e e N o . 4 4 2 , o t h e r w i s e k n o w n a s t h e N e w L a b o r C o d e , a s a m e n d e d , w a s f i l e d against Charlie Comila, Aida Comila and one Indira Ram Singh Lastra.On the charge of illegal recruitment, this appellant argues that "she was merely trying tohelp the applicants to process their papers, believing that Indira Ram Sighn Lastra andErlinda Ramos would really send the applicants to Italy." With respect to coappellantCharlie Comila, the defense submits that the prosecution "miserably failed to prove hisparticipation in the illegal recruitment and estafa." The trial and appellate courts foundboth appellants guilty beyond moral certainty of doubt of the crimes charged againstthem. Hence the appeal.Issue: Whether or not illegal recruitment was committed in large scale by a syndicateHeld:The Supreme Court is fully convinced that both the trial and appellate courts committedno error in finding both appellants guilty beyond moral certainty of

doubt of the crimesc h a r g e d a g a i n s t t h e m . T h r o u g h t h e r e s p e c t i v e t e s t i m o n i e s o f i t s w i t n e s s e s , t h e prosecution has satisfactorily established that both appellants were then engaged inu n l a w f u l r e c r u i t m e n t a n d p l a c e m e n t a c t i v i t i e s . T h e c r i m e o f i l l e g a l r e c r uitment iscommitted when, among other things, a person who, without being duly authorizedaccording to law represents or gives the distinct i m p r e s s i o n t h a t h e o r s h e h a s t h e power or the ability to provide work abroad convincing those to whom the representationis made or to whom the impression is given to thereupon part with their money in order to be assured of that employment.I n f a c t , e v e n i f t h e r e i s n o c o n s i d e r a t i o n i n v o l v e d , a p p e l l a n t w i l l s t i l l b e d e e m e d a s having engaged in recruitment activities, since it was sufficiently demonstrated that shepromised overseas employment to private complainants. To be engaged in the practicea n d p l a c e m e n t , i t i s p l a i n t h a t t h e r e m u s t a t l e a s t b e a p r o m i s e o r o f f e r o f a n employment from the person posing as a recruiter whether locally or abroad.As regards appellant Charlie Comila, it is inconceivable for him to feign ignorance of thei l l e g a l r e c r u i t m e n t a c t i v i t i e s o f h i s w i f e A i d a , a n d o f h i s l a c k o f p a r t i c i p a t i o n t h e r e i n . Again, we quote with approval what the trial court has said in its decision. 26. GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS) , V E R S U S NATIONAL LABOR RELATIONS COMMISSION, LAN T I N G S E C U R I T Y A N D WATCHMAN AGENCY, TOMAS LANTING, DANIEL FANILA ET AL Facts: Page25 Tomas Lanting, doing business under the name and style of Lanting Security andWatchman Agency (LSWA) entered into a Security Service Contract to provide securityguards to the properties of the Government Service Insurance System (GSIS) at thecontract rate of P3,000.00 per guard per month.D u r i n g t h e e f f e c t i v i t y o f t h e c o n t r a c t , L S W A r e q u e s t e d t h e G S I S f o r a n u p w a r d adjustment of the contract rate in view of Section 7 of Wage Order No. 1 and Section 3o f W a g e O r d e r N o . 2 , w h i c h w e r e i s s u e d b y t h e R e g i o n a l T r i p a r t i t e W a g e s a n d Productivity Board-NCR pursuant to Republic Act No. 6727, otherwise known as theWage Rationalization Act. On March 15, 1993, GSIS terminated the Security ServiceContract with LSWA.O n M a r c h 7 , 1 9 9 4 , c o m p l a i n a n t s f i l e d s e p a r a t e c o m p l a i n t s a g a i n s t L S W A f o r underpayment of wages and non-payment of labor standard benefits from March 1991to March 15, 1993. Virgilio Soriano also complained of illegal dismissal.In its Position Paper, LSWA alleged that complainants were estopped from claiming thatthey were underpaid because they were informed that the pay and benefits given tot h e m w e r e b a s e d o n t h e c o n t r a c t r a t e o f P 1 0 3 . 0 0 p e r e i g h t h o u r s o f w o r k o r a b o u t P3,100.00 per month. On August 9, 1994, LSWA filed a Third-Party Complaint againstGSIS for underpayment of complainants' wages.In its Position Paper, GSIS alleged that the Third-Party Complaint states no cause of action against it; that LSWA obligated itself in the Security Service Contract to be solelyl i a b l e f o r t h e

enforcement of and compliance with all existing labor laws, rules andregulations; that the GSIS Board of Trustees approved the upward a d j u s t m e n t o n a month-to-month basis, at P4,200 per guard per month, effective January 8, 1991 to May31, 1991, under Board Resolution No. 207 dated May 24, 1991, which was incorporatedin the Security Service Contract; that GSIS fully paid the services of the security guardsas agreed upon in the Security Service Contract.The Labor Arbiter held LSWA and GSIS jointly and severally liable for the payment of complainants' money claims, pursuant to Articles 106 and 107 of the Labor Code. TheNLRC held the GSIS solely liable for payment of complainants' money claims. Hence,the present petition.Issue: Whether or not GSIS is solitarily liable to pay respondents salary differentialHeld:The petition is bereft of merit. In this case, the GSIS cannot evade liability by claimingt h a t i t h a d f u l l y p a i d c o m p l a i n a n t s ' s a l a r i e s b y i n c o r p o r a t i n g i n t h e S e c u r i t y S e r v i c e Contract the salary rate increases mandated by Wage Order Nos. 1 and 2 by increasingthe contract price from P3,000.00 to P3,176.07 per guard per month effective November 1, 1990 to January 7, 1991, and P4,200.00 effective January 8, 1991 to May 31, 1991.Thus, the Court does not agree with the GSIS's claim that a double burden would be Page26 imposed upon the latter because it would be paying twice for complainants' services.Such fears are unfounded. Under Article 1217 of the Civil Code, if the GSIS should payt h e m o n e y c l a i m s o f c o m p l a i n a n t s , i t h a s t h e r i g h t t o r e c o v e r f r o m L S W A w h a t e v e r amount it has paid in accordance with the terms of the service contract between theLSWA and the GSIS.J o i n t a n d s o l i d a r y l i a b i l i t y i s s i m p l y m e a n t t o a s s u r e a g g r i e v e d w o r k e r s o f immediate and sufficient payment of what is due them. This is in line with the policy of the State to protect and alleviate the plight of the working class. The joint and solidaryliability of LSWA and the GSIS to pay complainants' salary differentials shall be withoutprejudice to the GSIS's right of reimbursement from LSWA. 27. TOYOTA MOTOR PHILS. CORP. WORKERS ASSOCIATION ( T M P C W A ) , VERSUS (NLRC-2ND DIVISION) Facts:Toyota Motor Philippines Corporation Workers Association (Union) and its dismissedo f f i c e r s a n d m e m b e r s s e e k t o s e t a s i d e t h e D e c i s i o n o f t h e C o u r t of Appeals whichaffirmed the Decision and Resolution of the National Labor Relation s C o m m i s s i o n (NLRC), declaring illegal the strikes staged by the Union and upholding the dismissal of the 227 Union officers and members.On the other hand, in the related cases docketed as G.R. Nos. 158798-99, ToyotaMotor Philippines Corporation (Toyota) prays for the recall of the award of severancecompensation to the 227 dismissed employees, which was granted.In view of the fact that the parties are petitioner/s and respondent/s and vice-versain the four (4) interrelated cases, they will be referred to as simply the Union and Toyotahereafter.I S S U E : ( 1 ) W H E T H E R T H E M A S S A C T I O N S C O M M I T T E D B Y T H E U N I O N O N DIFFERENT OCCASIONS ARE ILLEGAL STRIKES; AND(2) WHETHER SEPARATION PAY SHOULD BE AWARDED TO THE U N I O N MEMBERS WHO PARTICIPATED IN THE ILLEGAL

STRIKES.H E L D : We rule that the protest actions undertaken by the Union officials and memberson February 21 to 23, 2001 are not valid and proper exercises of their right to assembleand ask government for redress of their complaints, but are illegal strikes in breach of the Labor Code. The Unions position is weakened by the lack of permit from the City of Manila to hold rallies. Shrouded as demonstrations, they were in reality temporarys t o p p a g e s o f w o r k p e r p e t r a t e d t h r o u g h t h e c o n c e r t e d a c t i o n o f t h e e m p l o ye e s w h o Page27 deliberately failed to report for work on the convenient excuse that they will hold a rallyat the BLR and DOLE offices in Intramuros, Manila, on February 21 to 23, 2001. Thepurported reason for these protest actions was to safeguard their rights against anyabuse which the med-arbiter may commit against their cause. However, the Union failedto advance convincing proof that the med-arbiter was biased against them. The acts of the med-arbiter in the performance of his duties are presumed regular. Sans amplee v i d e n c e t o t h e c o n t r a r y, t h e U n i o n w a s u n a b l e t o j u s t i f y t h e February 2001 massactions. What comes to the fore is that the decision n o t t o w o r k f o r t w o d a ys w a s d e s i g n e d a n d c a l c u l a t e d t o c r i p p l e t h e m a n u f a c t u r i n g a r m o f T o yo t a . I t b e c o m e s o b v i o u s t h a t t h e r e a l a n d u l t i m a t e g o a l o f t h e U n i o n i s t o c o e r c e T o yo t a t o f i n a l l y acknowledge the Union as the sole bargaining agent of the company. This is not a legaland valid exercise of the right of assembly and to demand redress of grievance.It is obvious that the February 21 to 23, 2001 concerted actions were undertakenwithout satisfying the prerequisites for a valid strike under Art. 263 of the Labor Code.The Union failed to comply with the following requirements: (1) a notice of strike filedwith the DOLE 30 days before the intended date of strike, or 15 days in case of unfair labor practice; (2) strike vote approved by a majority of the total union membership int h e b a r g a i n i n g u n i t c o n c e r n e d o b t a i n e d b y s e c r e t b a l l o t i n a m e e t i n g c a l l e d f o r t h a t purpose; and (3) notice given to the DOLE of the results of the voting at least sevendays before the intended strike. These requirements are mandatory and the failure of aunion to comply with them renders the strike illegal. The evident intention of the law inrequiring the strike notice and the strike-vote report is to reasonably regulate the right tostrike, which is essential to the attainment of legitimate policy objectives embodied inthe law. As they failed to conform to the law, the strikes on February 21, 22, and 23,2001 were illegal.T h e C o u r t d e c l i n e d t o g r a n t t e r m i n a t i o n p a y b e c a u s e t h e c a u s e s f o r d i s m i s s a l recognized under Art. 282 of the Labor Code were s e r i o u s o r g r a v e i n n a t u r e a n d attended by willful or wrongful intent or they reflected adversely on the moral character o f t h e e m p l o y e e s . W e t h e r e f o r e f i n d t h a t i n a d d i t i o n t o s e r i o u s m i s c o n d u c t , i n dismissals based on other grounds under Art. 282 like willful disobedience, gross andh a b i t u a l n e g l e c t o f d u t y, f r a u d o r w i l l f u l b r e a c h o f t r u s t , a n d c o m m i s s i o n o f a c r i m e a g a i n s t t h e e m p l o ye r o r h i s f a m i l y, s e p a r a t i o n p a y s h o u l d n o t b e c o n c e d e d t o t h e dismissed employee. Based on existing jurisprudence, the award of separation pay tothe Union officials and members in the instant petitions cannot be sustained. 28. MT. CARMEL COLLEGE VS. JOCELYN RESUENA, ET AL.

Facts:In this Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court,petitioner is not appealing the judgment itself but the manner of execution of the same.Petitioner Mt. Carmel College is a private educational institution. It is administered byt h e C a r m e l i t e F a t h e r s a t N e w E s c a l a n t e , N e g r o s O c c i d e n t a l . R e s p o n d e n t s were Page28 employees of petitioner. Respondents, together with several faculty members, nonacademic personnel, and other students, participated in a protest action ag a i n s t petitioner. Thereafter, petitioners Director, Rev. Fr. Modesto E. Malandac, issued aMemorandum to each of the respondents. The Memorandum directed respondents toexplain in writing why they should not be dismissed for loss of trust and confidence for joining the protest action against the school administration. Petitioner maintained thatr e s p o n d e n t s w e r e o c c u p yi n g p o s i t i o n s o f h i g h l y c o n f i d e n t i a l n a t u r e . A f t e r a h e a r i n g conducted by petitioners Fact-Finding Committee and submission of its Report on 25April 1998, recommending dismissal or suspension of respondents, petitioner issuedw r i t t e n n o t i c e s o f t e r m i n a t i o n t o r e s p o n d e n t s o n 7 M a y 1 9 9 8 . R e s p o n d e n t s w e r e terminated by petitioner on 15 May 1998. Respondents charged petitioner with illegaldismissal and claimed 13 th month pay, separation pay, damages and attorneys fees.Labor Arbiter Drilon found that they were not illegally dismissed but ordered thatthey be awarded 13th month pay, separation pay and attorneys fees in the amount of P334,875.47. Upon appeal to the NLRC, the NLRC reversed the findings of the Labor Arbiter ruling that the termination of respondents was illegal and ordering the paymentof backwages of respondents from 15 May 1998 up to 25 May 1999. It further directedthe reinstatement of respondents or payment of separation pay, with backwages. Thiswas affirmed by the Court of Appeals.I S S U E : (1) whether reinstatement in the instant case is self-executory and does notneed a writ of execution for its enforcement; and (2) whether the continuing award of backwages is proper.A n o r d e r f o r r e i n s t a t e m e n t m u s t b e s p e c i f i c a l l y d e c l a r e d a n d c a n n o t b e presumed; like back wages, it is a separate and distinct r e l i e f g i v e n t o a n i l l e g a l l yd i s m i s s e d e m p l o ye e . T h e r e b e i n g n o s p e c i f i c o r d e r f o r r e i n s t a t e m e n t a n d t h e o r d e r being for complainants separation, there can be no basis for the award of salaries/backwages during the pendency of appeal.T h i s C o u r t h a d d e c l a r e d i n t h e a f o r e s a i d c a s e t h a t r e i n s t a t e m e n t d u r i n g a p p e a l i s warranted only when the Labor Arbiter himself rules that the dismissed employee shouldbe reinstated. But this was precisely because on appeal to the NLRC, it found that therewas no illegal dismissal; thus, neither reinstatement nor back wages may be awarded.an illegally dismissed employee is entitled to two reliefs: back wages and reinstatement.The two reliefs provided are separate and distinct. In instances where reinstatement isn o l o n g e r f e a s i b l e b e c a u s e o f s t r a i n e d r e l a t i o n s b e t w e e n t h e e m p l o y e e a n d t h e e m p l o ye r , s e p a r a t i o n p a y i s g r a n t e d . I n e f f e c t , a n i l l e g a l l y d i s m i s s e d e m p l o ye e i s entitled to either reinstatement, if viable, or separation pay if reinstatement is no longer viable, and back wages.

Page29 The normal consequences of respondents illegal dismissal, t h e n , a r e reinstatement without loss of seniority rights, and payment of back wages computedfrom the time compensation was withheld up to the date of actual reinstatement. Wherer e i n s t a t e m e n t i s n o l o n g e r v i a b l e a s a n o p t i o n , s e p a r a t i o n pay equivalent to one (1)m o n t h s a l a r y f o r e v e r y y e a r o f s e r v i c e s h o u l d b e a w a r d e d a s a n a l t e r n a t i v e . T h e payment of separation pay is in addition to payment of back wages. 29.CALTEX (PHILS.), INC. (NOW CHEVRON PHILIPPINES, INC.) VERSUS NLRCAND ROMEO T. STO. TOMAS Facts:Romeo T. Sto Tomas (private respondent) was a regular employee of petitioner sinceFebruary 2, 1984. He was a Senior Accounting Analyst receiving a monthly salary of P29,860.00 at the time of his termination on July 31, 1997. Petitioner, through a letter dated June 30, 1997, notified private respondent of his termination effective July 31,1997 due to the redundancy of his position and awarded him a separation package.R e s p o n d e n t f i l e d w i t h t h e L a b o r A r b i t e r a c o m p l a i n t f o r i l l e g a l d i s m i s s a l a g a i n s t petitioner. The LA found that private respondent's dismissal from the service on theg r o u n d o f r e d u n d a n c y w a s d o n e i n g o o d f a i t h a n d a v a l i d e x e r c i s e o f m a n a g e m e n t prerogative; that redundancy did not deter the employer to hire additional workers whenit is deemed best for proper management; and that there is no need for petitioner toconduct an impartial investigation or hearing since private respondents dismissal wasnot related to his blameworthy act or omission. While the LA found that petitioner failedt o g i v e n o t i c e t o D O L E o n e m o n t h b e f o r e t h e i n t e n d e d d a t e o f p r i v a t e r e s p o n d e n t s termination, the LA ruled that non-compliance with the procedural requirement will notper se make the termination illegal and held that requirement of procedural process wasnot totally disregarded.Respondent filed his appeal with the National Labor Relations Commission. TheNLRC expounded that although Article 283 of the Labor Code authorizes terminationdue to redundancy, there must be factual basis; that the records did not disclose anyevidence to show basis for respondents termination; that neither did petitioner sendnotice to DOLE one month prior to respondents dismissal.Issues: The issues for resolution are (1) whether private respondents termination onthe ground of redundancy was valid, and (2) whether petitioner gave a written notice toDOLE as required under Article 283 of the Labor Code.Held: Page30 The CA correctly dismissed herein petitioners petition for certiorari . The NLRC did notcommit grave abuse of discretion in finding that respondent was illegally dismissed.W e h a v e h e l d t h a t t h e e m p l o ye r m u s t c o m p l y w i t h t h e f o l l o w i n g r e q u i s i t e s t o ensure the validity of the implementation of a redundancy program: 1) a written noticeserved on both the employees and the Department of Labor and Employment (DOLE)at least one month prior to the intended date of retrenchment; 2) payment of separationpay equivalent to at least one month pay or at least one month pay for every year of service, whichever is higher; 3) good faith in abolishing the redundant positions; and 4)fair and reasonable criteria in ascertaining what positions are to be declared redundantand accordingly abolished. As we ruled, redundancy exists where the services of an

employee are in excess of what is reasonably demanded by the actual requirementof the enterprise. It is the burden of petitioner, as employer, to prove the factual andlegal basis for the dismissal of its employees on the ground of redundancy. 30. ROQUE S. DUTERTE VERSUS KINGSWOOD TRADING CO., INC., FILEMONLIM AND NATIONAL LABOR RELATIONS COMMISSION Facts:P e t i t i o n e r w a s h i r e d a s t r u c k / t r a i l e r d r i v e r b y r e s p o n d e n t K i n g s w o o d TradingC o m p a n y , I n c . ( K T C ) o f w h i c h c o r e s p o n d e n t F i l e m o n L i m i s t h e P r e s i d e n t . O n November 8, 1998, petitioner had his first heart attack and was confined for two weeksat the Philippine Heart Center (PHC). This was confirmed by respondent KTC whichadmitted that petitioner was declared on sick leave with corresponding notification. Amonth later, petitioner returned to work armed with a medical certificate signed by hisattending physician at the PHC, attesting to petitioners fitness to work. However, saidcertificate 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 atthe PHC. Upon release, he stayed home and spent time to recuperate.In June 1999, 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 worku n l e s s p h y s i c a l l y e x a m i n e d b y t h e c o m p a n y p h y s i c i a n . O n N o v e m b e r 1 1 , 1 9 9 9 , petitioner filed against his employer a complaint for illegal dismissal and damages. Thel a b o r a r b i t e r f o u n d f o r t h e p e t i t i o n e r . H o w e v e r , w h i l e c a t e g o r i c a l l y d e c l a r i n g t h a t petitioners dismissal was illegal, the labor arbiter, instead of applying Article 279 [5] of t h e L a b o r C o d e on illegal dismissals, applied Article 284 on Disease as ground f o r termination on the rationale that since the respondents admitted that petitioner could notbe allowed back to work because of the latters disease, the case fell within the ambit of Article 284. On respondents appeal, the NLRC, in its Resolution of April 24, 2002, seta s i d e t h e labor arbiters decision, ruling that Article 284 of the Labor Code has n o application to this case, there being no illegal dismissal to speak of. The CA upheldt h e N L R C R e s o l u t i o n , s a y i n g t h a t t h e C o m m i s s i o n c o m m i t ted no grave abuse of Page31 discretion in holding that petitioner was not illegally dismissed and could not be grantedany relief.Issue:W o u l d t h e d i s m i s s a l o f a n e m p l o ye e o n t h e g r o u n d o f d i s e a s e u n d e r t h e s a i d Article 284 still require the employer to present a certification from a competent publichealth authority that the disease is of such a nature that it could not be cured within aperiod of six months even with proper medical treatment?Held:The Court disagrees with the NLRC and CA. The law is unequivocal: the employer,b e f o r e i t c a n l e g a l l y d i s m i s s i t s e m p l o ye e o n t h e g r o u n d o f d i s e a s e , m u s t a d d u c e a certification from a competent public authority that the disease of which its employee issuffering 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 requiredc e r t i f i c a t i o n . A n d w h e n t h e r e s p o n d e n t s a s k e d t h e petitioner to look for another jobbecause he was unfit to work, such u n i l a t e r a l d e c l a r a t i o n , e v e n i f b a c k e d u p b y t h e findings of its company doctors,

did not meet the quantum requirement mandated by thelaw, i.e., there must be a certification by a competent public authority. All told, we rulea n d s o h o l d t h a t petitioners dismissal did not comply with both the substantive a n d procedural aspects of due process. Clearly, his dismissal is tainted with invalidity. 31. GSIS VS. VALLAR Facts:From 1991 to 1996, former Judge Teotimo Vallar presided over the MunicipalCircuit Trial Court (MCTC) of CatarmanSagay, Camiguin Province. During his tenure,Judge Vallar suffered chronic obstructive pulmonary disease (COPD). On July 4, 1996,J u d g e V a l l a r p a s s e d a w a y a t t h e a g e o f s i x t y - s i x ( 6 6 ) . T h e c a u s e o f d e a t h w a s bronchopneumonia secondary to paraplegia: ne u r o m ye l i t i s . H i s s u r v i v i n g s p o u s e , Victoriousa Vallar, convinced that her husbands ailment was work-related, filed a claimfor death benefits with the Government Service Insurance System (GSIS) pursuant toPresidential Decree (P.D.) No. 626, as amended. However, the GSIS, in its Decisiondated December 18, 2001, denied her claim for lack of substantial evidence to provet h a t t h e c a u s e o f h i s d e a t h w a s w o r k c o n n e c t e d . O n a p p e a l b y V i c t o r i o u s a , t h e Employees Compensation Commission (ECC) rendered a Decision affirming the GSIS judgment. The Court of Appeals rendered its Decision reversing that of the ECC anda w a r d e d f u l l b e n e f i t s p u r s u a n t t o t h e p r o v i s i o n s o f P r e s i d e n t i a l D e c r e e N o . 6 2 6 , a s amended.Issue: Whether the Court of Appeals erred in holding that the diseases which causedthe demise of Judge Vallar are compensable under the law. Page32 Held:Section 1 of P.D. No. 626, as amended, defines a compensable sickness as anyillness definitely accepted as an occupational disease listed by the Commission or any illness caused by employment subject to proof by the emplo yee that the risk of c o n t r a c t i n g t h e s a m e i s i n c r e a s e d b y h i s w o r k i n g c o n d i t i o n s . U n d e r t h e A m e n d e d Rules on Employee Compensation, for the sickness and the resulting disability or deathto be compensable, the claimant must prove that: (a) the sickness must be the resultof an occupational disease listed under Annex A of the Rules with the conditions sett h e r e i n s a t i s f i e d , o r ( b ) i t m u s t b e s h o w n t h a t t h e r i s k o f c o n t r a c t i n g t h e d i s e a s e i s increased by the working conditions. It is true that neuromyelitis optica or Davicsdisease, a disorder of the spinal cord, is not listed as an occupational disease in AnnexA of the Amended Rules on Employee Compensation. However, this will not bar aclaim for benefits under the law if the complainant can adduce substantial evidence thatthe risk of contracting the illness is increased or aggravated by the working conditions towhich the employee is exposed to. Judge Vallar evidently did his best to live up to theseexacting standards. He worked long hours and burned the midnight oil reading recordsof cases, transcripts of stenographic notes, law books, legal periodicals and other legalm a t e r i a l s . O f t e n , h e h a d t o w o r k a t h o m e a n d e v e n d u r i n g w e e k e n d s . H i s d a i l y routine certainly subjected him to visual fatigue, stress and strain. These severelystrenuous working conditions contributed to the weakening of his immune system andcaused him to contract neuromyelitis. Thus,

his health failed and eventually, he died.The Decision of the Court of Appeals (Second Division) was AFFIRMED. Petitioner GSIS was ordered to pay respondent Victoriousa B. Vallar, upon notice, the full benefitsshe is entitled to under P.D. No. 626, as amended. 32. PIONEER INTERNATIONAL, LTD VS. HON. TEOFILO GUADIZ, J R . , I N H I S CAPACITY AS PRESIDING JUDGE OF REGIONAL TRIAL COURT, BRANCH 147,MAKATI CITY, AND ANTONIO D. TODARO G.R. No. 156848 October 11, 2007Facts:PIL is a corporation duly organized under Australian laws, while PCPI and PPHIare corporations duly organized under Philippine laws. PIL is engaged in the ready-mixand concrete aggregates business and has established a presence worldwide. PILestablished PPHI as the holding company of the stocks of its operating company in thePhilippines, PCPI. McDonald is the Chief Executive Officer of PILs Hong Kong officewhile Klepzig is the President and Managing Director of PPHI and PCPI. For his part,Todaro further alleged that he was the managing director of Betonval Readyconcrete,Inc. (Betonval) from June 1975 up to his resignation in February 1996. Page33 Before Todaro filed his complaint, there were several meetings and exchanges of lettersbetween Todaro and the officers of Pioneer Concrete (Hong Kong) Limited, Pioneer Concrete Group HK, PPHI, and PIL. According to Todaro, PIL contacted him in May1 9 9 6 a n d a s k e d i f h e c o u l d j o i n i t i n e s t a b l i s h i n g a p r e - m i x e d concrete plant and inoverseeing its operations in the P h i l i p p i n e s . T o d a r o c o n f i r m e d h i s a v a i l a b i l i t y a n d expressed interest in joining PIL. Todaro met with several of PILs representatives andeven gave PIL the names of three of his subordinates in Betonval whom he would like to join him in PIL. Todaro sent a letter accepting the proposal of PIONEER INTL. as aconsultant for three (3) months on the condition that after three (3) months consultancy,he should be employed by PIONEER INTL., on a permanent basis, as its ManagingDirector or CEO in the Philippines. McDonald, under the letterhead of Pioneer ConcreteGroup HK, replied to Todaro stating his confirmation of the offer to engage Todaro as aconsultant to Pioneer International Ltd. Should Pioneer proceed with an investment int h e Philippines, then Pioneer would offer him a position to manage the p r e m i x e d concrete operations. Todaro confirmed McDonalds package concerning the consultancyand reiterated his desire to be the manager of Pioneers Philippine business venture.Klepzig sent another letter, under the letterhead of PPHI, to Todaro dated 18 September 1997. Klepzigs message reads:It has not proven possible for this company to meet with your expectations regarding theconditions of your providing Pioneer with consultancy services. This, and your refusalto consider my terms of offer of permanent employment, leave me no alternative but towithdraw these offers of employment with this company.The letter dated 20 October 1997 of K.M. Folwell (Folwell), PILs Executive GeneralManager of Australia and Asia, to Todaro confirmed the contents of Klepzigs letter.PIL filed, by special appearance, a motion to dismiss Todaros complaint. PILs c o defendants, PCPI, PPHI, and Klepzig, filed a separate motion to dismiss. PILasserted that the trial court has no jurisdiction over PIL because P I L i s a f o r e i g n corporation not doing business in the Philippines. PIL also

questioned the service of summons on it. Assuming arguendo that Klepzig is PILs agent in the Philippines, it wasnot Klepzig but De Leon who received the summons for PIL. PIL further stated that theNational Labor Relations Commission (NLRC), and not the trial court, has jurisdictionover the subject matter of the action. It claimed that assuming that the trial court has jurisdiction over the subject matter of the action, the complaint should be dismissed onthe ground of forum non-conveniens. Finally, PIL maintained that the complaint doesnot state a cause of action because there was no perfected contract, and no personal j u d g m e n t c o u l d b e r e n d e r e d b y t h e t r i a l court against PIL because PIL is a foreigncorporation not doing business i n t h e P h i l i p p i n e s a n d t h e r e w a s i m p r o p e r s e r v i c e o f summons on PIL.Issues: Page34 A.[The trial court] did not and cannot acquire jurisdiction o v e r t h e p e r s o n o f [ P I L ] considering that: [PIL] is a foreign corporation not doing business in the Philippines.M o r e o v e r , t h e c o m p l a i n t d o e s n o t c o n t a i n a p p r o p r i a t e a l l e g a t i o n s o f u l t i m a t e f a c t s showing that [PIL] is doing or transacting business in the Philippines. Assuminga r g u e n d o t h a t j u r i s d i c t i o n m a y b e a c q u i r e d o v e r t h e p e r s o n o f [ P I L ] , [ t h e t r i a l court] still failed to acquire jurisdiction since summons was improperly served on [PIL].B . [ T o d a r o ] d o e s not have a cause of action and the complaint fails to state a c a u s e of action. Jurisprudence is settled in that in resolving a motion to dismiss, a court canconsider all the pleadings filed in the case, including annexes, motions and all evidenceon record.C . [ T h e t r i a l c o u r t ] d i d n o t a n d c a n n o t a c q u i r e j u r i s d i c t i o n o v e r t h e s u b j e c t m a t t e r o f the complaint since the allegations contained therein indubitably show that [Todaro]bases his claims on an alleged breach of an employment contract. Thus, exclusive jurisdiction is vested with the [NLRC].D . P u r s u a n t t o t h e p r i n c i p l e o f f o r u m n o n - c o n v e n i e n s , [ t h e t r i a l c o u r t ] c o m m i t t e d grave abuse of discretion when it took cognizance of the case.Held:T h e d o c t r i n e o f f o r u m n o n c o n v e n i e n s r e q u i r e s a n e x a m i n a t i o n o f t h e truthfulness of the allegations in the complaint. Section 1, Rule 16 of the 1997 Rules of Civil Procedure does not mention forum non-conveniens as a ground for filing a motionto dismiss. The propriety of dismissing a case based on forum non-conveniens requiresa f a c t u a l d e t e r m i n a t i o n ; h e n c e , i t i s m o r e p r o p e r l y c o n s i d e r e d a m a t t e r o f d e f e n s e . While it is within the discretion of the trial court to abstain from assuming jurisdiction onthis ground, the trial court should do so only after vital facts are established to determinewhether special circumstances require the courts desistance.PIL was doing business in the Philippines when it negotiated Todaros employment withP P H I . T h i s i s i n a c c o r d a n c e t o S e c t i o n 3 ( d ) o f R e p u b l i c A c t N o . 7 0 4 2 , F o r e i g n Investments Act of 1991. PILs alleged acts in actively negotiating to employ Todaro torun its pre-mixed concrete operations in the Philippines, which acts are hypotheticallya d m i t t e d i n P I L s m o t i o n t o dismiss, are not mere acts of a passive investor in a domestic corporation. Such are managerial and operational acts in directi n g a n d establishing commercial operations in the Philippines. Page35

When summons is served on a foreign juridical entity, there are three prescribed ways:(1) service on its resident agent designated in accordance with law for that purpose, (2)s e r v i c e o n t h e g o v e r n m e n t o f f i c i a l d e s i g n a t e d b y l a w t o r e c e i v e s u m m o n s i f t h e corporation does not have a resident agent, and (3) service on any of the corporations officers or agents within the Philippines. However, summons was not served personallyo n K l e p z i g a s a g e n t o f P I L . I n s t e a d , s u m m o n s w a s s e r v e d on De Leon, Klepzigs E x e c u t i v e A s s i s t a n t . I n t h i s i n s t a n c e , D e L e o n w a s n o t P I L s a g e n t b u t a m e r e employee of Klepzig. In effect, the sheriff resorted to substituted service. For symmetry,the rule on substituted service of summons on a natural person was applied and it washeld that no reason was given to justify the service of PILs summons on De Leon. PILtransacted business in the Philippines and Klepzig was its agent within the Philippines.H o w e v e r , t h e r e w a s i m p r o p e r s e r v i c e o f s u m m o n s o n P I L s i n c e s u m m o n s w a s n o t served personally on Klepzig.Todaros employment in the Philippines would not be with PIL but with PPHI as stated int h e l e t t e r o f F o l w e l l . A s s u m i n g t h e e x i s t e n c e o f t h e e m p l o y m e n t a g r e e m e n t , t h e employer-employee relationship would be between PPHI and Todaro, not between PILand Todaro. PILs liability for the non-implementation of the alleged employmentagreement is a civil dispute properly belonging to the regular courts. Todaros causeso f a c t i o n a s s t a t e d i n h i s c o m p l a i n t a r e , i n a d d i t i o n t o b r e a c h o f c o n t r a c t , b a s e d o n violation of Articles 19 and 21 of the New Civil Code for the clear and evident badfaith and malice on the part of defendants. The NLRCs jurisdiction is limited to thoseenumerated under Article 217 of the Labor Code. W H E R E F O R E , t h e p e t i t i o n w a s P A R T I A L L Y G R A N T E D . T h e D e c i s i o n d a t e d 2 7 September 2001 and the Resolution dated 14 January 2003 of the appellate court wereAFFIRMED with the MODIFICATION that there was improper service of summons onPioneer International, Ltd. The case was remanded to the trial court for proper serviceof summons and trial. No costs. 36. SMC VS. LAYOC Facts:Respondents were among the Supervisory Security Guards of the Beer Divisiono f t h e San Miguel Corporation, a domestic corporation duly organized and e x i s t i n g under and by virtue of the laws of the Republic of the Philippines with offices at No. 40S a n M i g u e l A v e n u e , M a n d a l u yo n g C i t y. T h e y s t a r t e d w o r k i n g a s g u a r d s w i t h t h e petitioner San Miguel Corporation assigned to the Beer Division on different datesu n t i l s u c h t i m e t h a t t h e y w e r e p r o m o t e d as supervising security guards. From the Page36

commencement of their employment, the private respondents were required to punchtheir time cards for purposes of determining the time they would come in and out of thecompanys work place. Corollary, the private respondents were availing the benefits for overtime, holiday and night premium duty through time card punching. However, in thee a r l y 1 9 9 0 s , t h e S a n M i g u e l C o r p o r a t i o n e m b a r k e d o n a Decentralization Programaimed at enabling the separate divisions of the S a n M i g u e l C o r p o r a t i o n t o p u r s u e a more efficient and effective management of

their respective operations. As a result of t h e D e c e n t r a l i z a t i o n P r o g r a m , t h e B e e r D i v i s i o n o f t h e S a n M i g u e l C o r p o r a t i o n implemented a no time card policy whereby the Supervisory I and II composing of thesupervising security guards of the Beer Division were no longer required to punch their time cards. Consequently, without prior consultation with the private respondents, thetime cards were ordered confiscated and the latter were no longer allowed to render overtime work.However, in lieu of the overtime pay and the premium pay, the personnel of the Beer Division of the petitioner San Miguel Corporation affected by the No Time Card Policywere given a 10% across-the-board increase on their basic pay while the supervisorsw h o w e r e a s s i g n e d i n t h e n i g h t s h i f t ( 6 : 0 0 p . m . t o 6 : 0 0 a . m . ) w e r e g i v e n n i g h t s h i f t allowance ranging from P2,000.00 to P2,500.00 a month.Respondents filed a complaint for unfair labor practice, violation of Article 100 of theL a b o r C o d e o f t h e P h i l i p p i n e s , a n d v i o l a t i o n o f t h e e q u a l p r o t e c t i o n c l a u s e a n d d u e process of law in relation to paragraphs 6 and 8 of Article 32 of the New Civil Code of the Philippines. Respondents prayed for actual damages for two years (1993-1994),moral damages, exemplary damages, and overtime, holiday, and night premium pay.Respondents stated that the Beer Division of SMC maliciously and fraudulently refusedpayment of their overtime, holiday, and night premium pay from because of the no timecard policy. Moreover, petitioners had no written authority to stop respondents frompunching their time cards because the alleged memorandum authorizing such stoppaged i d n o t i n c l u d e s u p e r v i s o r y s e c u r i t y g u a r d s . T h u s , t h e r e s p o n d e n t s s u f f e r e d a diminution of benefits, making petitioners liable for non-payment of overtime, holiday,and night premium pay.The Labor Arbiter ruled that rendering services beyond the regular eight-hour work dayhas become company practice. Moreover, petitioners failed to show good faith in thee x e r c i s e o f t h e i r m a n a g e m e n t p r e r o g a t i v e i n a l t e r i n g c o m p a n y p r a c t i c e b e c a u s e p e t i t i o n e r s c h a n g e d t h e t e r m s a n d c o n d i t i o n s o f e m p l o ym e n t f r o m h o u r s o f w o r k rendered to result only with respect to respondents and not with other supervisors inother departments. The NLRC affirmed with modification the ruling of Arbiter Canizaresthat respondents suffered a diminution of benefits as a result of the adoption of the not i m e c a r d p o l i c y. T h e N L R C c i t e d a w e l l - e s t a b l i s h e d r u l e t h a t e m p l o ye e s h a v e a vested right over existing benefits voluntarily granted to them by their employer, whomay not unilaterally withdraw, eliminate, or diminish such benefits. In the present case,there was a company practice which allowed the enjoyment of substantial additionalremuneration. Furthermore, there is no rule excluding managerial employees from the Page37

coverage of the principle of non-diminution of benefits. The appellate court ruled thatw h i l e t h e i m p l e m e n t a t i o n o f t h e n o t i m e c a r d p o l i c y w a s a v a l i d e x e r c i s e o f management prerogative, the rendering of overtime work by respondents was a long-accepted practice in SMC which could not be peremptorily withdrawn without runningafoul with the principles of justice and equity. The appellate court affirmed the deletionof the award of actual, moral, and exemplary

damages. With the exception of Layoc,respondents did not present proof of previous earnings from overtime work and werenot awarded with actual damages. Moreover, the appellate court did not find that theimplementation of the no time card policy caused any physical suffering, moral shock,social humiliation, besmirched reputation, and similar injury to respondents to justify theaward of moral and exemplary damages.Issue: Whether the circumstances in the present case constitute an exception to therule that supervisory employees are not entitled to overtime pay.Held:Article 82 of the Labor Code states that the provisions of the Labor Code on workingc o n d i t i o n s a n d r e s t p e r i o d s s h a l l n o t a p p l y t o m a n a g e r i a l e m p l o ye e s . T h e o t h e r provisions in the Title include normal hours of work (Article 83), hours worked (Article84), meal periods (Article 85), night shift differential (Article 86), overtime work (Article87), undertime not offset by overtime (Article 88), emergency overtime work (Article8 9 ) , a n d c o m p u t a t i o n o f a d d i t i o n a l c o m p e n s a t i o n ( A r t i c l e 9 0 ) . I t i s t h u s c l e a r t h a t , generally, managerial employees such as respondents are not entitled to overtime payfor services rendered in excess of eight hours a day. Respondents failed to show thatthe circumstances of the present case constitute an exception to this general rule.First, respondents assert that Article 100 of the Labor Code prohibits the elimination or diminution of benefits. However, contrary to the nature of benefits, petitioners did notfreely give the payment for overtime work to respondents. Petitioners paid respondentso v e r t i m e p a y a s c o m p e n s a t i o n f o r s e r v i c e s r e n d e r e d i n a d d i t i o n t o t h e r e g u l a r w o r k hours. Respondents rendered overtime work only when their services were neededafter their regular working hours and only upon the instructions of their superiors. Asidef r o m t h e i r a l l e g a t i o n s , r e s p o n d e n t s w e r e n o t a b l e t o p r e s e n t a n yt h i n g t o p r o v e t h a t petitioners were obliged to permit respondents to render overtime work and give themthe corresponding overtime pay. Even if petitioners did not institute a no time card policy, respondents could not demand overtime pay from petitioners if respondents didnot render overtime work. The requirement of rendering additional service differentiatesovertime pay from benefits such as thirteenth month pay or yearly merit increase. Thesebenefits do not require any additional service from their beneficiaries. Thus, overtimepay does not fall within the definition of benefits under Article 100 of the Labor Code. Page38 Given the discretion granted to the various divisions of SMC in the management andoperation of their respective businesses and in the formulation and implementation of policies affecting their operations and their personnel, the no time card policy affectingall of the supervisory employees of the Beer Division is a valid exercise of managementp r e r o g a t i v e . T h e n o t i m e c a r d p o l i c y u n d o u b t e d l y c a u s e d p e c u n i a r y l o s s t o respondents. However, petitioners granted to respond e n t s a n d o t h e r s u p e r v i s o r ye m p l o ye e s a 1 0 % a c r o s s - t h e - b o a r d i n c r e a s e i n p a y a n d n i g h t s h i f t a l l o w a n c e , i n addition to their yearly merit increase in basic salary, to cushion the impact of the loss.So long as a companys management prerogatives are exercised in good faith for thea d v a n c e m e n t o f t h e e m p l o y e r s i n t e r e s t a n d n o t f o r t h e p u r p o s e of defeating or ci r c u m v e n t i n g t h e r i gh t s o f t h e e m p l o ye e s u n d e r s p e c i a l l a w s o r u n d e r v a l i d agreements, the Court will uphold

them.WHEREFORE, the petition is GRANTED. The Decision dated 29 August 2001 of theCourt of Appeals in CA-G.R. SP No. 55838 ordering petitioners San Miguel Corporation,A n d r e s S o r i a n o I I I , F r a n c i s c o C . E i z m e n d i , J r . , a n d F a u s t i n o F . G a l a n g t o p a y Numeriano Layoc, Jr. overtime pay and the other respondents nominal damages isSET ASIDE. The complaint of respondents is DISMISSED. 41. LOLITA LOPEZ, PETITIONER, VS. BODEGA CITY (VIDEO-DISCO KITCHENOF THE PHILIPPINES) AND/OR ANDRES C. TORRES-YAP, RESPONDENTS. Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the July 18, 2002 Decision1 of the Court of Appeals (CA) in CA-G.R. SPNo. 66861, dismissing the petition for certiorari filed before it and affirming the Decisionof the National Labor Relations Commission (NLRC) in NLRC-NCR Case No. 00-0301729-95; and its Resolution dated October 16, 2002,2 denying petitioner's Motion for Reconsideration. The NLRC Decision set aside the Decision of the Labor Arbiter findingthat Lolita Lopez (petitioner) was illegally dismissed by Bodega City and/or Andres C.Torres-Yap (respondents).FACTS1 Respondent Bodega City (Bodega City) is a corporation, while respondent Andres C.Torres-Yap (Yap) is its owner/ manager of Bodega City. Petitioner was the "lady keeper"of Bodega City tasked with manning its ladies' comfort room.2 Bodega alleged that Lopez have acted in a hostile manner against a lady customer who informed the management that she saw petitioner sleeping while on duty. Page39 3 Petitioner Lopez filed with NLRC, a complaint for illegal dismissal contending that shewas dismissed from her employment without cause and due process.4 I n t h e i r a n s w e r , r e s p o n d e n t s B o d e g a c o n t e n d e d t h a t n o e m p l o y e r - e m p l o y e e relationship by virtue of a concessionaire agreement she entered into with respondents.5 T h e c o m p l a i n t w a s d i s m i s s e d b y t h e L a b o r A r b i t e r f o r l a c k o f m e r i t . H o w e v e r , o n appeal, the NLRC set aside the order of dismissal and remanded the case for further p r o c e e d i n g s . U p o n r e m a n d , t h e c a s e w a s a s s i g n e d t o a d i f f e r ent Labor Arbiter.T h e r e a f t e r , h e a r i n g s w e r e c o n d u c t e d a n d t h e p a r t i e s w e r e r e q u i r e d t o s u b m i t memoranda and other supporting documents.6 The Judgment finds that Lopez was an employee of respondents and that the latter illegally dismissed her.37 Respondents(Bodega) filed an appeal with the NLRC. On March 22, 2001, the NLRCissued a Resolution, the dispositive portion of which reads as follows: WHEREFORE,premises duly considered, the Decision appealed from is hereby ordered SET ASIDEand VACATED, and in its stead, a new one entered DISMISSING the above-entitledcase for lack of merit.48 Petitioner (LOPEZ_filed an MR of the above-quoted NLRC Resolution, but the NLRCdenied the same.9 A g g r i e v e d , petitioner filed a Petition for Certiorari with the CA. The the C A promulgated the presently assailed Decision dismissing her special civ i l a c t i o n f o r certiorari.10 Petitioner moved for reconsideration but her motion was denied.11 Hence, herein petition based on the following grounds:(RULE 45)1.Petitioner contends that it was wrong for the CA to conclude that even if she didn o t s i g n t h e d o c u m e n t e v i d e n c i n g t h e c o n c e s s i o n a i r e a g r e e m e n t , s h e i m p l i e d l y accepted and thus bound herself to the terms and

conditions contained in the saidagreement when she continued to perform the t a s k w h i c h w a s a l l e g e d l y s p e c i f i e d therein for a considerable length of time.2. Petitioner claims that the concessionaire agreement was only offered to her during her tenth year of service and after she organized a union and filed a complaintagainst respondents. Prior to all these, petitioner asserts that her job as a "lady keeper"was a task assigned to her as an employee of respondents.Petitioner Lopez further argues her EVIDENCES Page40 (1)receipt of a special allowance - from respondents is a clear e v i d e n c e t h a t s h e w a s a n e m p l o ye e o f t h e l a t t e r , a s t h e a m o u n t s h e r e c e i v e d w a s e q u i v a l e n t t o t h e minimum wage at that time.( 2 ) h e r i d e n t i f i c a t i o n c a r d ( E V I D E N C E 2 ) c l e a r l y s h o w s t h a t s h e w a s n o t a concessionaire but an employee of respondents Moreover, petitioner submits that thefact( 3 ) t h a t s h e was required to follow rules and regulations prescribing a p p r o p r i a t e conduct while she was in the premises of Bodega City is clear evidence of the existenceof an employer-employee relationship between her and petitioners.12 On the other hand, respondents Bodega contend that the present petition was filedfor the sole purpose of delaying the proceedings of the case; the grounds relied upon inthe instant petition are matters that have been exhaustively discussed by the NLRC andthe CA;Respondent Bodegas evidence to rebut[1] concessionaire contract for a period of three years is evidence of her impliedacceptance of such proposal;[ 2 ] L o p e z f a i l e d t o p r e s e n t e v i d e n c e t o p r o v e h e r a l l e g a t i o n t h a t t h e s u b j e c t concessionaire agreement was only proposed to her in her 10th year of employmentwith respondent company and after she organized a union and filed a labor complainta g a i n s t r e s p o n d e n t s ; p e t i t i o n e r f a i l e d t o p r e s e n t c o m p e t e n t d o c u m e n t a r y a n d testimonial evidence to prove her contention that she was an employee of respondentssince 1985.ISSUES : Whether or not Lopez is an employee of respondents.HELDTo ascertain the existence of an employer-employee relationship, jurisprudence hasi n v a r i a b l y a p p l i e d t h e f o u r f o l d t e s t , n a m e l y : ( 1 ) t h e m a n n e r o f s e l e c t i o n a n d engagement; (2) the payment of wages; (3) the presence or absence of the power of dismissal; and (4) the presence or absence of the power of control. Of these four, thelast one is the most important. The so-called "control test" is commonly regarded as themost crucial and determinative indicator of the presence or absence of an employer-employee relationship.To prove the element of payment of wages, petitioner presented a petty cash voucher showing that she received an allowance for five (5) days.18 The CA did not err when itheld that a solitary petty cash voucher did not prove that petitioner had been receivings a l a r y f r o m r e s p o n d e n t s o r t h a t s h e h a d b e e n r e s p o n d e n t s ' e m p l o y e e f o r 1 0 ye a r s . Indeed, if petitioner was really an employee of respondents for that length of time, she Page41 should have been able to present salary vouchers or pay slips and not just a s i n g l e petty cash voucher. The Court agrees with respondents that petitioner could have

easilyshown other pieces of evidence such as a contract of employment, SSS or Medicareforms, or certificates of withholding tax on compensation income; or she could havepresented witnesses to prove her contention that she was an employee of respondents.Petitioner failed to do so.The only evidence presented by petitioner as proof of her alleged employment are her ID card and one petty cash voucher for a fiveday allowance which were disputed byrespondents.To prove the element of control, there is nothing in the agreement which specifies themethods by which petitioner should achieve these results. Thus, petitioner was notd i s m i s s e d by respondents. Instead, as shown by the letter of Yap to h e r t h e i r contractual relationship was terminated by reason of respondents' termination of thesubject concessionaire agreement. 42. C.F. SHARP CREW MANAGEMENT, INC., PET I T I O N E R , V S . H O N . UNDERSECRETARY JOSE M. ESPANOL, JR., HON. SECRETARY LEONARDO A.Q U I S U M B I N G A N D R I Z A L I N T E R N A T I O N A L S H I P P I N G S E R V I C E S , RESPONDENTS. The petitioner C.F. Sharp Crew Management, Inc. (C.F. Sharp) appeals by certiorari theApril 30, 2002 Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 53747 and theNovember 5, 2002 Resolution2 denying its reconsideration.PARTIESLouis Cruise Lines (LCL), a foreign corporation duly organized and existing under thelaws of Cyprus, entered into a Crewing Agreement3 withP a p a d o p o l o u s S h i p p i n g , L t d . ( P A P A S H I P ) . P A P A S H I P i n t u r n a p p o i n t e d p r i v a t e respondentR i z a l I n t e r n a t i o n a l S h i p p i n g S e r v i c e s ( R i z a l ) a s m a n n i n g a g e n c y i n t h e P h i l i p p i n e s , recruiting Filipino seamen for LCLs vessel.FACTS Page42 1 LCL terminated the Crewing Agreement with PAPASHIP to take effect on December 31, 1996. It then appointed C.F. Sharp as crewing agent in the Philippines. C.F. Sharprequested for accreditation as the new manning agency of LCL with the (POEA), butRizal objected on the ground that its accreditation still existed and would only expire onDecember 31, 1996.2 P e n d i n g a p p r o v a l o f t h e a c c r e d i t a t i o n , t w o ( 2 ) p r i n c i p a l s o f L C L a r r i v e d i n t h e Philippines and conducted a series of interviews for seafarers at C.F. Sharps office.R i z a l r e p o r t e d L C L s r e c r u i t m e n t a c t i v i t i e s t o t h e P O E A o n D e c e m b e r 9 , 1 9 9 6 , a n d requested an ocular inspection of C.F. Sharps premises.3 On December 17, 1996, POEA representatives conducted an inspection and foundthe two(2) principals C.F. Sharp interviewing and recruiting .The Inspection Report5signed by Corazon Aquino of the POEA and countersigned by Mr. Reynaldo Banawis of C.F. Sharp was thereafter submitted to the POEA.4. On January 2, 1997, Rizal filed a complaint6 for illegal recruitment, cancellation or revocation of license, and blacklisting against LCL and C.F. Sharp with the POEA5.For its part, C.F. Sharp admitted that the two principals conducted interviews at C.F.Sharps office, but denied that they were for recruitment and selection purposes but for L C L s e x crew members who had various complaints against Rizal. It belittled thein spection report of the POEA inspection team claiming that it simply state d t h a t interviews and recruitment were undertaken, without reference to who were

conductingthe interview and for what vessels.86. The POEA Administrator was not persuaded and found C.F. Sharp liable for illegalrecruitment and ordered suspended for a period of six (6) months or in lieu thereof, it iso r d e r e d t o p a y a f i n e o f P50,000.00 for violation of Art. 29 of the Labor Code, asamended in relation to Sec. 6(b), Rule II, Book II of the Rules a n d R e g u l a t i o n s Governing Overseas Employment in accordance with the schedule of penalties. Further,t h e r e s p o n d e n t C F S h a r p i s a s i t i s h e r e b y o r d e r e d suspended for another period of [eighteen] (18) months or to pay the fine o f P 1 8 0 , 0 0 0 . 0 0 f o r c o m m i t t i n g 9 c o u n t s o f violation of Article 29 of the Labor Code as amended in relation to Sec. 2(k), Rule I,Book VI of the Rules and Regulations governing Overseas Employment.7 C . F . S h a r p e l e v a t e d t h e A d m i n i s t r a t o r s r u l i n g t o t h e D e p a r t m e n t o f L a b o r a n d Employment (DOLE), but the AFFIRMED the decision.8 . A s u p e r s e d e a s b o n d w a s p o s t e d b y t h e CF Sharp for payment of the fines asimposed above should the CF Sharp opt to pay the fine instead o f u n d e r g o i n g suspension of its license. However, the suspension shall remain in force until such fineis paid, or in the event that the petitioner-appellant further appeals this Order.9. C.F. Sharps motion for reconsideration having been denied on February 5, 1999 bythe then Undersecretary, Jose M. Espanol, Jr., Page43 10. It elevated the case to this Court on petition for certiorari, DOLE Resolution, thisCourt referred the petition to the CA.11. The CA denied C.F. Sharps petition for certiorari,17 holding that C.F. Sharp wasa l r e a d y e s t o p p e d f r o m a s s a i l i n g t h e S e c r e t a r y o f L a b o r s r u l i n g b e c a u s e i t h a d manifested its option to have the cash bond posted a n s w e r f o r t h e a l t e r n a t i v e f i n e s imposed upon it. By paying the adjudged fines, C.F. Sharp effectively executed the judgment, The CA also agreed with the POEA Administrator and the Secretary of Labor that LCL, along with C.F. Sharp, undertook recruitment activities without authority..Finally, it affirmed both labor officials finding that C.F. Sharp violated Article 29 of theL a b o r C o d e a n d S e c t i o n 2 ( k ) , R u l e I , B o o k V I o f t h e P O E A R u l e s w h e n i t a p p o i n t e d Henry Desiderio as agent, without prior approval from the POEA. Thus, the appellatecourt declared that the Secretary of Labor acted well within his discretion in holding C.F.Sharp liable for illegal recruitment.12 C.F. Sharp filed a motion for reconsideration,18 but the CA denied it on November 25, 2002.19Issue: Whether or not C.F. Sharp is liable for illegal recruitment.HELDC.F. Sharp denies committing illegal recruitment activities in December 1996. It positsthat the interviews undertaken by the LCL principals do not amount to illegal recruitmentu n d e r S e c t i o n 6 o f R e p u b l i c A c t N o . 8 0 4 2 o r t h e M i g r a n t s W o r k e r s A c t . F u r t h e r , i t contends that the interviews conducted were not for selection and recruitment purposes,but were in connection with the seamens past employment with Rizal, specifically, their complaints for non-remittance of SSS premiums, withholding of wages, illegal exactionsf r o m m e d i c a l e x a m i n a t i o n s a n d d e l a ye d a l l o t m e n t s . I t c l a i m s t h a t i t w a s o n l y u p o n approval of its application for accreditation that the employment contracts were enteredinto and actual deployment of the seamen was made. C.F. Sharp, thus, concludes that itcannot be held liable for illegal

recruitment.Article 13(b) of the Labor Code defines recruitment and placement as:any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuringw o r k e r s , a n d i n c l u d e s r e f e r r a l s , c o n t r a c t s e r v i c e s , p r o m i s i n g o r a d v e r t i s i n g f o r employment, locally or abroad whether for profit or not: Provided, That any person or entity which in any manner, offers or promises for a fee employment to two or morepersons shall be deemed engaged in recruitment and placement.On the basis of this definition and contrary to what C.F. Sharp wants to portray - theconduct of preparatory interviews is a recruitment activity. Page44 This Office cannot conceive of a good reason why LCL should be interested at the timei n u n e a r t h i n g a l l e g e d v i o l a t i o n s c o m m i t t e d b y R i z a l S h i p p i n g w h o s e r e p r e s e n t a t i v e status as manning agency was to be terminated in just a few weeks thereafter, spendingvaluable time and money in the process. They stood to gain nothing from such taxingexercise involving several hundreds of ex-crew members, which could be handled byg o v e r n m e n t a g e n c i e s l i k e t h e P O E A , N L R C , S S S . T h e o b s e r v a t i o n o f t h e P O E A Administrator that the complaints of the crewmen were filed only after Rizal Shippingfiled its complaints with the POEA merely to bolster the defense of CF Sharp, is tellingand was just an afterthought. 43. BMG RECORDS (PHILS.), INC. A N D J O S E Y A P , J R . , P E T I T I O N E R S , VS. AIDA C.. APARECIO AND NATIONAL LABOR RELATIONS COMMISSION, RESPONDENTS.Facts: Aida Aparecio worked for BMG records as one of the promo girls in its Cebu Branch.Later on , Aparecio filed a complaint against BMG and its Branch Manager, Jose Yap,Jr., copetitioner herein, for illegal dismissal and non-payment of overtime pay, holidaypay, premium pay for rest day, 13 th month pay, service incentive leave, and separationpay. The labor arbiter dismissed Aparecio's complaint. Since the letter of resignationshowed no signs that it was made through duress or compulsion, it was concluded thatthe severance of her employment in BMG was brought about by her resignation and notby the illegal dismissal supposedly committed by the latter. Upon appeal, however, theN L R C f o u n d t h a t A p a r e c i o w a s i l l e g a l l y d i s m i s s e d f r o m s e r v i c e . A m o t i o n f o r reconsideration of the Decision was filed by petitioners. he NLRC, however, resolved tod e n y t h e m o t i o n . O n a p p e a l , t h e C A a f f i r m e d i n t o t o t h e j u d g m e n t o f t h e N L R C . Petitioners' motion for reconsideration was subsequently denied.Issue: Whether or not respondent Aparecio was illegally dismissed by BMG.Held:N o , t h e s e v e r a n c e o f h e r e m p l o y m e n t w a s b r o u g h t a b o u t b y h e r s u b m i s s i o n o f resignation letter to herein petitioner. Page45

Also, resignation is the voluntary act of an employee who is in a situation where oneb e l i e v e s t h a t p e r s o n a l r e a s o n s c a n n o t b e s a c r i f i c e d i n f a v o r o f t h e e x i g e n c y o f t h e service, and one has no other choice but to dissociate oneself from employment. It is aformal pronouncement or relinquishment of an office, with the intention of relinquishingthe office accompanied by the act of relinquishment. As the intent to relinquish mustconcur with the overt act of relinquishment, the acts of the employee before and after the alleged resignation must be considered in determining whether in fact, he or sheintended to sever from his or her employment. 44. VICENTE ALMARIO VS. PAL Facts:Vicente Almario worked for Pal as Systems Engineer and later on as First Officer.Upon promotion, Almario underwent an additional training. After eight monts of service,he tendered his resignation.O n F e b r u a r y 1 1 , 1 9 9 7 , P A L f i l e d a C o m p l a i n t a g a i n s t A l m a r i o b e f o r e t h e M a k a t i Regional Trial Court (RTC), for reimbursement o f P 8 5 1 , 1 0 7 w o r t h o f t r a i n i n g c o s t s , attorneys fees equivalent to 20% of the said amount, and costs of litigation.The RTC dismissed the complaint of PAL and ordered them to pay Almario damages.On appeal by both parties, the Court of Appeals, by Decision dated March 31, 2005,reversed the trial courts decision. It found Almario liable under the CBA between PALand ALPAP and, in any event, under Article 22 of the Civil Code.Issue: Whether or not Almario, who resigned after only eight months of service, shouldreimburse the training cost to PAL. Held:Yes, PAL invested for the training of Almario to enable him to acquire a higher level of s k i l l , p r o f i c i e n c y, o r t e c h n i c a l c o m p e t e n c e s o t h a t h e c o u l d e f f i c i e n t l y d i s c h a r g e t h e position of A-300 officer.Also, the CBA is the law between the contracting parties. Hence, it should be compliedwith both the employee and the employer. 45. PALISOC VS. EASWAYS MARINE, INC. Facts: Page46 Mars Palisoc filed an action before the Arbitration Branch of the N L R C a g a i n s t respondents and Capt. Terencio.The Labor Arbiter ruled in favor of Palisoc and ordered Easways Marine, Inc. and itsPresident to pay disability benefits, medical reimbursement to the former.Respondents appealed to the NLRC and it modified the decision of the Labor Arbiter.Petitioner filed a motion for reconsideration but the NLRC denied the same for lack of m e r i t . T h e r e a f t e r , p e t i t i o n e r f i l e d a p e t i t i o n f o r c e r t i o r a r i b e f o r e t h e C A . T h e C A dismissed the petition.Issue: Whether or not petitioner is entitled to disability benefits.Held:Yes, petitioners inability to work for more than 120 days determines his entitlement topermanent disability benefits.Also, the concept of permanent disability in the Labor Code (192 [c] [1]) applies also toseafarers. 46. PIER AND ARRASTRE & STEVEDORING SERVICES ET AL. VS. BOCLOT Facts:P e t i t i o n e r P i e r 8 A r r a s t r e a n d S t e v e d o r i n g S e r v i c e s , I n c . ( P A S S I ) i s a d o m e s t i c corporation engaged in the business of providing arrastre and stevedoring services atPier 8 in the Manila North Harbor.R e s p o n d e n t J e f f B . B o c l o t w a s h i r e d b y P A S S I t o p e r f o r m t h e f u n c t i o n s o f a stevedore. Thereafter, the

Philippine Ports Authority (PPA) seized the facilities and tooko v e r t h e o p e r a t i o n s o f P A S S I t h r o u g h i t s S p e c i a l T a k e o v e r U n i t , a b s o r b i n g P A S S I workers as well as their relievers.R e s p o n d e n t f i l e d a C o m p l a i n t w i t h t h e L a b o r A r b i t e r o f t h e N L R C , c l a i m i n g regularization; payment of service incentiv e l e a v e a n d 1 3 t h m o n t h p a y s ; m o r a l , exemplary and actual damages; and attorneys fees. Respondent alleged that he washired by PASSI in October 1999 and was issued company ID No. 304, a PPA Pass and Page47 SSS documents. In fact, respondent contended that he became a regular employee byApril 2000, since it was his sixth continuous month in service in PASSIs regular courseof business.However, petitioners alleged that respondent was hired as a mere reliever stevedoreand could thus not become a regular employee.Labor Arbiter Felipe P. Pati ruled for petitioners and dismissed respondents complaintc o n t e n d i n g t h a t Articles 280 and 281 of the Labor Code were inapplicable, on thecontention that the aforementioned articles speak of probationary empl o ye e s a n d casual employees while respondent, as a reliever, is neither a probationary employeenor a casual employee.The NLRC predicated its findings that respondent is a regular employee of petitionerso n t h e r e a s o n a b l e c o n n e c t i o n b e t w e e n t h e a c t i v i t y p e r f o r m e d b y t h e e m p l o y e e i n relation to the usual business or trade of the employer. It was elevated before the Courtof Appeals but it was affirmed. Hence, Petition for review under Rule 45Issue: WHETHER OR NOT THE COURT OF APPEALS ERRED IN RULING THATP R I V A T E R E S P O N D E N T J E F F B O C L O T I S A R E G U L A R E M P L O Y E E O F PETITIONER PIER 8 ARRASTRE & STEVEDORING SERVICES, INC. BECAUSE HEPERFORMED TASKS WHICH ARE USUALLY NECESSARY AND DESIRABLE TOTHE MAIN BUSINESS OF PETITIONER CORPORATIONHeld:Under the 1987 Philippine Constitution, the State affords full protection to labor, localand overseas, organized and unorganized; and the promotion of full employment andequality of employment opportunities for all. The State affirms labor as a primary socialeconomic force and guarantees that it shall protect the rights of workers and promotetheir welfare.Article 280. Regular and Casual Employment. The provisions of written agreement tothe contrary notwithstanding and regardless of the oral agreement of the parties, anemployment shall be deemed to be regular where the employee has been engaged toperform activities which are usually necessary or desirable in the usual business or t r a d e o f t h e e m p l o ye r , e x c e p t w h e r e t h e e m p l o ym e n t h a s b e e n f i x e d f o r a s p e c i f i c project or undertaking the completion or termination of which has been determined att h e t i m e o f t h e engagement of the employee or where the work or services to b e performed is seasonal in nature and the employment is for the duration of the season.A n e m p l o ym e n t s h a l l b e d e e m e d t o b e c a s u a l i f i t i s n o t c o v e r e d b y t h e precedingp a r a g r a p h : P r o v i d e d , T h a t , a n y e m p l o y e e w h o h a s r e n d e r e d at least one year of

Page48 service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shallcontinue while such actually exist.T h e p r i m a r y s t a n d a r d , t h e r e f o r e , o f d e t e r m i n i n g a r e g u l a r e m p l o y m e n t i s t h e reasonable connection between the particular activity performed by the employee inrelation to the usual business or trade of the employer. The test is whether the former isusually necessary or desirable in the usual business or trade of the employer. Theconnection can be determined by considering the nature of the work performed and itsrelation to the scheme of the particular business or trade in its entirety. Also, if theemployee has been performing the job for at least one year, even if the performance isnot continuous or merely intermittent, the law deems the repeated and continuing needfor its performance as sufficient evidence of the necessity if not indispensability of thatactivity to the business. Hence, the employment is also considered regular, but onlywith respect to such activity and while such activity exists. 47. CACERES VS. UNIVERSAL ROBINA SUGAR MILLING CORP. ET AL. Facts:Universal Robina Sugar Milling Corporation (respondent) is a corporationengaged in the cane sugar milling business. Pedy Caseres (petitioner Caseres) startedworking for respondent in 1989, while Andito Pael (petitioner Pael) in 1993. At the startof their respective employments, they were made to sign a Contract of Employment for Specific Project or Undertaking. Petitioners' contracts were renewed from time to time,u n t i l M a y 1999 when they were informed that their contracts will not be r e n e w e d anymore.Petitioners filed a complaint for illegal dismissal, regularization, incentive leave pay,13th month pay, damages and attorneys fees.I n a D e c i s i o n d a t e d A u g u s t 2 4 , 1 9 9 9 , t h e L a b o r A r b i t e r ( L A ) d i s m i s s e d t h e complaint for not being substantiated with clear and convincing evidence.The National Labor Relations Commission (NLRC) affirmed the LA's dismissal, and theCourt of Appeals (CA) dismissed the petition filed before it.Issue: WHETHER OR NOT THE PETITIONERS ARE SEASONAL/PROJECT/TERMEMPLOYEES NOT REGULAR EMPLOYEES OF RESPONDENTS Page49 Held:ART. 280. Regular and Casual Employees. The provision of written agreement to thec o n t r a r y n o t w i t h s t a n d i n g a n d r e g a r d l e s s o f t h e o r a l a g r e e m e n t o f t h e p a r t i e s , a n employment shall be deemed to be regular where the employee has been engaged toperform activities which are usually necessary or desirable in the usual business or t r a d e o f t h e e m p l o ye r , e x c e p t w h e r e t h e e m p l o y m e n t h a s b e e n f i x e d f o r a s p e c i f i c project or undertaking the completion or termination of which has been determined att h e t i m e o f t h e e n g a g e m e n t o f t h e e m p l o y e e o r w h e r e t h e w o r k o r s e r v i c e s t o b e performed is seasonal in nature and the employment is for the duration of the season.An employment shall be deemed to be casual if it is not covered by the precedingp a r a g r a p h : P r o v i d e d , T h a t , a n y e m p l o y e e w h o h a s r e n d e r e d a t l e a s t o n e y e a r o f service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed

and his employment shallcontinue while such actually exists.P e t i t i o n e r s ' r e p e a t e d a n d s u c c e s s i v e r e e m p l o ym e n t o n t h e b a s i s o f a c o n t r a c t o f e m p l o y m e n t f o r m o r e t h a n o n e y e a r c a n n o t a n d d o e s n o t m a k e t h e m r e g u l a r e m p l o ye e s . Length of service is not the controlling determinant of the e m p l o ym e n t tenure of a project employeeThe fact that petitioners were constantly re-hired does not ipso facto establish that theybecame regular employees. Their respective contracts with respondent show that therewere intervals in their employment. In petitioner Caseres's case, while his employmentlasted from August 1989 to May 1999, the duration of his employment ranged from oned a y t o s e v e r a l m o n t h s a t a t i m e , a n d s u c h s u c c e s s i v e e m p l o y m e n t s w e r e n o t continuous. With regard to petitioner Pael, his employment never lasted for more than am o n t h a t a t i m e . T h e s e s u p p o r t t h e c o n c l u s i o n t h a t t h e y w e r e i n d e e d p r o j e c t e m p l o ye e s , a n d s i n c e t h e i r w o r k d e p e n d e d o n t h e a v a i l a b i l i t y o f s u c h c o n t r a c t s o r projects, necessarily the employment of respondents work force was not permanent butco-terminous with the projects to which they were assigned and from whose payrollsthey were paidMoreover, even if petitioners were repeatedly and successively re-hired, still it did notq u a l i f y t h e m a s r e g u l a r e m p l o y e e s , a s l e n g t h o f s e r v i c e i s n o t t h e c o n t r o l l i n g determinant of the employment tenure of a p r o j e c t e m p l o y e e , b u t w h e t h e r t h e e m p l o ym e n t h a s b e e n f i x e d f o r a s p e c i f i c p r o j e c t o r u n d e r t a k i n g , i t s c o m p l e t i o n h a s been determined at the time of the engagement of the employee. Further, the proviso inArticle 280, stating that an employee who has rendered service for at least one (1) year shall be considered a regular employee, pertains to casual employees and not to projectemployees. 48. JOHN F. MCLEOD, PETITIONER, VS. NATIONAL LAB O R R E L A T I O N S COMMISSION (FIRST DIVISION), FILIPINAS SYNTHETIC FIBER CORPORATION Page50

(FILSYN), FAR EASTERN TEXTILE MILLS, INC., STA. ROSA T E X T I L E S , I N C . , (PEGGY MILLS, INC..), PATRICIO L. LIM, AND ERIC HU, RESPONDENTS. Facts:J o h n F . . M c L e o d f i l e d a c o m p l a i n t f o r r e t i r e m e n t b e n e f i t s , v a c a t i o n a n d s i c k l e a v e benefits, non-payment of unused airline tickets, holiday pay, underpayment of salarya n d 1 3 t h m o n t h p a y, m o r a l a n d e x e m p l a r y d a m a g e s , a t t o r n e y s f e e s p

l u s i n t e r e s t against Filipinas Synthetic Corporation (Filsyn), Far Eastern Textile Mills, Inc., Sta. RosaTextiles, Inc., Patricio Lim and Eric Hu.The Labor Arbiter decided in favor of herein petitioner and held all respondents as jointlyand solidarily liable for complainants money claims.Filipinas Synthetic Fiber Corporation (Filsyn), Far Eastern Textile Mills, Inc. (FETMI),Sta. Rosa Textiles, Inc. (SRTI), Patricio L. Lim (Patricio), and Eric Hu appealed to theN L R C . T h e N L R C r e v e r s e d a n d s e t a s i d e t h e d e c i s i o n o f L a b o r A r b i t e r a n d o r d e r e d respondent Peggy Mills, Inc. to pay complainant his retirement pay equivalent to 22.5days for every year of service for his twelve (12) years of service from 1980 to 1992based on a salary rate of P50,495.00 a month.John F. McLeod (McLeod) filed a motion for reconsideration which the NLRC denied inits Resolution of 30 June 1999. McLeod thus filed a petition for certiorari before theCourt of Appeals assailing the decision and resolution of the NLRC.The CA affirmed with modification the decision of the NLRC that respondent PatricioLim is jointly and solidarily liable with Peggy Mills, Inc., to pay the following amounts topetitioner John F. McLeod.I s s u e : W h e t h e r a n e m p l o y e r e m p l o y e e r e l a t i o n s h i p e x i s t s b e t w e e n t h e p r i v a t e respondents and the petitioner?Held:No, McLeod failed to present evidence to support his allegation of employer-employeer e l a t i o n s h i p b e t w e e n h i m a n d a n y o f F i l s yn , S R T I , a n d F E T M I . P e r s o n a l l i a b i l i t y o f corporate directors, trustees or officers attaches only when (1) they assent to a patentlyunlawful act of the corporation, or when they are guilty of bad faith or gross negligencein directing its affairs, or when there is a conflict of interest resulting in damages to thec o r p o r a t i o n , i t s s t o c k h o l d e r s o r o t h e r p e r s o n s ; ( 2 ) t h e y c o n s e n t t o t h e i s s u a n c e o f watered down stocks or when, having knowledge of such issuance, do not forthwith filewith the corporate secretary their written objection; (3) they agree to hold themselvespersonally and solidarily liable with the corporation; or (4) they are made by specificprovision of law personally answerable for their corporate action.Considering that McLeod failed to prove any of the foregoing exceptions in the presentcase, McLeod cannot hold Patricio solidarily liable with PMI. Page51 55. LINGKOD MANGGAGAWA SA RUBBERWORLD, ADIDASANGLO, ITSO F F I C E R S A N D M E M B E R S A S R E P R E S E N T E D B Y S O N I A E S P E R A N Z A , PETITIONERS, VS. RUBBERWORLD (PHILS.) INC. AND ANTONIO YANG, LAYAMANANGHAYA SALGADO & CO., CPAS (IN ITS CAPACITY AS LIQUIDATOR OFRUBBERWORLD (PHILS., INC.), RESPONDENTS.FACTS: Herein petitioner union, the Lingkod Manggagawa Sa Rubberworld, Adida s - A n g l o (Lingkod, for brevity), filed a complaint against Rubberworld for unfair labor practice(ULP), illegal shutdown, and non-payment of salaries and separation pay.W h i l e t h e a f o r e m e n t i o n e d c o m p l a i n t w a s p e n d i n g w i t h L a b o r A r b i t e r D i n o p o l , Rubberworld filed with the SEC a Petition for Declaration of a State of Suspension of P a y m e n t s w i t h P r o p o s e d R e h a b i l i t a t i o n P l a n . W i t h t h e c r e a t i o n o f t h e M a n a g e m e n t Committee, all actions for claims against Rubberworld Philippines, Inc. pending beforea n y c o u r t , t r i b u n a l , o f f i c e , b o a r d , b o d y, C o m m i s s i o n o r s h e r i f f a r e h e r e b y d e e m e d SUSPENDED.N o t w i t h s t a n d i n g t h e S E C ' s a f o r e m e n

t i o n e d s u s p e n s i o n o r d e r a n d d e s p i t e Rubberworld's submission of a Motion to Suspend Proceedings, Labor Arbiter Dinopolwent ahead with the ULP case and rendered his decision thereon declaring respondentRubberworld Phils., Inc. to have committed unfair labor practiceA writ of execution was issued by the NLRC in favor of the petitioner union with a copythereof served on the respondent corporation. Faced with this dilemma, Rubberworldf i l e d w i t h t h e C o u r t a n U r g e n t O m n i b u s M o t i o n t o d e c l a r e n u l l a n d v o i d t h e execution/garnishment made pursuant to the same writ. ISSUE :Whether the writ of execution issued by the NRLC will lie in this case? HELD: Given the factual milieu obtaining in this case, it cannot be said that the decision of theLabor Arbiter, or the decision/dismissal order and writ of execution issued by the NLRC,could ever attain final and executory status. The Labor Arbiter completely disregardeda n d v i o l a t e d S e c t i o n 6 ( c ) o f P r e s i d e n t i a l D e c r e e 9 0 2 - A , a s a m e n d e d , w h i c h categorically mandates the suspension of all actions for claims against a corporationplaced under a management committee by the SEC. Thus, the proceedings before theLabor Arbiter and the order and writ subsequently issued by the NLRC are all null andvoid for having been undertaken or issued in violation of the SEC suspension Order. Assuch, the Labor Arbiters decision, including the dismissal by the NLRC of Rubberworlsappeal, could not have achieved a final and executory status. Page52

Acts executed against the provisions of mandatory or prohibitory laws shall be void,except when the law itself authorizes their validity.The Labor Arbiter's decision in thisc a s e i s v o i d ab initio, and therefore, non-existent. A void judgment is in effect no judgment at all. No rights are divested by it nor obtained from it. Being worthless initself, all proceedings upon which the judgment is founded are equally

w o r t h l e s s . I t neither binds nor bars anyone. All acts performed under it and all claims flowing out of itare void. In other words, a void judgment is regarded as a nullity, and the situation is thesame as it would be if there were no judgment. It accordingly leaves the party-litigants inthe same position they were in before the trial. 56. NORSK HYDRO (PHILS.), INC. AND HANS T. NEVERDAL, P E T I T I O N E R S , VS. BENJAMIN S. ROSALES, JR., RESPONDENT.FACTS: Rosales filed before the Labor Arbiter a complaint for illegal dismissal against NorskHydro. He claimed that there was no evidence showing that he defrauded the company.He also claimed that he was not given opportunity to go over the records incriminatinghim and that the investigation was hastily terminated.F o r t h e i r p a r t , p e t i t i o n e r s N o r s k H yd r o a n d N e v e r d a l m a i n t a i n e d t h a t R o s a l e s w a s dismissed for a just cause, having connived with the real estate brokers to overprice thep r o p e r t i e s a n d p r o f i t e d f r o m i t t o t h e g r o s s d i s a d v a n t a g e o f t h e c o m p a n y . T h e y contended that Rosales was given time to explain. They had set a hearing, yet Rosalesfailed to answer the charges against him.The Labor Arbiter dismissed the complaint. It held that the company was justified interminating Rosales employment on the ground of loss of trust and confidence. TheLabor Arbiter found Abecias sworn statement sufficient basis for the company to lose itstrust and confidence on Rosales. Moreover, the Labor Arbiter found nothing irregular inthe manner Rosales was dismissed.Rosales appealed to the NLRC, which affirmed the decision of the Labor Arbiter. TheNLRC ruled that the issue of whether there was overpricing is secondary only to theissue of whether Rosales breached the trust and confidence reposed upon him by hisemployer.Undaunted, Rosales filed a petition for certiorari before the Court of Appeals ascribinggrave abuse of discretion on the part of the NLRC because (1) there was no legal basisfor his dismissal; and (2) his right to due process was violated.The Court of Appeals reversed the decision of the NLRC and declared that Rosales wasi l l e g a l l y d i s m i s s e d . T h e C o u r t o f A p p e a l s h e l d t h a t N o r s k H yd r o f a i l e d to prove withsubstantial evidence that Rosales participated in the alleged o v e r p r i c i n g n o r h a d i t shown the extent of his participation. According to the Court of Appeals, the companyshould not have relied on the affidavit of Abecia, who was not a representative of any of Page53

the owners and that, without being cross-examined, his affidavit was hearsay. It ruledthat Norsk Hydro did not observe due process because it did not furnish Rosales or hisc o u n s e l w i t h t h e d o c u m e n t s f o r h i m t o p r e p a r e i n t e l l i g e n t a n s w e r s t o t h e c h a r g e s against him. ISSUE: Whether the respondent employee was legally dismissed by the petitioner? HELD:

Law and jurisprudence have long recognized the right of employer s t o d i s m i s s employees by reason of loss of trust and confidence, especially in cases of employeesoccupying positions of responsibility, on the premise that an employee concerned holdsa position of trust and confidence.It should also be stressed that proof beyond reasonable doubt is not needed to justifythe loss of trust and confidence on the responsible officer. It is sufficient that there besome basis for the same, or that the employer has reasonable ground to believe thatthe employee is responsible for the misconduct, and his participation therein rendershim unworthy of trust and confidence demanded of his position. Article 282(c) of theLabor Code states, however, that the loss of trust and confidence must be based onwillful breach of the trust reposed in the employee by his employer. Ordinary breach willnot suffice; it must be willful. Such 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. More specifically the loss of trust must befounded on clearly established facts. 57. COCA COLA BOTTLERS (PHILS.), INC./ERIC MONTINOLA, MANAG E R , PETITIONERS, VS. DR. DEAN N. CLIMACO, RESPONDENT.FACTS: Respondent Dr. Dean N. Climaco is a medical doctor who was hired by petitioner Coca-Cola Bottlers Phils., Inc. by virtue of a Retainer Agreement. Respondent inquired fromthe management of petitioner company whether it was agreeable to recognizing him asa regular employee. The management refused to do so.R e s p o n d e n t f i l e d a C o m p l a i n t b e f o r e t h e N L R C , s e e k i n g r e c o g n i t i o n a s a r e g u l a r emplo yee of petitioner company and prayed for the payment of all benefits of a regular employee, including 13th Month Pay, Cost of Living Allowance, Holiday Pay, ServiceIncentive Leave Pay, and Christmas Bonus.While the complaint was pending before the Labor Arbiter, respondent received a letter from petitioner company concluding their retainership agreement effective thirty (30)d a ys f r o m r e c e i p t t h e r e o f . T h i s p r o m p t e d r e s p o n d e n t t o f i l e a c o m p l a i n t f o r i l l e g a l dismissal against petitioner company with the NLRC. Page54

operation, medication and hospital expenses of the respondent in the afore s t a t e d hospitals.In January 1998, the respondent, still limping heavily, went to the petitioners office toreport for work. He was, however, informed by the petitioner that he was consideredresigned from his job. During their meeting, Montes told him that he was deemed tohave resigned from his work and to accept a consideration of P50,000.00. Respondentr e j e c t e d t h e e x p l a n a t i o n a n d o f f e r . T h e r e a f t e r , b e f o r e Christmas of 1998, he againconversed with Montes who reiterated to him t h a t h e w a s r e g a r d e d a s r e s i g n e d b u t raised the consideration therein to P100,000.00. Respondent rebuffed the increasedoffer. On 30 June 1999, respondent, through his counsel, sent a letter to the petitioner d e m a n d i n g e m p l o ym e n t r e l a t e d m o n e y c l a i m s . T h e r e b e i n g n o r e s p o n s e f r o m t h e petitioner.Labor Arbiter Nambi rendered his Decision dismissing the complaint of respondent for lack of merit. He stated that the prescriptive period for filing an illegal

dismissal case isfour years from the dismissal of the employee concerned. Since the respondent statedin his complaint that he was dismissed from work on 24 August 1994 and he filed thecomplaint only on 1 September 1999, Labor Arbiter Nambi concluded that respondentsc a u s e o f a c t i o n a g a i n s t p e t i t i o n e r h a d a l r e a d y p r e s c r i b e d . H e a l s o n o t e d t h a t respondent committed several labor-related offenses against the petitioner which maybe considered as just causes for the termination of his employment under Article 282 of the Labor Code.I s s u e : W h e t h e r r e s p o n d e n t i s e n t i t l e d t o m o n e y c l a i m s i n r e l a t i o n t o i t s p r e s c r i p t i v e period and if he was dismissed legally.Held:T h e p e t i t i o n i s P A R T L Y G R A N T E D i n s o f a r a s i t p r a ys f o r t h e n o n - r e i n s t a t e m e n t o f respondent.Rationale:T h e f o u r - ye a r p r e s c r i p t i v e p e r i o d s h a l l c o m m e n c e t o r u n o n l y u p o n t h e a c c r u a l o f a cause of action of the worker. It is settled that in illegal dismissal cases, the cause of action accrues from the time the employment of the worker was unjustly terminated.Thus, the fouryear prescriptive period shall be counted and computed from the date of the employees dismissal up to the date of the filing of complaint for unlawful terminationof employment.E m p l o ye r e m p l o ye e r e l a t i o n s h i p b e t w e e n t h e p e t i t i o n e r a n d r e s p o n d e n t c a n n o t b e dee med to have been extinguished on 10 November 1994. It should be borne in mindthat there are four tests in determining the existence of employer-employee relationship:( 1 ) t h e m a n n e r o f s e l e c t i o n a n d e n g a g e m e n t ; ( 2 ) t h e p a y m e n t o f w a g e s ; ( 3 ) t h e presence or absence of the power of dismissal; and (4) the presence or absence of thepower of control. The so-called "control test" is commonly regarded as the most cruciala n d d e t e r m i n a t i v e i n d i c a t o r o f t h e p r e s e n c e o r a b s e n c e o f a n e m p l o ye r - e m p l o ye e Page60

relationship. Under the control test, an employer-employee relationship exists where theperson for whom the services are performed reserves the right to control not only theend achieved, but also the manner and means to be used in reaching that end.T h e o r d e r f o r t h e r e i n s t a t e m e n t w a s c o n t r a r y t o l a w ; t h a t a s a c o m m o n c a r r i e r , i t i s obliged under the law to observe extra-ordinary diligence in the conduct of its business;that it will violate such obligation if it will reinstate the respondent as bus driver; that toallow the respondent to drive a bus, despite the fact that the latter sustained a fracturedleft leg and was

still limping, would imperil the lives of the passengers and the propertyof the petitioner; and that the award of back wages to the respondent was unjustified.The Labor Code mandates that before an employer may legally dismiss an employeefrom the service, the requirement of substantial and procedural due process must bec o m p l i e d w i t h . U n d e r t h e r e q u i r e m e n t o f s u b s t a n t i a l d u e p r o c e s s , t h e g r o u n d s f o r termination of employment must be based on just or authorized causes. The followingare just causes for the termination of employment under Article 282 of the Labor Code:(a) Serious misconduct or willful disobedience by the employee of the lawful orders of h i s e m p l o ye r o r r e p r e s e n t a t i v e i n c o n n e c t i o n w i t h h i s w o r k ; ( b ) G r o s s a n d h a b i t u a l neglect by the employee of his duties;(c) Fraud or willful breach by the employee of thetrust reposed in him by his employer or duly authorized representative(d) Commissiono f a c r i m e o r o f f e n s e b y t h e e m p l o y e e a g a i n s t t h e p e r s o n o f h i s e m p l o y e r o r a n y immediate member of his family or his duly authorized representative; and(e) Other causes analogous to the foregoing.A b a n d o n m e n t o f w o r k , o r t h e d e l i b e r a t e a n d u n j u s t i f i e d r e f u s a l o f a n e m p l o ye e t o resume his employment, may be a just cause for the termination of employment under paragraph (b) of Article 282 of the Labor Code since it is a form of neglect of duty.T h e p e t i t i o n e r i n s i s t e d t h a t r e s p o n d e n t h a d a l r e a d y a b a n d o n e d h i s w o r k o n 1 0 November 1994 and, thus, the latters employment was deemed terminated as of suchdate. We, however, found that there was no abandonment of work on the part of therespondent. Petitioner also alleged that respondent was guilty of insubordination as wellas gross and habitual neglect in the performance of his duties for reckless driving andfor being involved in several vehicular accidents. 62. THELMA DUMPIT-MURILLO VS. COURT OF APPEALS Facts:O n O c t o b e r 2 , 1 9 9 5 , u n d e r T a l e n t C o n t r a c t N o . N T 9 5 1 8 0 5 , p r i v a t e r e s p o n d e n t Associated Broadcasting Company (ABC) hired petitioner Thelma Dumpit-Murillo as anewscaster and co-anchor for BalitangBalita, an early evening news program. Thecontract was for a period of three months and was also renewed thereafter. Petitionersservices were engaged for the program Live on Five. On September 30, 1999, after four years of repeated renewals, petitioners talent contract expired. Two weeks after Page61

the expiration of the last contract, petitioner sent a letter to Mr. Jose Javier, VicePresident for News and Public Affairs of ABC, informing the l a t t e r t h a t s h e w a s s t i l l interested in renewing her contract subject to a salary increase. Thereafter, petitioner stopped reporting for work. On November 5, 1999, she wrote Mr. Javier another letter s t a t i n g t h a t u p o n n o r e s p o n s e f r o m t h e f i r s t l e t t e r s h e d e e m i t a s a c o n s t r u c t i v e dismissal of her services.A month later, petitioner sent a demand letter

to ABC, demanding: (a) reinstatement toher former position; (b) payment of unpaid wages for services rendered from September 1 t o O c t o b e r 2 0 , 1 9 9 9 a n d f u l l b a c k w a g e s ; ( c ) p a y m e n t o f 1 3 t h m o n t h p a y , vacation/sick/service incentive leaves and o t h e r m o n e t a r y b e n e f i t s d u e t o a r e g u l a r employee starting March 31, 1996. ABC replied that a check covering petitioners talentfees for September 16 to October 20, 1999 had been processed and prepared, but thatthe other claims of petitioner had no basis in fact or in law.On December 20, 1999, petitioner filed a complaint against ABC, Mr. Javier and Mr.Edward Tan, for illegal constructive dismissal, nonpayment of salaries, overtime pay,premium pay, separation pay, holiday pay, service incentive leave pay, vacation/sickleaves and 13th month pay. She likewise demanded payment for moral, exemplary andactual damages, as well as for attorneys fees.The parties agreed to submit the case for resolution after settlement failed during themandatory conference/conciliation. On March 29, 2000, the Labor Arbiter dismissed thec o m p l a i n t . O n appeal, the NLRC reversed the Labor Arbiter in a Resolution datedAugust 3 0 , 2 0 0 0 . T h e N L R C h e l d t h a t a n e m p l o ye r - e m p l o ye e r e l a t i o n s h i p e x i s t e d between petitioner and ABC; that the subject talent contract was void; that the petitioner was a regular employee illegally dismissed; and that she was entitled to reinstatementand back wages or separation pay, aside from 13th month pay and service incentiveleave pay, moral and exemplary damages and attorneys fees.Issue: Whether petitioner was a fixed term employee and therefore cannot be dismissedwithout just cause.Held:T h e p e t i t i o n e r w a s a f i x e d - t e r m e m p l o ye e , a r e R E V E R S E D a n d S E T A S I D E . T h e NLRC decision is AFFIRMED.Rationale:Petitioner avers however that an employer-employee relationship was created when theprivate respondents started to merely renew the contracts repeatedly fifteen times or for four consecutive years. Page62

Strict rules of evidence do not govern claims for workmen's compensationfor under P.D. No. 626; the degree of proof required is merely substantial evidence or such relevant evidence as a reasonable mind might accept as adequate to support aconclusion. Thus, it suffices that such claims be based on mere probability, not certainty,of causal relation.T h e r e is no question that the high-grade uncontested documentary e v i d e n c e presented by petitioner established with a reasonable probability - even certainty - thatthe decedent succumbed to sudden cardiac deat h within twentyfour (24) hours fromundertaking backbreaking work and after manifesting signs of over-fatigue. His deathtook place under the second condition, giving rise to the presumption that it was work-related and therefore compensable. 69. EX-BATAAN VETERANS SECURITY AGENCY, INC., VS. THE SECRETARYOF LABOR BIENVENIDO E. LAGUESMA Facts:E x Bataan Veterans Security Agency, Inc. (EBVSAI) is in the busines s of providing security services while private respondents are EB V S A I s e m p l o y e e s assigned to the National Power Corporation at Ambuklao Hydro Electric Plant, Bokod,Benguet (Ambuklao Plant). Private respondents instituted a complaint for underpaymentof wages against EBVSAI before the Regional Office of the

Department of Labor andEmployment (DOLE). EX-BATAAN VETERANS SECURITY AGENCY is ORDERED topay the computed deficiencies owing to the affected employees.EBVSAI filed a motion for reconsideration and alleged that the Regional Director does not have jurisdiction over the subject matter of the case because the money claimof each private respondent exceeded P5,000. EBVSAI pointed out that the RegionalDirector should have endorsed the case to the Labor Arbiter.Issue:1 . W h e t h e r t h e S e c r e t a r y o f L a b o r o r h i s d u l y a u t h o r i z e d r e p r e s e n t a t i v e s acquired jurisdiction over EBVSAI; and2. Whether the Secretary of Labor or his duly authorized representatives have jurisdiction over the money claims of private respondents which exceed P5,000.Held:E B V S A I c l a i m s t h a t t h e R e g i o n a l D i r e c t o r d i d n o t a c q u i r e j u r i s d i c t i o n o v e r EBVSAI because he failed to comply with Section 11, Rule 14 of the 1997 Rules of Civil Page67

Procedure. EBVSAI points out that the notice of hearing was served at the AmbuklaoPlant, not at EBVSAIs main office in Makati, and that it was addressed to LeonardoCastro, Jr., EBVSAIs Vice-President.1. In this case, EBVSAI does not deny having received the notices of hearing. In fact, on 29 March and 13 June 1996, Danilo Burgos and Edwina Manao,detachment commander and bookkeeper of EBVSAI, respectively, appeared before theRegional Director. They claimed that the 22 March 1996 notice of hearing was receivedlate and manifested that the notices should be sent to the Manila

office. Thereafter, thenotices of hearing were sent to the Manila office. They were also informed of EBVSAIsv i o l a t i o n s a n d w e r e a s k e d t o p r e s e n t t h e e m p l o y m e n t r e c o r d s o f t h e p r i v a t e respondents for verification. They were, moreover, asked to submit, within 10 days,p r o o f o f c o m p l i a n c e o r t h e i r p o s i t i o n p a p e r . The Regional Director validly acquired jurisdiction over E B V S A I . E B V S A I c a n n o l o n g e r q u e s t i o n t h e j u r i s d i c t i o n o f t h e Regional Director after receiving the notices of hearing and after appearing before theRegional Director. EBVSAI maintains that under Articles 129 and 217(6) of the Labor Code, the Labor Arbiter, not the Regional Director, has exclusive and original jurisdictionover the case because the individual monetary claim of private respondents exceedsP5,000. EBVSAI also argues that the case falls under the exception clause in Article1 2 8 ( b ) o f t h e L a b o r C o d e . E B V S A I a s s e r t s t h a t t h e R e g i o n a l D i r e c t o r s h o u l d h a v e certified the case to the Arbitration Branch of the National Labor Relations Commission(NLRC) for a full-blown hearing on the merits.2. In this case, the Regional Director validly assumed jurisdiction over themoney claims of private respondents even if the claims exceeded P5,000 because such jurisdiction was exercised in accordance with Article 128(b) of the Labor Code and thecase does not fall under the exception clause. In Allied Investigation Bureau, Inc. v.Sec. of Labor, we ruled that while it is true that under Articles 129 and 217 of the Labor Code, the Labor Arbiter has jurisdiction to hear and decide cases where the aggregatem o n e y c l a i m s o f e a c h e m p l o ye e e x c e e d s P 5 , 0 0 0 . 0 0 , s a i d p r o v i s i o n s o f l a w d o n o t contemplate nor cover the visitorial and enforcement powers of the Secretary of Labor or his duly authorized representative. Rather, said powers are defined and set forth inArticle 128 of the Labor Code (as amended by R.A. No. 7730).This was further affirmed in our ruling in Cirineo Bowling Plaza, Inc. v. Sensing, wherewe sustained the jurisdiction of the DOLE Regional Director and held that the visitoriala n d e n f o r c e m e n t p o w e r s o f t h e D O L E R e g i o n a l D i r e c t o r t o o r d e r a n d e n f o r c e compliance with labor standard laws can be exercised even where the individual claime x c e e d s P 5 , 0 0 0 . H o w e v e r , i f t h e l a b o r standards case is covered by the exceptionclause in Article 128(b) of the L a b o r C o d e , t h e n t h e R e g i o n a l D i r e c t o r w i l l h a v e t o endorse the case to the appropriate Arbitration Branch of the NLRC. 71. AMA COMPUTER COLLEGE VS. ROLANDO A. AUSTRIA Facts: Page68

Petitioner AMA Computer College, Paraaque (AMA) is an educational institution dulyorganized under the laws of the Philippines. The rest of the petitioners are principalofficers of AMA. Respondent Rolando A. Austria (respondent) was hired by AMA onprobationary employment as a college dean on April 24, 2000. On August 22, 2000, respondents appointment as dean was confirmed by AMAs Officer-in-Charge (OIC). Inv i e w o f t h i s , h e w i l l b e e n t i t l e d t o a transportation allowance of One Thousand FiveHundred Sixty Pesos

(P1,560.00). In the event that Mr. Austria gives up the Deanp o s i t i o n o r fails to meet the standards of the (sic) based on the evaluation of h i s immediate superior, he shall be considered for a faculty position and the appointeeagrees that he shall lose the transportation allowance he e n j o ys a s D e a n a n d b e entitled to his faculty rate.S o m e t i m e i n A u g u s t 2 0 0 0 , r e s p o n d e n t w a s c h a r g e d w i t h v i o l a t i n g A M A s Employees Conduct and Discipline provided in its Orientation Handbook. Thereafter,respondent was placed on preventive suspension from September 8, 2000 to October 10, 2000. Notices of Investigation were sent to respondent. Eventually, on September 29, 2000, respondent was informed of his dismissal. Respondent filed a Complaint for Illegal Dismissal, Illegal Suspension, Non-Payment of Salary and 13th Month Pay withprayer for Damages and Attorney's Fees against AMA and the rest of the petitioners.Respondent substantially refuted the charges of gross inefficiency, incompetence, andleaking of test questions filed against him. The Labor Arbiter ruled that since respondentcan no longer be reinstated beyond September 17, 2000 as his designation as collegedean was only until such date, respondent should instead be paid his compensation andtransportation allowance for the period from September 8, 2000 to September 17, 2000,or the salary and benefits withheld prior thereto.Issue: 1. What is the nature of respondent's employment?2 . W a s h e unlawfully dismissed which therefore entitles him to benefit from s u c h employment?Held:1. The Court ruled that the nature of respondent's employment as dean is onew i t h a f i x e d t e r m . W e h e l d t h a t A r t i c l e 2 8 0 o f t h e L a b o r C o d e d o e s n o t p r o s c r i b e o r prohibit an employment contract with a fixed period. Even if the duties of the employeeconsist of activities necessary or desirable in the usual business of the employer, theparties are free to agree on a fixed period of time for the performance of sucha c t i v i t i e s . T h e r e i s n o t h i n g e s s e n t i a l l y c o n t r a d i c t o r y b e t w e e n a d e f i n i t e p e r i o d o f employment and the nature of the employees duties.2 . T h e r e s o l u t i o n o f t h e s e c o n d q u e s t i o n r e q u i r e s f u l l c o g n i z a n c e o f respondents fixed term of employment and all the effects thereof. It is axiomatic that acontract of employment for a definite period terminates on its own force at the end of such period. The lack of notice of termination is of no consequence because when the Page69 contract specifies the length of its duration, it comes to an end upon the expiration of such period.The unanimous finding of the Labor Arbiter, the NLRC and the CA thatr e s p o n d e n t a d e q u a t e l y r e f u t e d a l l t h e c h a r g e s a g a i n s t h i m a s s u m e s r e l e v a n c e o n l y insofar as respondents dismissal from the service was effected by petitioners beforeexpiration of the fixed period of employment. True, petitioners erred in dismissing therespondent, acting on the mistaken belief that respondent was liable for the chargesl e v e l e d a g a i n s t h i m . B u t r e s p o n d e n t a l s o c a n n o t c l a i m e n t i t l e m e n t t o a n y b e n e f i t flowing from such employment after September 17, 2000, because the employment,which is the source of the benefits, had, by then, already ceased to exist.