1 PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC. v.

DRILON Not an invalid exercise of legislative power because the Labor Code itself vests
the DOLE with rule-making powers.
FACTS: Protection to Labor does not signify the promotion of employment alone. The
1. PASEI, a firm engaged in the recruitment of OFWs, challenges the Constitution wants that employment be decent, just, and humane.
constitutionality of Dept. Order No. 1 (1988) of DOLE or the guidelines on the The Government is duty-bound to insure that our toiling expatriates have
temporary suspension of deployment of Filipino domestic and household adequate protection, personally and economically, while away from home and
workers. as part of its duty, it has ordered an indefinite ban on deployment.
2. It claimed that said order discriminates against males and females, does not The petitioners reliance on the Constitutional guaranty of worker
apply to all Filipino workers but only to domestic helpers and females with participation in policy making processes must submit to the demands and
similar skills, and is violative of the right to travel. necessities of the States power of regulation.
3. It contends that it is an invalid exercise of the lawmaking power, police power The court understands the grave implications of the Order to recruitment
being legislative, and not executive in character. businesses but it is the States interest to provide a decent living to its citizens.
4. PASEI invoked Sec. 3, Art. 13 of the Constitution providing for worker
participation in policy and decision-making process affecting their rights and
benefits and the order was passed without prior consultations.
5. The SolGen invoked the police power of the State in submitting the validity of
the guidelines and informed the Court that the Labor Secretary already lifted
the deployment ban in certain states.
6. It is admitted that the order is in the nature of a police power measure.

ISSUE: Whether the order is valid under the Constitution. YES.

RATIO:
Official acts enjoy presumed validity (no clear and convincing evidence was
shown to the contrary).
Police power: State authotity to enact legislation that may interfere with
personal liberty or property in order to promote the general welfare.
Police power constitutes an implied limitation on the Bill of Rights.
Equality before the law admits classifications provided that it rest on
substantial distinctions, germane to the purposes of the law, not confined to
existing conditions and apply equally to all members of the same class.
The unhappy plight that the female labor force experience abroad
compels urgent Government action.
The same cannot be said for male workers (save for some isolated cases) so the
classifications are borne by evidence; discrimination is justified.
DO No. 1 is a valid implementation of the Labor Code to afford protection to
labor.
2 EAGLE SECURITY AGENCY v. NLRC performance of any work, task, job or project, giving protection as mandated
by the Constitution.
FACTS: Solidary liability does not preclude the right of reimbursement from the
1. Petitioners Philippine Tuberculosis Society (PTSI) and Eagle Security Agency co-debtor by the one who paid.
entered into a Contract for Security Services wherein Eagle will provide Ultimate liability for the payment of the increases rests with the
security services in PTSIs premises (1979-1985). principal.
2. Private respondents were assigned by Eagle to PTSI as security guards.
3. 1985: A complaint was filed by private respondents against PTSI and Eagle for
unpaid wage and allowance increases.
4. Labor Arbiter: Ordered Eagle and PTSI to pay jointly and severally the wages.
5. PTSI and Eagle appealed. Still ordered to pay.
6. Motion for Reconsideration. Denied by NLRC for lack of merit.
7. PTSI and Eagle filed for separate petitions for certiorari.
8. A TRO was issued enjoining the NLRC from enforcing its decision.
9. PTSI: Payment of the wage shall be borne exclusively by Eagle pursuant to the
Contract.
10. Eagle: PTSI should be liable pursuant to Wage Order Nos. 3, 5 and 6 (increase
in the minimum wage shall be borne by the principal or client of the service
contractor)
11. PTSI: To uphold the ruling of the NLRC would be violative of the Constitutional
prohibition against impairment of the obligation of contracts.

ISSUES:
1. Whether the wage orders would violate the non-impairment clause. NO,
they are labor standard legislations enacted pursuant to the police
power of the State.
2. Whether PTSI and Eagle are solidarily liable for the unpaid wages. YES.

RATIO:
1. They are enacted to alleviate the plight of the workers whose wages barely
meet the spiraling costs of their basic needs. The increase in the minimum wage
was ordered precisely to ensure the workers health, efficiency and well-being
towards achieving the countrys goal of ensuring increased productivity and
viability of business and industry.
2. Petitioners solidary liability finds support in Articles 106, 107 and 109 of
Labor Code. It is mandated to assure compliance of the provisions therein
including the statutory minimum wage. It facilitates payment of the workers
3 ST. LUKES MEDICAL CENTER EMPLOYEES ASSOCIATION v. NLRC ISSUES:
1. Whether Santos constitutional right of security of tenure was violated. NO.
FACTS: 2. Whether Santos was illegally dismissed on the basis of her inability to
1. Santos was hired as x-ray technician of SLMC (1984). secure a certificate of registration from the Board of Radiologic Technology.
2. 1992: Congress passed RA 7431 known as the Radiologic Technology Act of NO.
1992. This law required that no person shall practice as an x-ray technologist
without having obtained the proper certificate of registration from the Board RATIO:
of Radiologic Technology. While the security of tenure is guaranteed by the Constitution, its exercise may
3. The HR Director of SLMC issued a final notice to all practitioners of Radiologic be regulated pursuant to the police power of the State to safeguard health,
Technology to comply with RA 7431, otherwise, the unlicensed employee will morals, peace, education, order, safety, and the general welfare of the people.
be transferred to an area which does not require a license if a slot is available. The state is justified in prescribing the specific requirements for x-ray
4. Santos received a notice requiring her to take and pass the exam, otherwise, technicians.
she may be compelled to retire from employment should there be no other The law is clear that the Certificate of Registration cannot be substituted by any
position available. other requirement to allow a person to practice as a technician.
5. Another memorandum was issued to Santos advising her that only a license can Persons who desire to engage in the learned profession may be required to take
assure her of her continued employment and that it was her last chance to take an exam as a prerequisite to engage in their careers.
and pass the exam. No malice or ill-will can be imputed upon SLMC because her continued
6. Santos was informed that the management of SLMC has approved her employment without a certificate exposes the hospital to possible sanctions or
retirement in lieu of separation pay. license revocation.
7. The Personnel Manager of SLMC issued a Notice of Separation from the Santos was given enough opportunity to qualify for the position but she still
Company to Santos due to her refusal to accept the offer for early retirement. failed to comply.
Further, it said that her qualifications do not fit any of the present vacant Management has rights which are also entitled to respect and enforcement in
positions in the hospital. the interest of fair play.
8. The President of the Philippine Association of Radiologic Technologists asked
SLMC to give Santos due consideration by giving her an assignment in any
department in the hospital awaiting her chance to pass the Board exam.
9. Another Notice of Separation was issued to Santos after she failed to present
her appeal for rechecking to PRC of the recent board exam which she failed.
10. Santos filed a complaint against SLMC for illegal dismissal and non-payment of
salaries and benefits.
11. The Alliance of Filipino Workers President requested SLMC to accommodate
Santos and assign her to a vacant position. In response, SLMC said that Santos
must go through the usual application procedures.
12. Petitioners: Santos failure to comply with the certification requirement did not
constitute just case for termination as it violated her right to security of tenure.
13. Labor Arbiter: Ordered SLMC to pay Santos her separation pay. All other claims
were dismissed.
14. NLRC and CA affirmed.
4 MAGANA v. MEDICARD PHIL., INC. Even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it
is obligatory on the part of the employer to reinstate and pay the wages of the
FACTS: dismissed employee during the period of appeal until reversal by the higher
1. Medicard, a health maintenance organization, hired Magana as company nurse court.
who was detailed to Medicards corporate client (Manila Pavilion).
2. Medicard was summarily replaced with another nurse. Medicard then offered
Magana the position of liaison officer.
3. Magana found the offer unacceptable and with her continued non-assignment,
she sued Medicard and Manila Pavilion in the NLRC for illegal dismissal and
payment of benefits and damages.
4. Labor Arbiter: Medicard was a mere labor contractor for Manila Pavilion which
exercised control and termination powers over Magana. The summary
replacement was without cause and of bad faith. Ordered Manila Pavilion to
reinstate Magana and with Medicard, be solidarily liable for backwages, etc.
5. NLRC: Affirmed, but found Medicard, not Manila Pavilion, as Maganas
employer and held it liable for constructive illegal dismissal and for the
payment of the backwages. Also awarded reinstatement wages for Medicards
failure to reinstate her pending appeal as required by the Labor Code.
6. CA: Found Maganas dismissal with cause, noting that Medicards failure to
assign Magana to a suitable position within six months after her replacement
is analogous to a suspension of operations of an enterprise entitling her of
separation pay only. Deleted reinstatement wages.

ISSUE: Whether Magana is entitled to draw wages under an arbiters ruling

ordering her reinstatement even though such order is subsequently reversed on
appeal. YES.

RATIO:
The unusual, mandatory mandatory order by law to execute reinstatement
orders pending appeal, unheard of in ordinary civil proceedings, is a police
power measure, grounded on the theory that the preservation of the lives of
the citizens is a basic duty of the State that is more vital than the preservation
of corporate profits.
The employee shall either be admitted back to work under the same terms and
conditions prevailing prior to his dismissal or separation or, at the option of the
employer, merely reinstated in the payroll. This must be done immediately
upon the filing of their appeal, without need of any executory writ.
5 JMM PROMOTION MANAGEMENT, INC. v. CA
FACTS:
1. Pres. Cory Aquino ordered a total ban against the deployment of performing
artists to Japan and other foreign destinations after the death of Maricris
Sioson.
2. The ban was rescinded after leaders of the overseas employment industry
promised to extend full support for a program aimed at removing kinks in the
deployment system.
3. The government issued Dept. Order No. 28 creating Entertainment Industry
Advisory Council (EIAC), tasked to issue guidelines on the training, testing
certification and deployment of artists abroad.
4. Pursuant to EIACs recommendations, Labor Sec issued Dept. Order No. 3
establishing various procedures and requirements for screening artists.
5. Artists successfully hurdling the test, training and certification were to be
issued Artists Record Book (ARB), a necessary prerequisite to processing of
any contract of employment by the POEA.
6. The Dept. of Labor issued a series of orders for fine-tuning and implementing
the new system.
7. The Federation of Entertainment Talent Managers of the Philippines (FETMOP)
filed a class suit assailing these Department Orders saying that they violated
the constitutional right to travel, abridged existing contracts for employment,
and deprived individual artists of their licenses without due process of law.
Further contended that it violated the right to life, liberty, and property.
8. JMM Promotion and Kary International (Petitioners) filed a Motion for
Intervention.
9. TC: Denied petitioners prayer for a writ of preliminary injunction and
dismissed the complaint.
10. CA: Dismissed the appeal. The Department orders and issuances constituted a
valid exercise by the State of the police power.
Police power concerns government enactments which precisely interfere with
personal liberty or property in order to promote the general welfare or the
common good.
This Court took judicial notice not only of the trend, but also of the fact that
most of our women, a large number employed as domestic helpers and
entertainers, worked under exploitative conditions marked by physical and
personal abuse.
The government began instituting measures aimed at deploying only those
individuals who met set standards which would qualify them as legitimate
performing artists.
The tests are aimed at segregating real artists or performers from those passing
themselves off as such, eager to accept any available job and therefore exposing
themselves to possible exploitation.
ON DUE PROCESS and RIGHT TO LABOR AS PROPERTY:
The proper regulation of a profession, calling, business or trade has always
been upheld as a legitimate subject of a valid exercise of the police power by
the state.
So long as professionals and other workers meet reasonable regulatory
standards no such deprivation exists.

ISSUE: Whether the ARB requirement and Department Order No. 3 were valid
exercise of police power. YES.
RATIO:
Salus populi est suprema lex embodies the character of the entire spectrum of
public laws aimed at promoting the general welfare of the people under the
States police power.
It is an inherent attribute of sovereignty which extends to all public needs.
6 CALALANG v. WILLIAMS
FACTS:
1. Calalang, in his capacity as citizen and taxpayer, filed a petition for a writ of
prohibition against Williams, Chairman of National Traffic Commission, the
Director of Public Workes, the Acting Secretary of Public Works and
Communications, Mayor of the City of Manila, and acting Chief of Police.
2. Calalang: The National Traffic Commission resolved to recommend that
animal-drawn vehicles be prohibited from passing along Rosario Street and
Rizal Avenue for a period of one year from the opening of the Colgante Bridge
to traffic.
3. This measure was pursuant to the provisions of CA 548 authorizing the
Director of Public Works to promulgate rules and regulations to regulate and
control the use of and traffic on national roads.
4. Calalang: Rules and regulations infringe upon the constitutional precept
regarding the promotion of social justice to insure the well-being and economic
security of all the people.
ISSUE: Whether the rules and regulations infringe upon the constitutional precept
regarding the promotion of social justice. NO.
RATIO:
Social justice is neither communism, nor despotism, nor atomism, nor
anarchy, but the humanization of laws and the equalization of social and
economic forces by the State so that justice in its rational and objectively
secular conception may at least be approximated.
Social justice means the promotion of the welfare of all the people, the adoption
by the Government of measures calculated to insure economic stability of all
the competent elements of society, through the maintenance of a proper
economic and social equilibrium in the interrelations of the members of the
community, constitutionally, through the adoption of measures legally
justifiable, or extra constitutionally, through the exercise of powers underlying
the existence of all governments on the time-honored principle of salus populi
est suprema lex.
Social justice is bringing about the greatest good to the greatest
number.
7 HFS PHILIPPINES, INC. v. PILAR
FACTS:
1. Pilar was engaged by IUM Shipmanagement and its Philippine manning agent,
HFS Philippines, as a crew member (electrician) of the Norwegian vessel.
2. Four months after he boarded, he complained of loss of appetite, nausea,
vomiting, and severe nervousness. His condition did not improve despite being
given medical treatment.
3. He was diagnosed with depression and gastric ulcer. The physician declared
him unfit for work and recommended hospitalization and repatriation. He
returned to Manila same day.
4. He was met by an HFS representative who brought him to Medical Center
where it was confirmed that he was suffering from major depression.
5. He was placed under continuous medical treatment for several months.
6. He was later on declared fit to work.
7. He sought the opinion of other physicians. One said he was still depressed and
the other with illnesses making him unfit to work.
8. He then filed a complaint for underpayment of disability and medical benefits
and for damages in the NLRC. NLRC referred the case to the National
Conciliation and Mediation Board because he was a registered member of the
Seamans Union.
9. Pilar: He was hit by an officer on the head. He was traumatized and from there,
all he symptoms started showing. He claimed to be entitled to disability
compensation under Art. 12 of the CBA between AMOSUP and the Norwegian
Shipowners Assoc.
10. Petitioners: In the absence of proof that his depression was caused by an
accident, he is not entitled to disability and medical benefits. Instead, he was
only entitled to the 120-day sick pay as provided in the CBA.
11. NCMB: Pilars depression was a compensable sickness since it arose out of his
employment. In view of the principle of social justice, that those who have less
in life should have more in the law, he was awarded disability compensation.
12. CA: He was not entitled to disability compensation granted by the CBA but is
entitled to disability benefits granted by Sec. 32 of the employment contract
after proving that his illnesses impaired him.
ISSUE: Whether Pilar is entitled to disability compensation. YES, under the
employment contract.
RATIO:
Pilar is clearly entitled to sick pay because he fell ill while on board the vessel
as provided by the CBA.
However, the CBA does not cover all kinds of illnesses such as those suffered
by Pilar. Neither the NCMB nor the CA found that his illnesses were the result
of an accident or a marine peril.
A seafarer may be entitled to disability compensation if (1) he is shown to have
contracted an illness or suffered an injury in the course of his employment and
(2) such illness or injury resulted in his total or partial disability.
The discrepancy between the findings of the company doctor and Pilars doctor
would make or break his claim. The Court, thus, adopts the findings favorable
to Pilar.
The law looks tenderly on the laborer. Where the evidence may be
reasonably interpreted in two divergent ways, one prejudicial and the
other favorable to him, the balance must be tilted in his favor consistent
with the principle of social justice.
8 PLDT v. NLRC and ABUCAY
FACTS:
1. Abucay, a traffic operator of PLDT, was accused by two complainants of having demanded
and received P3,800 in consideration of her promise to facilitate the application approval
for telephone installation.
2. She was found guilty and was separated from the service.
3. She went to the Ministry of Labor and Employment claiming she had been illegally
removed. Complaint dismissed but she was awarded one month pay for every year of
service as financial assistance and for reasons of equity and compassion.
4. PLDT and Abucay appealed to the NLR Board. Dismissed.
5. PLDT questions the affirmance of the award as having been made with grave abuse of
discretion. An employee dismissed for cause is entitled to neither reinstatement nor
backwages and is not allowed any relief at all because the dismissal is accordance with
law.
6. NLRC: Abucay is sufficiently punished with her dismissal.
7. SolGen: Separation pay allowed on grounds of social and compassionate justice.
ISSUE: Whether Abucay is entitled to the separation pay. NO.
RATIO:
General rule: A person dismissed for cause is not entitled to separation pay.
Exception: Equity. It is grounded on the precepts of conscience and not on any sanction of
positive law.
The Constitution is replete with positive commands for the promotion of social justice, and
particularly the protection of the rights of the workers.
Separation pay shall be allowed as a measure of social justice only in those instances
where the employee is validly dismissed for causes other than serious misconduct
or those reflecting on his moral character.
The policy of social justice is not intended to countenance wrongdoing simply because it
is committed by the underprivileged. At best it may mitigate the penalty but it certainly
will not condone the offense. Compassion for the poor is an imperative of every humane
society but only when the recipient is not a rascal claiming an undeserved privilege.
This great policy of our Constitution is not meant for the protection of those who have
proved they are not worthy of it, like the workers who have tainted the cause of labor with
the blemishes of their own character.
Abucay was dismissed for dishonesty. The fact that she worked with PLDT for more
than a decade should even be taken against her as in reflects a regrettable lack of
loyalty. If regarded as justification for moderating penalty, it will pervert the
meaning of social justice and undermining the efforts of labor to cleanse its ranks of
all undesirables.
9 TOYOTA MOTOR PHILS. CORP WORKERS ASSOCIATION v. NLRC
FACTS:
1. The Union is a legitimate labor organization and is certified as the sole and
exclusive bargaining agent of all Toyota rank and file employees.
2. Toyota is a domestic corporation engaged in the assembly and sale of vehicles
and parts.
3. Toyota challenged the said Order via an appeal to the DOLE Secretary.
4. In the meantime, the Union submitted it CBA proposals to Toyota but it refused
to negotiate pending appeal.
5. The Union filed a Notice of strike which was converted by the NCMB to a
preventive mediation case pending the appeal.
6. The Union and Toyota were required to attend a hearing.
7. The Union officers and members failed to render the required overtime work
and instead marched and staged a picket in front of the BLR Office. It also
requested that its members be allowed to be absent to attend the hearing.
Toyota denied the request.
8. Despite the denial, more than 200 employees staged mass actions in front of
the BLR and the DOLE Offices to protest.
9. Due to their absence, Toyota experience acute lack of manpower in its
manufacturing and production lines and was unable to meet its goals resulting
to losses of P53M.
10. Toyota sent individual letters to 360 employees requiring them to explain
within 24 hours why they should not be dismissed for defiance of companys
order to render overtime work, failure to report, and participation in the
actions.
11. The Union again filed for another notice of strike for union busting amounting
to unfair labor practice. But submitted their explanation.
12. Toyota terminated the employment of 227 employees for participation in
concerted actions in violation of its Code of Conduct and for misconduct under
Art. 282 of the Labor Code.
13. The Union went on another strike and barricaded the plants and prevented
workers who reported for work from entering therefrom.
14. Toyota filed a petition for injunction and issuance of a TRO before the NLRC.
Approved. It also filed a petition to declare the strike illegal.
15. The Secretary of Labor ordered all striking workers to return to work and for
Toyota to accept the returning employees, under same terms or put them under
payroll reinstatement (which it chose).
16. Despite orders, several payroll-reinstated members of the Union staged a
protest rally and picketed in the Bicutan and Sta. Rosa plants.
17. NLRC considered the mass action illegal.
18. CA deleted the award of severance compensation to the dismissed Union
members considering the illegal strikes as serious misconduct.
ISSUES:
1. Whether the mass actions committed by the Union on different occasions are
illegal strikes. YES.
2. Whether separation pay should be awarded to the Union members who
participated in the illegal strikes. NO.
RATIO:
These strikes were illegal because unlawful means were employed. The acts of
the Union officers and members are in palpable violation of Art. 264(e), which
proscribes acts of violence, coercion, or intimidation, or which obstruct the free
ingress to and egress from the company premises. Undeniably, the strikes from
March 28 to April 12, 2001 were illegal.
The Union, by its mass actions, has inflamed an already volatile situation, which
was explicitly proscribed by the DOLE Secretarys Order.
One exception where separation pay is given even though an employee is
validly dismissed is when there is justification in applying the principle of social
justice.
There can be no good faith in intentionally incurring absences in a collective
fashion from work just to attend the DOLE hearings.
The Unions strategy was plainly to cripple the operations of Toyota.
The Union officials and members are supposed to know through common sense
that huge losses would befall the company by the abandonment of their regular
work.
They were also fully aware of the companys prohibition against concerted
action inimical to the interests of the company.
They violated the order of the DOLE Secretary, exhibiting lack of obeisance to
the rule of law.
10 YRASUEGUI v. PAL, INC.
FACTS:
1. Yrasuegui was a former international flight steward of PAL, he was dismissed
because of his failure to adhere to the weight standards of PAL.
2. The ideal weight for his height (58) is 166 lbs. as mandated by the Cabin and Crew
Administration Manual of PAL.
3. PAL advised him to go on an extended vacation leave to address his weight
concerns. He failed to meet the standards prompting another leave without pay.
4. After meeting the required weight, he was allowed to return to work. But his
weight problem recurred. He again went on leave without pay.
5. In line with company policy, he was removed from flight duty and was formally
requested to trim down to his ideal weight.
6. When he went back for a weight check, it was discovered that he gained weight
(215 lbs.).
7. Yrasuegui, in a letter, made a commitment addressed to the Cabin Crew Group
Manager to reduce weight.
8. Despite the ninety-day period given him to reach his ideal weight, he remained
overweight. He remained grounded. He was directed to report every two weeks
for weight check but he failed to go.
9. He was still given one more month to comply. He continuously ignored all
directives to report back for weight checks.
10. He requested for leniency but PAL finally served a Notice of Administrative Charge
for violation of company standards on weight requirements. He was given 10 days
to file his answer.
11. Yrasuegui: His violation, if any, had already been condoned since no action has
been taken by the company regarding the case. And that PAL discriminated against
him because the company has not been fair in treating the cabin crew members
who are similarly situated.
12. After a hearing, Yrasuegui was informed that due to his inability to attain his ideal
weight, and considering the utmost leniency given to him, his services were
considered terminated effective immediately.
13. He filed for illegal dismissal against PAL.
14. Labor Arbiter: Illegally dismissed. Weight standards need not be complied with
under pain of dismissal since his weight did not hamper the performance of his
duties. Directed reinstatement.
15. NLRC: Affirmed, entitled to full backwages. Obesity is a disease in itself. There can
be no intentional defiance or serious misconduct to lawful order of PAL.
16. CA: Reversed, NLRC looked at wrong and irrelevant considerations. Weight
standards of PAL are meant to be continuing qualification for an employees
position. Failure to adhere is an analogous cause for dismissal.
ISSUES:
1. Whether Yrasueguis obesity is a ground for dismissal. YES.
2. Whether he was unduly discriminated against when he was dismissed. NO.
3. Whether he is entitled to reinstatement and backwages. NO, but he is entitled to
separation pay.
RATIO:
The weight standards were a continuing qualification to keep his job.
He was able to reduce weight so it clearly shows that it is possible for him to lose
weight. He also repeatedly ignored all requests for weight checks.
His obesity may not be unintended but it is voluntary.
PAL has committed itself to safely transport its passengers. In order to achieve this,
it must necessarily rely on its employees, its cabin flight deck crew on board the
aircraft.
The weight standards should be viewed as imposing strict norms of discipline
upon its employees.
He failed to prove that he complied with the return to work order of PAL.
No record of him actually rendering services for PAL when he was dismissed, in
order to insist on the payment of his full backwages.
Separation pay is granted to a legally dismissed employee as an act of social
justice or based on equity.
In both instances, it is required that the dismissal (1) was not for serious
misconduct and (2) does not reflect on the moral character of the employee.
11 CEBU ROYAL PLANT v. DEPUTY MINISTER OF LABOR
FACTS:
1. Pilones was removed by Cebu Royal Plant due to pulmonary tuberculosis
minimal.
2. He complained to the Ministry of Labor where it was held that Pilones was
already a permanent employee and was entitled to security of tenure and that
the TB was not certified to be incurable within 6 months to justify his
separation.
3. Cebu Royal: Pilones was still on probation at the time of dismissal and had no
security of tenure. His dismissal was necessary for the protection of public
health, as he was handling ingredients in the processing of soft drinks sold to
the public.
ISSUE: Whether Pilones was illegally dismissed. YES.
RATIO:
There was an attempt to circumvent the law by separating the employee after
five months' service to prevent him from becoming a regular employee, and
then rehiring him on probation, again without security of tenure. We cannot
permit this subterfuge if we are to be true to the spirit and mandate of social
justice.
On the other hand, we have also the health of the public and of the dismissed
employee himself to consider. Hence, although we must rule in favor of his
reinstatement, this must be conditioned on his fitness to resume his work, as
certified by competent authority.
The lowly worker who, often at the mercy of his employers, must look up to the
law for his protection.
The law regards him with tenderness and even favor and always with faith and
hope in his capacity to help in shaping the nation's future.
Entitled to backwages for 3 years only and reinstatement only upon the
certification by a competent public health authority the he is fit to return to
work.
12 GREGORIO ARANETA UNIVERSITY FOUNDATION v. NLRC
FACTS:
1. The President of Gregorio Araneta University Foundation wrote the then
Minister of Labor Blas Ople soliciting his opinion on a proposed retrenchment
and reorganization program made necessary by the Universitys financial
difficulties.
2. Ople found no serious objection to the program but advised that it should be
implemented without prejudice to whatever benefits that might have accrued
to the employees concerned at the date of reorganization.
3. The University started the retrenchment program and required all employees
to submit courtesy resignation letters for reappointment.
4. The private respondents (faculty members) did not submit their courtesy
resignations.
5. They were all served notices of termination.
6. They filed for cases of illegal dismissal, non-payment of separation pay, unfair
labor practice and damages against the University before the NLRC.
7. Private respondents: The retrenchment program was without any criteria and
they were replaced by faculty members with inferior qualifications.
8. University: Sufficient notice was given to them prior to their dismissal. And
earlier, the president publicly announced the proposals for a new working
structure. Complainants are estopped from questioning their dismissal
because they accepted their 30-day termination pay.
9. Labor Arbiter: Upheld the dismissal. University was ordered to pay
complainants termination benefit in accordance with the law.
10. NLRC: Reinstate all complainants except Ramos with full back wages and pay
them separation/retirement pay and other accrued benefits under the existing
laws.
ISSUES: Whether the complainants should be reinstated. YES.
RATIO:
The failure of the private respondents to file their courtesy resignations cannot
automatically result in dismissal or inclusion in the retrenchment.
The private respondents positions as deans and department heads are
necessary in its usual business.
 Section 18, Article 11 of the 1987 Constitution provides that The state
affirms labor as a primary social economic force. It shall protect the rights
of workers and promote their welfare. This constitutional protection to
labor has been carried through all our three (3) constitutions since 1935.
Retrenchments are allowed for all unnecessary positions based on the
petitioners own reorganization program. However, the reorganization cannot
be used as a convenient device to get rid of existing personnel in order to
replace them with new ones. For this purpose, the regular rules and procedures
on dismissal of employees will have to be followed.
13 QUITORIANO v. JEBSENS MARITIME, INC.
FACTS:
1. Jebsens Maritime hired Quitoriano as 2nd Officer aboard a vessel for 6 months.
2. Quitoriano was assigned as navigating officer and port watcher. He complained
of dizziness with severe headache, general body weakness, chest pains, easy
fatigability, weak grip, numbness on the left side of his body and his speech
slurred.
3. He diagnosed as suffering from mild stroke. Since his condition did not
improve, he was repatriated for further treatment.
4. He underwent several tests under the company designated physician.
5. He was later on issued a medical report declaring him fit to work.
6. He later on sought the opinion of an independent cardiologist who found that
he is suffering from hypertension cardiovascular disease and hyperlipidemia.
7. He repeatedly asked Jebsens for full permanent disability compensation but
was unsuccessful.
8. He filed a complaint to recover permanent total disability compensation as
provide in the CBA before the NLRC.
9. Jebsens: He is fit to work according to the company physician.
10. Labor Arbiter: Dismissed complaint, petitioner recovered from disability after
being certified fit to work by company physician.
11. NLRC: Affirmed, allow Quitoriano to resume sea duty.
12. CA: Affirmed.
ISSUE: Whether his disability is considered permanent and total warranting
compensation. YES.
RATIO:
In accordance with the avowed policy of the State to give maximum aid and full
protection to labor, the Court has applied the Labor Code concept of permanent
total disability to Filipino seafarers, it holding that the notion of disability is
intimately related to the workers capacity to earn, what is compensated being
not his injury or illness but his inability to work resulting in the impairment of
his earning capacity; hence, disability should be understood less on its medical
significance but more on the loss of earning capacity.
EO 247: Secure the best terms and conditions of employment of Filipino
contract workers and ensure compliance therewith and to promote and
protect the well-being of Filipino workers overseas.
 That petitioner was not likely to fully recover from his disability is mirrored by
the Labor Arbiters finding that his illness would possibly recur once he
resumes his sea duties. Such finding could account why petitioner was not re-
deployed by respondents
Petitioners disability being then permanent and total, he is entitled to 100%
compensation.
14 SARA LEE CORPORATION v. MACATLANG
FACTS:
1. Aris filed a Notice of Permanent Closure with the DOLE. All employees were
duly informed.
2. Aris Philippines Workers Confederation (Union) staged a strike for violation of
duty to bargain collectively, union busting and illegal closure.
3. After conciliation, the parties entered into an agreement whereby Aris
undertook to pay its employees the benefits which accrued by virtue of the
closure.
4. FAPI (one of the petitioners) was incorporated. The employees then filed
against Aris complaint for illegal dismissal contending that FAPI was organized
by Aris management to defeat their right of security of tenure.
5. Aris: It has all the requirements for a valid closure and is not connected to FAPI.
6. Labor Arbiter: Found the dismissal of 5,984 complainants as illegal and
awarded separation pay and other benefits amounting to P3B.
7. FAPI: Its total assets would not be enough to answer for the award. To compel
it to post a bond might stop its operations.
8. NLRC granted the reduction of the appeal bond to P9M due to the huge
economic losses the companies might suffer.
9. Macatlang: The appeal bond must be equivalent to the amount of the award.
10. CA: Deemed it reasonable under the circumstances to order the posting of an
additional appeal bond of P1B.
11. Corporations: CA overlooked the fact that Macatlang et al. already received
separation pay of P419M and P15M which should be excluded.
ISSUE: Whether the appeal bond should be reduced.
RATIO:
Appeal is not a constitutional right, but a mere statutory privilege. Hence,
parties who seek to avail themselves of it must comply with the statutes or
rules allowing it.
It is presumed that an appeal bond is only necessary in cases where the labor
arbiters decision or order contains a monetary award. Conversely, when the
labor arbiter does not state the judgment award, posting of bond may be
excused.
 The Rules only allow the filing of a motion to reduce bond on two (2)
conditions: (1) that there is meritorious ground; and (2) a bond in a reasonable
amount is posted.
The appeal bond is lowered to P725M. It is a balancing of the constitutional
obligation of the state to afford protection to labor which, specific to this case,
is assurance that in case of affirmance of the award, recovery is not negated;
and on the other end of the spectrum, the opportunity of the employer to
appeal.
15 GRANDTEQ INDUSTRIAL STEEL PRODUCTS, INC. v. MARGALLO
FACTS:
1. Grandteq is a domestic corporation engaged in the business of selling welding
electrodes, alloy steels, aluminum and copper alloys.
2. Grandteq employed Margallo as Sales Engineer.
3. Margallo claimed that she availed of the car loan program offered by Gradteq
as a reward for being Salesman of the Year.
4. Margallo then received a letter requiring her to explain why a disciplinary
action should not be given for allegedly violating/committing moonlighting,
sabotage, and breach of trust and confidence.
5. Margallo: She was just following the orders from her boss and had been doing
similar actions for his other bosses.
6. She claimed that she was later on asked to resign, that if she did, she would still
be paid her commissions and other benefits, and be reimbursed her car loan
payments.
7. She tendered her resignation but alleged that she was never paid her money
claims.
8. She said that Grandteq failed to pay her commission, refund the advances she
gave her customers. Ganteq also sold her car to another employee.
9. She filed a complaint before the Labor Arbiter for recovery of sales commission,
cash incentive, car loan payment, damages, attorneys fees.
10. Grandteq: All of Margallos credit sales were unpaid, outstanding and past due.
She was also not entitled to sales incentives because those were intended for
customers. She also has no right to refund the car loan under the agreement
which forfeits all her payments in favor of Grandteq plus regaining possession
of the car.
11. Labor Arbiter: No proof of entitlement to commission, cash incentive, and
reimbursement.
12. NLRC: Ordered to refund the car loan payments because of the promise given
to her that such would be returned superseding the previous agreement on
forfeiture. She was also entitled to the commission but not to the cash incentive.
13. CA: Affirmed the NLRC.
ISSUE: Whether the car loan payments should be returned to Margallo. YES.
RATIO:
 It must be remembered that Margallo herself paid for the down payment and
her share in the monthly amortization of the car. However, she did not get to
leave with the car when she resigned from Grandteq. In effect, Margallo parted
with her hard earned money for nothing, being left, as she is, with an empty
bag.
The inequitableness in the conduct of Grandteq and Gonzales is heightened by
the fact that after they regained possession of the car, they resold the same to
another employee under a similar contract bearing the same terms and
conditions signed by Margallo.
No person may unjustly enrich oneself at the expense of another.
Equity is exercised in this case as the complement of legal jurisdiction [that]
seeks to reach and to complete justice where courts of law, through the
inflexibility of their rules and want of power to adapt their judgments to the
special circumstances of cases, are incompetent to do so.
Although not strictly a labor contract, the car loan agreement herein involves a
benefit extended by the employers, Grandteq and Gonzales, to their employee,
Margallo. It should benefit, and not unduly burden, Margallo.
16 SAMEER OVERSEAS PLACEMENT AGENCY, INC. v. CABILES
FACTS:
1. Sameer is a recruitment and placement agency.
2. Responding to an ad it published, Cabiles submitted her application for a
quality control job in Taiwan which was accepted.
3. She was asked to sign a one-year employment contract and she was required
to pay a placement fee of P70k.
4. She was deployed to Taiwan Wacoal where she was asked to work as a cutter
instead of a quality control worker as agreed upon.
5. Sameer claims that a certain Mr. Huwang from Wacoal informed Jo, without
prior notice, that she was terminated. She was asked to prepare for immediate
repatriation.
6. Joy filed a complaint with the NLRC against Sameer and Wacoal for being
illegally dismissed.
7. Sameer: The termination was due to her inefficiency, negligence in her duties,
and failure to comply with the work requirements.
8. Labor Arbiter dismissed Joys complaint for being based on mere allegations.
9. NLRC: Joy was illegally dismissed. No proof for just cause of termination.
Awarded Joy 3 months worth of salary
10. CA: Affirmed NLRC.
ISSUE: Whether Joy was illegally dismissed and was entitled to backwages. YES.
RATIO:
Workers are entitled to substantive and procedural due process before
termination. Security of tenure is guaranteed by the Constitution.
OFWs likewise enjoy security of tenure (lex loci contractus).
The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment
opportunities for all.
Overseas Filipino workers (OFWs) may only be terminated for a just or
authorized cause and after compliance with procedural due process
requirements.
Joy Cabiles, having been illegally dismissed, is entitled to her salary for the
unexpired portion of the employment contract that was violated together with
attorneys fees and reimbursement of amounts withheld from her salary.
 This government loses its soul if we fail to ensure decent treatment for all
Filipinos. We default by limiting the contractual wages that should be paid to
our workers when their contracts are breached by the foreign employers.
While we sit, this court will ensure that our laws will reward our overseas
workers with what they deserve: their dignity. Inevitably, their dignity is ours
as well.
17 RACELIS v. UNITED PHILIPPINE LINES, HOLLAND AMERICA LINES, and
LISING
FACTS:
1. Racelis was recruited and hired by United Philippine Lines for its Holland
America Lines to serve as Demi Chef De Partie onboard a vessel.
2. In the course of the employment, he suffered severe pain in his ears and high
blood pressure causing him to collapse while in the performance of duties.
3. He was medically repatriated for further treatment.
4. He was seen by the company-designated physician and was diagnosed to be
suffering from Brainstem Cavernous Malformation.
5. He underwent surgery twice but developed complication which caused his
death.
6. A certain Dr. Abaya e-mailed the counsel of UPL that Racelis illness was
congenital and that there may be familial strains, hence, his death was not
work-related.
7. Racelis survising spouse sought to claim death benefits pursuant to the
International Transport Workers Federation CBA but to no avail.
8. She filed a complaint for death benefits, burial assistance, moral and exemplary
damages, and attorneys fees against respondents before the NLRC.
9. Respondents: Not entitled to death benefits because cause of death was not
work-related. Disease was not an occupational disease. His death occurred
after repatriation so he was no longer an employee.
10. Labor Arbiter: Ordered UPL to pay for burial assistance because death occurred
in the course of the employment contract.
11. NLRC: Affirmed, proximate cause of death supervened during his employment.
12. CA: Annulled NLRC decision. Racelis death did not occur in the employ of
respondents. Not work-related.
ISSUE: Whether Racelis spouse is entitled to the grant of death benefits. YES.
RATIO:
While it is true that Brainstem (pontine) Cavernous Malformation is not listed
as an occupational disease under Section 32-A of the 2000 POEASEC, Section
20 provides that the liabilities of the employer when the seafarer suffers work-
related injury or illness during the term of his contract are as follows: (t)hose
illnesses not listed in Section 32 of this Contract are disputably presumed as
work-related.
 While it is true that a medical repatriation has the effect of terminating the
seafarers contract of employment, it is, however, enough that the work-
related illness, which eventually becomes the proximate cause of death,
occurred while the contract was effective for recovery to be had.
The POEA-SEC was designed primarily for the protection and benefit of Filipino
seafarers in the pursuit of their employment onboard ocean-going vessels. As
such, it is a standing principle that its provisions are to be construed and
applied fairly, reasonably, and liberally in their favor.
It would be highly inequitable and even repugnant to the States policy on labor
to deny petitioners claim for death benefits for the mere technicality triggered
by Rodolfos prior medical repatriation. As it has been clearly established that
Rodolfo had been suffering from a work-related illness during the term of his
employment that caused his medical repatriation and, ultimately, his death, it
is but proper to consider the same as a compensable work-related death
despite it having occurred after his repatriation.
19 CALLANTA v. CARNATION PHILIPPINES
FACTS:
1. Callanta was a salesman of Carnation for 15 years
a. Carnation filed an application for clearance to terminate Callanta because
of serious misconduct and misappropriation
2. After 3 years, 1 month and 5 days, Callanta filed a complaint for illegal
dismissal.
3. Carnation argues that such has already prescribed because Art. 291 and 292
provide that offenses and money claims under the Labor Code prescribe in 3
years.
ISSUE: WON the action had already prescribed. NO
RATIO:
1. Although illegal dismissal is a violation of the Labor Code, it does not fall within
the ambit of the term offense in 291.
a. Because in illegal dismissal, no penalty or fine or imprisonment is imposed
b. Backwages are money claims but such is not the main cause of action. The
principal cause of action is the deprivation of employment.
2. The 4-year prescription in the Civil Code Art. 1146 must apply.
3. Even if falls under 291/ 292, a strict application of said provisions must not
destroy the enforcement of the fundamental rights of the employee.
4. Also, there was illegal dismissal because the shortage should have first been
investigated pursuant to the due process clause. Outright dismissal was too
severe.
20 PHIL ASSOC OF SERVICE EXPORTERS vs. DRILON (SEC. OF LABOR),
ACHACOSO (POEA)
FACTS:
1. Phil. Assoc. of Service Exporters (PASEI) is a recruitment agency of Filipino
workers for overseas placement
2. D.O. No. 1 was issued by DOLE which suspends temporarily the deployment of
female domestic household workers
a. PASEI assails the validity of this D.O.: that such discriminates domestic
workers, it violates the right to travel, and that the executive cannot
exercise lawmaking power; it violates the non-impariment clause of the
Constitution
3. SolGen filed a Comment saying that the ban in several countries (Iraq, Jordan
etc.) had already been lifted; and such D.O. is a valid exercise of the police
power of the state
4. No impairment of right to travel- right to travel is subject to the requirements
of public safety.
5. DO implements the Labor Code provision to afford protection to Labor
6. PASEI invocation of the requirement that the workers must me given
participation in policy and decision making, is not well-taken
a. Said right must submit to the demands of the States power of regulation
7. Sec. 3. The State shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and equality of
employment opportunities for all
a. It not only signifies promotion of labor, but also ensuring decent, just and
humane employment.

ISSUE: WON D.O. No.1 is valid. YES

RATIO:
1. Police power is the state authority to enact legislation that may interfere with
the personal liberty or property in order to promote general welfare
a. Scope is ever-expanding to meet the exigencies of the times
b. But it may not be exercised arbitrarily, this the Bill of Rights is a limitation
2. Official acts enjoy presumption of validity as a general rule. Unless clear and
convincing evidence is shown
3. NO DISCRIMINATION- although the D.O. only applies to females, it does not
unduly discriminate
a. Requisites for valid classification: based on substantial distinctions;
germane to the purpose of law; not limited to existing conditions; applies
equally to all members of the same class
b. SC took judicial notice of the exploitation, torture and harassment of female
workers abroad.
c. The DO will apply as long as the conditions exist.
d. Even if the ban applies only to female domestic workers and not all female
workers, it does not discriminate because the classification is based on
substantial distinctions
i. What would be discriminatory is to apply the ban only to particular
recruiters
21 ISAE vs. QUISUMBING (SEC. OF LABOR) of any kind, in particular women being guaranteed conditions of work not
inferior to those enjoyed by men, with equal pay for equal work;
FACTS: a. Persons with substantially equal qualifications, skill, effort, responsibility,
1. International School Manila is a domestic educational institution established and under similar conditions should be paid similar salaries
for dependents of foreign diplomatic personnel and temporary residents. b. If the School Employs Filipinos and foreigners in the same rank, it is
a. The school hires both local and foreign teachers, and it distinguishes those presumed that they perform equal work, and such does not require
locally hired based on a test (domicile, home economy, allegiance to which evidence, contrary to the Schools contentions
country, where the employee was hired) c. No evidence was adduced by the School that the foreign hires are more
b. The school also grants those foreign-hired more benefits (transportation, efficient or effective
shipping, taxes, travel allowance), 25% more salary. 3. General principles of international law include principles of equity, i.e., the
2. ISAE, legitimiate labor union of all faculty, questioned said difference general principles of fairness and justice, based on the test of what is
a. Such constitutes racial discrimination reasonable. The Universal Declaration of Human Rights, the International
3. Acting Sec. of Labor held that there was no discrimination Covenant on Economic, Social, and Cultural Rights, the International
a. There are some foreigners who are locally hired who are paid the same as Convention on the Elimination of All Forms of Racial Discrimination, the
Filipino workers Convention against Discrimination in Education, the Convention (No. 111)
b. Foreign hires also have limited tenure compared to Filipinos who have Concerning Discrimination in Respect of Employment and Occupation - all
security of tenure embody the general principle against discrimination, the very antithesis of
fairness and justice.
ISSUE: WON such distinction in benefits and salaries is discriminatory. YES. 4. While the SC notes that the School needs to attract foreign hires, such should
not prejudice local hires
RATIO: a. The limited tenure and dislocation factor (foreign hires are far from their
1. The Constitution in the Article on Social Justice and Human Rights exhorts families, hometown etc) cannot serve as basis for the difference in salaries
Congress to "give highest priority to the enactment of measures that protect
and enhance the right of all people to human dignity, reduce social, economic,
and political inequalities." Article 19 of the Civil Code requires every person,
"in the exercise of his rights and in the performance of his duties, [to] act with
justice, give everyone his due, and observe honesty and good faith."
a. Labor is entitled to "humane conditions of work." These conditions refer to
physical workplace - the factory, the office or the field as well as the manner
by which employers treat their employees.
b. directs the State to promote "equality of employment opportunities for all."
Similarly, the Labor Code provides that the State shall "ensure equal work
opportunities regardless of sex, race or creed."
2. International Covenant on Economic, Social, and Cultural Rights, in Article 7:
The States Parties to the present Covenant recognize the right of everyone to
the enjoyment of just and favorable conditions of work, which ensure, in
particular: a..Remuneration which provides all workers, as a minimum, with: i.
Fair wages and equal remuneration for work of equal value without distinction
22 CHU vs. NLRC, VICTORIAS MILLING COMPANY INC. 4. An employees right to security of tenure does not give him such a vested right
in his position as would deprive the company of its prerogatives to change his
FACTS: assignment or transfer him where he will be most useful.
1. Chu retired from Victorias Milling upon reaching 60 years old, under its regular
retirement program.
a. However, he was granted by the Board a 1 year extension and that he
assigned as Head of Warehousing, Sugar, Shipping, and Marine Department
(6,941k/month) under a Special Contract of Employement
2. In a memorandum issued by the Company, there was a rotation of personnel to
other departments. Thus, Chu was transferred to the Sugar Sales Dept.
a. Chu protested his transfer
3. Chu filed a complaint for illegal dismissal alleging constructive dismissal
4. LA- no constructive dismissal; the transfer was without change in rank or
salary; no bad faith NLRC- affirmed

ISSUE: WON there was illegal dismissal. NO.

RATIO:
1. An owner of a business enterprise is given considerable leeway in managing
his business because it is deemed important to society as a whole that he should
succeed.
a. The law recognizes inherent management of businesses (management
prerogatives) acts by which the one directing a business is able to control
variables thereof so as to enhance the chances of making a profit.
2. One of management prerogatives is the right to transfer employees in their
work station
a. Based on employees qualifications, aptitude and competence in various
business operations
b. Security of tenure does not give the employee vested right in his position
especially when management thinks he will be more useful in another
assignment.
c. When the transfer is not unreasonable, nor inconvenient nor prejudicial to
him, or it does not involve a diminution of rank, salaries or benefits or other
privileges, the employee cannot complain that it amounts to constructive
dismissal
3. Nothing in the Special Contract of Employment waived the companys right to
transfer Chu to any position
23 SAN MIGUEL BREWERY SALES FORCE UNION (PTGWO) vs BLAS OPLE, SMC
FACTS:
1. A CBA was entered into by SMC and he Union, which provides that all
employees within the bargaining unit is entitled to a basic salary plus
commission based on their respective sales
2. SMC introduced a new marketing scheme which sells its beer products directly
to wholesalers through its sales offices. (Complementary Distribution System
CDS)
3. The union filed a complaint for unfair labor practice with a notice of strike;
because such new marking scheme would reduce the take home pay of
salesmen and truck helpers
4. Ministry of Labor- no unfair labor practice; its implemented to improve
efficiency and economy
ISSUE: WON such constitutes unfair labor practice. NO.
RATIO:
1. The CDS is a valid exercise of management prerogatives
a. Except as limited by special laws, an employer is free to regulate, according
to his own discretion and judgment, all aspects of employment, including
hiring, work assignments, working methods, time, place and manner of
work, tools to be used, processes to be followed, supervision of workers,
working regulations, transfer of employees, work supervision, lay-off of
workers and the discipline, dismissal and recall of work.
2. The company is entitled to device means designed to increase its profits
3. As long as these prerogatives are exercised in good faith for the advancement
of employers interest and not for the purpose of circumventing the rights of
employees under the law or valid agreements, the Court will uphold them.
4. Note that SMC offered to compensate the sales employees adversely affected
by paying a back adjustment commission- proves lack of bad faith
24 PAL vs NLRC, PAL EMPLOYEES ASSOCIATION
FACTS:
1. In 1985 PAL amended its Code of Discipline and several employees were
subjected to disciplinary measures
2. PALEA filed a complaint with the NLRC for unfair labor practice
a. That such Code was arbitrary because it was issued without notice or prior
discussion with the Union; such was unfair oppressive and prejudicial to
the employees; no publication was made; copies were limited
3. PAL argued such was a valid exercise of management prerogative as an
employer
4. LA- no bad faith on the part of PAL, however, PAL failed to circulate copies, and
sec. 1 of such Code was too broad; sec 7 violates prohibition against double
jeopardy
5. NLRC- no unfair labor practice; must circulate copies; union should have been
given a chance to participate, so that they would have a more harmonious
relationship (shared management prerogative)
ISSUE: WON management may be compelled to share with the Union its
prerogative of formulating a Code of Discipline. YES.
RATIO:
1. It was only in 1989 (after the Labor Code was amended, Art. 211) that the law
requires the state to ensure the participation of workers in decision and policy-
making processes affecting their rights, duties and welfare
2. PAL is correct is saying that at the time the Code of Discipline was amended,
there was no law requiring labor participation in such processes
a. HOWEVER, the exercise of management prerogative is not unlimited
b. Even if the law was not yet amended at the time of implementations,
attainment of a harmonious labor-management relationship is possible
with the transparency in managerial moves affecting employees rights
3. In this case, the provisions of the Code of Discipline is not purely business
oriented nor concern purely management aspect
a. The provisions have repercussions on employees right to security of
tenure, thus affects employees property rights (employment is a property
right)
4. A line must be drawn between management prerogatives regarding business
operations per se and those which affects the rights of employees
 a. As regards those affecting the rights of employees- management should see
to it that its employees are at least properly informed of its decisions or
modes of action
b. As found by the LA and NLRC (which the SC accords due respect), PAL failed
to furnish copies to its employees
5. As PAL contends, the CBA agreement provides that the Company has the right
to enforce rules and regulations to carry out functions of management
a. Such cannot be interpreted as a waiver of employees rights
b. Industrial peace cannot be achieved if the employees are denied their just
participation in the discussion of matters affecting their rights
25 JENNY PECKSON vs. ROBINSONS SUPERMARKET CORP.
FACTS:
1. Peckson is a Category Buyer of Robinsons
a. She was transferred by VP for Merchandising to the position of Provincial
Coordinator
2. Peckson was claiming such is a demotion because the position is non-
supervisory and clerical in nature, thus she refused the assignment
a. she was made to explain her refusal and was reminded that disobedience
or refusal to do assigned task will be punished with suspension
b. she explained she considered such as a demotion, thus refuses to accept
3. Peckson filed a complaint for constructive dismissal
4. LA- no constructive dismissal; the organizational chart presented by Peckson
that Provincial Coordinator is a rank lower than her current position was
incorrect, both had the same job levels; job assignment is an employers
prerogative and Peckson cannot refuse such transfer because both positions
had the same salary, responsibility.
5. NLRC and CA affirmed
ISSUE: WON there was a demotion. NONE.
RATIO:
1. This Court has consistently refused to interfere with the exercise by
management of its prerogative to regulate the employees work assignments,
the working methods and the place and manner of work.
a. this Court has always upheld the employers prerogative to regulate all
aspects of employment relating to the employees work assignment, the
working methods and the place and manner of work. Indeed, labor laws
discourage interference with an employers judgment in the conduct of his
business.
2. doctrine of management prerogative: every employer has the inherent right to
regulate, according to his own discretion and judgment, all aspects of
employment, including hiring, work assignments, working methods, the time,
place and manner of work, work supervision, transfer of employees, lay-off of
workers, and discipline, dismissal, and recall of employees. The only limitations
to the exercise of this prerogative are those imposed by labor laws and the
principles of equity and substantial justice. It must be exercised without GAD
3. As regards the transfer of employees:
 a. a transfer is a movement from one position to another of equivalent rank,
level or salary without break in the service or a lateral movement from one
position to another of equivalent rank or salary; (based on employees
qualifications, skills and competence)
b. the employer has the inherent right to transfer or reassign an employee for
legitimate business purposes;
c. a transfer becomes unlawful where it is motivated by discrimination or bad
faith or is effected as a form of punishment or is a demotion without
sufficient cause;
d. the employer must be able to show that the transfer is not unreasonable,
inconvenient, or prejudicial to the employee
4. If the transfer of an employee is not unreasonable, or inconvenient, or
prejudicial to him, and it does not involve a demotion in rank or a diminution
of his salaries, benefits and other privileges, the employee may not complain
that it amounts to a constructive dismissal.
5. In this case, the transfer was not a constructive dismissal. The new job was not
merely clerical, and has similar responsibilities and salary
6. No denial of due process: she was made to explain twice by the VP for
Merchandising wherein she failed to reply on the first.
7. There is also no proof that the memo sent to her clients that she was no longer
a Category Buyer and her email address was removed, was not deliberately
made to subject her to public embarrassment these are mere logical steps
taken by Robinsons.
26 IMASEN PHIL MANUFACTURING CORP. vs RAMONCHITO ALCON, JOAN
PAPA
FACTS:
1. Alcon and Papa were hired as welders of Imasen (manufacturers of seat
recliners and slide adjusters)
2. When Alcon and Papa reported for work (8pm to 5am shift), the security guard
went on patrol and saw the two of them having sexual intercourse on a carton
used as a mattress
a. The guard then submitted a handwritten report to the Finance and
Administration Manager
b. Imasen then required Alcon and Papa to explain
c. They explained that they were merely sleeping on the carton and there
were employees near the area thus making the allegations impossible
3. Imasen terminated their employment and found them guilty of gross
misconduct
4. They filed with the LA a complaint for illegal dismissal
5. LA- no illegal dismissal; NLRC affirmed- there was just cause
6. CA- there was illegal dismissal; although sexual intercourse within the
company premises is serious misconduct, such was not committed with
wrongful intent; merely suspension
ISSUE: WON there was illegal dismissal. NONE, its a valid exercise of mgmt.
prerogative.
RATIO:
1. It is true that employees enjoy security of tenure. This case is about the balance
between security of tenure and management prerogative on the other
a. Art. 293 prohibits employers from terminating the services of an employee
except for just or authorized cause and upon observance of due process
b. The constitutional guarantee of social justice does not mean all disputes
shall be automatically decided in favor of labor. It also recognizes the
employers right and prerogative to manage its operations according to
reasonable standards and norms of fair play
2. The just causes for dismissing an employee are provided under Article 282
(now Article 296) of the Labor Code. Under Article 282(a), serious misconduct
by the employee justifies the employer in terminating his or her employment.
 a. It is a management prerogative to regulate its business- dismiss and hire
employees, work assignments, methods, time place and manner of work,
discipline and supervision etc.
b. Misconduct elements: (a) the misconduct must be serious; (b) it must relate
to the performance of the employees duties showing that the employee has
become unfit to continue working for the employer; and (c) it must have
been performed with wrongful intent.
3. No illegal dismissal.
a. Sexual acts and intimacies between two consenting adults belong, as a
principled ideal, to the realm of purely private relations.1wphi1 Whether
aroused by lust or inflamed by sincere affection, sexual acts should be
carried out at such place, time and circumstance that, by the generally
accepted norms of conduct, will not offend public decency nor disturb the
generally held or accepted social morals. Under these parameters, sexual
acts between two consenting adults do not have a place in the work
environment.
b. They had sexual intercourse within company premises during work hours-
such could affect the ethics and morality in the company;
c. They did it in an area accessible to co-workers
d. Their infraction transgressed the bounds of socially and morally accepted
human public behavior, and at the same time showed brazen disregard for
the respect that their employer expected of them as employees
27 SHS PERFORATED MATERIALS INC. (SHS) vs. DIAZ
FACTS:
1. Diaz was a Manager for Business Development on probationary status of SHS
(P100k/mo.)
a. In his contract, he was tasked to report to Mr. Hartmanshenn (President);
and to report to work at least 2 times a week to observe plant processes
b. Hartmanshenn is often abroad and communicates with Diaz through calls
and e-mails
c. Hartmanshenn expressed dissatisfaction because of Diazs poor
performance at work; he only reported for work only 8 times in 4 months
2. Hartmanshenn arrived to the Philippines and tried to contact Diaz, but the
latter did not answer and/or reply. He said he never received those messages
a. So, Hartmanshenn told the Accounting Department not to release the salary
of Diaz
b. The next day, Diaz sent to SHS a demand letter for his salary and a
resignation letter
3. When they both finally met, Hartmanshenn allegedly expressed his
disappointment at Diaz and the latter failed to give a proper explanation
a. Diaz claims that Hartmanshenn merely insulted him and offered P25k
instead of his salary
4. Diaz filed a complaint for illegal dismissal, non-payment of wages and 13th
month pay
5. LA- illegal dismissal, ordered Diazs reinstatement + backwages +moral&
exemp damages
a. There was constructive dismissal because of the withholding of Diazs
salary; his probationary status was deemed regularized because SHS failed
to conduct an evaluation of his performance and to give notice 2 days before
of his termination
b. NLRC reversed. Withholding of salary was a valid exercise of management
prerogative; reasonable because of failure to report to work; there was
voluntary resignation
c. CA- there was illegal dismissal.
ISSUES:
1. WON there was illegal dismissal. YES.
2. WON withholding of salaries is a valid management prerogative. NO.
RATIO:
1. Management prerogative refers to the right of an employer to regulate all
aspects of employment, such as the freedom to prescribe work assignments,
working methods, processes to be followed, regulation regarding transfer of
employees, supervision of their work, lay-off and discipline, and dismissal and
recall of work.
a. LC prohibits withholding of wages without the consent of the employee
(Art.116) the only form of wage withholding is in case of wage deductions
(insurance with the consent of employee; union dues; authorized by law)
2. Although there is sufficient proof that Diaz failed to report to work from Nov
16-30, his duties only include meeting with clients. Thus, his work does not
require close supervision and monitoring by the company
a. Failure to report to work does not automatically signify he did not work
b. Diaz presented receipts for payment by clients; that he submitted reports
to harmanshenn, and that documents that showed clients vouched they had
meetings with Diaz
c. Although theres uncertainty as to whether Diaz really worked or not, the
scales of justice must be titled in favor of the employee in line with the
policy that the State must afford protection to labor.
3. As regards the resignation letter- SC believes that Diaz was merely forced to
resign because of the withholding of his salary. It would be absurd for Diaz to
tolerate working despite the unlawful withholding of his salary
a. He even cited in his letter that the cause for resignation is the illegal and
unfair labor practice
4. The reliance of SHS to the Solas case is misplaced. The employer in that case
was allowed by the SC to deduct the employees wages for payment of income
taxes (sanctioned by the NLRC) and payment of a debt due to the employer
(Art/ 1706, NCC)
a. In this case, there was no sufficient proof that Diaz in fact did not really
work during said period thus, such amounts to constructive dismissal.
5. probationary employees who are unjustly dismissed during the probationary
period are entitled to reinstatement and payment of full backwages and other
benefits and privileges from the time they were dismissed up to their actual
reinstatement.
6. Corporate officers are not liable personally, because of the absence of bad faith
on their part.
28 SUPREME STEEL vs SUPREME STEEL UNION
FACTS:
1. The union filed a notice of strike with the National Conciliation and Mediation
Board (NCMB) because Supreme Steel violated provisions of the CBA
a. Sec. of Labor certified the case for compulsory arbitration
2. The union alleged that Supreme Steel:
a. denied the CBA mandated wage increase to 4 employees (CBA requires
increase every year: 2003- P14, 2004- P12, 2005- P12)
i. Supreme Steel argues that has been company practice to adjust wages
after reaching one year and once that is done, the CBA increase is no
longer implemented
b. That the CBA prohibits the hiring by the company of contractual
employees except in the warehouse and packing section, but Supreme
Steel still hired employees
i. Supreme Steel said they did hire temporary workers but only to
cope with the seasonal increase of job orders from abroad
c. That Supreme Steel failed to provide a shuttle service as provided in the
CBA
i. Supreme Steel only said that it is difficult to implement this provision
d. Failure by company to answer medical expenses of 3 employees
e. Failure to comply with the time-off pay provision- that allows employees to
be excused from work when summoned by the union to testify or when his
presence is necessary
f. Dismissal of Madayag because he has type 2 diabetes
g. Denial of paternity leaves
h. Discrimination and harassment of several union officers (who were
transferred, penalized, inclusion of non-taxable items to their taxable
incomes)
i. Non-implementation of COLA (cost of living allowance) to those who do not
earn minimum wages
i. CBA, Section 2. All salary increase granted by the COMPANY shall not
be credited to any future contractual or legislated wage increases. Both
increases shall be implemented separate and distinct from the
increases stated in this Agreement. It should be understood by both
parties that contractual salary increase are separate and distinct from
legislated wage increases, thus the increase brought by the latter shall
be enjoyed also by all covered employees.
3. NLRC- all are decided in favor of the Union except for the paternity leave and e. Companys scheme was to hire employees for five month contracts and to
discrimination issues. CA affirmed. renew them after the expiration. This scheme is to prevent employees from
acquiring the status of regular employees.
ISSUE: WON hiring of temporary employees is a valid exercise of management f. The primary standard to determine a regular employment is the reasonable
prerogative despite prohibition by the CBA. NO. connection between the particular activity performed by the employee in
relation to the business or trade of the employer. The test is whether the
former is usually necessary or desirable in the usual business or trade of
RATIO: the employer. If the employee has been performing the job for at least one
1. CBA is the law between the parties and compliance therewith is mandated by year, even if the performance is not continuous or merely intermittent, the
the express policy of the law. If the terms of a CBA are clear and there is no law deems the repeated and continuing need for its performance as
doubt as to the intention of the contracting parties, the literal meaning of its sufficient evidence of the necessity, if not indispensability, of that activity to
stipulation shall prevail. Must be construed liberally; doubt resolved in favor of the business of the employer.
labor. 7. Dismissal of Madayag is illegal. There was no certification by a public health
2. SC affirms CA decision except as regards the COLA issue. officer as required by the LC.
3. As regards the wage increase: it should be interpreted that the increase should 8. As regards the COLA. The non-implementation of such to non-minimum wage
be given to all employees over and above the amount they are receiving even earners is not a diminution of benefits. There was no proof that it had been a
if that amount includes an anniversary increase. voluntary company practice for a long period of time. In fact, it only lasted for
a. Thus, even if Supreme Steel already granted an anniversary increase, such a year.
cannot be credited to the contractual increase provided for by the CBA
b. Supreme Steel failed to prove that it has been company practice that the
anniversary increases offsets the CBA increase
4. As regards the shuttle services- mere difficulty is not an excuse. CBA is a
contract and thus must be complied with. Company must recondition the
shuttle, otherwise it may be held guilty of unfair labor practice.
5. Medical and First Aid- the injury incurred by an employee during a company
sportsfest must be reimbursed by the company. CBA must be interpreted
liberally and not technically. Thus first aid is not merely limited to minor
injuries as the Company believes
6. Hiring of temporary employees is proscribed by the CBA
a. Company argues its a management prerogative
b. Law respects companys management prerogatives, however, such is not
unlimited. Such is limited by CBAs, the law and principles of fair play and
justice
c. The CBA is clear in providing that temporary employees are not allowed in
the company except in the warehousing and packing sections.
d. The company is bound by said provision and cannot excuse himself from
such
29 PLDT vs. PAGUIO employer bears the burden of proving that the transfer of the employee has
complied with the foregoing test.
FACTS: 3. In this case, there was no credible reason for Paguios transfer except his
1. Paguio was the head of the Garnet Exchange of PLDT criticisms of the Companys performance evaluation methods.
a. He sent a letter to his immediate supervisor criticizing the criteria for a. Paguios rating was outstanding. There was no proof he failed to comply
performance by PLDT because such depended on manpower and it was with management policy. His transfer could not be due to poor performance
unfair because they were disallowed to use contractors for new b. The transfer is prejudicial because the new position does not make it
installations and was not made beneficiary of the cut-over bonus. possible for a promotion, he had neither office nor staff.
2. Paguio was reassigned as head of the special assignment at the East Center, and
was asked to give Go his position.
a. PLDT explained that the reassignment was because Paguio was not a team
player and he cannot accept the decisions of the management which is short
of insubordination
3. Paguio filed a complaint for illegal demotion
a. LA- transfer was valid
b. NLRC- transfer was unlawful because the criticism of Paguio was done in
good faith to help his team
c. CA- affirmed

ISSUE: WON the transfer was valid. NO.

RATIO:
1. Paguio argues his new position was functionless: no office or staff and he
cannot be promoted
a. PLDT: the reassignment was not a demotion, the position has equal rank
and salary; his reinstatement is not possible because his position no longer
exists due to a company-wide organization
2. GR: an employer is free to regulate, according to his own discretion and
judgment, all aspects of employment, including the transfer of employees.
a. An employees right to security of tenure does not give him such a vested
right in his position as would deprive the company of its prerogative to
change his assignment or transfer him where he will be most useful
b. HOWEVER, the exercise of management prerogative cannot be utilized to
circumvent the law and public policy on labor and social justice; must be
exercised always with the principles of fair play and justice
c. the employer must be able to show that the transfer is not unreasonable,
inconvenient or prejudicial to the employee; nor does it involve a demotion
in rank or a diminution of his salaries, privileges and other benefits. The
30 BUSINESSDAY INFORMATION SYSTEMS (BSSI) vs. NLRC
FACTS:
1. BSSI manufactures and sells computer forms. Because of financial losses, DBP
and APT took possession of its assets and manufacturing plant
a. Thus, some plant employees were laid off after notice and with separation
pay of months salary
b. BSSI retained some to rehabilitate its business. But after 2 months, these
employees were discharged to cease business operations. Their separation
pay was equivalent to 1 months pay.
2. The respondent who were dismissed first, claimed discrimination because they
were only paid months worth of salary
a. LA- There was discrimination; NLRC affirmed
ISSUE: WON there was discrimination. YES.
RATIO:
1. LC allows reduction of personnel due to redundancy, labor saving devices,
retrenchment, closing of the establishment
a. 1 months pay per year of service- in case of termination due to labor saving
devices or redundancy
b. month pay per year of service or 1 month pay (whichever is higher)- in
case of retrenchment, closure, or undertaking not due to serious business
losses
2. The company has a right to terminate employees because of retrenchment or
closure of business operations, but payment of separation benefits unequally
is discrimination
a. Note that the Company terminated first those who have worked longer and
retained those who have fewer work years
b. there was impermissible discrimination against the private respondents in
the payment of their separation benefits. The law requires an employer to
extend equal treatment to its employees. It may not, in the guise of
exercising management prerogatives, grant greater benefits to some and
less to others
c. Management prerogatives are not absolute prerogatives but are subject to
legal limits, collective bargaining agreements, or general principles of fair
play and justice
31 ROYAL PLANT WORKERS UNION vs. COCA COLA
FACTS:
1. In 1988 both bottling lines of Coca Cola were provided with chairs for the
workers. And their schedule includes a 15-minute break every 2 hours of
work
a. In 2008, a nationwide directive was given by Coca Cola where the chairs
were removed because employees are tasked to clean the machinery and
equipment; and to prevent employees from sleeping on the job because of
the dangerous machinery. The schedule now includes a 30-minute break
every 1 hour of work
2. The union after instituting a grievance to bring back the chairs, was
unsuccessful.
a. They argue that there is no connection between the cleaning of the
machineries with the removal of the chairs; no evidence that there are
employees sleeping on the job; it is a diminution of benefits under Art. 100,
LC
3. They submitted the case for arbitration
a. Arbitration committee rendered a decision in favor of the union
b. The use of chairs has been company practice for almost 34 years in line 2,
and 20 years in line 1
c. It has ripened into a benefit, in accordance with art. 100 of the LC
4. CA reversed. Removal of chairs is a management prerogative to control its
enterprise effectively and to optimize employee efficiency.
ISSUE: WON removal of chairs is a valid management prerogative. YES.
RATIO:
1. Note: Coca Cola is correct in challenging the ruling of thee arbitration
committee via 43 to the CA.
2. Removal of chairs is a valid exercise of management prerogative
a. Management is free to regulate, according to its own discretion all aspects
of employment, including hiring, work assignments, working methods,
time, place and manner of work, work processes, supervision, transfer, lay-
off, discipline, dismissal and recall of workers.
i. This must be exercised in good faith and with due regard to labor rights
b. The removal was pursuant to the management directive I operate, I
maintain, I clean program.
 i. The removal was compensated by reduction of operating hours and
increase in break period- no violation of justice and fair play
c. It was done in good faith by the management to avoid employees sleeping
on the job- to increase work efficiency
3. Labor Code only requires employers to grant seats for women. All employees
here are male.
a. Also, studies show sitting for a long time is hazardous to the health
4. There was no provision on the CBA requiring the management to provide seats
5. No violation of Art. 100 as regards the non-diminution of benefits
a. This only refers to benefits with monetary equivalents
32 BREW MASTER INTERNATIONAL vs. NAFLU (NATIONAL FEDERATION OF
LABOR UNIONS)
FACTS:
1. Estrada was a route helper of Brew Master. He was absent without permission
for a month so he made to explain why he should not be disciplined.
a. He explained that he had to take his kids back to Samar because his wife left
them and he had no money to send a letter to the company
b. The company terminated his employment, because company rules provide
that absence of 6 days without permission is considered abandonment of
work
2. Estrada complains that the dismissal was without cause
a. LA- valid dismissal; employers management prerogative includes the
prescription of rules and regulations to govern the conduct of employees
b. NLRC- illegal dismissal. Prolonged absence is not abandonment of work
which warrants outright termination of employment. Employee was a first
offender
ISSUE: WON there was illegal dismissal. NONE.
RATIO:
1. Estradas absence was because of a grave family problem. There was no one to
take care of his children after his wife abandoned them. He was under
emotional, psychological and physical stress.
a. His absence is thus, justified.
2. Abandonment is only valid if: (1) the failure to report for work or absence
without valid or justifiable reason; and (2) a clear intention to sever the
employer-employee relation
a. No evidence other than complainant's letter explaining his absence was
presented. Needless to state, the letter did not indicate, in the least, that
complainant was no longer interested in returning to work.
b. our Constitution looks with compassion on the workingman and protects
his rights not only under a general statement of a state policy thus placing
labor contracts on a higher plane and with greater safeguards.
c. They are impressed with public interest and labor contracts must, perforce,
yield to the common good
33 PNCC SKYWAY TRAFFIC MANAGEMENT WORKERS ORGANIZATION vs.
PNCC SKYWAY CORP.
FACTS:
1. The union and company entered into a CBA
a. The CBA allows vacation leave with pay to employees with at least 1year
continuous service (number of days depend on years of service) and that
the company shall take into consideration the preference of the employees.
b. The Security guards must pay for and renew their own licenses and must
apply for a leave of absence to renew such
2. The Head of PNCC issued the schedule vacation leave of its personnel, but
employees may swap schedules provided it is accompanied by a written
request
3. The union objected to the scheduled vacation leave, because its members were
not given the right to schedule their leave
a. Such was done to avoid the monetizing of their vacation leave
4. Arbitrator decided in favor of the union and said that employees who opt not
to use their vacation leave may convert them into cash; payment of the renewal
of security guards licenses should be paid by the company
a. CA reversed and said that the Arbitrator has no authority to interpret it
beyond what is expressly written
3. Since the grant of vacation leave is under the employers prerogative, it can
compel the employees to exhaust all their vacation leave credits.
4. The purpose of a vacation leave is to afford a laborer a chance to get a much-
needed rest to replenish his worn-out energy and acquire a new vitality to
enable him to efficiently perform his duties, and not merely to give him
additional salary and bounty.
5. The rule of construction in favor of labor is not applicable. Since the CBA is
clear, there is no ambiguity to be resolved in favor of the employees.
6. As regards the security guards- although the CBA provides that the guards shall
shoulder the renewal expenses. Such is contrary to law (R.A. 5487), which
imposes upon operators of private security and security guards a pro-rata
division of cost
a. Contracts are only valid provided they are not contrary to law, morals, good
customs, public policy or public order.

ISSUE: WON CA is correct. YES.

RATIO:
1. Where the language of a written contract is clear and unambiguous, the
contract must be taken to mean that which, on its face, it purports to mean,
unless some good reason can be assigned to show that the words used should
be understood in a different sense
2. CBA is clear that the scheduling of vacation leave shall be under the employers
option and that it may only take into considerations the employees preference
a. Union members cannot demand as a matter of right that their preference
be granted by the Company.
b. A CBA is a contract and the parties must comply with it in good faith
c. There is no basis for the arbitrator to interpret in any other way
d. If the union members are given freedom to schedule their on vacation
leaves, it may cripple the number of key employees especially on peak
seasons and/or holidays