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LABOR STANDARDS (Atty.

Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

oMIDTERMS that will enhance their welfare and enable them to realize their full potential in the service of
the nation.

I.GENERAL CONCEPTS b.STATUTES and JURISPRUDENCE labor code, civil code, special law, irr.
A.DEFINITION
a.LABOR c.COMPANY PRACTICE/POLICY
1. exertion by human beings of physical or mental efforts or both towards the production of Any benefit and supplement being enjoyed by EEs cannot be reduced, diminished,
goods and services. discontinued or eliminated by the ER. The principle of non-diminution of benefits is founded
2. that sector or group in society which derives its livelihood chiefly from rendition of work or on the Constitutional mandate to "protect the rights of workers and promote their
services in exchange for compensation under managerial direction welfare,and to afford labor full protection. Said mandate in turn is the basis of Article 4 of the
Labor Code which states that all doubts in the implementation and interpretation of this
b.LABOR LAW the law governing the rights and duties of Ers and Ees, 1st with respect to Code, including its implementing rules and regulations shall be rendered in favor of labor.
the terms and conditions of employment, and 2nd, with respect to the labor disputes arising Jurisprudence is replete with cases which recognize the right of EEs to benefits which were
from CBA respecting such terms and conditions. voluntarily given by the ER and which ripened into company practice.
Labor legislation are more specific than social legislation. All labor legislation are social
legislation. As to effect of employment, it directly affects employment like wages. As to e.CONTRACT/CBA
purpose, it designated to meet the daily needs of workers. As to coverage, covers
employment for profit or gain. As to effect to EEs, affect their work as to payor, benefits are C.SOCIAL JUSTICE/SPIRIT OF INTENTION
paid by the workers ER. a. 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
c.LABOR STANDARDS v. LABOR RELATION State so that justice in its rational and objectively secular conception may at least be
1.labstan deals with the minimum standards as to wages, hours of work and other terms approximated. Social justice means the promotion of the welfare of all the people, the
and conditions of employment that ERs must provide their EEs. adoption by the Government of measures calculated to insure economic stability of all the
2.Labrel defines the status, rights and duties as well as the institutional mechanism that competent elements of society, through the maintenance of a proper economic and social
govern the individual and collective interactions between Ers, Ees and their representatives. 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
d.SOCIAL LEGISLATION powers underlying the existence of all governments on the time-honored principle of salus
1.laws that provide particular kinds of protection or benefits to society or segments thereof populi est supremalex.
in furtherance of social justice.
2.laws that requires payment of benefits by government agencies to the worker or his family b.APPLICATION
when and while he connot work by reason of sickness, disability, old age, death and similar The policy of social justice is not intended to countenance wrongdoing simply because it is
hazards. committed by the underprivileged. At best it may mitigate the penalty but it certainly will not
Broader than labor legislation. Not all social legislations are labor legislation. As to effect of condone the offense. Social justice cannot be permitted to be refuge of scoundrels any
employment, it governs the effect of employment like compensation for injuries. As to more than can equity be an impediment to the punishment of the guilty. Those who invoke
purpose, it involves long range benefits. As to coverage, covers employment for profit and social justice may do so only if their hands are clean and their motives blameless and not
non profit. As to effect to EE, affects life of EE. As to payor, benefits are paid by government simply because they happen to be poor. (PLDT v. NLRC)
agencies like EEs compensation commission.
Even though strikes and lockouts have been recognized as effective bargaining tools, it is
B.SOURCES an antiquated notion that they are truly beneficial, as they only provide short-term solutions
a.CONSTITUTION by forcing concessions from one party; but staging such strikes would damage the working
ARTICLE II: relationship between ERs and EEs, thus endangering the business that they both want to
Section 5. The maintenance of peace and order, the protection of life, liberty, and property, succeed. The more progressive and truly effective means of dispute resolution, lies in
and promotion of the general welfare are essential for the enjoyment by all the people of the mediation, conciliation, and arbitration, which do not increase tension but instead provide
blessings of democracy. relief from them. In the end, an atmosphere of trust and understanding has much more to
offer a business relationship than the traditional enmity that has long divided the ER and the
Section 9. The State shall promote a just and dynamic social order that will ensure the EE, (TOYOTA MOTORS PHIL. WORKERS ASSOC. v. NLRC)
prosperity and independence of the nation and free the people from poverty through policies
that provide adequate social services, promote full employment, a rising standard of living, It is true that there have been instances when the Court awarded financial assistance to
and an improved quality of life for all. EEs who were terminated for just causes, on grounds of equity and social justice. When the
EE commits an act of dishonesty, depravity, or iniquity, the grant of financial assistance is
Section 10. The State shall promote social justice in all phases of national development. misplaced compassion. It is tantamount not only to condoning a patently illegal or dishonest
act, but an endorsement thereof. It will be an insult to all the laborers who, despite their
Section 11. The State values the dignity of every human person and guarantees full respect economic difficulties, strive to maintain good values and moral conduct. (RENO v. NLM)
for human rights.
c.INTENTION
Section 13. The State recognizes the vital role of the youth in nation-building and shall However, we opt for liberality in the application of the rules to the instant case in light of the
promote and protect their physical, moral, spiritual, intellectual, and social well-being. It shall following considerations. First, the rule that negligence of counsel binds the client may be
inculcate in the youth patriotism and nationalism, and encourage their involvement in public relaxed where adherence thereto would result in outright deprivation of the clients liberty or
and civic affairs. property or where the interests of justice so require.[Second, this Court is not a slave of
technical rules, shorn of judicial discretion in rendering justice, it is guided by the norm
Section 14. The State recognizes the role of women in nation-building, and shall ensure the that on the balance, technicalities take a backseat against substantive rights. Thus, if the
fundamental equality before the law of women and men. application of the rules would tend to frustrate rather than promote justice, it is always within
this Courts power to suspend the rules or except a particular case from its
Section 18. The State affirms labor as a primary social economic force. It shall protect the application.(MAGALLANES v. SUN YAT SEN)
rights of workers and promote their welfare.
D.ER-EE RELATIONSHIP
Section 20. The State recognizes the indispensable role of the private sector, encourages
private enterprise, and provides incentives to needed investments. a.FOUR-FOLD TEST: 1)Selection and engagement of the Ee; 2)payment of wages;
3)power of dismissal; and 4)power of control.
ARTICLE III
Section 1. No person shall be deprived of life, liberty, or property without due process of
b.ECONOMIC REALITY/ DEPENDENCY TEST whether the worker is dependent on the
law, nor shall any person be denied the equal protection of the laws.
alleged ER for his continued employment in that line of business.
Section 4. No law shall be passed abridging the freedom of speech, of expression, or of the
press, or the right of the people peaceably to assemble and petition the government for 2-TIERED approach
redress of grievances. 1.the putative ERs power to control EE with respect to means and methods by which the
work is to be accomplished; and
Section 8. The right of the people, including those employed in the public and private 2.the underlying economic realities of the activity or relationship.
sectors, to form unions, associations, or societies for purposes not contrary to law shall not
be abridged. c.WHO DETERMINES ER-EE RELATIONSHIP
It can be assumed that the DOLE in the exercise of its visitorial and enforcement power
ARTICLE XIII somehow has to make a determination of the existence of an ER-EE relationship. Such
Section 1. The Congress shall give highest priority to the enactment of measures that prerogatival determination, however, cannot be coextensive with the visitorial and
protect and enhance the right of all the people to human dignity, reduce social, economic, enforcement power itself. Indeed, such determination is merely preliminary, incidental and
and political inequalities, and remove cultural inequities by equitably diffusing wealth and collateral to the DOLEs primary function of enforcing labor standards provisions. The
political power for the common good. determination of the existence of ER-EE relationship is still primarily lodged with the NLRC.
To this end, the State shall regulate the acquisition, ownership, use, and disposition of This is the meaning of the clause in cases where the relationship of ER-EE still exists in
property and its increments. Art. 128 (b). (PEOPLES BROADCASTING v.SEC. OF DOLE)

Section 2. The promotion of social justice shall include the commitment to create economic e.ON CALL/RETAINER
opportunities based on freedom of initiative and self-reliance. the Court finds that the schedule of work and the requirement to be on call for emergency
cases do not amount to such control, but are necessary incidents to the Retainership
Section 3. The State shall afford full protection to labor, local and overseas, organized and Agreement. The Court also notes that the Retainership Agreement granted to both parties
unorganized, and promote full employment and equality of employment opportunities for all. the power to terminate their relationship upon giving a 30-day notice. Hence, petitioner
It shall guarantee the rights of all workers to self-organization, collective bargaining and company did not wield the sole power of dismissal or termination.
negotiations, and peaceful concerted activities, including the right to strike in accordance
with law. They shall be entitled to security of tenure, humane conditions of work, and a living The Court agrees with the Labor Arbiter and the NLRC that there is nothing wrong with the
wage. They shall also participate in policy and decision-making processes affecting their employment of respondent as a retained physician of petitioner company and upholds the
rights and benefits as may be provided by law. validity of the Retainership Agreement which clearly stated that no ER-EE relationship
The State shall promote the principle of shared responsibility between workers and ERs and existed between the parties. The Agreement also stated that it was only for a period of 1
the preferential use of voluntary modes in settling disputes, including conciliation, and shall year beginning January 1, 1988 to December 31, 1998, but it was renewed on a yearly
enforce their mutual compliance therewith to foster industrial peace. basis.
The State shall regulate the relations between workers and ERs, recognizing the right of Considering that there is no ER-EE relationship between the parties, the termination of the
labor to its just share in the fruits of production and the right of enterprises to reasonable Retainership Agreement, which is in accordance with the provisions of the Agreement, does
returns to investments, and to expansion and growth. not constitute illegal dismissal of respondent. Consequently, there is no basis for the moral
and exemplary damages granted by the Court of Appeals to respondent due to his alleged
Section 14. The State shall protect working women by providing safe and healthful working illegal dismissal.
conditions, taking into account their maternal functions, and such facilities and opportunities

Page 1 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

E.MANAGEMENT PREROGATIVE a.CONTENTS OF VALID QUITCLAIM/WAIVER


a.DEFINITION/BASIS:We have held that management is free to regulate, according to its b.VALID AND BINDING AGREEMENT
own discretion and judgment, all aspects of employment, including hiring, work c.QUITCLAIMS GENERALLY FROWNED UPON
assignments, working methods, time, place and manner of work, processes to be followed,
supervision of workers, working regulations, transfer of EEs, work supervision, lay off of
workers and discipline, dismissal and recall of workers. The exercise of management II. THE LABOR CODE OF THE PHILIPPINES (PD442 as amended)
prerogative, however, is not absolute as it must be exercised in good faith and with due A. PRELIMINARY TITLE
regard to the rights of labor. (JULIES BAKESHOP v. ARNAIZ) ART.1. Name of Decree this Decree shall be known as the Labor Code of the
Philippines.
An ER has the prerogative to prescribe reasonable rules and regulations necessary for the
proper conduct of its business, to provide certain disciplinary measures in order to ART.2. Date of Effectivity this Code shall take effect six (6) months after its
implement said rules and to assure that the same would be complied with. An ER enjoys a promulgation.
wide latitude of discretion in the promulgation of policies, rules and regulations on work-
related activities of the EEs. ART.5.Rules and regulation the DOLE and other Government agencies charged with the
administration and enforcement of this code or any of its parts shall promulgate the
It is axiomatic that appropriate disciplinary sanction is within the purview of management necessary implementing rules and regulation. Such rules and regulations shall become
imposition.Thus, in the implementation of its rules and policies, the ER has the choice to do effective fifteen (15) days after announcement of their adoption in newspapers of general
so strictly or not, since this is inherent in its right to control and manage its business circulation.
effectively. Consequently, management has the prerogative to impose sanctions lighter than
those specifically prescribed by its rules, or to condone completely the violations of its erring ART.3. Declaration of Basic Policy the State shall (APERA): 1.afford protection of
EEs. Of course, this prerogative must be exercised free of grave abuse of discretion, Labor; 2.promote full employment;3.ensure equal work opportuniyies regardless of sex,
bearing in mind the requirements of justice and fair play. Indeed, we have previously age, or creed;4.regulate the relations between workers and ERs; and 5.assure the right of
stated:Management also has its own rights, which, as such, are entitled to respect and workers to (SCSJ):a.self-organization; b.collective bargaining; c.security of tenure; and
enforcement in the interest of simple fair play.(SMC v. NLRC) d.just and humane condition of work.

LIMITATIONS: i.CONSTRUCTION IN FAVOR OF LABOR


1.law Art. 4. Construction in favor of labor. All doubts in the implementation and interpretation of
2.Contract or CBA the provisions of this Code, including its implementing rules and regulations, shall be
3.general principle of fair play and justice resolved in favor of labor.

b.GENERALLY NOT SUBJECT TO JUDICIAL INTERFERENCE ii.SCOPE/APPLICATION


The state cant interfere as to whether the management will strictly implement or Art.6. Applicability all rights and benefits granted to workers under this code shall,
not.(ARENO v. SKYCABLE) except as may otherwise de provided herein, apply alike to all workers, whether agricultural
or non-agricultural.
c.EXERCISE IN GOOD FAITH Exceptions:
1. Government EEs;
Despite an apparent reason to implement a retrenchment program as a cost-cutting
2.EEs of the government corporations(LRTA v. VENUS);
measure, respondent, however, did not outrightly dismiss the workers affected by the
3.Foreign governments;
closure of Paper Mill No. 4 but gave them an option to be transferred to posts of equal rank
4.international agencies, EEs of intergovernmental or international organizations
and pay. As can be seen, retrenchment was utilized by respondent only as an available
(SEAFDEC v. NLRC);
option in case the affected EE would not want to be transferred. Respondent did not
5.Corporate officers/inter-corporate disputes which fall under the jurisdiction of the regular
proceed directly to retrench. This, to our mind, is an indication of good faith on respondents
courts pursuant to Securities Regulation Code; and
part as it exhausted other possible measures other than retrenchment. Besides, the ERs
prerogative to bring down labor costs by retrenching must be exercised essentially as a 6.Local water districts except where NLRC jurisdiction is invoked.
measure of last resort, after less drastic means have been tried and found
Petitioner SEAFDEC-AQD is an international agency beyond the jurisdiction of public
wanting.(PANTOJA v. SCA HYGIENE)
respondent NLRC. The RP became a signatory to the Agreement establishing SEAFDEC.
The purpose of the Center is to contribute to the promotion of the fisheries development in
d.TRANSFER OR FROMOTION (DEMOTION)
Southeast Asia by mutual co-operation among the member governments. The Council shall
respondent Reyes failed to justify petitioners transfer from the position of chief bakers to be the supreme organ of the Center and all powers of the Center shall be vested in the
utility/security personnel. We find that the threat being alluded to by respondent Reyes Council.
that the petitioners might introduce harmful foreign substances in baking bread is
imaginary and not real. We recall that what triggered the petitioners reassignment was the Being an intergovernmental organization, SEAFDEC including its Departments (AQD),
filing of their complaints against private respondents in the NLRC. The petitioners were not enjoys functional independence and freedom from control of the state in whose territory its
even given an opportunity to refute the reason for the transfer. The drastic change in office is located. Pursuant to its being a signatory to the Agreement, It expressly waived the
petitioners nature of work unquestionably resulted in, as rightly perceived by them, a application of the Philippine laws on the disbursement of funds of petitioner SEAFDEC-
demeaning and humiliating work condition. The transfer was a demotion in rank, beyond AQD.(SEAFDEC v. NLRC)
doubt. There is demotion when an EE is transferred from a position of dignity to a servile or
menial job. One does not need to stretch the imagination to distinguish the work of a chief PAL never ceased to be operated as a private corporation, and was not subjected to the
baker to that of a security cum utility man.(JULIES BAKESHOP v. ARNAIZ) Civil Service Law. The Court can allow that PAL, during the period material, was a
government-controlled corporation in the sense that the GSIS owned a controlling interest
F.EMPLOYMENT RESTRICTION over its stocks. One stubborn fact, however, remains: Through the years, PAL functioned as
a.PROHIBITION AGAINST COMPETITIVE EMPLOYMENT a private corporation and managed as such for profit. Their personnel were never
in determining whether the contract is reasonable or not, the trial court should consider the considered government EEs. It may perhaps not be amiss for the Court to take judicial
following factors: (a) whether the covenant protects a legitimate business interest of the ER; notice of the fact that the civil service law and rules and regulations have not actually been
(b) whether the covenant creates an undue burden on the EE; (c) whether the covenant is made to apply to PAL and its EEs. Of governing application to them was the Labor Code.
injurious to the public welfare; (d) whether the time and territorial limitations contained in the (PALOMA v. PAL)
covenant are reasonable; and (e) whether the restraint is reasonable from the standpoint of
public policy.(RIVERA v. SOLIDBANK)
B.BOOK I, TITLE I, CHAPTER 1 (Art. 13,14,18,221,22)
b.PROHIBITION ON EMPLOYMENT OF RELATIVES READ: EO797
i.BASED ON CONTRACT - If the terms of a CBA are clear and have no doubt upon the Art. 13. Definitions.
intention of the contracting parties, the literal meaning of its stipulation shall prevail. a."Worker" means any member of the labor force, whether employed or unemployed.
However, if, in a CBA, the parties stipulate that the hirees must be presumed of employment b."Recruitment and placement" refers to any act of canvassing, enlisting, contracting,
qualification standards but fail to state such qualification standards in said CBA, the VA may transporting, utilizing, hiring or procuring workers, and includes referrals, contract services,
resort to evidence extrinsic of the CBA to determine the full agreement intended by the promising or advertising for employment, locally or abroad, whether for profit or not:
parties. When a CBA may be expected to speak on a matter, but does not, its sentence Provided, That any person or entity which, in any manner, offers or promises for a fee,
imports ambiguity on that subject. The VA is not merely to rely on the cold and cryptic words employment to two or more persons shall be deemed engaged in recruitment and
on the face of the CBA but is mandated to discover the intention of the parties. Recognizing placement.
the inability of the parties to anticipate or address all future problems, gaps may be left to be c."Private fee-charging employment agency" means any person or entity engaged in
filled in by reference to the practices of the industry, and the step which is equally a part of recruitment and placement of workers for a fee which is charged, directly or indirectly, from
the CBA although not expressed in it. In order to ascertain the intention of the contracting the workers or ERs or both.
parties, their contemporaneous and subsequent acts shall be principally considered. The d."License" means a document issued by the Department of Labor authorizing a person or
VA may also consider and rely upon negotiating and contractual history of the parties, entity to operate a private employment agency.
evidence of past practices interpreting ambiguous provisions. The VA has to examine such e."Private recruitment entity" means any person or association engaged in the recruitment
practices to determine the scope of their agreement, as where the provision of the CBA has and placement of workers, locally or overseas, without charging, directly or indirectly, any
been loosely formulated. Moreover, the CBA must be construed liberally rather than fee from the workers or ERs.
narrowly and technically and the Court must place a practical and realistic construction upon f."Authority" means a document issued by the Department of Labor authorizing a person or
it.(UNITED KIMBERLY v. KIMBERLY-CLARK) association to engage in recruitment and placement activities as a private recruitment entity.
g."Seaman" means any person employed in a vessel engaged in maritime navigation.
ii.BONA FIDE OCCUPATIONAL QUALIFICATION EXCEOTION h."Overseas employment" means employment of a worker outside the Philippines.
i.Emigrant" means any person, worker or otherwise, who emigrates to a foreign country by
c.PROHIBITION MARRYING EMPLOYESS OF COMPETITOR virtue of an immigrant visa or resident permit or its equivalent in the country of destination.

G.ATTORNEYS FEES Art. 14. Employment promotion. The Secretary of Labor shall have the power and
we have ruled that attorney's fees may be awarded only when the EE is illegally dismissed authority:
in bad faith and is compelled to litigate or incur expenses to protect his rights by reason of a.To organize and establish new employment offices in addition to the existing employment
the unjustified acts of his ER. In this case, the NLRC deleted the award of moral and offices under the Department of Labor as the need arises;
exemplary damages precisely because of the absence of evidence that respondent's b.To organize and establish a nationwide job clearance and information system to inform
suspension and eventual dismissal were tainted with bad faith and malice. applicants registering with a particular employment office of job opportunities in other parts
of the country as well as job opportunities abroad;
c.develop and organize a program that will facilitate occupational, industrial and
We note that although the Labor Arbiter awarded attorney's fees, the basis for the same
geographical mobility of labor and provide assistance in the relocation of workers from one
was not discussed in the decision nor borne out by the records of this case. There must
area to another; and
always be a factual basis for the award of attorney's fees. This is consistent with the policy
d.To require any person, establishment, organization or institution to submit such
that no premium should be placed on the right to litigate. For these reasons, we believe and
employment information as may be prescribed by the Secretary of Labor.
so rule that the award of attorney's fees should be deleted.(PEPSI v. SANTOS)
Art. 18. Ban on direct-hiring. No ER may hire a Filipino worker for overseas employment
H.QUITCLAMS AND COMPROMISE AGREEMENT except through the Boards and entities authorized by the Secretary of Labor. Direct-hiring
Page 2 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

by members of the diplomatic corps, international organizations and such other ERs as may b.Illegal recruitment when committed by a syndicate or in large scale shall be considered
be allowed by the Secretary of Labor is exempted from this provision. an offense involving economic sabotage and shall be penalized in accordance with Article
39 hereof.
NAME HIREES individual workers who are able to secure contracts overseas employment Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3)
on their own efforts and representations without assistance or participation of any agency. or more persons conspiring and/or confederating with one another in carrying out any
Their hiring nonetheless, shall pass through the POEA for processing purpose. Not covered unlawful or illegal transaction, enterprise or scheme defined under the first paragraph
by ban on direct hiring. hereof. Illegal recruitment is deemed committed in large scale if committed against three (3)
or more persons individually or as a group.
Art. 21. Foreign service role and participation. To provide ample protection to Filipino c.The Secretary of Labor and Employment or his duly authorized representatives shall have
workers abroad, the labor attaches, the labor reporting officers duly designated by the the power to cause the arrest and detention of such non-licensee or non-holder of authority
Secretary of Labor and the Philippine diplomatic or consular officials concerned shall, even if after investigation it is determined that his activities constitute a danger to national security
without prior instruction or advice from the home office, exercise the power and duty: and public order or will lead to further exploitation of job-seekers. The Secretary shall order
a.To provide all Filipino workers within their jurisdiction assistance on all matters arising out the search of the office or premises and seizure of documents, paraphernalia, properties
of employment; and other implements used in illegal recruitment activities and the closure of companies,
b.To insure that Filipino workers are not exploited or discriminated against; establishments and entities found to be engaged in the recruitment of workers for overseas
c.To verify and certify as requisite to authentication that the terms and conditions of employment, without having been licensed or authorized to do so.
employment in contracts involving Filipino workers are in accordance with the Labor Code
and rules and regulations of the Overseas Employment Development Board and National b.PROHIBITED ACTS - Art. 34. Prohibited practices. It shall be unlawful for any
Seamen Board; individual, entity, licensee, or holder of authority:
d.To make continuing studies or researches and recommendations on the various aspects a.To charge or accept, directly or indirectly, any amount greater than that specified in the
of the employment market within their jurisdiction; schedule of allowable fees prescribed by the Secretary of Labor, or to make a worker pay
e.To gather and analyze information on the employment situation and its probable trends, any amount greater than that actually received by him as a loan or advance;
and to make such information available; and b.To furnish or publish any false notice or information or document in relation to recruitment
f.To perform such other duties as may be required of them from time to time. or employment;
c.To give any false notice, testimony, information or document or commit any act of
Art. 22. Mandatory remittance of foreign exchange earnings. It shall be mandatory for misrepresentation for the purpose of securing a license or authority under this Code.
all Filipino workers abroad to remit a portion of their foreign exchange earnings to their d.To induce or attempt to induce a worker already employed to quit his employment in order
families, dependents, and/or beneficiaries in the country in accordance with rules and to offer him to another unless the transfer is designed to liberate the worker from oppressive
regulations prescribed by the Secretary of Labor. terms and conditions of employment;
e.To influence or to attempt to influence any person or entity not to employ any worker who
SEAMEN OR MARINERS 80% has not applied for employment through his agency;
WORKERS FOR FILIPINO CONTRACTORS/CONSTRUCTIOM CO. - 70% f.To engage in the recruitment or placement of workers in jobs harmful to public health or
PROFESSIONALS WHOSE EMPLOYMENT CONTRACT PROVIDE FOR LODGING morality or to the dignity of the Republic of the Philippines;
FACILITIES 70% g.To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly
PROFESSIONALS WITHOUT BOARD AND LODGING 50% authorized representatives;
DOMESTIC AND OTHER SERVICE WORKERS 50% h.To fail to file reports on the status of employment, placement vacancies, remittance of
foreign exchange earnings, separation from jobs, departures and such other matters or
information as may be required by the Secretary of Labor.
C.BOOK I, TITLE I, CHAPTER 2 (Art. 25-35) i.To substitute or alter employment contracts approved and verified by the Department of
Art. 25. Private sector participation in the recruitment and placement of workers. Labor from the time of actual signing thereof by the parties up to and including the periods
Pursuant to national development objectives and in order to harness and maximize the use of expiration of the same without the approval of the Secretary of Labor;
of private sector resources and initiative in the development and implementation of a j.To become an officer or member of the Board of any corporation engaged in travel agency
comprehensive employment program, the private employment sector shall participate in the or to be engaged directly or indirectly in the management of a travel agency; and
recruitment and placement of workers, locally and overseas, under such guidelines, rules k.To withhold or deny travel documents from applicant workers before departure for
and regulations as may be issued by the Secretary of Labor. monetary or financial considerations other than those authorized under this Code and its
implementing rules and regulations.
Art. 26. Travel agencies prohibited to recruit. Travel agencies and sales agencies of
airline companies are prohibited from engaging in the business of recruitment and c.ELEMENTS OF ILLEGAL RECRUITMENT:
placement of workers for overseas employment whether for profit or not. 1. the offender is a licensee/non-licensee or holder/non-holder of authority engaged in the
recruitment and placement of workers
Art. 27. Citizenship requirement. Only Filipino citizens or corporations, partnerships or 2. the offender undertakes either any recruitment activities defined under Art.13b, or any
entities at least seventy-five percent (75%) of the authorized and voting capital stock of prohibited practices enumerated under Art.34.
which is owned and controlled by Filipino citizens shall be permitted to participate in the
recruitment and placement of workers, locally or overseas. d.ILLEGAL RECRUITMENT IN LARGE SCALE OR BY A SYNDICATE
LARGE SCALE illegal recruitment is committed AGAINST 3 or more persons individually
Art. 28. Capitalization. All applicants for authority to hire or renewal of license to recruit are or as a group
required to have such substantial capitalization as determined by the Secretary of Labor. SYNDICATE illegal recruitment is committed BY 3 or more person who conspire or
confederate with one another in carrying out any unlawful or illegal transaction enterprise or
Art. 29. Non-transferability of license or authority. No license or authority shall be used scheme.
directly or indirectly by any person other than the one in whose favor it was issued or at any
place other than that stated in the license or authority be transferred, conveyed or assigned READ:RA8042, as amended by RA10022
to any other person or entity. Any transfer of business address, appointment or designation Section 5.Definition. - For purposes of this Act, illegal recruitment shall mean any act of
of any agent or representative including the establishment of additional offices anywhere canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers and
shall be subject to the prior approval of the Department of Labor. includes referring, contract services, promising or advertising for employment abroad,
whether for profit or not, when undertaken by non-licensee or non-holder of authority
Art. 30. Registration fees. The Secretary of Labor shall promulgate a schedule of fees for contemplated under Article 13(f) of Presidential Decree No. 442, as amended, otherwise
the registration of all applicants for license or authority. known as the Labor Code of the Philippines: Provided, That any such non-licensee or non-
holder who, in any manner, offers or promises for a fee employment abroad to two or more
Art. 31. Bonds. All applicants for license or authority shall post such cash and surety bonds persons shall be deemed so engaged. It shall likewise include the following acts, whether
as determined by the Secretary of Labor to guarantee compliance with prescribed committed by any person, whether a non-licensee, non-holder, licensee or holder of
recruitment procedures, rules and regulations, and terms and conditions of employment as authority:
may be appropriate. "(a) To charge or accept directly or indirectly any amount greater than that specified in the
schedule of allowable fees prescribed by the Secretary of Labor and Employment, or to
Art. 32. Fees to be paid by workers. Any person applying with a private fee-charging make a worker pay or acknowledge any amount greater than that actually received by him
employment agency for employment assistance shall not be charged any fee until he has as a loan or advance;
obtained employment through its efforts or has actually commenced employment. Such fee "(b) To furnish or publish any false notice or information or document in relation to
shall be always covered with the appropriate receipt clearly showing the amount paid. The recruitment or employment;
Secretary of Labor shall promulgate a schedule of allowable fees. "(c) To give any false notice, testimony, information or document or commit any act of
misrepresentation for the purpose of securing a license or authority under the Labor Code,
Art. 33. Reports on employment status. Whenever the public interest requires, the or for the purpose of documenting hired workers with the POEA, which include the act of
Secretary of Labor may direct all persons or entities within the coverage of this Title to reprocessing workers through a job order that pertains to nonexistent work, work different
submit a report on the status of employment, including job vacancies, details of job from the actual overseas work, or work with a different ER whether registered or not with the
requisitions, separation from jobs, wages, other terms and conditions and other employment POEA;
data. "(d) To include or attempt to induce a worker already employed to quit his employment in
order to offer him another unless the transfer is designed to liberate a worker from
Art. 35. Suspension and/or cancellation of license or authority. The Minister of Labor oppressive terms and conditions of employment;
shall have the power to suspend or cancel any license or authority to recruit EEs for "(e) To influence or attempt to influence any person or entity not to employ any worker who
overseas employment for violation of rules and regulations issued by the Ministry of Labor, has not applied for employment through his agency or who has formed, joined or supported,
the Overseas Employment Development Board, or for violation of the provisions of this and or has contacted or is supported by any union or workers' organization;
other applicable laws, General Orders and Letters of Instructions. "(f) To engage in the recruitment or placement of workers in jobs harmful to public health or
morality or to the dignity of the Republic of the Philippines;
D.BOOK I, TITLE I, CHAPTER 3 (Art. 36-38) "(h) To fail to submit reports on the status of employment, placement vacancies, remittance
Art. 36. Regulatory power. The Secretary of Labor shall have the power to restrict and of foreign exchange earnings, separation from jobs, departures and such other matters or
regulate the recruitment and placement activities of all agencies within the coverage of this information as may be required by the Secretary of Labor and Employment;
Title and is hereby authorized to issue orders and promulgate rules and regulations to carry "(i) To substitute or alter to the prejudice of the worker, employment contracts approved and
out the objectives and implement the provisions of this Title. verified by the Department of Labor and Employment from the time of actual signing thereof
by the parties up to and including the period of the expiration of the same without the
Art. 37. Visitorial Power. The Secretary of Labor or his duly authorized representatives approval of the Department of Labor and Employment;
may, at any time, inspect the premises, books of accounts and records of any person or "(j) For an officer or agent of a recruitment or placement agency to become an officer or
entity covered by this Title, require it to submit reports regularly on prescribed forms, and member of the Board of any corporation engaged in travel agency or to be engaged directly
act on violation of any provisions of this Title. or indirectly in the management of travel agency;
"(k) To withhold or deny travel documents from applicant workers before departure for
i.ILLEGAL RECRUITMENT monetary or financial considerations, or for any other reasons, other than those authorized
a.DEFINITION - Art. 38. Illegal recruitment. under the Labor Code and its implementing rules and regulations;
a.Any recruitment activities, including the prohibited practices enumerated under Article 34 "(l) Failure to actually deploy a contracted worker without valid reason as determined by the
of this Code, to be undertaken by non-licensees or non-holders of authority, shall be Department of Labor and Employment;
deemed illegal and punishable under Article 39 of this Code. The Department of Labor and "(m) Failure to reimburse expenses incurred by the worker in connection with his
Employment or any law enforcement officer may initiate complaints under this Article. documentation and processing for purposes of deployment, in cases where the deployment

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LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

does not actually take place without the worker's fault. Illegal recruitment when committed 0FW-Person who is to be engaged, is engaged or has been engaged in a remunerated
by a syndicate or in large scale shall be considered an offense involving economic activity in a state of which he or she is not a citizen or on board a vessel navigating the
sabotage; and foreign seas other than a government ship used for military or non-commercial purposes or
"(n) To allow a non-Filipino citizen to head or manage a licensed recruitment/manning on an installation located offshore or on the high seas; to be used interchangeably with
agency. MIGRANT WORKERS.

"Illegal recruitment is deemed committed by a syndicate if carried out by a group of three i.COMMENCEMENT OF EE-relationship
(3) or more persons conspiring or confederating with one another. It is deemed committed in We rule that distinction must be made between the perfection of the employment contract
large scale if committed against three (3) or more persons individually or as a group. and the commencement of the ER-EE relationship. The perfection of the contract, which
in this case coincided with the date of execution thereof, occurred when petitioner and
"In addition to the acts enumerated above, it shall also be unlawful for any person or entity respondent agreed on the object and the cause, as well as the rest of the terms and
to commit the following prohibited acts: conditions therein. The commencement of the ER-EE relationship, as earlier discussed,
"(1) Grant a loan to an overseas Filipino worker with interest exceeding eight percent (8%) would have taken place had petitioner been actually deployed from the point of hire. Thus,
per annum, which will be used for payment of legal and allowable placement fees and make even before the start of any ER-EE relationship, contemporaneous with the perfection of the
the migrant worker issue, either personally or through a guarantor or accommodation party, employment contract was the birth of certain rights and obligations, the breach of which may
postdated checks in relation to the said loan; give rise to a cause of action against the erring party. Thus, if the reverse had happened,
"(2) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker that is the seafarer failed or refused to be deployed as agreed upon, he would be liable for
is required to avail of a loan only from specifically designated institutions, entities or damages. (STOLT-NIELSEN v. MEDIGUILLO)
persons;
"(3) Refuse to condone or renegotiate a loan incurred by an overseas Filipino worker after ii.SECTION 10 of RA8042
the latter's employment contract has been prematurely terminated through no fault of his or the subject clause in the 5th paragraph of Section 10 of R.A. No. 8042 is violative of the
her own; right of petitioner and other OFWs to equal protection. The subject clause or for three
"(4) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker months for every year of the unexpired term, whichever is less in the 5th paragraph of
is required to undergo health examinations only from specifically designated medical clinics, Section 10 of Republic Act No. 8042 is DECLARED UNCONSTITUTIONAL. (SERRANO v.
institutions, entities or persons, except in the case of a seafarer whose medical examination GALLANT MARITIME SERVICES INC.)
cost is shouldered by the principal/shipowner;
"(5) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker iii.LIABILITY OF PRINCIPAL/AGENT FOR DAMAGES
is required to undergo training, seminar, instruction or schooling of any kind only from the recruitment agency is solidarily liable with the foreign principal for unpaid salaries of a
specifically designated institutions, entities or persons, except fpr recommendatory trainings worker it recruited. Before recruiting, the agency is required to submit a document
mandated by principals/shipowners where the latter shoulder the cost of such trainings; containing its power to sue and be sued jointly and solidarily with the principal or foreign
"(6) For a suspended recruitment/manning agency to engage in any kind of recruitment based ER for any violation of the recruitment agreement and the contracts of employment.
activity including the processing of pending workers' applications; and (Sec.10, Rule V of the implementing regulation of the LC)
"(7) For a recruitment/manning agency or a foreign principal/ER to pass on the overseas
Filipino worker or deduct from his or her salary the payment of the cost of insurance fees, Note: the recruitment agency may still be sued even if the agency agreement between the
premium or other insurance related charges, as provided under the compulsory worker's recruitment agency and the principal is already severed if no notice of the termination was
insurance coverage. given to the EE based on Art. 1921.
"The persons criminally liable for the above offenses are the principals, accomplices and
accessories. In case of juridical persons, the officers having ownership, control, Exception: where the workers themselves insisted for the recruitment agency to send them
management or direction of their business who are responsible for the commission of the back to their foreign ER despite their knowledge of its ability to pay their wages, the Court
offense and the responsible EEs/agents thereof shall be liable. absolved the agency from liability.
"In the filing of cases for illegal recruitment or any of the prohibited acts under this section,
the Secretary of Labor and Employment, the POEA Administrator or their duly authorized Note: even if it was the principal of the manning agency who entered into contract with the
representatives, or any aggrieved person may initiate the corresponding criminal action with EE, the manning agent in the Philippines is jointly and solidarily liable with the principal.
the appropriate office. For this purpose, the affidavits and testimonies of operatives or
personnel from the Department of Labor and Employment, POEA and other law Note: a foreign corporation that, through unlicensed agents, recruits workers in the country
enforcement agencies who witnessed the acts constituting the offense shall be sufficient to may be sued in and found liable by Philippine Courts.
prosecute the accused.
"In the prosecution of offenses punishable under this section, the public prosecutors of the E. BOOK I, TITLE II, CHAPTER 3 (Art. 39-42)
Department of Justice shall collaborate with the anti-illegal recruitment branch of the POEA Art. 39. Penalties.
and, in certain cases, allow the POEA lawyers to take the lead in the prosecution. The a.The penalty of life imprisonment and a fine of One Hundred Thousand Pesos
POEA lawyers who act as prosecutors in such cases shall be entitled to receive additional (P1000,000.00) shall be imposed if illegal recruitment constitutes economic sabotage as
allowances as may be determined by the POEA Administrator. defined herein;
"The filing of an offense punishable under this Act shall be without prejudice to the filing of b.Any licensee or holder of authority found violating or causing another to violate any
cases punishable under other existing laws, rules or regulations."1avvphi1 provision of this Title or its implementing rules and regulations shall, upon conviction
thereof, suffer the penalty of imprisonment of not less than two years nor more than five
Section 6.Penalties. years or a fine of not less than P10,000 nor more than P50,000, or both such imprisonment
"(a) Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of and fine, at the discretion of the court;
not less than twelve (12) years and one (1) day but not more than twenty (20) years and a c.Any person who is neither a licensee nor a holder of authority under this Title found
fine of not less than One million pesos (P1,000,000.00) nor more than Two million pesos violating any provision thereof or its implementing rules and regulations shall, upon
(P2,000,000.00). conviction thereof, suffer the penalty of imprisonment of not less than four years nor more
"(b) The penalty of life imprisonment and a fine of not less than Two million pesos than eight years or a fine of not less than P20,000 nor more than P100,000 or both such
(P2,000,000.00) nor more than Five million pesos (P5,000,000.00) shall be imposed if illegal imprisonment and fine, at the discretion of the court;
recruitment constitutes economic sabotage as defined therein. d.If the offender is a corporation, partnership, association or entity, the penalty shall be
"Provided, however, That the maximum penalty shall be imposed if the person illegally imposed upon the officer or officers of the corporation, partnership, association or entity
recruited is less than eighteen (18) years of age or committed by a non-licensee or non- responsible for violation; and if such officer is an alien, he shall, in addition to the penalties
holder of authority. herein prescribed, be deported without further proceedings;
"(c) Any person found guilty of any of the prohibited acts shall suffer the penalty of e.In every case, conviction shall cause and carry the automatic revocation of the license or
imprisonment of not less than six (6) years and one (1) day but not more than twelve (12) authority and all the permits and privileges granted to such person or entity under this Title,
years and a fine of not less than Five hundred thousand pesos (P500,000.00) nor more than and the forfeiture of the cash and surety bonds in favor of the Overseas Employment
One million pesos (P1,000,000.00). Development Board or the National Seamen Board, as the case may be, both of which are
"If the offender is an alien, he or she shall, in addition to the penalties herein prescribed, be authorized to use the same exclusively to promote their objectives.
deported without further proceedings.
"In every case, conviction shall cause and carry the automatic revocation of the license or Title II
registration of the recruitment/manning agency, lending institutions, training school or EMPLOYMENT OF NON-RESIDENT ALIENS
medical clinic." Art. 40. Employment permit of non-resident aliens. Any alien seeking admission to the
Philippines for employment purposes and any domestic or foreign ER who desires to
Section 7.Prescription. Illegal recruitment cases under this Rule shall prescribe in five (5) engage an alien for employment in the Philippines shall obtain an employment permit from
years; Provided, however, that illegal recruitment cases involving economic sabotage shall the Department of Labor.
prescribed in twenty (20) years. The employment permit may be issued to a non-resident alien or to the applicant ER after a
determination of the non-availability of a person in the Philippines who is competent, able
Section 8.Independent Action. The filing of an offense punishable under this section shall and willing at the time of application to perform the services for which the alien is desired.
be without prejudice to the filing of cases punishable under other existing laws, rules or For an enterprise registered in preferred areas of investments, said employment permit may
regulations. be issued upon recommendation of the government agency charged with the supervision of
said registered enterprise.
e.ILLEGAL RECRUITMENT AND ESTAFA
a person may be charged and convicted for both. Illegal recruitment is a malum prohibitum, Art. 41. Prohibition against transfer of employment.
whereas estafa is malum in se, meaning that the criminal intent is not necessary for a.After the issuance of an employment permit, the alien shall not transfer to another job or
conviction in the former but is required in the latter. change his ER without prior approval of the Secretary of Labor.
b.Any non-resident alien who shall take up employment in violation of the provision of this
Acts constituting estafa the accused represented themselves to complainants to have Title and its implementing rules and regulations shall be punished in accordance with the
capacity to send workers abroad although they did not have authority or livense. It is by this provisions of Articles 289 and 290 of the Labor Code.
representation that they induced complainants to pay a placement fee. Such acts constitute In addition, the alien worker shall be subject to deportation after service of his sentence.
estafa under Art.315, par.2 of the RPC.
Art. 42. Submission of list. Any ER employing non-resident foreign nationals on the
f.POWERS OF THE SECRETARY OF LABOR effective date of this Code shall submit a list of such nationals to the Secretary of Labor
We reiterate that the Secretary of Labor, not being a judge, may no longer issue search or within thirty (30) days after such date indicating their names, citizenship, foreign and local
arrest warrants. Hence, the authorities must go through the judicial process. To that extent, addresses, nature of employment and status of stay in the country. The Secretary of Labor
we declare Article 38, paragraph (c), of the Labor Code, unconstitutional and of no force shall then determine if they are entitled to an employment permit.
and effect.
Exception: in cases of deportation of illegal and undesirable aliens whom the president or F.BOOK II, TITLE II, CHAPTERS 1-3
the commissioner of immigration may order arrested, following a final order of deportation. a.DEFINITION
(SALAZAR v. ACHACOSO) i. ART. 58. Definition of Terms. - As used in this Title:
(a) "Apprenticeship" means practical training on the job supplemented by related
Note: the secretary of lanor may order closure of illegal recruitment establishment because theoretical instruction.
it is only administrative and regulatory in nature. (b) An "apprentice" is a worker who is covered by a written apprenticeship agreement with
an individual ER or any of the entities recognized under this Chapter.
g.MIGRANT WORKERS/OFW

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LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

(c) An "apprenticeable occupation" means any trade, form of employment or occupation modification of work schedules, reassignment to a vacant position, acquisition or
which requires more than three (3) months of practical training on the job supplemented by modification of equipment or devices, appropriate adjustments or modifications of
related theoretical instruction. examinations, training materials or company policies, rules and regulations, the provision of
(d) "Apprenticeship agreement" is an employment contract wherein the ER binds himself auxiliary aids and services, and other similar accommodations for disabled persons;
to train the apprentice and the apprentice in turn accepts the terms of training. (i) Sheltered Employment refers to the provision of productive work for disabled persons
through workshops providing special facilities, income-producing projects or homework
ii.LEARNERS ART. 73. Learners defined. - Learners are persons hired as trainees in schemes with a view to giving them the opportunity to earn a living thus enabling them to
semi-skilled and other industrial occupations which are non-apprenticeable and which may acquire a working capacity required in open industry;
be learned through practical training on the job in a relatively short period of time which shall (j) Auxiliary Social Services are the supportive activities in the delivery of social services to
not exceed three (3) months. the marginalized sectors of society;
(k) Marginalized Disabled Persons refer to disabled persons who lack access to
ii.HANDICAPPED WORKERS - ART. 78. Definition. - Handicapped workers are those rehabilitative services and opportunities to be able to participate fully in socioeconomic
whose earning capacity is impaired by age or physical or mental deficiency or injury. activities and who have no means of livelihood and whose incomes fall below the poverty
threshold;
READ: RA7796(TESDA LAW), SEC.4. (l) Qualified Individual with a Disability shall mean an individual with a disability who, with or
SEC. 4. Definition of Terms. - As used in this Act: without reasonable accommodations, can perform the essential functions of the
"Skill" shall mean the acquired and practiced ability to carry out a task or job; employment position that such individual holds or desires. However, consideration shall be
"Skills Development" shall mean the process through which learners and workers are given to the ER's judgment as to what functions of a job are essential, and if an ER has
systematically provided with learning opportunities to acquire or upgrade, or both, their prepared a written description before advertising or interviewing applicants for the job, this
ability, knowledge and behavior pattern required as qualifications for a job or range of jobs description shall be considered evidence of the essential functions of the job;
in a given occupational area; (m) Readily Achievable means a goal can be easily attained and carried out without much
"Technical Education" shall refer to the education process designed at post-secondary difficulty or expense. In determining whether an action is readily achievable, factors to be
and lower tertiary levels, officially recognized as non-degree programs aimed at preparing considered include
technicians, para-professionals and other categories of middle-level workers by providing (1) the nature and cost of the action;
them with a broad range of general education, theoretical, scientific and technological
studies, and related job skills training; (2) the overall financial resources of the facility or facilities involved in the action; the
"Trade" shall mean any group of interrelated jobs or any occupation which is traditionally or number of persons employed at such facility; the effect on expenses and resources, or the
officially recognized as craft or artisan in nature requiring specific qualifications that can be impact otherwise of such action upon the operation of the facility;
acquired through work experience and/or training; (3) the overall financial resources of the covered entity with respect to the number of its
EEs; the number, type and location of its facilities; and
"Middle-Level Manpower" refers to those: (4) the type of operation or operations of the covered entity, including the composition,
1.who have acquired practical skills and knowledge through formal or non-formal education structure and functions of the work force of such entity; the geographic separateness,
and training equivalent to at least a secondary education but preferably at post-secondary administrative or fiscal relationship of the facility or facilities in question to the covered
education with a corresponding degree of diploma; or entity.
2.skilled workers who have become highly competent in their trade or craft as attested by (n) Public Transportation means transportation by air, land and sea that provides the public
industry; with general or special service on a regular and continuing basis;

"Private Enterprises" refers to an economic system under which property of all kinds can be (o) Covered Entity means an ER, employment agency, labor organization or joint-labor
privately owned and in which individuals, alone or in association with another, can embark management committee; and
on a business activity. This includes industrial, agricultural, or agro-industrial establishments (p) Commerce shall be taken to mean as travel, trade, traffic, commerce, transportation, or
engaged in the production, manufacturing, processing, repacking or assembly of goods communication among the provinces or between any foreign country or any territory or
including service-oriented enterprises; possession and any province.
"Trainers" shall mean persons who direct the practice of skills towards immediate
improvement in some task; Sec. 5. Equal Opportunity for Employment. No disable person shall be denied access
"Trainors/trainers" shall mean persons who provide training to trainers aimed at developing to opportunities for suitable employment. A qualified disabled EE shall be subject to the
the latter's capacities for imparting attitudes, knowledge, skills and behavior patters required same terms and conditions of employment and the same compensation, privileges, benefits,
for specific jobs, tasks, occupations or group of related occupations. fringe benefits, incentives or allowances as a qualified able bodied person.
"Trainees" shall mean persons who are participants in a vocational, administrative or
technical training program for the purpose of acquiring and developing job-related skills; Five percent (5%) of all casual emergency and contractual positions in the Departments of
"Apprenticeship" training within employment with compulsory related theoretical instruction Social Welfare and Development; Health; Education, Culture and Sports; and other
involving a contract between an apprentice and an ER on an approved apprenticeable government agencies, offices or corporations engaged in social development shall be
occupation; reserved for disabled persons.
"Apprentice" is a person undergoing training for an approved apprenticeable occupation
during an apprenticeship agreement; Sec. 7. Apprenticeship. Subject to the provisions of the Labor Code as amended,
"Apprenticeship Agreement" is a contract wherein a prospective ER binds himself to train disabled persons shall be eligible as apprentices or learners: Provided, That their handicap
the apprentice who in turn accepts the terms of training for a recognized apprenticeable is not as much as to effectively impede the performance of job operations in the particular
occupation emphasizing the rights, duties and responsibilities of each party; occupation for which they are hired; Provided, further, That after the lapse of the period of
"Apprenticeable Occupation" is an occupation officially endorsed by a tripartite body and apprenticeship, if found satisfactory in the job performance, they shall be eligible for
approved for apprenticeable by the Authority; employment.
"Learners" refers to persons hired as trainees in semi-skilled and other industrial
occupations which are non-apprenticeable. Learnership programs must be approved by the Sec. 32. Discrimination on Employment. No entity, whether public or private, shall
Authority; discriminate against a qualified disabled person by reason of disability in regard to job
"User-Led" or "Market-Driven Strategy" refers to a strategy which promotes strengthened application procedures, the hiring, promotion, or discharge of EEs, EE compensation, job
linkages between educational/training institutions and industry to ensure that appropriate training, and other terms, conditions, and privileges of employment. The following constitute
skills and knowledge are provided by the educational system; acts of discrimination:
"Dual System/Training" refers to a delivery system of quality technical and vocational (a) Limiting, segregating or classifying a disabled job applicant in such a manner that
education which requires training to be carried out alternately in two venues: in-school and adversely affects his work opportunities;
in the production plant. In- school training provides the trainee the theoretical foundation, (b) Using qualification standards, employment tests or other selection criteria that screen
basic training, guidance and human formation, while in-plant training develops his skills and out or tend to screen out a disabled person unless such standards, tests or other selection
proficiency in actual work conditions as it continues to inculcate personal discipline and criteria are shown to be job-related for the position in question and are consistent with
work values; business necessity;
"Levy Grant System" refers to a legal contribution from participating ERs who would be (c) Utilizing standards, criteria, or methods of administration that:
beneficiaries of the program (often as a percentage of the payroll) which is subsequently (1) have the effect of discrimination on the basis of disability; or
turned over or rebated to enterprises offering EE training programs. (2) perpetuate the discrimination of others who are subject to common administrative
control.
READ: RA7277(MAGNA CARTA FOR PERSONS WITH DISABILITY) SEC.4,5,7,32 (d) Providing less compensation, such as salary, wage or other forms of remuneration and
Sec. 4. Definition of Terms. For purposes of this Act, these terms are defined as fringe benefits, to a qualified disabled EE, by reason of his disability, than the amount to
follows: which a non-disabled person performing the same work is entitled;
(a) Disabled persons are those suffering from restriction or different abilities, as a result of a (e) Favoring a non-disabled EE over a qualified disabled EE with respect to promotion,
mental, physical or sensory impairment, to perform an activity in the manner or within the training opportunities, study and scholarship grants, solely on account of the latter's
range considered normal for a human being; disability;
(b) Impairment is any loss, diminution or aberration of psychological, physiological, or (f) Re-assigning or transferring a disabled EE to a job or position he cannot perform by
anatomical structure or function; reason of his disability;
(c) Disability shall mean 1) a physical or mental impairment that substantially limits one or (g) Dismissing or terminating the services of a disabled EE by reason of his disability unless
more psychological, physiological or anatomical function of an individual or activities of such the ER can prove that he impairs the satisfactory performance of the work involved to the
individual; 2) a record of such an impairment; or 3) being regarded as having such an prejudice of the business entity: Provided, however, That the ER first sought to provide
impairment; reasonable accommodations for disabled persons;
(d) Handicap refers to a disadvantage for a given individual, resulting from an impairment or (h) Failing to select or administer in the most effective manner employment tests which
a disability, that limits or prevents the function or activity, that is considered normal given the accurately reflect the skills, aptitude or other factor of the disabled applicant or EE that such
age and sex of the individual; tests purports to measure, rather than the impaired sensory, manual or speaking skills of
(e) Rehabilitation is an integrated approach to physical, social, cultural, spiritual, educational such applicant or EE, if any; and
and vocational measures that create conditions for the individual to attain the highest (i) Excluding disabled persons from membership in labor unions or similar organizations.
possible level of functional ability;
(f) Social Barriers refer to the characteristics of institutions, whether legal, economic, READ: RA7610(PROTECTION AGAINST CHILD ABUSE) SEC.12
cultural, recreational or other, any human group, community, or society which limit the fullest Sec. 12. Employment of Children. Children below fifteen (15) years of age may be
possible participation of disabled persons in the life of the group. Social barriers include employed except:
negative attitudes which tend to single out and exclude disabled persons and which distort (1) When a child works directly under the sole responsibility of his parents or legal guardian
roles and inter-personal relationships; and where only members of the ER's family are employed: Provided, however, That his
(g) Auxiliary Aids and Services include: employment neither endangers his life, safety and health and morals, nor impairs his normal
(1) qualified interpreters or other effective methods of delivering materials to individuals with development: Provided, further, That the parent or legal guardian shall provide the said
hearing impairments; minor child with the prescribed primary and/or secondary education; or
(2) qualified readers, taped tests, or other effective methods of delivering materials to (2) When a child's employment or participation in public & entertainment or information
individuals with visual impairments; through cinema, theater, radio or television is essential: Provided, The employment contract
(3) acquisition or modification of equipment or devices; and concluded by the child's parent or guardian, with the express agreement of the child
(4) other similar services and actions or all types of aids and services that facilitate the concerned, if possible, and the approval of the Department of Labor and Employment:
learning process of people with mental disability. Provided, That the following requirements in all instances are strictly complied with:
(h) Reasonable Accommodation include 1) improvement of existing facilities used by EEs in (a) The ER shall ensure the protection, health, safety and morals of the child;
order to render these readily accessible to and usable by disabled persons; and 2)

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LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

(b) the ER shall institute measures to prevent the child's exploitation or discrimination taking (3) (i) Regularly and directly assist a proprietor or a managerial EE whose primary duty
into account the system and level of remuneration, and the duration and arrangement of consists of the management of the establishment in which he is employed or subdivision
working time; and; thereof; or (ii) execute under general supervision work along specialized or technical lines
(c) The ER shall formulate and implement, subject to the approval and supervision of requiring special training, experience, or knowledge; or (iii) execute, under general
competent authorities, a continuing program for training and skill acquisition of the child. supervision, special assignments and tasks; and
In the above exceptional cases where any such child may be employed, the ER shall first (4) Who do not devote more than 20 percent of their hours worked in a work week to
secure, before engaging such child, a work permit from the Department of Labor and activities which are not directly and closely related to the performance of the work described
Employment which shall ensure observance of the above requirement. in paragraphs (1), (2) and (3) above.
The Department of Labor Employment shall promulgate rules and regulations necessary for
the effective implementation of this Sec. a.TEST OF MANAGERIAL/SUPERVISORY STATUS
The test of supervisory or managerial status depends on whether a person possesses
b.REQUIREMENTS/EFFECT OF AN INVALID AGREEMENT authority to act in the interest of his ER and whether such authority is not merely routinary or
Since Palad is not considered an apprentice because the apprenticeship agreement was clerical in nature, but requires the use of independent judgment.
enforced before the TESDAs approval of petitioners apprenticeship program, Palad is
deemed a regular EE performing the job of a "fish cleaner." Clearly, the job of a "fish ii.FIELD PERSONNEL
cleaner" is necessary in petitioners business as a tuna and sardines factory. Under Article READ: TITLE I, BOOK III, RULE1,SEC.2(f) OMNIBUS RULES OF THE LABOR CODE
28021 of the Labor Code, an employment is deemed regular where the EE has been (f) Non-agricultural field personnel if they regularly perform their duties away from the
engaged to perform activities which are usually necessary or desirable in the usual business principal or branch office or place of business of the ER and whose actual hours of work in
or trade of the ER. (CENTURY CANNING v. CA) the field cannot be determined with reasonable certainty
a.DRIVER/CONDUCTOR
Even if we recognize the companys need to train its EEs through apprenticeship, we can it serves as an amplification of the interpretation of the definition of field personnel under the
only consider the first apprenticeship agreement for the purpose. With the expiration of the Labor Code as those 'whose actual hours of work in the field cannot be determined with
first agreement and the retention of the EEs, Atlanta had, to all intents and purposes, reasonable certainty. EEs engaged on task or contract basis or paid on purely commission
recognized the completion of their training and their acquisition of a regular EE status. To basis are not automatically exempted from the grant of service incentive leave, unless, they
foist upon them the second apprenticeship agreement for a second skill which was not even fall under the classification of field personnel.
mentioned in the agreement itself,is a violation of the Labor Codes implementing rules60
and is an act manifestly unfair to the EEs, to say the least. This we cannot allow.(ATLANTA AUTOBUS contention that since he is paid on commission basis exempts him from service
v. SEBOLINO) incentive pay is MISPLACED. To ascertain an EEs entitlement to service incentive pay is
whether he is field personnel.
c.DISABLED PERSONS ATTAINING REGULAR STATUS
Without a doubt, the task of counting and sorting bills is necessary and desirable to the Accdg. to the Bureau of Working Conditions (BWC), Advisory Opinion to Philippine
business of respondent bank. Technical-Clerical Commercial EEs Association :
As held by the Court, "Articles 280 and 281 of the Labor Code put an end to the pernicious As a general rule, [field personnel] are those whose performance of their job/service is not
practice of making permanent casuals of our lowly EEs by the simple expedient of supervised by the ER or his representative, the workplace being away from the principal
extending to them probationary appointments, ad infinitum." The contract signed by office and whose hours and days of work cannot be determined with reasonable certainty;
petitioners is akin to a probationary employment, during which the bank determined the hence, they are paid specific amount for rendering specific service or performing specific
EEs' fitness for the job. When the bank renewed the contract after the lapse of the six- work. If required to be at specific places at specific times, EEs including drivers cannot be
month probationary period, the EEs thereby became regular EEs. No ER is allowed to said to be field personnel despite the fact that they are performing work away from the
determine indefinitely the fitness of its EEs.(BERNARDO v. NLRC) principal office of the EE.

G.BOOK III(CONDITIONS OF EMPLOYMENT) it is not just about location but also with the fact that the EE's performance is unsupervised
1.TITLE I, CHAPTER I, ART.82-90 by the ER& if actual hours of work in the field can be determined with reasonable certainty
ART. 83. Normal hours of work. - The normal hours of work of any EE shall not exceed by the ER. in every terminal or stop there is a person who will check the bus, punch the
eight (8) hours a day. cards of the conductor. Thus, it shows control of Autobus over the driver, hence, he his not
Health personnel in cities and municipalities with a population of at least one million a field EE but a regular EE.(AUTOBUS v. BAUTISTA)
(1,000,000) or in hospitals and clinics with a bed capacity of at least one hundred (100) shall
hold regular office hours for eight (8) hours a day, for five (5) days a week, exclusive of time b.ACTUAL HOURS OF WORK CANNOT BE DETERMINED WITH REASONABLE
for meals, except where the exigencies of the service require that such personnel work for CERTAINTY
six (6) days or forty-eight (48) hours, in which case, they shall be entitled to an additional in the case at bar, during the entire course of their fishing voyage, fishermen employed by
compensation of at least thirty percent (30%) of their regular wage for work on the sixth day. petitioner have no choice but to remain on board its vessel. Although they perform non-
For purposes of this Article, "health personnel" shall include resident physicians, nurses, agricultural work away from petitioner's business offices, the fact remains that throughout
nutritionists, dietitians, pharmacists, social workers, laboratory technicians, paramedical the duration of their work they are under the effective control and supervision of petitioner
technicians, psychologists, midwives, attendants and all other hospital or clinic personnel. through the vessel's patron or master as the NLRC correctly held.(MERCIDAR v. NLRC)
chanroblesvirtuallawlibrary
ART. 85. Meal periods. - Subject to such regulations as the Secretary of Labor may iii.FAMILY MEMBERS
prescribe, it shall be the duty of every ER to give his EEs not less than sixty (60) minutes members of the family of the ER who are dependent on him for support. They are not
time-off for their regular meals. covered by this title because the amount given by the ER by way of support may far exceed
ART. 86. Night shift differential. - Every EE shall be paid a night shift differential of not the benefits to which the EE is entitled under the provisions of law.
less than ten percent (10%) of his regular wage for each hour of work performed between
ten oclock in the evening and six oclock in the morning. iv.DOMESTIC SERVANTS/PERSONS IN THE PERSONAL SERVICE OF ANOTHER
ART. 87. Overtime work. - Work may be performed beyond eight (8) hours a day provided Under Rule XIII, Section 1(b), Book 3 of the Labor Code, as amended, the terms
that the EE is paid for the overtime work, an additional compensation equivalent to his househelper or domestic servant are defined as follows:The term househelper as used
regular wage plus at least twenty-five percent (25%) thereof. Work performed beyond eight herein is synonymous to the term domestic servant and shall refer to any person, whether
hours on a holiday or rest day shall be paid an additional compensation equivalent to the male or female, who renders services in and about the ERs home and which services are
rate of the first eight hours on a holiday or rest day plus at least thirty percent (30%) thereof. usually necessary or desirable for the maintenance and enjoyment thereof, and ministers
ART. 88. Undertime not offset by overtime. - Undertime work on any particular day shall exclusively to the personal comfort and enjoyment of the ERs family.
not be offset by overtime work on any other day. Permission given to the EE to go on leave
on some other day of the week shall not exempt the ER from paying the additional The foregoing definition clearly contemplates such househelper or domestic servant who is
compensation required in this Chapter. employed in the ERs home to minister exclusively to the personal comfort and enjoyment of
ART. 90. Computation of additional compensation. - For purposes of computing the ERs family. Such definition covers family drivers, domestic servants, laundry women,
overtime and other additional remuneration as required by this Chapter, the "regular wage" yayas, gardeners, houseboys and similar househelps.
of an EE shall include the cash wage only, without deduction on account of facilities
provided by the ER. READ: TITLE I, BOOK III, RULE1,SEC.2(d) OMNIBUS RULES OF THE LABOR CODE
(d) Domestic servants and persons in the personal service of another if they perform such
a.COVERAGE - ART. 82. Coverage. - The provisions of this Title shall apply to EEs in all services in the ER's home which are usually necessary or desirable for the maintenance
establishments and undertakings whether for profit or not, but not to government EEs, and enjoyment thereof, or minister to the personal comfort, convenience, or safety of the ER
managerial EEs, field personnel, members of the family of the ER who are dependent on as well as the members of his ER's household
him for support, domestic helpers, persons in the personal service of another, and workers
who are paid by results as determined by the Secretary of Labor in appropriate regulations. The criteria is the personal comfort and enjoyment of the family of the ER in the home of
As used herein, "managerial EEs" refer to those whose primary duty consists of the said ER. While it may be true that the nature of the work of a househelper, domestic
management of the establishment in which they are employed or of a department or servant or laundrywoman in a home or in a company staffhouse may be similar in nature,
subdivision thereof, and to other officers or members of the managerial staff. the difference in their circumstances is that in the former instance they are actually serving
"Field personnel" shall refer to non-agricultural EEs who regularly perform their duties away the family while in the latter case, whether it is a corporation or a single proprietorship
from the principal place of business or branch office of the ER and whose actual hours of engaged in business or industry or any other agricultural or similar pursuit, service is being
work in the field cannot be determined with reasonable certainty. rendered in the staffhouses or within the premises of the business of the ER. In such
instance, they are EEs of the company or ER in the business concerned entitled to the
i.MANAGERIAL EES v. MANAGERIAL STAFF/SUPERVISORS privileges of a regular EE.
READ: TITLE I, BOOK III, RULE1,SEC.2(b) AND (c), OMNIBUS RULES OF THE LABOR
CODE The mere fact that the househelper or domestic servant is working within the premises of
SECTION 2. Exemption. The provisions of this Rule shall not apply to the following the business of the ER and in relation to or in connection with its business, as in its
persons if they qualify for exemption under the conditions set forth herein: staffhouses for its guest or even for its officers and EEs, warrants the conclusion that such
(a) Government EEs whether employed by the National Government or any of its political househelper or domestic servant is and should be considered as a regular EE of the ER
subdivision, including those employed in government-owned and/or controlled corporations; and not as a mere family househelper or domestic servant as contemplated in Rule XIII,
Section 1(b), Book 3 of the Labor Code, as amended.
(b) Managerial EEs, if they meet all of the following conditions:
(1) Their primary duty consists of the management of the establishment in which they are In the case at bar, the petitioner itself admits in its position paper [33] that respondent
employed or of a department or sub-division thereof. worked at the company premises and her duty was to cook and prepare its EEs lunch and
(2) They customarily and regularly direct the work of two or more EEs therein. merienda. Clearly, the situs, as well as the nature of respondents work as a cook, who
(3) They have the authority to hire or fire EEs of lower rank; or their suggestions and caters not only to the needs of Mr. Tan and his family but also to that of the petitioners EEs,
recommendations as to hiring and firing and as to the promotion or any other change of makes her fall squarely within the definition of a regular EE under the doctrine enunciated in
status of other EEs, are given particular weight. the Apex Mining case. That she works within company premises, and that she does not
cater exclusively to the personal comfort of Mr. Tan and his family, is reflective of the
(c) Officers or members of a managerial staff if they perform the following duties and existence of the petitioners right of control over her functions, which is the primary indicator
responsibilities: of the existence of an ER-EE relationship. (REMINGTON v. CASTANEDA)
(1) The primary duty consists of the performance of work directly related to management
policies of their ER;
(2) Customarily and regularly exercise discretion and independent judgment; and v.WORKERS PAID BY RESULT

Page 6 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

(e) Workers who are paid by results, including those who are paid on piece-work, "takay," Their houses are situated right on the area where the farm are located, such that after the
"pakiao" or task basis, and other non-time work if their output rates are in accordance with roll call, which does not necessarily require the personal presence, they can go back to their
the standards prescribed under Section 8, Rule VII, Book Three of these regulations, or houses to attend to some chores. In short, they are not subject to the absolute control of the
where such rates have been fixed by the Secretary of Labor and Employment in accordance company during this period, otherwise, their failure to report in the assembly time would
with the aforesaid Section. justify the company to impose disciplinary measures. The CBA does not contain any
provision to this effect; the record is also bare of any proof on this point. This, therefore,
READ: TITLE I, BOOK III, RULE7, SEC.8 OMNIBUS RULES OF THE LABOR CODE demonstrates the indubitable fact that the thirty (30)-minute assembly time was not primarily
intended for the interests of the ER, but ultimately for the EEs to indicate their availability or
va.CATEGORIES non-availability for work during every working day.(ARICA v. NLRC)
1) those whose time and performance are supervised by the ER. (Here, there is an element
of control and supervision over the manner as to how the work is to be performed. A piece- v.COMMUTING TIME, TRAVEL TIME AT LECTURES, SEMINARS ETC.
rate worker belongs to this category especially if he performs his work in the company READ: TITLE I, BOOK III, RULE1, SEC.6 OMNIBUS RULES OF THE LABOR CODE
premises.); and SECTION 6. Lectures, meetings, training programs. Attendance at lectures, meetings,
(2) those whose time and performance are unsupervised. (Here, the ERs control is over training programs, and other similar activities shall not be counted as working time if all of
the result of the work. Workers on pakyao and takay basis belong to this group.) the following conditions are met:
(a) Attendance is outside of the EE's regular working hours;
Both classes of workers are paid per unit accomplished. Piece-rate payment is generally (b) Attendance is in fact voluntary; and
practiced in garment factories where work is done in the company premises, while payment (c) The EE does not perform any productive work during such attendance.
on pakyao and takay basis is commonly observed in the agricultural industry, such as in
sugar plantations where the work is performed in bulk or in volumes difficult to quantify. TRAVEL FROM HOME TO WORK normal travel from home to work which is NOT
Petitioners belong to the first category, i.e., supervised EEs. (LAMBO v. NLRC) working time. Generally, not compensable because it is a normal incident of employment.
Exception: a) made to work on an emergency call and travel is necessary in proceeding to
vb.PAKYAW the workplace; b) travel done through a conveyance provided by the ER; c) travel done
under the supervision and control of the ER; and e) travel done under vexing and
b.HOURS WORK - ART. 84. Hours worked. - Hours worked shall include (a) all time dangerous circumstance.
during which an EE is required to be on duty or to be at a prescribed workplace; and (b) all
time during which an EE is suffered or permitted to work. TRAVEL THAT IS ALL IN DAYS WORK the time spent by EE in travel as part of his
Rest periods of short duration during working hours shall be counted as hours worked. principal activity, like travel from jobsite to jobsite during the workday. Compensable and
(same with R1S3 of the omnibus) must be counted as hours worked.

i.PRINCIPLES IN DETERMINING HOURS WORKED TRAVEL AWAY FROM HOME travel that keeps an EE away from home overnight.
READ: TITLE I, BOOK III, RULE1, SEC.3-4 OMNIBUS RULES OF THE LABOR CODE Considered as working time when it cuts across an EEs workday because it substitutes for
the hours that the EE should have been in the office.
SECTION 4. Principles in determining hours worked. The following general principles
shall govern in determining whether the time spent by an EE is considered hours worked for vi.SEMESTRAL BREAK
purposes of this Rule: compensable hours worked apply to regular full-time teachers only. It is a form of
(a) All hours are hours worked which the EE is required to give his ER, regardless of interruption beyond their control.
whether or not such hours are spent in productive labor or involve physical or mental
exertion.(basis of engage to wait and assembly time) The "No work, no pay" principle does not apply in the instant case. The petitioner's
(b) An EE need not leave the premises of the work place in order that his rest period shall members received their regular salaries during this period. It is clear from the . . . law that it
not be counted, it being enough that he stops working, may rest completely and may leave contemplates a "no work" situation where the EEs voluntarily absent themselves.
his work place, to go elsewhere, whether within or outside the premises of his work Petitioners, in the case at bar, certainly do not, ad voluntatem absent themselves during
place.(basis of meal break and assembly time) semestral breaks. Rather, they are constrained to take mandatory leave from work. For this,
(c) If the work performed was necessary, or it benefited the ER, or the EE could not they cannot be faulted nor can they be begrudged that which is due them under the law. To
abandon his work at the end of his normal working hours because he had no replacement, a certain extent, the private respondent can specify dates when no classes would be held.
all time spent for such work shall be considered as hours worked, if the work was with the Surely, it was not the intention of the framers of the law to allow ERs to withhold EE benefits
knowledge of his ER or immediate supervisor.(basis of no off-setting rule) by the simple expedient of unilaterally imposing "no work" days and consequently avoiding
(d) The time during which an EE is inactive by reason of interruptions in his work beyond his compliance with the mandate of the law for those days. (UNIV. PANGASINAN FACULTY v.
control shall be considered working time either if the imminence of the resumption of work UNIV. PANGASINAN)
requires the EE's presence at the place of work or if the interval is too brief to be utilized
effectively and gainfully in the EE's own interest.(basis of semestral break and powere vii.POWER INTERRUPTION/BROWNOUT
interruption) 1. 1ST 20mins is compensable
2. succeeding minutes not compensable
ii.ENGAGED TO WAIT RULE/IDLE TIME 3. if despite the lapse of 1st 20mins, the EEs are required to stay in their workplace, such
READ: TITLE I, BOOK III, RULE1, SEC.5(a) OMNIBUS RULES OF THE LABOR CODE time is compensable.
SECTION 5. Waiting time. (a) Waiting time spent by an EE shall be considered as
working time if waiting is an integral part of his work; (b)the EE is required or engaged by viii.EXCEPTION TO 8-HOUR RULE
the ER to wait; and c) An EE who is required to remain on call in the ER's premises or so ART. 89. Emergency overtime work. - Any EE may be required by the ER to perform
close thereto that he cannot use the time effectively and gainfully for his own purpose. overtime work in any of the following cases:chan robles virtual law library
(a) When the country is at war or when any other national or local emergency has been
When the work is NOT CONTINUOS, the time during which the laborer is not working AND declared by the National Assembly or the Chief Executive;
CAN LEAVE HIS WORKING PLACE and can rest completely, shall NOT TO BE (b) When it is necessary to prevent loss of life or property or in case of imminent danger to
COUNTED. For the purposes of this case, We do not need to set for seamen a criterion public safety due to an actual or impending emergency in the locality caused by serious
different from that applied to laborers on land, for under the provisions of the above quoted accidents, fire, flood, typhoon, earthquake, epidemic, or other disaster or calamity;
section, the only thing to be done is to determine the meaning and scope of the term (c) When there is urgent work to be performed on machines, installations, or equipment, in
"working place" used therein. As We understand this term, a laborer need not leave the order to avoid serious loss or damage to the ER or some other cause of similar nature;
premises of the factory, shop or boat in order that his period of rest shall not be counted, it (d) When the work is necessary to prevent loss or damage to perishable goods; and
being enough that he "cease to work", may rest completely and leave or may leave at his (e) Where the completion or continuation of the work started before the eighth hour is
will the spot where he actually stays while working, to go somewhere else, whether within or necessary to prevent serious obstruction or prejudice to the business or operations of the
outside the premises of said factory, shop or boat. If these requisites are complied with, the ER.
period of such rest shall not be counted. (LUZON STEVEDORING v. LUZON MARINE) Any EE required to render overtime work under this Article shall be paid the additional
compensation required in this Chapter.
From these facts, the CIR correctly concluded that work in petitioner company was
CONTINUOS and therefore the mealtime breaks should be COUNTED as working time for In addition:
purposes of overtime compensation. (NDC v. CIR) 1.PART-TIME WORK not prohibited. the 8-hour labor law prescribes the maximum but not
the minimum.
ENGAGED TO WAIT/REQUIRED TO WAIT. 2.COMPRESSED WORK WEEK(CWW)
Waiting is an integral part of the job; the time spent waiting is compensable> 3.FLEXIBLE WORK ARRANGEMENT
WAITING TO BE ENGAGED/NOT REQUIRED TO WAIT 4.12-HOUR WORKSHIFT W/ OT is validated by consent and ots 4-hour OT pay becomes
Idle time is not working time; it is not compensable. a contractual commitment(INTERPHIL LAB. EES UNION v. INTERPHIL)
5.NORMAL HOURS OF WORK OF HEALTH PERSONNEL
iii.ON CALL
READ: TITLE I, BOOK III, RULE1, SEC.5(b) OMNIBUS RULES OF THE LABOR CODE ix. COMPRESSED WORK WEEK(CWW)
b) An EE who is required to remain on call in the ER's premises or so close thereto that he requisites:
cannot use the time effectively and gainfully for his own purpose shall be considered as 1.it is expressly and voluntarily supported by majority of the EEs affected;
working while on call. An EE who is not required to leave word at his home or with company 2.if work is hazardous, a certification is needed from accredited safety organization or the
officials where he may be reached is not working while on call. firms safety committee that work beyond 8-hours is within the limits or levels of exposure
set by DOLEs occupational safety and health standards; and
However, if he is NOT REQUIRED TO REMAIN on call in the ERs premises BUT IS 3.the DOLE is dyly notified
MERELY REQUIRED TO LEAVE WORD AT HIS HOME OR WITH THE COMPANY
OFFICIALS where he may be reached, he is not considered working while on call. Reversion to the normal 8-hour workday shall not constitute a diminution of benefits but
considered as a legitimate exercise of management prerogative provided that prior notice of
Further, management retains the prerogative, whenever exigencies of the service so suce reversion is given within a reasonable period of time.
require, to change the working hours of its EEs. So long as such prerogative is exercised in
good faith for the advancement of the ER's interest and not for the purpose of defeating or x.FLEXIBLE SCHEDULE FOR SOLO PARENTS
circumventing the rights of the EEs under special laws or under valid agreements, this Court READ: RA8972 SEC.3(a)(e)
will uphold such exercise.(SIME DARBY v. NLRC) Section 3.Definition of Terms. - Whenever used in this Act, the following terms shall mean
as follows:
iv.ASSEMBLY TIME (a) "Solo parent" - any individual who falls under any of the following categories:
The thirty (30)-minute assembly time long practiced and institutionalized by mutual consent (1) A woman who gives birth as a result of rape and other crimes against chastity even
of the parties under Article IV, Section 3, of theCBA cannot be considered as waiting time without a final conviction of the offender: Provided, That the mother keeps and raises the
within the purview of Section 5, Rule I, Book III of the Rules and Regulations Implementing child;
the Labor Code. (2) Parent left solo or alone with the responsibility of parenthood due to death of spouse;
(3) Parent left solo or alone with the responsibility of parenthood while the spouse is
Furthermore, the thirty (30)-minute assembly is a deeply- rooted, routinary practice of the detained or is serving sentence for a criminal conviction for at least one (1) year;
EEs, and the proceedings attendant thereto are not infected with complexities as to deprive (4) Parent left solo or alone with the responsibility of parenthood due to physical and/or
the workers the time to attend to other personal pursuits. They are not new EEs as to mental incapacity of spouse as certified by a public medical practitioner;
require the company to deliver long briefings regarding their respective work assignments.

Page 7 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

(5) Parent left solo or alone with the responsibility of parenthood due to legal separation or 5)The maternity benefits provided under Section 14A shall be paid only for the first four deliveries;
de facto separation from spouse for at least one (1) year, as long as he/she is entrusted 6) The SSS shall immediately reimburse the Er of 100% of the amount of maternity benefits
with the custody of the children; advanced to the Ee by the Er upon receipt of satisfactory proof of such payment and legality
(6) Parent left solo or alone with the responsibility of parenthood due to declaration of nullity thereof; and
or annulment of marriage as decreed by a court or by a church as long as he/she is 7)If an Ee should give birth or suffer abortion or miscarriage without the required contributions
entrusted with the custody of the children; having been remitted for her by her Er to the SSS, or without the latter having been previously
(7) Parent left solo or alone with the responsibility of parenthood due to abandonment of notified by the Er of the time of the pregnancy, the Er shall pay to the SSS damages equivalent to
spouse for at least one (1) year; the benefits which
(8) Unmarried mother/father who has preferred to keep and rear her/his child/children
instead of having others care for them or give them up to a welfare institution; PATERNITY LEAVE(RA8187) Notwithstanding any law, rules and regulations to the contrary,
(9) Any other person who solely provides parental care and support to a child or children; every married male EE in the private and public sectors shall be entitled to a paternity leave of 7
(10) Any family member who assumes the responsibility of head of family as a result of the days with full pay for the first 4 deliveries of the legitimate spouse with whom he is cohabiting.
death, abandonment, disappearance or prolonged absence of the parents or solo parent. purposes of enabling him to effectively lend support to his wife in her period of recovery and/or in
A change in the status or circumstance of the parent claiming benefits under this Act, such the nursing of the newlyborn child.
that he/she is no longer left alone with the responsibility of parenthood, shall terminate
his/her eligibility for these benefits. Requirements:
(b) "Children" - refer to those living with and dependent upon the solo parent for support The male EE (Ee) applying for paternity leave shall:
who are unmarried, unemployed and not more than eighteen (18) years of age, or even 1.Notify his ER (Er) of the pregnancy of his legitimate spouse and
over eighteen (18) years but are incapable of self-support because of mental and/or 2.The expected date of such delivery.
physical defect/disability.
(c) "Parental responsibility" - with respect to their minor children shall refer to the rights and Conditions for entitlement:
duties of the parents as defined in Article 220 of Executive Order No. 209, as amended, The male Ee is;
otherwise known as the "Family Code of the Philippines." 1.Legally married to, and is cohabiting with the woman who delivers the baby
(d) "Parental leave" - shall mean leave benefits granted to a solo parent to enable him/her to 2.Ee of private or public sector;
perform parental duties and responsibilities where physical presence is required. 3.Only for the first 4 deliveries of legitimate spouse with whom he is cohabiting; and
(e) "Flexible work schedule" - is the right granted to a solo parent EE to vary his/her 4.Notify his Er of the pregnancy of his legitimate spouse and the expected date of such delivery
arrival and departure time without affecting the core work hours as defined by the ER.
delivery shall include childbirth or any miscarriage. Shall not be convertible to cash.
xi.MEAL BREAL, COFFEE BREAK
ART. 85. Meal periods. - Subject to such regulations as the Secretary of Labor may SOLO PARENT LEAVE(RA8972) SEC.8 - Parental Leave. - In addition to leave privileges under
prescribe, it shall be the duty of every ER to give his EEs not less than sixty (60) minutes existing laws, parental leave of not more than seven (7) working days every year shall be granted
time-off for their regular meals. to any solo parent EE who has rendered service of at least one (1) year.
READ: TITLE I, BOOK III, RULE1, SEC.7 OMNIBUS RULES OF THE LABOR CODE
SECTION 7. Meal and Rest Periods. Every ER shall give his EEs, regardless of sex, not Conditions for entitlement:
less than one (1) hour time-off for regular meals, except in the following cases when a meal 1. He or she must fall among those referred to as solo parent
period of not less than twenty (20) minutes may be given by the ER provided that such 2. Must have the actual and physical custody of the child or children
shorter meal period is credited as compensable hours worked of the EE: 3. Must have at least rendered service of one year to his or her ER
(a) Where the work is non-manual work in nature or does not involve strenuous physical 4. He or she must remain a solo parent
exertion;
(b) Where the establishment regularly operates not less than sixteen (16) hours a day; A change in the status or circumstance of the parent claiming benefits under this Act, such that
(c) In case of actual or impending emergencies or there is urgent work to be performed on he/she is no longer left alone with the responsibility of parenthood, shall terminate his/her eligibility
machineries, equipment or installations to avoid serious loss which the ER would otherwise for these benefits. (Sec.3)
suffer; and
(d) Where the work is necessary to prevent serious loss of perishable goods. If unutilized, is not convertible to cash unless otherwise agreed. Non-compliance with the law may
Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be make ER liable for damages.
considered as compensable working time.
No ER shall discriminate against any solo parent EE with respect to terms and conditions of
RULES ON MEAL PERIOD employment on account of his/her status.
1.not be less than 60mins, it is compensable.
Except where during the so-called meal period, the laborers are required to standby for BATTERED WOMAN LEAVE(RA9262) SEC.43 Entitled Leave Victims under this Act shall be
emergency work or said meal period is not one of complete rest, such period is considered entitled to take a paid leave of absence up to ten (10) days in addition to other paid leaves under
OT(hours worked) the Labor Code and Civil Service Rules and Regulations, extendible when necessity arises as
2.less than 60mins but not less than 20mins and the shortened mealtime must be with full specified in the protection order.
pay under the following circumstances: a)non-manual work in nature or does not involve
strenuous physical exertion; b)establishment regularly operates not less than 16hours a Any ER who shall prejudice the right of the person under this section shall be penalized in
day; c)actual or impending emergencies or there is urgent work to be performed on accordance with the provisions of the Labor Code and Civil Service Rules and Regulations.
machineries, equipments or installation to avoid serious loss which the ER would otherwise Likewise, an ER who shall prejudice any person for assisting a co-EE who is a victim under this Act
suffer; and d)necessary to prevent serious loss of perishable goods shall likewise be liable for discrimination.
3.less than 20mins, it becomes only a rest period and is thus considered as work time.
EE has to submit a certification from punong barangay, kagawad, prosecutor or clerk of court that
Meal period during OT work is not given to workers performing OT for the reason that OT ang action under the said Act has been filed and is pending.
work is usually for a short period ranging from 1-3hours and to deduct from the same 1full
hour as meal period may reduce the EEs OT work to nothing. MAGNA CARTA OF WOMEN(RA9710) SEC.18 - Special Leave Benefits for Women. - A
woman EE having rendered continuous aggregate employment service of at least six (6) months
SHORTENED MEAL BREAK UPON EEs REQUEST not compensable. for the last twelve (12) months shall be entitled to a special leave benefit of two (2) months with full
Requisites: pay based on her gross monthly compensation following surgery caused by gynecological
1.EEs voluntarily agree in writing and waived the OT pay; disorders.
2.no diminution in the salary and other FB of the EEs already existing;
3.work is not physically strenuous and they are provided with adequate coffee breaks in the Filing of complaint under this Act shall not preclude the offended party from pursuing other
AM and PM; remedies available under the law and to invoke any provisions of existing laws especially those
4.value of benefits is equal to compensation due to them; recently enacted laws protecting women and their children.
5.OT pay will become due and demandable if ever they are permitted or made to work
beyond 4:30 PM; and If violence has been proven to be perpetrated by agents of the state, including but not limited to
6.the arrangement is of temporary duration. extrajudicial kills, enforced disappearances, torture, and internal displacements, such shall be
considered aggravating offenses with corresponding penalties depending on the severity of the
Thus, the 8-hour work period does not include the meal break. Nowhere in the law may it be offenses.
inferred that EEs must take their meals within the company premises. EEs are not
prohibited from going out of the premises as long as they return to their posts on time. f.Service Charges: TipS
Private respondent's act, therefore, of going home to take his dinner does not constitute ART. 96. Service charges. - All service charges collected by hotels, restaurants and similar
abandonment. (PAL v. NLRC) establishments shall be distributed at the rate of eighty-five percent (85%) for all covered EEs and
fifteen percent (15%) for management. The share of the EEs shall be equally distributed among
xii.REST PERIOD them. In case the service charge is abolished, the share of the covered EEs shall be considered
READ: TITLE I, BOOK III, RULE1, SEC.7(LAST PAR.)OMNIBUS RULES OF THE integrated in their wages.
LABOR CODE
Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be BOOKIII, RULEIV
considered as compensable working time. SECTION 1. Coverage. This rule shall apply to all EEs except:
(a) Those of the government and any of the political subdivision, including government-owned and
controlled corporation;
(b) Those of retail and service establishments regularly employing less than ten (10) workers;
(c) Domestic helpers and persons in the personal service of another;
FINALS (d) Managerial EEs as defined in Book Three of the Code;
(e) Field personnel and other EEs whose time and performance is unsupervised by the ER
e.SPECIAL LEAVES including those who
COVERED Ees MANAGEMENT
MATERNITY LEAVE(RA7322) A covered female EE (Ee) is entitled to a daily maternity benefit are engaged on
equivalent to 100% of her present basic salary, allowances and other benefits or the cash task or contract 85% 15%
equivalent of such benefits for 60 days or 78 days in case of caesarian delivery. basis, purely Equally distributed among them 1.To answer for losses
commission basis, and breakages and
Requirements:1)There is childbirth, abortion or miscarriage: and 2)She has paid at least 3 monthly or those who are
contributions paid a fixed amount 2.Distributed to Ees
for performing work receiving more than
Conditions for entitlement: irrespective of the P2000 a month at the
1)The Ee shall have notified her ER (Er) of her pregnancy and the probable date of her childbirth time consumed in discretion of the
which notice shall be transmitted to the SSS; the performance management.
2)The payment shall be advanced by the Er in 2 equal installments within 30 days from the filing of thereof.cralaw
the maternity leave application;
3)In case of caesarian delivery, the Ee shall be paid the daily maternity benefit for 78 days; SECTION 2. Status of EEs paid by the month. EEs who are uniformly paid by the month,
4)Payment of daily maternity benefits shall be a bar to the recovery of sickness benefits for the irrespective of the number of working days therein, with a salary of not less than the statutory or
same compensable period of 60 days for the same childbirth, abortion, or miscarriage; established minimum wage shall be paid for all days in the month whether worked or not.cralaw

Page 8 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

forty (40%) percent of their normal income for the last two (2) years, subject to the provision of
For this purpose, the monthly minimum wage shall not be less than the statutory minimum wage Section 7 of this issuance;
multiplied by 365 days divided by twelve.cralaw (b) The Government and any of its political subdivisions, including government-owned and
controlled corporations, except those corporations operating essentially as private subsidiaries of
SECTION 3. Holiday Pay. Every ER shall pay his EEs their regular daily wage for any worked the Government;
regular holidays.cralaw (c) ERs already paying their EEs 13-month pay or more in a calendar year of its equivalent at the
time of this issuance;
As used in the rule, the term 'regular holiday' shall exclusively refer to: New Year's Day, Maundy (d) ERs of household helpers and persons in the personal service of another in relation to such
Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the last Sunday of workers; and
August, the thirtieth of November, the twenty-fifth and thirtieth of December. Nationwide special (e) ERs of those who are paid on purely commission, boundary, or task basis, and those who are
days shall include the first of November and the last day of December.cralaw paid a fixed amount for performing a specific work, irrespective of the time consumed in the
As used in this Rule legal or regular holiday and special holiday shall now be referred to as 'regular performance thereof, except where the workers are paid on piece-rate basis in which case the ER
holiday' and 'special day', respectively.cralaw shall be covered by this issuance insofar as such workers are concerned.
As used herein, workers paid on piece-rate basis shall refer to those who are paid a standard
SECTION 4. Compensation for holiday work. Any EE who is permitted or suffered to work on amount for every piece or unit of work produced that is more or less regularly replicated, without
any regular holiday, not exceeding eight (8) hours, shall be paid at least two hundred percent regard to the time spent in producing the same.
(200%) of his regular daily wage. If the holiday work falls on the scheduled rest day of the EE, he The term "its equivalent" as used in paragraph c) hereof shall include Christmas bonus, mid-year
shall be entitled to an additional premium pay of at least 30% of his regular holiday rate of 200% bonus, profit-sharing payments and other cash bonuses amounting to not less than 1/12th of the
based on his regular wage rate.cralaw basic salary but shall not include cash and stock dividends, cost of living allowances and all other
allowances regularly enjoyed by the EE, as well as non-monetary benefits. Where an ER pays less
SECTION 5. Overtime pay for holiday work. For work performed in excess of eight hours on a than 1/12th of the EEs basic salary, the ER shall pay the difference.
regular holiday, an EE shall be paid an additional compensation for the overtime work equivalent to
his rate for the first eight hours on such holiday work plus at least 30% thereof.cralaw Section 4. EEs covered Except as provided in Section 3 of this issuance, all EEs of covered ERs
Where the regular holiday work exceeding eight hours falls on the scheduled rest day of the EE, he shall be entitled to benefit provided under the Decree who are receiving not more than P1,000 a
shall be paid an additional compensation for the overtime work equivalent to his regular holiday- month, regardless of their position, designation or employment status, and irrespective of the
rest day for the first 8 hours plus 30% thereof. The regular holiday rest day rate of an EE shall method by which their wages are paid, provided that they have worked for at least one month
consist of 200% of his regular daily wage rate plus 30% thereof.cralaw during the calendar year.

i.TIPS, DEFINED Section 5. Option of covered ERs A covered ER may pay one-half of the 13th-month pay required
A tip may range from pure gift out of benevolence or friendship, to a compensation for a service by the Decree before the opening of the regular school year and the other half on or before the
measured by its supposed value but not fixed by an agreement, although usually the word is 24th day of December of every year.
applied to what is paid to a servant in addition to the regular compensation for his service in order In any establishment where a union has been recognized or certified as the collective bargaining
to secure better service or in recognition of it. It has been said that a tip denotes a voluntary act, agent of the EEs therein, the periodicity or frequency of payment of the 13th month pay may be the
but it also has been said that from the very beginning of the practice of tipping it was evident that, subject of agreement.
whether considered from the standpoint of the giver or the recipient, a tip lacked the essential Nothing herein shall prevent ERs from giving the benefits provided in the Decree to their EEs who
element of a gift, namely, the free bestowing of a gratuity without a consideration, and that, despite are receiving more than One Thousand (P1,000) Pesos a month or benefits higher than those
its apparent voluntariness, there is an element of compulsion in tipping. provided by the Decree.

Tipping is done to get the attention and secure the immediate services of a waiter, porter or others Section 6. Special feature of benefit The benefits granted under this issuance shall not be credited
for their services. Since a tip is considered a pure gift out of benevolence or friendship, it can not as part of the regular wage of the EEs for purposes of determining overtime and premium pay,
be demanded from the customer. Whether or not tips will be given is dependent on the will and fringe benefits, as well as premium contributions to the State Insurance Fund, social security,
generosity of the giver. Although a customer may give a tip as a consideration for services medicare and private welfare and retirement plans.
rendered, its value still depends on the giver. They are given in addition to the compensation by the
ER. A gratuity given by an ER in order to inspire the EE to exert more effort in his work is more Section 7. Exemption of Distressed ERs Distressed ERs shall qualify for exemption from the
appropriately called a bonus. requirement of the Decree upon prior authorization by the Secretary of Labor. Petitions for
exemptions may be filed within the nearest regional office having jurisdiction over the ER not later
The contract of employment between petitioners and Orlando is categorical that the monthly salary than January 15, 1976. The regional offices shall transmit the petitions to the Secretary of Labor
of Orlando is US$450.00 flat rate. This already included his overtime pay which is integrated in his within 24 hours from receipt thereof.
12 hours of work. The words plus tips of US$2.00 per passenger per day were written at the line
for overtime. Since payment for overtime was included in the monthly salary of Orlando, the Section 8. Report of compliance Every covered ER shall make a report of his compliance with the
supposed tips mentioned in the contract should be deemed included thereat. Decree to the nearest regional labor office not later than January 15 of each year.
The report shall conform substantially with the following form:
It is presumed that the parties were aware of the plain, ordinary and common meaning of the word REPORT ON COMPLIANCE WITH PD NO. 851
tip. As a bartender, Orlando can not feign ignorance on the practice of tipping and that tips are 1. Name of establishment
normally paid by customers and not by the ER. (ACE NAVIGATION CO. v. CA) 2. Address
3. Principal product or business
ii.WHEN NOT ENTITLED 4. Total employment
As regards the share of Damalerio in the service charges collected during the period of his 5. Total number of workers benefited
preventive suspension, the same form part of his earnings, and his dismissal having been 6. Amount granted per EE
adjudged to be illegal, he is entitled not only to full backwages but also to other benefits, including 7. Total amount of benefits granted
a just share in the service charges, to be computed from the start of his preventive suspension until 8. Name, position and tel. no. of person giving information
his reinstatement.
Section 9. Adjudication of claims Non-payment of the thirteenth-month pay provided by the Decree
However, mindful of the animosity and strained relations between the parties, emanating from this and these rules shall be treated as money claims cases and shall be processed in accordance with
litigation, we uphold the ruling a quo that in lieu of reinstatement, separation pay may be given to the Rules Implementing the Labor Code of the Philippines and the Rules of the National Labor
the private respondent, at the rate of one (1) month pay for every year of service. Should petitioner Relations Commission.
opt in favor of separation pay, the private respondent shall no longer be entitled to share in the
service charges collected during his preventive suspension. (MARANAW HOTELS AND RESORT Section 10. Prohibition against reduction or elimination of benefits Nothing herein shall be
CORPORATION) construed to authorize any ER to eliminate, or diminish in any way, supplements, or other EE
benefits or favorable practice being enjoyed by the EE at the time of promulgation of this issuance.
Q: What are service charges (SC)?
A: These are charges collected by hotels, restaurants and similar establishments and shall be i.EES NOT ENTITLED
distributed at the rate of: Respondent is not a rank-and-file EE and is, therefore, not entitled to thirteenth-month pay.
However, the NLRC and the CA are correct in refusing to award 14th and 15th month pay as well
Q: Who are covered Ees? as the monthly salary increase of 10 percent per year for two years based on her latest salary
A: GR: All Ees are covered, regardless of their position, designation, employment status, rate. The respondent must show that these benefits are due to her as a matter of right. Mere
irrespective of the method by which their wages are paid. allegations by the respondent do not suffice in the absence of proof supporting the same. With
Note: Applies only to hotels, restaurants and similar establishment collecting service charges. respect to salary increases in particular, the respondent must likewise show that she has a vested
XPN: Managerial Ees. (Sec. 2, Rule VI, Book III, IRR) right to the same, such that her salary increases can be made a component in the computation of
backwages. What is evident is that salary increases are a mere expectancy. They are by nature
Q: When is the share of EE distributed and paid to them? volatile and dependent on numerous variables, including the companys fiscal situation, the EEs
A: Not less than once every 2 weeks or twice a month at intervals not exceeding 16 days. future performance on the job, or the EEs continued stay in a position. In short, absent any proof,
there is no vested right to salary increases.(HOUSE OF SARA LEE, vs. CYNTHIA F. REY)
Q: What happens if the Service Charge is abolished?
A: The share of the covered Ees shall be considered integrated in their wages on the basis of the The coverage of the Contract includes Compensation, Overtime, Sundays and Holidays,
average monthly share of each Ees for the past 12 months immediately preceding the abolition. Vacations, Living Allowance, Sickness, Injury and Death, Transportation and Travel Expense,
Note: Service charges form part of the award in illegal dismissal cases. Subsistence and Living Quarters. It does not provide for the payment of 13th month pay. The
Contract of Employment,[22] which is the standard employment contract of the POEA, likewise
does not provide for the payment of 13th month pay. Hence, in the absence of any provision in his
f.13TH MONTH PAY Contract governing the payment of 13th month pay, Tanchico is not entitled to the benefit.(
READ: PD851 PETROLEUM SHIPPING LIMITED(ESSO) vs. NLRC)
Section 1. Payment of 13-month Pay All ERs covered by Presidential Decree No. 851, hereinafter
referred to as the "Decree", shall pay to all their EEs receiving a basic salary of not more than ii.BASIS FOR COMPUTATION
P1,000 a month a thirteenth-month pay not later than December 24 of every year. Under the Revised Guidelines on the Implementation of the 13th month pay issued on November
16, 1987, the salary ceiling of P1,000.00 under P.D. No. 851 was removed. It further provided that
Section 2. Definition of certain terms As used in this issuance. the minimum 13th month pay required by law shall not be less than one-twelfth (1/12) of the total
(a) "Thirteenth-moth pay" shall mean one twelfth (1/12) of the basic salary of an EE within a basic salary earned by an EE within a calendar year. The guidelines pertinently provides: The
calendar year; basic salary of an EE for the purpose of computing the 13th month pay shall include all
(b) "Basic salary" shall include all remunerations or earnings paid by an ER to an EE for services remunerations or earnings paid by his ER for services rendered but does not include allowances
rendered but may not include cost-of-living allowances granted pursuant to Presidential Decree No. and monetary benefits which are not considered or integrated as part of the regular or basic salary,
525 or Letter of Instructions No. 174, profit-sharing payments, and all allowances and monetary such as the cash equivalent of unused vacation and sick leave credits, overtime premium, night
benefits which are not considered or integrated as part of the regular or basic salary of the EE at differential and holiday pay, and cost-of-living allowances.
the time of the promulgation of the Decree on December 16, 1975.
For EEs receiving regular wage, we have interpreted basic salary to mean, not the amount
Section 3.ERs covered The Decree shall apply to all ERs except to: actually received by an EE, but 1/12 of their standard monthly wage multiplied by their length of
(a) Distressed ERs, such as (1) those which are currently incurring substantial losses or (2) in the service within a given calendar year. Thus, we exclude from the computation of basic salary
case of non-profit institutions and organizations, where their income, whether from donations, payments for sick, vacation and maternity leaves, night differentials, regular holiday pay and
contributions, grants and other earnings from any source, has consistently declined by more than premiums for work done on rest days and special holidays.

Page 9 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

ART. 118. Retaliatory measures. - It shall be unlawful for an ER to refuse to pay or reduce the
The revised guidelines also provided for a pro-ration of this benefit only in cases of resignation or wages and benefits, discharge or in any manner discriminate against any EE who has filed any
separation from work. As the rules state, under these circumstances, an EE is entitled to a pay in complaint or instituted any proceeding under this Title or has testified or is about to testify in such
proportion to the length of time he worked during the year, reckoned from the time he started proceedings.
working during the calendar year.The Court of Appeals thus held that: Considering the foregoing,
the computation of the 13th month pay should be based on the length of service and not on the ART. 119. False reporting. - It shall be unlawful for any person to make any statement, report, or
actual wage earned by the worker.(HONDA PHILS., INC., vs. SAMAHAN NG MALAYANG record filed or kept pursuant to the provisions of this Code knowing such statement, report or
MANGGAGAWA SA HONDA) record to be false in any material respect.

iii.BONUS a.NO WORK, NO PAY PRINCIPLE; APPLICABILITY/NON-APPLICABILITY


the Christmas bonus was included in the 13th month pay, then there would be no need for having a
specific provision on Christmas bonus in the CBA. But it did provide for a bonus in graduated GR: If there is no work performed by the Ee, without the fault of the Er, there can be no wage or
amounts depending on the length of service of the EE. The intention is clear therefore that the pay.
bonus provided in the CBA was meant to be in addition to the legal requirement. Moreover, why XPN: The laborer was able, willing and ready to work but was:
exclude the payment of the 1978 Christmas bonus and pay only the 1979-1980 bonus. The 1. Prevented by management;
classification of the company's workers in the CBA according to their years of service supports the 2. Illegally locked out;
allegation that the reason for the payment of bonus was to give bigger reward to the senior EEs 3. Illegally suspended;
a purpose which is not found in P.D. 851. A bonus under the CBA is an obligation created by the 4. Illegally dismissed
contract between the management and workers while the 13th month pay is mandated by the 5. Otherwise illegally prevented from
law.(UNITED CMC TEXTILE WORKERS UNION vs.LA and VALENZUELA)
The petitioners herein do not deny their participation in the June 15, 1993 strike. As such, they did
An ER cannot be forced to distribute bonuses which it can no longer afford to pay, a bonus is an not suffer any loss of earnings during their absence from work. Their reinstatement sans
amount granted and paid to anEE for his industry and loyalty which contributed to the success of backwages is in order, to conform to the policy of a fair days wage for a fair days labor. Under the
the ERs business and made possible the realization of profile. It is an act of generosity and is a principle of a fair days wage for a fair days labor, the petitioners were not entitled to the wages
management prerogative, given in addition to what is ordinarily received by or strictly due the during the period of the strike (even if the strike might be legal), because they performed no work
recipient. Thus, it is not a demandable and enforceable obligation, except when it is made part of during the strike. Verily, it was neither fair nor just that the dismissed EEs should litigate against
the wage, salary or compensation of the EE. (PRODUCERS BANK OF THE PHILIPPINES vs. their ER on the latters time. DANILO ESCARIO vs. NLRC)
NLRC)
b.WAGES/SALARIES, FACILITIES, SUPPLEMENT
3. TITLE II, CHAPTER III, ART.96-105, 110-119, 123-129 Specifically, "wage" is defined in letter (f) as the remuneration or earnings, however designated,
ART. 98. Application of Title. - This Title shall not apply to farm tenancy or leasehold, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece,
domestic service and persons working in their respective homes in needle work or in any cottage or commission basis, or other method of calculating the same, which is payable by an ER to an EE
industry duly registered in accordance with law. under a written or unwritten contract of employment for work done or to be done, or for services
rendered or to be rendered and includes the fair and reasonable value, as determined by the
ART. 102. Forms of payment. - No ER shall pay the wages of an EE by means of promissory Secretary of Labor, of board, lodging, or other facilities customarily furnished by the ER to the EE.
notes, vouchers, coupons, tokens, tickets, chits, or any object other than legal tender, even when
expressly requested by the EE. "Customary" is founded on long-established and constant practice connoting regularity. The
Payment of wages by check or money order shall be allowed when such manner of payment is receipt of an allowance on a monthly basis does not ipso facto characterize it as regular and
customary on the date of effectivity of this Code, or is necessary because of special circumstances forming part of salary because the nature of the grant is a factor worth considering. We agree with
as specified in appropriate regulations to be issued by the Secretary of Labor and Employment or the observation of the OSG that the subject allowances were temporarily, not regularly, received by
as stipulated in a collective bargaining agreement. petitioners because In the case of the housing allowance, once a vacancy occurs in the
company-provided housing accommodations, the EE concerned transfers to the company
ART. 103. Time of payment. - Wages shall be paid at least once every two (2) weeks or twice a premises and his housing allowance is discontinued . On the other hand, the transportation
month at intervals not exceeding sixteen (16) days. If on account of force majeure or allowance is in the form of advances for actual transportation expenses subject to liquidation,given
circumstances beyond the ERs control, payment of wages on or within the time herein provided only to EEs who have personal cars. The Bislig allowance is given to Division Managers and
cannot be made, the ER shall pay the wages immediately after such force majeure or corporate officers assigned in Bislig, Surigao del Norte. Once the officer is transferred outside
circumstances have ceased. No ER shall make payment with less frequency than once a month. Bislig, the allowance stops.(LIDUVINO M. MILLARES et al. vs. NLRC)
The payment of wages of EEs engaged to perform a task which cannot be completed in two (2)
weeks shall be subject to the following conditions, in the absence of a collective bargaining Q: When can the cost of facilities furnished by the Er be charged against an Ee?
agreement or arbitration award: A: In order that the cost be charged against the Ee, the latters acceptance of such facilities must
(1) That payments are made at intervals not exceeding sixteen (16) days, in proportion to the be voluntary.
amount of work completed;
(2) That final Q: What are the requirements for deducting values for facilities?
A: FACILITIES SUPPLEMENT settlement is A:1.Proof must be shown that such facilities are customarily furnished by the trade
Items of expenses necessary for the Extra remuneration or special made upon 2.The provision of deductible facilities must be voluntarily accepted in writing
laborers and his familys existence privileges or benefits given to or completion of 3.The facilities must be charged at fair and reasonable value (Mabeza v. NLRC, G.R. No. 118506,
and subsistence received by the laborers over and the work. April 18, 1997)
Note: Does not include tools of trade above their ordinary earnings or
or articles / services primarily for the wages (Atok Big Wedge Mining Co. ART. 104. In short, the benefit or privilege given to the EE which constitutes an extra remuneration above and
benefit of the Er or necessary to the v. Atok Big Wedge Mutual Benefit Place of over his basic or ordinary earning or wage is supplement; and when said benefit or privilege is part
conduct of the Ers business. Assoc, G.R. No. L7349, July 19, payment. - of the laborers' basic wages, it is a facility. The distinction lies not so much in the kind of benefit or
1955) . Payment of item (food, lodging, bonus or sick leave) given, but in the purpose for which it is given.23 In the
Forms part of the wage Independent of wage wages shall case at bench, the items provided were given freely by SLL for the purpose of maintaining the
Deductible from wage Not wage deductible be made at efficiency and health of its workers while they were working at their respective projects
WAGE
For the benefit of the worker and his SALARY
Granted for the convenience of the or near the
Compensation
family. for manual labor (skilled orEr. Paid to white collared workers place of As a general rule, on payment of wages, a party who alleges payment as a defense has the burden
unskilled) also known as blue collared and denotes higher degree of undertaking, of proving it.Specifically with respect to labor cases, the burden of proving payment of monetary
workers, paid at stated times and employment or a superior grade except as claims rests on the ER, the rationale being that the pertinent personnel files, payrolls, records,
measured by the day, week, month or of services and implies a otherwise remittances and other similar documents which will show that OT, differentials, SIL and other
season. position in office. provided by claims of workers have been paid are not in the possession of the worker but in the custody and
Considerable pay for a lower and less Out gesture of a larger and such absolute control of the ER. (SLL INTERNATIONAL CABLES SPECIALIST and SONNY L. LAGON,
responsible character of employment. more important service regulations vs. NLRC)
as the
GR: Not subject to execution Subject to execution. Secretary of i.BONUS INCLUDED/NOT INCLUDED; A DEMANDABLE OBLIGATION
XPN: Debts incurred for food, shelter, Labor and The general rule is that a bonus is a gratuity or an act of liberality which the recipient has no right to
clothing and medical attendance. Employment demand as a matter of right. 8 A bonus, however, is a demandable or enforceable obligation when
may it is made part of the wage or salary or compensation of the EE. 9 Whether or not a bonus forms
prescribe under conditions to ensure greater protection of wages. part of wages depends upon the circumstances and conditions for its payment. If it is additional
compensation which the ER promised and agreed to give without any conditions imposed for its
ART. 112. Non-interference in disposal of wages. - No ER shall limit or otherwise interfere with payment, such as success of business or greater production or output, then it is part of the wage.
the freedom of any EE to dispose of his wages. He shall not in any manner force, compel, or oblige But if it is paid only if profits are realized or if a certain level of productivity is achieved, it can not be
his EEs to purchase merchandise, commodities or other property from any other person, or considered part of the wage. Where it is not payable to all but only to some EEs and only when
otherwise make use of any store or services of such ER or any other person. their labor becomes more efficient or more productive, it is only an inducement for efficiency, a
prize therefor, not a part of the wage.( METRO TRANSIT ORGANIZATION, INC. vs. NLRC)
ART. 113. Wage deduction. - No ER, in his own behalf or in behalf of any person, shall make any
deduction from the wages of his EEs, except: ii.SALES ON COMMISSION
(a) In cases where the worker is insured with his consent by the ER, and the deduction is to Considering the above circumstances, the Third Division held, correctly, that the sales
recompense the ER for the amount paid by him as premium on the insurance; commissions were an integral part of the basic salary structure of Philippine Duplicators' EEs-
(b) For union dues, in cases where the right of the worker or his union to check-off has been salesmen. These commissions are not overtime payments, nor profit-sharing payments nor any
recognized by the ER or authorized in writing by the individual worker concerned; and other fringe benefit. Thus, the salesmen's commissions, comprising a pre-determined percent of
(c) In cases where the ER is authorized by law or regulations issued by the Secretary of Labor and the selling price of the goods sold by each salesman, were properly included in the term "basic
Employment. salary" for purposes of computing their 13th month pay. (PHIL. DUPLICATORS INC. vs. NLRC)

ART. 114. Deposits for loss or damage. - No ER shall require his worker to make deposits from iii.MEAL COUPONS
which deductions shall be made for the reimbursement of loss of or damage to tools, materials, or In determining whether a benefit or privilege, is a supplement or a facility the criterion is not the
equipment supplied by the ER, except when the ER is engaged in such trades, occupations or kind of benefit or item but its purpose. The benefit or privilege given to the EEs which constitutes
business where the practice of making deductions or requiring deposits is a recognized one, or is an extra remuneration above and over his basic or or-dinary earning or wage is supplement; and if
necessary or desirable as determined by the Secretary of Labor and Employment in appropriate it forms part of the EEs basic wage. It is facility. Therefore, no deduction should be made from the
rules and regulations. wages of the members of a commercial ship for meals freely given them by their employer not as
part of their wages but as a necessary matter in the maintenance of their health and efficiency,
ART. 115. Limitations. - No deduction from the deposits of an EE for the actual amount of the loss such benefit being in the nature of a supplement. (STATES MARINE CORP. vs. CEBU
or damage shall be made unless the EE has been heard thereon, and his responsibility has been SEAMENS ASSOC.)
clearly shown.
c.EQUAL PAY FOR EQUAL WORK OF EQUAL VALUE
ART. 117. Deduction to ensure employment. - It shall be unlawful to make any deduction from The School contends that petitioner has not adduced evidence that local-hires perform work equal
the wages of any EE for the benefit of the ER or his representative or intermediary as consideration to that of foreign-hires. The Court finds this argument a little cavalier. If an ER accords EEs the
of a promise of employment or retention in employment. same position and rank, the presumption is that these EEs perform equal work. This presumption
is borne by logic and human experience. If the ER pays one EE less than the rest, it is not for that

Page 10 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

EE to explain why he receives less or why the others receive more. That would be adding insult to GENERAL RETAINER/RETAINER FEE(COMPENSTATION FOR COMMITMENT TO RENDER
injury. The ER has discriminated against that EE; it is for the ER to explain why the EE is treated LEGAL SERVICES) vs. SPECIAL RETAINER(REMUNERATION FOR LEGAL SERVICES
unfairly. (INTL SCHOOL ALLIANCE OF EDUCATORS vs. QUISUMBING) ACTUALLY RENDERED)
The difference between a compensation for a commitment to render legal services and a
d.WITHHOLDING OF WAGES remuneration for legal services actually rendered can better be appreciated with a discussion of the
ART. 116. Withholding of wages and kickbacks prohibited. - It shall be unlawful for any person, two kinds of retainer fees a client may pay his lawyer. These are a general retainer, or a retaining
directly or indirectly, to withhold any amount from the wages of a worker or induce him to give up fee, and a special
any part of his wages by force, stealth, intimidation, threat or by any other means whatsoever retainer.
without the workers consent.
A general retainer, or retaining fee, is the fee paid to a lawyer to secure his future services as
Management prerogative refers to the right of an ER to regulate all aspects of employment, such general counsel for any ordinary legal problem that may arise in the routinary business of the client
as the freedom to prescribe work assignments, working methods, processes to be followed, and referred to him for legal action. The future services of the lawyer are secured and committed to
regulation regarding transfer of EEs, supervision of their work, lay-off and discipline, and dismissal the retaining client. For this, the client pays the lawyer a fixed retainer fee which could be monthly
and recall of work. Although management prerogative refers to the right to regulate all aspects of or otherwise, depending upon their arrangement. The fees are paid whether or not there are cases
employment, it cannot be understood to include the right to temporarily withhold salary/wages referred to the lawyer. The reason for the remuneration is that the lawyer is deprived of the
without the consent of the EE. To sanction such an interpretation would be contrary to Article 116 opportunity of rendering services for a fee to the opposing party or other parties. In fine, it is a
of the Labor Code, x x x Any withholding of an EEs wages by an ER may only be allowed in the compensation for lost opportunities.
form of wage deductions under the circumstances provided in Article 113 of the Labor Code. (SHS
PERFORATED MATERIALS vs. DIAZ) A special retainer is a fee for a specific case handled or special service rendered by the lawyer for
a client. A client may have several cases demanding special or individual attention. If for every
e.DIRECT PAYMENT PRINCIPELE case there is a separate and independent contract for attorney's fees, each fee is considered a
ART. 105. Direct payment of wages. - Wages shall be paid directly to the workers to whom they special retainer.(TRB vs. NLRC)
are due, except:
(a) In cases of force majeure rendering such payment impossible or under other special i.WAGE ORDER
circumstances to be determined by the Secretary of Labor and Employment in appropriate ART. 123. Wage Order. - Whenever conditions in the region so warrant, the Regional Board shall
regulations, in which case, the worker may be paid through another person under written authority investigate and study all pertinent facts; and based on the standards and criteria herein prescribed,
given by the worker for the purpose; or shall proceed to determine whether a Wage Order should be issued. Any such Wage Order shall
(b) Where the worker has died, in which case, the ER may pay the wages of the deceased worker take effect after fifteen (15) days from its complete publication in at least one (1) newspaper of
to the heirs of the latter without the necessity of intestate proceedings. The claimants, if they are all general circulation in the region.
of age, shall execute an affidavit attesting to their relationship to the deceased and the fact that In the performance of its wage-determining functions, the Regional Board shall conduct public
they are his heirs, to the exclusion of all other persons. If any of the heirs is a minor, the affidavit hearings/consultations, giving notices to EEs and ERs groups, provincial, city and municipal
shall be executed on his behalf by his natural guardian or next-of-kin. The affidavit shall be officials and other interested parties.
presented to the ER who shall make payment through the Secretary of Labor and Employment or Any party aggrieved by the Wage Order issued by the Regional Board may appeal such order to
his representative. The representative of the Secretary of Labor and Employment shall act as the Commission within ten (10) calendar days from the publication of such order. It shall be
referee in dividing the amount paid among the heirs. The payment of wages under this Article shall mandatory for the Commission to decide such appeal within sixty (60) calendar days from the filing
absolve the ER of any further liability with respect to the amount paid. thereof.
The filing of the appeal does not stay the order unless the person appealing such order shall file
f.NON-DIMINUTION OF BENEFITS PRINCIPLE with the Commission, an undertaking with a surety or sureties satisfactory to the Commission for
Article 100 of the Labor Code, otherwise known as the Non-Diminution Rule, mandates that the payment to the EEs affected by the order of the corresponding increase, in the event such
benefits given to EEs cannot be taken back or reduced unilaterally by the ER because the benefit order is affirmed. (As amended by Republic Act No. 6727, June 9, 1989).
has become part of the employment contract, written or unwritten. The rule against diminution of
benefits applies if it is shown that the grant of the benefit is based on an express policy or has Q: What are the standards or criteria for minimum wage setting?
ripened into a practice over a long period of time and that the practice is consistent and deliberate. A: In the determination of such regional minimum wages, the Regional Board shall, among other
Nevertheless, the rule will not apply if the practice is due to error in the construction or application relevant factors consider the following:
of a doubtful or difficult question of law. But even in cases of error, it should be shown that the a)The demand for living wages
correction is done soon after discovery of the error. (CENTRAL AZUCARERA DE TARLAC vs. b)Wage adjustment visavis the consumer price index
CENTRAL AZUCARERA DE TARLAC LABOR UNION) c)The cost of living and changes or increases therein
d)The needs of workers and their families
g.PREFERENTIAL RIGHT IN CASE OF BANKRUPTCY e)The need to induce industries to invest in the countryside
We have repeatedly stressed that before the workers' preference provided by Article 110 may be f)Improvements in standards of living
invoked, there must first be a declaration of bankruptcy or a judicial liquidation of the ER's g)The prevailing wage levels
business. xxx xxx In DBP v. Santos, supra, the Court discussed the import of Article 110 and h)Fair return of the capital invested and capacity to pay of ERs
Section 10 of Rule VIII, Book III and stated: "It is quite clear from the provisions that a declaration i)Effects on employment generation and family income
of bankruptcy or ajudicial liquidation must be present before the worker's preference may be j)The equitable distribution of income and wealth along the imperatives of economic and social
enforced. Thus, Article 110 of the Labor Code and its implementing rule cannot be invoked by the development
respondents in this case absent a formal declaration of bankruptcy or a liquidation order.
Q: What is salary ceiling method?
In the event of bankruptcy or liquidation of an ER's business, his workers shall enjoy first A: A method of minimum wage adjustment whereby the wage adjustment is applied to Ees
preference as regards their unpaid wages and other monetary claims, any provision of law to the receiving a certain denominated ceiling. In other words, workers already being paid more than the
contrary notwithstanding. Such unpaid wages,and monetary claims shall be paid in full before the existing minimum wage are also to be given a wage increase. (ECOP v. NWCP, G.R. No. 96169,
claims of the Government and other creditors may be paid." (Italics ours.) We ruled in DBP v. Sep. 24, 1991)
NLRC, supra, that the amendment "expands worker preference to cover not only unpaid wages but Q: What is a floor wage method?
also other monetary claims to which even claims of the Government must be deemed subordinate." A: It involves the fixing of a determinate amount to be added to the prevailing statutory minimum
Hence, under the new law, even mortgage credits are subordinate to workers' claims. In this wage rates.
connection, respondent NLRC ruled: "Lastly, while we are cognizant of the pronouncement of the
Supreme Court with respect to Art. 110 and while we hold in respect said pronouncements, we are j.WAGE DISTORTION
of the earnest view that considering that Art. 110 has been amended by RA 6715, complainants'
preference over government claims and other creditors be adhered to." (Rollo, p. 65) R.A. No. Elaborating on this statutory definition, this Court ruled: Wage distortion presupposes a
6715, however, took effect only on March 21; 1989. The amendment cannot therefore be classification of positions and ranking of these positions at various levels. One visualizes a
retroactively applied to, nor can it affect, the mortgage credit which was secured by the petitioner hierarchy of positions with corresponding ranks basically in terms of wages and other emoluments.
several years prior to its effectivity. (DBP vs. NLRC) Where a significant change occurs at the lowest level of positions in terms of basic wage without a
corresponding change in the other level in the hierarchy of positions, negating as a result thereof
h.ATTORNEYS FEES the distinction between one level of position from the next higher level, and resulting in a parity
ART. 111. Attorneys fees. - (a) In cases of unlawful withholding of wages, the culpable party may between the lowest level and the next higher level or rank, between new entrants and old hires,
be assessed attorneys fees equivalent to ten percent of the amount of wages recovered. there exists a wage distortion.
(b) It shall be unlawful for any person to demand or accept, in any judicial or administrative
proceedings for the recovery of wages, attorneys fees which exceed ten percent of the amount of The concept of wage distortion assumes an existing grouping or classification of EEs which
wages recovered. establishes distinctions among such EEs on some relevant or legitimate basis. This classification is
reflected in a differing wage rate for each of the existing classes of EEs.
ORDINARY vs. EXTRAORDINARY ATTYS FEES: In its ordinary concept, an attorney's fee is the
reasonable compensation paid to a lawyer by his client for the legal services he has rendered to Wage distortion involves four elements:
the latter. The basis of this compensation is the fact of his employment by and his agreement with 1. An existing hierarchy of positions with corresponding salary rates;
the client. In its extraordinary concept, an attorney's fee is an indemnity for damages ordered by 2. A significant change in the salary rate of a lower pay class without a concomitant increase in the
the court to be paid by the losing party in a litigation. The basis of this is any of the cases provided salary rate of a higher one;
by law where such award can be made, such as those authorized in Article 2208, Civil Code, and 3. The elimination of the distinction between the two levels;
is payable not to the lawyer but to the client, unless they have agreed that the award shall pertain 4. The existence of the distortion in the same region of the country.
to the lawyer as additional compensation or as part thereof.
A wage parity between EEs in different rungs is not at issue here, but a wage disparity between
As an adjunctive episode of the action for the recovery of bonus differentials in NLRC-NCR EEs in the same rung but located in different regions of the country. Contrary to petitioners
Certified Case No. 0466, private respondent's present claim for attorney's fees may be filed before postulation, a disparity in wages between EEs holding similar positions but in different regions does
the NLRC even though or, better stated, especially after its earlier decision had been reviewed and not constitute wage distortion as contemplated by law..
partially affirmed. It is well settled that a claim for attorney's fees may be asserted either in the very
action in which the services of a lawyer had been rendered or in a separate action. Petitioners claim of wage distortion must also be denied for one other reason. The difference in
wages between EEs in the same pay scale in different regions is not the mischief sought to be
With respect to the first situation, the remedy for recovering attorney's fees as an incident of the banished by the law. In fact, Republic Act No. 6727 (the Wage Rationalization Act), recognizes
main action may be availed of only when something is due to the client. Attorney's fees cannot be existing regional disparities in the cost of living. Section 2 of said law provides: SEC. 2. It is
determined until after the main litigation has been decided and the subject of the recovery is at the hereby declared the policy of the State to rationalize the fixing of minimum wages and to promote
disposition of the court. The issue over attorney's fees only arises when something has been productivity-improvement and gain-sharing measures to ensure a decent standard of living for the
recovered from which the fee is to be paid. workers and their families; to guarantee the rights of labor to its just share in the fruits of
production; to enhance employment generation in the countryside through industry dispersal; and
While a claim for attorney's fees may be filed before the judgment is rendered, the determination as to allow business and industry reasonable returns on investment, expansion and growth.
to the propriety of the fees or as to the amount thereof will have to be held in abeyance until the
main case from which the lawyer's claim for attorney's fees may arise has become final. Otherwise, Petitioner also avers that the implementation of the Wage Order in only one region violates the
the determination to be made by the courts will be premature. 24Of course, a petition for attorney's equal-pay-for-equal-work principle. This is not correct. At the risk of being repetitive, we stress that
fees may be filed before the judgment in favor of the client is satisfied or the proceeds thereof RA 6727 mandates that wages in every region must be set by the particular wage board of that
delivered to the client. region, based on the prevailing situation therein. Necessarily, the wages in different regions will not
be uniform. Thus, under RA 6727, the minimum wage in Region 1 may be different from that in

Page 11 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

Region 13, because the socioeconomic conditions in the two regions are different. (PRUBANKERS 2.When ErEe relationship ceased to exist at the time of the inspection
ASSOC. vs. PRUDENTIAL BANK AND TRUST CO.) 3.If ER contests the finding of the Labor Regulation Officer and such contestable issue is not
verifiable in the normal course of inspection
Q: Can the issue of WD be raised in a notice of strike?
A: No. WD is nonstrikeable. (Ilaw at Buklod ng Manggagawa v. NLRC, G.R. No. 91980, June 27, 4.TITLE iii, ARTS. 122-155
1991.) WD is neither a deadlock in collective bargaining nor ULP. ART. 122. Creation of Regional Tripartite Wages and Productivity Boards. - There is hereby
created Regional Tripartite Wages and Productivity Boards, hereinafter referred to as Regional
Q: Is the Er legally obliged to correct WD? Boards, in all regions, including autonomous regions as may be established by law. The
A: The Er and the union shall negotiate to correct the distortions. If there is no union, the Er and the Commission shall determine the offices/headquarters of the respective Regional Boards.
workers shall endeavor to correct such distinctions. The Regional Boards shall have the following powers and functions in their respective territorial
jurisdictions:
k.VISITORIAL/ENFORCEMENT/ADJUDICATORY POWER (a) To develop plans, programs and projects relative to wages, incomes and productivity
A: Art. 128 Art. 129 Art. 217(a)(6) improvement for their respective regions;
VP and EP of SLE RD LA (b) To determine and fix minimum wage rates applicable in their regions, provinces or industries
Inspection of Adjudication of Ees LA exercises original therein and to issue the corresponding wage orders, subject to guidelines issued by the
establishments and claims for wages and and exclusive Commission;
issuance of orders to benefits jurisdiction (c) To undertake studies, researches, and surveys necessary for the attainment of their functions,
compel compliance objectives and programs, and to collect and compile data on wages, incomes, productivity and
with labor standards, other related information and periodically disseminate the same;
wage orders and other (d) To
coordin A: Organized Establishment Unorganized Establishments
labor laws (with union) (without union)
ate with
the The Er and the union shall negotiate to The Er and the workers shall endeavor to
Enforcement of labor Limited to monetary All other claims other correct distortion. correct the distortion.
legislation in general claims arising from ErEe Regiona Any dispute shall be resolved through Any dispute shall be settled through the
relations l Boards a grievance procedure under the CBA. NCMB.
Proceeding is an Initiated by sworn LA decides case as may
offshoot of routine complaints filed by any within 30 calendar be If it remains unresolved, it shall be If it remains unresolved within 10 days it
inspections interested party days after submission necessa dealt with through voluntary shall be referred to the NLRC.
of the case by the ry to arbitration.
parties for decision attain The dispute will be resolved within 10 The NLRC shall conduct continuous
the days from the time the dispute was hearings and decide the dispute within 20
No jurisdictional reqts Jurisdictional reqts: 1) All other claims
policy referred to voluntary arbitration. days from the time the same was
1) Complaint arises from arising from ErEe
and referred.
ErEe relationship relations
2) Claimant is an Ee or 2) Including those of intention of this Code;
person employed in persons in domestic (e) To receive, process and act on applications for exemption from prescribed wage rates as may
domestic or household or household service be provided by law or any Wage Order; and
service or a HH 3) Involving an (f) To exercise such other powers and functions as may be necessary to carry out their mandate
3) Complaint does NOT amount exceeding under this Code.
include a claim for P5,000 Implementation of the plans, programs, and projects of the Regional Boards referred to in the
reinstatement 4) Whether or not second paragraph, letter (a) of this Article, shall be through the respective regional offices of the
4) Aggregate money accompanied with a Department of Labor and Employment within their territorial jurisdiction; Provided, however, That
claim of EACH claimant claim for the Regional Boards shall have technical supervision over the regional office of the Department of
does not exceed P5,000 reinstatement Labor and Employment with respect to the implementation of said plans, programs and projects.
Each Regional Board shall be composed of the Regional Director of the Department of Labor and
Appealable to SLE (In Appealable to NLRC Appealable to NLRC Employment as chairman, the Regional Directors of the National Economic and Development
case compliance Authority and the Department of Trade and Industry as vice-chairmen and two (2) members each
order is issued by from workers and ERs sectors who shall be appointed by the President of the Philippines, upon
Regional Office) the recommendation of the Secretary of Labor and Employment, to be made on the basis of the list
of nominees submitted by the workers and ERs sectors, respectively, and who shall serve for a
term of five (5) years.
DOLE REGIONAL DIRECTORS(Small Money Claims)
Each Regional Board to be headed by its chairman shall be assisted by a Secretariat. (As
Q: What is the rule on the recovery of simple money claims?
amended by Republic Act No. 6727, June 9, 1989).
A:
1.The aggregate money claim of each EE (Ee) or househelper (HH) does not exceed P5,000.
ART. 130. Nightwork prohibition. - No woman, regardless of age, shall be employed or permitted
2.The claim is presented by an Ee or person employed in the domestic or household service or
or suffered to work, with or without compensation:
HH.
(a) In any industrial undertaking or branch thereof between ten oclock at night and six oclock in
3.The claim arises from ErEe relationship.
the morning of the following day; or
4.The claimant does not seek reinstatement.
(b) In any commercial or non-industrial undertaking or branch thereof, other than agricultural,
between midnight and six oclock in the morning of the following day; or
Note: In the absence of any of the ff. requisites, it is the labor arbiter (LA) who shall have the
(c) In any agricultural undertaking at nighttime unless she is given a period of rest of not less than
jurisdiction over the claims arising from ErEe relations, except claims for Ees compensation, SSS,
nine (9) consecutive hours.
Philhealth, and maternity benefits, pursuant to Art.217 of the Labor Code.
The proceedings before the Regional Office shall be summary and nonlitigious in nature.
ART. 131. Exceptions. - The prohibitions prescribed by the preceding Article shall not apply in any
of the following cases:
Q: What is the adjudicatory power of the Regional Director (RD)?
(a) In cases of actual or impending emergencies caused by serious accident, fire, flood, typhoon,
A: The RD or any of his duly authorized hearing officer is empowered through summary proceeding
earthquake, epidemic or other disasters or calamity, to prevent loss of life or property, or in cases
and after due notice, to hear and decide cases involving recovery of wages and other monetary
of force majeure or imminent danger to public safety;
claims and benefits, including legal interests
(b) In case of urgent work to be performed on machineries, equipment or installation, to avoid
serious loss which the ER would otherwise suffer;
DOLE SECRETARY OF LABOR(V/E)
(c) Where the work is necessary to prevent serious loss of perishable goods;
Q: What constitute visitorial power?
(d) Where the woman EE holds a responsible position of managerial or technical nature, or where
A:1.Access to ERs records and premises at any time of the day or night, whenever work is being
the woman EE has been engaged to provide health and welfare services;
undertaken
(e) Where the nature of the work requires the manual skill and dexterity of women workers and the
2.To copy from said records
same cannot be performed with equal efficiency by male workers;
3.Question any EE and investigate any fact, condition or matter which may be necessary to
(f) Where the women EEs are immediate members of the family operating the establishment or
determine violations or which may aid in the enforcement of the Labor Code and of any labor law,
undertaking; and
wage order, or rules and regulation issued pursuant thereto.
(g) Under other analogous cases exempted by the Secretary of Labor and Employment in
appropriate regulations.
Q: Give 4 instances where the visitorial power of the SLE may be exercised under the Labor Code.
A: Power to:
ART. 132. Facilities for women. - The Secretary of Labor and Employment shall establish
1.Inspect books of accounts and records of any person or entity engaged in recruitment and
standards that will ensure the safety and health of women EEs. In appropriate cases, he shall, by
placement, require it to submit reports regularly on prescribed forms and act in violations of any
regulations, require any ER to:
provisions of the LC on recruitment and placement. (Art. 37)
(a) Provide seats proper for women and permit them to use such seats when they are free from
2.Have access to ERs records and premises to determine violations of any provisions of the LC on
work and during working hours, provided they can perform their duties in this position without
recruitment and placement. (Art. 128)
detriment to efficiency;
3.Conduct industrial safety inspections of establishments. (Art. 165)
(b) To establish separate toilet rooms and lavatories for men and women and provide at least a
4.Inquire into the financial activities of legitimate labor organizations (LLO) and examine their
dressing room for women;
books of accounts upon the filing of the complaint under oath and duly supported by the written
(c) To establish a nursery in a workplace for the benefit of the women EEs therein; and
consent of at least 20% of the total membership of the LO concerned.
(d) To determine appropriate minimum age and other standards for retirement or termination in
special occupations such as those of flight attendants and the like.
Q: What is enforcement power?
A: It is the power of the SLE to:
Article 134.Family Planning Services; Incentives for Family Planning.- (a) Establishments
1.Issue compliance orders
which are required by law to maintain a clinic or infirmary shall provide free family planning
2.Issue writs of execution for the enforcement of their orders, except in cases where the ER (Er)
services to their EEs which shall include, but not be limited to, the application or use of
contests the findings of the labor officer and raise issues supported by documentary proof which
contraceptive pills and intrauterine devices.
were not considered in the course of inspection
3.Order stoppage of work or suspension of operation when noncompliance with the law or
(b) In coordination with other agencies of the government engaged in the promotion of family
implementing rules and regulations poses grave and imminent danger to health and safety of
planning, the Department of Labor and Employment shall develop and prescribe incentive bonus
workers in the workplace
schemes to encourage family planning among female workers in any establishment or enterprise.
4.Require Ers to keep and maintain such employment records as may be necessary in aid to the
visitorial and enforcement powers
Article 135.Discrimination Prohibited. It shall be unlawful for any ER to discriminate against
5.Conduct hearings within 24 hours to determine whether:a.An order for stoppage of work or any woman EE with respect to terms and conditions of employment solely on account of her sex.
suspension of operations shall be lifted or not; and b.Er shall pay EEs concerned their salaries in
case the violation is attributable to his fault. (As amended by RA 7730; Guico v. Secretary,
The following are acts of discrimination:
Q: What are the instances when enforcement power may not be used?
(a) Payment of a lesser compensation, including wage, salary or other form of remuneration and
A:
fringe benefits, to a female EE as against a male EE, for work of equal value; and
1.Case does not arise from the exercise of visitorial power
Page 12 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

ANTI-SEXUAL HARASSMENT ACT(RA7877) SEC.3-6


(b) Favoring a male EE over a female EE with respect to promotion, training opportunities, study Q: Who may be held liable for sexual harassment?
and scholarship grants solely on account of their sexes. A: In a work, education or trainingrelated environment sexual harassment may be committed by
an:
Criminal liability for the willful commission of any unlawful act as provided in this Article or any 1.Ee ; 2.Manager ; 3.Supervisor ; 4. Agent of the (Er); 5. Teacher, instructor, professor; 6. Coach,
violation of the rules and regulations issued pursuant to Section 2 hereof shall be penalized as trainer, or 7. Any other person who, having authority, influence or moral ascendancy over another
provided in Articles 288 and 289 of this Code: Provided, That the institution of any criminal action in a work or training or education environment: a. Demands, b. Requests or c. Requires any
under this provision shall not bar the aggrieved EE from filing an entirely separate and distinct sexual favor from the other, regardless of whether the demand, request or requirement for
action for money claims, which may include claims for damages and other affirmative reliefs. The submission is accepted by the object of R.A. 7877. (Sec. 3)
actions hereby authorized shall proceed independently of each other. (As amended by Republic
Act No. 6725, May 12, 1989). Q: How is sexual harassment committed?
A: Generally, a person liable demands, requests, or otherwise requires any sexual favor from the
Article 137.Prohibited Acts. (a) It shall be unlawful for any ER: other, regardless of whether the demand, request or requirement for submission is accepted by the
latter.
(1) To deny any woman EE the benefits provided for in this Chapter or to discharge any woman
employed by him for the purpose of preventing her from enjoying any of the benefits provided Q: Under the Sexual Harassment Act, does the definition of sexual harassment require a
under this Code; categorical demand or request for sexual favor?
A: No. It is true that the provision calls for a demand, request or requirement of a sexual favor.
(2) To discharge such woman on account of her pregnancy, or while on leave or in confinement But it is not necessary that the demand, request or requirement of a sexual favor be articulated in a
due to her pregnancy; categorical manner. It may be discerned, with equal certitude, from the acts of the offender.
Likewise, it is not essential that the demand, request or requirement be made as a condition for
(3) To discharge or refuse the admission of such woman upon returning to her work for fear that continued employment or for promotion to a higher position. It is enough that the respondents acts
she may again be pregnant. result in creating an intimidating, hostile or offensive environment for the EE. (Domingo v. Rayala,
G.R. No. 155831, Feb. 18, 2008)
Article 138.Classification of Certain Women Workers. Any woman who is permitted or
suffered to work, with or without compensation, in any night club, cocktail lounge, massage clinic, Q: When is sexual harassment committed?
bar or similar establishments under the effective control or supervision of the ER for a substantial A: Specifically:
period of time as determined by the Secretary of Labor and Employment, shall be considered as an 1. In a workrelated or employment environment:
EE of such establishment for purposes of labor and social legislation. a. The sexual favor is made as a condition in the hiring or in the employment, reemployment or
continued employment of said individual, or in granting said individual favorable compensation,
Article 139.Minimum Employable Age.- (a) No child below fifteen (15) years of age shall be terms, conditions, promotions, or privileges; or the refusal to grant the sexual favor results in
employed, except when he works directly under the sole responsibility of his parents or guardian, limiting, segregating or classifying the Ee which in a way would discriminate, deprive or diminish
and his employment does not in any way interfere with his schooling. employment opportunities or otherwise adversely affect said Ee;
b. The above acts would impair the Ees rights or privileges under existing labor laws; or
(b) Any person between fifteen (15) and eighteen (18) years of age may be c. The above acts would result in an intimidating, hostile, or offensive environment for the Ee.
employed for such number of hours and such periods of the day as determined by the Secretary of
Labor and Employment in appropriate regulations. 2. In an education or training environment:
a. Against one who is under the care, custody or supervision of the offender;
(c) The foregoing provisions shall in no case allow the employment of a person b. Against one whose education, training, apprenticeship or tutorship is entrusted to the offender;
below eighteen (18) years of age in an undertaking which is hazardous or deleterious in nature as c. Sexual favor is made a condition to the giving of a passing grade, or the granting of honors and
determined by the Secretary of Labor and Employment. scholarships, or the payment of a stipend, allowance or other benefits, privileges, or
considerations; or
Article 140.Prohibition Against Child Discrimination. - No ER shall discriminate against any d. Sexual advances result in an intimidating, hostile or offensive environment for the student,
person in respect to terms and conditions of employment on account of his age. trainee or apprentice.

Article 141.Coverage. - This Chapter shall apply to all persons rendering services in households Q: What are the duties of the Er or head of office in a workrelated, education or training
for compensation. environment?
A:
Domestic or household service shall mean service in the ERs home which is usually necessary 1.Prevent or deter the commission of acts of sexual harassment and
or desirable for the maintenance and enjoyment thereof and includes ministering to the personal 2.Provide the procedures for the resolution, settlement or prosecution of acts of sexual
comfort and convenience of the members of the ERs household, including services of family harassment.
drivers.
Towards this end, the Er or head of office shall:
Article 142.Contract of Domestic Service. The original contract of domestic service shall not 1.Promulgate appropriate rules and regulations in consultation with the jointly approved by the Ees
last for more than two (2) years but it may be renewed for such periods as may be agreed upon by or students or trainees, through their duly designated representatives, prescribing the procedure for
the parties. the investigation or sexual harassment cases and the administrative sanctions therefore. (Sec. 4)

Article 143.Minimum Wage. (a) Househelpers shall be paid the following minimum wage rates: Note: Administrative sanctions shall not be a bar to prosecution in the proper courts for unlawful
acts of sexual harassment.
(1) Eight hundred pesos (P800.00) a month for househelpers in Manila, Quezon, Pasay, and
Caloocan cities and municipalities of Makati, San Juan, Mandaluyong, Muntinlupa, Navotas, The said rules and regulations issued shall include, among others, guidelines on proper decorum in
Malabon, Paranaque, Las Pias, Pasig, Marikina, Valenzuela, Taguig and Pateros in Metro Manila the workplace and educational or training institutions.
and in highly urbanized cities; 1.Create a committee on decorum and investigation of cases on sexual harassment.
2.The Er or head of office, education or training institution shall disseminate or post a copy of this
(2) Six hundred fifty pesos (P650.00) a month for those in other chartered cities and first-class R.A. 7877 for the information of all concerned
municipalities; and
Q: What is the liability of the Er, head of office, educational or training institution?
(3) Five hundred fifty pesos (P550.00) a month for those in other municipalities. A: Ee shall be solidarily liable for damages arising from the acts of sexual harassment committed in
the employment, education or training environment provided:
Provided, That the ERs shall review the employment contracts of their househelpers every three 1.The Er or head of office, educational or training institution is informed of such acts by the
(3) years with the end in view of improving the terms and conditions thereof. offended party; and
2.No immediate action is taken thereon. (Sec. 5)
Provided, further, That those househelpers who are receiving at least One thousand pesos
(P1,000.00) shall be covered by the Social Security System (SSS) and be entitled to all the Q: Can an independent action for damages be filed?
benefits provided thereunder. (As amended by Republic Act No. 7655, August 19, 1993). A: Yes. Nothing under R.A. 7877 shall preclude the victim of work, education or trainingrelated
sexual harassment from instituting a separate and independent action for damages and other
Article 144.Minimum Cash Wage. The minimum wage rates prescribed under this Chapter shall affirmative relief. (Sec. 6)
be the basic cash wages which shall be paid to the househelpers in addition to lodging, food and
medical attendance. Q: What is the threefold liability rule in sexual harassment cases?
A: An act of sexual harassment may give rise to civil, criminal and administrative liability on the part
Article 145.Assignment to Non-Household Work. No househelper shall be assigned to work in of the offender, each proceeding independently of the others.
a commercial, industrial or agricultural enterprise at a wage or salary rate lower than that provided
for agricultural or non-agricultural workers as prescribed herein. Q: When does the action prescribe?
A: Any action shall prescribe in 3 years.
Article 146.Opportunity for Education. If the househelper is under the age of eighteen (18)
years, the ER shall give him or her an opportunity for at least elementary education. The cost of Under Rule XIII, Section 1(b), Book 3 of the Labor Code, as amended, the terms househelper or
education shall be part of the househelpers compensation, unless there is a stipulation to the domestic servant are defined as follows: The term househelper as used herein is synonymous
contrary. to the term domestic servant and shall refer to any person, whether male or female, who renders
services in and about the ERs home and which services are usually necessary or desirable for the
Article 147.Treatment of Househelpers. The ER shall treat the househelper in a just and maintenance and enjoyment thereof, and ministers exclusively to the personal comfort and
humane manner. In no case shall physical violence be used upon the househelper. enjoyment of the ERs family. The foregoing definition clearly contemplates such househelper or
domestic servant who is employed in the ERs home to minister exclusively to the personal comfort
Article 148.Board, Lodging, and Medical Attendance. The ER shall furnish the househelper, and enjoyment of the ERs family. Such definition covers family drivers, domestic servants, laundry
free of charge, suitable and sanitary living quarters as well as adequate food and medical women, yayas, gardeners, houseboys and other similar househelps
attendance.
RA10151
Article 149.Indemnity for Unjust Termination of Services. If the period of household service is
fixed, neither the ER nor the househelper may terminate the contract before the expiration of the (APEX MINING vs. NLRC)
term, except for a just cause. If the househelper is unjustly dismissed, he or she shall be paid the (BARCENAS vs. NLRC)
compensation already earned plus that for fifteen (15) days by way of indemnity. (BACSIN vs. WAHIMAN)

If the househelper leaves without justifiable reason, he or she shall forfeit any unpaid salary due 5.BOOK FOUR, ARTS-156-161
him or her not exceeding fifteen (15) days. Article 156.First-Aid Treatment. Every ER shall keep in his establishment such first-aid
medicines and equipment as the nature and conditions of work may require, in accordance with
Article 150.Service of Termination Notice. If the duration of the household service is not such regulations as the Department of Labor and Employment shall prescribe.
determined either in stipulation or by the nature of the service, the ER or the househelper may give
notice to put an end to the relationship five (5) days before the intended termination of the service. The ER shall take steps for the training of a sufficient number of EEs in first-aid
treatment.

Page 13 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

recruits, supplies, or places workers to perform a job, work, or service for a principal. In labor-only
Article 157.Emergency Medical and Dental Services. It shall be the duty of every ER to furnish contracting, the following elements are present: (a) the contractor or subcontractor does not have
his EEs in any locality with free medical and dental attendance and facilities consisting of: substantial capital or investment to actually perform the job, work, or service under its own account
and responsibility; and (b) the EEs recruited, supplied, or placed by such contractor or
(a) The services of a full-time registered nurse when the number of EEs exceeds fifty (50) but not subcontractor perform activities which are directly related to the main business of the principal. On
more than two hundred (200) except when the ER does not maintain hazardous workplaces, in the other hand, permissible job contracting or subcontracting refers to an arrangement whereby a
which case, the services of a graduate first-aider shall be provided for the protection of workers, principal agrees to put out or farm out with the contractor or subcontractor the performance or
where no registered nurse is available. The Secretary of Labor and Employment shall provide by completion of a specific job, work, or service within a definite or predetermined period, regardless
appropriate regulations, the services that shall be required where the number of EEs does not of whether such job, work, or service is to be performed or completed within or outside the
exceed fifty (50) and shall determine by appropriate order, hazardous workplaces for purposes of premises of the principal.
this Article;
A person is considered engaged in legitimate job contracting or subcontracting if the following
(b) The services of a full-time registered nurse, a part-time physician and dentist, and an conditions concur: (a) The contractor carries on a distinct and independent business and
emergency clinic, when the number of EEs exceeds two hundred (200) but not more than three undertakes the contract work on his account under his own responsibility according to his own
hundred (300); and manner and method, free from the control and direction of his ER or principal in all matters
connected with the performance of his work except as to the results thereof; (b) The contractor has
(c) The services of a full-time physician, dentist and a full-time registered nurse as well as a dental substantial capital or investment; and (c) The agreement between the principal and the contractor
clinic and an infirmary or emergency hospital with one bed capacity for every one hundred (100) or subcontractor assures the contractual EEs entitlement to all labor and occupational safety and
EEs when the number of EEs exceeds three hundred (300). health standards, free exercise of the right to self-organization, security of tenure, and social
welfare benefits.
In cases of hazardous workplaces, no ER shall engage the services of a physician or a dentist who
cannot stay in the premises of the establishment for at least two (2) hours, in the case of those EEs need not prove that the contractor does not have substantial capital,investment, and tools to
engaged on part-time basis, and not less than eight (8) hours, in the case of those employed on engage in job-contracting.LSC was unable to present proof that BMSI had substantial capital.
full-time basis. Where the undertaking is non-hazardous in nature, the physician and dentist may The record before us is bereft of any proof pertaining to the contractors capitalization, nor to its
be engaged on retainer basis, subject to such regulations as the Secretary of Labor and investment in tools, equipment, or implements actually used in the performance or completion of
Employment may prescribe to insure immediate availability of medical and dental treatment and the job, work, or service that it was contracted to render. What is clear was that the equipment
attendance in case of emergency. (As amended by Section 26, Presidential Decree No. 570-A, used by BMSI were owned by, and merely rented from, LSC. In Mandaue Galleon Trade, Inc. v.
November 1, 1974). Andales, 548 SCRA 17 (2008), we held: The law casts the burden on the contractor to prove that it
has substantial capital, investment, tools, etc. EEs, on the other hand, need not prove that the
Article 158.When Emergency Hospital Not Required. The requirement for an emergency contractor does not have substantial capital, investment, and tools to engage in job-contracting
hospital or dental clinic shall not be applicable in case there is a hospital or dental clinic which is
accessible from the ERs establishment and he makes arrangement for the reservation therein of The CA erred in considering BMSIs Certificate of Registration as sufficient proof that it is an
the necessary beds and dental facilities for the use of his EEs. independent contractor. In San Miguel Corporation v. Vicente B. Semillano, Nelson Mondejas,
Jovito Remada, Alilgilan Multi-Purpose Coop (AMPCO), and Merlyn N. Policarpio, 623 SCRA 114
Article 159.Health Program. The physician engaged by an ER shall, in addition to his duties (2010), we held that a Certificate of Registration issued by the Department of Labor and
under this Chapter, develop and implement a comprehensive occupational health program for the Employment is not conclusive evidence of such status. The fact of registration simply prevents the
benefit of the EEs of his ER. legal presumption of being a mere labor-only contractor from arising.

Article 160.Qualifications of Health Personnel. The physicians, dentists and nurses employed BMSI can only be classified as a labor-only contractor. The CA, therefore, erred when it ruled
by ERs pursuant to this Chapter shall have the necessary training in industrial medicine and otherwise. Consequently, the workers that BMSI supplied to LSC became regular EEs of the latter.
occupational safety and health. The Secretary of Labor and Employment, in consultation with Having gained regular status, petitioners were entitled to security of tenure and could only be
industrial, medical, and occupational safety and health associations, shall establish the dismissed for just or authorized causes and after they had been accorded due process. Petitioners
qualifications, criteria and conditions of employment of such health personnel. lost their employment when LSC terminated its Agreement with BMSI. However, the termination of
LSCs Agreement with BMSI cannot be considered a just or an authorized cause for petitioners
ART. 161. Assistance of ER. - It shall be the duty of any ER to provide all the necessary dismissal. (BABAS vs. LORENZO SHIPPING)
assistance to ensure the adequate and immediate medical and dental attendance and treatment to
an injured or sick EE in case of emergency. In this case the Labor Arbiter, the NLRC, and the Court of Appeals were unanimous in finding that
FVA was a legitimate job contractor. Among the circumstances that established the status of FVA
(OCEAN BUILDERS vs. SPS. CUBCUB) as a legitimate job contractor are: (1) FVA is registered with the DOLE and the DTI; (2) FVA has a
(ECASINAS vs. SHANGRI-LA) Contract for Services with Dusit for the supply of valet parking and door attendant services; (3)
FVA has an independent business and provides valet parking and door attendant services to other
6.BOOK SIX, POST-EMPLOYMENT clients like Mandarin Oriental, Manila Hotel, Peninsula Manila Hotel, Westin Philippine Plaza,
a.TERMINATION OF EMPLOYMENT (ARTS.278-286) Golden B Hotel, Pan Pacific Manila Hotel, and Strikezone Bowling Lane; and (4) FVAs total assets
ART. 278. Coverage. - The provisions of this Title shall apply to all establishments or undertakings, from 1997 to 1999 amount toP1,502,597.70 to P9,021,335.13. In addition, it provides the uniforms
whether for profit or not. and lockers of its EEs. (OREGAS vs. NLRC)
ART. 279. Security of tenure. - In cases of regular employment, the ER shall not terminate the
services of an EE except for a just cause or when authorized by this Title. An EE who is unjustly In determining whether there is labor-only contracting, the control test is merely one of the factors
dismissed from work shall be entitled to reinstatement without loss of seniority rights and other to consider; Finding that a contractor is a labor-only contractor, as opposed to permissible job
privileges and to his full backwages, inclusive of allowances, and to his other benefits or their contracting, is equivalent to declaring that there is an ER-EE relationship between the principal and
monetary equivalent computed from the time his compensation was withheld from him up to the the EEs of the supposed contractor, and the labor-only contractor is considered as a mere agent
time of his actual reinstatement. (As amended by Section 34, Republic Act No. 6715, March 21, of the principal, the real ER (ALIVIADO vs. PROCTER AND GAMBLE)
1989).
. Independent contractors often present themselves to possess unique skills, expertise or talent to
1.CLASSIFICATION OF EES distinguish them from ordinary EEs. The specific selection and hiring of SONZA, because of his
i.CONTRACTOR, INDEPENDENT CONTRACTOR, LABOR-ONLY CONTRACTOR (ARTS.-106- unique skills, talent and celebrity status not possessed by ordinary EEs, is a circumstance
109) indicative, but not conclusive, of an independent contractual relationship. If SONZA did not
ART. 106. Contractor or subcontractor. - Whenever an ER enters into a contract with another possess such unique skills, talent and celebrity status, ABS-CBN would not have entered into the
person for the performance of the formers work, the EEs of the contractor and of the latters Agreement with SONZA but would have hired him through its personnel department just like any
subcontractor, if any, shall be paid in accordance with the provisions of this Code. other EE. In any event, the method of selecting and engaging SONZA does not conclusively
In the event that the contractor or subcontractor fails to pay the wages of his EEs in accordance determine his status. We must consider all the circumstances of the relationship, with the control
with this Code, the ER shall be jointly and severally liable with his contractor or subcontractor to test being the most important element.
such EEs to the extent of the work performed under the contract, in the same manner and extent
that he is liable to EEs directly employed by him. All the talent fees and benefits paid to SONZA were the result of negotiations that led to the
The Secretary of Labor and Employment may, by appropriate regulations, restrict or prohibit the Agreement. If SONZA were ABS-CBNs EE, there would be no need for the parties to stipulate on
contracting-out of labor to protect the rights of workers established under this Code. In so benefits such as SSS, Medicare, x x x and 13th month pay which the law automatically
prohibiting or restricting, he may make appropriate distinctions between labor-only contracting and incorporates into every ER-EE contract. Whatever benefits SONZA enjoyed arose from contract
job contracting as well as differentiations within these types of contracting and determine who and not because of an ER-EE relationship.
among the parties involved shall be considered the ER for purposes of this Code, to prevent any
violation or circumvention of any provision of this Code. SONZAs talent fees, amounting to P317,000 monthly in the second and third year, are so huge
There is "labor-only" contracting where the person supplying workers to an ER does not have and out of the ordinary that they indicate more an independent contractual relationship rather than
substantial capital or investment in the form of tools, equipment, machineries, work premises, an ER-EE relationship. ABS-CBN agreed to pay SONZA such huge talent fees precisely because
among others, and the workers recruited and placed by such person are performing activities of SONZAs unique skills, talent and celebrity status not possessed by ordinary EEs. Obviously,
which are directly related to the principal business of such ER. In such cases, the person or SONZA acting alone possessed enough bargaining power to demand and receive such huge talent
intermediary shall be considered merely as an agent of the ER who shall be responsible to the fees for his services. The power to bargain talent fees way above the salary scales of ordinary EEs
workers in the same manner and extent as if the latter were directly employed by him. is a circumstance indicative, but not conclusive, of an independent contractual relationship.
ART. 107. Indirect ER. - The provisions of the immediately preceding article shall likewise apply to
any person, partnership, association or corporation which, not being an ER, contracts with an Applying the control test to the present case, we find that SONZA is not an EE but an independent
independent contractor for the performance of any work, task, job or project. contractor. The control test is themost important test our courts apply in distinguishing an EE from
ART. 108. Posting of bond. - An ER or indirect ER may require the contractor or subcontractor to an independent contractor. This test is based on the extent of control the hirer exercises over a
furnish a bond equal to the cost of labor under contract, on condition that the bond will answer for worker. The greater the supervision and control the hirer exercises, the more likely the worker is
the wages due the EEs should the contractor or subcontractor, as the case may be, fail to pay the deemed an EE. The converse holds true as wellthe less control the hirer exercises, the more
same. likely the worker is considered an independent contractor.
ART. 109. Solidary liability. - The provisions of existing laws to the contrary notwithstanding,
every ER or indirect ER shall be held responsible with his contractor or subcontractor for any Being an exclusive talent does not by itself mean that SONZA is an EE of ABS-CBN. Even an
violation of any provision of this Code. For purposes of determining the extent of their civil liability independent contractor can validly provide his services exclusively to the hiring party. In the
under this Chapter, they shall be considered as direct ERs. broadcast industry, exclusivity is not necessarily the same as control. (SONZA vs. ABS-CBN)

In declaring BMSI as an independent contractor, the CA, in the challenged Decision, heavily relied (GARDEN OF MEMORIES vs. NLRC)
on the provisions of the Agreement, wherein BMSI declared that it was an independent contractor,
with substantial capital and investment.De Los Santos v. NLRC, 372 SCRA 723 (2001), instructed ii.REGULAR, PROJECT/SEASONAL, PROBATIONARY, CASUAL EES (ARTS.280-281)
us that the character of the business, i.e., whether as labor-only contractor or as job contractor, ART. 280. Regular and casual employment. - The provisions of written agreement to the contrary
should be measured in terms of, and determined by, the criteria set by statute. The parties cannot notwithstanding and regardless of the oral agreement of the parties, an employment shall be
dictate by the mere expedience of a unilateral declaration in a contract the character of their deemed to be regular where the EE has been engaged to perform activities which are usually
business. necessary or desirable in the usual business or trade of the ER, except where the employment has
been fixed for a specific project or undertaking the completion or termination of which has been
Thus, in distinguishing between prohibited labor-only contracting and permissible job contracting, determined at the time of the engagement of the EE or where the work or service to be performed
the totality of the facts and the surrounding circumstances of the case are to be considered. Labor- is seasonal in nature and the employment is for the duration of the season.
only contracting, a prohibited act, is an arrangement where the contractor or subcontractor merely

Page 14 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Section 93 of the 1992 Manual of Regulations for Private Schools provides that full-time teachers
Provided, That any EE who has rendered at least one year of service, whether such service is who have satisfactorily completed their probationary period shall be considered regular or
continuous or broken, shall be considered a regular EE with respect to the activity in which he is permanent. Moreover, for those teaching in the tertiary level, the probationary period shall not be
employed and his employment shall continue while such activity exists. more than six consecutive regular semesters of satisfactory service. The requisites to acquire
ART. 281. Probationary employment. - Probationary employment shall not exceed six (6) months permanent employment, or security of tenure, are (1) the teacher is a full-time teacher; (2) the
from the date the EE started working, unless it is covered by an apprenticeship agreement teacher must have rendered three consecutive years of service; and (3) such service must have
stipulating a longer period. The services of an EE who has been engaged on a probationary basis been satisfactory.
may be terminated for a just cause or when he fails to qualify as a regular EE in accordance with
reasonable standards made known by the ER to the EE at the time of his engagement. An EE who As previously held, a part-time teacher cannot acquire permanent status. Only when one has
is allowed to work after a probationary period shall be considered a regular EE served as a full-time teacher can he acquire permanent or regular status. The petitioner was a part-
time lecturer before she was appointed as a full-time instructor on probation. As a part-time
As can be gleaned from this provision, there are two kinds of regular EEs, namely: (1) those who lecturer, her employment as such had ended when her contract expired. Thus, the three semesters
are engaged to perform activities which are usually necessary or desirable in the usual business or she served as part-time lecturer could not be credited to her in computing the number of years she
trade of the ER; and (2) those who have rendered at least one year of service, whether continuous has served to qualify her for permanent status.
or broken, with respect to the activity in which they are employed. Simply stated, regular EEs are
classified into: regular EEs by nature of work; and regular EEs by years of service. The former Completing the probation period does not automatically qualify her to become a permanent EE of
refers to those EEs who perform a particular activity which is necessary or desirable in the usual the university. Petitioner could only qualify to become a permanent EE upon fulfilling the
business or trade of the ER, regardless of their length of service; while the latter refers to those reasonable standards for permanent employment as faculty member. Consistent with academic
EEs who have been performing the job, regardless of the nature thereof, for at least a year. If the freedom and constitutional autonomy, an institution of higher learning has the prerogative to
EE has been performing the job for at least one year, even if the performance is not continuous or provide standards for its teachers and determine whether these standards have been met. At the
merely intermittent, the law deems the repeated and continuing need for its performance as end of the probation period, the decision to re-hire an EE on probation, belongs to the university as
sufficient evidence of the necessity, if not indispensability, of that activity to the business. the ER alone.

A project EE is assigned to carry out a specific project or undertaking the duration and scope of We reiterate, however, that probationary EEs enjoy security of tenure, but only within the period of
which are specified at the time the EE is engaged in the project. A project is a job or undertaking probation. Likewise, an EE on probation can only be dismissed for just cause or when he fails to
which is distinct, separate and identifiable from the usual or regular undertakings of the company. qualify as a regular EE in accordance with the reasonable standards made known by the ER at the
A project EE is assigned to a project which begins and ends at determined or determinable times. time of his hiring. Upon expiration of their contract of employment, academic personnel on
probation cannot automatically claim security of tenure and compel their ERs to renew their
The principal test used to determine whether EEs are project EEs as distinguished from regular employment contracts. In the instant case, petitioner, did not attain permanent status and was not
EEs, is whether or not the EEs were assigned to carry out a specific project or undertaking, the illegally dismissed. As found by the NLRC, her contract merely expired. (LACUESTA vs. ATENEO)
duration or scope of which was specified at the time the EEs were engaged for that project. In this
case, apart from respondents bare allegation that petitioner was a project EE, it had not shown In the cases of Espiritu Santo Parochial School vs. NLRC and Colegio San Agustin vs. NLRC, the
that petitioner was informed that he would be assigned to a specific project or undertaking. Neither court recognized the distinction between a calendar year and a school year. InEspiritu Santo
was it established that he was informed of the duration and scope of such project or undertaking at Parochial School, we held: x x x the petitioners can not talk of a three-year probationary
the time of his engagement. employment expiring each school year. If it expires per school year, it is not a three-year period.
Then in Colegio San Agustin, we said: x x x As applied to private school teachers, the probationary
Respondent did not report the termination of petitioners supposed project employment to the period is three years as provided in the Manual of Regulations for Private Schools. It must be
Department of Labor and Employment (DOLE). Department Order No. 19 (as well as the old Policy stressed that the law speaks of three years not three school years. x x x Needless to say, a
Instructions No. 20) requires ERs to submit a report of an EEs termination to the nearest public calendar year consists of twelve (12) months, while a school year consists only of ten (10) months.
employment office every time the employment is terminated due to a completion of a project. A school year begins in June of one calendar year and ends in March of the succeeding calendar
Respondents failure to file termination reports, particularly on the cessation of petitioners year.
employment, was an indication that the petitioner was not a project but a regular EE. (GOMA vs.
PAMPLONA PLANTATION) Public respondent therefore erred in finding that private respondents probationary employment
was supposed to end in June 1992. The contract clearly states the duration of private respondents
Seafarers are not covered by the term regular employment, as defined under Article 280 of the termit shall begin at the opening of school year 1989-1990 (i.e., June 1989) and shall end at the
Labor Codethey are considered contractual EEs whose rights and obligations are governed closing of school year 1991-1992 (i.e., March, 1992). Hence, petitioners are not obliged to pay
primarily by the Philippine Overseas Employment Administration (POEA) Standard Employment private respondent her salary for the months of April, May and June as her employment already
Contract for Filipino Seamen (POEA Standard Employment Contract), the Rules and Regulations ceased in March, in accordance with the provisions of her employment contract. (MT. CARMEL
Governing Overseas Employment, and, more importantly, by R.A. No. 8042; It is an accepted CPLLEGE vs. NLRC)
maritime industry practice that the employment of seafarers is for a fixed period only.It is well to
remind both parties that, as early as Brent School, Inc. v. Zamora, 181 SCRA 702 (1990), we 2.TERMINATION BY ER
already held that seafarers are not covered by the term regular employment, as defined under a.JUST CAUSE
Article 280 of the Labor Code. This was reiterated in Coyoca v. National Labor Relations ART.285B - An EE may put an end to the relationship without serving any notice on the ER for
Commission, 243 SCRA 190 (1995).Instead, they are considered contractual EEs whose rights any of the following just causes:
and obligations are governed primarily by the POEA Standard Employment Contract for Filipino 1. Serious insult by the ER or his representative on the honor and person of the EE;
Seamen (POEA Standard Employment Contract) 2. Inhuman and unbearable treatment accorded the EE by the ER or his representative;
3. Commission of a crime or offense by the ER or his representative against the person of the EE
the Rules and Regulations Governing Overseas Employment, and, more importantly, by Republic or any of the immediate members of his family; and
Act No. 8042, otherwise known as The Migrant Workers and Overseas Filipinos Act of 1995. Even 4. Other causes analogous to any of the foregoing.
the POEA Standard Employment Contract itself mandates that in no case shall a contract of
employment concerning seamen exceed 12 months. It is an accepted maritime industry practice b.WITHOUT CAUSE
that the employment of seafarers is for a fixed period only. The Court acknowledges this to be for ART.285A - An EE may terminate without just cause the EE-ER relationship by serving a written
the mutual interest of both the seafarer and the ER. Seafarers cannot stay for a long and indefinite notice on the ER at least one (1) month in advance. The ER upon whom no such notice was
period of time at sea as limited access to shore activity during their employment has been shown to served may hold the EE liable for damages.
adversely affect them. Furthermore, the diversity in nationality, culture and language among the
crew necessitates the limitation of the period of employment. i.RESIGNATION
Generally, an EE who voluntarily resigns from employment is not entitled to separation pay. In the
The Court quoted with favor the NLRCs explanation that the reference to permanent and present case, however, upon the request of petitioner, private respondent agreed to a scheme
probationary masters and EEs was a misnomer. It did not change the fact that the contract for whereby the former would receive separation pay despite having resigned voluntarily. Thus, the
employment was for a definite period of time. In using the terms probationary and permanent terms and conditions they both agreed upon constituted a contract freely entered into, which
vis--vis seafarers, what was really meant was eligible for re-hire. This is the only logical should be performed in good faith, as it constituted the law between the parties.
explanation possible as the parties cannot and should not violate the POEAs directive that a
contract of enlistment must not exceed 12 months. (DELA CRUZ vs. MAERSK FILIPINAS Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily
CREWING) entered into and represented a reasonable settlement, it is binding on the parties and may not later
be disowned, simply because of a change of mind.
Thus, the work provided by petitioner depends on the availability of such contracts or projects. The
duration of the employment of his work force is not permanent but coterminous with the projects to Voluntary resignation is defined as the act of an EE, who finds himself in a situation in which he
which the workers are assigned. Viewed in this context, the respondents are considered as project believes that personal reasons cannot be sacrificed in favor of the exigency of the service; thus, he
EEs of petitioner. Indeed, the status of respondents as project EEs was upheld by the Court of has no other choice but to disassociate himself from his employment. As discussed above,
Appeals based on the findings of facts of the Labor Arbiter and the NLRC. petitioner negotiated for a resignation with separation pay as the manner in which his employment
relations with private respondent would end. He was already suffering from a lingering illness at the
However, respondents, even if working as project EEs, enjoy security of tenure. Section 3, Article time he tendered his resignation. His continued employment would have been detrimental not only
XIII, of the Constitution guarantees the right of workers to security of tenure, and because of this, to his health, but also to his performance as an EE of private respondent.
an EE may only be terminated for just or authorized causes that must comply with the due process
requirements mandated by law. Clearly then, the claim of petitioner that he was illegally dismissed cannot be sustained,
considering that his voluntary resignation has been indubitably estab-lished as a fact by the three
The employment of a project worker hired for a specific phase of a construction project is tribunals below. Indeed, illegal dismissal and voluntary resignation are adversely opposed modes
understood to be coterminous with the completion of such phase and not upon the accomplishment of terminating employment relations, in that the presence of one precludes that of the other.
of the whole project, and a worker hired for a particular phase of a construction project can be (ALFARO vs. CA)
dismissed upon the completion of such phase (SABEROLA vs. SUAREZ)
Clearly, therefore, private respondent Ernesto de la Cruz was required by the employment contract
if petitioners were repeatedly and successively re-hired, still it did not qualify them as regular EEs, not only to pay his own repatriation expenses but also to give thirty (30) days notice should he
as length of service is not the controlling determinant of the employment tenure of a project EE, but decide to terminate his employment prior to the expiration of the period provided in the contract.
whether the employment has been fixed for a specific project or undertaking, its completion has When the Master approved his request for relief, the Master emphasized that private respondent
been determined at the time of the engagement of the EE. Further, the proviso in Article 280, was required to give thirty (30) days notice and to shoulder his own repatriation expenses.
stating that an EE who has rendered service for at least one (1) year shall be considered a regular Approval of his request for relief, therefore, did not constitute a waiver by petitioners of the
EE, pertains to casual EEs and not to project EEs. (CASERES vs. UNIVERSAL ROBINA) provisions of the contract, as private respondent would have us believe, for it was made clear to
(ARO vs. NLRC) him that the provisions of the contract, insofar as the thirty (30) days notice and repatriation
expenses were concerned, were to be enforced.
The Manual of Regulations for Private Schools, and not the Labor Code, determines whether or not
a faculty member in an educational institution has attained regular or permanent status. In Resignations, once accepted and being the sole act of the EE, may not be withdrawn without the
University of Santo Tomas v. National Labor Relations Commission the Court en banc said that consent of the ER.
under Policy Instructions No. 11 issued by the Department of Labor and Employment, the
probationary employment of professors, instructors and teachers shall be subject to the standards In the instant case, the Master had already accepted the resignation and, although the private
established by the Department of Education and Culture. Said standards are embodied in respondent was being required to serve the thirty (30) days notice provided in the contract, his
paragraph 75 (now Section 93) of the Manual of Regulations for Private Schools. resignation was already approved. Private respondent cannot claim that his resignation ceased to
be effective because he was not immediately discharged in Port Pylos, Greece, for he could no
longer unilaterally withdraw such resignation. When he later signified his intention of continuing his

Page 15 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

work, it was already up to the petitioners to accept his withdrawal of his resignation. The mere fact Academy v. Edpan, 578 SCRA 262 (2009), we held that, [e]ven if no hearing or conference was
that they did not accept such withdrawal did not constitute illegal dismissal for acceptance of the conducted, the requirement of due process had been met since he was accorded a chance to
withdrawal of the resignation was their (petitioners) sole prerogative. explain his side of the controversy. (NAGKAKAISANG LAKAS NG MANGGAGAWA SA KEIHIN
vs. KEIHIN PHIL)
Once an EE resigns and his resignation is accepted, he no longer has any right to the job. If the EE
later changes his mind, he must ask for approval of the withdrawal of his resignation from his ER, We have consistently held that in order to constitute a valid dismissal, two requisites must concur:
as if he were re-applying for the job. It will then be up to the ER to determine whether or not his (a) the dismissal must be for any of the causes expressed in Art. 282 of the Labor Code, and (b)
service would be continued. If the ER accepts said withdrawal, the EE retains his job. If the ER the EE must be accorded due process, basic of which are the opportunity to be heard and defend
does not, as in this case, the EE cannot claim illegal dismissal for the ER has the right to determine himself.
who his EEs will be. To say that an EE who has resigned is illegally dismissed, is to encroach upon
the right of ERs to hire persons who will be of service to them. On the outset, it must be stressed that to constitute immorality, the circumstances of each
particular case must be holistically considered and evaluated in light of the prevailing norms of
Under the terms of the employment contract, it is the ships Master who determines where a conduct and applicable laws. American jurisprudence has defined immorality as a course of
seaman requesting relief may be signed off. It is, therefore, erroneous for private respondent to conduct which offends the morals of the community and is a bad example to the youth whose
claim that his resignation was effective only in Greece and that because he was not immediately ideals a teacher is supposed to foster and to elevate, the same including sexual misconduct. Thus,
allowed to disembark in Greece (as the ER wanted compliance with the contractual conditions for in petitioners case, the gravity and seriousness of the charges against him stem from his being a
termination on the part of the EE), the resignation was to be deemed automatically married man and at the same time a teacher.
withdrawn.(INTERTROD MARITIME vs. NLRC)
Consequently, it is but stating the obvious to assert that teachers must adhere to the exacting
We are not unaware that the execution of the resignation letters was undisputed, but the standards of morality and decency. There is no dichotomy of morality. A teacher, both in his official
aforementioned circumstances of this case and the fact that private respondents filed a complaint and personal conduct, must display exemplary behavior. He must freely and willingly accept
for illegal dismissal from employment against Blue Angel completely negate the claim that private restrictions on his conduct that might be viewed irksome by ordinary citizens. In other words, the
respondents voluntarily resigned. Well-entrenched is the rule that resignation is inconsistent with personal behavior of teachers, in and outside the classroom, must be beyond reproach.
the filing of a complaint for illegal dismissal. To constitute resignation, the resignation must be
unconditional with the intent to operate as such. There must be clear intention to relinquish the Accordingly, teachers must abide by a standard of personal conduct which not only proscribes the
position. In this case, private respondents actively pursued their illegal dismissal case against Blue commission of immoral acts, but also prohibits behavior creating a suspicion of immorality because
Angel such that they cannot (BLUE ANGEL MANPOWER AND SECURITY SERVICES vs. CA) of the harmful impression it might have on the students. Likewise, they must observe a high
standard of integrity and honesty.
From the totality of evidence on record, it was clearly demonstrated that respondent Cinderella has
sufficiently discharged its burden to prove that petitioners resignation was voluntary. In voluntary the foregoing, it seems obvious that when a teacher engages in extra-marital relationship,
resignation, the EE is compelled by personal reason(s) to disassociate himself from employment. It especially when the parties are both married, such behavior amounts to immorality, justifying his
is done with the intention of relinquishing an office, accompanied by the act of abandonment. To termination from employment.
determine whether the EE indeed intended to relinquish such employment, the act of the EE before
and after the alleged resignation must be considered. Petitioner relinquished her position when she Having concluded that immorality is a just cause for dismissing petitioner, it is imperative that the
submitted the letters of resignation. The resignation letter submitted on February 15, 2000 private respondent prove the same. Since the burden of proof rests upon the ER to show that the
confirmed the earlier resignation letter she submitted on February 7, 2000. The resignation letter dismissal was for a just and valid cause, the same must be supported by substantial evidence.
contained words of gratitude which can hardly come from an EE forced to resign. (SANTOS vs. NLRC)
(SAMSON vs. NLRC)
Petitioner stopped reporting for work although she met with the officers of the corporation to settle
her accountabilities but never raised the alleged intimidation employed on her. Also, though the Petitioners reliance on the authorities it cited that sleeping on the job is always a valid ground for
complaint was filed within the 4-year prescriptive period, its belated filing supports the contention of dismissal, is misplaced. The authorities cited involved security guards whose duty necessitates that
respondent that it was a mere afterthought. Taken together, these circumstances are substantial they be awake and watchful at all times inasmuch as their function, to use the words in Luzon
proof that petitioners resignation was voluntary. Hence, petitioner cannot take refuge in the Stevedoring Corp. v. Court of Industrial Relations, is to protect the company from pilferage or
argument that it is the ER who bears the burden of proof that the resignation is voluntary and not loss. Accordingly, the doctrine laid down in those cases is not applicable to the case at bar.
the product of coercion or intimidation. Having submitted a resignation letter, it is then incumbent
upon her to prove that the resignation was not voluntary but was actually a case of constructive While an ER enjoys a wide latitude of discretion in the promulgation of policies, rules and
dismissal with clear, positive, and convincing evidence. Petitioner failed to substantiate her claim of regulations on work-related activities of the EEs, those directives, however, must always be fair
constructive dismissal. and reasonable, and the corresponding penalties, when prescribed, must be commensurate to the
offense involved and to the degree of the infraction. In the case at bar, the dismissal meted out on
We enumerated the requisites for intimidation to vitiate consent as follows: (1) that the intimidation private respondent for allegedly sleeping on the job, under the attendant circumstances, appears to
caused the consent to be given; (2) that the threatened act be unjust or unlawful; (3) that the threat be too harsh a penalty, considering that he was being held liable for first time, after nine (9) long
be real or serious, there being evident disproportion between the evil and the resistance which all years of unblemished service, for an alleged offense which caused no prejudice to the ER, aside
men can offer, leading to the choice of doing the act which is forced on the person to do as the from absence of substantiation of the alleged offense. The authorities cited by petitioner are also
lesser evil; and (4) that it produces a well-grounded fear from the fact that the person from whom it irrelevant for the reason that there is no evidence on the depravity of conduct, willfulness of the
comes has the necessary means or ability to inflict the threatened injury to his person or property. x disobedience, or conclusiveness of guilt on the part of private respondent. Neither was it shown
xx that private respondents alleged negligence or neglect of duty, if any, was gross and habitual.
Thus, reinstatement is just and proper. (VH MANUFACTURING vs. NLRC)
None of the above requisites was established by petitioner. Other than the allegation that Mr.
Tecson intimidated petitioner into resigning, there were no other proofs presented to support a 1.2.WILLFUL DISOBEDIENCE (ART.282A)
finding of forced resignation to stand against respondents denial and proof against dismissal. Willful disobedience of the ERs lawful orders, as a just cause for the dismissal of an EE, envisages
Neither can we consider the conduct of audits and other internal investigations as a form of the concurrence of at least two requisites: (1) the EEs assailed conduct must have been willful or
harassment against petitioner. Said investigation was legitimate and justified, conducted in view of intentional, the willfulness being characterized by a wrongful and perverse attitude; and (2) the
the discovery of the anomalous transaction involving the EEs of the respondent including order violated must have been reasonable, lawful, made known to the EE and must pertain to the
petitioner. (VICENTE vs. CA) duties which he had been engaged to discharge.
(ROSARIO vs. VICTORY RICE MILL) (SMC vs. PONTILLAS)
C.CIVIC AND MILITARY DUTY
ART. 286. When employment not deemed terminated. - The bona-fide suspension of the 1.3.GROSS AND HABITUAL NEGLECT OF DUTY (ART.282B)
operation of a business or undertaking for a period not exceeding six (6) months, or the fulfillment To quote petitioner National Bookstores Personnel Manager Padilla, Jr., we are constrained to
by the EE of a military or civic duty shall not terminate employment. In all such cases, the ER terminate your employment or services with the Company effective immediately for gross neglect
shall reinstate the EE to his former position without loss of seniority rights if he indicates his desire of duty and loss of confidence. Gross neglect of duty and loss of confidence are just causes for
to resume his work not later than one (1) month from the resumption of operations of his ER or termination of employment by an ER. Gross negligence has been defined as the want or absence
from his relief from the military or civic duty. of or failure to exercise slight care or diligence, or the entire absence of care. It evinces a
thoughtless disregard of consequences without exerting any effort to avoid them. A perusal of the
3.TERMINATION BY ER records of the case does not in any way show that private respondents were even remotely
a.SUBSTANTIVE DUE PROCESS negligent of their duties so as to cause the loss of petitioner National Bookstores funds. Private
1.JUST CAUSES respondents were able to illustrate with candor and sincerity the procedure they took prior to the
ART.282B - Termination by ER. - An ER may terminate an employment for any of the following loss which was witnessed by an EE of petitioner National Bookstore. They were in fact subjected to
causes: a thorough body search by petitioner National Bookstores lady guard before leaving their place of
(a) Serious misconduct or willful disobedience by the EE of the lawful orders of his ER or work on the date in issue, a claim not controverted by petitioners. Moreover, it was not even shown
representative in connection with his work; that they had access to the vault where the money was kept.
(b) Gross and habitual neglect by the EE of his duties;
(c) Fraud or willful breach by the EE of the trust reposed in him by his ER or duly authorized Significantly, in order to constitute a just cause for the EEs dismissal, the neglect of duties must
representative; not only be gross but also habitual. Thus, the single or isolated act of negligence does not
(d) Commission of a crime or offense by the EE against the person of his ER or any immediate constitute a just cause for the dismissal of the EE. Verily, assuming arguendo that private
member of his family or his duly authorized representatives; and respondents were negligent, although we find otherwise, it could only be a single or an isolated act
(e) Other causes analogous to the foregoing. that cannot be categorized as habitual, hence, not a just cause for their dismissal.(NATIONAL
BOOKSTORE vs. CA)
1.1.SERIOUS MISCONDUCT (ART.282A)
(COLEGIO DE SAN JUAN DE LETRAN-CALAMBA vs. VILLAS) Aboitiz had run out of Large Quickbox. However, records show that Salas made a requisition for
Quickboxas early as May 21, 2003; that he made several follow-ups with Eric Saclamitao regarding
Misconduct is defined as the transgression of some established and definite rule of action, a the request; and that he even talked to the supplier to facilitate the immediate delivery of the
forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere Quickbox. It cannot be gainsaid that Salas exerted efforts to avoid a stock out ofQuickbox.
error in judgment. For serious misconduct to justify dismissal under the law, (a) it must be Accordingly, he cannot be held liable for gross negligence. If there is anything that Salas can be
serious, (b) must relate to the performance of the EEs duties; and (c) must show that the EE has faulted for, it is his failure to promptly inform his immediate supervisor, Mr. Ed Dumago, of the non-
become unfit to continue working for the ER. delivery of the requisitioned items. Nevertheless, such failure did not amount to gross neglect of
duty or to willful breach of trust, which would justify his dismissal from service.(SALAS vs.
We reject petitionersclaim that respondent company failed to observe the requirements of ABOITIZ)
procedural due process. In the dismissal of EEs, it has been consistently held that the twin
requirements of notice and hearing are essential elements of due process. The ER must furnish repeated and habitual infractions, committed despite several warnings, constitute gross
the EE with two written notices before termination of employment can be legally effected: (a) a misconduct; Habitual absenteeism without leave constitutes gross negligence and is sufficient to
notice apprising the EE of the particular acts or omissions for which his dismissal is sought, and (b) justify termination of an EE.Habitual neglect implies repeated failure to perform ones duties for a
a subsequent notice informing the EE of the ERs decision to dismiss him. period of time. Buguats repeated acts of absences without leave and her frequent tardiness reflect
her indifferent attitude to and lack of motivation in her work. Her repeated and habitual infractions,
With regard to the requirement of a hearing, the essence of due process lies in an opportunity to be committed despite several warnings, constitute gross misconduct. Habitual absenteeism without
heard. Such opportunity was afforded the petitioner when she was asked to explain her side of the leave constitute gross negligence and is sufficient to justify termination of an EE.
story. InMetropolitan Bank and Trust Company v. Barrientos, 481 SCRA 311 (2006), we held that,
the essence of due process lies simply in an opportunity to be heard, and not that an actual We find the penalty of dismissal from the service reasonable and appropriate to Buguats infraction.
hearing should always and indispensably be held. Similarly in Philippine Pasay Chung Hua Her repeated negligence is not tolerable; neither should it merit the penalty of suspension only. The

Page 16 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

record of an EE is a relevant consideration in determining the penalty that should be meted out. breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse.
Buguat committed several infractions in the past and despite the warnings and suspension, she Petitioners having failed to establish by substantial evidence any valid ground for terminating
continued to display a neglectful attitude towards her work. An EEs past misconduct and present respondents services, we uphold the finding of the Labor Arbiter and the CA that respondent was
behavior must be taken together in determining the proper imposable penalty. The totality of illegally dismissed.(NORKIS DISTRIBUTOR vs. DESCALLAR)
infractions or the number of violations committed during the period of employment shall be
considered in determining the penalty to be imposed upon an erring EE. The offenses committed We hold that petitioner Sy was validly dismissed on the ground of fraud and willful breach of trust
by him should not be taken singly and separately but in their totality. Fitness for continued under Article 282 of the Labor Code. Records show that as bank manager, he authorized kiting or
employment cannot be compartmentalized into tight little cubicles of aspects of character, conduct, drawing of checks against uncollected funds in wanton violation of the banks policies. It was
and ability separate and independent of each other. It is the totality, not the compartmentalization, sufficient basis for the bank to lose trust in him. Unlike a rank-and-file worker, where breach of trust
of such company infractions that Buguat had consistently committed which justified her dismissal. as a ground for valid dismissal requires proof of involvement in the alleged anomaly and where
mere uncorroborated accusation by the ER will not suffice, the sheer existence of a basis for
Management has the prerogative to discipline its EEs and to impose appropriate penalties on believing that the ERs trust has been breached is enough for the dismissal of a managerial EE.
erring workers pursuant to company rules and regulations. On the other hand, the law also
recognizes the right of the ER to expect from its workers not only good performance, adequate Under the Labor Code, only unjustly dismissed EEs are entitled to retirement benefits and other
work and diligence, but also good conduct and loyalty. The ER may not be compelled to continue privileges including reinstatement and backwages. Since petitioners dismissal was for a just
to employ such persons whose continuance in the service will patently be inimical to his interests. cause, he is not entitled to any retirement benefit. To hold otherwise would be to reward acts of
(CHALLENGE SOCKS vs. CA) willful breach of trust by the EE. It would also open the floodgate to potential anomalous banking
transactions by bank EEs whose employments have been extended. Since a banks operation is
We, therefore, agree with the Labor Arbiters findings, to wit: The imputed absence and tardiness of essentially imbued with public interest, it owes great fidelity to the public it deals with. In turn, it
the complainant are documented. He faltered on his attendance 38 times of the 66 working days. cannot be compelled to continue in its employ a person in whom it has lost trust and confidence
His last absences on 11, 13, 14, 15 and 16 March 2000 were undertaken without even and whose continued employment would patently be inimical to the banks interest. While the scale
notice/permission from management. These attendance delinquencies may be characterized as of justice is tilted in favor of workers, the law does not authorize blind submission to the claim of
habitual and are sufficient justifications to terminate the complainants employment. On this score, labor regardless of merit. (SY vs. METROBANK)
Valiao v. Court of Appeals, 435 SCRA 543 (2004), is instructive: xxx It bears stressing that
petitioners absences and tardiness were not isolated incidents but manifested a pattern of 1.5. COMMISSION OF A CRIME (ART.282D)
habituality. xxx The totality of infractions or the number of violations committed during the period of
employment shall be considered in determining the penalty to be imposed upon an erring EE. The 1.6.ANALOGOUS CASES (ART.282E)
offenses committed by him should not be taken singly and separately but in their totality. Fitness In this case, petitioner dismissed respondent based on the NBIs finding that the latter stole and
for continued employment cannot be compartmentalized into tight little cubicles of aspects of used Yusecos credit cards. But since the theft was not committed against petitioner itself but
character, conduct, and ability separate and independent of each other. against one of its EEs, respondents misconduct was not work-related and therefore, she could not
be dismissed for serious misconduct. Nonetheless, Article 282(e) of the Labor Code talks of other
We cannot simply tolerate injustice to ERs if only to protect the welfare of undeserving EEs. As analogous causes or those which are susceptible of comparison to another in general or in specific
aptly put by then Associate Justice Leonardo A. Quisumbing: Needless to say, so irresponsible an detail. For an EE to be validly dismissed for a cause analogous to those enumerated in Article 282,
EE like petitioner does not deserve a place in the workplace, and it is within the managements the cause must involve a voluntary and/or willful act or omission of the EE.
prerogative xxx to terminate his employment. Even as the law is solicitous of the welfare of EEs, it
must also protect the rights of an ER to exercise what are clearly management prerogatives. As A cause analogous to serious misconduct is a voluntary and/or willful act or omission attesting to
long as the companys exercise of those rights and prerogative is in good faith to advance its an EEs moral depravity. Theft committed by an EE against a person other than his ER, if proven
interest and not for the purpose of defeating or circumventing the rights of EEs under the laws or by substantial evidence, is a cause analogous to serious misconduct. (JOHN HANCOCK LIFE
valid agreements, such exercise will be upheld. (MANSION PRINTING vs. BITARA) INSURANCE vs. DAVIS)

Under the circumstances, MERALCOs sanction of dismissal will not be commensurate to Beltrans A reading of the weight standards of PAL would lead to no other conclusion than that they
inadvertence not only because there was no clear showing of bad faith and malice but also in constitute a continuing qualification of an EE in order to keep the job. Tersely put, an EE may be
consideration of her untainted record of long and dedicated service to MERALCO. In the similar dismissed the moment he is unable to comply with his ideal weight as prescribed by the weight
case of Philippine Long Distance Telephone Company v. Berbano, Jr., 606 SCRA 81 (2009), we standards. The dismissal of the EE would thus fall under Article 282(e) of the Labor Code. As
held that: The magnitude of the infraction committed by an EE must be weighed and equated with explained by the CA: x x x [T]he standards violated in this case were not mere orders of the ER;
the penalty prescribed and must be commensurate thereto, in view of the gravity of the penalty of they were the prescribed weights that a cabin crew must maintain in order to qualify for and keep
dismissal or termination from the service. The ER should bear in mind that in termination cases, his or her position in the company. In other words, they were standards that establish continuing
what is at stake is not simply the EEs job or position but [her] very livelihood. Where a penalty less qualifications for an EEs position. By its nature, these qualifying standards are norms that apply
punitive would suffice, whatever missteps may be committed by an EE ought not to be visited with prior to and after an EE is hired. They apply prior to employment because these are the standards
a consequence so severe such as dismissal from employment. Hence, we find no reversible error a job applicant must initially meet in order to be hired. They apply after hiring because an EE must
or any grave abuse of discretion on the part of the CA in ordering Beltrans reinstatement without continue to meet these standards while on the job in order to keep his job. Under this perspective,
backwages. The forfeiture of her salary is an equitable punishment for the simple negligence a violation is not one of the faults for which an EE can be dismissed pursuant to pars. (a) to (d) of
committed. (MERALCO vs. BELTRAN) Article 282; the EE can be dismissed simply because he no longer qualifies for his job
irrespective of whether or not the failure to qualify was willful or intentional. x x x
1.4.LOSS OF TRUST AND CONFIDENCE (ART.282C)
MANAGERIAL vs. RANK AND FILE EES In fine, We hold that the obesity of petitioner, when placed in the context of his work as flight
Significantly, (t)ampering with electric meters or metering installations of the Company or the attendant, becomes an analogous cause under Article 282(e) of the Labor Code that justifies his
installation of any device, with the purpose of defrauding the Company is classified as an act of dismissal from the service. His obesity may not be unintended, but is nonetheless voluntary. As the
dishonesty from Meralco EEs, expressly prohibited under company rules. It is reasonable that its CA correctly puts it, [v]oluntariness basically means that the just cause is solely attributable to the
commission is classified as a severe act of dishonesty, punishable by dismissal even on its first EE without any external force influencing or controlling his actions. This element runs through all
commission, given the nature and gravity of the offense and the fact that it is a grave wrong just causes under Article 282, whether they be in the nature of a wrongful action or omission.
directed against their ER. Gross and habitual neglect, a recognized just cause, is considered voluntary although it lacks the
element of intent found in Article 282(a), (c), and (d).
The dismissal is also justified as the act imputed upon the petitioner qualifies as fraud or willful
breach by the EE of the trust reposed in him by his ER or duly authorized representative under Employment in particular jobs may not be limited to persons of a particular sex, religion, or national
Article 282 (c) of the Labor Code. While the petitioner contests this ground by denying that his origin unless the ER can show that sex, religion, or national origin is an actual qualification for
position is one of trust and confidence, it is undisputed that at the time of his dismissal, he was performing the job. The qualification is called a bona fideoccupational qualification (BFOQ). In the
holding a supervisory position after he rose from the ranks since commencement of his United States, there are a few federal and many state job discrimination laws that contain an
employment with Meralco. As a supervisor with duty and power that included testing of service exception allowing an ER to engage in an otherwise unlawful form of prohibited discrimination
meters and investigation of violations of contract of customers, his position can be treated as one when the action is based on a BFOQ necessary to the normal operation of a business or
of trust and confidence, requiring a high degree of honesty as compared with ordinary rank-and-file enterprise.
EEs.
Bona Fide Occupational Qualification (BFOQ) is valid provided it reflects an inherent quality
We emphasize that dismissal of a dishonest EE is to the best interest not only of the management reasonably necessary for satisfactory job performance; Under the Meiorin Test, (1) the ER must
but also of labor. As a measure of self-protection against acts inimical to its interest, a company show that it adopted the standard for a purpose rationally connected to the performance of the job,
has the right to dismiss its erring EEs. An ER cannot be compelled to continue employing an EE (2) the ER must establish that the standard is reasonably necessary to the accomplishment of that
guilty of acts inimical to the ERs interest, justifying loss of confidence in him. (YABUT vs. work-related purpose, and, (3) the ER must establish that the standard is reasonably necessary in
MERALCO) order to accomplish the legitimate work-related purpose. this Court held that in order to justify a
BFOQ, the 470 ER must prove that (1) the employment qualification is reasonably related to the
The Bank should be reminded that for a dismissal based on loss of trust and confidence to be essential operation of the job involved; and (2) that there is factual basis for believing that all or
valid, the breach of trust must be willful, meaning it must be done intentionally, knowingly, and substantially all persons meeting the qualification would be unable to properly perform the duties of
purposely, without justifiable excuse. Loss of trust and confidence stems from a breach of trust the job. In short, the test of reasonableness of the company policy is used because it is parallel to
founded on dishonest, deceitful or fraudulent act. This is obviously not the case here. BFOQ. BFOQ is valid provided it reflects an inherent quality reasonably necessary for satisfactory
(PRUDENTIAL BANK vs. MAURICIO) job performance.

e quantum of proof required in determining the legality of an EEs dismissal is only substantial There is no merit to the argument that BFOQ cannot be applied if it has no supporting statute. Too,
evidence or such relevant evidence as a reasonable mind might accept as adequate to support a the Labor Arbiter, NLRC, and CA are one in holding that the weight standards of PAL are
conclusion, even if other minds, equally reasonable, might conceivably opine otherwise.Now, reasonable. A common carrier, from the nature of its business and for reasons of public policy, is
petitioners terminated his employment on the ground of loss of trust and confidence for supposedly bound to observe extraordinary diligence for the safety of the passengers it transports. It is bound
committing acts inimical to the companys interests. However, in termination cases, the burden of to carry its passengers safely as far as human care and foresight can provide, using the utmost
proof rests upon the ER to show that the dismissal is for a just and valid cause and failure to do so diligence of very cautious persons, with due regard for all the circumstances. The law leaves no
would necessarily mean that the dismissal was illegal. The ERs case succeeds or fails on the room for mistake or oversight on the part of a common carrier. Thus, it is only logical to hold that
strength of its evidence and not on the weakness of the EEs defense. If doubt exists between the the weight standards of PAL show its effort to comply with the exacting obligations imposed upon it
evidence presented by the ER and the EE, the scales of justice must be tilted in favor of the latter. by law by virtue of being a common carrier.
Moreover, the quantum of proof required in determining the legality of an EEs dismissal is only
substantial evidence or such relevant evidence as a reasonable mind might accept as adequate to The business of PAL is air transportation.As such, it has committed itself to safely transport its
support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise. passengers. In order to achieve this, it must necessarily rely on its EEs, most particularly the cabin
Thus, it is incumbent upon petitioners to prove by substantial evidence that valid grounds exist for flight deck crew who are on board the aircraft. The weight standards of PAL should be viewed as
terminating respondents employment on the ground of loss of trust and confidence. However, our imposing strict norms of discipline upon its EEs. In other words, the primary objective of PAL in the
review of the records of this case reveals that the CA correctly held that petitioners failed to imposition of the weight standards for cabin crew is flight safety. It cannot be gainsaid that cabin
discharge this burden. attendants must maintain agility at all times in order to inspire passenger confidence on their ability
to care for the passengers when something goes wrong. It is not farfetched to say that airline
To our mind, the failure to reach the monthly sales quota cannot be considered an intentional and companies, just like all common carriers, thrive due to public confidence on their safety records.
unjustified act of respondent amounting to a willful breach of trust on his part that would call for his People, especially the riding public, expect no less than that airline companies transport their
termination based on loss of confidence. This is simply not the willful breach of trust and passengers to their respective destinations safely and soundly. A lesser performance is
confidence contemplated in Article 282(c) of the Labor Code. Indeed, the low sales performance unacceptable.
could be attributed to several factors which are beyond respondents control. To be a valid ground
for an EEs dismissal, loss of trust and confidence must be based on a willful breach. To repeat, a

Page 17 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

The task of a cabin crew or flight attendant is not limited to serving meals or attending to the whims engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as
and caprices of the passengers. The most important activity of the cabin crew is to care for the a regular EE in accordance with reasonable standards made known by the ER to the EE at the
safety of passengers and the evacuation of the aircraft when an emergency occurs. Passenger time of his engagement. An EE who is allowed to work after a probationary period shall be
safety goes to the core of the job of a cabin attendant. Truly, airlines need cabin attendants who considered a regular EE. (CANADIAN OPPORTUNITIES UNLIMITED vs. DALANGIN)
have the necessary strength to open emergency doors, the agility to attend to passengers in
cramped working conditions, and the stamina to withstand grueling flight schedules. On board an
aircraft, the body weight and size of a cabin attendant are important factors to consider in case of
emergency. Aircrafts have constricted cabin space, and narrow aisles and exit doors. Thus, the 2.AUTHORIZED CAUSE (ARTS.283-284)
arguments of respondent that [w]hether the airlines flight attendants are overweight or not has no ART. 283. Closure of establishment and reduction of personnel. - The ER may also terminate the
direct relation to its mission of transporting passengers to their destination; and that the weight employment of any EE due to the installation of labor-saving devices, redundancy, retrenchment to
standards has nothing to do with airworthiness of respondents airlines, must fail. prevent losses or the closing or cessation of operation of the establishment or undertaking unless
the closing is for the purpose of circumventing the provisions of this Title, by serving a written
There is no need to individually evaluate their ability to perform their task. That an obese cabin notice on the workers and the Ministry of Labor and Employment at least one (1) month before the
attendant occupies more space than a slim one is an unquestionable fact which courts can intended date thereof. In case of termination due to the installation of labor-saving devices or
judicially recognize without introduction of evidence. It would also be absurd to require airline redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least
companies to reconfigure the aircraft in order to widen the aisles and exit doors just to his one (1) month pay OR to at least one (1) month pay for every year of service, whichever
accommodate overweight cabin attendants like petitioner. The biggest problem with an overweight is higher. In case of retrenchment to prevent losses and in cases of closures or cessation of
cabin attendant is the possibility of impeding passengers from evacuating the aircraft, should the operations of establishment or undertaking not due to serious business losses or financial
occasion call for it. The job of a cabin attendant during emergencies is to speedily get the reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2)
passengers out of the aircraft safely. Being overweight necessarily impedes mobility. Indeed,in an month pay for every year of service, whichever is higher. A fraction of at least six (6) months
emergency situation, seconds are what cabin attendants are dealing with, not minutes. Three lost shall be considered one (1) whole year.
seconds can translate into three lost lives. Evacuation might slow down just because a wide-bodied
cabin attendant is blocking the narrow aisles. These possibilities are not remote. 2.1.RETRENCHEMENT TO PREVENT LOSSES (ART.283)
a.DEFINITION, REQUISITES, RELOCATION OF BUSINESS
Petitioner is also in estoppel. He does not dispute that the weight standards of PAL were made Broadly speaking, there appears no complete dissolution of petitioners business undertaking but
known to him prior to his employment. He is presumed to know the weight limit that he must the relocation of petitioners plant to Batangas, in our view, amounts to cessation of petitioners
maintain at all times. In fact, never did he question the authority of PAL when he was repeatedly business operations in Makati. It must be stressed that the phrase closure or cessation of
asked to trim down his weight. Bona fides exigit ut quod convenit fiat. Good faith demands that operation of an establishment or undertaking not due to serious business losses or reverses under
what is agreed upon shall be done. Kung ang tao ay tapat kanyang tutuparin ang Article 283 of the Labor Code includes both the complete cessation of all business operations and
napagkasunduan. (YRASUEGI vs. PAL) the cessation of only part of a companys business. In Philippine Tobacco Flue-Curing & Redrying
Corp. vs. NLRC, a company transferred its tobacco processing plant in Balintawak, Quezon City to
1.7.ABANDONMENT Candon, Ilocos Sur. The company therein did not actually close its entire business but merely
To constitute abandonment, two elements must concur: (1) the failure to report for work or absence relocated its tobacco processing and redrying operations to another place. Yet, this Court
without valid or justifiable reason, and (2) a clear intention to sever the ER-EE relationship, with the considered the transfer as closure not due to serious business losses for which the workers are
second element as the more determinative factor and being manifested by some overt acts. Mere entitled to separation pay.
absence is not sufficient. The ER has the burden of proof to show a deliberate and unjustified There is no doubt that petitioner has legitimate reason to relocate its plant because of the
refusal of the EE to resume his employment without any intention of returning. (RCBC CABLE expiration of the lease contract on the premises it occupied. That is its prerogative. But even
MASTER SYSTEM vs. BALUYOT) though the transfer was due to a reason beyond its control, petitioner has to accord its EEs some
relief in the form of severance pay. Thus, inE. Razon, Inc. vs. Secretary of Labor and Employment,
Mere absence or failure to work, even after notice to return, is not tantamount to abandonment. petitioner therein provides arrastre services in all piers in South Harbor, Manila, under a
The records are bereft of proof that petitioners even furnished respondent such notice. management contract with the Philippine Ports Authority. Before the expiration of the term of the
Furthermore, it is a settled doctrine that the filing of a complaint for illegal dismissal is inconsistent contract, the PPA cancelled the said contract resulting in the termination of employment of workers
with abandonment of employment. An EE who takes steps to protest his dismissal cannot logically engaged by petitioner. Obviously, the cancellation was not sought, much less desired by petitioner.
be said to have abandoned his work. The filing of such complaint is proof enough of his desire to Nevertheless, this Court required petitioner therein to pay its workers separation pay in view of the
return to work, thus negating any suggestion of abandonment. (GSP MANUFACTURING vs. cessation of its arrastre operations.
CABANBAN)
Petitioners contention that private respondents resigned from their jobs, does not appear
(SHIE JIE CORP. vs. NFL) convincing. As public respondent observed, the subsequent transfer of petitioner to another place
hardly accessible to its workers resulted in the latters untimely separation from the service not to
their own liking, hence, not construable as resignation. Resignation must be voluntary and made
To constitute abandonment, there must be concurrence of the intention to abandon and some overt with the intention of relinquishing the office, accompanied with an act of relinquishment. Indeed, it
acts from which it may be inferred that the EE concerned has no more interest in working. In other would have been illogical for private respondents herein to resign and then file a complaint for
words, there must be a clear, deliberate and unjustified refusal to resume employment and a clear illegal dismissal. Resignation is inconsistent with the filing of the said complaint. (CHENIVER vs.
intention to sever the ER-EE relationship on the part of the EE. NLRC)

Where the findings of the National Labor Relations Commission contradict those of the labor Redundancy and retrenchment are not synonymous but distinct and separate grounds for
arbiter, the Supreme Court, in the exercise of its equity jurisdiction, may look into the records of the termination of employment. Redundancy exists where the services of an EE are in excess of what
case and reexamine the questioned findings is reasonably demanded by the actual requirements of the enterprise. A position is redundant
where it is superfluous, and superfluity of a position or positions may be the outcome of a number
The rule that abandonment of work is inconsistent with the filing of a complaint for illegal dismissal of factors, such as overhiring of workers, decreased volume of business, or dropping of a particular
is not applicable in this case. Such rule applies where the complainant seeks reinstatement as a product line or service activity previously manufactured or undertaken by the enterprise.
relief. Corollarily, it has no application where the complainant does not pray for reinstatement and
just asks for separation pay instead as in the present case. It goes without saying that the prayer Retrenchment, on the other hand, is used interchangeably with the term lay-off. It is the
for separation pay, being the alternative remedy to reinstatement, contradicts private respondents termination of employment initiated by the ER through no fault of the EEs and without prejudice to
stance. That he was illegally dismissed is belied by his own pleadings as well as contemporaneous the latter, resorted to by management during periods of business recession, industrial depression,
conduct. (JO vs. NLRC) or seasonal fluctuations, or during lulls occasioned by lack of orders, shortage of materials,
conversion of the plant for a new production program or the introduction of new methods or more
1.8.TOTALITY OF CIRCUMSTANCE efficient machinery, or of automation. Simply put, it is an act of the ER of dismissing EEs because
The totality of the circumstances obtaining in the case convinces us that Gala could not but have of losses in the operation of a business, lack of work, and considerable reduction on the volume of
knowledge of the pilferage of company electrical supplies on May 25, 2006; he was complicit in its his business, a right consistently recognized and affirmed by this Court.
commission, if not by direct participation, certainly, by his inaction while it was being perpetrated
and by not reporting the incident to company authorities. Thus, we find substantial evidence to Under the aforequoted Article 283 of the Labor Code, there are three basic requisites for a valid
support the conclusion that Gala does not deserve to remain in Meralcos employ as a regular EE. retrenchment: (1) the retrenchment is necessary to prevent losses and such losses are proven; (2)
He violated his probationary employment agreement, especially the requirement for him to written notice to the EEs and to the Department of Labor and Employment at least one month prior
observe at all times the highest degree of transparency, selflessness and integrity in the to the intended date of retrenchment; and (3) payment of separation pay equivalent to one month
performance of their duties and responsibilities[.] He failed to qualify as a regular EE.(MERALCO pay or at least 1/2 month pay for every year of service, whichever is higher
vs. GALA)
As for the first requisite, whether or not an ER would imminently suffer serious or substantial losses
1.9 PREVENTIVE SUSPENSION for economic reasons is essentially a question of fact for the Labor Arbiter and the NLRC to
We, however, find no merit in the challenge made by Arlene and Joseph against the legality of the determine. Here, both the Labor Arbiter and the NLRC found that the private respondent was
preventive suspension imposed by Blue Sky upon them pending the investigation of the alleged suffering and would continue to suffer serious losses, thereby justifying the retrenchment of some
theft. In Mandapat v. Add Force Personnel Services, Inc., 624 SCRA 155 (2010), we explained that of its EEs, including the petitioners. We are not prepared to disregard this finding of fact. It is
preventive suspension may be legally imposed on an EE whose alleged violation is the subject of settled that findings of quasi-judicial agencies which have acquired expertise in the matters
an investigation. The purpose of the suspension is to prevent an EE from causing harm or injury to entrusted to their jurisdiction are accorded by this Court not only with respect but with finality if they
his colleagues and to the ER. The maximum period of suspension is 30 days, beyond which the EE are supported by substantial evidence. The latter means that amount of relevant evidence which a
should either be reinstated or be paid wages and benefits due to him. (BLUE SKY TRADING CO. reasonable mind might accept as adequate to justify a conclusion.
vs. BLAS)
Notice to both the EEs concerned and the Department of Labor and Employment is mandatory and
2.TERMINATION OF A PROBATIONARY EE must be written and given at least one month before the intended date of retrenchmentand the
In International Catholic Migration Commission v. NLRC, 169 SCRA 606 (1989), the Court fact that the EEs were already on temporary lay-off at the time notice should have been given to
explained that a probationary EE, as understood under Article 281 of the Labor Code, is one who is them is not an excuse to forego the one-month written notice.The requirement of notice to both
on trial by an ER, during which, the latter determines whether or not he is qualified for permanent the EEs concerned and the Department of Labor and Employment (DOLE) is mandatory and must
employment. A probationary appointment gives the ER an opportunity to observe the fitness of a be written and given at least one month before the intended date of retrenchment. In this case, it is
probationer while at work, and to ascertain whether he would be a proper and efficient EE. undisputed that the petitioners were given notice of the temporary lay-off. There is, however, no
Dalangin was barely a month on the job when the company terminated his employment. He was evidence that any written notice to permanently retrench them was given at least one month prior
found wanting in qualities that would make him a proper and efficient EE or, as the company put to the date of the intended retrenchment. The NLRC found that GTI conveyed to the petitioners the
it, he was unfit and unqualified to continue as its Immigration and Legal Manager. impossibility of recalling them due to the continued unavailability of work. But what the law requires
is a written notice to the EEs concerned and that requirement is mandatory. The notice must also
The essence of a probationary period of employment fundamentally lies in the purpose or objective be given at least one month in advance of the intended date of retrenchment to enable the EEs to
of both the ER and the EE during the period. While the ER observes the fitness, propriety and look for other means of employment and therefore to ease the impact of the loss of their jobs and
efficiency of a probationer to ascertain whether he is qualified for permanent employment, the latter the corresponding income. That they were already on temporary lay-off at the time notice should
seeks to prove to the former that he has the qualifications to meet the reasonable standards for have been given to them is not an excuse to forego the one-month written notice because by this
permanent employment. The trial period or the length of time the probationary EE remains on time, their lay-off is to become permanent and they were definitely losing their employment.
probation depends on the parties agreement, but it shall not exceed six (6) months under Article
281 of the Labor Code, unless it is covered by an apprenticeship agreement stipulating a longer The lack of written notice to the petitioners and to the DOLE does not, however, make the
period. Article 281 provides: Probationary employment.Probationary employment shall not petitioners retrenchment illegal such that they are entitled to the payment of back wages and
exceed six (6) months from the date the EE started working, unless it is covered by an separation pay in lieu of reinstatement as they contend. Their retrenchment, for not having been
apprenticeship agreement stipulating a longer period. The services of an EE who has been effected with the required notices, is merely defective. In those cases where we found the

Page 18 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

retrenchment to be illegal and ordered the EEs reinstatement and the payment of back wages, the through the required documents, preferably audited financial statements prepared by independent
validity of the cause for retrenchment, that is the existence of imminent or actual serious or auditors, may not summarily be done away with.
substantial losses, was not proven. But here, such a cause is present as found by both the Labor
Arbiter and the NLRC. There is only a violation by GTI of the procedure prescribed in Article 283 of Applying this caveat, it is therefore incumbent for the ER, before putting into effect any
the Labor Code in effecting the retrenchment of the petitioners. retrenchment process on its work force, to show by convincing evidence that it was being wrecked
by serious financial problems. Simply declaring its state of insolvency or its impending doom will
Where the dismissal of an EE is in fact for a just and valid cause but he is not accorded his right to not be sufficient. To do so would render the security of tenure of workers and EEs illusory. Any ER
due process, the dismissal shall be upheld but the ER must be sanctionedin the nature of desirous of ridding itself of its EEs could then easily do so without need to adduce proof in support
indemnification or penaltyfor noncompliance with the requirements of or for failure to observe of its action. We can not countenance this. Security of tenure is a right guaranteed to EEs and
due process.It is now settled that where the dismissal of an EE is in fact for a just and valid workers by the Constitution and should not be denied on the basis of mere speculation. On the
cause and is so proven to be but he is not accorded his right to due process, i.e., he was not requirement that the prerogative to retrench must be exercised in good faith, we have ruled that the
furnished the twin requirements of notice and the opportunity to be heard, the dismissal shall be hiring of new EEs and subsequent rehiring of retrenched EEs constitute bad faith; that the failure
upheld but the ER must be sanctioned for non-compliance with the requirements of or for failure to of the ER to resort to other less drastic measures than retrenchment seriously belies its claim that
observe due process. The sanction, in the nature of indemnification or penalty, depends on the retrenchment was done in good faith to avoid losses; and that the demonstrated arbitrariness in the
facts of each case and the gravity of the omission committed by the ER. Accordingly, we affirm the selection of which of its EEs to retrench is further proof of the illegality of the ERs retrenchment
deletion by the NLRC of the award of back wages. But because the required notices of the program, not to mention its bad faith.
petitioners retrenchment were not served upon the petitioners and the DOLE, GTI must be
sanctioned for such failure and thereby required to indemnify each of the petitioners the sum of This Court has repeatedly enjoined ERs to adopt and observe fair and reasonable standards to
P2,000.00 which we find to be just and reasonable under the circumstances of this case. effect retrenchment. This is of paramount importance because an ERs retrenchment program
(SEBUGUERO vs. NLRC) could be easily justi-fied considering the subjective nature of this requirement. The adoption and
implementation of unfair and unreasonable criteria could not easily be detected especially in the
b.PROOF REQUIRED retrenchment of large numbers of EEs, and in this aspect, abuse is a very distinct and real
Under the first requisite, it is imperative and incumbent on the part of the ER to sufficiently and possibility. This is where labor tribunals should exercise more diligence; this aspect is where they
convincingly establish business reverses of the kind or in the amount that would justify should concentrate when placed in a position of having to judge an ERs retrenchment program.
retrenchment. To justify retrenchment, the ER must prove serious business losses, as not all
business losses suffered by an ER would justify retrenchment under the aforesaid Article 283. The By discarding the cabin crew personnels previous years of service and taking into consideration
loss referred to in the said provision cannot be of just any kind or amount, otherwise, a company only one years worth of job performance for evaluation, Philippine Airlines (PAL) virtually did away
could easily feign excuses to suit its whims and prejudices or to rid itself of unwanted EEs. As with the concept of seniority, loyalty and past efficiency, and treated all cabin attendants as if they
consistently held by this Court, to guard against abuse, any claim of actual or potential business were on equal footing, with no one more senior than the other.In assessing the overall
losses must satisfy the following established standards, to wit: (a) the losses incurred are performance of each cabin crew personnel, PAL only considered the year 1997. This makes the
substantial and not de minimis; (b) the losses are actual or reasonably imminent; (c) the evaluation of each cabin attendants efficiency rating capricious and prejudicial to PAL EEs
retrenchment is reasonably necessary and is likely to be effective in preventing the expected covered by it. By discarding the cabin crew personnels previous years of service and taking into
losses; and (d) the alleged losses, if already incurred, or the expected imminent losses sought to consideration only one years worth of job performance for evaluation, PAL virtually did away with
be forestalled are proven by sufficient and convincing evidence. The Court has previously ruled the concept of seniority, loyalty and past efficiency, and treated all cabin attendants as if they were
that financial statements audited by independent external auditors constitute the normal method of on equal footing,with no one more senior than the other. (FLIGHT ATTENDANT AND STEWARD
proof of the profit and loss performance of a company. (PT&T vs. NLRC) ASSOC OF THE PHIL. vs. PAL)

c.STANDARDS TO BE OBSERVED e.RETRENCHMENT OF AN OFW


The rule is well-settled that labor laws discourage interference with an ERs judgment in the Philippine Law recognizes retrenchment as a valid cause for the dismissal of a migrant or overseas
conduct of his business. Even as the law is solicitous of the welfare of EEs, it must also protect the Filipino worker under Article 283 of the Labor Code, which provides: Closure of establishment and
right of an ER to exercise what are clearly management prerogatives. As long as the companys reduction of personnel. (INTL MANAGEMENT vs. LOGARTA)
exercise of the same is in good faith to advance its interest and not for the purpose of defeating or
circumventing the rights of EEs under the laws or valid agreements, such exercise will be upheld. 2.2.CLOSURE OF BUSINESS (ART.283)
As already stated, Art. 283 of the Labor Code does not obligate an ER to pay separation benefits
It is not disputed that the LIFO rule applies to termination of employment in the line of work. Verily, when the closure is due to losses. In the case before us, the basis for the claim of the additional
what is contemplated in the LIFO rule is that when there are two or more EEs occupying the same separation benefit of 17.5 days is alleged discrimination, i.e., unequal treatment of EEs, which is
position in the company affected by the retrenchment program, the last one employed will proscribed as an unfair labor practice by Art. 248 (e) of said Code. Under the facts and
necessarily be the first to go. (MAYA FARMS EES ORG. vs. NLRC) circumstances of the present case, the grant of a lesser amount of separation pay to private
respondent was done, not by reason of discrimination, but rather, out of sheer financial
We have laid down the principle that in selecting the EEs to be dismissed, a fair and reasonable bankruptcya fact that is not controlled by management prerogatives. Stated differently, the total
criteria must be used, such as but not limited to: (a) less preferred status (e.g., temporary EE), (b) cessation of operation due to mind-boggling losses was a supervening fact that prevented the
efficiency, and (c) seniority. The records disclose that no criterion whatsoever was adopted by company from continuing to grant the more generous amount of separation pay. The fact that
petitioners in dismissing Rivera and Macaspac. Another procedural lapse committed by petitioners North Davao at the point of its forced closure voluntarily paid any separation benefits at all
is the lack of written notice to the DOLE required under Art. 283 of the Labor Code. The purpose of although not required by lawand 12.5 days worth at that, should have elicited admiration instead
such notice is to ascertain the verity of the cause of termination of employment. (GOLDEN of condemnation. But to require it to continue being generous when it is no longer in a position to
THREADS vs. NLRC) do so would certainly be unduly oppressive, unfair and most revolting to the conscience. (NORTH
DAVAO MINING vs. NLRC)
d.SUBSTANTIAL LOSS
There should, in other words, be a certain degree of urgency for the retrenchment, which is after all a.CESSATION OF BUSINESS OPERATIONS
a drastic recourse with serious consequences for the livelihood of the EEs retired or otherwise laid- In fact, even granting arguendo that respondent was not experiencing losses, it is still authorized
off. Because of the consequential nature of retrenchment, it must, thirdly, be reasonably necessary by Article 283 of the Labor Code to cease its business operations. Explicit in the said provision is
and likely to effectively prevent the expected losses. The ER should have taken other measures that closure or cessation of business operations is allowed even if the business is not undergoing
prior or parallel to retrenchment to forestall losses, i.e., cut other costs than labor costs. An ER economic losses. The owner, for any bona fide reason, can lawfully close shop anyone. Just as no
who, for instance,lays off substantial numbers of workers while continuing to dispense fat executive law forces anyone to go into business, no law can compel anybody to continue in it. It would indeed
bonuses and perquisites or so-called golden parachutes, can scarcely claim to be retrenching in be stretching the intent and spirit of the law if we were to unjustly interfere with the managements
good faith to avoid losses. To impart operational meaning to the constitutional policy of providing prerogative to close or cease its business operations, just because said business operations are
full protection to labor, the ERs prerogative to bring down labor costs by retrenching must be not suffering any loss or simply to provide the workers continued employment.
exercised essentially as a measure of last resort, after less drastic meanse.g., reduction of both
management and rank-and-file bonuses and salaries, going on reduced time, improving titioners proposition that she was not a union member and, therefore, not legally bound by the
manufacturing efficiencies, trimming of marketing and advertising costs, etc.have been tried and terms of the Collective Bargaining Agreement, is irrelevant in the instant controversy. Non-
found wanting. membership in a union does not exempt an EE from the application of Article 283 of the Labor
Code which enumerates the au-thorized causes for terminating employment. In this case, petitioner
Lastly, but certainly not the least important, alleged losses if already realized, and the expected was terminated pursuant to the retrenchment program implemented by respondent. As discussed
imminent losses sought to be forestalled, must be proved by sufficient and convincing evidence. above, the respondent complied with the legal requirements for a valid retrenchment. Therefore,
The reason for requiring this quantum of proof is readily apparent: any less exacting standard of petitioners separation from employment was legal and valid. (MANATAD vs. PT&T)
proof would render too easy the abuse of this ground for termination of services of EEs.(LOPEZ
SUGAR CORP. vs. FEDERATION OF FREE WORKERS) 2.3.REDUNDANCY (ART.283)
We do not believe that redundancy in an ERs personnel force necessarily or even ordinarily refers
The law speaks of serious business losses or financial reverses. Sliding incomes or decreasing to duplication of work. That no other person was holding the same position that private respondent
gross revenues are not necessarily losses, much less serious business losses within the meaning held prior to the termination of his services, does not show that his position had not become
of the law. The fact that an ER may have sustained a net loss, such loss, per se, absent any other redundant. Indeed, in any well-organized business enterprise, it would be surprising to find
evidence on its impact on the business, nor on expected losses that would have been incurred had duplication of work and two (2) or more people doing the work of one person. We believe that
operations been continued, may not amount to serious business losses mentioned in the law. The redundancy, for purposes of our Labor Code, exists where the services of an EE are in excess of
ER must show that its losses increased through a period of time and that the condition of the what is reasonably demanded by the actual requirements of the enterprise. Succinctly put, a
company will not likely improve in the near future, or that it expected no abatement of its losses in position is redundant where it is superfluous, and superfluity of a position or positions may be the
the coming years. Put simply,not every loss incurred or expected to be incurred by a company will outcome of a number of factors, such as overhiring of workers, decreased volume of .business, or
justify retrenchment. dropping of a particular produet line or service activity previously manufactured or undertaken by
the enterprise. The ER has no legal obligation to keep in its payroll more EEs than are necessary
The ER must also exhaust all other means to avoid further losses without retrenching its EEs. for the operation of its business.
Retrenchment is a means of last resort; it is justified only when all other less drastic means have
been tried and found insufficient. Even assuming that the ER has actually incurred losses by It is of no legal moment that the financial troubles of the company were not of private respondents
reason of the Asian economic crisis, the retrenchment is not completely justified if there is no making. Private respondent cannot insist on the retention of his position upon the ground that he
showing that the retrenchment was the last recourse resorted to. Where the only less drastic had not contributed to the financial problems of Wiltshire. The characterization of private
measure that the ERundertook was the rotation work scheme, or the three-day-work-per-EE-per- respondents services as no longer necessary or sustainable, and therefore properly terminable,
week schedule, and it did not endeavor at other measures, such as cost reduction, lesser was an exercise of business judgment on the part of petitioner company. The wisdom or
investment on raw materials, adjustment of the work routine to avoid scheduled power failure, soundness of such characterization or decision was not subject to discretionary review on the part
reduction of the bonuses and salaries of both management and rank-and-file, improvement of of the Labor Arbiter nor of the NLRC so long, of course, as violation of law or merely arbitrary and
manufacturing efficiency, and trimming of marketing and advertising costs, the claim that malicious action is not shown. It should also be noted that the position held by private respondent,
retrenchment was done in good faith to avoid losses is belied. Alleged losses if already realized, Sales Manager, was clearly managerial in character.
and the expected imminent losses sought to be forestalled, must be proved by sufficient and
convincing evidence. The reason for requiring this is readily apparent: any less exacting standard Where, as in the instant case, the ground for dismissal or termination of services does not relate to
of proof would render too easy the abuse of this ground for termination of services of EEs; a blameworthy act or omission on the part of the EE, there appears to us no need for an
scheming ERs might be merely feigning business losses or reverses in order to ease out EEs. investigation and hearing to be conducted by the ER who does not, to begin with, allege any
malfeasance or non-feasance on the part of the EE. In such case, there are no allegations which
It was grave error for the Labor Arbiter, the NLRC and the Court of Appeals, to have simply the EE should refute and defend himself from. Thus, to require petitioner Wiltshire to hold a
assumed that PAL was in grievous financial state, without requiring the latter to substantiate such hearing, at which private respondent would have had the right to be present, on the business and
claim. It bears stressing that in retrenchment cases, the presentation of proof of financial difficulties financial circumstances compelling retrenchment and resulting in redundancy, would be to impose
upon the ER an unnecessary and inutile hearing as a condition for legality of termination.

Page 19 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

observance of notice and hearing. Also, in Loadstar Shipping Co., Inc. v. Mesano, 408 SCRA 478
This is not to say that the EE may not contest the reality or good faith character of the (2003), the Court, sanctioning the ER for disregarding the due process requirements, held that the
retrenchment or redundancy asserted as grounds for termination of services. The appropriate EEs written explanation did not excuse the fact that there was a complete absence of the first
forum for such controversion would, however, be the Department of Labor and Employment and notice. (KING OF KINGS vs. MAMAC)
not an investigation or hearing to be held by the ER itself. It is precisely for this reason that an ER
seeking to terminate services of an EE or EEs because of closure of establishment and reduction 1.1.CONTENTS OF A VALID NOTICE
of personnel, is legally required to give a written notice not only to the EE but also to the
Department of Labor and Employment at least one month before effectivity date of the termination. 1.2.FAILURE TO COMPLY
In the instant case, private respondent did controvert before the appropriate labor authorities the Therefore statutory due process should be differentiated from failure to comply with constitutional
grounds for termination of services set out in petitioners letter to him dated 17 June 1985. due process.Constitutional due process protects the individual from the government and assures
(WILTSHIRE FILE CO. vs. NLRC)(ESCAREAL vs. NLRC)(DE OCAMPO vs. NLRC) him of his rights in criminal, civil or administrative proceedings; while statutory due process found in
the Labor Code and Implementing Rules protects EEs from being unjustly terminated without just
2.4.TEMPORARY CLOSURE cause after notice and hearing.
ART. 286. When employment not deemed terminated. - The bona-fide suspension of the
operation of a business or undertaking for a period not exceeding six (6) months, or the The violation of the petitioners right to statutory due process by the private respondent warrants
fulfillment by the EE of a military or civic duty shall not terminate employment. In all such cases, the the payment of indemnity in the form of nominal damages. The amount of such damages is
ER shall reinstate the EE to his former position without loss of seniority rights if he indicates his addressed to the sound discretion of the court, taking into account the relevant circumstances.
desire to resume his work not later than one (1) month from the resumption of operations of his ER Considering the prevailing circumstances in the case at bar, we deem it proper to fix it at
or from his relief from the military or civic duty. P30,000.00. We believe this form of damages would serve to deter ERs from future violations of
the statutory due process rights of EEs. At the very least, it provides a vindication or recognition of
this fundamental right granted to the latter under the Labor Code and its Implementing Rules.
2.5.DISEASE (ART.284) (AGABON vs. NLRC)
ART. 284. Disease as ground for termination. - An ER may terminate the services of an EE who
has been found to be suffering from any disease and whose continued employment is prohibited by It is, therefore, established that there was ground for respondents dismissal, i.e., retrenchment,
law or is prejudicial to his health as well as to the health of his co-EEs: Provided, That he is paid which is one of the authorized causes enumerated under Article 283 of the Labor Code. Likewise, it
separation pay equivalent to at least one (1) month salary or to one-half (1/2) month salary for is established that JAKA failed to comply with the notice requirement under the same Article.
every year of service, whichever is greater, a fraction of at least six (6) months being considered as Considering the factual circumstances in the instant case and the above ratiocination, we,
one (1) whole year. therefore, deem it proper to fix the indemnity at P50,000.00. (JAKA FOOD vs. PACOT)

s this Court stated in Triple Eight Integrated Services, Inc. vs. NLRC,the requirement for a medical 2.AMPLE OPPORTUNITY TO BE HEARD; HEARING
certificate under Article 284 of the Labor Code cannot be dispensed with; otherwise, it would Thus, the opportunity to be heard afforded by law to the EE is qualified by the word ample which
sanction the unilateral and arbitrary determination by the ER of the gravity or extent of the EEs ordinarily means considerably more than adequate or sufficient. In this regard, the phrase ample
illness and thus defeat the public policy in the protection of labor. (SY vs. CA) opportunity to be heard can be reasonably interpreted as extensive enough to cover actual
hearing or confer-ence. To this extent, Section 2(d), Rule I of the Implementing Rules of Book VI of
A plain reading of the abovequoted provision clearly presupposes that it is the ER who terminates the Labor Code is in conformity with Article 277(b).
the services of the EE found to be suffering from any disease and whose continued employment is
prohibited by law or is prejudicial to his health as well as to the health of his co-EEs. It does not Section 2(d), Rule I of the Implementing Rules of Book VI of the Labor Code should not be taken to
contemplate a situation where it is the EE who severs his or her employment ties. This is precisely mean that holding an actual hearing or conference is a conditionsine qua non for compliance with
the reason why Section 8, Rule 1, Book VI of the Omnibus Rules Implementing the Labor Code, the due process requirement in termination of employment. The test for the fair procedure
directs that an ER shall not terminate the services of the EE unless there is a certification by a guaranteed under Article 277(b) cannot be whether there has been a formal pretermination
competent public health authority that the disease is of such nature or at such a stage that it cannot confrontation between the ER and the EE. The ample opportunity to be heard standard is neither
be cured within a period of six (6) months even with proper medical treatment.(VILLARUEL vs. synonymous nor similar to a formal hearing. To confine the EEs right to be heard to a solitary form
YEO HAN GUAN) narrows down that right. It deprives him of other equally effective forms of adducing evidence in his
defense. Certainly, such an exclusivist and absolutist interpretation is overly restrictive. The very
It bears stressing that respondent was not an ordinary rank-and-file EE. With the nature of his nature of due process negates any concept of inflexible procedures universally applicable to every
position, he was reposed with managerial duties to oversee petitioners business in his assigned imaginable situation.
area. As a managerial EE, respondent was tasked to perform important and crucial functions and,
thus, bound by more exacting work ethic. He should have realized that such sensitive position Section 2(d), Rule I of the Implementing Rules of Book VI of the Labor Code itself provides that the
required the full trust and confidence of his ER in every exercise of managerial discretion insofar as so-called standards of due process outlined therein shall be observed substantially, not strictly.
the conduct of the latters business is concerned. The power to dismiss an EE is a recognized This is a recognition that while a formal hearing or conference is ideal, it is not an absolute,
prerogative inherent in the ERs right to freely manage and regulate his business. The law, in mandatory or exclusive avenue of due process.
protecting the rights of the laborers, authorizes neither oppression nor self-destruction of the ER.
The workers right to security of tenure is not an absolute right, for the law provides that he may be A hearing means that a party should be given a chance to adduce his evidence to support his side
dismissed for cause. As a general rule, ERs are allowed wide latitude of discretion in terminating of the case and that the evidence should be taken into account in the adjudication of the
the employment of managerial personnel. The mere existence of a basis for believing that such EE controversy. To be heard does not mean verbal argumentation alone inasmuch as one may be
has breached the trust and confidence of his ER would suffice for his dismissal. Needless to say, heard just as effectively through written explanations, submissions or pleadings. Therefore, while
an irresponsible EE like respondent does not deserve a place in the workplace, and it is petitioners the phrase ample opportunity to be heard may in fact include an actual hearing, it is not limited to
management prerogative to terminate his employment. To be sure, an ER cannot be compelled to a formal hearing only. In other words, the existence of an actual, formal trial-type hearing,
continue with the employment of workers when continued employment will prove inimical to the although preferred, is not absolutely necessary to satisfy the EEs right to be heard.
ERs interest.(WUERTH PHIL. vs. YNSON)
The following are the guiding principles in connection with the hearing requirement in dismissal
2.6.REORGANIZATION/ABOLITION cases: (a) ample opportunity to be heard means any meaningful opportunity (verbal or written)
(HANTEX TRADING CO. vs. CA) given to the EE to answer the charges against him and submit evidence in support of his defense,
whether in a hearing, conference or some other fair, just and reasonable way. (b) a formal hearing
or conference becomes mandatory only when requested by the EE in writing or substantial
evidentiary disputes exist or a company rule or practice requires it, or when similar circumstances
justify it. (c) the ample opportunity to be heard standard in the Labor Code prevails over the
b.PROCEDURAL DUE PROCESS hearing or conference requirement in the implementing rules and regulations. (PEREZ vs. PT&T)
1.TWIN-NOTICE REQUIREMENT
To stress, if the dismissal is based on a just cause under Article 282 of the Labor Code, the ER That the workers involved in the incident were mustered or convened thereafter by the captain is
must give the EE (1) two written notices and (2) a hearing (or at least, an opportunity to be heard). inconsequential. It is insufficient compliance with the law which requires, as a vital component of
The first notice is intended to inform the EE of the ERs intent to dismiss and the particular acts or due process, observance of the twin requirements of notice and hearing before dismissing an EE.
omissions for which the dismissal is sought. The second notice is intended to inform the EE of the As regards the notice requirement, the Court has stated: On the issue of due process . . ., the law
ERsdecision to dismiss. This decision, however, must come only after the EE has been given a requires the ER to furnish the worker whose employment is sought to be terminated a written
reasonable period, from receipt of the first notice, within which to answer the charge; and ample notice containing a statement of the cause or causes for termination and shall afford him ample
opportunity to be heard with the assistance of counsel, if the EE so desires. opportunity to be heard and to defend himself with the assistance of a representative. Specifically,
the ER must furnish the worker with two (2) written notices before termination of employment can
Neither Section 2 of Book V of Rule XXIII nor Section 2(d) of Rule 1 of Book VI of the Implementing be legally effected: (a) notice which apprises the EE of the particular acts or omissions for which
Rules require strict literal compliance with the stated procedure; only substantial compliance is his dismissal is sought; and (b) the subsequent notice which informs the EE of the ERs decision to
needed. On this basis, the Memoranda sent to respondents may be deemed to have sufficiently dismiss him.
conformed to the first notice required under the Implementing Rules. The Memoranda served the
purpose of informing them of the pending matters beclouding their employment and of extending to Neither is the ship captains having witnessed the altercation an excuse for dispensing with the
them an opportunity to clear the air. In fact, not only were respondents duly informed of the notice and hearing requirements. Serving notice to private respondent under the circumstances
particular acts for which their dismissal was sought; they were, in truth and in fact, able to defend cannot be regarded as an absurdity and superfluity. (WALLEM MARITIME SERVICES vs. NLRC)
themselves and to respond to the charges with the assistance of a counsel of their own choosing.
(GLAXO WELLCOME vs. NAGKAKAISANG EMPLEYADO NG WELLCOME) The right to counsel and the assistance of one in investigations involving termination cases is
neither indis-pensable nor mandatory, except when the EE himself requests for one or that he
The first written notice to be served on the EEs should contain the specific causes or grounds for manifests that he wants a formal hearing on the charges against him. In petitioners case, there is
termination against them, and a directive that the EEs are given the opportunity to submit their no showing that he requested for a formal hearing to be conducted or that he be assisted by
written explanation within a reasonable period. Reasonable opportunity under the Omnibus Rules counsel. Verily, since he was furnished a second notice informing him of his dismissal and the
means every kind of assistance that management must accord to the EEs to enable them to grounds therefor, the twin-notice requirement had been complied with to call for a deletion of the
prepare adequately for their defense. This should be construed as a period of at least five (5) appellate courts award of nominal damages to petitioner. (LOPEZ vs. ALTURAS)
calendar days from receipt of the notice to give the EEs an opportunity to study the accusation
against them, consult a union official or lawyer, gather data and evidence, and decide on the c.TERMINATING A PROBATIONARY EE
defenses they will raise against the complaint. Moreover, in order to enable the EEs to intelligently Within the limited legal six-month probationary period, probationary EEs are still entitled to security
prepare their explanation and defenses, the notice should contain a detailed narration of the facts of tenure. It is expressly provided in the afore-quoted Article 281 that a probationary EE may be
and circumstances that will serve as basis for the charge against the EEs. A general description of terminated only on two grounds: (a) for just cause, or (b) when he fails to qualify as a regular EE in
the charge will not suffice. Lastly, the notice should specifically mention which company rules, if accordance with reasonable standards made known by the ER to the EE at the time of his
any, are violated and/or which among the grounds under Art. 282 is being charged against the engagement. (PHIL.DAILY INQUIRER vs. MAGTIBAY)
EEs.
4.FAILURE TO COMPLY WITH THE REQUIREMENT OF DUE PROCESS
In the instant case, KKTI admits that it had failed to provide respondent with a charge sheet. a.SUBSTANTIVE
However, it maintains that it had substantially complied with the rules, claiming that respondent 1.REINSTATEMENT, DOCTRINE OF STRAINED RELATIONS
would not have issued a written explanation had he not been informed of the charges against him. It must be emphasized that the rules of dismissal for managerial EEs are different from those
We are not convinced. First, respondent was not issued a written notice charging him of committing governing ordinary EEs for it would be unjust and inequitable to compel an ER to continue with the
an infraction. The law is clear on the matter. A verbal appraisal of the charges against an EE does employment of a person who occupies a managerial and sensitive position despite loss of trust and
not comply with the first notice requirement. In Pepsi Cola Bottling Co. v. NLRC, 210 SCRA 277 confidence. At the very least, the relationship must be considered seriously strained, foreclosing
(1992), the Court held that consultations or conferences are not a substitute for the actual

Page 20 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

the remedy of reinstatement. We find that the allegations of irregularities were sufficiently reckoned from the time of illegal dismissal up to the time that the EE is actually reinstated to his
substantiated thus justifying petitioners separation. former position. (BANK OF LUBAO vs. MANABAT)

his is not a case of dismissal. The situation is that of a corporate office having been declared 3.SEPARATION PAY
vacant, and of TANs not having been elected thereafter. The matter of whom to elect is a 3.1.BASIS OF COMPUTATION
prerogative that belongs to the Board, and involves the exercise of deliberate choice and the Prescinding from the above, we hold that petitioner is liable for illegal dismissal and should be
faculty of discriminative selection. Generally speaking, the relationship of a person to a corporation, responsible for the reinstatement of the Lubat group and the payment of their back wages.
whether as officer or agent or EE, is not determined by the nature of the services performed, but by However, since reinstatement is no longer possible as peti-tioner has already closed its Balintawak
the incidents of the relationship as they actually exist. (AURELIO vs. NLRC) plant, respondent members of the said group should instead be awarded normal separation pay (in
lieu of reinstatement) equivalent to at least one month pay, or one month pay for every year of
Under the law and prevailing jurisprudence, an illegally dismissed EE is entitled to reinstatement as service, whichever is higher. It must be stressed that the separation pay being awarded to the
a matter of right. However, if reinstatement would only exacerbate the tension and strained Lubat group is due to illegal dismissal; hence, it is different from the amount of separation pay
relations between the parties, or where the relationship between the ER and the EE has been provided for in Article 283 in case of retrenchment to prevent losses or in case of closure or
unduly strained by reason of their irreconcilable differences, particularly where the illegally cessation of the ERs business, in either of which the separation pay is equivalent to at least one
dismissed EE held a managerial or key position in the company, it would be more prudent to order (1) month or one-half (1/2) month pay for every year of service, whichever is higher.
payment of separation pay instead of reinstatement.
The amount of separation pay is based on two factors: the amount of monthly salary and the
In such cases, it should be proved that the EE concerned occupies a position where he enjoys the number of years of service. Although the Labor Code provides different definitions as to what
trust and confidence of his ER; and that it is likely that if reinstated, an atmosphere of antipathy and constitutes one year of service, Book Six does not specifically de-fine one year of service for
antagonism may be generated as to adversely affect the efficiency and productivity of the EE purposes of computing separation pay. However, Articles 283 and 284 both state in connection
concerned. with separation pay that a fraction of at least six months shall be considered one whole year.
Applying this to the case at bar, we hold that the amount of separation pay which respondent
The principle of strained relations cannot be applied indiscriminately. Otherwise, reinstatement members of the Lubat and Luris groups should receive is one-half (1/2) their respective average
can never be possible simply because some hostility is invariably engendered between the parties monthly pay during the last season they worked multiplied by the number of years they actually
as a result of litigation. That is human nature. Besides, no strained relations should arise from a rendered service, provided that they worked for at least six months during a given year.(PHIL.
valid and legal act of asserting ones right; otherwise, an EE who shall assert his right could be TOBACCO FLU CURING vs. NLRC)
easily separated from the service, by merely paying his separation pay on the pretext that his
relationship with his ER had already become strained. 3.2.WHO IS LIABLE
Under Article 283 of the Labor Code, separation pay is required where the termination of
The doctrine of strained relations has been made applicable to cases where the EE decides not to employment relationship is occasioned by the cessation of operations of an establishment. The
be reinstated and demands for separation pay. The same, however, does not apply to herein said article, therefore, puts the burden of paying separation pay on ERI/MPSI, the ER for whom
petition, as petitioner is asking for his reinstatement despite his illegal dismissal. (CABIGTING vs. services had been rendered by the EEs who were separated from employment in view of the
SAN MIGUEL FOODS, INC.) cessation of its business operations by the cancellation of its management contract with the PPA.
(E.RAZON, INC. vs. SEC. OF LABOR)
However, if reinstatement would only exacerbate the tension and strained relations between the
parties, or where the relationship between the ER and the EE has been unduly strained by reason 3.3.ER NOT LIABLE
of their irreconcilable differences, particularly where the illegally dismissed EE held a managerial or It is clear that Article 283 of the Labor Code applies in cases of closures of establishment and
key position in the company, it would be more prudent to order payment of separation pay instead reduction of personnel. The peculiar circumstances in the case at bar, however, involves neither
of reinstatement. Under the doctrine of strained relations, the payment of separation pay is the closure of an establishment nor a reduction of personnel as contemplated under the aforesaid
considered an acceptable alternative to reinstatement when the latter option is no longer desirable article. When the Patalon Coconut Estate was closed because a large portion of the estate was
or viable. On one hand, such payment liberates the EE from what could be a highly oppressive acquired by DAR pursuant to CARP, the ownership of that large portion of the estate was precisely
work environment. On the other hand, it releases the ER from the grossly unpalatable obligation of transferred to PEARA and ultimately to the petitioners as members thereof and as agrarian lot
maintaining in its employ a worker it could no longer trust. In such cases, it should be proved that beneficiaries. Hence, Article 283 of the Labor Code is not applicable to the case at bench.
the EE concerned occupies a position where he enjoys the trust and confidence of his ER; and that
it is likely that if reinstated, an atmosphere of antipathy and antagonism may be generated as to Since the closure was due to the act of the government to benefit the petitioners, as members of
adversely affect the efficiency and productivity of the EE concerned. (BANK OF LUBAO vs. the Patalon Estate Agrarian Reform Association, by making them agrarian lot beneficiaries of said
MANABAT) estate, the petitioners are not entitled to separation pay. The termination of their employment was
not caused by the private respondents. The blame, if any, for the termination of petitioners
2.BACKWAGES employment can even be laid upon the petitioner-EEs themselves inasmuch as they formed
2.1.BASIS/RATIONALE themselves into a cooperative, PEARA, ultimately to take over, as agrarian lot beneficiaries, of
n accordance with these provisions, backpay (the same as backwages) could be awarded where, private respondents landed estate pursuant to RA 6657. The resulting closure of the business
in the opinion of the Court of Industrial Relations (CIR), such was necessary to effectuate the establishment, Patalon Coconut Estate, when it was placed under CARP, occurred through no fault
policies of the Industrial Peace Act. Only in one case was backpay a matter of right, and that was, of the private respondents. (NATIONAL FEDERATION OF LABOR vs. NLRC)
when an ER had declared a lockout without having first bargained collectively with his EEs in
accordance with the provisions of the Act. 5.CONSTRUCTIVE DISMISSAL
Dismissal connotes a permanent severance or complete separation of the worker from the service
As the CIR was given wide discretion to grant or disallow payment of backpay (backwages) to an on the initiative of the ER regardless of the reasons therefore. A constructive discharge is defined
EE, it also had the implied power of mitigating (reducing) the backpay where backpay was allowed. as a quitting because continued employment is rendered impossible, unreasonable or unlikely, as
Thus, in the exercise of its jurisdiction, the CIR increased or diminished the award of backpay, an offer involving demotion in rank and a diminution in pay. (JO CINEMA vs. ABELLANA)
depending on several circumstances, among them, the good faith of the ER, the EE's employment
in other establishments during the period of illegal dismissal, or the probability that the EE could Clearly, constructive dismissal had already set in when the suspension went beyond the maximum
have realized net earnings from outside employment if he had exercised due diligence to search period allowed by law. Section 4, Rule XIV, Book V of the Omnibus Rules provides that preventive
for outside employment. suspension cannot be more than the maximum period of 30 days. Hence, we have ruled that after
the 30-day period of suspension, the EE must be reinstated to his former position because
From this ruling came the burden of disposing of an illegal dismissal case on its merits and of suspension beyond this maximum period amounts to constructive dismissal.
determining whether or not the computation of the award of backwages is correct. In order not to
unduly delay the disposition of illegal dismissal cases, this Court found occasion in the case of The strict adherence by the NLRC to the definition of constructive dismissal is erroneous.
Mercury Drug Co., Inc., et al. v. CIR, et al.to rule that a fixed amount of backwages without further Apparently, the NLRC ruled out constructive dismissal in this case mainly because according to it
qualifications should be awarded to an illegally dismissed EE (hereinafter the Mercury Drug rule). constructive dismissal consists in the act of quitting because continued employment is rendered
This ruling was grounded upon considerations of expediency in the execution of the decision. impossible, unreasonable or unlikely as in the case of an offer involving demotion in rank and a
diminution in pay. Based on this definition, the NLRC concluded that since respondent neither
Under the abovequoted provision, it became mandatory to award backwages to illegally dismissed resigned nor abandoned his job and the fact that respondent pursued his reinstatement negate
regular EEs. The law specifically declared that the award of backwages was to be computed from constructive dismissal. What makes this conclusion tenuous is the fact that constructive dismissal
the time compensation was withheld from the EE up to the time of his reinstatement. This does not always involve forthright dismissal or diminution in rank, compensation, benefit and
notwithstanding, the rule generally applied by the Court after the promulgation of theMercury Drug privileges. There may be constructive dismissal if an act of clear discrimination, insensibility, or
case, and during the effectivity of P.D. No. 442 was still the Mercury Drug rule. A survey of cases disdain by an ER becomes so unbearable on the part of the EE that it could foreclose any choice
from 1974 until 1989, when the amendatory law to P.D. No. 442, namely, R.A. No. 6715 took by him except to forego his continued employment.(HYATT TAXI SERVICES INC. vs. CATINOY)
effect, supports this conclusion.
A diminution of pay is prejudicial to the EE and amounts to constructive dismissal. The gauge for
In an even later case (1987) the Court declared that the general principle is that an EE is entitled to constructive dismissal is whether a reasonable person in the em-ployees position would feel
receive as backwages all the amounts he may have received from the date of his dismissal up to compelled to give up his employment under the prevailing circumstances. Constructive dismissal is
the time of his reinstatement. However, in compliance with the jurisprudential policy of fixing the defined as quitting when continued employment is rendered impossible, unreasonable or unlikely
amount of backwages to a just and reasonable level, the award of backwages equivalent to three as the offer of employment involves a demotion in rank or diminution in pay. It exists when the
(3) years, without qualification or deduction, was nonetheless followed in said case. resignation on the part of the EE was involuntary due to the harsh, hostile and unfavorable
conditions set by the ER. It is brought about by the clear discrimination, insensibility or disdain
In a more direct approach to the rule on the award of backwages, this Court declared in the 1990 shown by an ER which becomes unbearable to the EE. An EE who is forced to surrender his
case of Medado v. Court of Appeals that "any decision or order-granting backwages in excess of position through the ERs unfair or unreasonable acts is deemed to have been illegally terminated
three (3) years is null and void as to the excess." and such termination is deemed to be involuntary.

"full backwages" as meaning exactly that, i.e., without deducting from back-wages the earnings Ordinarily, when there is constructive dismissal, which is a form of illegal dismissal, the ER is liable
derived elsewhere by the concerned EE during the period of his illegal dismissal. In other words, for the full amount of backwages, if reinstatement is no longer possible, and separation pay. In the
the provision calling for "full backwages" to illegally dismissed EEs is clear, plain and free from case at bar, we cannot hold Siemens Philippines liable for the monetary obligations of Siemens
ambiguity and, therefore, must be applied without attempted or strained interpretation. Index animi Germany. The circumstances surrounding this case necessitate a different treatment in the award
sermo est. (BUSTAMANTE vs. NLRC) of backwages and separation pay, since the companies involved are separate and distinct from
each other. However, by Siemens Philippines failure to work for the renewal of Domingos
2.2.NOT AVAILING consultancy contract with Siemens Germany, Siemens Philippines may be held answerable in
Reinstatement and payment of backwages are distinct and separate reliefs given to alleviate the damages to Domingo.
economic setback brought about by the EEs dismissal. The award of one does not bar the other.
Backwages may be awarded without reinstatement, and reinstatement may be ordered without An illegally or constructively dismissed EE is entitled to: (1) either reinstatement, if viable, or
awarding backwages. (PALTENG vs. UCPG) separation pay if reinstatement is no longer viable; and (2) backwages. These two reliefs are
separate and distinct from each other and are awarded conjunctively. (SIEMENS PHIL. vs.
2.3.PERIOD COVERED DOMINGO)
The backwages that should be awarded to the respondent should be modified. EEs who are
illegally dismissed are entitled to full backwages, inclusive of allowances and other benefits or their A floating status requires the dire exigency of the ERs bona fide suspension of operation of a
monetary equivalent, computed from the time their actual compensation was withheld from them business or undertaking. In security services, this happens when the security agencys clients
up to the time of their actual reinstatement. But if reinstatement is no longer possible, the which do not renew their contracts are more than those that do and the new ones that the agency
backwages shall be computed from the time of their illegal termination up to the finality of the gets. Also, in instances when contracts for security services stipulate that the client may request
decision. Thus, when there is an order of reinstatement, the computation of backwages shall be the agency for the replacement of the guards assigned to it even for want of cause, the replaced

Page 21 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

security guard may be placed on temporary offdetail if there are no available posts under Republic Act No. 7641 which was enacted on December 9, 1992amended Article 287 of the Labor
respondents existing contracts. When a security guard is placed on a floating status, he does not Code by providing for retirement pay to qualified private sector EEs in the absence of any
receive any salary or financial benefit provided by law. Due to the grim economic consequences to retirement plan in the establishment. The pertinent provision of said law reads: x x x Admittedly,
the EE, the ER should bear the burden of proving that there are no posts available to which the EE petitioner worked for 14 years for the bus company which did not adopt any retirement scheme.
temporarily out of work can be assigned. This, respondent failed to discharge. (PIDO vs. NLRC) Even if petitioner as bus conductor was paid on commission basis then, he falls within the
coverage of R.A. 7641 and its implementing rules. As thus correctly ruled by the Labor Arbiter,
Constructive dismissal exists where there is cessation of work because continued employment is petitioners retirement pay should include the cash equivalent of the 5-day SIL and 1/12 of the 13th
rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank or a month pay. (SERRANO vs. SEVERINO SANTOS TRANSIT)
diminution in pay and other benefits. Aptly called a dismissal in disguise or an act amounting to
dismissal but made to appear as if it were not, constructive dismissal may, likewise, exist if an act
of clear discrimination, insensibility, or disdain by an ER becomes so unbearable on the part of the
EE that it could foreclose any choice by him except to forego his continued employment. In cases
of a transfer of an EE, the rule is settled that the ER is charged with the burden of proving that its
CASE DIGESTS
conduct and action are for valid and legitimate grounds such as genuine business necessity and
that the transfer is not unreasonable, inconvenient or prejudicial to the EE. If the ER cannot ARCO METAL PRODUCTS, CO., INC., and Mrs. Salvador Uy, VS. SAMAHAN NG MGA
overcome this burden of proof, the EEs transfer shall be tantamount to unlawful constructive MANGGAGAWA SA ARCO METAL-NAFLU (SAMARM-NAFLU)
dismissal. (MORALES vs. HARBOUR CENTER) G.R. No. 170734, May 14, 2008
TINGA, J,:
3. RETIREMENT (ART.287)
Court imposed two (2) essential requisites in order that R.A. 7641 may be given retroactive effect: FACTS: Petitioner is a company engaged in the manufacture of metal products, whereas
(1) the claimant for retirement benefits was still in the employ of the ER at the time the statute took respondent is the labor union of petitioners rank and file EEs. Sometime in December 2003,
effect; and (2) the claimant had complied with the requirements for eligibility for such retirement petitioner paid the 13th month pay, bonus, and leave encashment of three union members in
benefits under the statute. amounts proportional to the service they actually rendered in a year, which is less than a full twelve
(12) months. The EEs were:
Retirement is the result of a bilateral act of the parties, a voluntary agreement between the ER and 1. Rante Lamadrid Sickness 27 August 2003 to 27 February 2004
the EE whereby the latter, after reaching a certain age, agrees to sever his or her employment with 2. Alberto Gamban Suspension 10 June 2003 to 1 July 2003
the former. The age of retirement is primarily determined by the existing agreement between the 3. Rodelio Collantes Sickness August 2003 to February 2004
ER and the EEs. However, in the absence of such agreement, the retirement age shall be fixed by Respondent protested the prorated scheme, claiming that on several occasions petitioner did not
law. Under Art. 287 of the Labor Code as amended, the legally mandated age for compulsory prorate the payment of the same benefits to 7 EEs who had not served for the full 12 months. The
retirement is 65 years, while the set minimum age for optional retirement is 60 years. payments were made in 1992-1994, 1996, 1999, and 2003-2004. According to respondent, the
prorated payment violates the rule against diminution of benefits under Article 100 of the Labor
In this case, it may be stressed that the CBA does not per se specifically provide for the Code. Thus, they filed a complaint before the National Conciliation and Mediation Board (NCMB).
compulsory retirement age nor does it provide for an optional retirement plan. It merely provides The parties submitted the case for voluntary arbitration.
that the retirement benefits accorded to an EE shall be in accordance with law. Thus, we must
apply Art. 287 of the Labor Code which provides for two types of retirement: (a) compulsory and (b) The voluntary arbitrator, Apron M. Mangabat, ruled in favor of petitioner and found that the giving of
optional. The first takes place at age 65, while the second is primarily determined by the collective the contested benefits in full, irrespective of the actual service rendered within one year has not
bargaining agreement or other employment contract or ERs retirement plan. In the absence of any ripened into a practice. He noted the affidavit of Joselito Baingan, manufacturing group head of
provision on optional retirement in a collective bargaining agreement, other employment contract, petitioner, which states that the giving in full of the benefit was a mere error. He also interpreted the
or ERs retirement plan, an EE may optionally retire upon reaching the age of 60 years or more, but phrase for each year of service found in the pertinent CBA provisions to mean that an EE must
not beyond 65 years, provided he has served at least five years in the establishment concerned. have rendered one year of service in order to be entitled to the full benefits provided in the CBA.[5]
That prerogative is exclusively lodged in the EE. (UNIVERSAL ROBINA SUGAR MILLING CO. vs.
CABALLEDA) Unsatisfied, respondent filed a Petition for Review[6] under Rule 43 before the CA, imputing
serious error to Mangabats conclusion. The CA ruled that the CBA did not intend to foreclose the
Pursuant to the existing CBA, the School has the option to retire an EE upon reaching the age limit application of prorated payments of leave benefits to covered EEs. The appellate court found that
of sixty (60) or after having rendered at least twenty (20) years of service to the School, the last petitioner, however, had an existing voluntary practice of paying the aforesaid benefits in full to its
three (3) years of which must be continuous. Retirement is a different specie of termination of EEs, thereby rejecting the claim that petitioner erred in paying full benefits to its seven EEs. The
employment from dismissal for just or authorized causes under Articles 282 and 283 of the Labor appellate court noted that aside from the affidavit of petitioners officer, it has not presented
Code. While in all three cases, the EE to be terminated may be unwilling to part from service, there any evidence in support of its position that it has no voluntary practice of granting the contested
are eminently higher standards to be met by the ER validly exercising the prerogative to dismiss for benefits in full and without regard to the service actually rendered within the year. It also
just or authorized causes. In those two instances, it is indispensable that the ER establish the questioned why it took petitioner eleven (11) years before it was able to discover the alleged error.
existence of just or authorized causes for dismissal as spelled out in the Labor Code. Retirement,
on the other hand, is the result of a bilateral act of the parties, a voluntary agreement between the ISSUE/S:
ER and the EE whereby the latter after reaching a certain age agrees and/or consents to sever his 1)whether the intent of the CBA provisions is to grant full benefits regardless of service actually
employment with the former. rendered by an EE to the company.
2) Whether Any benefit and supplement being enjoyed by EEs cannot be reduced, diminished,
By their acceptance of the CBA, the Union and its members are obliged to abide by the discontinued or eliminated by the ER
commitments and limitations they had agreed to cede to management. The questioned retirement
provisions cannot be deemed as an imposition foisted on the Union, which very well had the right HELD: 1)There is no doubt that in order to be entitled to the full monetization of sixteen (16) days
to have refused to agree to allowing management to retire EEs with at least 20 years of service. It of vacation and sick leave, one must have rendered at least one year of service. The clear wording
should not be taken to mean that retirement provisions agreed upon in the CBA are absolutely of the provisions does not allow any other interpretation. Anent the 13th month pay and bonus, we
beyond the ambit of judicial review and nullification. A CBA, as a labor contract, is not merely agree with the findings of Mangabat that the CBA provisions did not give any meaning different
contractual in nature but impressed with public interest. If the retirement provisions in the CBA run from that given by the law, thus it should be computed at 1/12 of the total compensation which an
contrary to law, public morals, or public policy, such provisions may very well be voided. Certainly, EE receives for the whole calendar year. The bonus is also equivalent to the amount of the
a CBA provision or employment contract that would allow management to subvert security of 13thmonth pay given, or in proportion to the actual service rendered by an EE within the year.
tenure and allow it to unilaterally retire EEs after one month of service cannot be upheld. Neither
will the Court sustain a retirement clause that entitles the retiring EE to benefits less than what is 2) yes .Any benefit and supplement being enjoyed by EEs cannot be reduced, diminished,
guaranteed under Article 287 of the Labor Code, pursuant to the provisions express proviso discontinued or eliminated by the ER.[14] The principle of non-diminution of benefits is founded on
thereto in the provision. the Constitutional mandate to "protect the rights of workers and promote their welfare,[15] and
to afford labor full protection.[16] Said mandate in turn is the basis of Article 4 of the Labor
Yet the CBA in the case at bar contains no such infirmities which must be stricken down. There is Code which states that all doubts in the implementation and interpretation of this Code,
no essential difference between the CBA provision in this case and those we affirmed in Pantranco including its implementing rules and regulations shall be rendered in favor of labor.
and Progressive. Twenty years is a more than ideal length of service an EE can render to one ER. Jurisprudence is replete with cases which recognize the right of EEs to benefits which were
Under ordinary contemplation, a CBA provision entitling an EE to retire after 20 years of service voluntarily given by the ER and which ripened into company practice.
and accordingly collect retirement benefits is reward for services rendered since it enables an EE
to reap the fruits of his laborparticularly retirement benefits, whether lump-sum or otherwiseat We held that the ER cannot unilaterally withdraw the existing privilege of commutation or
an earlier age, when said EE, in presumably better physical and mental condition, can enjoy them conversion to cash given to said workers, and as also noted that the ER had in fact granted and
better and longer. We affirm the continued validity of Pantranco and its kindred cases, and thus paid said cash equivalent of the unenjoyed portion of the sick leave benefits to some intermittent
reiterate that under Article 287 of the Labor Code, a CBA may validly accord management the workers.
prerogative to optionally retire an EE under the terms and conditions mutually agreed upon by
management and the bargaining union, even if such agreement allows for retirement at an age In the years 1992, 1993, 1994, 1999, 2002 and 2003, petitioner had adopted a policy of freely,
lower than the optional retirement age or the compulsory retirement age. The Court of Appeals voluntarily and consistently granting full benefits to its EEs regardless of the length of service
gravely erred in refusing to consider this case from the perspective of Pantranco, or from the rendered. True, there were only a total of seven EEs who benefited from such a practice, but it was
settled doctrine enunciated therein. an established practice nonetheless. Jurisprudence has not laid down any rule specifying a
minimum number of years within which a company practice must be exercised in order to
The exercise by management of its retirement prerogative is less susceptible to dubitability as to constitute voluntary company practice.[20] Thus, it can be six (6) years,[21] three (3) years,[22] or
the question whether an EE could be validly retired. The only factual matter to consider then is even as short as two (2) years.[23] Petitioner cannot shirk away from its responsibility by merely
whether the EE concerned had attained the requisite age or number of years in service pursuant to claiming that it was a mistake or an error, supported only by an affidavit of its manufacturing group
the CBA or employment agreement, or if none, pursuant to Article 287 of the Labor Code. In fact, head.
the question of the amount of retirement benefits is more likely to be questioned than the
retirement itself. Evidently, it more clearly emerges in the case of retirement that management Indeed, if petitioner wants to prove that it merely erred in giving full benefits, it could have easily
would anyway have the right to retire an EE, no matter the degree of involvement of said EE in presented other proofs, such as the names of other EEs who did not fully serve for one year and
union activities thus were given prorated benefits. Experientially, a perfect attendance in the workplace is always
the goal but it is seldom achieved. There must have been other EEs who had reported for work
There is another point that militates against the Union. A ruling in its favor is tantamount to a less than a full year and who, as a consequence received only prorated benefits. This could have
concession that a validly drawn management prerogative to retire its EEs can be judicially easily bolstered petitioners theory of mistake/error, but sadly, no evidence to that effect was
interfered on a showing that the EE in question is highly valuable to the union. Such a rule would presented.
be a source of mischief, even if narrowly carved out by the Court, for it would imply that an active PLDT COMPANY vs. NLRC and Marlyn Bucay
union member or officer may be, by reason of his/her importance to the union, somehow exempted G.R. No. L-80609 August 23, 1988
from the normal standards of retirement applicable to the other, perhaps less vital members of the CRUZ, J.:
union. Indeed, our laws protection of the right to organize labor does not translate into perpetual
job security for union leaders by reason of their leadership role alone. Should we entertain such a FACTS: Marilyn Abucay, a traffic operator of the PLDT Company, was accused by two
notion, the detriment is ultimately to the union itself, promoting as it would a stagnating entrenched complainants of having demanded and received from them the total amount of P3,800.00 in
leadership. We can thus can comfortably uphold the principle, as reiterated in Philippine Airlines, consideration of her promise to facilitate approval of their applications for telephone installation.
that the exercise by the ER of a valid and duly established prerogative to retire an EE does not Investigated and heard, she was found guilty as charged and accordingly separated from the
constitute unfair labor practice.(CAINTA CATHOLIC SCHOOL vs. CAINTA CATHOLIC SCHOOL service. She went to the Ministry of Labor and Employment claiming she had been illegally
EES UNION) removed. After consideration of the evidence and arguments of the parties, the company was
sustained and the complaint was dismissed for lack of merit. Nevertheless, the dispositive portion
of labor arbiters decision declared: Considering that Dr. Helen Bangayan and Mrs. Consolacion

Page 22 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

Martinez are not totally blameless in the light of the fact that the deal happened outside the the levers of powers are nearly monopolized by the propertied few or their franchises. In
premises of respondent company and that their act of giving P3,800.00 without any receipt is recognition of its importance, our constitution has accorded the right to strike a distinct status while
tantamount to corruption of public officers, complainant must be given one month pay for every our laws have assured that its rightful exercise will not be negated by the issuance of unnecessary
year of service as financial assistance. inunctions.
- with due respect, the prevailing thought is replaced, modified or altered by the
Both the petitioner and the private respondent appealed to the NLRC Board, which upheld the said thought applied by the Hon. Court to rationalize its October 19, 2007 decision, in
decision in toto and dismissed the appeals. The private respondent took no further action, thereby page 48, that : Even though strikes and lockouts have been recognized as
impliedly accepting the validity of her dismissal. The petitioner, however, is now before us to effective bargaining tools, it is an antiquated notion that they are truly beneficial, as
question the affirmance of the above-quoted award as having been made with grave abuse of they only provide short-term solutions by forcing concessions from one party; but
discretion. In its challenged resolution of September 22, 1987, the NLRC said: Anent the award of staging such strikes would damage the working relationship between ERs and EEs,
separation pay as financial assistance in complainants favor, We find the same to be equitable, thus endangering the business that they both want to succeed. The more
taking into consideration her long years of service to the company whereby she had undoubtedly progressive and truly effective means of dispute resolution, lies in mediation,
contributed to the success of respondent. While we do not in any way approve of complainants conciliation, and arbitration, which do not increase tension but instead provide relief
(private respondent) malfeasance, for which she is to suffer the penalty of dismissal, it is for from them. In the end, an atmosphere of trust and understanding has much more to
reasons of equity and compassion that we resolve to uphold the award of financial assistance in offer a business relationship than the traditional enmity that has long divided the ER
her favor. and the EE,

ISSUE: WON the award of financial assistance to an EE who had been dismissed for cause as 6) It is respectfully submitted that the October 19, 2007 decision of the Second Division in the
found by the public respondent is legal. instant case, is unconstitutional as it infringes on the constitutional provision that no doctrines
or principle of law laid down by the Court in a decision rendered en banc or division maybe
HELD: The rule embodied in the Labor Code is that a person dismissed for cause as defined modified or reversed by the Court except sitting en banc
therein is not entitled to separation pay. We hold that henceforth separation pay shall be allowed
as a measure of social justice only in those instances where the EE is validly dismissed for causes 7) For compelling reasons and considering the constitutional issues raised, it is respectfully
other than serious misconduct or those reflecting on his moral character. Where the reason for the submitted that the Hon. Supreme Court En Banc must with utmost urgency take jurisdiction over
valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude, like the Motion for Reconsideration and resolved it with finality.
theft or illicit sexual relations with a fellow worker, the ER may not be required to give the RENO FOODS, INC., and/or Vicente Khu vs. NAGKAKAISANG LAKAS NG
dismissed EE separation pay, or financial assistance, or whatever other name it-is called, on the MANGGAGAW(NLM)
ground of social justice. G.R. No. 164016 March 15, 2010
DEL CASTILLO, J.:
A contrary rule would, as the petitioner correctly argues, have the effect, of rewarding rather than
punishing the erring EE for his offense. And we do not agree that the punishment is his dismissal FACTS: Reno Foods is a manufacturer of canned meat products of which Vicente Khu is the
only and that the separation pay has nothing to do with the wrong he has committed. Of course it president and is being sued in that capacity. Respondent Nenita Capor (Capor) was an EE of
has. Indeed, if the EE who steals from the company is granted separation pay even as he is validly Reno Foods until her dismissal.
dismissed, it is not unlikely that he will commit a similar offense in his next employment because
he thinks he can expect a like leniency if he is again found out. This It is a standard operating procedure of RENO to subject all its EEs to reasonable search of their
belongings upon leaving the company premises. On October 19, 1998, the guard on duty found 6
The policy of social justice is not intended to countenance wrongdoing simply because it is Reno canned goods wrapped in nylon leggings inside Capors fabric clutch bag. The only other
committed by the underprivileged. At best it may mitigate the penalty but it certainly will not contents of the bag were money bills and a small plastic medicine container.
condone the offense. Social justice cannot be permitted to be refuge of scoundrels any more than
can equity be an impediment to the punishment of the guilty. Those who invoke social justice may RENO accorded Capor several opportunities to explain her side, often with the assistance of the
do so only if their hands are clean and their motives blameless and not simply because they union officers of NLMKatipunan. In fact, after RENO sent a Notice of Termination to Capor, she
happen to be poor. was given yet another opportunity for reconsideration through a labor-management grievance
conference. Unfortunately, RENO did not find reason to change its earlier decision to terminate
Applying the above considerations, we hold that the grant of separation pay in the case at bar is Capors employment with the company. Thus, filed a complaint-affidavit against Capor for qualified
unjustified. The private respondent has been dismissed for dishonesty, as found by the labor theft in the Office of the City Prosecutor, Malabon-Navotas Substation. a Resolution was issued
arbiter and affirmed by the NLRC and as she herself has impliedly admitted. The fact that she has finding probable cause for the crime charged. Consequently, an Information was filed against
worked with the PLDT for more than a decade, if it is to be considered at all, should be taken Capor.
against her as it reflects a regrettable lack of loyalty that she should have strengthened instead of
betraying during all of her 10 years of service with the company. If regarded as a justification for Meanwhile, NLMKatipunan filed on behalf of Capor a complaint[4] for illegal dismissal and money
moderating the penalty of dismissal, it will actually become a prize for disloyalty, perverting the claims against RENO with the Head Arbitration Office of the NLRC for the National Capital Region.
meaning of social justice and undermining the efforts of labor to cleanse its ranks of all The complaint prayed that Capor be paid her full backwages as well as moral and exemplary
undesirables. damages.
TOYOTA MOTOR PHILS. CORP. WORKERS ASSOC.(TMPCWA),Ed Cubelo, et al. vs. NLRC
COM.(2ND Division), TOYOTA MOTOR PHILS. CORP. et al. Ruling of the Labor Arbiter: finding Capor guilty of serious misconduct which is a just cause for
G. R. CASE NOS. 158786 & 158789 termination. In this case, the Labor Arbiter found that theft of company property is tantamount to
x - - -- - - - - - - - - - - - - - - - - - - - - - - - x serious misconduct; as such, Capor is not entitled to reinstatement and backwages, as well as
TOYOTA MOTOR PHIL. CORP., vs, ), ED CUBELO, et al. vs. NLRC COM.(2 ND Division), moral and exemplary damages under Art. 232 of LC.
TOYOTA MOTOR PHILS
G.R. CASE NOS. 158798-99 Ruling of the NLRC: WHEREFORE, premises considered, the decision under review is hereby
MODIFIED by granting an award of financial assistance in the form of separation pay equivalent to
one-half month pay for every year of service. In all other respects the decision stands affirmed. All
URGENT PLEA/REQUEST FOR THE HON. SUPREME COURT EN BANC TO TAKE other claims of the complainant are dismissed for lack of merit.[8]
JURISDICTION OF THE MOTION FOR RECONSIDERATION ON COMPELLING AND URGENT
REASONS Both parties moved for a reconsideration of the NLRC Decision. Petitioners asked that the award
of financial assistance be deleted, while Capor asked for a finding of illegal dismissal and for
1) The petitioners filed a MR from the October 19, 2007 novel but strange decision of the Hon. reinstatement with full backwages. the NLRC issued its Resolution denying both motions for
Supreme Courts (2nd Division) finding Petitioners February 22 & 23 2001 rally at the Bureau of reconsideration for lack of merit.
Labor Relations an illegal strike,
shrouded as an exercise of freedom of expression and consequently dismissed Ruling of the Court of Appeals: affirmed the NLRCs award of financial assistance to Capor. It
227 ordinary union members and officers for mere participation and suspended from stressed that the laborers welfare should be the primordial and paramount consideration when
work some 62 other union members. carrying out and interpreting provisions of the Labor Code. It explained that the mandate laid down
in PLDT vs. NLRC was not absolute, but merely directory.
2) The October 19, 2007 decision dismissing 218 ordinary union members who participated in the
rally later declared as an illegal strike ISSUE: whether the NLRC committed grave abuse of discretion amounting to lack or excess of
is a reversal, substantial modification or alteration of prevailing jurisprudence that jurisdiction in granting financial assistance to an EE who was validly dismissed for theft of company
ordinary union members or EEs cannot be dismissed for mere participation in an property.
illegal strike. This is a well settled rule in this jurisdiction in the string of cases.
HELD: Conviction in a criminal case is not necessary to find just cause for termination of
3) The primacy of freedom of expression over the right to profit in the hierarchy of constitutional employment. Criminal cases require proof beyond reasonable doubt while labor disputes require
rights as enshrined in the case of Philippine Blooming Mills EEs Organization et.al. versus only substantial evidence, which means such relevant evidence as a reasonable mind might
Philippine Blooming Mills, et.al. 51 SCRA 189, 205 was overturned. The October 19, 2007 decision accept as adequate to justify a conclusion.[20]
reverse the prevailing doctrine by giving primacy to the right to profit over freedom of expression in
declaring We find no justification for the award of separation pay to Capor. This award is a deviation from
we rule that the protest actions undertaken by the Union officials and members on established law and jurisprudence. The law is clear. Separation pay is only warranted when the
February 21 to 23, 2001 are not valid and proper exercise of their right to assemble cause for termination is not attributable to the EEs fault, such as those provided in Articles 283 and
and ask government for redress of their complaints, but are illegal strikes in breach 284 of the Labor Code, as well as in cases of illegal dismissal in which reinstatement is no longer
of the Labor Code. The Unions position is weakened by the lack of permit from the feasible.[22] It is not allowed when an EE is dismissed for just cause,[23] such as serious
City of Manila to hold rallies. Shrouded as demonstrations, they were in reality misconduct. Jurisprudence has classified theft of company property as a serious misconduct and
temporary stoppages of work perpetrated through the concerted action of the EEs denied the award of separation pay to the erring EE.
who deliberately failed to report for work on the convenient excuse that they will hold
a rally at the BLR and DOLE offices in Intramuros, Manila It is true that there have been instances when the Court awarded financial assistance to EEs who
4) Similarly, the ruling that the Secretary of Labors assumption of jurisdiction or certification to were terminated for just causes, on grounds of equity and social justice. When the EE commits an
compulsory arbitration enjoins the exercise of freedom of expression by some 60 dismissed EEs act of dishonesty, depravity, or iniquity, the grant of financial assistance is misplaced compassion.
who are no longer working and did not disrupt production, and declaring their May 23 And 28 2001 It is tantamount not only to condoning a patently illegal or dishonest act, but an endorsement
picket in front of Toyota (more than a month after their strike on March 28 to April 12, 2001) - as thereof. It will be an insult to all the laborers who, despite their economic difficulties, strive to
illegal strike for violation of the directive that: maintain good values and moral conduct.
the Union and its members shall refrain from engaging in any activity that might
exacerbate the tense labor situation in Toyota to preserve Toyotas right to profit. The fact that private respondent served petitioner for more than twenty years with no negative
is sheer violation of the constitutional right to freedom of expression and the record prior to his dismissal, in our view of this case, does not call for such award of benefits, since
principles of constitutional hierarchy of values. his violation reflects a regrettable lack of loyalty and worse, betrayal of the company. If an EEs
length of service is to be regarded as justification for moderating the penalty of dismissal, such
5) The October 19, 2007 decision turns upside down the prevailing thought on how the gesture will actually become a prize for disloyalty, distorting the meaning of social justice and
constitutional right to strike is judicially viewed and applied as enunciated in the case of Bisig ng undermining the efforts of labor to clean its ranks of undesirables. His length of service even
Manggagawa sa Concrete Aggregates, Inc. (BIMCAI) et.al..versus National Labor Relations aggravates his offense. He should have been more loyal to petitioner company from which he
Commission, et.al.G.R. NO. 105090, September 16, 1993 (This Division) as eloquently penned by derived his family bread and butter for seventeen years.
no less than the Chief Justice, (then Justice) the Hon. Reynato Puno and is quoted extensively: Azucena MAGALLANES, Evelyn Bacolod, and Heirs of Judith Cotecson vs. SUN YAT SEN
The restoration of the right to strike is the most valuable gain of labor after the EDSA Revolution. It ELEMENTARY SCHOOL, Paz Go, Elena Cubillan,Willy Gan Teng, Benito Ang, and Teotimo Tan
is the EEs sole weapon which can effectively protect their basic rights especially in a society where G.R. No. 160876, January 18, 2008]
Page 23 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

SANDOVAL-GUTIERREZ, J.: security agency. At the time of his termination, SERVA was receiving a monthly salary of
P6,000.00. He claimed that the holiday pay, unpaid vacation and sick leave benefits and other
FACTS: Petitioners were all employed as teachers in SYSES in Surigao City. Respondent Paz Go monetary considerations were withheld from him. He further contended that his dismissal was
and Elena Cubillan are principals of the said school, Willy Ang Gan Teng and Benito Ang are its undertaken without due process and violative of existing labor laws, aggravated by nonpayment of
directors, while Teotimo Tan is the school treasurer. separation pay.[3]

respondents terminated the services of petitioners. Thus, they filed with the Sub-Regional In a motion to dismiss which was treated as its position paper, TAPE countered that the labor
Arbitration Branch of NLRC, Butuan City, complaints against respondents for illegal dismissal, arbiter had no jurisdiction over the case in the absence of an EE Relationshipbetween the parties.
underpayment of wages, payment of backwages, 13th month pay, ECOLA, separation pay, moral TAPE made the following assertions: (1) that SERVA was initially employed as a security guard for
damages, and attorneys fees. Likewise, petitioner Cotecson filed a separate complaint praying for RPN9; (2) that he was tasked to assist TAPE during its live productions, specifically, to control the
the same reliefs. crowd; (3) that when RPN-9 severed its relationship with the security agency, TAPE engaged
SERVAs services, as part of the support group and thus a talent, to provide security service to
Labor Arbiter Rogelio P. Legaspi rendered a Decision declaring that petitioners were illegally production staff, stars and guests of Eat Bulaga as well as to control the audience during the one-
dismissed from the service and ordering respondents to reinstate them to their former or equivalent and-a-half hour noontime program; (4) that it was agreed that complainant would render his
positions without loss of seniority rights, and to pay them their backwages, salary differential, 13th services until such time that SERVA company shall have engaged the services of a professional
month pay differential, and service incentive leave benefits. Respondents were likewise directed to security agency; (5) that in 1995, when his contract with RPN-9 expired, SERVA was retained as a
pay petitioners moral and exemplary damages. talent and a member of the support group, until such time that TAPE shall have engaged the
services of a professional security agency; (6) that SERVA was not prevented from seeking other
On appeal by respondents, the NLRC reversed the Arbiters judgment, holding that petitioners are employment, whether or not related to security services, before or after attending to his Eat Bulaga
contractual EEs and that respondents merely allowed their contracts to lapse. functions; (7) that sometime in late 1999, TAPE started negotiations for the engagement of a
professional security agency, the Sun Shield Security Agency; and (8) that on 2 March 2000, TAPE
Petitioners timely filed a MR, but it was denied by the NLRC. Petitioners then filed with the CA a issued memoranda to all talents, whose functions would be rendered redundant by the
petition for certiorari and ruled that Cotecson, Bacolod, and Magallanes shall be entitled to engagement of the security agency, informing them of the managements decision to terminate
separation pay equivalent to one month salary and backwages computed from the time of their their services. (9)TAPE averred that SERVA was an independent contractor falling under the talent
illegal dismissal up to the time of the promulgation of its Decision. group category and was working under a special arrangement which is recognized in the
industry.[5]
With respect to Bella Gonzales and Grace Gonzales, the CA found that that they have not acquired
the status of regular EEs having rendered only two years of service. Consequently, their dismissal SERVA for his part insisted that he was a regular EE having been engaged to perform an activity
from the service is valid. Under the Manual of Regulations for Private Schools, only full-time that is necessary and desirable to TAPEs business for thirteen (13) years.[6]
teachers who have rendered three (3) years of consecutive service shall be considered permanent.
Labor Arbiter Daisy G. Cauton-Barcelona declared SERVA to be a regular EE of TAPE. The Labor
Respondents then filed with this Court a petition for certiorari the same was dismissed for lack of Arbiter also ruled that the termination was valid on the ground of redundancy, and ordered the
merit. Their MR was denied with finality by this Court on July 19, 2000. payment of SERVAs separation pay equivalent to 1-month pay for every year of service.

petitioners filed with the Labor Arbiter a motion for execution of his Decision as modified by the CA. SERVA filed a MR but it was denied. SERVA filed a petition for certiorari with the CA contending
In an Order dated January 8, 2001, the Labor Arbiter computed the petitioners monetary awards that the NLRC acted with grave abuse of discretion amounting to lack or excess of jurisdiction
reckoned from the time of their illegal dismissal in June 1994 up to October 29, 1999, pursuant to when it reversed the decision of the Labor Arbiter. SERVA asserted that he was a regular EE
the Decision of the CA. Respondents interposed an appeal to the NLRC contending that the considering the nature and length of service rendered. Thus, Reversing the decision of the NLRC,
computation should only be up to June 20, 1995. Thus, the NLRC modified the Labor Arbiters the CA found SERVA to be a regular EE.
computation and ruled that the monetary awards due to petitioners should be computed from June
1994 up to June 20, 1995. TAPE filed the instant petition for review raising substantially the same grounds as those in its
petition for certiorari before the CA.
Petitioners then filed a petition for certiorari with the CA, raffled off to the Seventh Division.
However, in its Resolution the petition was dismissed outright for their failure to attach to their ISSUE: whether an EE Relationship exists between TAPE and SERVA.
petition copies of the pleadings filed with the Labor Arbiter.
HELD: At the outset, it bears emphasis that the existence of EE Relationshipis ultimately a
Petitioners filed a MR, but they erroneously indicated therein the case number. Their error was question of fact. Generally, only questions of law are entertained in appeals by certiorari to the
compounded by stating that the petition was with the Special Sixteenth Division, instead of the Supreme Court. This rule, however, is not absolute. Among the several recognized exceptions is
Seventh Division. On realizing their mistake, petitioners then filed with the Seventh Division a when the findings of the CA and Labor Arbiters, on one hand, and that of the NLRC, on the other,
Motion to Transfer The Case to it. are conflicting,[15] as obtaining in the case at bar.

In a Resolution promulgated on May 8, 2003, the Seventh Division denied petitioners Motion To The position of TAPE is untenable.. When the security agencys contract with RPN-9 expired
Transfer The Case on the ground, among others, that the motion is non-existent since it does not SERVA was retained as talent. Clearly, SERVA was hired by TAPE. SERVA presented his
bear the correct case number, hence, could not be attached to the records. identification card[21] to prove that he is indeed an EE of TAPE. It has been in held that in a
business establishment, an identification card is usually provided not just as a security measure but
ISSUE/S: to mainly identify the holder thereof as a bona fideEE of the firm who issues it.[22]
1) whether the CA 7TH Division erred in holding that affixing a wrong docket number on a motion
renders it non-existent; Wages, as defined in the Labor Code, are remuneration or earnings, however designated, capable
2) whether the issuance by the NLRC of the Order amending the amounts of separation pay and of being expressed in terms of money, whether fixed or ascertained on a time, task, piece or
backwages, awarded by the CA 7TH Division to petitioners and computed by the Labor Arbiter, is commission basis, or other method of calculating the same, which is payable by an ER to an EE
tantamount to grave abuse of discretion amounting to lack or excess of jurisdiction. under a written or unwritten contract of employment for work done or to be done, or for service
rendered or to be rendered. It is beyond dispute that SERVA received a fixed amount as monthly
HELD: the CA is correct when it ruled that petitioners MR is non-existent when Petitioners counsel compensation for the services he rendered to TAPE.
placed a wrong case number in their motion. In Mega Land Resources and Development
Corporation v. C-E Construction Corporation which involves a wrong docket number in a motion, The Memorandum informing SERVA of the discontinuance of his service proves that TAPE had the
we ruled that the duty to correct the mistake falls solely on the party litigant whose fault caused the power to dismiss SERVA.
anomaly. To hold otherwise would be to impose upon appellate courts the burden of being nannies
to appellants, ensuring the absence of pitfalls that hinder the perfection of petitions and appeals. Control is manifested in the bundy cards submitted by SERVA in evidence. He was required to
Strictly speaking, it is a dogma that the mistake or negligence of counsel binds the clients[4] and report daily and observe definite work hours. TAPE failed to establish that SERVA is an
appellate courts have no share in that burden. independent contractor.

However, we opt for liberality in the application of the rules to the instant case in light of the theory of private SERVAs that petitioner is an independent contractor runs counter to their very
following considerations. First, the rule that negligence of counsel binds the client may be relaxed own allegation that petitioner is a talent or a program EE. An independent contractor is not an EE
where adherence thereto would result in outright deprivation of the clients liberty or property or of the ER, while a talent or program EE is an EE. The only difference between a talent or program
where the interests of justice so require.[5]Second, this Court is not a slave of technical rules, EE and a regular EE is the fact that a regular EE is entitled to all the benefits that are being prayed
shorn of judicial discretion in rendering justice, it is guided by the norm that on the balance, for. This is the reason why private SERVAs try to seek refuge under the concept of an independent
technicalities take a backseat against substantive rights. Thus, if the application of the rules would contractor theory. For if petitioner were indeed an independent contractor, private SERVAs will not
tend to frustrate rather than promote justice, it is always within this Courts power to suspend the be liable to pay the benefits prayed for in petitioners complaint.
rules or except a particular case from its application.[6]
Regardless of whether or not SERVA had been performing work that is necessary or desirable to
2)It does not escape our attention that upon respondents appeal from the Labor Arbiters the usual business of TAPE, SERVA is still considered a regular EE under Article 280 of the Labor
Order computing the benefits due to petitioners, the NLRC modified the final and executory Code. An employment shall be deemed to be casual if it is not covered by Art. 280. Provided, that,
Decision of the CA (Special Sixteenth Division) when it decreed that the monetary award due to any EE who has rendered at least one year of service, whether such service is continuous or
petitioners should be computed up to June 20, 1995 only (not October 28, 1999), thus, amounting broken, shall be considered a regular EE with respect to the activity in which he is employed and
to a lesser amount of P147,673.16. his employment shall continue while such activity exists.
As a regular EE, SERVA cannot be terminated except for just cause or when authorized by
We sustain petitioners contention that the NLRC, in modifying the award of the CA, committed law.[29] It is clear from the tenor of the 2 March 2000 Memorandum that SERVAs termination
grave abuse of discretion amounting to lack or excess of jurisdiction. Quasi-judicial agencies have was due to redundancy.
neither business nor power to modify or amend the final and executory Decisions of the appellate COCA COLA BOTTLERS (PHILS.), INC./ERIC MONTINOLA, Manager, vs. DR. DEAN N.
courts. Under the principle of immutability of judgments, any alteration or amendment which CLIMACO
substantially affects a final and executory judgment is void for lack of jurisdiction.[8]We thus rule G.R. No. 146881 February 5, 2007
that the Order dated March 30, 2001 of the NLRC directing that the monetary award should be AZCUNA, J.:
computed from June 1994, the date petitioners were dismissed from the service, up to June 20,
1995 only, is void. FACTS: Respondent Dr. Dean N. Climaco is a medical doctor who was hired by petitioner Coca-
TELEVISION AND PRODUCTION EXPONENTS, INC. and/or Antonio P. Tuviera vs. ROBERTO Cola Bottlers Phils., Inc. by virtue of a Retainer Agreement
C. SERVA The Retainer Agreement, which began on January 1, 1988, was renewed annually. The last one
G.R. No. 167648 January 28, 2008 expired on December 31, 1993. Despite the non-renewal of the Retainer Agreement, respondent
TINGA, J,: continued to perform his functions as company doctor to Coca-Cola until he received a letter4
dated March 9, 1995 from petitioner company concluding their retainership agreement effective 30
FACTS: TAPE is a domestic corporation engaged in the production of television programs, such as days from receipt thereof.
the long-running variety program, Eat Bulaga. Its president is Antonio P. Tuviera (Tuviera). SERVA
Roberto C. Serva had served as a security guard for TAPE. It is noted that as early as September 1992, petitioner was already making inquiries regarding his
status with petitioner company. First, he wrote a letter addressed to Dr. Willie Sy, the Acting
SERVA filed a complaint for illegal dismissal and nonpayment of benefits against TAPE. He President and Chairperson of the Committee on Membership, Philippine College of Occupational
alleged that he was first connected with Agro-Commercial Security Agency but was later on Medicine. In response, Dr. Sy wrote a letter5 to the Personnel Officer of Coca-Cola Bottlers Phils.,
absorbed by TAPE as a regular company guard. He was detailed at Broadway Centrum in QC Bacolod City, stating that respondent should be considered as a regular part-time physician, having
where Eat Bulaga regularly staged its productions. SERVA received a memorandum informing him served the company continuously for four (4) years. He likewise stated that respondent must
of his impending dismissal on account of TAPEs decision to contract the services of a professional receive all the benefits and privileges of an EE under Article 157 (b)6 of the Labor Code.

Page 24 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

changed and that FRANCISCO was still connected with KCas Technical Assistant to Seiji Kamura
Petitioner company, however, did not take any action. Hence, respondent made another inquiry and in charge of all BIR matters.[9]
directed to the Assistant Regional Director, Bacolod City District Office of the Department of Labor
and Employment (DOLE), who referred the inquiry to the Legal Service of the DOLE, Manila. In his Thereafter, KC reduced her salary by P2,500.00 a month beginning January up to September 2001
letter7 dated May 18, 1993, Director Dennis P. Ancheta, Legal Service, DOLE, stated that he for a total reduction of P22,500.00 as of September 2001. FRANCISCO was not paid her mid-year
believed that an ER-EE relationship existed between petitioner and respondent based on the bonus allegedly because the company was not earning well. Thereafter, FRANCISCO did not
Retainer Agreement and the Comprehensive Medical Plan, and the application of the "four-fold" receive her salary from the company. She made repeated follow-ups with the company cashier but
test. However, Director Ancheta emphasized that the existence of ER-EE relationship is a question she was advised that the company was not earning well. FRANCISCO asked for her salary from
of fact. Hence, termination disputes or money claims arising from ER-EE relations exceeding Acedo and the rest of the officers but she was informed that she is no longer connected with the
P5,000 may be filed with the National Labor Relations Commission (NLRC). He stated that their company. Since she was no longer paid her salary, FRANCISCO did not report for work and filed
opinion is strictly advisory. an action for constructive dismissal before the labor arbiter.

An inquiry was likewise addressed to the Social Security System (SSS). Thereafter, Mr. Romeo R. The Labor Arbiter found that FRANCISCO was illegally dismissed, the NLRC affirmed with
Tupas, OIC-FID of SSS-Bacolod City, wrote a letter8 to the Personnel Officer of Coca-Cola Bottlers modification the Decision of the Labor Arbiter. On appeal, the CA reversed the NLRC decision,
Phils., Inc. informing the latter that the legal staff of his office was of the opinion that the services of dismissing the complaint filed by private respondent against Kasei Corporation, et al. for
respondent partake of the nature of work of a regular company doctor and that he was, therefore, constructive dismissal.
subject to social security coverage.
ISSUE/S:
Respondent inquired from the management of petitioner company whether it was agreeable to (1) whether there was an ER-EE relationship between FRANCISCO and private respondent Kasei
recognizing him as a regular EE. The management refused to do so. respondent filed a Complaint9 Corporation; and if in the affirmative, (2) whether FRANCISCO was illegally dismissed.
before the NLRC, Bacolod City, seeking recognition as a regular EE of petitioner company and
prayed for the payment of all benefits of a regular EE, including 13th Month Pay, Cost of Living HELD: 1)By applying the control test, there is no doubt that FRANCISCO is an EE of KCbecause
Allowance, Holiday Pay, Service Incentive Leave Pay, and Christmas Bonus. While the complaint she was under the direct control and supervision of Seiji Kamura, the corporations Technical
was pending before the Labor Arbiter, respondent received a letter dated March 9, 1995 from Consultant. She reported for work regularly and served in various capacities as Accountant,
petitioner company concluding their retainership agreement effective thirty (30) days from receipt Liaison Officer, Technical Consultant, Acting Manager and Corporate Secretary, with substantially
thereof. This prompted respondent to file a complaint for illegal dismissal against petitioner the same job functions, that is, rendering accounting and tax services to the company and
company with the NLRC, Bacolod City. performing functions necessary and desirable for the proper operation of the corporation such as
securing business permits and other licenses over an indefinite period of engagement.
LA: DISMISSED THE CASE on illegal dismissal and found that petitioner company lacked the
power of control over respondents performance of his duties, and recognized as valid the Retainer Under the broader economic reality test, the FRANCISCO can likewise be said to be an EE of
Agreement between the parties. NLRC dismissed the appeal in both cases for lack of merit. CA respondent corporation because she had served the company for 6 years before her dismissal,
ruled that an ER-EE relationship existed between petitioner company and respondent after receiving check vouchers indicating her salaries/wages, benefits, 13th month pay, bonuses and
applying the four-fold test. allowances, as well as deductions and SSS contributions from August 1, 1999 to December 18,
2000.[26] When FRANCISCO was designated General Manager, respondent corporation made a
ISSUES:1) whether or not there exists an ER-EE relationship between the parties;2)whether the report to the SSS signed by Irene Ballesteros. FRANCISCOs membership in the SSS as
termination of respondents employment is illegal. manifested by a copy of the SSS specimen signature card which was signed by the President of
KC and the inclusion of her name in the on-line inquiry system of the SSS evinces the existence of
HELD: The Court agrees with the finding of the Labor Arbiter and the NLRC that the circumstances an ER-EE relationship between FRANCISCO and respondent corporation. It is therefore apparent
of this case show that no ER-EE relationship exists between the parties. The Labor Arbiter and the that FRANCISCO is economically dependent on respondent corporation for her continued
NLRC correctly found that petitioner company lacked the power of control over the performance by employment in the latters line of business.
respondent of his duties. The Labor Arbiter reasoned that the Comprehensive Medical Plan, which
contains the respondents objectives, duties and obligations, does not tell respondent "how to 2)A diminution of pay is prejudicial to the EE and amounts to constructive dismissal. Constructive
conduct his physical examination, how to immunize, or how to diagnose and treat his patients, EEs dismissal is an involuntary resignation resulting in cessation of work resorted to when continued
of [petitioner] company, in each case." In effect, the Labor Arbiter held that petitioner company, employment becomes impossible, unreasonable or unlikely; when there is a demotion in rank or a
through the Comprehensive Medical Plan, provided guidelines merely to ensure that the end result diminution in pay; or when a clear discrimination, insensibility or disdain by an ER becomes
was achieved, but did not control the means and methods by which respondent performed his unbearable to an EE.[35] In Globe Telecom, Inc. v. Florendo-Flores,[36] we ruled that where an
assigned tasks. EE ceases to work due to a demotion of rank or a diminution of pay, an unreasonable situation
arises which creates an adverse working environment rendering it impossible for such EE to
The NLRC affirmed the findings of the Labor Arbiter and stated that it is precisely because the continue working for her ER. Hence, her severance from the company was not of her own making
company lacks the power of control that the contract provides that respondent shall be directly and therefore amounted to an illegal termination of employment.
responsible to the EE concerned and their dependents for any injury, harm or damage caused PEOPLES BROADCASTING (BOMBO RADYO PHILS., INC.), vs. SEC. OF DOLE
through professional negligence, incompetence or other valid causes of action. G.R. No. 179652 March 6, 2012
PEOPLES BROADCASTING (BOMBO RADYO PHILS., INC.), vs. SEC. OF DOLE
allegation of complainant that since he is on call at anytime of the day and night makes him a
G.R. No. 179652 May 8, 2009
regular EE is off-tangent. Complainant does not dispute the fact that outside of the two (2) hours
TINGA, J.:
that he is required to be at respondent companys premises, he is not at all further required to just
sit around in the premises and wait for an emergency to occur so as to enable him from using such
FACTS: a complaint filed by JUEZA against BOMBO for illegal deduction, non-payment of service
hours for his own benefit and advantage. In fact, complainant maintains his own private clinic
incentive leave, 13th month pay, premium pay for holiday and rest day and illegal diminution of
attending to his private practice in the city, where he services his patients, bills them accordingly --
benefits, delayed payment of wages and non-coverage of SSS, PAG-IBIG and Philhealth before
and if it is an EE of respondent company who is attended to by him for special treatment that needs
the DOLE Regional Office No. VII, Cebu City.[2] On the basis of the complaint, the DOLE
hospitalization or operation, this is subject to a special billing. More often than not, an EE is
conducted a plant level inspection. In the Inspection Report Form,[3] the Labor Inspector wrote
required to stay in the ERs workplace or proximately close thereto that he cannot utilize his time under the heading Findings/Recommendations non-diminution of benefits and Note:
effectively and gainfully for his own purpose. Such is not the prevailing situation here. Respondent deny ER-EE relationship with the complainant- see Notice of Inspection results. In
the Notice of Inspection Results the Labor Inspector made the following notations:
In addition, the Court finds that the schedule of work and the requirement to be on call for
emergency cases do not amount to such control, but are necessary incidents to the Retainership
Management representative informed that complainant is a drama talent hired on a per drama
Agreement. The Court also notes that the Retainership Agreement granted to both parties the participation basis hence no ER-EEship [sic] existed between them. As proof of this, management
power to terminate their relationship upon giving a 30-day notice. Hence, petitioner company did
presented photocopies of cash vouchers, billing statement, employments of specific undertaking (a
not wield the sole power of dismissal or termination.
contract between the talent director & the complainant), summary of billing of drama production
etc. BOMBO had not control of the talent if he ventures into another contract w/ other broadcasting
The Court agrees with the Labor Arbiter and the NLRC that there is nothing wrong with the
industries.
employment of respondent as a retained physician of petitioner company and upholds the validity
of the Retainership Agreement which clearly stated that no ER-EE relationship existed between the
On the other hand, complainant Juezans alleged violation of non-diminution of benefits is
parties. The Agreement also stated that it was only for a period of 1 year beginning January 1,
computed as follows: P 2,000/15 days + 1.5 mos = P 6,000.
1988 to December 31, 1998, but it was renewed on a yearly basis.
Considering that there is no ER-EE relationship between the parties, the termination of the
Petitioner was required to rectify/restitute the violations within five (5) days from receipt. No
Retainership Agreement, which is in accordance with the provisions of the Agreement, does not
rectification was effected by petitioner; thus, summary investigations were conducted, with the
constitute illegal dismissal of respondent. Consequently, there is no basis for the moral and
parties eventually ordered to submit their respective position papers.[6]
exemplary damages granted by the Court of Appeals to respondent due to his alleged illegal
dismissal. DOLE Regional Director Atty. Rodolfo M. Sabulao (Regional Director) ruled that respondent is an
ANGELINA FRANCISCO vs. NLRC, Kasei Corp., Seiichiro Takahashi, Timoteo Acedo, Delfin EE of petitioner, and that the former is entitled to his money claims amounting to P203,726.30.
Liza, Irene Ballesteros, Trinidad Liza and Ramon Escueta Petitioner sought reconsideration of the Order, claiming that the Regional Director gave credence
G.R. No. 170087August 31, 2006 to the documents offered by respondent without examining the originals, but at the same time he
YNARES-SANTIAGO, J.: missed or failed to consider petitioners evidence. Petitioners motion for reconsideration was
denied. the Acting DOLE Secretary dismissed the appeal on the ground that petitioner did not post
FACTS: FRANCISCO was hired by Kasei Corporation during its incorporation stage. She was a cash or surety bond and instead submitted a Deed of Assignment of Bank Deposit.[9]
designated as Accountant and Corporate Secretary and was assigned to handle all the accounting
needs of the company. She was also designated as Liaison Officer to the City of Makati to secure Petitioner elevated the case to the CA, claiming that it was denied due process when the DOLE
business permits, construction permits and other licenses for the initial operation of the company. Secretary disregarded the evidence it presented and failed to give it the opportunity to refute the
Although she was designated as Corporate Secretary, she was not entrusted with the corporate claims of respondent. Petitioner maintained that there is no ER-EE relationship had ever existed
documents; neither did she attend any board meeting nor required to do so. She never prepared between it and respondent because it was the drama directors and producers who paid,
any legal document and never represented the company as its Corporate Secretary. However, on supervised and disciplined respondent. It also added that the case was beyond the jurisdiction of
some occasions, she was prevailed upon to sign documentation for the company.[6] the DOLE and should have been considered by the labor arbiter because respondents claim
exceeded P5,000.00.
Later on, FRANCISCO was designated Acting Manager. The corporation also hired Gerry Nino as
accountant in lieu of FRANCISCO. As Acting Manager, FRANCISCO was assigned to handle The Court of Appeals held that petitioner was not deprived of due process.It further ruled that
recruitment of all EEs and perform management administration functions; represent the company the latter had the power to order and enforce compliance with labor standard laws irrespective of
in all dealings with government agencies, especially with the BIR, SSS and in the city government the amount of individual claims because the limitation imposed by Article 29 of the Labor Code had
of Makati; and to administer all other matters pertaining to the operation of Kasei Restaurant which been repealed by Republic Act No. 7730.[10] Petitioner sought reconsideration of the decision but
is owned and operated by Kasei Corporation.[7] its motion was denied.[11]

For 5 years, FRANCISCO performed the duties of Acting Manager. As of December 31, 2000 her ISSUE: does the Secretary of Labor have the power to determine the existence of an ER-EE
salary was P27,500.00 plus P3,000.00 housing allowance and a 10% share in the profit of Kasei relationship?
Corporation. Subsequently, FRANCISCO was replaced by Liza R. Fuentes as Manager.
FRANCISCO alleged that she was required to sign a prepared resolution for her replacement but HELD: To resolve this pivotal issue, one must look into the extent of the visitorial and enforcement
she was assured that she would still be connected with Kasei Corporation. Timoteo Acedo, the power of the DOLE found in Article 128 (b) of the Labor Code, as amended by Republic Act 7730.
designated Treasurer, convened a meeting of all EEs of KC and announced that nothing had The provision is quite explicit that the visitorial and enforcement power of the DOLE comes into
play only in cases when the relationship of ER-EE still exists. It also underscores the avowed
Page 25 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

objective underlying the grant of power to the DOLE which is to give effect to the labor standard measures in order to implement said rules and to assure that the same would be complied with.[35]
provision of this Code and other labor legislation. Of course, a persons entitlement to labor An ER enjoys a wide latitude of discretion in the promulgation of policies, rules and regulations on
standard benefits under the labor laws presupposes the existence of ER-EE relationship in the first work-related activities of the EEs.[36]
place. The clause in cases where the relationship of ER-EE still exists signifies that the ER-EE
relationship must have existed even before the emergence of the controversy. Necessarily, the It is axiomatic that appropriate disciplinary sanction is within the purview of management
DOLEs power does not apply in two instances, namely: (a) where the ER-EE relationship has imposition.[37] Thus, in the implementation of its rules and policies, the ER has the choice to do so
ceased; and (b) where no such relationship has ever existed. strictly or not, since this is inherent in its right to control and manage its business effectively.
Consequently, management has the prerogative to impose sanctions lighter than those specifically
In the first situation, the claim has to be referred to the NLRC because it is the NLRC which has prescribed by its rules, or to condone completely the violations of its erring EEs. Of course, this
jurisdiction in view of the termination of the ER-EE relationship. The same procedure has to be prerogative must be exercised free of grave abuse of discretion, bearing in mind the requirements
followed in the second situation since it is the NLRC that has jurisdiction in view of the absence of of justice and fair play. Indeed, we have previously stated:
ER-EE relationship between the evidentiary parties from the start.
Management also has its own rights, which, as such, are entitled to respect and enforcement in the
In the second situation especially, the existence of an ER-EE relationship is a matter which is not interest of simple fair play. Out of its concern for those with [fewer] privileges in life, the Supreme
easily determinable from an ordinary inspection, necessarily so, because the elements of such a Court has inclined more often than not toward the worker and upheld his cause in his conflicts with
relationship are not verifiable from a mere ocular examination. The intricacies and implications of the ER. Such favoritism, however, has not blinded the Court to rule that justice is in every case for
an ER-EE relationship demand that the level of scrutiny should be far above the cursory and the the deserving, to be dispensed in the light of the established facts and applicable law and
mechanical. doctrine.[38]
All told, we find that SMC acted well within its rights when it dismissed respondent for his
It can be assumed that the DOLE in the exercise of its visitorial and enforcement power somehow numerous absences. Respondent was afforded due process and was validly dismissed for cause.
has to make a determination of the existence of an ER-EE relationship. Such prerogatival JIMMY ARENO, JR. vs. SKYCABLE PCC-BAGUIO
determination, however, cannot be coextensive with the visitorial and enforcement power itself. G.R. No. 180302 February 5, 2010
Indeed, such determination is merely preliminary, incidental and collateral to the DOLEs primary DEL CASTILLO, J.:
function of enforcing labor standards provisions. The determination of the existence of ER-EE
relationship is still primarily lodged with the NLRC. This is the meaning of the clause in cases FACTS: petitioner was employed as a cable technician by respondent Skycable PCC-Baguio. an
where the relationship of ER-EE still exists in Art. 128 (b). accounting clerk of respondent, Hyacinth Soriano (Soriano), sent to the human resource manager
a letter-complaint[5]against petitioner alleging that on two separate occasions, the latter spread
Thus, before the DOLE may exercise its powers under Article 128, two important questions must false rumors about her. she was again insulted by petitioner when the latter approached her and
be resolved: (1) Does the ER-EE relationship still exist, or alternatively, was there ever an ER-EE said that she was seen going out with Aldrin Estrada, their field service supervisor, at Central Park,
relationship to speak of; and (2) Are there violations of the Labor Code or of any labor law? The Baguio City. During that incident, petitioner uttered, Ikaw lang ang nakakaalam ng totoo with
existence of an ER-EE relationship is a statutory prerequisite to and a limitation on the power of malicious intent and in a provocative manner. Soriano averred that petitioners unscrupulous
the Secretary of Labor, one which the legislative branch is entitled to impose. The rationale behavior constituted serious and grave offense in violation of the companys Code of Discipline.
underlying this limitation is to eliminate the prospect of competing conclusions of the Secretary of
Labor and the NLRC, on a matter fraught with questions of fact and law, which is best resolved by On the same day, respondent issued a Memorandum[6] requiring petitioner to submit an
the quasi-judicial body, which is the NRLC, rather than an administrative official of the executive explanation within 76 hours from notice thereof. Petitioner submitted his written explanation[7]
branch of the government. If the Secretary of Labor proceeds to exercise his visitorial and dated January 23, 2002 denying all the allegations in Sorianos letter-complaint and further denying
enforcement powers absent the first requisite, as the dissent proposes, his office confers having uttered the statement imputed on him. An administrative investigation was accordingly
jurisdiction on itself which it cannot otherwise acquire. conducted. In a Memo[9] dated February 6, 2002, the investigating committee found petitioner
SAN MIGUEL CORPORATION and Geribern Abella vs. NLRC, Labor Arbiter Pedro Ramos and guilty of having made malicious statements against Soriano during the January 7,
Ernesto Ibias 2002conversation, which is categorized as an offense under the Company Code of Discipline.
G.R. Nos. 146121-22, April 16, 2008 Consequently, petitioner was suspended for three days without pay. The Memo was allegedly
TINGA, J,: served on February 7, 2002 but petitioner refused to sign it.

FACTS: Ernesto M. Ibias (respondent) was employed by petitioner SMC on 24 December 1978 Notwithstanding the suspension order, however, petitioner still reported for work. By reason
initially as a CRO operator in its Metal Closure and Lithography Plant. Respondent continuously thereof, respondent sent petitioner a letter denominated as 1st Notice of Termination[10] requiring
worked therein until he advanced as Zamatic operator. He was also an active and militant member him to explain in writing why he should not be terminated for insubordination. petitioner inquired
of a labor organization called Ilaw Buklod Manggagawa (IBM)-SMC Chapter. from respondent whether he is already dismissed or merely suspended since he was refused entry
into the company premises. Respondent replied that petitioner was merely suspended and gave
It appears that per company records, respondent was AWOP for several occasions. respondent him additional time to tender his written explanation to the 1st Notice of Termination.
was alleged to have falsified his medical consultation card by stating therein that he was granted
sick leave by the plant clinic on said dates when in truth he was not. He was given Notice to petitioner again wrote to respondent, this time requesting for further investigation on his alleged act
Explain through telegrams and was required to state in writing why he should not be subject to of spreading rumors against Soriano in order for him to confront his accuser and present his
disciplinary action for falsifying his medical consultation card. Respondent did not comply with witnesses with the assistance of counsel. Respondent denied the request reiterating that there has
these notices. Subsequently, respondent submitted a handwritten explanation to the charges, to been substantial compliance with due process and that a reinvestigation is moot because the
wit: "Tungkol po sa ibinibintang po ninyong [sic] sa akin na falsification of medical consultation card suspension was already served.
ito po hindi ko magagawa at sa mga araw na hindi ko po ipinasok ito po ay may kaukulang
supporting paper[s]." Anent the new charge of insubordination, petitioner submitted to respondent his written
explanation[12] averring that he still reported for work on the first day of his suspension because
During the investigation, respondent admitted that he was absent on several dates and had not the accusation of Soriano is baseless and her testimony is hearsay. Besides, according to
sought sick leave permission for those dates, and also denied falsifying or having had anything to petitioner, he did not defy any order related to his duties, no representative of the management
do with the falsification of his medical consultation card. However, upon verification with the plant prevented him from working and that reporting to work without being paid for the service he
clinic, Siwa found that respondent was not granted sick leaves on those dates. When Siwa rendered on that day did not in any way affect the companys productivity. an investigation on the
confronted respondent about the falsification, respondent allegedly replied that he resorted to insubordination case was conducted which was attended by the parties and their respective
falsification to cover up his AWOPs which he was forced to incur because of personal problems. counsels. Through a Final Notice of Termination petitioner was dismissed from service on the
ground of insubordination or willful disobedience in complying with the suspension order.
After the completion of the investigation, SMC concluded that respondent committed the offenses
of excessive AWOPs and falsification of company records or documents, and accordingly ISSUE: whether or not petitioner were validly dismissed.
dismissed him. respondent filed a complaint for illegal dismissal against SMC and Geribern Abella.
HELD: The NLRC initially ruled that Sorianos testimony during the investigation on the alleged act
ISSUE: whether the CA erred in sustaining the findings of the labor arbiter and the NLRC and in of petitioner in spreading rumors is hearsay. Nevertheless, it reversed itself by holding that while
dismissing SMC's claims that respondent was terminated from service with just cause. Soriano stated that her allegation with regard to the first two instances that petitioner was
spreading false information about her is based on what she heard from other people, her narration
HELD: The settled rule in administrative and quasi-judicial proceedings is that proof beyond of the third instance relating to what has transpired during their January 7, 2002 conversation is not
reasonable doubt is not required in determining the legality of an ER's dismissal of an EE, and not hearsay. The NLRC ruled quoting in part the relevant testimony of Soriano as recorded in the
even a preponderance of evidence is necessary as substantial evidence is considered sufficient. transcript of the investigation:

while there may be no denying that respondent's medical card had falsified entries in it, SMC was evidence on record repudiates petitioners pretension. His insistence that he had no notice of his
unable to prove, by substantial evidence, that it was respondent who made the unauthorized suspension is belied by evidence as it shows that the suspension order was served on petitioner
entries. Besides, SMC's (Your) Guide on EE Conduct[25] punishes the act of falsification of on February 7, 2002 by his immediate superior, Al Luzano, but petitioner declined to sign it. No
company records or documents; it does not punish mere possession of a falsified document. acceptable reason was advanced for doing so except petitioners shallow excuse that it should be
sent to him by registered mail.
while respondent has admitted these absences, before the Court, he also seeks to belittle the plain
by countering that SMC has not been too rigid in its application of company rules pertaining to As a just cause for dismissal of an EE under Article 282[41] of the Labor Code, willful disobedience
leave availments. These medical certifications, however, cannot work to erase his AWOPs; of the ERs lawful orders requires the concurrence of two elements: (1) the EEs assailed conduct
respondent had never submitted these documents to SMC and it is only when the case was must have been willful, i.e.,characterized by a wrongful and perverse attitude; and (2) the order
pending before the Labor Arbiter that he produced the same. violated must have been reasonable, lawful, made known to the EE, and must pertain to the duties
which he had been engaged to discharge.[42] Both requisites are present in the instant case. It is
even if he was not punished for his subsequent AWOPs, the same remained on record. He was noteworthy that upon receipt of the notice of suspension, petitioner did not question such order at
aware of the number of AWOPs he incurred and should have known that these were punishable the first instance. He immediately defied the order by reporting on the first day of his suspension.
under company rules. The fact that he was spared from suspension cannot be used as a reason to Deliberate disregard or disobedience of rules by the EE cannot be countenanced. It may
incur further AWOPs and be absolved from the penalty therefor. encourage him to do even worse and will render a mockery of the rules of discipline that EEs are
required to observe.[43]
The Court of Appeals, NLRC, and the labor arbiter found that respondent incurred unauthorized
absences, but concluded that the penalty of discharge or determination was disproportionate to Petitioner was served the first notice of termination and was given time to submit his written
respondent's absences in view of SMC's inconsistent and lax implementation of its policy on EEs explanation. A hearing was conducted wherein both parties with their respective counsels were
attendance. The Court disagrees. Respondent's dismissal was well within the purview of SMC's present. After finding cause for petitioners termination, a final notice apprising him of the decision
management prerogative. to terminate his employment was served. All things considered, respondent validly dismissed
petitioner for cause after complying with the procedural requirements of the law.
What the lower tribunals perceived as laxity, we consider as leniency. SMC's tendency to excuse
justified absences actually redounded to the benefit of respondent since the imposition of the DANNIE M. PANTOJA vs. SCA HYGIENE PRODUCTS CORPORATION
corresponding penalty would have been deleterious to him. In a world where "no work-no pay" is G.R. No. 163554 April 23, 2010
the rule of thumb, several days of suspension would be difficult for an ordinary working man like DEL CASTILLO, J.:
respondent. He should be thankful that SMC did not exact from him almost 70 days suspension
before he was finally dismissed from work. FACTS: Respondent, a corporation engaged in the manufacture, sale and distribution of industrial
paper and tissue products, employed petitioner as a utility man on March 15, 1987. Petitioner was
In any case, when SMC imposed the penalty of dismissal for the 12th and 13thAWOPs, it was eventually assigned at respondents Paper Mill No. 4, the section which manufactures the
acting well within its rights as an ER. An ER has the prerogative to prescribe reasonable rules and companys industrial paper products, as a back tender in charge of the proper operation of the
regulations necessary for the proper conduct of its business, to provide certain disciplinary sections machineries.
Page 26 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

despite due notice. On the next hearing scheduled on, both Atty. Delicana and Atty. Pefianco
In a Notice of Transfer dated March 27, 1999,respondent informed petitioner of its reorganization appeared but the latter verbally manifested his withdrawal as counsel for respondents. Thus,
plan and offered him a position at Paper Mill No. 5 under the same terms and conditions of respondents, through Atty. Delicana, and Reyes, continued to explore the possibility of settling the
employment in anticipation of the eventual closure and permanent shutdown of Paper Mill No. 4 case amicably. Manifesting that they need to sleep on the proposed settlement, respondents
effective May 5, 1999. The closure and concomitant reorganization is in line with respondents requested for continuance of the hearing. Come said date, however, respondents did not appear.
decision to streamline and phase out the companys industrial paper manufacturing operations due
to financial difficulties brought about by the low volume of sales and orders for industrial paper Realizing the futility of further resetting the case to give way to a possible settlement, the Labor
products. Arbiter ordered the parties to file their respective position papers.

However, petitioner rejected respondents offer for his transfer. Thus, a notice of termination[6] of Despite his earlier withdrawal as counsel, Atty. Pefianco filed a Joint Position Paper [5] on behalf of
employment effectiveMay 5, 1999 was sent to petitioner as his position was declared redundant by respondents alleging that they were dismissed from employment without valid cause. As for
the closure of Paper Mill No. 4. He then received his separation pay equivalent to two months pay petitioners, they stated in their position paper [6] that respondents were never dismissed but that
for every year of service in the amount of P356,335.20 and thereafter executed a release and they abandoned their jobs after filing their complaints. Petitioners denied that Reyes is the ER of
quitclaim[7] in favor of respondent.. respondent informed DOLE of its reorganization and partial Arnaiz and Napal but admitted such fact insofar as Tolores is concerned.
closure by submitting with the said office an Establishment Termination Report[8] together with the
list of 31 terminated EEs. LA: dismissed without prejudice. NLRC: overruled the Decision of the LA. NLRC: MR has merit,
previous Decision is VACATED. NLRC: again reconsidered its own ruling and held that
petitioner filed a complaint for illegal dismissal against respondent assailing his termination as respondents were not dismissed, either actually or constructively, but instead willfully disobeyed
without any valid cause. He averred that the alleged redundancy never occurred as there was no the return to work order of their ER.
permanent shutdown of Paper Mill No. 4 due to its continuous operation since his termination. A
co-EE, Nestor Agtang, confirmed this fact and further attested that several contractual workers CA:, found merit in the petition, ruling that respondents were constructively dismissed since their
were employed to operate Paper Mill No. 4. Petitioner also presented in evidence documents designation from chief bakers to utility/security personnel is undoubtedly a demotion in rank which
pertaining to the actual and continuous operation of Paper Mill No. 4 such as the Paper Mill involved a drastic change in the nature of work resulting to a demeaning and humiliating work
Personnel Schedule for July 2-8, 2000[11] and 23-29, 2000[12] and Paper Machine No. 4 condition.
Production Report and Operating Data dated April 28, 2000 and May 18, 2000.
ISSUES: 1.WON CA in disturbing the findings of facts of LA as well as the NLRC committed GAD
In its defense, respondent refuted petitioners claim of illegal dismissal. It argued that petitioner tantamount to lack of jurisdiction or did CA manifestly overlook relevant facts not disputed by the
has voluntarily separated himself from service by opting to avail of the separation benefits of the respondents, w/c if properly considered could justify a different conclusion.
company instead of accepting reassignment/transfer to another position of equal rank and pay. 2.Was the transfer/reassignment of respondent to another position w/o diminution in pay and other
According to respondent, petitioners discussion on the alleged resumption of operation of Paper privileges tantamount to constructive dismissal.
Mill No. 4 is rendered moot by the fact of petitioners voluntary separation.
HELD:We find no merit in the petition.
ISSUE: whether or not respondent is guilty of illegal dismissal. 1.The Court of Appeals is correct in reviewing the findings of the National Labor Relations
Commission. Indeed, factual findings of labor officials who are deemed to have acquired
HELD: the abolishment of Paper Mill No. 4 was undoubtedly a business judgment arrived at in the expertise in matters within their respective jurisdictions are generally accorded not only respect, but
face of the low demand for the production of industrial paper at the time. Despite an apparent even finality. [25] It is a well-entrenched rule that findings of facts of the NLRC, affirming those of
reason to implement a retrenchment program as a cost-cutting measure, respondent, however, did the Labor Arbiter, are accorded respect and due consideration when supported by substantial
not outrightly dismiss the workers affected by the closure of Paper Mill No. 4 but gave them an evidence. [26] We, however, find that the doctrine of great respect and finality has no application
option to be transferred to posts of equal rank and pay. As can be seen, retrenchment was utilized to the case at bar. As stated, the Labor Arbiter dismissed respondents complaints on mere
by respondent only as an available option in case the affected EE would not want to be transferred. technicality. The NLRC, upon appeal, then came up with three divergent rulings. At first, it
Respondent did not proceed directly to retrench. This, to our mind, is an indication of good faith on remanded the case to the Labor Arbiter. However, in a subsequent resolution, it decided to resolve
respondents part as it exhausted other possible measures other than retrenchment. Besides, the the case on the merits by ruling that respondents were constructively dismissed. But later on, it
ERs prerogative to bring down labor costs by retrenching must be exercised essentially as a again reversed itself in its third and final resolution of the case and ruled in petitioners favor.
measure of last resort, after less drastic means have been tried and found wanting. Giving the Therefore, contrary to Reyess claim, the NLRC did not, on any occasion, affirm any factual
workers an option to be transferred without any diminution in rank and pay specifically belie findings of the Labor Arbiter. The CA is thus correct in reviewing the entire records of the case to
petitioners allegation that the alleged streamlining scheme was implemented as a ploy to ease out determine which findings of the NLRC is sound and in accordance with law. Besides, the CA, at
EEs, thus, the absence of bad faith. Apparently, respondent implemented its streamlining or any rate, may still resolve factual issues by express mandate of the law despite the respect given
reorganization plan with good faith, not in an arbitrary manner and without prejudicing the tenurial to administrative findings of fact. [27]
rights of its EEs.
2.The transfer/reassignment of respondents constitutes constructive dismissal. We have held that
Petitioner harps on the fact that there was no actual shutdown of Paper Mill No. 4 but that it management is free to regulate, according to its own discretion and judgment, all aspects of
continued to be operational. No evidence, however, was presented to prove that there was employment, including hiring, work assignments, working methods, time, place and manner of
continuous operation after the shutdown in the year 1999. What the records reveal is that Paper work, processes to be followed, supervision of workers, working regulations, transfer of EEs, work
Mill No. 4 resumed its operation in 2000 due to a more favorable business climate. The supervision, lay off of workers and discipline, dismissal and recall of workers. The exercise of
resumption of its industrial paper manufacturing operations does not, however, make respondents management prerogative, however, is not absolute as it must be exercised in good faith and with
streamlining/reorganization plan illegal because, again, the abolishment of Paper Mill No. 4 in 1999 due regard to the rights of labor. [28]
was a business judgment arrived at to prevent a possible financial drain at that time. As long as no
arbitrary or malicious action on the part of an ER is shown, the wisdom of a business judgment to In constructive dismissal cases, the ER has the burden of proving that the transfer of an EE is for
implement a cost saving device is beyond this courts determination. After all, the free will of just or valid ground, such as genuine business necessity. The ER must demonstrate that the
management to conduct its own business affairs to achieve its purpose cannot be denied.[20] transfer is not unreasonable, inconvenient, or prejudicial to the EE and that the transfer does not
involve a demotion in rank or a diminution in salary and other benefits. If the ER fails to overcome
We held that work reassignment of an EE as a genuine business necessity is a valid management this burden of proof, the EEs transfer is tantamount to unlawful constructive dismissal. [29]
prerogative.[21] After being given an option to be transferred, petitioner rejected the offer for
reassignment to Paper Mill No. 5 even though such transfer would not involve any diminution of In the case at bench, respondent Reyes failed to justify petitioners transfer from the position of
rank and pay. Instead, he opted and preferred to be separated by executing a release and chief bakers to utility/security personnel. We find that the threat being alluded to by respondent
quitclaim in consideration of which he received separation pay in the amount of P356,335.20 equal Reyes that the petitioners might introduce harmful foreign substances in baking bread is
to two months pay for every year of service plus other accrued benefits. Clearly, petitioner freely imaginary and not real. We recall that what triggered the petitioners reassignment was the filing of
and voluntarily consented to the execution of the release and quitclaim. Having done so apart from their complaints against private respondents in the NLRC. The petitioners were not even given an
the fact that the consideration for the quitclaim is credible and reasonable, the waiver represents a opportunity to refute the reason for the transfer. The drastic change in petitioners nature of work
valid and binding undertaking.[22] As aptly concluded by the CA, the quitclaim was not executed unquestionably resulted in, as rightly perceived by them, a demeaning and humiliating work
under force or duress and that petitioner was given a separation pay more than what the law condition. The transfer was a demotion in rank, beyond doubt. There is demotion when an EE is
requires from respondent. transferred from a position of dignity to a servile or menial job. One does not need to stretch the
YMBONG vs. ABS-CBN imagination to distinguish the work of a chief baker to that of a security cum utility man. [31]
G.R. No.184885, March 7, 2012
[D]emotion involves a situation in which an EE is relegated to a subordinate or less important
TINIO vs. CA
position constituting a reduction to a lower grade or rank, with a corresponding decrease in duties
G.R. No.171764, June 8, 2007
and responsibilities, and usually accompanied by a decrease in salary. [32] When there is a
Julies Bakeshop and/or Edgar Reyes v. HENRY ARNAIZ, EDGAR NAPAL,and JONATHAN demotion in rank and/or a diminution in pay; when a clear discrimination, insensibility or disdain by
TOLORES, an ER becomes unbearable to the EE; or when continued employment is rendered impossible,
G.R. No. 173882, February 15, 2012 unreasonable or unlikely, the transfer of an EE may constitute constructive dismissal. [33]
DEL CASTILLO, J.:
We agree with the CA in ruling that the transfer of respondents amounted to a demotion. Although
FACTS: Reyes hired respondents as chief bakers in his 3 franchise branches of Julies Bakeshop there was no diminution in pay, there was undoubtedly a demotion in titular rank. One cannot deny
in Sibalom and San Jose, Antique. respondents filed separate complaints against petitioners for the disparity between the duties and functions of a chief baker to that of a utility/security personnel
underpayment of wages, payment of premium pay for holiday and rest day, service incentive leave tasked to clean and manage the orderliness of the outside premises of the bakeshop.
pay, 13th month pay, cost of living allowance (COLA) and attorneys fees. These complaints were Respondents were even prohibited from entering the bakeshop. The change in the nature of their
later on consolidated. work undeniably resulted to a demeaning and humiliating work condition.
ROLANDO C. RIVERA vs. SOLIDBANK CORPORATION,
Subsequently, in a memorandum Reyes reassigned respondents as utility/security personnel
G.R. No. 163269 April 19, 2006
tasked to clean the outside vicinity of his bakeshops and to maintain peace and order in the area.
CALLEJO, SR., J.:
Upon service of the memo, respondents, however, refused to sign the same and likewise refused
to perform their new assignments by not reporting for work.
FACTS: Petitioner had been working for Solidbank Corporation since July 1, 1977.[3] He was
In a letter-memorandum directed respondents to report back for work and to explain why they initially employed as an Audit Clerk, then as Credit Investigator, Senior Clerk, Assistant
Accountant, and Assistant Manager. Prior to his retirement, he became the Manager of the Credit
failed to assume their duties as utility/security personnel. A second letter-memorandum of the
Investigation and Appraisal Division of the Consumers Banking Group. In the meantime, Rivera
same tenor was also sent to respondents. Respondents did not heed both memoranda.
and his brother-in-law put up a poultry business in Cavite.
Proceedings before the Labor Arbiter
In December 1994, Solidbank offered two retirement programs to its EEs: (a) the Ordinary
Retirement Program (ORP), under which an EE would receive 85% of his monthly basic salary
Meanwhile, in the preliminary conference before the LA, respondents with their counsel, Atty.
multiplied by the number of years in service; and (b) the Special Retirement Program (SRP), under
Delicana, on one hand, and Reyes on the other, appeared before the LA to explore the possibility
which a retiring EE would receive 250% of the gross monthly salary multiplied by the number of
of an amicable settlement. It was agreed that the parties would enter into a compromise
agreement. However, respondents, who were then represented by a different counsel, Atty. years in service.[4] Since Rivera was only 45 years old, he was not qualified for retirement under
the ORP. Under the SRP, he was entitled to receive P1,045,258.95 by way of benefits.[5]
Pefianco, amended their complaints by including in their causes of action illegal dismissal and a
claim for reinstatement and backwages.
Deciding to devote his time and attention to his poultry business in Cavite, Rivera applied for
retirement under the SRP. Solidbank approved the application and Rivera was entitled to receive
The supposed signing of the compromise agreement (which could have culminated in respondents
the net amount of P963,619.28. This amount included his performance incentive award (PIA), and
receiving the total amount of P54,126.00 as payment for their 13th month pay and separation pay)
was reset because of respondents non-appearance in the hearing . Atty. Pefianco failed to appear his unearned medical, dental and optical allowances in the amount of P1,666.67, minus his total

Page 27 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

accountabilities to Solidbank amounting to P106,973.00.[6] Rivera received the amount and However, KCPI did not set any other employment qualifying standards for the recommendees of
confirmed his separation from Solidbank on February 25, 1995.[7] retired, resigned, deceased or disabled EEs and agreed to hire such recommendees who were
high school graduates as an act of liberality and generosity. The provision remained unchanged.4
Subsequently, Solidbank required Rivera to sign an undated Release, Waiver and Quitclaim, which Through the years, several UKCEU members who resigned or were disabled availed of the said
was notarized on March 1, 1995.[8] Rivera acknowledged receipt of the net proceeds of his benefits and recommended their successors. Although such recommendees were merely high
separation and retirement benefits and promised that [he] would not, at any time, in any manner school graduates, KCPI nonetheless employed them.
whatsoever, directly or indirectly engage in any unlawful activity prejudicial to the interest of
Solidbank, its parent, affiliate or subsidiary companies, their stockholders, officers, directors, KCPI rejected Guerreros recommendation because his nephew was not a member of his
agents or EEs, and their successors-in-interest and will not disclose any information concerning the (Guerreros) immediate family. The matter was brought to Voluntary Arbitrator Danilo Lorredo who
business of Solidbank, its manner or operation, its plans, processes, or data of any kind.[9] ruled that Guerreros nephew should be employed as his replacement in accordance with the CBA.
KCPI brought the matter to the Court w/c Affirmed the ruling of the VA in Kimberly Clark Philippines
Aside from acknowledging that he had no cause of action against Solidbank or its affiliate v. Lorredo,5 where it was held that:the phrase "in default thereof" has not been intended or
companies, Rivera agreed that the bank may bring any action to seek an award for damages contemplated by the parties as having a preclusive effect within the group. It simply sets a priority
resulting from his breach of the Release, Waiver and Quitclaim, and that such award would include on who can possibly be recommendees for employment. The EE, in fine, need not be childless at
the return of whatever sums paid to him by virtue of his retirement under the SRP.[10] Rivera was all for him to be allowed to nominate a third degree collateral relative; otherwise, his ability to
likewise required to sign an undated Undertaking as a supplement to the Release, Waiver and designate such relative is all but suddenly lost by the birth of an only child and regained by the
Quitclaim in favor of Solidbank in which he declared that he received in full his entitlement under latter's demise. This situation could not have been intended.6
the law (salaries, benefits, bonuses and other emoluments), including his separation pay in
accordance with the SRP. In this Undertaking, he promised that [he] will not seek employment However, the Court also ruled that KCPI was not obliged to unconditionally accept the
with a competitor bank or financial institution within one (1) year from February 28, 1995, and that recommendee since the latter must still meet the required employment standard theretofore set by
any breach of the Undertaking or the provisions of the Release, Waiver and Quitclaim would entitle it. Even a qualified recommendee would be hired only on a "probationary status." As such, KCPI
Solidbank to a cause of action against him before the appropriate courts of law.[11] Unlike the was not left without its own safeguards under the agreement.
Release, Waiver and Quitclaim, the Undertaking was not notarized.
KCPI issued Guidelines on the Hiring of Replacements of Retired/Resigned EEs8 for the effective
On May 1, 1995, the Equitable Banking Corporation (Equitable) employed Rivera as Manager of its implementation of Article XX, Section 1 of the existing CBA, to take effect on January 1, 1996. The
Credit Investigation and Appraisal Division of its Consumers Banking Group.[12] Upon Guidelines require, among others, that: (a) such recommendees must be at least 18 years of age
discovering this, Solidbank First Vice-President for Human Resources Division (HRD) Celia J.L. but not more than 30 years old at the time of the hiring, and (b) have completed, after graduating
Villarosa wrote a letter dated May 18, 1995, informing Rivera that he had violated the Undertaking. from high school, at least a two-year technical/vocational course or a third year level of college
She likewise demanded the return of all the monetary benefits he received in consideration of the education. Moreover, where both husband and wife are EEs of the company, they shall be treated
SRP within five (5) days from receipt; otherwise, appropriate legal action would be taken against as one family; hence, only one of the spouses would be allowed to avail of the benefit.
him.[13]
UKCEU, through its President, Reynaldo B. Hermoso, requested for a grievance meeting, UKCEU
When Rivera refused to return the amount demanded within the given period, Solidbank filed a specifically requested the deferment of the implementation of the Guidelines until January 1, 1997,
complaint for Sum of Money with Prayer for Writ of Preliminary Attachment[14] before the RTC of after the next CBA negotiations in 1997 during which the matter will be taken up. KCPI agreed to
Manila on June 26, 1995. Solidbank, as plaintiff, alleged therein that in accepting employment with postpone the implementation of the Guidelines until January 1, 1997 but only with respect to the
a competitor bank for the same position he held in Solidbank before his retirement, Rivera violated educational qualification.
his Undertaking under the SRP. Considering that Rivera accepted employment with Equitable
barely three months after executing the Undertaking, it was clear that he had no intention of During the negotiation for the 1997 CBA, UKCEU proposed the amendment of Article XX, Section
honoring his commitment under said deed. Solidbank prayed that Rivera be ordered to return the 1 of the existing CBA. After the negotiation, KCPI and UKCEU executed a CBA to cover the period
net amount of P963,619.28 plus interests therein, and attorneys fees. from July 1, 1997 to June 30, 1999. The educational qualifications contained in the Guidelines
prepared and issued by KCPI were not incorporated in the CBA. Neither were the proposed
In an Order dated July 6, 1995, the trial court issued a Writ of Preliminary Attachment[17] ordering amendment of UKCEU. Article XX, Section 1 of the preceding CBA was retained without any
Deputy Sheriff Eduardo Centeno to attach all of Riveras properties not exempt from execution. modification.KCPI continued to hire EEs pursuant to the CBA up to 1998. It had employed 44 EEs
Thus, the Sheriff levied on a parcel of land owned by Rivera. from 1995 to 1998.

ISSUE/S: However, in the second half of 1998, KCPI started to suspend the implementation of the CBA. This
(1) whether the parties raised a genuine issue in their pleadings, affidavits, and documents, that is, was partly due to the depressed economic conditions then prevailing in the Philippines, and in
whether the employment ban incorporated in the Undertaking which petitioner executed upon his compliance with the freeze hiring policy of its Asia-Pacific headquarters. It refused to hire, as
retirement is unreasonable, oppressive, hence, contrary to public policy; regular EEs, 80 recommendees of retiring EEs.KCPI and UKCEU failed to settle the matter through
(2) whether petitioner is liable to respondent for the restitution of P963,619.28 representing his the existing grievance machinery.
retirement benefits, and interest thereon at 12% per annum as of May 23, 1995 until payment of
the full amount. the parties filed before the NCMB, a Submission Agreement referring to arbitration the issue of
whether KCPI violated Article XX, Section 1 of the CBA. The parties agreed not to appeal any
HELD: (1) There is no factual basis for the trial courts ruling, for the simple reason that it rendered resolution/decision of the VA.
summary judgment and thereby foreclosed the presentation of evidence by the parties to prove
whether the restrictive covenant is reasonable or not. Moreover, on the face of the Undertaking, Meantime, in August 1999, KCPI and UKCEU executed a new CBA. Article XX, Section 1 of the
the post-retirement competitive employment ban is unreasonable because it has no geographical preceding CBA was incorporated in the new CBA, governing the relation of the parties up to June
limits;respondent is barred from accepting any kind of employment in any competitive bank within 30, 2002.
the proscribed period. Although the period of one year may appear reasonable, the matter of
whether the restriction is reasonable or unreasonable cannot be ascertained with finality solely HELD: We rule against petitioner.
from the terms and conditions of the Undertaking, or even in tandem with the Release, Waiver and As a general proposition, an arbitrator is confined to the interpretation and application of the
Quitclaim. collective bargaining agreement. He does not sit to dispense his own brand of industrial justice: his
award is legitimate only in so far as it draws its essence from the CBA,i.e., when there is a rational
Undeniably, petitioner retired under the SRP and received P963,619.28 from respondent. nexus between the award and the CBA under consideration. It is said that an arbitral award does
However, petitioner is not proscribed, by waiver or estoppel, from assailing the post-retirement not draw its essence from the CBA; hence, there is an unauthorized amendment or alteration
competitive employment ban since under Article 1409 of the New Civil Code, those contracts thereof, if:
whose cause, object or purpose is contrary to law, morals, good customs, public order or public 1. It is so unfounded in reason and fact;
policy are inexistent or void from the beginning. Estoppel cannot give validity to an act that is 2. It is so unconnected with the working and purpose of the agreement;
prohibited by law or one that is against public policy.[51] 3. It is without factual support in view of its language, its context, and any other indicia of the
parties' intention;
in determining whether the contract is reasonable or not, the trial court should consider the 4. It ignores or abandons the plain language of the contract;
following factors: (a) whether the covenant protects a legitimate business interest of the ER; (b) 5. It is mistakenly based on a crucial assumption which concededly is a nonfact;
whether the covenant creates an undue burden on the EE; (c) whether the covenant is injurious to 6. It is unlawful, arbitrary or capricious; and
the public welfare; (d) whether the time and territorial limitations contained in the covenant are 7. It is contrary to public policy.
reasonable; and (e) whether the restraint is reasonable from the standpoint of public policy.[62]
A CBA is more than a contract; it is a generalized code to govern a myriad of cases which the
A restriction in the contract which does not preclude the EE from engaging in competitive activity, draftsmen cannot wholly anticipate. It covers the whole employment relationship and prescribes the
but simply provides for the loss of rights or privileges if he does so is not in restraint of trade. rights and duties of the parties. It is a system of industrial self-government with the grievance
(emphasis added)[65] machinery at the very heart of the system. The parties solve their problems by molding a system of
private law for all the problems which may arise and to provide for their solution in a way which will
(2)On the assumption that the competitive employment ban in the Undertaking is valid, petitioner is generally accord with the variant needs and desires of the parties.
not automatically entitled to return the P963,619.28 he received from respondent. To reiterate, the
terms of the Undertaking clearly state that any breach by petitioner of his promise would entitle If the terms of a CBA are clear and have no doubt upon the intention of the contracting parties, the
respondent to a cause of action for protection in the courts of law; as such, restitution of literal meaning of its stipulation shall prevail. However, if, in a CBA, the parties stipulate that the
theP963,619.28 will not follow as a matter of course. Respondent is still burdened to prove its hirees must be presumed of employment qualification standards but fail to state such qualification
entitlement to the aforesaid amount by producing the best evidence of which its case is standards in said CBA, the VA may resort to evidence extrinsic of the CBA to determine the full
susceptible. agreement intended by the parties. When a CBA may be expected to speak on a matter, but does
UNITED KIMBERLY-CLARK EES UNION PHILIPPINE TRANSPORT GENERAL WORKERS not, its sentence imports ambiguity on that subject. The VA is not merely to rely on the cold and
ORGANIZATION (UKCEU-PTGWO), vs. cryptic words on the face of the CBA but is mandated to discover the intention of the parties.
KIMBERLY CLARK PHILIPPINES, INC., Recognizing the inability of the parties to anticipate or address all future problems, gaps may be
G.R. No. 162957 March 6, 2006 left to be filled in by reference to the practices of the industry, and the step which is equally a part
CALLEJO, SR., J.: of the CBA although not expressed in it. In order to ascertain the intention of the contracting
parties, their contemporaneous and subsequent acts shall be principally considered. The VA may
FACTS:UKCEU, a local chapter affiliate of the PTGWO, is the certified collective bargaining agent also consider and rely upon negotiating and contractual history of the parties, evidence of past
of all rank-and-file EEs of the San Pedro milling plant of KCPI, a multinational corporation engaged practices interpreting ambiguous provisions. The VA has to examine such practices to determine
in the manufacture of bathroom and facial tissues, paper napkins, feminine care products, the scope of their agreement, as where the provision of the CBA has been loosely formulated.
disposable diapers and absorbent cotton. Moreover, the CBA must be construed liberally rather than narrowly and technically and the Court
must place a practical and realistic construction upon it.
Way back in 1980, KCPI and the UKCEU executed a CBA. Article XX, Section 1 of the CBA reads:
Section 1. The Company agrees to employ, regardless of sex, the immediate member of the family In the present case, the parties are in agreement that, on its face, Article XX, Section 1 of their
of an EE provided qualified, upon the EE's resignation, retirement, disability or death. In case of 1997 CBA does not contain any provision relative to the employment qualification standards of
resignation, however, employment of an immediate member of the family of an EE may be allowed recommendees of retired/resigned, deceased or disabled EEs of respondent who are members of
provided the EE has rendered a service of ten (10) years and above and the resignation is not a petitioner. However, in determining the employment qualification standards for said
forced resignation. For the purpose of this section, the phrase "immediate member of the family of recommendees, the VA should have relied on the November 7, 1995 Guidelines issued by
an EE" shall refer to the EE's legitimate children and in default thereof to the EE's collateral relative respondent, which reads:
within the third civil degree. The recommendee of the retired/resigned EE shall, if qualified, be D. Definition of the phrase "immediate member of the family of an EE"
hired on probationary status. (Emphasis added)3 1. The phrase "immediate member of the family of an EE" shall refer to the EEs legitimate children
and in default thereof to the EEs collateral relatives within the third civil degree.

Page 28 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

2. A resigned/retired EE may be allowed to recommend a collateral relative within the third civil discriminates against all spouses of present EEs without regard to the actual effect on the
degree (e.g., brother, sister, nephew or niece) as his/her replacement only in the following cases: individual's qualifications or work performance.27 These courts also find the no-spouse
a. Where the retired/resigned EE is single or if married has no legitimate children. employment policy invalid for failure of the ER to present any evidence of business necessity other
b. Where the retired/resigned EEs children are still minors (below 18 years old) at the time of than the general perception that spouses in the same workplace might adversely affect the
his/her separation from the company. business.28 They hold that the absence of such a bona fide occupational qualification29
invalidates a rule denying employment to one spouse due to the current employment of the other
E. General Provisions spouse in the same office.30 Thus, they rule that unless the ER can prove that the reasonable
1. The privilege to recommend a replacement can be exercised by the EE concerned only once. demands of the business require a distinction based on marital status and there is no better
Thus, in the following cases, a recommendee who has been hired on probationary status can no available or acceptable policy which would better accomplish the business purpose, an ER may not
longer be substituted with another recommendee. discriminate against an EE based on the identity of the EEs spouse.31 This is known as the bona
a. where the recommendee fails to pass in his performance evaluation. fide occupational qualification exception.
b. where the recommendee resigns without completing his probationary period.
c. where the recommendee is dismissed for cause. We note that since the finding of a bona fide occupational qualification justifies an ERs no-spouse
d. where the recommendee dies during his probationary period.48 rule, the exception is interpreted strictly and narrowly by these state courts. There must be a
compelling business necessity for which no alternative exists other than the discriminatory
Respondent issued said Guidelines in light of the ruling of this Court in Kimberly Clark Philippines practice.32 To justify a bona fide occupational qualification, the ER must prove two factors: (1) that
v. Lorredo. Respondent saw it imperative to do away with its practice of accommodating the employment qualification is reasonably related to the essential operation of the job involved;
recommendees who were mere high school graduates, and to require higher employment and, (2) that there is a factual basis for believing that all or substantially all persons meeting the
standards for them. qualification would be unable to properly perform the duties of the job.33

By agreement of the parties, the implementation of the Guidelines was deferred until January 1, The concept of a bona fide occupational qualification is not foreign in our jurisdiction. We employ
1997, unless revoked or amended by the 1997 CBA. Petitioner proposed that the practice of hiring the standard of reasonableness of the company policy which is parallel to the bona fide
recommendees of retired/resigned, deceased or disabled EEs who were union members, who occupational qualification requirement. We do not find a reasonable business necessity in the case
were at least high school graduates, be included in their CBA, but respondent did not agree. at bar.
Hence, Article XX, Section 1 of the 1997 CBA of the parties remained intact. There was thus no
more legal bar for respondent to implement the November 7, 1995 Guidelines. By executing the It is significant to note that in the case at bar, respondents were hired after they were found fit for
1997 CBA, in its present form, petitioner is bound by the terms and conditions therein set forth. the job, but were asked to resign when they married a co-EE. Petitioners failed to show how the
marriage of Simbol, then a Sheeting Machine Operator, to Alma Dayrit, then an EE of the
The VA, however, ignored the plain language of the 1997 CBA of the parties, as well as the Repacking Section, could be detrimental to its business operations. Neither did petitioners explain
Guidelines issued by respondent. He capriciously based his resolution on the respondents practice how this detriment will happen in the case of Wilfreda Comia, then a Production Helper in the
of hiring which, however, by agreement of petitioner and respondent, was discontinued. Selecting Department, who married Howard Comia, then a helper in the cutter-machine. The policy
The Court has recognized in numerous instances the undoubted right of the ER to regulate, is premised on the mere fear that EEs married to each other will be less efficient. If we uphold the
according to his own discretion and best judgment, all aspects of employment, including but not questioned rule without valid justification, the ER can create policies based on an unproven
limited to, work assignments and supervision, working methods and regulations, time, place and presumption of a perceived danger at the expense of an EEs right to security of tenure.
manner of work, processes to be followed, and hiring, supervision, transfer, discipline, lay off,
dismissal and recall of workers. Encompassing though it could be, the exercise of this right is not The questioned policy may not facially violate Article 136 of the Labor Code but it creates a
absolute. Management prerogative must be exercised in good faith for the advancement of the disproportionate effect and under the disparate impact theory, the only way it could pass judicial
ERs interest and not for the purpose of defeating or circumventing the rights of the EEs under scrutiny is a showing that it is reasonable despite the discriminatory, albeit disproportionate, effect.
special laws, valid agreements such as the individual contract of employment and the collective The failure of petitioners to prove a legitimate business concern in imposing the questioned policy
bargaining agreement, and general principles of justice and fair play. In this case, the Court finds cannot prejudice the EEs right to be free from arbitrary discrimination based upon stereotypes of
that respondent acted in accord with the CBA and the November 7, 1995 Guidelines, which, by married persons working together in one company.40
agreement of the parties, may be implemented by respondent after January 1, 1997. DUNCAN ASSOCIATION OF DETAILMAN-OTGWO vs. GLAXO WELLCOME
STAR PAPER CORPORATION et al. vs. RONALDO D. SIMBOL et al. G.R.No. 162994, September 17, 2004
G.R. No. 164774 April 12, 2006
PUNO, J.: PEPSI COLA PRODUCTS PHILIPPINES, INC. and Ernesto F. Gochuico vs. EMMANUEL V.
SANTOS
FACTS: Petitioner Star Paper Corporation (the company) is a corporation engaged in trading [G.R. No. 165968, April 14, 2008]
principally of paper products. Josephine Ongsitco is its Manager of the Personnel and QUISUMBING, J.:
Administration Department while Sebastian Chua is its Managing Director.
FACTS: Respondent Emmanuel V. Santos was employed by petitioner Pepsi Cola Products Phils.,
The evidence for the petitioners show that respondents Ronaldo D. Simbol (Simbol), Wilfreda N. Inc. sometime in July 1989. In March 1996, he was promoted as Acting Regional Sales Manager at
Comia (Comia) and Lorna E. Estrella (Estrella) were all regular EEs of the company. Simbol was the Libis Sales Office.
employed by the company on October 27, 1993. He met Alma Dayrit, also an EE of the company,
whom he married on June 27, 1998. Prior to the marriage, Ongsitco advised the couple that should On February 14, 1997, respondent received from petitioner Ernesto F. Gochuico a memorandum[4]
they decide to get married, one of them should resign pursuant to a company policy promulgated in charging him with violation of company rules and regulations and Article 282(a)[5] of the Labor
1995. Simbol resigned on June 20, 1998 pursuant to the company policy.4 Code, as follows: Falsifying company records or documents or knowingly using falsified records or
documents/ Breach of trust and confidence/ Engaging in fictitious transactions, fake invoicing,
Comia was hired by the company on February 5, 1997. She met Howard Comia, a co-EE, whom deals padding and other sales malpractices/ Misappropriation or embezzlement of company funds
she married on June 1, 2000. Ongsitco likewise reminded them that pursuant to company policy, or property and other acts of dishonesty. Article 282 (a) Serious misconduct or willful disobedience
one must resign should they decide to get married. Comia resigned on June 30, 2000.5 to the lawful orders of his ER.[6]

Estrella was hired on July 29, 1994. She met Luisito Zuiga (Zuiga), also a co-worker. Petitioners The charges arose out of alleged artificial sales by the sales personnel of the Libis Sales Office in
stated that Zuiga, a married man, got Estrella pregnant. The company allegedly could have March 1996 allegedly upon the instruction of respondent. The alleged artificial sales resulted in
terminated her services due to immorality but she opted to resign on December 21, 1999.6 damage to petitioners amounting to P795,454.54. The memorandum also apprised respondent of
his preventive suspension and the scheduled hearings of the administrative investigation. After the
The respondents each signed a Release and Confirmation Agreement. They stated therein that termination of the hearings, petitioners found respondent guilty of the aforesaid charges with the
they have no money and property accountabilities in the company and that they release the latter exception of falsifying company records. As a result, respondent was dismissed on June 27, 1997.
of any claim or demand of whatever nature.7
Respondent filed a case for illegal dismissal which the Labor Arbiter dismissed on April 30,
Respondents offer a different version of their dismissal. Simbol and Comia allege that they did not 1998.[8] On appeal, the NLRC remanded the case to the Labor Arbiter for further proceedings.
resign voluntarily; they were compelled to resign in view of an illegal company policy. As to Which it decided that, In addition, as his suspension and dismissal is illegal, and apparently tainted
respondent Estrella, she alleges that she had a relationship with co-worker Zuiga who with malice and bad faith, an award of P100,000.00 as moral damages and P50,000.00 as
misrepresented himself as a married but separated man. After he got her pregnant, she discovered exemplary damages is hereby granted.
that he was not separated. Thus, she severed her relationship with him to avoid dismissal due to
the company policy. On November 30, 1999, she met an accident and was advised by the doctor Petitioners appealed to the NLRC which affirmed the Labor Arbiter's finding of illegal dismissal. It
at the Orthopedic Hospital to recuperate for 21 days. She returned to work on December 21, 1999 observed that after the case was remanded, the Labor Arbiter immediately conducted hearings.
but she found out that her name was on-hold at the gate. She was denied entry. She was directed Moreover, in the hearing dated September 7, 1999,[11] petitioners agreed to submit the case for
to proceed to the personnel office where one of the staff handed her a memorandum. The resolution based on the additional pleadings submitted by the parties. Nevertheless, the NLRC
memorandum stated that she was being dismissed for immoral conduct. She refused to sign the deleted the award of moral and exemplary damages in the absence of evidence that respondent's
memorandum because she was on leave for twenty-one (21) days and has not been given a suspension and eventual dismissal were tainted with bad faith and malice.
chance to explain. The management asked her to write an explanation. However, after submission
of the explanation, she was nonetheless dismissed by the company. Due to her urgent need for ISSUE/S: (1) whether respondent was validly dismissed; (2) whether a trial on the merits was
money, she later submitted a letter of resignation in exchange for her thirteenth month pay.8 necessary; and (3) whether the award of attorney's fees was proper.

Respondents later filed a complaint for unfair labor practice, constructive dismissal, separation pay HELD: 1)In any event, we have carefully reviewed the records of this case and found no
and attorneys fees. They averred that the aforementioned company policy is illegal and compelling reason to disturb the uniform findings and conclusions of the Labor Arbiter, the NLRC,
contravenes Article 136 of the Labor Code. They also contended that they were dismissed due to and the Court of Appeals. In an illegal dismissal case, the onus probandirests on the ER to prove
their union membership. that its dismissal of an EE is for a valid cause.[16] In the instant case, petitioners failed to present
evidence to justify respondent's dismissal. Save for the notice of termination, we could not find any
LA- dismissed the complaint for lack of merit, that the policy was pursuant to management evidence which would clearly and convincingly show that respondent was guilty of the charges
prerogative. imputed against him. There appears to be no compelling reason why petitioners would rather
NLRC-affirmed LAs decision and denied the subsequent MR. present their witnesses on direct testimony rather than reduce their testimonies into affidavits. The
CA-reversed,declaring illegal dismissal and ordering to reinstate petitioners without loss of seniority submission of these affidavits appears to be the more prudent course of action particularly when
rights with full backwages from the time of their dismissal until actual reinstatement plus ordering the Labor Arbiter informed the parties that no further trial will be conducted in the case.
respondents to pay petitioner attorney;s fees.
2) we reiterate that it is not legally objectionable, for being violative of due process, for the Labor
Petitioners appeal: policy/regulation is violative of the constitutional rights towards marriage and Arbiter to resolve a case based solely on the position papers, affidavits or documentary evidence
the family of EEs and of Article 136 of the Labor Code; and respondents resignations were far submitted by the parties.[17] The holding of a formal hearing or trial is discretionary with the Labor
from voluntary.14 Arbiter and is something that the parties cannot demand as a matter of right. The requirements of
due process are satisfied when the parties are given the opportunity to submit position papers
ISSUE: whether the policy of the ER banning spouses from working in the same company violates wherein they are supposed to attach all the documents that would prove their claim in case it be
the rights of the EE under the Constitution and the Labor Code or is a valid exercise of decided that no hearing should be conducted or was necessary.[18]
management prerogative
3) we have ruled that attorney's fees may be awarded only when the EE is illegally dismissed in
HELD: The courts that have broadly26 construed the term "marital status" rule that it encompassed bad faith and is compelled to litigate or incur expenses to protect his rights by reason of the
the identity, occupation and employment of one's spouse. They strike down the no-spouse unjustified acts of his ER.[19]In this case, the NLRC deleted the award of moral and exemplary
employment policies based on the broad legislative intent of the state statute. They reason that the damages precisely because of the absence of evidence that respondent's suspension and eventual
no-spouse employment policy violate the marital status provision because it arbitrarily dismissal were tainted with bad faith and malice.
Page 29 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

the abovementioned letters, no other evidence was presented to show how and why Gran was
We note that although the Labor Arbiter awarded attorney's fees, the basis for the same was not considered incompetent, insubordinate, or disobedient. Petitioner EDI had clearly failed to
discussed in the decision nor borne out by the records of this case. There must always be a factual overcome the burden of proving that Gran was validly dismissed.
basis for the award of attorney's fees. This is consistent with the policy that no premium should be
placed on the right to litigate. For these reasons, we believe and so rule that the award of Petitioners imputation of incompetence on private respondent due to his insufficient knowledge in
attorney's fees should be deleted.[20] programming and zero knowledge of the ACAD system based only on the above mentioned
EDI-STAFFBUILDERS INTERNATIONAL, INC.,vs.. NLRC and Eleazar S. Gran letters, without any other evidence, cannot be given credence. An allegation of incompetence
[G.R. No. 145587, October 26, 2007] should have a factual foundation. Incompetence may be shown by weighing it against a standard,
VELASCO JR., J.: benchmark, or criterion. However, EDI failed to establish any such bases to show how petitioner
found Gran incompetent.
FACTS: Petitioner EDI is a corporation engaged in recruitment and placement of Overseas Filipino
Workers (OFWs).[5] ESI is another recruitment agency which collaborated with EDI to process the 3)the elements that must concur for the charge of insubordination or willful disobedience to prosper
documentation and deployment of private respondent to Saudi Arabia. were not present. the following twin elements must concur: (1) the EE's assailed conduct must
have been willful, that is, characterized by a wrongful and perverse attitude; and (2) the order
Private respondent Gran was an OFW recruited by EDI, and deployed by ESI to work for OAB, in violated must have been reasonable, lawful, made known to the EE and must pertain to the duties
Riyadh, Kingdom of Saudi Arabia.[6] which he had been engaged to discharge. In the case at bar, petitioner failed to show that the order
of the company which was violatedthe submission of Daily Activity Reportswas part of
It appears that OAB asked EDI through its October 3, 1993 letter for curricula vitae of qualified Grans duties as a Computer Specialist. Before the Labor Arbiter, EDI should have provided a copy
applicants for the position of Computer Specialist.[7] In a facsimile transmission dated of the company policy, Grans job description, or any other document that would show that the
November 29, 1993, OAB informed EDI that, from the applicants curricula vitae submitted to it for Daily Activity Reports were required for submission by the EEs, more particularly by a Computer
evaluation, it selected Gran for the position of Computer Specialist. The faxed letter also Specialist. The burden devolves not only upon the foreign-based ER but also on the employment
stated that if Gran agrees to the terms and conditions of employment contained in it, one of which or recruitment agency for the latter is not only an agent of the former, but is also solidarily liable
was a monthly salary of SR (Saudi Riyal) 2,250.00 (USD 600.00), EDI may arrange for Grans with the foreign principal for any claims or liabilities arising from the dismissal of the worker.[48]
immediate dispatch.[8]
The CA is correct in applying Prieto. The purpose of the required trade test is to weed out
After accepting OABs offer of employment, Gran signed an employment contract[9] that granted incompetent applicants from the pool of available workers. It is supposed to reveal applicants with
him a monthly salary of USD 850.00 for a period of two years. Gran was then deployed to Riyadh, false educational backgrounds, and expose bogus qualifications. Since EDI deployed Gran to
Kingdom of Saudi Arabia on February 7, 1994. Riyadh, it can be presumed that Gran had passed the required trade test and that Gran is qualified
for the job. Even if there was no objective trade test done by EDI, it was still EDIs responsibility to
Upon arrival in Riyadh, Gran questioned the discrepancy in his monthly salary his employment subject Gran to a trade test; and its failure to do so only weakened its position but should not in any
contract stated USD 850.00; while his Philippine Overseas Employment Agency (POEA) way prejudice Gran. In any case, the issue is rendered moot and academic because Grans
Information Sheet indicated USD 600.00 only. However, through the assistance of the EDI office in incompetency is unproved.
Riyadh, OAB agreed to pay Gran USD 850.00 a month.[10]
4)Under the twin notice requirement, the EEs must be given two (2) notices before their
After Gran had been working for about five months for OAB, his employment was terminated employment could be terminated: (1) a first notice to apprise the EEs of their fault, and (2) a
through OABs July 9, 1994 letter,[11] on the following grounds: Non-compliance to contract second notice to communicate to the EEs that their employment is being terminated. In between
requirements by the recruitment agency primarily on your salary and contract duration/ Non- the first and second notice, the EEs should be given a hearing or opportunity to defend themselves
compliance to pre-qualification requirements by the recruitment agency/ Insubordination or personally or by counsel of their choice.[55]
disobedience to Top Management Order and/or instructions (non-submittal of daily activity reports
despite several instructions). A careful examination of the records revealed that, indeed, OABs manner of dismissing Gran fell
short of the two notice requirement. While it furnished Gran the written notice informing him of his
On July 11, 1994, Gran received from OAB the total amount of SR 2,948.00 representing his final dismissal, it failed to furnish Gran the written notice apprising him of the charges against him, as
pay, and on the same day, he executed a Declaration[13] releasing OAB from any financial prescribed by the Labor Code.[56] Consequently, he was denied the opportunity to respond to said
obligation or otherwise, towards him. notice. In addition, OAB did not schedule a hearing or conference with Gran to defend himself and
adduce evidence in support of his defenses. Moreover, the July 9, 1994 termination letter was
After his arrival in the Philippines, Gran instituted a complaint, on July 21, 1994, against ESI/EDI, effective on the same day. This shows that OAB had already condemned Gran to dismissal, even
OAB, Country Bankers Insurance Corporation, and Western Guaranty Corporation with the NLRC- before Gran was furnished the termination letter. It should also be pointed out that OAB failed to
NCR-QC, for underpayment of wages/salaries and illegal dismissal. give Gran the chance to be heard and to defend himself with the assistance of a representative in
accordance with Article 277 of the Labor Code. Clearly, there was no intention to provide Gran with
The Ruling of the Labor Arbiter that there was neither underpayment nor illegal dismissal. Thus, due process. Summing up, Gran was notified and his employment arbitrarily terminated on the
the NLRC reversed the Labor Arbiters Decision and rendered a new one same day, through the same letter, and for unjustified grounds. Obviously, Gran was not afforded
due process.
ISSUE/S: 5) We reiterate the rule that with regard to EEs hired for a fixed period of employment, in cases
1) whether the failure of gran to furnish a copy of his appeal memorandum to petitioner EDI would constitute a jurisdiction defect and a deprivation of arising before the effectivity of R.A. No. 8042 [58] (Migrant Workers and Overseas Filipinos Act) on
petitioner EDIs right to due process as would justify the dismissal of grans appeal. August 25, 1995, that when the contract is for a fixed term and the EEs are dismissed without just
2) whether petitioner EDI has established by way of substantial evidence that grans termination was justifiable by reason of incompetence corollary cause, they are entitled to the payment of their salaries corresponding to the unexpired portion of
hereto, whether the Prieto vs. NLRC as applied by CA is applicable. their contract.[59] On the other hand, for cases arising after the effectivity of R.A. No. 8042, when
3) whether petitioner has established by way of substantial evidence that grans termination was justified by reason of insubordination and disobedience. the termination of employment is without just, valid or authorized cause as defined by law or
4) whether gran was afforded due process prior to termination. contract, the worker shall be entitled to the full reimbursement of his placement fee with interest of
5) whether gran is entitled to backwages for the unexpired portion of his contract.
twelve percent (12%) per annum, plus his salaries for the unexpired portion of his employment
contract or for three (3) months for every year of the unexpired term whichever is less.[60]
HELD: The petition lacks merit except with respect to Grans failure to furnish EDI with his Appeal
Memorandum filed with the NLRC. In the present case, the employment contract provides that the employment contract shall be valid
1) In a catena of cases, it was ruled that failure of appellant to furnish a copy of the appeal to the for a period of two (2) years from the date the EE starts to work with the ER.[61] Gran arrived in
adverse party is not fatal to the appeal. Riyadh, Saudi Arabia and started to work on February 7, 1994;[62] hence, his employment contract
is until February 7, 1996. Since he was illegally dismissed on July 9, 1994, before the effectivity of
Thus, the doctrine that evolved from several cases is that failure to furnish the adverse party with a R.A. No. 8042, he is therefore entitled to backwages corresponding to the unexpired portion of his
copy of the appeal is treated only as a formal lapse, an excusable neglect, and hence, not a contract, which was equivalent to USD 16,150.
jurisdictional defect. Accordingly, in such a situation, the appeal should not be dismissed; however,
it should not be given due course either. the duty that is imposed on the NLRC, in such a case, is It is made clear that the foregoing rules on quitclaim or waiver shall apply only to labor contracts of
to require the appellant to comply with the rule that the opposing party should be provided with a OFWs in the absence of proof of the laws of the foreign country agreed upon to govern said
copy of the appeal memorandum. contracts. Otherwise, the foreign laws shall apply.
AUJERO vs. PHILCOMSAT
The glaring failure of NLRC to ensure that Gran should have furnished petitioner EDI a copy of the G.R. No. 193484, JaNUARY 18, 2012
Appeal Memorandum before rendering judgment reversing the dismissal of Grans complaint LAND AND HOUSING DEVT CO. vs. ESQUILLO
constitutes an evasion of the pertinent NLRC Rules and established jurisprudence. Worse, this G.R. No. 152012
failure deprived EDI of procedural due process guaranteed by the Constitution which can serve as
AL ARELLANO et al. vs. POWERTECH CORPORATION, Wille Cabobos and CA
basis for the nullification of proceedings in the appeal before the NLRC. One can only surmise the
[G.R. No. 150861, January 22, 2008]
shock and dismay that OAB, EDI, and ESI experienced when they thought that the dismissal of
REYES, R.T., J.:
Grans complaint became final, only to receive a copy of Grans Motion for Execution of Judgment
which also informed them that Gran had obtained a favorable NLRC Decision. This is not level
FACTS: The case stems from a complaint for illegal dismissal and other money claims filed by the
playing field and absolutely unfair and discriminatory against the ER and the job recruiters. The
Nagkakaisang Manggagawa Ng Powertech Corporation in behalf of its 52 individual members and
rights of the ERs to procedural due process cannot be cavalierly disregarded for they too have
non-union members against their ER, Powertech. The case was dismissed as to twenty-seven
rights assured under the Constitution.
(27) EEs by virtue of duly executed affidavits of repudiation and quitclaim. The case proceeded
with respect to the remaining twenty-five (25) EEs, petitioners in this case.
2) In the present case, the employment contract signed by Gran specifically states that Saudi
Labor Laws will govern matters not provided for in the contract (e.g. specific causes for termination,
Labor Arbiter Renell Joseph R. Dela Cruz rendered a Decision[3]declaring illegal the termination
termination procedures, etc.). Being the law intended by the parties (lex loci intentiones) to apply to
of twenty (20) of petitioners and granting their monetary claims in the total amount of
the contract, Saudi Labor Laws should govern all matters relating to the termination of the
P2,538,728.84.
employment of Gran.
Powertech appealed to the NLRC. During its pendency, Carlos Gestiada, for himself and on behalf
In international law, the party who wants to have a foreign law applied to a dispute or case has the
of other petitioners, executed a quitclaim, release and waiver[4] in favor of Powertech in
burden of proving the foreign law. The foreign law is treated as a question of fact to be properly consideration of the amount of P150K Earlier, Gestiada was appointed by his co-petitioners as
pleaded and proved as the judge or labor arbiter cannot take judicial notice of a foreign law. He is
their attorney-in-fact. The appointment was evidenced by a SPA. The compromise amount was
presumed to know only domestic or forum law. Unfortunately for petitioner, it did not prove the
paid to Gestiada by check.
pertinent Saudi laws on the matter; thus, the International Law doctrine of presumed-identity
approach or processual presumption comes into play.Where a foreign law is not pleaded or, even if
Relying on the quitclaim and release, Powertech filed a motion for the withdrawal of the appeal and
pleaded, is not proved, the presumption is that foreign law is the same as ours.[37] Thus, we apply
cash bond. The NLRC granted[6] the motion, dismissed the appeal and ordered the release of the
Philippine labor laws in determining the issues presented before us.
cash bond. The P150K check, however, bounced due to a stop payment order of Powertech.[7]
In illegal dismissal cases, it has been established by Philippine law and jurisprudence that the ER
Aggrieved, petitioners moved to nullify the release and quitclaim for lack of consideration. the
should prove that the dismissal of EEs or personnel is legal and just. In the instant case, petitioner NLRC declared the quitclaim, release and waiver void for lack of consideration, reinstated the
claims that private respondent Gran was validly dismissed for just cause, due to incompetence and
appeal and ordered Powertech to post a cash or surety bond for the monetary judgment less the
insubordination or disobedience. To prove its allegations, EDI submitted two letters as evidence.
amount it had previously posted.[8]
Petitioner claims that Gran was incompetent for the Computer Specialist position because he had
insufficient knowledge in programming and zero knowledge of [the] ACAD system.[45]
Gestiada terminated the services of their counsel, Atty. Evangelista and, instead, retained Atty.
Petitioner also claims that Gran was justifiably dismissed due to insubordination or disobedience
Manuel Luis Felipe of the PAO. A day later, Powertech paid P150K to Gestiada purportedly as
because he continually failed to submit the required Daily Activity Reports[46] However, other than compromise amount for all of petitioners. That same day, Gestiada, through Atty. Felipe, and
Page 30 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

Powertech filed a joint motion to dismiss[10] with the NLRC based on the compromise agreement. Social Security System (SSS), Juanito expired at the Worker's Quarters at 10:30 a.m., of
Atty. Evangelista opposed[11] the motion, alleging that the compromise agreement is Myocardial Infarction.
unconscionable, that he was illegally terminated as counsel for the other petitioners without their Petitioner Maria M. Buenaobra immediately filed her claim for death benefits under the
consent, and that the P150K was received by Gestiada as payment solely for his backwages and SSS law. She started receiving her pension in November 1988. Petitioner was, however, unaware
other monetary claims. of the other compensation benefits due her under Presidential Decree No. 626, as amended, or the
Law on EEs Compensation. In September 1998, or more than ten (10) years after the death of her
In denying the joint motion to dismiss, the NLRC held that the P150Kreceived by Gestiada did not husband, that she learned of the benefits under P.D. No. 626 through the television program of
cover the monetary claim of petitioners against Powertech. Evidence show that there was no then broadcaster Ted Failon who informed that one may claim for EEs Compensation Commission
voluntary severance of attorney-client relationship between Gestiada representing the other (ECC) benefits if the spouse died while working for the company. Petitioner prepared the
complainants and Atty. Evangelista. The other complainants in this case have never indicated any documents to support her claim for ECC benefits. On 23 April 1999, she filed with the SSS her
objection to the continued appearance of Atty. Evangelista. Hence, it must be presumed that Atty. claim for funeral benefits under P.D. No. 626, as amended, which was docketed as SSS # 04-
Evangelistas appearance is with the consent of all the complainants herein. 0089326-0.[6]
On 28 July 1999, the SSS denied the claim of petitioner for funeral benefits ruling that the
ISSUE: whether the compromise agreement between powertech and gestiada is valid. cause of death of Juanito was not work-connected, absent a causal relationship between the
illness and the job. Caridad R. Borja, Assistant Vice-President National Capital Region (AVP
HELD: The P150K was paid to Gestiada solely as payment for his backwages,not those of NCR) Central of the SSS Member Assistance Center in Quezon City wrote:
petitioners; there is evident collusion between Powertech and Gestiada, hence, the compromise Please be informed that funeral claim under the EEs Compensation is hereby denied. Per
agreement is void. medical evaluation, cause of death of subject members (sic) cannot be considered work
connected since there is no causal relationship between the illness and the job.
First, the P150Kcompromise is rather measly when taken in light of the more than P2.5 million On 8 October 1999, petitioner wrote to Atty. Teofilo E. Hebron, Executive Director of the
judgment on appeal to the NLRC. Petitioners already won on the arbiter level P2.5 million pesos. ECC, appealing the denial of her claim. On 11 November 1999, Atty. Hebron ordered Dr. Simeon
It is highly improbable that they would suddenly agree to accept P150Kas compromise for the P2.5 Z. Gonzales, Assistant Vice-President (AVP) of the Medical Services Group of the SSS to review
million. That translates to a paltry sum of P6,000.00 each for petitioners. From this amount will still the claim of petitioner.
be deducted attorneys fees and other litigation expenses. In effect, petitioners agreed to waive On 23 November 1999, the Medical Services Group through Dr. Perla A. Taday, AVP for
more than 94% of what they expect to receive from Powertech. We note that the compromise is a Medical Operations, concluded its re-evaluation and affirmed the denial of petitioners claim. It
mere 6% of the contingent sum that may be received by petitioners. This minuscule amount is reiterated that there is no causal relationship between the cause of death/illness and members job
certainly questionable because, to Our mind, it does not represent a true and fair amount which a as dump truck driver.[7] Pursuant to Section 5, Rule XVIII of the Implementing Rules of PD 626,
reasonable agent may bargain for his principal. the records of the deceased Juanito were elevated to the Commission.
On 13 April 2000, the Commission rendered a decision, dismissing the appeal.[8] It ruled
We contrast the monetary judgment to the P150Kreceived by Gestiada, which appears to be his that petitioner failed to show by substantial evidence that her husbands cause of death was due to,
share in the P2.5 million based on the calculation of the NLRC.[25]We find no plausible reason to or the risk of contracting his ailment was increased by his occupation and working conditions, as
disbelieve his claim that the sum represents payment solely of his backwages. per Section 1(b), Rule III of P.D. No. 626, as amended. In addition, the Commission declared that
petitioners claim has prescribed, citing ECC Resolution No. 93-08-0068.
Second, even granting for the mere sake of argument that the P150Kwas a fair and reasonable Petitioner appealed to the Court of Appeals. She alleged that her cause of action had not
compromise for all, petitioners failed to receive a single centavo from the compromise. This prescribed because the filing of her claim for SSS benefits shortly after Juanitos death suspended
conclusively indicates that Gestiada received the P150Kin payment of his backwages and no other. the running of the prescriptive period for filing EC claims, as per Item No. III of ECC Resolution No.
90-03-0022 dated 23 March 1990. The appellate court dismissed the petition. It ruled that
Third, We give credence to the admission of Gestiada that he received the P150Kas payment for petitioner's filing of her claim for SSS benefits shortly after Juanitos death did not suspend the
his own backwages. In his letter to Atty. Evangelista, Gestiada said that he was pressured by running of the prescriptive period for filing EC claims. It interpreted the aforementioned ECC
Powertech to sign the waiver and quitclaim for petitioners in order to receive his share in the P2.5 Resolutions to mean that a claimant must indicate the kind of claim filed before the running of the
million judgment. Having no stable job after his dismissal, Gestiada had no other choice but to prescriptive period for filing EC claims may be interrupted. In the case at bar, petitioner indeed
breach his fiduciary obligation to petitioners. He succumbed to the pressure of Powertech in filed a claim with SSS. In fact, she has been receiving her pension since November
signing the waiver, release and quitclaim in exchange for the P150K. In short, he colluded with 1988. However, she failed to specify whether the basis of her claim was any contingency which
Powertech to the detriment of petitioners. Powertech knew that Gestiada had plenary authority to may be held compensable under the EC Program.[9]
act for petitioners in the labor case. It had prior dealings with him. It also knew that Gestiada was In addition, the Court of Appeals cited P.D. No. 626 which states that a contingency may
authorized to negotiate for any amount he may deem just and reasonable and to sign waivers and be held compensable if listed in Annex "A" of the Rules Implementing EEs' Compensation as an
quitclaims on behalf of petitioners. Powertech obviously used that knowledge, capitalized on the occupational disease, and satisfying all conditions set forth therein; or if not listed as an
vulnerable position of Gestiada in entering into the agreement and took advantage of the situation occupational disease, or listed but has not satisfied the conditions set forth therein, it must be
to the disadvantage of petitioners. proven by substantial evidence that the risk of contracting the disease which caused the death of
the member, was increased by the member's working conditions. [10]
Fourth, the events that led to the execution of the compromise agreement show that Powertech The appellate court likewise held that the three-year prescriptive period does not apply in
was negotiating in bad faith. More importantly, they show that Powertech colluded with Gestiada to the instant case. Instead, it applied Art. 1142(2) of the Civil Code which reads:
defraud petitioners of their share of the P2.5 million Labor Arbiter judgment. Art. 1144. The following actions must be brought within ten (10) years from the time the right of
action accrues:
Evidently, Powertech never intended to pay the P150Kcompromise agreement. It was minded to (1) Upon a written contract;
do so only after the NLRC declared the compromise void and reinstated the P2.5 million judgment (2) Upon an obligation created by law;
of the Labor Arbiter. It cannot escape Our notice that Powertech even ordered a stop payment for (3) Upon a judgment. [Emphasis supplied.]
the P150Kcheck issued to Gestiada without any sufficient reason. Worse, it was recalcitrant in The appellate court then held that the petitioner's cause of action has
making good the check despite due demand. prescribed. Petitioner's husband died on 27 June 1988. She filed her claim for funeral benefits
under P.D. No. 626 or the Law on EEs' Compensation only on 23 April 1999, or more than ten (10)
To Our mind, what prompted Powertech to agree to pay the P150Kwas the NLRC order voiding the years from his death.
compromise agreement and reinstating the Labor Arbiter P2.5 million judgment. By then, Lastly, the appellate court ruled that even assuming petitioner's cause of action has not
Powertech was faced with the possibility of paying P2.5 million to petitioners. It was also required prescribed, her claim for EEs' Compensation benefits cannot prosper because of her failure to
by law to post a surety bond for the same amount in order to perfect its appeal with the NLRC. prove by substantial evidence that her husband's working conditions increased the risk of
contracting the myocardial infarction that caused his death.
Armed with the NLRC order, petitioners were bent on pursuing their appeal. Powertech panicked. Petitioners Motion for Reconsideration dated 27 September 2000 was denied by the
It negotiated with Gestiada offering him P150Kin exchange for a waiver and quitclaim for himself appellate court in a Resolution promulgated on 6 March 2001.
and for petitioners. Powertech knew that Gestiada was authorized by petitioners to negotiate for ISSUES
any sum he may deem just and reasonable and to sign quitclaims and waivers for them. 1. WHETHER, INDEED, THE CLAIM OF PETITIONER, HAD PRESCRIBED.
Jobless and having no regular income, Gestiada succumbed to the pressure. He connived with 2. WHETHER OR NOT THE ILLNESS OF PETITIONERS HUSBAND, MYOCARDIAL
Powertech and agreed to receive the P150Kfor himself in exchange for signing a quitclaim and INFARCTION, IS WORK-RELATED.
waiver in the name of petitioners. HELD
1. The claim of petitioner for funeral benefits under P.D. No. 626, as amended, has not
To give effect to the collusion, Gestiada had to get rid of Atty. Evangelista, who had previously yet prescribed.
succeeded in nullifying the compromise agreement. He fired Atty. Evangelista without cause The issue of prescription in the case at bar is governed by P.D. No. 626, or the Law
basing his dismissal on his plenary authority as agent of petitioners. He then procured the services on EEs' Compensation. Art. 201 of P.D. No. 626 and Sec. 6, Rule VII of the 1987
of another lawyer, Atty. Felipe. We find it striking that Gestiada was not authorized under the Amended Rules on EEs' Compensation both read as follows:
SPAto terminate or retain another counsel for petitioners in the labor dispute. The SPAmerely No claim for compensation shall be given due course unless said claim is filed with
authorized Gestiada to negotiate with Powertech, nothing more. the System within three years from the time the cause of action accrued.
We agree with the petitioner that her claim for death benefits under the SSS law
All these circumstances indicate that the P150Kwas received by Gestiada solely as payment for his should be considered as the EEs Compensation claim itself. This is but logical and
backwages and not a whit of a settlement for the monetary claim of petitioners. reasonable because the claim for death benefits which petitioner filed with the SSS
is of the same nature as her claim before the ECC. Furthermore, the SSS is the
In line with Our conclusion that Powertech colluded with Gestiada, the CA gravely erred in same agency with which EEs Compensation claims are filed. As correctly
upholding the compromise agreement. The appellate court decision was premised on the contended by the petitioner, when she filed her claim for death benefits with the SSS
compromise agreement being entered into by Powertech and Gestiada in good faith. It is now under the SSS law, she had already notified the SSS of her EEs compensation
clear that there is ample evidence indicating that Powertech was negotiating in bad faith and, claim, because the SSS is the very same agency where claims for payment of
worse, it colluded with Gestiada in shortchanging, nay, fraudulently depriving petitioners of their sickness/disability/death benefits under P.D. No. 626 are filed.
just share in the award. Section 4(b)(2), Rule 3 of the ECC Rules of Procedure for the Filing and Disposition
MARIA BUENA OBRA, vs. SOCIAL SECURITY SYSTEM of the EEs Compensation Claims, quoted above, also provides for the conditions
G.R. No. 147745. April 9, 2003 when EC claims filed beyond the three-year prescriptive period may still be given
J. Puno due course. Section 4(b)(2) states the condition for private sector EEs, requiring that
a claim for Medicare, sickness, burial, disability or death should be filed within three
FACTS: Juanito Buena Obra, husband of petitioner, worked as a driver for twenty-four (24) years (3) years from the occurrence of the contingency. In the instant case, the petitioner
and five (5) months. His first and second ERs were logging companies. Thereafter, he was was able to file her claim for death benefits under the SSS law within the three-year
employed at Jollar Industrial Sales and Services Inc. as a dump truck driver from January 1980 to prescriptive period. In fact, she has been receiving her pension under the SSS law
June 1988. He was assigned to the following projects:[4] since November 1988.
1. January 1980 to December 1981 F.F. Cruz Project, Nabua, Camarines Sur hauling/delivery 2. Myocardial infarction is also known as heart attack. It results in permanent heart
of filling materials from quarry to job site damage or death. A heart attack is called myocardial infarction because part of the
2. January 1982 to December 1983 F.F. Cruz, 300 MW Coal Fire Thermal Plant, Calaca, heart muscle (myocardium) may literally die (infarction). This occurs when a blood
Bacungan and Makban Geothermal Plant, Los Baos, Laguna hauling/delivery of filling materials clot blocks one of the coronary arteries (the blood vessels that bring blood and
from quarry to job site oxygen to the heart muscle). When the heart muscle does not obtain the oxygen-
3. January 1984 to December 1985 Dizon Copper Silver Mines, Pili, San Marcelino, Zambales rich blood that it needs, it will begin to die. The severity of a heart attack usually
hauling/delivery filling materials from quarry to job site depends on how much of the heart muscle is injured or dies during the heart
4. January 1986 to June 1988 Metro Manila Hauling Project attack. Heart attack accounts for 1 out of every 5 deaths. It is a major cause of
On 27 June 1988, Juanito suffered a heart attack while driving a dump truck inside the sudden death in adults. Heavy exertion or emotional stresscan trigger a heart
work compound, and died shortly thereafter. In the Report of Death[5] submitted by his ER to the attack.[16]

Page 31 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

In the case at bar, the petitioners husbands heart disease falls under the second schedule and the corresponding salaries and fringe benefits of its personnel in consultation with
condition of ECC Resolution No. 432 dated July 20, 1977 which states that the strain the LRTA. Pursuant to the above Agreement, petitioner METRO hired its own EEs, including herein
of work that brought about the acute attack must be of sufficient severity and must private respondents. Petitioner METRO thereafter entered into a CBA with Pinag-isang Lakas ng
be followed within 24 hours by the clinical signs of a cardiac insult to constitute Manggagawa sa METRO, Inc. National Federation of Labor, otherwise known as PIGLAS-
causal relationship. Petitioners husband was driving a dump truck within the METRO, INC. NFL KMU (Union), the certified exclusive collective bargaining representative of
company premises where they were stacking gravel and sand when he suffered the the rank-and-file EEs of petitioner METRO.
heart attack. He had to be taken down from the truck and brought to the workers
quarters where he expired at 10:30 a.m., just a few minutes after the heart attack, Meanwhile,petitioners LRTA and METRO executed a Deed of Sale where petitioner LRTA
which is much less than the 24 hours required by ECC Resolution No. 432. This is a purchased the shares of stocks in petitioner METRO. However, petitioners LRTA and METRO
clear indication that severe strain of work brought about the acute attack that caused continued with their distinct and separate juridical personalities. Hence, when the above 10)-
his death. year Agreement expired on June 8, 1994, they renewed the same, initially on a yearly basis, and
Professional drivers, especially truck drivers like the decedent in the instant case, subsequently on a monthly basis.
carry the burden of being more exposed and subjected to the stress and strain of
everyday traffic, and the greater physical exertion brought about by driving a large On July 25, 2000, the Union filed a Notice of Strike with the National Conciliation and Mediation
and heavy vehicle. In addition, according to the petitioner, her husband was under a Board(NCMB) against petitioner METRO on account of a deadlock in the collective bargaining
lot of stress in the workplace. He was a model worker and his ER highly depended negotiation. On the same day, the Union struck The power supply switches in the different light rail
on him. He became the object of envy of his co-workers which caused him much transit substations were turned off. The members of the Union picketed the various substations.
emotional stress. Add to this the fact that he has been a truck driver for more than They completely paralyzed the operations of the entire light rail transit system. As the strike
twenty-four (24) years. Due to the combination of emotional stress and vigorous adversely affected the mobility of the commuting public, then Secretary of Labor Bienvenido E.
physical exertion, it was easy for him to succumb to the heart ailment. We hold that Laguesma issued on that same day an assumption of jurisdiction order directing all the striking EEs
the illness of the decedent which caused his death is work-connected, and thus "to return to work immediately upon receipt of this Order and for the Company to accept them back
compensable by virtue of ECC Resolution No. 432 dated 20 July 1977. under the same terms and conditions of employment prevailing prior to the strike."
As a final note, we find it necessary to reiterate that P.D. No. 626, as amended, is a
social legislation whose primordial purpose is to provide meaningful protection to the In their memorandum,DOLE Sheriffs reported to Sec. Laguesma that they tried to personally serve
working class against the hazards of disability, illness and other contingencies the Order of assumption of jurisdiction to the Union through its officials and members, but the latter
resulting in the loss of income. refused to receive the same. The sheriffs thus posted the Order in the different stations/terminals of
PETITION GRANTED. the light rail transit system. Further, the Order of assumption of jurisdiction was published in
SEAFDEC v NLRC Philippine Daily Inquirer6and the Philippine Star. Despite such,the Union officers and members,
G.R. No. 86773 February 14, 1992 including herein private respondent workers, failed to return to work. Thus, they were considered
NOCON, J.: dismissed from employment.
FACTS: SEAFDEC-AQD is a department of an international organization, the Southeast Asian
Fisheries Development Center, organized through an agreement entered into in Bangkok, Thailand In the meantime, on July 31, 2000, the Agreement for the Management and Operation of the Metro
on December 28, 1967 by the governments of Malaysia, Singapore, Thailand, Vietnam, Indonesia Manila Light Rail Transit System between petitioners LRTA and METRO expired. The Board of
and the Philippines with Japan as the sponsoring country. Directors of petitioner LRTA decided not to renew the contract with petitioner METRO and directed
the LRTA management instead to immediately take over the management and operation of the
private respondent Juvenal Lazaga was employed as a Research Associate an a probationary light rail transit system to avert the mass transportation crisis.
basis by the SEAFDEC-AQD and was appointed Senior External Affairs Officer on January 5, 1983
with a monthly basic salary of P8,000.00 and a monthly allowance of P4,000.00. Thereafter, he private respondents Venus, Jr., Santos, Jr., and Roy filed a complaint for illegal dismissal before
was appointed to the position of Professional III and designated as Head of External Affairs Office the NLRC and impleaded both petitioners LRTA and METRO. LA rendered a consolidated
with the same pay and benefits. judgment in favor of the private respondent workers.

petitioner Lacanilao in his capacity as Chief of SEAFDEC-AQD sent a notice of termination to NLRC found that the striking workers failed to heed the return to work order and reversed and set
private respondent informing him that due to the financial constraints being experienced by the aside the decision of the LA. The suit against LRTA was dismissed since "LRTA is a GOCCS with
department, his services shall be terminated at the close of office hours on May 15, 1986 and that an original charter" and "it had no participation whatsoever with the termination of complainants
he is entitled to separation benefits equivalent to one (1) month of his basic salary for every year of employment. In fine, the cases against the LRTA and METRO were dismissed, respectively, for
service plus other benefits. lack of jurisdiction and for lack of merit. NLRC denied the workers Motion for Reconsideration
"[t]here being no showing that the Commission committed, (and that) the Motion for
Upon petitioner SEAFDEC-AQD's failure to pay private respondent his separation pay, the latter Reconsideration was based on, palpable or patent errors, and the fact that (the) said motion is not
filed on March 18, 1987 a complaint against petitioners for non-payment of separation benefits plus under oath."
moral damages and attorney's fees with the Arbitration Branch of the NLRC.
CA reversed the NLRC and reinstated the Decision rendered by the Labor Arbiter. Public
Petitioners in their answer with counterclaim alleged that the NLRC has no jurisdiction over the respondent appellate court declared the workers dismissal as illegal, pierced the veil of separate
case inasmuch as the SEAFDEC-AQD is an international organization and that private respondent corporate personality and held the LRTA and METRO as jointly liable for back wages.
must first secure clearances from the proper departments for property or money accountability
before any claim for separation pay will be paid, and which clearances had not yet been obtained HELD:We believe that METRO EEs are not covered by the prohibition against strikes applicable to
by the private respondent. EEs embraced in the Civil Service. It is not disputed, but in fact conceded, that METRO EEs are
not covered by the Civil Service. This being so, METRO EEs are not covered by the Civil Service
A formal hearing was conducted whereby private respondent alleged that the non-issuance of the law, rules and regulations but are covered by the Labor Code and, therefore, the rights and
clearances by the petitioners was politically motivated and in bad faith. On the other hand, prerogatives granted to private EEs there under, including the right to strike, are available to them.
petitioners alleged that private respondent has property accountability and an outstanding
obligation to SEAFDEC-AQD in the amount of P27,532.11. Furthermore, private respondent is not Moreover, as noted by Secretary Benjamin E. Diokno, of the Department of Budget and
entitled to accrued sick leave benefits amounting to P44,000.00 due to his failure to avail of the Management, in his letter, the EEs of METRO are not entitled to the government amelioration
same during his employment with the SEAFDEC-AQD. assistance authorized by the President pursuant to AO37 for government EEs, because the EEs of
METRO are not government EEs since Metro, Inc. "could not be considered as GOCCS as defined
ISSUE: whether NLRC has no jurisdiction to hear and decide respondent Lazaga's complaint since under Section 3 (b) of EO518.
SEAFDEC-AQD is immune from suit owing to its international character and the complaint is in
effect a suit against the State which cannot be maintained without its consent. The labor dispute only arose in 2000, after a deadlock occurred during the collective bargaining
The petition is impressed with merit. between petitioner METRO and the workers union. This alone is not a justification to pierce the
corporate veil of petitioner METRO and make petitioner LRTA liable to private respondent workers.
HELD: Petitioner SEAFDEC-AQD is an international agency beyond the jurisdiction of public There are no badges of fraud or any wrongdoing to pierce the corporate veil of petitioner METRO.
respondent NLRC. The RP became a signatory to the Agreement establishing SEAFDEC. The the test in determining the applicability of the doctrine of piercing the veil of corporate fiction is as
purpose of the Center is to contribute to the promotion of the fisheries development in Southeast follows:
Asia by mutual co-operation among the member governments. The Council shall be the supreme "1. Control, not mere majority or complete stock control, but complete domination, not only of
organ of the Center and all powers of the Center shall be vested in the Council. finances but of policy and business practice in respect to the transaction attacked so that the
corporate entity as to this transaction had at the time no separate mind, will or existence of its own;
Being an intergovernmental organization, SEAFDEC including its Departments (AQD), enjoys 2. Such control must have been used by the defendant to commit fraud or wrong, to perpetuate the
functional independence and freedom from control of the state in whose territory its office is violation of a statutory or other positive legal duty, or dishonest and unjust act in contravention of
located. Pursuant to its being a signatory to the Agreement, It expressly waived the application of plaintiffs legal rights; and
the Philippine laws on the disbursement of funds of petitioner SEAFDEC-AQD. 3. The aforesaid control and breach of duty must proximately cause the injury or unjust loss
complained of.
Respondent Lazaga's invocation of estoppel with respect to the issue of jurisdiction is unavailing
because estoppel does not apply to confer jurisdiction to a tribunal that has none over a cause of The absence of any one of these elements prevents piercing the corporate veil. Here, the records
action. Jurisdiction is conferred by law. Where there is none, no agreement of the parties can do not show that control was used to commit a fraud or wrong. In fact, it appears that piercing the
provide one. Settled is the rule that the decision of a tribunal not vested with appropriate jurisdiction corporate veil for the purpose of delivery of public service, would lead to a confusing situation since
is null and void. the outcome would be that Metro will be treated as a mere alter ego of LRTA, not having a
separate corporate personality from LRTA, when dealing with the issue of strike, and a separate
WHEREFORE, finding SEAFDEC-AQD to be an international agency beyond the jurisdiction of the juridical entity not covered by the Civil Service when it comes to other matters. Under the
courts or local agency of the Philippine government. Constitution, a government corporation is either one with original charter or one without original
charter, but never both.
LIGHT RAIL TRANSIT AUTHORITY vs. PERFECTO H. VENUS etc.
In sum, petitioner LRTA cannot be held liable to the EEs of petitioner METRO. The contention of
G.R. No. 163782 March 24, 2006
the petitioner that the private respondents abandoned their position is also not acceptable. An EE
METRO TRANSIT ORGANIZATION, INC. vs. COURT OF APPEALS, PERFECTO H. VENUS,
who forthwith takes steps to protest his lay-off cannot by any logic be said to have abandoned his
G.R. No. 163881 March 24, 2006
work. For abandonment to constitute a valid cause for termination of employment, there must be a
PUNO, J.:
deliberate, unjustified refusal of the EE to resume his employment. This refusal must be clearly
established. As we stressed in a recent case, mere absence is not sufficient; it must be
FACTS: Petitioner LRTA is a GOCCS created by EO603 to construct and maintain a light rail
accompanied by overt acts unerringly pointing to the fact that the EE simply does not want to work
transit system and provide the commuting public with an efficient, economical, dependable and
safe transportation. Petitioner METRO, formerly Meralco Transit Organization, Inc., was a qualified anymore. In the instant case, private respondent workers could not have defied the return-to-work
order of the Secretary of Labor simply because they were dismissed immediately, even before they
transportation corporation duly organized in accordance with the provisions of the Corporation
Code, registered with the SEC and existing under Philippine laws. could obey the said order.
Paloma v. PAL
petitioner LRTA constructed a light rail transit system from Monumento in Kalookan City to [G.R. No. 148415, July 14, 2008]
Baclaran in Paraaque, Metro Manila. To provide the commuting public with an efficient and --------------------------------------------------
dependable light rail transit system, petitioner LRTA, after a bidding process, entered into a 10year PAL v. Paloma
Agreement for the Management and Operation of the Metro Manila Light Rail Transit System with G.R. NO. 156764
petitioner METRO.The Agreement provided, METRO shall be free to employ such EEs and officers VELASCO JR., J.:
as it shall deem necessary in order to carry out the requirements of the Agreement. Such EEs and
officers shall be the EEs of METRO and not of the LRTA. METRO shall prepare a compensation
Page 32 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

FACTS: Paloma worked with PAL from September 1957, rising from the ranks to retire, after 35 more persons to whom, in consideration of a fee, an offer or promise of employment is made in the
years of continuous service, as senior vice president for finance. In March 1992, or some nine (9) course of the "canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring (of)
months before Paloma retired on November 30, 1992, PAL was privatized. workers. "

By way of post-employment benefits, PAL paid Paloma the total amount of PhP 5,163,325.64 The number of persons dealt with is not an essential ingredient of the act of recruitment and
which represented his separation/retirement gratuity and accrued vacation leave pay. For the placement of workers. Any of the acts mentioned in the basic rule in Article 13(b) will constitute
benefits thus received, Paloma signed a document denominated Release and Quitclaim[3] but recruitment and placement even if only one prospective worker is involved. The proviso merely lays
inscribed the following reservation therein: "Without prejudice to my claim for further leave benefits down a rule of evidence that where a fee is collected in consideration of a promise or offer of
embodied in my aide memoire transmitted to Mr. Roberto Anonas covered by my 27 Nov. 1992 employment to two or more prospective workers, the individual or entity dealing with them shall be
letter deemed to be engaged in the act of recruitment and placement. The words "shall be deemed"
create that presumption.
The leave benefits Paloma claimed being entitled to refer to his 450-day accrued sick leave credits
which PAL allegedly only paid the equivalent of 18 days. He anchored his entitlement on EO 1077 the word "shall be deemed" should by the same token be given the force of a disputable
dated January 9, 1986, and his having accumulated a certain number of days of sick leave credits, presumption or of prima facie evidence of engaging in recruitment and placement.
as acknowledged in a letter of Alvia R. Leao, then an administrative assistant in PAL. Leas
letter dated November 12, 1992 pertinently reads: At your request, we are pleased to confirm At any rate, the interpretation here adopted should give more force to the campaign against illegal
herewith the balance of your sick leave credits as they appear in our records: 230 days. According recruitment and placement, which has victimized many Filipino workers seeking a better life in a
to our existing policy, an EE is entitled to accumulate sick leave with pay only up to a maximum of foreign land, and investing hard- earned savings or even borrowed funds in pursuit of their dream,
230 days. only to be awakened to the reality of a cynical deception at the hands of theirown countrymen.
PP vs.RODOLFO GALLO y GADOT et al.
Had there been no ceiling as mandated by Company policy, your sick leave credits would have G.R. No. 187730 June 29, 2010
totaled 450 days to date. Answering Paloma's written demands for conversion to cash of his VELASCO, JR., J.:
accrued sick leave credits, PAL asserted having paid all of Paloma's commutable sick leave credits
due him pursuant to company policy made applicable to PAL officers starting 1990. FACTS: Originally, accused-appellant Gallo and accused Pacardo and Manta, together with
Mardeolyn Mardeolyn and 9 others, were charged with syndicated illegal recruitment and 18 counts
The company leave policy adverted to grants PAL's regular ground personnel a graduated sick of estafa committed against 18 complainants, including Dela Caza, Guantero and Sare. the
leave benefits, those having rendered at least 25 years of service being entitled to 20 days of sick present appeal concerns solely accused-appellants conviction for syndicated illegal recruitment in
leave for every year of service. An EE, under the policy, may accumulate sick leaves with pay up to Criminal Case No. 02-206293 and for estafa in Criminal Case No. 02-206297.
230 days. Subject to defined qualifications, sick leave credits in excess of 230 days shall be
commutable to cash at the EE's option and shall be paid in lump sum on or before May 31st of the On May 22, 2001, Dela Caza was introduced by Eleanor Panuncio to accused-appellant Gallo,
following year they were earned.[6] Per PAL's records, Paloma appears to have, for the period Pacardo, Manta, Mardeolyn, Lulu Mendanes, Yeo Sin Ung and another Korean national at the
from 1990 to 1992, commuted 58 days of his sick leave credits, broken down as follows: 20 days office of MPM Agency located in Malate, Manila. He was told that Mardeolyn was the President of
each in 1990 and 1991 and 18 days in 1992. MPM Agency, while Nelmar Martir was one of the incorporators. Also, that Marcelino Martir,
Norman Martir, Nelson Martir and Ma. Cecilia Ramos were its board members. Lulu Mendanes
Subsequently, Paloma filed before the Arbitration Branch of the NLRC Complaint[7] for acted as the cashier and accountant, while Pacardo acted as the agencys EE who was in charge
Commutation of Accrued Sick Leaves Totaling 392 days. In the complaint, docketed as NLRC- of the records of the applicants. Manta, on the other hand, was also an EE who was tasked to
NCR-Case No. 00-08-05792-94, Paloma alleged having accrued sick leave credits of 450 days deliver documents to the Korean embassy.
commutable upon his retirement pursuant to EO 1077 which allows retiring government EEs to
commute, without limit, all his accrued vacation and sick leave credits. And of the 450-day credit, Accused-appellant Gallo then introduced himself as a relative of Mardeolyn and informed Dela
Paloma added, he had commuted only 58 days, leaving him a balance of 392 days of accrued sick Caza that the agency was able to send many workers abroad. Together with Pacardo and Manta,
leave credits for commutation. he also told Dela Caza about the placement fee PhP 150,000 with a down payment of PhP 45,000
and the balance to be paid through salary deduction. Dela Caza, together with the other applicants,
ISSUE: whether or not EO 1077 applies only to government EEs subject to civil service law which, were briefed by Mardeolyn about the processing of their application papers for job placement in
as early as 1960 until its privatization, had been considered as a government-controlled Korea as a factory worker and their possible salary. Accused Yeo Sin Ung also gave a briefing
corporation--is covered by and subject to the limitations peculiar under the civil service system. about the business and what to expect from the company and the salary. Dela Casa paid PhP
45,000 to MPM Agency through accused-appellant Gallo who, while in the presence of Pacardo,
HELD: PAL never ceased to be operated as a private corporation, and was not subjected to the Manta and Mardeolyn, issued and signed OR41.
Civil Service Law. The Court can allow that PAL, during the period material, was a government-
controlled corporation in the sense that the GSIS owned a controlling interest over its stocks. One Two (2) weeks after paying MPM Agency, Dela Caza went back to the agencys office in Malate,
stubborn fact, however, remains: Through the years, PAL functioned as a private corporation and Manila only to discover that the office had moved to a new location at Batangas Street, Brgy. San
managed as such for profit. Their personnel were never considered government EEs. It may Isidro, Makati. He proceeded to the new address and found out that the agency was renamed to
perhaps not be amiss for the Court to take judicial notice of the fact that the civil service law and New Filipino. At the new office, he talked to Pacardo, Manta, Mardeolyn, Lulu Mendanes and
rules and regulations have not actually been made to apply to PAL and its EEs. Of governing accused-appellant Gallo. He was informed that the transfer was done for easy accessibility to
application to them was the Labor Code. clients and for the purpose of changing the name of the agency.

Paloma not entitled to the benefits granted in EO 1077; existing company policy on the matter Dela Caza decided to withdraw his application and recover the amount he paid but Mardeolyn,
applies which took effect in 1990. In our view, the only meaning and import of said rule and Pacardo, Manta and Lulu Mendanes talked him out from pursuing his decision. On the other hand,
regulation is that if an EE does not choose to enjoy his yearly sick leave of thirty days, he may accused-appellant Gallo even denied any knowledge about the money. After 2 more months of
accumulate such sick leave up to a maximum of six months and enjoy this six months sick leave at waiting in vain to be deployed, Dela Caza and the other applicants decided to take action. The first
the end of the sixth year but may not commute it to cash. attempt was unsuccessful because the agency again moved to another place. However, with the
help of the Office of Ambassador Seeres and the Western Police District, they were able to locate
In fine, absent any provision in the applicable company policy authorizing the commutation of the the new address at 500 Prudential Building, Carriedo, Manila. The agency explained that it had to
230 days accrued sick leave credits existing upon retirement, Paloma may not, as a matter of move in order to separate those who are applying as entertainers from those applying as factory
enforceable right, insist on the commutation of his sick leave credits to cash. As PAL's senior vice- workers. Accused-appellant Gallo, together with Pacardo and Manta, were then arrested.
president for finance upon his retirement, Paloma knew or at least ought to have known the
company policy on accrued sick leave credits and how it was being implemented. Had he acted on The testimony of prosecution witness Armando Albines Roa, a POEA EE, was dispensed with after
that knowledge in utmost good faith, these proceedings would have not come to pass. the prosecution and defense stipulated and admitted to the existence of the following documents:
1. Certification issued by Felicitas Q. Bay, Director II, Licensing Branch of the POEA to the effect
PP vs.HON. DOMINGO PANIS that "New Filipino Manpower Development & Services, Inc., with office address at 1256 Batangas
G.R. Nos. L-58674-77 July 11, 1990 St., Brgy. San Isidro, Makati City, was a licensedlandbased agency whose license expired on
CRUZ, J: December 10, 2001 and was delisted from the roster of licensed agencies on December 14, 2001."
It further certified that "Fides J. Pacardo was the agencys Recruitment Officer";
FACTS: Four informations were filed in the CFI of Zambales and Olongapo City alleging that 2. Certification issued by Felicitas Q. Bay of the POEA to the effect that MPM International
Serapio Abug, private respondent herein, "without first securing a license from the Ministry of Labor Recruitment and Promotion is not licensed by the POEA to recruit workers for overseas
as a holder of authority to operate a fee-charging employment agency, did then and there wilfully, employment;
unlawfully and criminally operate a private fee charging employment agency by charging fees and
expenses (from) and promising employment in Saudi Arabia" to four separate individuals named For his defense, accused-appellant denied having any part in the recruitment of Dela Caza. In fact,
therein, in violation of Article 16 in relation to Article 39 of the Labor Code. he testified that he also applied with MPM Agency for deployment to Korea as a factory worker.
According to him, he gave his application directly with Mardeolyn because she was his town mate
RESPONDENTS CONTENTION: Abug filed a M2Q on the ground that the informations did not and he was allowed to pay only PhP 10,000 as processing fee. Further, in order to facilitate the
charge an offense because he was accused of illegally recruiting only one person in each of the processing of his papers, he agreed to perform some tasks for the agency, such as taking
four informations. Under the proviso in Article 13(b), he claimed, there would be illegal recruitment photographs of the visa and passport of applicants, running errands and performing such other
only "whenever two or more persons are in any manner promised or offered any employment for a tasks assigned to him, without salary except for some allowance. He said that he only saw Dela
fee. " Denied at first, the motion was reconsidered and finally granted. Caza one or twice at the agencys office when he applied for work abroad. Lastly, that he was also
promised deployment abroad but it never materialized.
PETITIONERS CONTENTION1: is that the private respondent is being prosecuted under Article
39 in relation to Article 16 of the Labor Code; hence, Article 13(b) is not applicable. However, as RTC rendered its Decision convicting the accused of syndicated illegal recruitment and estafa. CA:
the first two cited articles penalize acts of recruitment and placement without proper authority, Decision of the RTC of Manila is AFFIRMED with the MODIFICATION.The CA held the totality of
which is the charge embodied in the informations, application of the definition of recruitment and the prosecutions evidence showed that the accused-appellant, together with others, engaged in
placement in Article 13(b) is unavoidable. the recruitment of Dela Caza. His actions and representations to Dela Caza can hardly be
construed as the actions of a mere errand boy. As determined by the appellate court, the offense is
PETITIONERS CONTENTION2: that the requirement of two or more persons is imposed only considered economic sabotage having been committed by more than three (3) persons, namely,
where the recruitment and placement consists of an offer or promise of employment to such accused-appellant Gallo, Mardeolyn, Eleonor Panuncio and Yeo Sin Ung. More importantly, a
persons and always in consideration of a fee. The other acts mentioned in the body of the article personal found guilty of illegal recruitment may also be convicted of estafa.7 The same evidence
may involve even only one person and are not necessarily for profit. proving accused-appellants commission of the crime of illegal recruitment in large scale also
establishes his liability for estafa under paragragh 2(a) of Article 315 of the Revised Penal Code
ISSUE: WON the interpretation of both parties of Article 13(b) of P.D. 442 were correct. (RPC).

HELD: Neither interpretation is acceptable. We fail to see why the proviso should speak only of an ISSUES:The court a quo gravely erred in finding the accused-appellant guilty of 1) illegal
offer or promise of employment if the purpose was to apply the requirement of two or more persons recruitment committed by a syndicate despite the failure of the prosecution to prove the same
to all the acts mentioned in the basic rule. For its part, the petitioner does not explain why dealings beyond reasonable doubt AND 2)estafa despite the failure of the prosecution to prove the same
with two or more persons are needed where the recruitment and placement consists of an offer or beyond reasonable doubt.
promise of employment but not when it is done through "canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring (of) workers. HELD: 1.The appeal has no merit. Evidence supports conviction of the crime of Syndicated Illegal
Recruitment To commit syndicated illegal recruitment, three elements must be established: (1) the
As we see it, the proviso was intended neither to impose a condition on the basic rule nor to offender undertakes either any activity within the meaning of "recruitment and placement" defined
provide an exception thereto but merely to create a presumption. The presumption is that the under Article 13(b), or any of the prohibited practices enumerated under Art. 34 of the Labor Code;
individual or entity is engaged in recruitment and placement whenever he or it is dealing with two or (2) he has no valid license or authority required by law to enable one to lawfully engage in

Page 33 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

recruitment and placement of workers;8 and (3) the illegal recruitment is committed by a group of 3 Decision, affirming Ocdens conviction but modifying the penalties imposed upon her for the three
or more persons conspiring or confederating with one another.9 When illegal recruitment is counts of estafa.
committed by a syndicate or in large scale, i.e., if it is committed against 3 or more persons
individually or as a group, it is considered an offense involving economic sabotage. ISSUES: THE TRIAL COURT ERRED IN CONVICTING ACCUSED-APPELLANT OF 1)ILLEGAL
RECRUITMENT COMMITTED IN LARGE SCALE ALTHOUGH THE CRIME WAS NOT PROVEN
After a thorough review of the records, we believe that the prosecution was able to establish the BEYOND REASONABLE DOUBT and 2) ESTAFA.
elements of the offense sufficiently. The evidence readily reveals that MPM Agency was never
licensed by the POEA to recruit workers for overseas employment. Even with a license, however, HELD: 1.Ocdens aforementioned contentions are without merit. It is well-settled that to prove
illegal recruitment could still be committed under Section 6 of Republic Act No. 8042 ("R.A. 8042"), illegal recruitment, it must be shown that appellant gave complainants the distinct impression that
otherwise known as the Migrants and Overseas Filipinos Act of 1995. In the instant case, accused- he had the power or ability to send complainants abroad for work such that the latter were
appellant committed the acts enumerated in Sec. 6 of R.A. 8042. Testimonial evidence presented convinced to part with their money in order to be employed.
by the prosecution clearly shows that, in consideration of a promise of foreign employment,
accused-appellant received the amount of Php 45,000.00 from Dela Caza. When accused- It is not necessary for the prosecution to present a certification that Ocden is a non-licensee or
appellant made misrepresentations concerning the agencys purported power and authority to non-holder of authority to lawfully engage in the recruitment and placement of workers. Section 6 of
recruit for overseas employment, and in the process, collected money in the guise of placement Republic Act No. 8042 enumerates particular acts which would constitute illegal recruitment
fees, the former clearly committed acts constitutive of illegal recruitment. "whether committed by any person, whether a non-licensee, non-holder, licensee or holder of
authority." Among such acts, under Section 6(m) of Republic Act No. 8042, is the "[f]ailure to
Additionally, accused-appellant cannot argue that the trial court erred in finding that he was indeed reimburse expenses incurred by the worker in connection with his documentation and processing
an EE of the recruitment agency. On the contrary, his active participation in the illegal recruitment for purposes of deployment, in cases where the deployment does not actually take place without
is unmistakable. The fact that he was the one who issued and signed the official receipt belies his the workers fault."
profession of innocence. This Court likewise finds the existence of a conspiracy between the Since illegal recruitment under Section 6(m) can be committed by any person, even by a licensed
accused-appellant and the other persons in the agency who are currently at large, resulting in the recruiter, a certification on whether Ocden had a license to recruit or not, is inconsequential. Ocden
commission of the crime of syndicated illegal recruitment. Without a doubt, the nature and extent of committed illegal recruitment as described in said provision by receiving placement fees from
the actions of accused-appellant, as well as with the other persons in MPM Agency clearly show Mana-a, Ferrer, and Golidans two sons, Jeffries and Howard, evidenced by receipts Ocden herself
unity of action towards a common undertaking. Hence, conspiracy is evidently present. issued; and failing to reimburse/refund to Mana-a, Ferrer, and Golidans two sons the amounts they
had paid when they were not able to leave for Italy, through no fault of their own.
To reiterate, in establishing conspiracy, it is not essential that there be actual proof that all the
conspirators took a direct part in every act. It is sufficient that they acted in concert pursuant to the Contrary to Ocdens claims, Golidan had personal knowledge of Ocdens illegal recruitment
same objective.14 activities, which she could competently testify to. Golidan herself had personal dealings with Ocden
as Golidan assisted her sons, Jeffries and Howard, in completing the requirements for their
2.The prosecution likewise established that accused-appellant is guilty of the crime of estafa as overseas job applications, and later on, in getting back home from Zamboanga where Jeffries and
defined under Article 315 paragraph 2(a) of the Revised Penal Code. The elements of estafa in Howard were stranded, and in demanding a refund from Ocden of the placement fees paid. That
general are: (1) that the accused defrauded another (a) by abuse of confidence, or (b) by means of Golidan is seeking a reimbursement of the placement fees paid for the failed deployment of her
deceit; and (2) that damage or prejudice capable of pecuniary estimation is caused to the offended sons Jeffries and Howard strengthens, rather than weakens, the prosecutions case. Going back to
party or third person.15 Deceit is the false representation of a matter of fact, whether by words or illegal recruitment under Section 6(m) of Republic Act No. 8042, failure to reimburse the expenses
conduct, by false or misleading allegations, or by concealment of that which should have been incurred by the worker when deployment does not actually take place, without the workers fault, is
disclosed; and which deceives or is intended to deceive another so that he shall act upon it, to his illegal recruitment.
legal injury.
The affidavit of desistance purportedly executed by Jeffries and Howard does not exonerate Ocden
All these elements are present in the instant case: the accused-appellant, together with the other from criminal liability when the prosecution had successfully proved her guilt beyond reasonable
accused at large, deceived the complainants into believing that the agency had the power and doubt. Generally, the Court attaches no persuasive value to affidavits of desistance, especially
capability to send them abroad for employment; that there were available jobs for them in Korea as when it is executed as an afterthought. It would be a dangerous rule for courts to reject testimonies
factory workers; that by reason or on the strength of such assurance, the complainants parted with solemnly taken before the courts of justice simply because the witnesses who had given them,
their money in payment of the placement fees; that after receiving the money, accused-appellant later on, changed their mind for one reason or another, for such rule would make solemn trial a
and his co-accused went into hiding by changing their office locations without informing mockery and place the investigation of truth at the mercy of unscrupulous witness. It is relevant to
complainants; and that complainants were never deployed abroad. As all these representations of note that "the right of prosecution and punishment for a crime is one of the attributes that by a
the accused-appellant proved false, paragraph 2(a), Article 315 of the Revised Penal Code is thus natural law belongs to the sovereign power instinctly charged by the common will of the members
applicable.1avvphi1 of society to look after, guard and defend the interests of the community, the individual and social
rights and the liberties of every citizen and the guaranty of the exercise of his rights." This cardinal
PP vs. DOLORES OCDEN principle which states that to the State belongs the power to prosecute and punish crimes should
G.R. No. 173198, June 1, 2011 not be overlooked since a criminal offense is an outrage to the sovereign State.
LEONARDO-DE CASTRO, J.:
In her bid to exculpate herself, Ocden asserts that she was also just an applicant for overseas
FACTS:All seven cases against Ocden were consolidated on July 31, 2000 and were tried jointly employment; and that she was receiving her co-applicants job applications and other
after Ocden pleaded not guilty.The prosecution presented three witnesses namely: Mana-a and requirements, and accepting her co-applicants payments of placement fees, because she was
Ferrer), complainants; Golidan), mother of complainants Jeffries and Howard Golidan. designated as the applicants leader by Ramos, the real recruiter.
(1) Ocden informed Mana-a, Ferrer, and Golidan about the job opportunity in Italy and the list of
necessary requirements for application; Ocdens testimony is self-serving and uncorroborated. Ocdens denial of any illegal recruitment
(2) Ocden required Mana-a, Ferrer, and Golidans sons, Jeffries and Howard, to attend the activity cannot stand against the prosecution witnesses positive identification of her in court as the
seminar conducted by Ramos at Ocdens house in Baguio City; person who induced them to part with their money upon the misrepresentation and false promise of
(3) Ocden received the job applications, pictures, bio-data, passports, and the certificates of deployment to Italy as factory workers. Besides, despite several opportunities given to Ocden by
previous employment (which was also issued by Ocden upon payment of P500.00), of Mana-a, the RTC, she failed to present Ramos, who Ocden alleged to be the real recruiter and to whom she
Ferrer, and Golidans sons, Jeffries and Howard; turned over the placement fees paid by her co-applicants.
(4) Ocden personally accompanied Mana-a, Ferrer, and Golidans sons, Jeffries and Howard,
for their medical examinations in Manila; Between the categorical statements of the prosecution witnesses, on the one hand, and the bare
(5) Ocden received money paid as placement fees by Mana-a, Ferrer, and Golidans sons, denial of Ocden, on the other, the former must perforce prevail. An affirmative testimony is far
Jeffries and Howard, and even issued receipts for the same; and stronger than a negative testimony especially when the former comes from the mouth of a credible
(6) Ocden assured Mana-a, Ferrer, and Golidans sons, Jeffries and Howard, that they would witness. Denial, same as an alibi, if not substantiated by clear and convincing evidence, is negative
be deployed to Italy.The defense presented the testimony of Ocden herself. and self-serving evidence undeserving of weight in law. It is considered with suspicion and always
Ocden denied recruiting private complainants and claimed that she was also an applicant for an received with caution, not only because it is inherently weak and unreliable but also because it is
overseas job in Italy, just like them. Ocden identified Ramos as the recruiter. easily fabricated and concocted.25

Ocden recounted that she met Ramos at a seminar held in St. Theresas Compound, Navy Base, conviction for large scale illegal recruitment must be based on a finding in each case of illegal
Baguio City, sometime in June 1998. The seminar was arranged by Comila, Ramoss sub-agent. recruitment of three or more persons, whether individually or as a group. While it is true that the
The seminar was attended by about 60 applicants, including Golidan. Ramos explained how one law does not require that at least three victims testify at the trial, nevertheless, it is necessary that
could apply as worker in a stuff toys factory in Italy. After the seminar, Comila introduced Ocden to there is sufficient evidence proving that the offense was committed against three or more persons.
Ramos. Ocden decided to apply for the overseas job, so she gave her passport and pictures to In this case, there is conclusive evidence that Ocden recruited Mana-a, Ferrer, and Golidans sons,
Ramos. Ocden also underwent medical examination at Zamora Medical Clinic in Manila, and Jeffries and Howard, for purported employment as factory workers in Italy.
completely submitted the required documents to Ramos in September 1998.
And even though only Ferrer and Golidan testified as to Ocdens failure to reimburse the
After the seminar, many people went to Ocdens house to inquire about the jobs available in Italy. placements fees paid when the deployment did not take place, their testimonies already
Since most of these people did not attend the seminar, Ocden asked Ramos to conduct a seminar established the fact of non-reimbursement as to three persons, namely, Ferrer and Golidans two
at Ocdens house. Two seminars were held at Ocdens house, one in September and another in sons, Jeffries and Howard.
December 1998. After said seminars, Ramos designated Ocden as leader of the applicants. As
such, Ocden received her co-applicants applications and documents; accompanied her co- 2.We are likewise affirming the conviction of Ocden for the crime of estafa. The very same
applicants to Manila for medical examination because she knew the location of Zamora Medical evidence proving Ocdens liability for illegal recruitment also established her liability for estafa.
Clinic; and accepted placement fees from Mana-a and Ferrer and from Golidan. In this jurisdiction, it is settled that a person who commits illegal recruitment may be charged and
convicted separately of illegal recruitment under the Labor Code and estafa under par. 2(a) of Art.
Ramos instructed Ocden that the applicants should each pay P250,000.00 and if the applicants 315 of the Revised Penal Code. The offense of illegal recruitment is malum prohibitum where the
could not pay the full amount, they would have to pay the balance through salary deductions once criminal intent of the accused is not necessary for conviction, while estafa is malum in se where the
they start working in Italy. Ocden herself paid Ramos P50,000.00 as placement fee and executed a criminal intent of the accused is crucial for conviction. Conviction for offenses under the Labor
promissory note in Ramoss favor for the balance, just like any other applicant who failed to pay the Code does not bar conviction for offenses punishable by other laws. Conversely, conviction for
full amount. Ocden went to Malaysia with Ramoss male friend but she failed to get her visa for estafa under par. 2(a) of Art. 315 of the Revised Penal Code does not bar a conviction for illegal
Italy. recruitment under the Labor Code. It follows that ones acquittal of the crime of estafa will not
necessarily result in his acquittal of the crime of illegal recruitment in large scale, and vice versa.31
Ocden denied deceiving Mana-a and Ferrer. Ocden alleged that she turned over to Ramos the The elements of estafa are present in this case. Both these elements are present in the instant
money Mana-a and Ferrer gave her, although she did not indicate in the receipts she issued that case. Ocden represented to Ferrer, Golidan, and Golidans two sons, Jeffries and Howard, that she
she received the money for and on behalf of Ramos. could provide them with overseas jobs. Convinced by Ocden, Ferrer, Golidan, and Golidans sons
Ocden pointed out that she and some of her co-applicants already filed a complaint against Ramos paid substantial amounts as placement fees to her. Ferrer and Golidans sons were never able to
before the NBI offices in Zamboanga City and Manila.13 leave for Italy, instead, they ended up in Zamboanga, where, Ocden claimed, it would be easier to
have their visas to Italy processed. Despite the fact that Golidans sons, Jeffries and Howard, were
RTC rendered a Decision finding Ocden guilty beyond reasonable doubt of the crimes of illegal stranded in Zamboanga for almost a month, Ocden still assured them and their mother that they
recruitment in large scale and three counts of estafa.Aggrieved by the above decision, Ocden filed would be able to leave for Italy. There is definitely deceit on the part of Ocden and damage on the
with the RTC a Notice of Appeal on August 15, 2001.15 The RTC erroneously sent the records of part of Ferrer and Golidans sons, thus, justifying Ocdens conviction for estafa in Criminal Case
the cases to the Court of Appeals, which, in turn, correctly forwarded the said records to us.In our Nos. 16316-R, 16318-R, and 16964-R.
Resolution16 dated May 6, 2002, we accepted the appeal and required the parties to file their Applying the Indeterminate Sentence Law, we take the minimum term from the penalty next lower
respective briefs. In the same resolution, we directed the Superintendent of the Correctional than the minimum prescribed by law, or anywhere within prision correccional minimum and
Institute for Women to confirm Ocdens detention thereat. the appellate court promulgated its medium (i.e., from 6 months and 1 day to 4 years and 2 months).33 Consequently, both the RTC

Page 34 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

and the Court of Appeals correctly fixed the minimum term in Criminal Case Nos. 16316-R and US$515.00, overtime pay and other benefits. The following day or on 4 February 1998, the contract
16318-R at 2 years, 11 months, and 10 days of prision correccional; and in Criminal Case No. was approved by the Philippine Overseas Employment Administration (POEA). Petitioner was to
16964-R at 4 years and 2 months of prision correccional, since these are within the range of prision be deployed on board the "MSV Seaspread" which was scheduled to leave the port of Manila for
correccional minimum and medium.1avvphi1 Canada on 13 February 1998.
As for the maximum term under the Indeterminate Sentence Law, we take the maximum period of
the prescribed penalty, adding 1 year of imprisonment for every P10,000.00 in excess of A week before the scheduled date of departure, Capt. Pacifico Fernandez, respondents Vice
P22,000.00, provided that the total penalty shall not exceed 20 years. To compute the maximum President, sent a facsimile message to the captain of "MSV Seaspread," which reads: I received a
period of the prescribed penalty, the time included in prision correccional maximum to prision phone call today from the wife of Paul Santiago in Masbate asking me not to send her husband to
mayor minimum shall be divided into three equal portions, with each portion forming a period. MSV Seaspread anymore. Other callers who did not reveal their identity gave me some feedbacks
Following this computation, the maximum period for prision correccional maximum to prision mayor that Paul Santiago this time if allowed to depart will jump ship in Canada like his brother
minimum is from 6 years, 8 months, and 21 days to 8 years. The incremental penalty, when proper, Christopher Santiago, O/S who jumped ship from the C.S. Nexus in Kita-kyushu, Japan last
shall thus be added to anywhere from 6 years, 8 months, and 21 days to 8 years, at the discretion December, 1997.To this message the captain of "MSV Seaspread" replied: Many thanks for your
of the court.34 advice concerning P. Santiago, A/B. Please cancel plans for him to return to Seaspread. 4
In computing the incremental penalty, the amount defrauded shall be substracted by P22,000.00, On 9 February 1998, petitioner was thus told that he would not be leaving for Canada anymore, but
and the difference shall be divided by P10,000.00. Any fraction of a year shall be discarded as was he was reassured that he might be considered for deployment at some future date.
done starting with People v. Pabalan.35
There being no aggravating circumstance, we apply the lowest of the maximum period, which is 6 Petitioner filed a complaint for illegal dismissal, damages, and attorney's fees against respondent
years, 8 months, and 21 days. Adding the one year incremental penalty, the maximum term of and its foreign principal, Cable and Wireless (Marine) Ltd. 5 The case was raffled to Labor Arbiter
Ocdens indeterminate sentence in these two cases is only 7 years, 8 months, and 21 days of TeresitaCastillon-Lora, who ruled that the employment contract remained valid but had not
prision mayor. commenced since petitioner was not deployed. According to her, respondent violated the rules and
regulations governing overseas employment when it did not deploy petitioner, causing petitioner to
HORTENCIA SALAZAR vs. HON. TOMAS D. ACHACOSO suffer actual damages representing lost salary income for nine (9) months and fixed overtime fee,
G.R. No. 81510 March 14, 1990 all amounting to US$7, 209.00.

FACTS: On November 3, 1987, public respondent Atty. Ferdinand Marquez to whom said The labor arbiter held respondent liable. On appeal by respondent, the National Labor Relations
complaint was assigned, sent to the petitioner the following telegram: On the same day, having Commission (NLRC) ruled that there is no ER-EE relationship between petitioner and respondent
ascertained that the petitioner had no license tooperate a recruitment agency, public respondent because under the Standard Terms and Conditions Governing the Employment of Filipino
Administrator Tomas D. Achacoso issued his challenged CLOSURE AND SEIZURE ORDER NO. Seafarers on Board Ocean Going Vessels (POEA Standard Contract), the employment contract
1205. shall commence upon actual departure of the seafarer from the airport or seaport at the point of
hire and with a POEA-approved contract. In the absence of an ER-EE relationship between the
On January 26, 1988 POEA Director on Licensing and Regulation Atty. Estelita B. Espiritu issued parties, the claims for illegal dismissal, actual damages, and attorneys fees should be dismissed. 7
an office order designating respondents Atty. Marquez, Atty. Jovencio Abara and Atty. Ernesto On the other hand, the NLRC found respondents decision not to deploy petitioner to be a valid
Vistro as members of a team tasked to implement Closure and Seizure Order No. 1205. Doing so, exercise of its management prerogative.
the group assisted by Mandaluyong policemen and mediamen Lito Castillo of the People's Journal
and Ernie Baluyot of News Today proceeded to the residence of the petitioner at 615 R.O. Santos Petitioner moved for the reconsideration of the NLRCs Decision but his motion was denied for lack
St., Mandaluyong, Metro Manila. There it was found that petitioner was operatin Hannalie Dance of merit.10 He elevated the case to the Court of Appeals through a petition for certiorari. the Court
Studio. Before entering the place, the team served said Closure and Seizure order on a certain of Appeals noted that there is an ambiguity in the NLRCs Decision when it affirmed with
Mrs. Flora Salazar who voluntarily allowed them entry into the premises. Mrs. Flora Salazar modification the labor arbiters Decision, because by the very modification introduced by the
informed the team that Hannalie Dance Studio was accredited with Moreman Development (Phil.). Commission (vacating the award of actual damages and attorneys fees), there is nothing more left
However, when required to show credentials, she was unable to produce any. Inside the studio,the in the labor arbiters Decision to affirm.12According to the appellate court, petitioner is not entitled to
team chanced upon twelve talent performers practicing a dance number and saw about twenty actual damages because damages are not recoverable by a worker who was not deployed by his
more waiting outside, The team confiscated assorted costumes which were duly receipted for by agency within the period prescribed in the POEA Rules.13 It agreed with the NLRCs finding that
Mrs. Asuncion Maguelan and witnessed by Mrs.Flora Salazar. petitioners non-deployment was a valid exercise of respondents management prerogative. 14 It
added that since petitioner had not departed from the Port of Manila, no ER-EE relationship
On January 28, 1988, petitioner filed with POEA a letter requesting that the personal properties between the parties arose and any claim for damages against the so-called ER could have no leg
seized at her residence last January 26, 1988 be immediately returned on the ground that said to stand on.15
seizure was contrary to law and against the will of the owner thereof. Among our reasons are the
following: 1. Our client has not been given any prior notice or hearing, hence the Closure and Petitioners subsequent motion for reconsideration was denied on 19 February 2004. 16 Petitioner
Seizure Order No. 1205 dated November 3, 1987 violates "due process of law" guaranteed under maintains that respondent violated the Migrant Workers Act and the POEA Rules when it failed to
Sec. 1, Art. III, of the Philippine Constitution; 2. Your acts also violate Sec. 2, Art. III of the deploy him within thirty (30) calendar days without a valid reason. In doing so, it had unilaterally
Philippine Constitution which guarantees right of the people "to be secure in their persons, houses, and arbitrarily prevented the consummation of the POEA- approved contract. Since it prevented his
papers, and effects against unreasonable searches and seizures of whatever nature and for any deployment without valid basis, said deployment being a condition to the consummation of the
purpose."; 3. The premises invaded by your Mr. Ferdi Marquez and five (5) others (including2 POEA contract, the contract is deemed consummated, and therefore he should be awarded actual
policemen) are the private residence of the Salazar family, and the entry, search as well as the damages, consisting of the stipulated salary and fixed overtime pay. 18 Petitioner adds that since
seizure of the personal properties belonging to our client were without her consent and were done the contract is deemed consummated, he should be considered an EE for all intents and purposes,
with unreasonable force and intimidation, together with grave abuse of the color of authority, and and thus the labor arbiter and/or the NLRC has jurisdiction to take cognizance of his claims. 19
constitute robbery and violation of domicile under Arts. 293 and 128 of the Revised Penal Code.
Unless said personal properties worth around TEN THOUSAND PESOS (P10,000.00) in all (and Petitioner additionally claims that he should be considered a regular EE, having worked for five (5)
which were already due for shipment to Japan) are returned within twenty-four (24) hours from your years on board the same vessel owned by the same principal and manned by the same local
receipt hereof, we shall feel free to take all legal action, civil and criminal, to protect our client's agent. He argues that respondents act of not deploying him was a scheme designed to prevent
interests. him from attaining the status of a regular EE.20

On February 2, 1988, before POEA could answer the letter, petitioner filed the instant petition. Petitioner submits that respondent had no valid and sufficient cause to abandon the employment
POEA filed a criminal complaint against her with the Pasig Provincial Fiscal. On February 2, 1988, contract, as it merely relied upon alleged phone calls from his wife and other unnamed callers in
the petitioner filed this suit for prohibition. arriving at the conclusion that he would jump ship like his brother. He points out that his wife had
executed an affidavit21 strongly denying having called respondent, and that the other alleged
ISSUE: May the Philippine Overseas Employment Administration (or the Secretary of Labor) validly callers did not even disclose their identities to respondent. 22 Thus, it was error for the Court of
issue warrants of search and seizure (or arrest) under Article 38 of the Labor Code? Appeals to adopt the unfounded conclusion of the NLRC, as the same was not based on
substantial evidence.23
HELD: Under the new Constitution, which states:" no search warrant or warrant of arrest shall
issue except upon probable cause to be determined personally by the judge after examination On the other hand, respondent argues that the Labor Arbiter has no jurisdiction to award
under oath or affirmation of the complainant and the witnesses he may produce, and petitioners monetary claims. His employment with respondent did not commence because his
particularly describing the place to be searched and the persons or things to be seized. " deployment was withheld for a valid reason. Consequently, the labor arbiter and/or the NLRC
cannot entertain adjudication of petitioners case much less award damages to him. The
No longer does the mayor have at this time the power to conduct preliminary investigations, much controversy involves a breach of contractual obligations and as such is cognizable by civil courts. 24
less issue orders of arrest. Section 143 of the LGC has been rendered functus officio by the 1987 On another matter, respondent claims that the second issue posed by petitioner involves a
Constitution. recalibration of facts which is outside the jurisdiction of this Court. 25

We agree that the Presidential Anti-Dollar Salting Task Force exercises, or was meant to exercise, ISSUE: whether the seafarer, who was prevented from leaving the port of Manila and refused
prosecutorial powers, and on that ground, it cannot be said to be a neutral and detached "judge" to deployment without valid reason but whose POEA-approved employment contract provides that
determine the existence of probable cause for purposes of arrest or search. Unlike a magistrate, a the ER-EE relationship shall commence only upon the seafarers actual departure from the port in
prosecutor is naturally interested in the success of his case. Although his office "is to see that the point of hire, is entitled to relief?
justice is done and not necessarily to secure the conviction of the person accused," he stands,
invariably, as the accused's adversary and his accuser. To permit him to issue search warrants and HELD:There is no question that the parties entered into an employment contract on 3 February
indeed, warrants of arrest, is to make him both judge and jury in his own right, when he is neither. 1998, whereby petitioner was contracted by respondent to render services on board "MSV
That makes, to our mind and to that extent, Presidential Decree No. 1936 as amended by Seaspread" for the consideration of US$515.00 per month for nine (9) months, plus overtime pay.
Presidential Decree No. 2002, unconstitutional. 5 However, respondent failed to deploy petitioner from the port of Manila to Canada. Considering
that petitioner was not able to depart from the airport or seaport in the point of hire, the
We reiterate that the Secretary of Labor, not being a judge, may no longer issue search or arrest employment contract did not commence, and no ER-EE relationship was created between the
warrants. Hence, the authorities must go through the judicial process. To that extent, we declare parties.26
Article 38, paragraph (c), of the Labor Code, unconstitutional and of no force and effect.
However, a distinction must be made between the perfection of the employment contract and the
EXCEPTION TO THE RULE THAT ONLY A JUDGE COULD ISSUE WARRANTS: the Morano v. commencement of the ER-EE relationship. SAME with STOLT CASE.
Vivo case involved a deportation case, governed by Section 69 of the defunct Revised Moreover, while the POEA Standard Contract must be recognized and respected, neither the
Administrative Code and by Section 37 of the Immigration Law. We have ruled that in deportation manning agent nor the ER can simply prevent a seafarer from being deployed without a valid
cases, an arrest (of an undesirable alien) ordered by the President or his duly authorized reason. Respondents act of preventing petitioner from departing the port of Manila and boarding
representatives, in order to carry out a final decision of deportation is valid. It is valid, however, "MSV Seaspread" constitutes a breach of contract, giving rise to petitioners cause of action.
because of the recognized supremacy of the Executive in matters involving foreign affairs. Respondent unilaterally and unreasonably reneged on its obligation to deploy petitioner and must
therefore answer for the actual damages he suffered.
Another factor which makes the search warrants under consideration constitutionally objectionable
is that they are in the nature of general warrants. We take exception to the Court of Appeals conclusion that damages are not recoverable by a
worker who was not deployed by his agency. The fact that the POEA Rules 27 are silent as to the
PAUL V. SANTIAGO vs. CF SHARP CREW MANAGEMENT, INC.
payment of damages to the affected seafarer does not mean that the seafarer is precluded from
G.R. No. 162419 July 10, 2007
claiming the same. The sanctions provided for non-deployment do not end with the suspension or
TINGA, J.:
cancellation of license or fine and the return of all documents at no cost to the worker. They do not
forfend a seafarer from instituting an action for damages against the ER or agency which has failed
FACTS: Petitioner had been working as a seafarer for Smith Bell Management, Inc. (respondent)
to deploy him.
for about five (5) years. 2 On 3 February 1998, petitioner signed a new contract of employment with
respondent, with the duration of nine (9) months. He was assured of a monthly salary of
Page 35 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

The POEA Rules only provide sanctions which the POEA can impose on erring agencies. It does rights of the creditor. In order for novation to take place, the concurrence of the following requisites
not provide for damages and money claims recoverable by aggrieved EEs because it is not the is indispensable: 1)There must be a previous valid obligation; 2)There must be an agreement of
POEA, but the NLRC, which has jurisdiction over such matters. the parties concerned to a new contract; 3)There must be the extinguishment of the old contract,
and 4)There must be the validity of the new contract.
Despite the absence of an ER-EE relationship between petitioner and respondent, the Court rules
that the NLRC has jurisdiction over petitioners complaint. The jurisdiction of labor arbiters is not We need not dwell on the issue of prescription. It was settled by the Court of Appeals with its ruling
limited to claims arising from ER-EE relationships. Section 10 of R.A. No. 8042 (Migrant Workers that recovery of damages under the first contract was already time-barred. Thus: Accordingly, the
Act), provides that: Sec. 10.Money Claims. Notwithstanding any provision of law to the contrary, prescriptive period of three (3) years within which Medequillo Jr. may initiate money claims under
the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and the 1st contract commenced on the date of his repatriation. xxx The start of the three (3) year
exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the prescriptive period must therefore be reckoned on February 1992, which by Medequillo Jr.s own
complaint, the claims arising out of an ER-EE relationship or by virtue of any law or contract admission was the date of his repatriation to Manila. It was at this point in time that Medequillo Jr.s
involving Filipino workers for overseas deployment including claims for actual, moral, exemplary cause of action already accrued under the first contract. He had until February 1995 to pursue a
and other forms of damages. x xx [Emphasis supplied] case for illegal dismissal and damages arising from the 1st contract. With the filing of his
Complaint-Affidavit on March 6, 1995, which was clearly beyond the prescriptive period, the cause
The Court also holds that petitioner is entitled to attorneys fees in the concept of damages and of action under the 1st contract was already time-barred.
expenses of litigation. Attorney's fees are recoverable when the defendant's act or omission has
compelled the plaintiff to incur expenses to protect his interest. 31 We note that respondents basis ISSUE2.THE COURT A QUO ERRED IN RULING THAT THERE WAS CONSTRUCTIVE
for not deploying petitioner is the belief that he will jump ship just like his brother, a mere suspicion DISMISSAL UNDER THE SECOND CONTRACT.
that is based on alleged phone calls of several persons whose identities were not even confirmed. HELD:The petitioners argue that under the POEA Contract, actual deployment of the seafarer is a
Time and again, this Court has upheld management prerogatives so long as they are exercised in suspensive condition for the commencement of the employment. We agree with petitioners on
good faith for the advancement of the ERs interest and not for the purpose of defeating or such point. However, even without actual deployment, the perfected contract gives rise to
circumventing the rights of the EEs under special laws or under valid agreements.32 Respondents obligations on the part of petitioners.
failure to deploy petitioner is unfounded and unreasonable, forcing petitioner to institute the suit
below. The award of attorneys fees is thus warranted. The POEA Standard Employment Contract provides that employment shall commence "upon the
actual departure of the seafarer from the airport or seaport in the port of hire."We adhere to the
However, moral damages cannot be awarded in this case. While respondents failure to deploy terms and conditions of the contract so as to credit the valid prior stipulations of the parties before
petitioner seems baseless and unreasonable, we cannot qualify such action as being tainted with the controversy started. Else, the obligatory force of every contract will be useless. Parties are
bad faith, or done deliberately to defeat petitioners rights, as to justify the award of moral bound not only to the fulfillment of what has been expressly stipulated but also to all the
damages. At most, respondent was being overzealous in protecting its interest when it became too consequences which, according to their nature, may be in keeping with good faith, usage and law.
hasty in making its conclusion that petitioner will jump ship like his brother.
Thus, even if by the standard contract employment commences only "upon actual departure of the
We likewise do not see respondents failure to deploy petitioner as an act designed to prevent the seafarer", this does not mean that the seafarer has no remedy in case of non-deployment without
latter from attaining the status of a regular EE. Even if petitioner was able to depart the port of any valid reason. Parenthetically, the contention of the petitioners of the alleged poor performance
Manila, he still cannot be considered a regular EE, regardless of his previous contracts of of respondent while on board the first ship MV "Stolt Aspiration" cannot be sustained to justify the
employment with respondent. In Millares v. National Labor Relations Commission,33 the Court ruled non-deployment, for no evidence to prove the same was presented.
that seafarers are considered contractual EEs and cannot be considered as regular EEs under the
Labor Code. Their employment is governed by the contracts they sign every time they are rehired We rule that distinction must be made between the perfection of the employment contract and the
and their employment is terminated when the contract expires. The exigencies of their work commencement of the ER-EE relationship. The perfection of the contract, which in this case
necessitates that they be employed on a contractual basis. 34 coincided with the date of execution thereof, occurred when petitioner and respondent agreed on
STOLT-NIELSEN TRANSPORTATION GROUP vs. SULPECIO MEDEQUILLO,JR., the object and the cause, as well as the rest of the terms and conditions therein. The
G.R. No. 177498 January 18, 2012 commencement of the ER-EE relationship, as earlier discussed, would have taken place had
PEREZ, J.: petitioner been actually deployed from the point of hire. Thus, even before the start of any ER-EE
relationship, contemporaneous with the perfection of the employment contract was the birth of
FACTS: On 6 March 1995, Sulpecio Madequillo filed a complaint before the Adjudication Office of certain rights and obligations, the breach of which may give rise to a cause of action against the
the POEA against the petitioners for illegal dismissal under a first contract and for failure to deploy erring party. Thus, if the reverse had happened, that is the seafarer failed or refused to be
under a second contract. In his complaint-affidavit,4 respondent alleged that: deployed as agreed upon, he would be liable for damages.
1.On 6 November 1991(First Contract), he was hired by STOLT on behalf of its principal
Chung-Gai Ship Management of Panama as Third Assistant Engineer on board the vessel ISSUE3:THE COURT A QUO ERRED IN FAILING TO FIND THAT EVEN ASSUMING THERE
"Stolt Aspiration" for a period of nine (9) months; WAS BASIS FOR HOLDING PETITIONER LIABLE FOR "FAILURE TO DEPLOY" RESPONDENT,
2.He would be paid with a monthly basic salary of $808.00 and a fixed overtime pay of $404.00 THE POEA RULES PENALIZES SUCH OMISSION WITH A MERE "REPRIMAND."
or a total of $1,212.00 per month during the employment period commencing on 6 November HELD:The appellate court correctly ruled that the penalty of reprimand provided under Rule IV,
1991; Part VI of the POEA Rules and Regulations Governing the Recruitment and Employment of Land-
3.On 8 November 1991, he joined the vessel MV "Stolt Aspiration"; based Overseas Workers is not applicable in this case. The breach of contract happened on
4.On February 1992 or for nearly three (3) months of rendering service and while the vessel February 1992 and the law applicable at that time was the 1991 POEA Rules and Regulations
was at Batangas, he was ordered by the ships master to disembark the vessel and repatriated Governing Overseas Employment. The penalty for non-deployment as discussed is suspension or
back to Manila for no reason or explanation; cancellation of license or fine.
5.Upon his return to Manila, he immediately proceeded to the petitioners office where he was
transferred employment with another vessel named MV "Stolt Pride" under the same terms and ISSUE4. How will the seafarer be compensated by reason of the unreasonable non-deployment of
conditions of the First Contract; the petitioners?
6.On 23 April 1992, the Second Contract was noted and approved by the POEA; HELD:The POEA Rules Governing the Recruitment and Employment of Seafarers do not provide
7.The POEA, without knowledge that he was not deployed with the vessel, certified the Second for the award of damages to be given in favor of the EEs. The claim provided by the same law
Employment Contract on 18 September 1992. refers to a valid contractual claim for compensation or benefits arising from ER-EE relationship or
8.Despite the commencement of the Second Contract on 21 April 1992, petitioners failed to for any personal injury, illness or death at levels provided for within the terms and conditions of
deploy him with the vessel MV "Stolt Pride"; employment of seafarers. However, the absence of the POEA Rules with regard to the payment of
9.He made a follow-up with the petitioner but the same refused to comply with the Second damages to the affected seafarer does not mean that the seafarer is precluded from claiming the
Employment Contract. same. The sanctions provided for non-deployment do not end with the suspension or cancellation
10.On 22 December 1994, he demanded for his passport, seamans book and other of license or fine and the return of all documents at no cost to the worker. As earlier discussed,
employment documents. However, he was only allowed to claim the said documents in they do not forefend a seafarer from instituting an action for damages against the ER or agency
exchange of his signing a document; which has failed to deploy him.
11.He was constrained to sign the document involuntarily because without these documents,
he could not seek employment from other agencies. We thus decree the application of Section 10 of RA8042 (Migrant Workers Act) which provides for
He prayed for actual, moral and exemplary damages as well as attorneys fees for his illegal money claims by reason of a contract involving Filipino workers for overseas deployment. The law
dismissal and in view of the Petitioners bad faith in not complying with the Second Contract. provides: Sec. 10. Money Claims. Notwithstanding any provision of law to the contrary, the LAs
of the National Labor Relations Commission (NLRC) shall have the original and exclusive
The case was transferred to the LA of the DOLE upon the effectivity of the Migrant Workers and jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the
Overseas Filipinos Act of 1995.The parties were required to submit their respective position papers claims arising out of an ER-EE relationship or by virtue of any law or contract involving Filipino
before the LA. However, petitioners failed to submit their respective pleadings despite the workers for overseas deployment including claims for actual, moral, exemplary and other forms of
opportunity given to them.5 damages.

LA rendered a judgment6 finding that the respondent was constructively dismissed by the Following the law, the claim is still cognizable by the LAs of the NLRC under the second phrase of
petitioners. LA found the first contract entered into by and between the complainant and the the provision. Applying the rules on actual damages, Article 2199 of the New Civil Code provides
respondents to have been novated by the execution of the second contract. In other words, that one is entitled to an adequate compensation only for such pecuniary loss suffered by him as
respondents cannot be held liable for the first contract but are clearly and definitely liable for the he has duly proved. Respondent is thus liable to pay petitioner actual damages in the form of the
breach of the second contract.8 However, he ruled that there was no substantial evidence to grant loss of nine (9) months worth of salary as provided in the contract.38 This is but proper because of
the prayer for moral and exemplary damages. NLRC affirmed with modification the Decision of the the non-deployment of respondent without just cause.
LA. SERRANO vs. GALLANT MARITIME SERVICES,INC.

Before the NLRC, the petitioners assailed that they were not properly notified of the hearings that FACTS:Serrano was hired by Gallant Maritime Services, Inc. and Marlow Navigation Co., Ltd.
were conducted before the LA. They further alleged that after the suspension of proceedings (respondents) under a POEA-approved Contract of Employment with the following terms and
before the POEA, the only notice they received was a copy of the decision of the LA.The NLRC conditions: Duration of contract-12 months, Position Chief Officer, Basic Salary-
ruled that records showed that attempts to serve the various notices of hearing were made on US$1,400.00,Hours of work-48 hours a week,Overtime-US$700.00 per month, Vacation leave with
petitioners counsel on record but these failed on account of their failure to furnish the Office of the pay 7.00 days per month .
LA a copy of any notice of change of address. There was also no evidence that a service of notice
of change of address was served on the POEA. On March 19, 1998, the date of his departure, petitioner was constrained to accept a downgraded
employment contract for the position of Second Officer with a monthly salary of US$1,000.00, upon
The NLRC upheld the finding of unjustified termination of contract for failure on the part of the the assurance and representation of respondents that he would be made Chief Officer by the end
petitioners to present evidence that would justify their non-deployment of the respondent.14 It of April 1998. Respondents did not deliver on their promise to make petitioner Chief Officer. Hence,
denied the claim of the petitioners that the monetary award should be limited only to three (3) petitioner refused to stay on as Second Officer and was repatriated to the Philippines. Petitioner's
months for every year of the unexpired term of the contract. It ruled that the factual incidents employment contract was for a period of 12 months, but at the time of his repatriation, he had
material to the case transpired within 1991-1992 or before the effectivity of Republic Act No. 8042 served only two (2) months and seven (7) days of his contract, leaving an unexpired portion of nine
or the Migrant Workers and Overseas Filipinos Act of 1995 which provides for such limitation.15 (9) months and twenty-three (23) days.

ISSUE1:THE COURT A QUO ERRED IN FINDING THAT THE SECOND CONTRACT NOVATED Petitioner filed with the Labor Arbiter a Complaint against respondents for constructive dismissal
THE FIRST CONTRACT. and for payment of his money claims. Labor arbiter rendered decision in favor of Serrano, however
HELD: We concur with the finding that there was a novation of the first employment contract. the LA based his computation on the salary period of three months only rather than the entire
Novation is the extinguishment of an obligation by the substitution or change of the obligation by a unexpired portion of nine months and 23 days of petitioner's employment contract. the LA applied
subsequent one which extinguishes or modifies the first, either by changing the object or principal the salary rate of US$2,590.00, consisting of petitioner's basic salary, US$1,400.00/month +
conditions, or, by substituting another in place of the debtor, or by subrogating a third person in the

Page 36 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

US$700.00/month, fixed overtime pay, + US$490.00/month, vacation leave pay = There being a suspect classification involving a vulnerable sector protected by the Constitution, the
US$2,590.00/compensation per month. Court now subjects the classification to a strict judicial scrutiny, and determines whether it serves a
compelling state interest through the least restrictive means. What constitutes compelling state
Petitioner appealed to the NLRC on the sole issue that the LA erred in not applying that in case of interest is measured by the scale of rights and powers arrayed in the Constitution and calibrated by
illegal dismissal, OFWs are entitled to their salaries for the unexpired portion of their contracts. history. It is akin to the paramount interest of the state for which some individual liberties must give
way, such as the public interest in safeguarding health or maintaining medical standards, or in
The NLRC corrected the LA's computation of the lump-sum salary awarded to petitioner by maintaining access to information on matters of public concern.
reducing the applicable salary rate from US$2,590.00 to US$1,400.00 because R.A. No. 8042
does not provide for the award of overtime pay, which should be proven to have been actually In the present case, the Court dug deep into the records but found no compelling state interest that
performed, and for vacation leave pay. the subject clause may possibly serve.
In fine, the Government has failed to discharge its burden of proving the existence of a compelling
Serrano filed a Motion for Partial Reconsideration, but this time he questioned the constitutionality state interest that would justify the perpetuation of the discrimination against OFWs under the
of the last clause in the 5th paragraph of Section 10 of RA 8042, which reads: Sec. 10. Money subject clause.
Claims. x x x In case of termination of overseas employment without just, valid or authorized
cause as defined by law or contract, the workers shall be entitled to the full reimbursement of his Assuming that, as advanced by the OSG, the purpose of the subject clause is to protect the
placement fee with interest of twelve percent (12%) per annum, plus his salaries for the unexpired employment of OFWs by mitigating the solidary liability of placement agencies, such callous and
portion of his employment contract or for three (3) months for every year of the unexpired term, cavalier rationale will have to be rejected. There can never be a justification for any form of
whichever is less. government action that alleviates the burden of one sector, but imposes the same burden on
another sector, especially when the favored sector is composed of private businesses such as
NLRC denied said petition. Petitioner filed a Petition for Certiorari with the CA, reiterating the placement agencies, while the disadvantaged sector is composed of OFWs whose protection no
constitutional challenge against the subject clause.CA affirmed the NLRC ruling on the reduction of less than the Constitution commands. The idea that private business interest can be elevated to
the applicable salary rate; however, the CA skirted the constitutional issue raised by petitioner. the level of a compelling state interest is odious.

ISSUE/S: 1. WON the subject clause violates Section 10, Article III of the Constitution on non- Moreover, even if the purpose of the subject clause is to lessen the solidary liability of placement
impairment of contracts; 2. WON the subject clause violate Section 1, Article III of the Constitution, agencies vis-a-vis their foreign principals, there are mechanisms already in place that can be
and Section 18, Article II and Section 3, Article XIII on labor as a protected sector; 3. WON The employed to achieve that purpose without infringing on the constitutional rights of OFWs.
subject clause or for three months for every year of the unexpired term, whichever is less in the 5th
paragraph of Section 10 of Republic Act No. 8042 constitutional.
Thus, the subject clause in the 5th paragraph of Section 10 of R.A. No. 8042 is violative of the right
HELD: 1) The answer is in the negative. Petitioners claim that the subject clause unduly interferes of petitioner and other OFWs to equal protection. The subject clause or for three months for every
with the stipulations in his contract on the term of his employment and the fixed salary package he year of the unexpired term, whichever is less in the 5th paragraph of Section 10 of Republic Act
will receive is not tenable. No. 8042 is DECLARED UNCONSTITUTIONAL.
BECMEN SERVICE EXPORTER AND PROMOTIONS,INC., vs. SPS. CUARESMA
The prohibition is aligned with the general principle that laws newly enacted have only a
prospective operation, and cannot affect acts or contracts already perfected; however, as to laws FACTS:On January 6, 1997, Jasmin Cuaresma (Jasmin) was deployed by Becmen Service
already in existence, their provisions are read into contracts and deemed a part thereof. Thus, the Exporter and Promotion, Inc. (Becmen) to serve as assistant nurse in Al-Birk Hospital in the
non-impairment clause under Section 10, Article II is limited in application to laws about to be Kingdom of Saudi Arabia (KSA), for a contract duration of three years, with a corresponding salary
enacted that would in any way derogate from existing acts or contracts by enlarging, abridging or in of US$247.00 per month. Over a year later, she died allegedly of poisoning. Jessie Fajardo, a co-
any manner changing the intention of the parties thereto. worker of Jasmin, narrated that on June 21, 1998, Jasmin was found dead by a female cleaner
lying on the floor inside her dormitory room with her mouth foaming and smelling of poison.
As aptly observed by the OSG, the enactment of R.A. No. 8042 in 1995 preceded the execution of
the employment contract between petitioner and respondents in 1998. Hence, it cannot be argued Based on the police report and the medical report of the examining physician of the Al-Birk
that R.A. No. 8042, particularly the subject clause, impaired the employment contract of the parties. Hospital, who conducted an autopsy of Jasmins body, the likely cause of her death was poisoning.
Rather, when the parties executed their 1998 employment contract, they were deemed to have Jasmins body was repatriated to Manila on September 3, 1998. The following day, the City Health
incorporated into it all the provisions of R.A. No. 8042. Officer of Cabanatuan City conducted an autopsy and the resulting medical report indicated that
Jasmin died under violent circumstances, and not poisoning as originally found by the KSA
But even if the Court were to disregard the timeline, the subject clause may not be declared examining physician. The toxicology report of the NBI, however, tested negative for non-volatile,
unconstitutional on the ground that it impinges on the impairment clause, for the law was enacted metallic poison and insecticides.
in the exercise of the police power of the State to regulate a business, profession or calling,
particularly the recruitment and deployment of OFWs, with the noble end in view of ensuring Simplicio and Mila Cuaresma (the Cuaresmas), Jasmins parents and her surviving heirs, received
respect for the dignity and well-being of OFWs wherever they may be employed. from the Overseas Workers Welfare Administration (OWWA) the following amounts: P50,000.00
for death benefits; P50,000.00 for loss of life; P20,000.00 for funeral expenses; and P10,000.00 for
Police power legislations adopted by the State to promote the health, morals, peace, education, medical reimbursement.
good order, safety, and general welfare of the people are generally applicable not only to future
contracts but even to those already in existence, for all private contracts must yield to the superior On November 22, 1999, the Cuaresmas filed a complaint against Becmen and its principal in the
and legitimate measures taken by the State to promote public welfare. KSA, Rajab & Silsilah Company (Rajab), claiming death and insurance benefits, as well as moral
and exemplary damages for Jasmins death, Jasmins death was work-related, having occurred at
2)The answer is in the affirmative. Section 1, Article III of the Constitution guarantees: No person the ERs premises; that under Jasmins contract with Becmen, she is entitled to iqama insurance
shall be deprived of life, liberty, or property without due process of law nor shall any person be coverage; that Jasmin is entitled to compensatory damages in the amount of US$103,740.00,
denied the equal protection of the law. which is the sum total of her monthly salary of US$247.00 per month under her employment
contract, multiplied by 35 years (or the remaining years of her productive life had death not
Section 18, Article II and Section 3, Article XIII accord all members of the labor sector, without supervened at age 25, assuming that she lived and would have retired at age 60).
distinction as to place of deployment, full protection of their rights and welfare. To Filipino workers,
the rights guaranteed under the foregoing constitutional provisions translate to economic security In their position paper, Becmen and Rajab insist that Jasmin committed suicide, citing a prior
and parity: all monetary benefits should be equally enjoyed by workers of similar category, while all unsuccessful suicide attempt sometime in March or April 1998 and relying on the medical report of
monetary obligations should be borne by them in equal degree; none should be denied the the examining physician of the Al-Birk Hospital. They likewise deny liability because the
protection of the laws which is enjoyed by, or spared the burden imposed on, others in like Cuaresmas already recovered death and other benefits totaling P130,000.00 from the OWWA.
circumstances. They insist that the Cuaresmas are not entitled to iqama insurance because this refers to the
issuance not insurance of iqama, or residency/work permit required in the KSA. On the issue
Such rights are not absolute but subject to the inherent power of Congress to incorporate, when it of moral and exemplary damages, they claim that the Cuaresmas are not entitled to the same
sees fit, a system of classification into its legislation; however, to be valid, the classification must because they have not acted with fraud, nor have they been in bad faith in handling Jasmins case.
comply with these requirements: 1) it is based on substantial distinctions; 2) it is germane to the
purposes of the law; 3) it is not limited to existing conditions only; and 4) it applies equally to all LA dismiss complaint for lack of merit. NLRC reversed the decision of LA undeclared that, based
members of the class. on substantial evidence adduced, Jasmin was the victim of compensable work-connected criminal
aggression.
There are three levels of scrutiny at which the Court reviews the constitutionality of a classification
embodied in a law: a) the deferential or rational basis scrutiny in which the challenged classification CA affirmed NLRC decision,and later on amended its decision,holding Petitioners are hereby
needs only be shown to be rationally related to serving a legitimate state interest; b) the middle-tier adjudged jointly and solidarily liable with the ER for the monetary awards with Becmen Service
or intermediate scrutiny in which the government must show that the challenged classification Exporter and Promotions, Inc. having a right of reimbursement from White Falcon Services, Inc.
serves an important state interest and that the classification is at least substantially related to
serving that interest; and c) strict judicial scrutiny in which a legislative classification which While the case was pending, Becmen filed a manifestation and motion for substitution alleging that
impermissibly interferes with the exercise of a fundamental right or operates to the peculiar Rajab terminated their agency relationship and had appointed White Falcon Services, Inc. (White
disadvantage of a suspect class is presumed unconstitutional, and the burden is upon the Falcon) as its new recruitment agent in the Philippines. Thus, White Falcon was impleaded as
government to prove that the classification is necessary to achieve a compelling state interest and respondent as well, and it adopted and reiterated Becmens arguments in the position paper it
that it is the least restrictive means to protect such interest. subsequently filed.

Upon cursory reading, the subject clause appears facially neutral, for it applies to all OFWs. ISSUES:1.) WON the Cuaresmas are entitled to monetary claims, by way of benefits and
However, a closer examination reveals that the subject clause has a discriminatory intent against, damages, for the death of their daughter Jasmin; 2.) WON Jasmins death be considered as work-
and an invidious impact on, OFWs at two levels: First, OFWs with employment contracts of less connected and thus compensable even while she was not on duty; 3.) WON employment agencies
than one year vis--vis OFWs with employment contracts of one year or more; Second, among may be held jointly and solidarily liable.
OFWs with employment contracts of more than one year; and Third, OFWs vis--vis local workers
with fixed-period employment; HELD:1) Article 19 of the Civil Code provides that every person must, in the exercise of his rights
and in the performance of his duties, act with justice, give everyone his due, and observe honesty
In sum, prior to R.A. No. 8042, OFWs and local workers with fixed-term employment who were and good faith. Article 21 of the Code states that any person who wilfully causes loss or injury to
illegally discharged were treated alike in terms of the computation of their money claims: they were another in a manner that is contrary to morals, good customs or public policy shall compensate the
uniformly entitled to their salaries for the entire unexpired portions of their contracts. But with the latter for the damage. And, lastly, Article 24 requires that in all contractual, property or other
enactment of R.A. No. 8042, specifically the adoption of the subject clause, illegally dismissed relations, when one of the parties is at a disadvantage on account of his moral dependence,
OFWs with an unexpired portion of one year or more in their employment contract have since been ignorance, indigence, mental weakness, tender age or other handicap, the courts must be vigilant
differently treated in that their money claims are subject to a 3-month cap, whereas no such for his protection.
limitation is imposed on local workers with fixed-term employment.
Clearly, Rajab, Becmen and White Falcons acts and omissions are against public policy because
3)The Court concludes that the subject clause contains a suspect classification in that, in the they undermine and subvert the interest and general welfare of our OFWs abroad, who are entitled
computation of the monetary benefits of fixed-term EEs who are illegally discharged, it imposes a to full protection under the law. They set an awful example of how foreign ERs and recruitment
3-month cap on the claim of OFWs with an unexpired portion of one year or more in their contracts, agencies should treat and act with respect to their distressed EEs and workers abroad. Their
but none on the claims of other OFWs or local workers with fixed-term employment. The subject shabby and callous treatment of Jasmins case; their uncaring attitude; their unjustified failure and
clause singles out one classification of OFWs and burdens it with a peculiar disadvantage. refusal to assist in the determination of the true circumstances surrounding her mysterious death,
and instead finding satisfaction in the unreasonable insistence that she committed suicide just so
they can conveniently avoid pecuniary liability; placing their own corporate interests above of the

Page 37 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

welfare of their EEs all these are contrary to morals, good customs and public policy, and
constitute taking advantage of the poor EE and her familys ignorance, helplessness, indigence ISSUES: 1. WHETHER THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN
and lack of power and resources to seek the truth and obtain justice for the death of a loved one. HOLDING THAT PRIVATE RESPONDENT WAS NOT AN APPRENTICE; and 2. WHETHER THE
COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING THAT PETITIONER
Giving in handily to the idea that Jasmin committed suicide, and adamantly insisting on it just to HAD NOT ADEQUATELY PROVEN THE EXISTENCE OF A VALID CAUSE IN TERMINATING
protect Rajab and Becmens material interest despite evidence to the contrary is against the THE SERVICE OF PRIVATE RESPONDENT.
moral law and runs contrary to the good custom of not denouncing ones fellowmen for alleged
grave wrongdoings that undermine their good name and honor. HELD: 1.The petition is without merit. In the case at bench, the apprenticeship agreement between
petitioner and private respondent was executed on May 28, 1990 allegedly employing the latter as
Whether employed locally or overseas, all Filipino workers enjoy the protective mantle of Philippine an apprentice in the trade of "care maker/molder." On the same date, an apprenticeship program
labor and social legislation, contract stipulations to the contrary notwithstanding. This was prepared by petitioner and submitted to the Department of Labor and Employment. However,
pronouncement is in keeping with the basic public policy of the State to afford protection to labor, the apprenticeship agreement was filed only on June 7, 1990. Notwithstanding the absence of
promote full employment, ensure equal work opportunities regardless of sex, race or creed, and approval by the Department of Labor and Employment, the apprenticeship agreement was
regulate the relations between workers and ERs. This ruling is likewise rendered imperative by enforced the day it was signed.
Article 17 of the Civil Code which states that laws which have for their object public order, public
policy and good customs shall not be rendered ineffective by laws or judgments promulgated, or by Based on the evidence before us, petitioner did not comply with the requirements of the law. It is
determinations or conventions agreed upon in a foreign country. mandated that apprenticeship agreements entered into by the ER and apprentice shall be entered
only in accordance with the apprenticeship program duly approved by the Minister of Labor and
The relations between capital and labor are so impressed with public interest,and neither shall act Employment.
oppressively against the other, or impair the interest or convenience of the public. In case of doubt,
all labor legislation and all labor contracts shall be construed in favor of the safety and decent living Prior approval by the Department of Labor and Employment of the proposed apprenticeship
for the laborer. program is, therefore, a condition sine qua non before an apprenticeship agreement can be validly
entered into.
The grant of moral damages to the EE by reason of misconduct on the part of the ER is sanctioned
by Article 2219 (10) of the Civil Code, which allows recovery of such damages in actions referred to The act of filing the proposed apprenticeship program with the Department of Labor and
in Article 21. Thus, in view of the foregoing, the Court holds that the Cuaresmas are entitled to Employment is a preliminary step towards its final approval and does not instantaneously give rise
moral damages, which Becmen and White Falcon are jointly and solidarily liable to pay, together to an ER-apprentice relationship.
with exemplary damages for wanton and oppressive behavior, and by way of example for the
public good. Hence, since the apprenticeship agreement between petitioner and private respondent has no
force and effect in the absence of a valid apprenticeship program duly approved by the DOLE,
2)evidence indicates that it is not. At the time of her death, she was not on duty, or else evidence to private respondents assertion that he was hired not as an apprentice but as a delivery boy
the contrary would have been adduced. Neither was she within hospital premises at the time. ("kargador" or "pahinante") deserves credence. He should rightly be considered as a regular EE of
Instead, she was at her dormitory room on personal time when she died. Neither has it been petitioner as defined by Article 280 of the Labor Code .
shown, nor does the evidence suggest, that at the time she died, Jasmin was performing an act
reasonably necessary or incidental to her employment as nurse, because she was at her dormitory RA 7796 which created the TESDA, has transferred the authority over apprenticeship programs
room. It is reasonable to suppose that all her work is performed at the Al-birk Hospital, and not at from the Bureau of Local Employment of the DOLE to the TESDA.16 RA 7796 emphasizes
her dormitory room.While the ERs premises may be defined very broadly not only to include TESDAs approval of the apprenticeship program as a pre-requisite for the hiring of apprentices.
premises owned by it, but also premises it leases, hires, supplies or uses, we are not prepared to Such intent is clear under Section 4 of RA 7796:
rule that the dormitory wherein Jasmin stayed should constitute ERs premises as would allow a
finding that death or injury therein is considered to have been incurred or sustained in the course of Since Palad is not considered an apprentice because the apprenticeship agreement was enforced
or arose out of her employment. There are certainly exceptions, but they do not appear to apply before the TESDAs approval of petitioners apprenticeship program, Palad is deemed a regular EE
here. Moreover, a complete determination would have to depend on the unique circumstances performing the job of a "fish cleaner." Clearly, the job of a "fish cleaner" is necessary in petitioners
obtaining and the overall factual environment of the case, which are here lacking.Thus we business as a tuna and sardines factory. Under Article 28021 of the Labor Code, an employment is
categorically hold, based on the evidence; the actual experiences of our OFWs; and the resilient deemed regular where the EE has been engaged to perform activities which are usually necessary
and courageous spirit of the Filipina that transcends the vilest desecration of her physical self, that or desirable in the usual business or trade of the ER.
Jasmin did not commit suicide but a victim of murderous aggression.
2. Under Article 27922 of the Labor Code, an ER may terminate the services of an EE for just
3)Under Republic Act No. 8042 (R.A. 8042), or the Migrant Workers and Overseas Filipinos Act of causes23 or for authorized causes.24 Furthermore, under Article 277(b)25 of the Labor Code, the
1995, the State shall, at all times, uphold the dignity of its citizens whether in country or overseas, ER must send the EE who is about to be terminated, a written notice stating the causes for
in general, and Filipino migrant workers, in particular. The State shall provide adequate and timely termination and must give the EE the opportunity to be heard and to defend himself. Thus, to
social, economic and legal services to Filipino migrant workers. The rights and interest of constitute valid dismissal from employment, two requisites must concur: (1) the dismissal must be
distressed overseas Filipinos, in general, and Filipino migrant workers, in particular, documented or for a just or authorized cause; and (2) the EE must be afforded an opportunity to be heard and to
undocumented, are adequately protected and safeguarded. chanroblesvirtuallawlibr defend himself.

Becmen and White Falcon, as licensed local recruitment agencies, miserably failed to abide by the In this case, the Labor Arbiter held that petitioner terminated Palad for habitual absenteeism and
provisions of R.A. 8042. Recruitment agencies are expected to extend assistance to their deployed poor efficiency of performance. Under Section 25, Rule VI, Book II of the Implementing Rules of
OFWs, especially those in distress. Instead, they abandoned Jasmins case and allowed it to the Labor Code, habitual absenteeism and poor efficiency of performance are among the valid
remain unsolved to further their interests and avoid anticipated liability which parents or relatives of causes for which the ER may terminate the apprenticeship agreement after the probationary
Jasmin would certainly exact from them. They willfully refused to protect and tend to the welfare of period.
the deceased Jasmin, treating her case as just one of those unsolved crimes that is not worth
wasting their time and resources on. The evidence does not even show that Becmen and Rajab However, the NLRC reversed the finding of the Labor Arbiter on the issue of the legality of Palads
lifted a finger to provide legal representation and seek an investigation of Jasmins case. Worst of termination: As to the validity of complainants dismissal in her status as an apprentice, suffice to
all, they unnecessarily trampled upon the person and dignity of Jasmin by standing pat on the state that the findings of the Arbiter that complainant was dismissed due to failure to meet the
argument that Jasmin committed suicide, which is a grave accusation given its un-Christian nature. standards is nebulous. What clearly appears is that complainant already passed the probationary
status of the apprenticeship agreement of 200 hours at the time she was terminated on 28
Private employment agencies are held jointly and severally liable with the foreign-based ER for any November 1997 which was already the fourth month of the apprenticeship period of 1000 hours. As
violation of the recruitment agreement or contract of employment. This joint and solidary liability such, under the Code, she can only be dismissed for cause, in this case, for poor efficiency of
imposed by law against recruitment agencies and foreign ERs is meant to assure the aggrieved performance on the job or in the classroom for a prolonged period despite warnings duly given to
worker of immediate and sufficient payment of what is due him. If the recruitment/placement the apprentice.
agency is a juridical being, the corporate officers and directors and partners as the case may be,
shall themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid We noted that no clear and sufficient evidence exist to warrant her dismissal as an apprentice
claims and damages.White Falcons assumption of Becmens liability does not automatically result during the agreed period. Besides the absence of any written warnings given to complainant
in Becmens freedom or release from liability. This has been ruled in ABD Overseas Manpower reminding her of "poor performance," respondents evidence in this respect consisted of an
Corporation v. NLRC. Instead, both Becmen and White Falcon should be held liable solidarily, indecipherable or unauthenticated xerox of the performance evaluation allegedly conducted on
without prejudice to each having the right to be reimbursed under the provision of the Civil Code complainant. This is of doubtful authenticity and/or credibility, being not only incomplete in the
that whoever pays for another may demand from the debtor what he has paid. sense that appearing thereon is a signature (not that of complainant) side by side with a date
SUN ACE vs. NLRC indicated as "1/16/98". From the looks of it, this signature is close to and appertains to the
Doctrine of imputed knowledge typewritten position of "Division/Department Head", which is below the signature of complainants
immediate superior who made the evaluation indicated as "11-15-97."
CENTURY CANNING CORPORATION vs. CA and GLORIA C. PALAD
G.R. No. 152894 August 17, 2007
The only conclusion We can infer is that this evaluation was made belatedly, specifically, after the
CARPIO, J.:
filing of the case and during the progress thereof in the Arbitral level, as shown that nothing
thereon indicate that complainant was notified of the results. Its authenticity therefor, is a big
FACTS: On 15 July 1997, Century Canning Corporation (petitioner) hired Gloria C. Palad (Palad)
question mark, and hence lacks any credibility. Evidence, to be admissible in administrative
as "fish cleaner" at petitioners tuna and sardines factory. Palad signed on 17 July 1997 an
apprenticeship agreement3 with petitioner. Palad received an apprentice allowance of P138.75 proceedings, must at least have a modicum of authenticity. This, respondents failed to comply with.
As such, complainant is entitled to the payment of her wages for the remaining two (2) months of
daily. On 25 July 1997, petitioner submitted its apprenticeship program for approval to the TESDA
her apprenticeship agreement.27
of the. On 26 September 1997, the TESDA approved petitioners apprenticeship program.
Indeed, it appears that the Labor Arbiters conclusion that petitioner validly terminated Palad was
According to petitioner, a performance evaluation was conducted on 15 November 1997, where
based mainly on the performance evaluation allegedly conducted by petitioner. However, Palad
petitioner gave Palad a rating of N.I. or "needs improvement" since she scored only 27.75% based
alleges that she had no knowledge of the performance evaluation conducted and that she was not
on a 100% performance indicator. Furthermore, according to the performance evaluation, Palad
even informed of the result of the alleged performance evaluation. Palad also claims she did not
incurred numerous tardiness and absences. As a consequence, petitioner issued a termination
receive a notice of dismissal, nor was she given the chance to explain. According to petitioner,
notice5 dated 22 November 1997 to Palad, informing her of her termination effective at the close of
Palad did not receive the termination notice because Palad allegedly stopped reporting for work
business hours of 28 November 1997.
after being informed of the result of the evaluation.
Palad then filed a complaint for illegal dismissal, underpayment of wages, and non-payment of pro-
Under Article 227 of the Labor Code, the ER has the burden of proving that the termination was for
rated 13th month pay for the year 1997.
LA dismissed the complaint for lack of merit but ordered petitioner to pay Palad her last salary and a valid or authorized cause.28 Petitioner failed to substantiate its claim that Palad was terminated
for valid reasons. In fact, the NLRC found that petitioner failed to prove the authenticity of the
her pro-rated 13th month pay. NLRC affirmed with modification the Labor Arbiters decision.
performance evaluation which petitioner claims to have conducted on Palad, where Palad received
a performance rating of only 27.75%. Petitioner merely relies on the performance evaluation to
CA: the questioned decision of the NLRC is hereby SET ASIDE. that the apprenticeship agreement
prove Palads inefficiency. It was likewise not shown that petitioner ever apprised Palad of the
which Palad signed was not valid and binding because it was executed more than two months
performance standards set by the company. When the alleged valid cause for the termination of
before the TESDA approved petitioners apprenticeship program. prior approval by the DOLE of
employment is not clearly proven, as in this case, the law considers the matter a case of illegal
the proposed apprenticeship program is a condition sine qua non before an apprenticeship
dismissal.29
agreement can be validly entered into. petitioner illegally dismissed Palad because it failed to show
that Palad was properly apprised of the required standard of performance. The Court of Appeals
Furthermore, Palad was not accorded due process. Even if petitioner did conduct a performance
likewise held that Palad was not afforded due process because petitioner did not comply with the
evaluation on Palad, petitioner failed to warn Palad of her alleged poor performance. In fact, Palad
twin requirements of notice and hearing.
Page 38 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

denies any knowledge of the performance evaluation conducted and of the result thereof. The list, consisting of several pages, is hardly legible. It requires extreme effort to sort out the
Petitioner likewise admits that Palad did not receive the notice of termination30 because Palad names of the EEs listed, as well as the other data contained in the list. For this reason alone, the
allegedly stopped reporting for work. The records are bereft of evidence to show that petitioner list deserves little or no consideration. As the respondents also pointed out, the list itself contradicts
ever gave Palad the opportunity to explain and defend herself. Clearly, the two requisites for a valid a lot of Atlantas claims and allegations, thus: it lists only the names of inactive EEs; even the
dismissal are lacking in this case. names of those the NLRC found to have been employed by Atlanta, like Costales and Almoite, and
ATLANTA INDUSTRIES, INC. vs. APRILITO R. SEBOLINO those who even Atlanta claims attained regular status do not appear in the list when it was
G.R. No. 187320 January 26, 2011 supposed to account for all EEs. the list contains no entries of EEs who were hired or who
BRION, J.: resigned.

FACTS: complainants filed several complaints for illegal dismissal, regularization, underpayment, We cannot fault the CA for ignoring the Master List even if Bernardo, its head office accountant,
nonpayment of wages and other money claims, as well as claims for moral and exemplary swore to its correctness and authenticity.56 Its substantive unreliability gives it very minimal
damages and attorneys fees against the petitioners Atlanta and its President and Chief Operating probative value. Atlanta would have been better served, in terms of reliable evidence, if true copies
Officer Robert Chan. Atlanta is a domestic corporation engaged in the manufacture of steel pipes. of the payroll (on which the list was based, among others, as Bernardo claimed in her affidavit)
The complaints were consolidated and were raffled to Labor Arbiter Daniel Cajilig, but were later were presented instead.
transferred to Labor Arbiter Dominador B. Medroso, Jr.
Third. The fact that Costales, Almoite, Sebolino and Sagun were already rendering service to the
The complainants alleged that they had attained regular status as they were allowed to work with company when they were made to undergo apprenticeship (as established by the evidence)
Atlanta for more than 6 months from the start of a purported apprenticeship agreement between renders the apprenticeship agreements irrelevant as far as the four are concerned. This reality is
them and the company. They claimed that they were illegally dismissed when the apprenticeship highlighted by the CA finding that the respondents occupied positions such as machine operator,
agreement expired. scaleman and extruder operator - tasks that are usually necessary and desirable in Atlantas usual
business or trade as manufacturer of plastic building materials. These tasks and their nature
In defense, Atlanta and Chan argued that the workers were not entitled to regularization and to characterized the four as regular EEs under Article 280 of the Labor Code. Thus, when they were
their money claims because they were engaged as apprentices under a government-approved dismissed without just or authorized cause, without notice, and without the opportunity to be heard,
apprenticeship program. The company offered to hire them as regular EEs in the event vacancies their dismissal was illegal under the law.
for regular positions occur in the section of the plant where they had trained. They also claimed
that their names did not appear in the master list of EEs prior to their engagement as apprentices. Even if we recognize the companys need to train its EEs through apprenticeship, we can only
consider the first apprenticeship agreement for the purpose. With the expiration of the first
On May 24, 2005, dela Cruz, Magalang, Zao and Chiong executed a Pagtalikod at Pagwawalang agreement and the retention of the EEs, Atlanta had, to all intents and purposes, recognized the
Saysay before Labor Arbiter Cajilig. Labor Arbiter Medroso dismissed the complaint with respect to completion of their training and their acquisition of a regular EE status. To foist upon them the
dela Cruz, Magalang, Zao and Chiong, but found the termination of service of the remaining nine second apprenticeship agreement for a second skill which was not even mentioned in the
to be illegal.6 Consequently, the arbiter awarded the dismissed workers backwages, wage agreement itself,is a violation of the Labor Codes implementing rules60 and is an act manifestly
differentials, holiday pay and service incentive leave pay. unfair to the EEs, to say the least. This we cannot allow.

Atlanta appealed to the NLRC. In the meantime Ramos, Alegria, Villagomez, Costales and Almoite Fourth. The compromise agreement allegedly entered into by Costales and Almoite, together with
allegedly entered into a compromise agreement with Atlanta.7 The agreement provided that except Ramos, Villagomez and Alegria, purportedly in settlement of the case before the NLRC, is not
for Ramos, Atlanta agreed to pay the workers a specified amount as settlement, and to binding on Costales and Almoite because they did not sign it. The company itself admitted62 that
acknowledge them at the same time as regular EEs. while Costales and Almoite were initially intended to be a part of the agreement, it did not pursue
their inclusion "due to their regularization.
NLRC rendered a decision (1) withdrawing the illegal dismissal finding with respect to Sagun, MARITES BERNARDO et al. vs. NLRC and FAR EAST BANK AND TRUST COMPANY
Mabanag, Sebolino and Pedregoza; (2) affirming the dismissal of the complaints of dela Cruz, G.R. No. 122917 July 12, 1999
Zao, Magalang and Chiong; (3) approving the compromise agreement entered into by Costales, PANGANIBAN, J.:
Ramos, Villagomez, Almoite and Alegria, and (4) denying all other claims.
FACTS: Complainants numbering 43 are deaf-mutes who were hired on various periods from 1988
Sebolino, Costales, Almoite and Sagun moved for the reconsideration of the decision, but the to 1993 by respondent FEBATCO as Money Sorters and Counters through a uniformly worded
NLRC denied the motion. The four then sought relief from the CA through a petition for certiorari agreement called "Employment Contract for Handicapped Workers". The EE shall perform among
under Rule 65 of the Rules of Court. They charged that the NLRC committed grave abuse of others, the following duties and responsibilities: i. Sort out bills according to color;ii. Count each
discretion in: (1) failing to recognize their prior employment with Atlanta; (2) declaring the second denomination per hundred, either manually or with the aid of a counting machine; iii. Wrap and
apprenticeship agreement valid; (3) holding that the dismissal of Sagun, Mabanag, Sebolino and label bills per hundred; iv. Put the wrapped bills into bundles; and v. Submit bundled bills to the
Melvin Pedregoza is legal; and (4) upholding the compromise agreement involving Costales, bank teller for verification. The EE shall undergo a training period of one (1) month, after which the
Ramos, Villagomez, Almoite and Alegria. BANK shall determine whether or not he/she should be allowed to finish the remaining term of this
Contract. The EE shall be entitled to an initial compensation of P118.00 per day, subject to
The CA granted the petition based on the following findings:1. The respondents were already EEs adjustment in the sole judgment of the BANK, payable every 15th and end of the month. The
of the company before they entered into the first and second apprenticeship agreements; 2. The regular work schedule of the EE shall be five (5) days per week, from Mondays thru Fridays, at
first and second apprenticeship agreements were defective as they were executed in violation of eight (8) hours a day. The EE may be required to perform overtime work as circumstance may
the law and the rules.The agreements did not indicate the trade or occupation in which the warrant, for which OT work he/she [shall] be paid an additional compensation of 125% of his daily
apprentice would be trained; neither was the apprenticeship program approved by the TESDA; 3. rate if performed during ordinary days and 130% if performed during Saturday or [a] rest day. The
The positions occupied by the respondents machine operator, extruder operator and scaleman EE shall likewise be entitled to the following benefits: i. Proportionate 13th month pay based on his
are usually necessary and desirable in the manufacture of plastic building materials, the companys basic daily wage.ii, Five (5) days incentive leave, iii. SSS premium payment. The Employment
main business. Costales, Almoite, Sebolino and Sagun were, therefore, regular EEs whose Contract shall be for a period of six (6) months unless earlier terminated by the BANK for any just
dismissals were illegal for lack of a just or authorized cause and notice; 4. The compromise or reasonable cause. Any continuation or extension of this Contract shall be in writing and
agreement entered into by Costales and Almoite, together with Ramos, Villagomez and Alegria, therefore this Contract will automatically expire at the end of its terms unless renewed in writing by
was not binding on Costales and Almoite because they did not sign the agreement.The petitioners the BANK.
themselves admitted that Costales and Almoite were initially planned to be a part of the
compromise agreement, but their employment has been regularized as early as January 11, 2006; Their employment[s] were renewed every six months such that by the time this case arose, there
hence, the company did not pursue their inclusion in the compromise agreement. were fifty-six (56) deaf-mutes who were employed by respondent under the said employment
agreement.
The CA faulted the NLRC for failing to appreciate the evidence regarding the respondents prior
employment with Atlanta. The CA noted that Atlanta failed to challenge the authenticity of the two NLRC: affirmed LAs decision. We agree that Art. 280 is not controlling herein. We give due
documents before it and the labor authorities.Atlanta and Chan moved for reconsideration, but the credence to the conclusion that complainants were hired as an accommodation to [the]
CA denied the motion in a resolution. recommendation of civic oriented personalities whose employment[s] were covered by
Employment Contract[s] with special provisions on duration of contract as specified under Art. 80.
ISSUE1: whether or not the documents accompanying the petition sufficiently supported the Hence, as correctly held by the LA a quo, the terms of the contract shall be the law between the
allegations therein. parties. that the Magna Carta for Disabled Persons was not applicable, "considering the prevailing
HELD: The accompanying CA decision38 and resolution,39 as well as those of the labor arbiter40 circumstances/milieu of the case."
and the NLRC,41 referred to the parties position papers and even to their replies and rejoinders.
Significantly, the CA decision narrates the factual antecedents, defines the complainants cause of ISSUES: The Honorable Commission committed grave abuse of discretion in holding 1)that the
action, and cites the arguments, including the evidence the parties adduced. If any, the defect in petitioners were not regular EEs; 2)that the employment contracts signed and renewed by the
the petition lies in the petitioners failure to provide legible copies of some of the material petitioners were valid; and 3)in not applying the provisions of the Magna Carta for the Disabled on
documents mentioned, especially several pages in the decisions of the labor arbiter and of the proscription against discrimination against disabled persons. 11
NLRC. This defect, however, is not fatal as the challenged CA decision clearly summarized the
labor tribunals rulings. We, thus, find no procedural obstacle in resolving the petition on the merits. HELD: The petition is meritorious. However, only the 27 EEs, who worked for more than six
months and whose contracts were renewed are deemed regular. Hence, their dismissal from
ISSUE2: WON Costales, Almoite, Sebolino and Sagun were illegally dismissed and the employment was illegal. The facts, viewed in light of the Labor Code and the Magna Carta for
apprenticeship agreements were invalid. Disabled Persons, indubitably show that the petitioners, except 16 of them, should be deemed
HELD: We find no merit in the petition. The CA committed no reversible error in nullifying the regular EEs. As such, they have acquired legal rights that this Court is duty-bound to protect and
NLRC decision42 and in affirming the labor arbiters ruling,43 as it applies to Costales, Almoite, uphold, not as a matter of compassion but as a consequence of law and justice.
Sebolino and Sagun. Specifically, the CA correctly ruled that the four were illegally dismissed
because (1) they were already EEs when they were required to undergo apprenticeship and (2) Respondent bank entered into the aforesaid contract with a total of 56 handicapped workers and
apprenticeship agreements were invalid. renewed the contracts of 37 of them. In fact, two of them worked from 1988 to 1993. Verily, the
renewal of the contracts of the handicapped workers and the hiring of others lead to the conclusion
First. Based on company operations at the time material to the case, Costales, Almoite, Sebolino that their tasks were beneficial and necessary to the bank. More important, these facts show that
and Sagun were already rendering service to the company as EEs before they were made to they were qualified to perform the responsibilities of their positions. In other words, their disability
undergo apprenticeship. The company itself recognized the respondents status through relevant did not render them unqualified or unfit for the tasks assigned to them.
operational records Under the CPS monthly report, Atlanta assigned Costales and Almoite to the
first shift 7am to 3pm of the Sections work. The Production and Work Schedules, in addition to the In this light, the Magna Carta for Disabled Persons mandates No disabled person shall be denied
one noted by the CA, showed that Sebolino and Sagun were scheduled on different shifts vis--vis access to opportunities for suitable employment. A qualified disabled EE shall be subject to the
the production and work of the companys PE/Spiral Section for the for several periods same terms and conditions of employment and the same compensation, privileges, benefits, fringe
benefits, incentives or allowances as a qualified able bodied person.
We stress that the CA correctly recognized the authenticity of the operational documents, for the
failure of Atlanta to raise a challenge against these documents before the labor arbiter, the NLRC The fact that the EEs were qualified disabled persons necessarily removes the employment
and the CA itself. The appellate court, thus, found the said documents sufficient to establish the contracts from the ambit of Article 80. Since the Magna Carta accords them the rights of qualified
employment of the respondents before their engagement as apprentices. able-bodied persons, they are thus covered by Article 280 of the Labor Code, which provides that
The provisions of written agreement to the contrary notwithstanding and regardless of the oral
Second. The Master List of EEs that the petitioners heavily rely upon as proof of their position that agreement of the parties, an employment shall be deemed to be regular where the EE has been
the respondents were not Atlantas EEs, at the time they were engaged as apprentices, is engaged to perform activities which are usually necessary or desirable in the usual business or
unreliable and does not inspire belief. trade of the ER, except where the employment has been fixed for a specific project or undertaking
the completion or termination of which has been determined at the time of the engagement of the

Page 39 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

EE or where the work or services to be performed is seasonal in nature and the employment is for
the duration of the season. NLRC, reversed and set aside the decision of the LA by dismissing the complaint for lack of merit
on the ground that respondents employment was terminated for a just cause. The NLRC failed to
An employment shall be deemed to be casual if it is not covered by the preceding paragraph: discuss the money claims.
Provided, That, any EE who has rendered at least one year of service, whether such service is
continuous or broken, shall be considered as regular EE with respect to the activity in which he is CA affirmed the NLRCs finding that there was no illegal dismissal. Anent the money claims,
employed and his employment shall continue while such activity exists. however, the CA concurred with the LAs ruling.

The test of whether an EE is regular was laid down in De Leon v. NLRC: The primary standard, ISSUE: whether the duties and responsibilities performed by respondent qualify him as a member
therefore, of determining regular employment is the reasonable connection between the particular of petitioners managerial staff.
activity performed by the EE in relation to the usual trade or business of the ER. The test is
whether the former is usually necessary or desirable in the usual business or trade of the ER. The HELD: This is clearly a question of fact, the determination of which entails an evaluation of the
connection can be determined by considering the nature of the work performed and its relation to evidence on record. The alleged errors of the CA lengthily enumerated in the petition [13] are
the scheme of the particular business or trade in its entirety. Also if the EE has been performing the essentially factual in nature and, therefore, outside the ambit of a petition for review on certiorari
job for at least one year, even if the performance is not continuous and merely intermittent, the law under Rule 45 of the Rules of Civil Procedure.
deems repeated and continuing need for its performance as sufficient evidence of the necessity if
not indispensibility of that activity to the business. Hence, the employment is considered regular, Petitioners claim exception to the foregoing rule and assert that the factual findings of the LA and
but only with respect to such activity, and while such activity exist. the NLRC were conflicting. This is not correct. The labor tribunals decisions were at odds only with
respect to the issue of illegal dismissal. Anent the money claims issue, it cannot be said that their
Without a doubt, the task of counting and sorting bills is necessary and desirable to the business of rulings were contradictory because the NLRC, disappointingly, did not make any finding thereon
respondent bank. and it erroneously construed that the resolution of the money claims was intertwined with the
As held by the Court, "Articles 280 and 281 of the Labor Code put an end to the pernicious practice determination of the legality of respondents dismissal. Nonetheless, the CA has already rectified
of making permanent casuals of our lowly EEs by the simple expedient of extending to them such lapse when it made a definitive review of the LAs factual findings on respondents money
probationary appointments, ad infinitum." 15 The contract signed by petitioners is akin to a claims.
probationary employment, during which the bank determined the EEs' fitness for the job. When the
bank renewed the contract after the lapse of the six-month probationary period, the EEs thereby EEs are considered occupying managerial positions if they meet all of the following conditions,
became regular EEs. 16 No ER is allowed to determine indefinitely the fitness of its EEs. namely:
1) Their primary duty consists of management of the establishment in which they are employed or
As regular EEs, the twenty-seven petitioners are entitled to security of tenure; that is, their services of a department or subdivision thereof;
may be terminated only for a just or authorized cause. Because respondent failed to show such 2) They customarily and regularly direct the work of two or more EEs therein;
cause, 17 these twenty-seven petitioners are deemed illegally dismissed and therefore entitled to 3) They have the authority to hire or fire other EEs of lower rank; or their suggestions and
back wages and reinstatement without loss of seniority rights and other privileges. 18 Considering recommendations as to the hiring and firing and as to the promotion or any other change of status
the allegation of respondent that the job of money sorting is no longer available because it has of other EEs are given particular weight.
been assigned back to the tellers to whom it originally belonged, 18 petitioners are hereby awarded
separation pay in lieu of reinstatement. 20 They are considered as officers or members of a managerial staff if they perform the following
duties and responsibilities:
Because the other sixteen worked only for six months, they are not deemed regular EEs and hence 1) The primary duty consists of the performance of work directly related to management of policies
not entitled to the same benefits. of their ER;
2) Customarily and regularly exercise discretion and independent judgment;
it must be emphasized that a contract of employment is impressed with public interest. Provisions 3) (i) Regularly and directly assist a proprietor or a managerial EE whose primary duty consists of
of applicable statutes are deemed written into the contract, and the "parties are not at liberty to management of the establishment in which he is employed or subdivision thereof; or (ii) execute
insulate themselves and their relationships from the impact of labor laws and regulations by simply under general supervision work along specialized or technical lines requiring special training,
contracting with each other." Clearly, the agreement of the parties regarding the period of experience, or knowledge; or (iii) execute, under general supervision, special assignment and
employment cannot prevail over the provisions of the Magna Carta for Disabled Persons, which tasks.
mandate that petitioners must be treated as qualified able-bodied EEs. 4) Who do not devote more than 20 percent of their hours worked in a workweek to
Respondent's reason for terminating the employment of petitioners is instructive. Because the activities which are not directly and closely related to the performance of the work described in
Bangko Sentral ng Pilipinas (BSP) required that cash in the bank be turned over to the BSP during paragraphs (1), (2), and (3) above
business hours from 8:00 a.m. to 5:00 p.m., respondent resorted to nighttime sorting and counting
of money. Thus, it reasons that this task "could not be done by deaf mutes because of their (Respondents) duties do not fall under any of the categories enumerated above. His work is not
physical limitations as it is very risky for them to travel at night." 24 We find no basis for this directly related to management policies. Even the circumstances shown by the instant case reveal
argument. Travelling at night involves risks to handicapped and able-bodied persons alike. This that (respondent) does not regularly exercise discretion and independent judgment. (Petitioners)
excuse cannot justify the termination of their employment. submitted a list of the responsibilities of HR Manager/Supervisor and Division
CLIENTLOGIC PHILPPINES, INC. (now known as SITEL) et al. vs. BENEDICT CASTRO Manager/Department Manager/Supervisors but these do not pertain to (respondent) who does not
G.R. No. 186070, April 11, 2011 have any of the said positions. He was just a team Supervisor and not (an) HR or Department
NACHURA, J.: Supervisor. [15]

We find no reversible error in the above ruling. The test of supervisory or managerial status
FACTS: Respondent was employed by petitioner SITEL as a call center agent for its Bell South depends on whether a person possesses authority to act in the interest of his ER and whether such
Account. After 6 months, he was promoted to the Mentor position, and thereafter to the Coach authority is not merely routinary or clerical in nature, but requires the use of independent judgment.
position. A Coach is a team supervisor who is in charge of dealing with customer complaints [16] The position held by respondent and its concomitant duties failed to hurdle this test.
which cannot be resolved by call center agents. In June 2006, he was transferred to the Dot Green
Account. This job description does not indicate that respondent can exercise the powers and prerogatives
equivalent to managerial actions which require the customary use of independent judgment. There
During respondents stint at the Dot Green Account, respondent noticed that some of the call is no showing that he was actually conferred or was actually exercising the following duties
center agents under him would often make excuses to leave their work stations. Their most attributable to a member of the managerial staff
common excuse was that they would visit the companys medical clinic. To verify that they were
not using the clinic as an alibi to cut their work hours, respondent sent an e-mail to the clinics According to petitioners, respondent also performed the following duties, as shown in the
personnel requesting for the details of the agents alleged medical consultation. His request was companys Statement of Policy on Discipline:
denied on the ground that medical records of EEs are highly confidential and can only be disclosed a. Know and understand in full the Policy on Discipline including their underlying reasons.
in cases involving health issues, and not to be used to build any disciplinary case against them. b. Implement strictly and consistently the Policy on Discipline.
c. Ensure that the said Policy on Discipline is communicated to and understood by all EEs.
respondent received a notice requiring him to explain why he should not be penalized for: (1) d. Monitor compliance by EEs with the said Policy.
violating Green Dot Companys Policy and Procedure for Direct Deposit Bank Info Request when e. Advise HR Manager on the state of discipline in their respective departments; problems, if any,
he accessed a customers online account and then gave the latters routing and reference numbers and recommend solution(s) and corrective action(s).
for direct deposit; and (2) gravely abusing his discretion when he requested for the medical records
of his team members. Respondent did not deny the infractions imputed against him. He, however, As correctly observed by the CA and the LA, these duties clearly pertained to Division
justified his actuations by explaining that the customer begged him to access the account because Managers/Department Managers/ Supervisors, which respondent was not, as he was merely a
she did not have a computer or an internet access and that he merely requested for a patient team supervisor. Petitioners themselves described respondent as the superior of a call center
tracker, not medical records. agent; he heads and guides a specific number of agents, who form a team. From the foregoing,
respondent is thus entitled to his claims for holiday pay, service incentive leave pay, overtime
a poster showing SITELs organizational chart was posted on the companys bulletin board, but pay and rest day pay,
respondents name and picture were conspicuously missing, and the name and photo of another AUTOBUS vs. BAUTISTA
EE appeared in the position which respondent was supposedly occupying. G.R. No. 156367May 16, 2005

On January 22, 2007, SITEL posted a notice of vacancy for respondents position, and on February FACTS:Antonio Bautista has been employed as driver-conductor he was paid on commission
12, 2007, he received a Notice of Termination. These events prompted him to file a complaint for basis, seven percent (7%) of the total gross income per travel, on a twice a month basis. while
illegal dismissal; non-payment of overtime pay, rest day pay, holiday pay, service incentive leave driving Autobus No. 114 along Sta. Fe, Nueva Vizcaya, his bus accidentally bumped the rear
pay; full backwages; damages; and attorneys fees before the Labor Arbiter (LA) against herein portion of Autobus No. 124 because it suddenly stopped w/o any warning sign
petitioners SITEL and its officers, Joseph Velasquez (Velasquez), Irene Roa (Roa), and Rodney
Spires (Spires). [5] BAUTISTA: kasalan ng Autobus dahil pinilit akong magtrabaho kahit wala akong tulog for
24hours dahil kadarating ko lang mula sa Isabela he was not allowed to work until he fully paid the
In their position paper, [petitioners averred that respondent was dismissed on account of valid and amount of P75,551.50, representing thirty percent (30%) of the cost of repair of the damaged
justifiable causes. He committed serious misconduct which breached the trust and confidence buses. the management sent him a termination letter. Thus, Bautista instituted a complaint for
reposed in him by the company. He was duly furnished the twin notices required by the Labor ILLEGAL DISMISSAL with Money Claims for nonpayment of 13th month pay and service incentive
Code. Further, he is not entitled to overtime pay, rest day pay, night shift differential, holiday pay, leave pay against Autobus
and service incentive leave pay because he was a supervisor, hence, a member of the managerial
staff. AUTOBUS: Bautistas employment was replete with offenses involving reckless imprudence, gross
negligence, and dishonesty. To support its claim, petitioner presented copies of letters, memos,
In his Position Paper, (respondent) states that he worked from 8PM to 10AM or 4PM to 12AM of irregularity reports, and warrants of arrest pertaining to several incidents wherein he was involved.
the following day; he was also required to work during his restdays and during holidays but he was in the exercise of its management prerogative, respondent's employment was terminated only after
not paid; he was also not paid overtime pay; night shift differentials, and service incentive leave. He the latter was provided with an opportunity to explain his side regarding the accident on 03 January
was employed as call center agent on 14 February 2005, then promoted as Mentor in August 2000. hindi siya entitled sa service incentive pay kasi on commission basis siya binabayaran
2005, and again promoted to Coach position in September 2005, which was the position he had
when he was terminated. LA: no illegal dismissal but Autobus must pay Bautista his a. 13th month pay & b. his service
incentive leave pay
LA:illegally dismissed and ordering petitioners to pay his full backwages and, in lieu of
reinstatement, his separation pay. The LA further awarded respondents money claims upon NLRC: affirmed the LA but deleted the award of 13th month pay because Bautista is not covered
finding that he was not occupying a managerial position. by the provision on [T]he Rules and Regulations Implementing Presidential Decree No. 851,

Page 40 of 88
LABOR STANDARDS (Atty. Nolasco)
J.SUAREZ II, 2ND SEM,SY 12-13

particularly Sec. 3: Section 3. ERs covered. ' The Decree shall apply to all ERs except to: e) ERs of dismissed for lack of merit. The NLRC dismissed petitioner's claim that it cannot be held liable for
those who are paid on purely commission, boundary, or task basis, performing a specific work, service incentive leave pay by fishermen in its employ as the latter supposedly are "field personnel"
irrespective of the time consumed in the performance thereof. xxx. and thus not entitled to such pay under the Labor Code.
-Bautista admitted that he is paid on commission basis
ISSUES: 1)won the commission erred in ruling and sustaining that fishing crew members like
CA: denied the MR Agao, cannot be classified as field personnel; 2)won commission acted with GAD amounting to
Lack of jurisdiction when it upheld the findings pf LA that petitioner had cinstructively dismissed
ISSUES: 1)Whether or not respondent is entitled to service incentive leave; 2)WON the three (3)- Agao.
year prescriptive period provided under Article 291 of the Labor Code, as amended, is applicable to
respondent's claim of service incentive leave pay. HELD:2)The petition has no merit. Art. 82. Coverage. The provisions of this Title [Working
Conditions and Rest Periods] shall apply to EEs in all establishments and undertakings whether for
HELD: 1)Article 95 of the Labor Code vis--vis Section 1(D), Rule V, Book III of the Implementing profit or not, but not to government EEs, field personnel, members of the family of the ER who are
Rules and Regulations of the Labor Code gives the conclusion that the grant of service incentive dependent on him for support, domestic helpers, persons in the personal service of another, and
leave has been delimited by the Implementing Rules and Regulations of the Labor Code to apply workers who are paid by results as determined by the Secretary of Labor in appropriate
only to those EEs not explicitly excluded by Section 1 of Rule V. According to the Implementing regulations.
Rules, Service Incentive Leave shall not apply to EEs classified as 'field personnel.
"Field personnel" shall refer to non-agricultural EEs who regularly perform their duties away from
Art. 95. RIGHT TO SERVICE INCENTIVE LEAVE: (a)Every EE who has rendered at least one the principal place of business or branch office of the ER and whose actual hours of work in the
year of service shall be entitled to a yearly service incentive leave of five days with pay. field cannot be determined with reasonable certainty.

Book III, Rule V: SERVICE INCENTIVE LEAVE: SECTION 1. Coverage. ' This rule shall apply to the requirement that "actual hours of work in the field cannot be determined with reasonable
all EEs except: (d) Field personnel and other EEs whose performance is unsupervised by the ER certainty" must be read in conjunction with Rule IV, Book III Section 1e of the Implementing Rules
including those who are engaged on task or contract basis, purely commission basis, or those who which provides that Field personnel and other EEs whose time and performance is unsupervised
are paid in a fixed amount for performing work irrespective of the time consumed in the by the ER.
performance thereof; .
the Court finds that the aforementioned rule did not add another element to the Labor Code
it serves as an amplification of the interpretation of the definition of field personnel under the Labor definition of field personnel. The clause "whose time and performance is unsupervised by the ER"
Code as those 'whose actual hours of work in the field cannot be determined with reasonable did not amplify but merely interpreted and expounded the clause "whose actual hours of work in
certainty. EEs engaged on task or contract basis or paid on purely commission basis are not the field cannot be determined with reasonable certainty." The former clause is still within the
automatically exempted from the grant of service incentive leave, unless, they fall under the scope and purview of Article 82 which defines field personnel. Hence, in deciding whether or not an
classification of field personnel. EE's actual working hours in the field can be determined with reasonable certainty, query must be
made as to whether or not such EE's time and performance is constantly supervised by the ER. 6
AUTOBUS contention that since he is paid on commission basis exempts him from service
incentive pay is MISPLACED. To ascertain an EEs entitlement to service incentive pay is whether in the case at bar, during the entire course of their fishing voyage, fishermen employed by
he is field personnel. petitioner have no choice but to remain on board its vessel. Although they perform non-agricultural
work away from petitioner's business offices, the fact remains that throughout the duration of their
Accdg. to the Bureau of Working Conditions (BWC), Advisory Opinion to Philippine Technical- work they are under the effective control and supervision of petitioner through the vessel's patron
Clerical Commercial EEs Association : or master as the NLRC correctly held. 8
As a general rule, [field personnel] are those whose performance of their job/service is not
supervised by the ER or his representative, the workplace being away from the principal office and 2)Neither did petitioner gravely abuse its discretion in ruling that private respondent had
whose hours and days of work cannot be determined with reasonable certainty; hence, they are constructively been dismissed by petitioner. Such factual finding of both the NLRC and the Labor
paid specific amount for rendering specific service or performing specific work. If required to be at Arbiter is based not only on the pleadings of the parties but also on a medical certificate of fitness
specific places at specific times, EEs including drivers cannot be said to be field personnel despite which, contrary to petitioner's claim private respondent presented when he reported to work on
the fact that they are performing work away from the principal office of the EE. May 28, 1990.

it is not just about location but also with the fact that the EE's performance is unsupervised by the the respondent, in a nutshell, would like us to believe that the Arbiter abused his discretion in giving
ER& if actual hours of work in the field can be determined with reasonable certainty by the ER. in credence to the factual version of the complainant. But it is settled that "(W)hen confronted with
every terminal or stop there is a person who will check the bus, punch the cards of the conductor. conflicting versions of factual matters," the Labor Arbiter has the "discretion to determine which
Thus, it shows control of Autobus over the driver, hence, he his not a field EE but a REGULAR EE party deserves credence on the basis of evidence received. And besides, it is settled in this
jurisdiction that "to constitute abandonment of position, there must be concurrence of the intention
2) Art. 291 of the LC provides the 3 year prescription period for money claims arising out of an ER- to abandon and some overt acts from which it may be inferred that the EE concerned has no more
EE relationship. cause of action has three elements: (1) a right in favor of the plaintiff by whatever interest in working" and that the filing of the complaint which asked for reinstatement plus
means and under whatever law it arises or is created; (2) an obligation on the part of the named backwages is inconsistent with respondents' defense of abandonment.
defendant to respect or not to violate such right; and (3) an act or omission on the part of such
defendant violative of the right of the plaintiff or constituting a breach of the obligation of the It is trite to say that the factual findings of quasi-judicial bodies are generally binding as long as
defendant to the plaintiff. To properly construe Article 291 of the Labor Code, it is essential to they are supported substantially by evidence in the record of the case. This is especially so where,
ascertain the time when the third element of a cause of action transpired. as here, the agency and its subordinate who heard the case in the first instance are in full
agreement as to the facts.
in cases of nonpayment of allowances and other monetary benefits, if it is established that the
benefits being claimed have been withheld from the EE for a period longer than three (3) years, the As regards the labor arbiter's award which was affirmed by respondent NLRC, there is no reason to
amount pertaining to the period beyond the three-year prescriptive period is therefore barred by apply the rule that reinstatement may not be ordered if, as a result of the case between the parties,
prescription. their relation is strained.