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In the case at bar, the Court is convinced that HELD: Yes. The CBA in this case contains no
the terms fixed therein were meant only to provision on the "no negative data bank
circumvent petitioners’ right to security of policy" as a prerequisite in the entitlement
tenure and are, therefore, invalid. of the benefits it set forth for the employees.
Although it can be said that petitioner is
The contracts of employment submitted by authorized to issue rules and regulations
respondents are highly suspect for not only pertinent to the availment and
being ambiguous, but also for appearing to administration of the loans under the CBA,
be tampered with. the additional rules and regulations,
however, must not impose new conditions
The Court here reiterates the rule that all which are not contemplated in the CBA and
doubts, uncertainties, ambiguities and should be within the realm of
insufficiencies should be resolved in favor of reasonableness. The "no negative data bank
labor. It is a well-entrenched doctrine that in policy" is a new condition which is never
illegal dismissal cases, the employer has the contemplated in the CBA and at some points,
burden of proof. This burden was not unreasonable to the employees because it
discharged in the present case. provides that before an employee or his/her
spouse can avail of the loan benefits under
the CBA. If the petitioner, indeed, intended The Court did not agree with petitioner’s
to include a "no negative data bank policy" insistence. What is rather decidedly
in the CBA, it should have presented such controlling is the fact that the spouse, child,
proposal to the union during the or parent is actually dependent for support
negotiations. upon the employee.
Philippine Journalist Inc. v. Journal The argument of petitioner that the grant of
Employees Union, GR No. 192601 the funeral and bereavement benefit was
FACTS: Both the Labor Arbiter and NLRC not voluntary but resulted from its mistaken
found that the dismissal of Michael Alfante interpretation as to who was considered a
was legal. On appeal the CA modified NLRC’s legal dependent of a regular employee
decision insofar as the funeral and deserves scant consideration. The
bereavement aid is concerned but voluntariness of the grant of the benefit
nevertheless declared his dismissal legal. PJI, became even manifest from petitioner’s
on the other hand, maintained that the legal admission that, despite the memorandum it
dependent who should be given funeral and issued in 2000 in order to "correct" the
bereavement aid must be consistent with interpretation of the term legal dependent,
the definition of legal dependent as provided it still approved in 2003 the claims for funeral
by SSS. It argues that the its earlier granting and bereavement aid of two employees,
of claims for funeral and bereavement aid based on its supposedly mistaken
without regard to the foregoing definition of interpretation.
the legal dependents of married or single
regular employees did not ripen into a The 2001-2004 CBA still contained the same
company policy whose unilateral withdrawal provision granting funeral or bereavement
would constitute a violation of Article 100 of aid in case of the death of a legal dependent
the Labor Code. of a regular employee without
differentiating the legal dependents
ISSUE: Whether or not PJI’s denial of according to the employee's civil status as
respondents’ claims for funeral and married or single even after being corrected
bereavement aid violates the labor code by the memorandum issued in 2000. The
continuity in the grant of the funeral and
HELD: Yes. Petitioner insists that bereavement aid to regular employees for
notwithstanding the silence of the CBA, the the death of their legal dependents has
term legal dependent should follow the undoubtedly ripened into a company policy.
definition of it under Republic Act (R.A.) No.
8282 (Social Security Law).
National Union of Workers in Hotel parties who are obliged under the law to
Restaurant and Allied Industries comply with its provisions.
(NUWHRAIN) - Philippine Plaza Chapter v
Philippines Plaza Inc. Thus, if the terms of the CBA are plain, clear
FACTS: The Union is the collective bargaining and leave no doubt on the intention of the
agent of the rank-and-file employees of contracting parties, the literal meaning of its
respondent Philippine Plaza Holdings, Inc. stipulations, as they appear on the face of
(PPHI). PPHI and the Union executed the the contract, shall prevail. Only when the
Third Rank-and-File Collective Bargaining words used are ambiguous and doubtful or
Agreement as Amended (CBA). The CBA leading to several interpretations of the
provided, among others, for the collection, party’s agreement that a resort to
by the PPHI, of a ten percent (10%) service interpretation and construction is called for.
charge on the sale of food, beverage,
transportation, laundry and rooms. En contra: Mitsubishi Motors Phils. Salaried
Thereafter, issues arose regarding the Employees Union (MMPSEU) v MItsubishi
collection of service charges. The Union Motors Phils
charged the PPHI with unfair labor practice FACTS: The parties’ CBA provides for the
(ULP) under Article 248 of the Labor Code, hospitalization insurance benefits for the
i.e., for violation of their collective covered dependents. Three members of
bargaining agreement. MMPSEU filed claims for reimbursement of
hospitalization expenses of their
ISSUE: How should the CBA provisions be dependents. MMPC paid only a portion of
interpreted? their hospitalization insurance claims, not
the full amount.
HELD: A collective bargaining agreement, as
used in Article 252 (now Article 262) of the Claiming that under the CBA, they are
Labor Code, is a contract executed at the entitled to hospital benefits, thus, they
request of either the employer or the asked for reimbursement from MMPC.
employee’s exclusive bargaining However, MMPC denied the claims
representative with respect to wages, hours contending that double insurance would
of work and all other terms and conditions of result if the said employees would receive
employment, including proposals for from the company the full amount of
adjusting any grievances or questions under hospitalization expenses despite having
such agreement. Jurisprudence settles that a already received payment of portions
CBA is the law between the contracting thereof from other health insurance
providers.
MMPSEU alleged that there is nothing in the Best Wear Garments v De Lemos
CBA which prohibits an employee from FACTS: Petitioner Best Wear Garments is a
obtaining other insurance or declares that sole proprietorship which hired respondents
medical expenses can be reimbursed only on piece-rate basis. De Lemos & Ocubillo
upon presentation of original official filed a complaint for illegal dismissal alleging
receipts. On the other hand, MMPC argued that they were arbitrarily transferred to
that the reimbursement of the entire other areas of operation of petitioner’s
amounts being claimed by the covered garments company., which amounted to
employees, including those already paid by constructive dismissal as it resulted in less
other insurance companies, would earnings for them. Petitioners denied having
constitute double indemnity or double terminated the employment of respondents
insurance, which is circumscribed under the who supposedly committed numerous
Insurance Code. absences without leave (AWOL). It explained
asserted that respondents are piece-rate
ISSUE: W/N the CBA is correct workers and hence they are not paid
according to the number of hours worked.
HELD: Yes. The condition that payment
should be direct to the hospital and doctor ISSUE: Whether the transfer of the
implies that MMPC is only liable to pay respondents to other areas of operation
medical expenses actually shouldered by the amounted to constructive dismissal?
employees’ dependents. It follows that
MMPC’s liability is limited, that is, it does not HELD: NO. Being piece-rate workers
include the amounts paid by other health assigned to individual sewing machines,
insurance providers. It is well to note at this respondents’ earnings depended on the
point that the CBA constitutes a contract quality and quantity of finished products.
between the parties and as such, it should be
strictly construed for the purpose of limiting Under these circumstances, it cannot be said
the amount of the employer’s liability. The that the transfer was unreasonable,
terms of the subject provision are clear and inconvenient or prejudicial to the
provide no room for any other respondents. Such deployment of sewers to
interpretation. As there is no ambiguity, the work on different types of garments as
terms must be taken in their plain, ordinary dictated by present business necessity is
and popular sense. within the ambit of management
prerogative which, in the absence of bad
faith, ill motive or discrimination, should not
be interfered with by the courts.
The constitutional policy of providing full In the meantime, the Union submitted its
protection to labor is not intended to CBA proposals to Toyota, but the latter
oppress or destroy management. While the refused to negotiate in view of its pending
Constitution is committed to the policy of appeal. Consequently, the Union filed a
social justice and the protection of the notice of strike with the NCMB based on
working class, it should not be supposed that Toyota’s refusal to bargain
every labor dispute will be automatically
decided in favor of labor. Management also In connection with Toyota’s appeal, Toyota
has its rights which are entitled to respect and the Union were required to attend a
and enforcement in the interest of simple hearing on before the Bureau of Labor
fair play. Thus, where management Relations (BLR). The February 21, 2001
prerogative to transfer employees is validly hearing was cancelled and reset to February
exercised, as in this case, courts will decline 22. This resulted to several strikes by the
to interfere. union.
Toyota Motors Phils. Workers v NLRC ISSUE: Whether the mass actions committed
FACTS: The Union filed a petition for by the Union on different occasions are
certification election among the Toyota rank illegal strikes; and
and file employees with the National
Conciliation and Mediation Board (NCMB). HELD: YES, THERE IS ILLEGAL STRIKE
The Med-Arbiter denied the petition, but, on
appeal, the DOLE Secretary granted the A strike means any temporary stoppage of
Union’s prayer, and, through an Order, work by the concerted action of employees
directed the immediate holding of the as a result of an industrial or labor dispute. A
certification election. labor dispute, in turn, includes any
controversy or matter concerning terms or
After Toyota’s plea for reconsideration was conditions of employment or the association
denied, the certification election was or representation of persons in negotiating,
conducted. The Med-Arbiter’s Order fixing, maintaining, changing, or arranging
certified the Union as the sole and exclusive the terms and conditions of employment,
bargaining agent of all the Toyota rank and regardless of whether the disputants stand
file employees. in the proximate relation of the employer
and the employee
Toyota challenged said Order via an appeal
to the DOLE Secretary. Applying pertinent legal provisions and
jurisprudence, we rule that the protest
actions undertaken by the Union officials Tirazona, in this case, has given PET more
and members on February 21 to 23 are not than enough reasons to distrust her. The
valid and proper exercises of their right to arrogance and hostility she has shown
assemble and ask government for redress of towards the company and her stubborn,
their complaints, but are illegal strikes in uncompromising stance in almost all
breach of the Labor Code. The Union’s instances justify the company’s termination
position is weakened by the lack of permit of her employment. Moreover, Tirazona’s
from the City of Manila to hold “rallies.” reading of what was supposed to be a
Shrouded as demonstrations, they were in confidential letter between the counsel and
reality temporary stoppages of work directors of the PET, even if it concerns her,
perpetrated through the concerted action of only further supports her employer’s view
the employees who deliberately failed to that she cannot be trusted. In fine, the Court
report for work on the convenient excuse cannot fault the actions of PET in dismissing
that they will hold a rally at the BLR and TIRAZONA.
DOLE offices on February 21 to 23. The
purported reason for these protest actions On 29 April 2008, Tirazona moved for
was to safeguard their rights against any reconsideration of our afore-mentioned
abuse which the med-arbiter may commit Decision. She argued therein that the Court
against their cause. However, the Union failed to consider the length of her service to
failed to advance convincing proof that the PET in affirming her termination from
med-arbiter was biased against them. employment. She prayed that her dismissal
be declared illegal. Alternatively, should the
Tirazona v Phil. Eds Techno-Service Court uphold the legality of her dismissal,
FACTS: Tirazona, being the Administrative Tirazona pleaded that she be awarded
Manager of Philippine EDS Techno-Service, separation pay and retirement benefits, out
Inc. (PET), was a managerial employee who of humanitarian considerations.
held a position of trust and confidence, she
claimed that she was denied due process; MOTION FOR RECONSIDERATION: In our
that she admitted to reading a confidential Resolution dated 23 June 2008, we denied
letter addressed to PET officers/directors Tirazona’s Motion for Reconsideration, as
containing the legal opinion of the counsel of the same did not present any substantial
PET regarding her case; and that she was arguments that would warrant a
validly terminated from her employment on modification of our previous ruling.
the ground that she willfully breached the
trust and confidence reposed in her by her On 21 August 2008, Tirazona filed the instant
employer. In the end, we concluded that: Motion for Leave to File [a] Second Motion
for Reconsideration, with the Second instances where the employee is validly
Motion for Reconsideration incorporated dismissed for causes other than serious
therein, raising essentially the same misconduct or those reflecting on his moral
arguments and prayers contained in her first character. x x x.
Motion for Reconsideration.
A contrary rule would, as the TIRAZONA
ISSUE: W/N TIRAZONA should be given correctly argues, have the effect, of
separation pay for equitable reasons. rewarding rather than punishing the erring
employee for his offense. And we do not
HELD: agree that the punishment is his dismissal
only and that the separation pay has nothing
NO. TIRAZONA is not entitled by such to do with the wrong he has committed. Of
benefit. course it has. Indeed, if the employee who
steals from the company is granted
As a general rule, an employee who has been separation pay even as he is validly
dismissed for any of the just causes dismissed, it is not unlikely that he will
enumerated under Article 282 of the Labor commit a similar offense in his next
Code is not entitled to separation pay. In Sy employment because he thinks he can
v. Metropolitan Bank & Trust Company,14 expect a like leniency if he is again found out.
we declared that only unjustly dismissed This kind of misplaced compassion is not
employees are entitled to retirement going to do labor in general any good as it
benefits and other privileges including will encourage the infiltration of its ranks by
reinstatement and backwages. those who do not deserve the protection
and concern of the Constitution.
Although by way of exception, the grant of
separation pay or some other financial The policy of social justice is not intended to
assistance may be allowed to an employee countenance wrongdoing simply because it
dismissed for just causes on the basis of is committed by the underprivileged. At best
equity,15 in Philippine Long Distance it may mitigate the penalty but it certainly
Telephone Company v. National Labor will not condone the offense. Compassion
Relations Commission,16 we set the limits for the poor is an imperative of every
for such a grant and gave the following ratio humane society but only when the recipient
for the same: is not a rascal claiming an undeserved
privilege. Social justice cannot be permitted
Separation pay shall be allowed as a to be [a] refuge of scoundrels any more than
measure of social justice only in those can equity be an impediment to the
punishment of the guilty. Those who invoke nor may it be used to reward, the indolent24
social justice may do so only if their hands or the wrongdoer, for that matter. This Court
are clean and their motives blameless and will not allow a party, in the guise of equity,
not simply because they happen to be poor. to benefit from its own fault.
This great policy of our Constitution is not
meant for the protection of those who have Reynaldo Moya v First Solid Rubber
proved they are not worthy of it, like the Industries
workers who have tainted the cause of labor FACTS: Moya filed before the NLRC-National
with the blemishes of their own character. Capital Region a complaint for illegal
(Emphasis ours.) dismissal against First Solid Rubber
Industries, Inc. (First Solid) and its President.
In accordance with the above He contended that his termination fell short
pronouncements, Tirazona is not entitled to of any of the just causes of serious
the award of separation pay. misconduct, gross and habitual neglect of
duties and willful breach of trust. He pointed
In sum, we hold that the award of separation out that the company failed to prove that his
pay or any other kind of financial assistance act fell within the purview of improper or
to Tirazona, under the guise of wrong misconduct, and that a single act of
compassionate justice, is not warranted in negligence as compared to eleven (11) years
this case. To hold otherwise would only of service of good record with the company
cause a disturbance of the sound will not justify his dismissal.
jurisprudence on the matter and a
perversion of the noble dictates of social Opposing the story of Moya, the company
justice. countered that Moya, who was exercising
supervision and control over the employees
While the Court commiserates with the as a department head, failed to exercise the
plight of Tirazona, who has recently diligence required of him to see to it that the
manifested23 that she has since been machine operator, Melandro Autor,
suffering from her poor health condition, the properly operated the machine. This act is
Court cannot grant her plea for the award of considered as a gross and habitual neglect of
financial benefits based solely on this duty which caused actual losses to the
unfortunate circumstance. For all its company.
conceded merit, equity is available only in
the absence of law and not as its ISSUE: Whether or not petitioner employee
replacement. Equity as an exceptional is entitled to separation pay based on his
extenuating circumstance does not favor, length of service.
HELD: NO. Petitioner is not entitled to ISSUE: Whether or not there is employer-
separation pay. Payment of separation pay employee relationship between Asiapro and
cannot be justified by his length of service. its owners-members.
It must be stressed that Moya was not an HELD: YES. In determining the existence of
ordinary rank-and-file employee. He was an employer-employee relationship, the
holding a supervisory rank being an Officer- following elements are considered: (1) the
in-Charge of the Tire Curing Department. selection and engagement of the workers;
The position, naturally one of trust, required (2) the payment of wages by whatever
of him abiding honesty as compared to means; (3) the power of dismissal; and (4)
ordinary rank-and-file employees. When he the power to control the worker‘s conduct,
made a false report attributing the damage with the latter assuming primacy in the
of five tires to machine failure, he breached overall consideration. All the aforesaid
the trust and confidence reposed upon him elements are present in this case.
by the company.
First. It is expressly provided in the Service
Republic of the Philippines represented by Contracts that it is the respondent
the Social Security Commission and Social cooperative which has the exclusive
Security Services v Asiapro Cooperative discretion in the selection and engagement
FACTS: Respondent Asiapro Cooperative of the owners-members as well as its team
entered into several service contracts with leaders who will be assigned at Stanfilco.
Stanfilco. Sometime later, the cooperative
owners-members requested Stanfilco’s help Second. It cannot be doubted then that
in registering them with SSS and remitting those stipends or shares in the service
their contributions. Petitioner SSS informed surplus are indeed wages, because these are
Asiapro that being actually a manpower given to the owners-members as
contractor supplying employees to Stanfilco, compensation in rendering services to
it must be the one to register itself with SSS respondent cooperative‘s client, Stanfilco.
as an employer and remit the contributions.
Respondent continuously ignoring the Third. It is also stated in the above-
demand of SSS the latter filed before the mentioned Service Contracts that it is the
SSC. Asiapro alleges that there exists no respondent cooperative which has the
employer-employee relationship between it power to investigate, discipline and remove
and its owners-members. SSC ruled in favor the owners-members and its team leaders
of SSS. On appeal, CA reversed the decision. who were rendering services at Stanfilco.
Fourth. In the case at bar, it is the notified him that as a cost-cutting measure
respondent cooperative which has the sole his services as a pianist would no longer be
control over the manner and means of required effective July 30, 1999.
performing the services under the Service
Contracts with Stanfilco as well as the means LEGEND HOTEL denied the existence of an
and methods of work. Also, the respondent employer-employee relationship with
cooperative is solely and entirely responsible respondent, insisting that he had been only
for its owners-members, team leaders and a talent engaged to provide live music at
other representatives at Stanfilco. All these Legend Hotel’s Madison Coffee Shop for
clearly prove that, indeed, there is an three hours/day on two days each week; and
employer-employee relationship between stated that the economic crisis that had hit
the respondent cooperative and its owners- the country constrained management to
members. dispense with his services.
Legend Hotel [Manila], owned by Titanium ISSUE: Whether or not there exist an
Corporation et. al. v Hernani S. Realuyo employer-employee relationship
FACTS: REALUYO is a pianist employed to
perform in the restaurant of LEGEND HOTEL. HELD: YES. Employer-employee relationship
Relauyo filed a complaint for alleged unfair existed between the parties
labor practice, constructive illegal dismissal,
and averred that he had worked as a pianist A review of the circumstances reveals that
at the Legend Hotel’s Tanglaw Restaurant respondent was, indeed, petitioner’s
from September 1992 with an initial rate of employee. He was undeniably employed as a
P400.00/night that was given to him after pianist in petitioner’s Madison Coffee
each night’s performance; that his rate had Shop/Tanglaw Restaurant from September
increased to P750.00/night; and that during 1992 until his services were terminated on
his employment, he could not choose the July 9, 1999.
time of performance, which had been fixed
from 7:00 pm to 10:00 pm for three to six First of all, petitioner actually wielded the
times/week. He added that the Legend power of SELECTION at the time it entered
Hotel’s restaurant manager had required into the service contract dated September 1,
him to conform with the venue’s motif; that 1992 with respondent. The power of
he had been subjected to the rules on selection was firmly evidenced by, among
employees’ representation checks and chits, others, the express written
a privilege granted to other employees; that recommendation dated January 12, 1998 by
on July 9, 1999, the management had Christine Velazco, petitioner’s restaurant
manager, for the increase of his Petitioner submits that it did not exercise
remuneration. the power of control over respondent. A
review of the records shows, however, that
Secondly, Respondent was paid P400.00 per respondent performed his work as a pianist
three hours of performance from 7:00 pm to under petitioner’s supervision and control.
10:00 pm, three to six nights a week. Such
rate of remuneration was later increased to Hacienda Leddy et. al. v Paquito Villegas
P750.00 upon restaurant manager Velazco’s FACTS: Villegas is an employee at the
recommendation. There is no denying that Hacienda Leddy as early as 1960. The
the remuneration denominated as talent hacienda was then succeeded by Gamboa.
fees was fixed on the basis of his talent and Villegas performed sugar farming job 8 hours
skill and the quality of the music he played a day, 6 days a week work, continuously for
during the hours of performance each night, not less than 302 days a year.
considering the prevailing rate for similar
talents in the entertainment industry. Gamboa went to Villegas' house and told
him that his services were no longer needed
Clearly, respondent received compensation without prior notice or valid reason. Hence,
for the services he rendered as a pianist in Villegas filed the instant complaint for illegal
petitioner’s hotel. Petitioner cannot use the dismissal.
service contract to rid itself of the
consequences of its employment of Gamboa, on the other hand, denied having
respondent. There is no denying that dismissed Villegas but admitted in his earlier
whatever amounts he received for his position paper that Villegas indeed worked
performance, howsoever designated by with the said farm owned by his father,
petitioner, were his wages. doing casual and odd jobs until the latter's
death in 1993. He was even given the benefit
Thirdly, the power of the employer to of occupying a small portion of the land
control the work of the employee is where his house was erected. He, however,
considered the most significant determinant maintained that Villegas ceased working at
of the existence of an employer-employee the farm as early as 1992, contrary to his
relationship. This is the so-called control allegation that he was dismissed.
test, and is premised on whether the person
for whom the services are performed ISSUE: Whether there exists an employer-
reserves the right to control both the end employee relationship between petitioner
achieved and the manner and means used to and Villegas
achieve that end.
HELD: Yes. If we are to follow the length of People’s Broadcasting (Bombo Radyo Phils) v
time that Villegas had worked with the Secretary of Labor (GR No. 179652; 2009)
Gamboas, it should be more than 20 years of
service. FACTS: Private respondent Juezan filed a
complaint against petitioner with the DOLE
Article 280 of the Labor Code, describes a Regional VII, Cebu City, for illegal deduction,
regular employee as one who is either (1) nonpayment of service incentive leave, 13th
engaged to perform activities which are month pay, premium pay for holiday and
necessary or desirable in the usual business rest day and illegal diminution of benefits,
or trade of the employer; and (2) those delayed payment of wages and noncoverage
casual employees who have rendered at of SSS, PAG-IBIG and Philhealth. After the
least one year of service, whether conduct of summary investigations, and
continuous or broken, with respect to the after the parties submitted their position
activity in which he is employed. papers, the DOLE Regional Director found
that private respondent was an employee of
While length of time may not be the petitioner, and was entitled to his money
controlling test to determine if Villegas is claims.
indeed a regular employee, it is vital in
establishing if he was hired to perform tasks Petitioner Bombo Radyo sought
which are necessary and indispensable to reconsideration of the Directors Order, but
the usual business or trade of the employer. failed. The Acting DOLE Secretary dismissed
If it was true that Villegas worked in the petitioners appeal on the ground that
hacienda only in the year 1993, specifically petitioner submitted a Deed of Assignment
February 9, 1993 and February 11, 1993, of Bank Deposit instead of posting a cash or
why would then he be given the benefit to surety bond.
construct his house in the hacienda? More
significantly, petitioner admitted that When the matter was brought before the
Villegas had worked in the hacienda until his CA, where petitioner Bombo Radyo claimed
father's demise. Clearly, even assuming that that it had been denied due process, it was
Villegas' employment was only for a specific held that petitioner Bombo Radyo was
duration, the fact that he was repeatedly re- accorded due process as it had been given
hired over a long period of time shows that the opportunity to be heard, and that the
his job is necessary and indispensable to the DOLE Secretary had jurisdiction over the
usual business or trade of the employer. matter, as the jurisdictional limitation
imposed by Article 129 of the Labor Code on
the power of the DOLE Secretary under Art.
128(b) of the Code had been repealed by RA Meteoro et. al. v Creative Creatures
7730. (GR No. 171275; 2009)
FACTS: Respondent is a domestic
In the Decision of this Court, the CA Decision corporation engaged in the business of
was reversed and set aside, and the producing, providing, or procuring the
complaint against petitioner was dismissed. production of set designs and set
From this Decision, the PAO filed a Motion construction services for television
for Clarification of Decision (with Leave of exhibitions, concerts, theatrical
Court). The PAO sought to clarify as to when performances, motion pictures and the like.
the visitorial and enforcement power of the On the other hand, petitioners were hired by
DOLE be not considered as co-extensive with respondent on various dates as artists,
the power to determine the existence of an carpenters and welders. They were tasked to
employer-employee relationship. design, create, assemble, set-up and
dismantle props, and provide sound effects
ISSUE: Whether or not there exists an to respondent’s various TV programs and
employer-employee (ER-EE) relationship? movies.
HELD: No. In the present case, the finding of Petitioners filed their respective complaints
the DOLE Regional Director that there was for non-payment of night shift differential
an employer-employee relationship has pay, overtime pay, holiday pay, 13th month
been subjected to review by this Court, with pay, premium pay for Sundays and/or rest
the finding being that there was no days, service incentive leave pay, paternity
employer-employee relationship between leave pay, educational assistance, rice
petitioner and private respondent, based on benefits, and illegal and/or unauthorized
the evidence presented. Private respondent deductions from salaries against
presented self-serving allegations as well as respondent, before the Department of Labor
self-defeating evidence. The findings of the and Employment (DOLE), National Capital
Regional Director were not based on Region (NCR).
substantial evidence, and private
respondent failed to prove the existence of In its position paper, respondent argued that
an employer-employee relationship. the DOLE-NCR had no jurisdiction over the
complaint of the petitioners because of the
The DOLE had no jurisdiction over the case, absence of an employer-employee
as there was no employer-employee relationship. It added that petitioners were
relationship present. Thus, the dismissal of free-lance individuals, performing special
the complaint against petitioner is proper. services with skills and expertise inherently
exclusive to them like actors, actresses, In the case at bar, whether or not petitioners
directors, producers, and script writers, such were independent contractors/project
that they were treated as special types of employees/freelance workers is a question
workers. of fact that necessitates the examination of
evidentiary matters not verifiable in the
ISSUE: Whether or not DOLE was divested of normal course of inspection. Indeed, the
jurisdiction. contracts of independent services, as well as
the check vouchers, were kept and
HELD: Yes. The case falls within the maintained in or about the premises of the
jurisdiction of NLRC. To resolve the issue workplace and were, therefore, verifiable in
raised by respondent, that is, the existence the course of inspection. However,
of an employer-employee relationship, respondent likewise claimed that petitioners
there is need to examine evidentiary were not precluded from working outside
matters. The following elements constitute the service contracts they had entered into
the reliable yardstick to determine such with it (respondent); and that there were
relationship: (a) the selection and instances when petitioners abandoned their
engagement of the employee; (b) the service contracts with the respondent,
payment of wages; (c) the power of because they had to work on another project
dismissal; and (d) the employers power to with a different company. Undoubtedly, the
control the employees conduct. There is no resolution of these issues requires the
hard and fast rule designed to establish the examination of evidentiary matters not
aforesaid elements. Any competent and verifiable in the normal course of inspection.
relevant evidence to prove the relationship Verily, the Regional Director and the
may be admitted. Identification cards, cash Secretary of Labor are divested of
vouchers, social security registration, jurisdiction to decide the case.
appointment letters or employment
contracts, payrolls, organization charts, and More importantly, the key requirement for
personnel lists, serve as evidence of the Regional Director and the DOLE
employee status. These pieces of evidence Secretary to be divested of jurisdiction is
are readily available, as they are in the that the evidentiary matters be not
possession of either the employee or the verifiable in the course of inspection. Where
employer; and they may easily be looked the evidence presented was verifiable in the
into by the labor inspector (in the course of normal course of inspection, even if
inspection) when confronted with the presented belatedly by the employer, the
question of the existence or absence of an Regional Director, and later the DOLE
employer-employee relationship. Secretary, may still examine it; and these
officers are not divested of jurisdiction to Respondent filed a complaint against
decide the case. petitioner with the National Labor Relations
Commission (NLRC) for alleged illegal
In sum, respondent contested the findings of dismissal and for the payment of backwages,
the labor inspector during and after the separation pay, actual damages and
inspection and raised issues the resolution of attorney’s fees.
which necessitated the examination of
evidentiary matters not verifiable in the Subsequently, respondent filed another
normal course of inspection. Hence, the Complaint with the Regional Trial Court
Regional Director was divested of (RTC) of Aparri, Cagayan, alleging that he
jurisdiction and should have endorsed the contracted such occupational disease by
case to the appropriate Arbitration Branch of reason of the gross negligence of petitioner
the NLRC. Considering, however, that an to provide him with a safe, healthy and
illegal dismissal case had been filed by workable environment.
petitioners wherein the existence or
absence of an employer-employee Petitioner filed a Motion to Dismiss on the
relationship was also raised, the CA correctly ground that the RTC has no jurisdiction over
ruled that such endorsement was no longer the subject matter of the complaint because
necessary. the same falls under the original and
exclusive jurisdiction of the Labor Arbiter
Indophil Textile Mills v Adviento (LA) under Article 217(a)(4) of the Labor
(GR No.171212; 2014) Code.
FACTS: Petitioner hired respondent Engr.
Salvador Adviento as Civil Engineer to The RTC issued a Resolution denying the
maintain its facilities in Lambakin, Marilao, aforesaid Motion and sustaining its
Bulacan. Respondent consulted a physician jurisdiction over the instant case. It held that
due to recurring weakness and dizziness. petitioner’s alleged failure to provide its
Few days later, he was diagnosed with employees with a safe, healthy and workable
Chronic Poly Sinusitis, and thereafter, with environment is an act of negligence, a case
moderate, severe and persistent Allergic of quasi-delict. As such, it is not within the
Rhinitis. Accordingly, respondent was jurisdiction of the LA under Article 217 of the
advised by his doctor to totally avoid house Labor Code.
dust mite and textile dust as it will transmute
into health problems. In its attempt to overturn the assailed
Decision and Resolution of the CA, petitioner
argues that respondents claim for damages
is anchored on the alleged gross negligence connection with their employer-employee
of petitioner as an employer to provide its relationship, and which would therefore fall
employees, including herein respondent, within the general jurisdiction of the regular
with a safe, healthy and workable courts of justice, were intended by the
environment; hence, it arose from an legislative authority to be taken away from
employer-employee relationship. The fact of the jurisdiction of the courts and lodged with
respondent’s employment with petitioner as Labor Arbiters on an exclusive basis.
a civil engineer is a necessary element of his
cause of action because without the same, It is obvious from the complaint that the
respondent cannot claim to have a right to a plaintiffs have not alleged any unfair labor
safe, healthy and workable environment. practice. Theirs is a simple action for
Thus, exclusive jurisdiction over the same damages for tortious acts allegedly
should be vested in the Labor Arbiter and the committed by the defendants. Such being
NLRC. the case, the governing statute is the Civil
Code and not the Labor Code.
ISSUE: Whether or not the RTC has
jurisdiction over the subject matter Indeed, jurisprudence has evolved the rule
that claims for damages under Article
HELD: Yes. While we have upheld the 217(a)(4) of the Labor Code, to be cognizable
present trend to refer worker-employer by the LA, must have a reasonable causal
controversies to labor courts in light of the connection with any of the claims provided
aforequoted provision, we have also for in that article. Only if there is such a
recognized that not all claims involving connection with the other claims can a claim
employees can be resolved solely by our for damages be considered as arising from
labor courts, specifically when the law employer-employee relations.
provides otherwise. For this reason, we have
formulated the "reasonable causal True, the maintenance of a safe and healthy
connection rule," wherein if there is a workplace is ordinarily a subject of labor
reasonable causal connection between the cases. More, the acts complained of appear
claim asserted and the employer-employee to constitute matters involving employee-
relations, then the case is within the employer relations since respondent used to
jurisdiction of the labor courts; and in the be the Civil Engineer of petitioner. However,
absence thereof, it is the regular courts that it should be stressed that respondent’s claim
have jurisdiction. Such distinction is apt since for damages is specifically grounded on
it cannot be presumed that money claims of petitioner’s gross negligence to provide a
workers which do not arise out of or in safe, healthy and workable environment for
its employees −a case of quasi-delict. This is SNMI was formed to do the sales and
easily ascertained from a plain and cursory marketing work, SMART abolished the
reading of the Complaint, which enumerates CSMG/FSD, Astorgas division.
the acts and/or omissions of petitioner
relative to the conditions in the workplace. SNMI agreed to absorb the CSMG personnel
who would be recommended by SMART.
As it is, petitioner does not ask for any relief SMART then conducted a performance
under the Labor Code. It merely seeks to evaluation of CSMG personnel and those
recover damages based on the parties' who garnered the highest ratings were
contract of employment as redress for favorably recommended to SNMI. Astorga
respondent's breach thereof. Such cause of landed last in the performance evaluation,
action is within the realm of Civil Law, and thus, she was not recommended by SMART.
jurisdiction over the controversy belongs to SMART, nonetheless, offered her a
the regular courts. More so must this be in supervisory position in the Customer Care
the present case, what with the reality that Department, but she refused the offer
the stipulation refers to the post- because the position carried lower salary
employment relations of the parties. rank and rate.
SMART sent a letter to Astorga demanding NLRC: Reversed the Labor Arbiter decision
that she pay the current market value of the and sustained Astorga’s dismissal. NLRC
Honda Civic Sedan which was given to her declared the abolition of CSMG and the
under the companys car plan program, or to creation of SNMI to do the sales and
surrender the same to the company for marketing services for SMART a valid
proper disposition.[11] Astorga, however, organizational action.
failed and refused to do either, thus
prompting SMART to file a suit for replevin. CA: affirmed NLRC with modification
Pending the resolution of Astorga’s motion The reorganization
to dismiss the suit for replevin, the Labor undertaken by SMART resulting in the
Arbiter rendered its decision. abolition of CSMG was a legitimate exercise
of management prerogative. However, the
Labor Arbiter: The dismissal from CA found that SMART failed to comply with
employment illegal. SMARTs right to abolish the mandatory one-month notice prior to
any of its departments. should be exercised the intended termination.
in good faith and for causes beyond its The CA also set aside the NLRCs order for the
control. The Arbiter found the abolition of return of the company vehicle holding that
CSMG done neither in good faith nor for this issue is not essentially a labor concern,
causes beyond the control of SMART, but a
but is civil in nature, and thus, within the FACTS: Grandteq is a domestic corporation
competence of the regular court to decide. engaged in the business of selling welding
electrodes, alloy steels, aluminum and
ISSUE: whether or not the replevin suit over copper alloys. Gonzales is the
the company vehicle is a civil or labor President/Owner of Grandteq. Grandteq
dispute? Who has jurisdiction over such employed Margallo as Sales Engineer
case? beginning 3 August 1999.
HELD: It is a civil dispute. The regular courts Margallo claimed that on an unstated date,
has jurisdiction. she availed herself of the car loan program
offered to her by Grandteq as a reward for
Replevin is an action whereby the owner or being Salesman of the Year. She paid the
person entitled to repossession of goods or down payment on a brand new Toyota
chattels may recover those goods or chattels Corolla, amounting to P201,000.00, out of
from one who has wrongfully distrained or her own pocket. The monthly amortization
taken, or who wrongfully detains such goods for the car was P10,302.00, of which
or chattels. It is designed to permit one P5,302.00 was to be her share and P5,000.00
having right to possession to recover was to be the share of Grandteq.
property in specie from one who has
wrongfully taken or detained the property. Margallo received a letter signed by
Gonzales indicating that the former is
Contrary to the CAs ratiocination, the RTC working with JVM Industrial Supply and
rightfully assumed jurisdiction over the suit Allied Services while being employed with
and acted well within its discretion in Grandteq. Margallo then averred that in
denying Astorgas motion to dismiss. SMARTs January 2004, De Leon asked her to just
demand for payment of the market value of resign, promising that if she did, she would
the car or, in the alternative, the surrender still be reimbursed her car loan payments.
of the car, is not a labor, but a civil, dispute. Relying on De Leons promise, Margallo
It involves the relationship of debtor and tendered her irrevocable resignation,
creditor rather than employee-employer effective immediately.
relations. As such, the dispute falls within
the jurisdiction of the regular courts. After Margallos resignation however,
Grandteq sold her car to Annaliza Estrella,
Grandteq Industrial Steel Products v Edna another employee, for P550,000.00. These
Margallo (GR No. 181393; 2009) events prompted her to file before the Labor
Arbiter a Complaint against Grandteq and
Gonzales, for recovery of car loan payment. It is also uncontroverted that after the
Grandteq and Gonzales opposed Margallos [respondent Margallo]s negotiated
claims. that Margallo had no right to the resignation, her car was resold to another
refund of her car loan payments under the employee for the original price. Under the
car loan agreement she executed with circumstances, the above-quoted
Grandteq, which expressly provided that in contractual provision is null and void for
the event that Margallo resigned or was being contrary to morals, good customs, and
terminated for cause during the effectivity of public policy. The law overrides contracts
said agreement, her car loan payments which are prepared by employers to
would be forfeited in favor of Grandteq, and circumvent the rights of their employees.
Grandteq would regain possession of the
car. Truly, the contracting parties may establish
such stipulations, clauses, terms and
ISSUE: conditions as they want, and their
Is a car benefit a labor or civil dispute? agreement would have the force of law
between them. However, those terms and
HELD: A LABOR DISPUTE. Although not conditions agreed upon must not be
strictly a labor contract, the car loan contrary to law, morals, customs, public
agreement herein involves a benefit policy or public order. Precisely, the law
extended by the employers, Grandteq and overrides such conditions which are
Gonzales, to their employee, Margallo. It prejudicial to the interest of the worker. The
should benefit, and not unduly burden, law affords protection to an employee, and
Margallo. The Court cannot, in any way, it will not countenance any attempt to
uphold a car loan agreement that threatens subvert its spirit and intent. The sheer
the employee with the forfeiture of all the inequality that characterizes employer-
car loan payments he/she had previously employee relations, where the scales
made, plus loss of the possession of the car, generally tip against the employee, often
should the employee wish to resign; scarcely provides him real and better
otherwise, said agreement can then be used options. Moreover, in controversies
by the employer as an instrument to either between a laborer and his master, doubts
hold said employee hostage to the job or reasonably arising from the evidence, or in
punish him/her for resigning. the interpretation of agreements and
writing should be resolved in the formers
It is uncontroverted that the car loan favor.
program was offered to the complainant as
a reward for being the Salesman of the Year.
The principle that no person may unjustly Manager, private respondent Niels H.B.
enrich oneself at the expense of another Have.
(Nemo cum alteris detrimento locupletari
potest) is embodied in Article 22 of the New He claimed illegal dismissal and prayed for
Civil Code. As can be gleaned from the reinstatement, payment of full backwages
foregoing, there is unjust enrichment when inclusive of allowances, 14th month pay, sick
(1) a person is unjustly benefited, and (2) and vacation leaves, share in the profits,
such benefit is derived at the expense of or moral and exemplary damages and
with damages to another. The main attorneys fees.
objective of the principle of unjust
enrichment is to prevent one from enriching Domondon alleged that VMPI, a
oneself at the expense of another. It is manufacturing company engaged in the
commonly accepted that this doctrine production and distribution of
simply means that a person shall not be confectionaries and related products, hired
allowed to profit or enrich himself him as Materials Manager through its then
inequitably at anothers expense. One President and General Manager Victor M.
condition for invoking this principle is that Endaya. He was tasked to supervise the
the aggrieved party has no other action Inventory Control, Purchasing, and
based on a contract, quasi-contract, crime, Warehouse and Distribution Sections of the
quasi-delict, or any other provision of law. company.
The principle against unjust enrichment He was given a guaranteed monthly salary of
obliges Grandteq and Gonzales to refund to ninety-eight thousand (P98,000.00) pesos
Margallo the car loan payments she had for fourteen (14) months with annual merit
made, since she has not actually acquired adjustment, profit sharing bonus from 0-2
the car. To relieve Grandteq and Gonzales of months based on individual, company and
their obligation to reimburse Margallo corporate performance, and a brand new
would, indeed, be to sanction unjust 1600cc Honda VTEC with 300 liters monthly
enrichment in favor of the first two and gas allowance
cause unjust poverty to the latter.
Things worked out well for him in the
Domondon vs NLRC 471 SCRA 559 (2009) beginning until Endaya was transferred to
FACTS: On November 20, 1998, petitioner China in August 1997 and was replaced by
Roberto T. Domondon filed a case against private respondent Have, a Dutch national.
private respondent Van Melle Phils., Inc. According to Domondon private respondent
(VMPI) and its President and General Have immediately set a one-on-one meeting
with him and requested his courtesy effected the registration of the car in his
resignation. Alleging that the decision came name.
from the Asia Regional Office, private
respondent Have wanted to reorganize and On July 30, 1998, P300,000.00 was credited
put his people in management. Petitioner to petitioners payroll account but he did not
refused to resign and life got difficult for him. use it to pay for the car as agreed upon.
Repeated demands for payment were
His decisions were always questioned by unheeded. In its letter of demand dated
private respondent Have. He was subjected October 28, 1998, private respondent VMPI
to verbal abuse. His competence was gave petitioner an option to apply the
undermined by baseless and derogatory P169,368.32 total cash conversion of his sick
memos, which lay the bases for his removal and vacation leave credits, 13th and 14th
from the company. He also did not receive months pay less taxes as partial
his 14th month pay. payment for the car and pay the balance of
P130,631.68, or return the car to the
Private respondents stated that Domondon company.
informed them about his intention to resign
and requested a soft landing financial Petitioner did not exercise either option.
support in the amount of three hundred Instead, on November 20, 1998, he filed a
thousand (P300,000.00) pesos on top of complaint for illegal dismissal against private
accrued benefits due him upon resignation. respondents.
Private respondents granted the request.
Where the Labor Arbiter ruled in favor of
Subsequently, however, petitioner proposed respondents VMPI. NLRC affirmed
the transfer of ownership of the car assigned
to him in lieu of the financial assistance from Domondon questioned the the jurisdiction
the company. Since company policy of the Labor Arbiter to resolve the issue of
prohibits disposition of assets without the transfer of car-ownership by private
valuable consideration, the parties agreed respondents.
that petitioner shall pay for the car with the
P300,000.00 soft landing financial assistance ISSUE:
from private respondent VMPI. Whether or not a counterclaim involving the
transfer of ownership of company cars falls
However, Private respondents averred that within the ambit of the Labor Arbiter
petitioner, who was then in charge of the
disposition of the assets of the company,
HELD: Yes. The Labor Arbiter has jurisdiction. household service, involving an amount
The jurisdiction of Labor Arbiters is provided exceeding five thousand pesos (P5,000.00)
under Article 217(a) of the Labor Code, as regardless of whether accompanied with a
amended, viz: claim for reinstatement.
(a) Except as otherwise provided under this
Code the Labor Arbiters shall have original In all these instances, the matrix is the
and exclusive jurisdiction to hear and decide, existence of an employer-employee
within thirty (30) calendar days after the relationship. In the case at bar, there is no
submission of the case by the parties for dispute that petitioner is an employee of the
decision without extension, even in the respondents.
absence of stenographic notes, the following
cases involving all workers, whether Without doubt, the transfer of the
agricultural or non-agricultural: ownership of the company car to petitioner
is connected with his resignation and arose
1. Unfair labor practice cases; out of the parties employer-employee
relations. Accordingly, private respondents
2. Termination disputes; claim for damages falls within the
jurisdiction of the Labor Arbiter.
3. If accompanied with a claim for
reinstatement, those cases that workers Prudential Bank v Clarita Reyes
may file involving wages, rates of pay, hours (352 SCRA 316)
of work and other terms and conditions of FACTS:The case stems from NLRC NCR Case
employment; No.00-06-03462-92, which is a complaint for
illegal suspension and illegal dismissal with
4. Claims for actual, moral, exemplary and prayer for moral and exemplary damages,
other forms of damages arising from gratuity, fringe benefits and attorney's fees
employer-employee relations; filed by Clarita Tan Reyes against Prudential
5. Cases arising from any violation of Article Bank and Trust Company (PRUDENTIAL)
264 of this Code, including questions before the labor arbiter.
involving the legality of strikes and lockouts;
Prior to her dismissal, REYES HELD: the
6. Except claims for Employees position of Assistant Vice President in the
Compensation, Social Security, Medicare foreign department of PRUDENTIAL, tasked
and maternity benefits, all other claims, with the duties, among others, to collect
arising from employer-employee relations, checks drawn against overseas banks
including those of persons in domestic or payable in foreign currency and to ensure
the collection of foreign bills or checks In her position paper, CLARITA T. REYES
purchased, including the signing of alleged that the real reason for her dismissal
transmittal letters covering the same. was her filing of the criminal cases against
PRUDENTIAL president, the vice president
The auditors of PRUDENTIAL discovered that and the auditors of PRUDENTIAL, such filing
two checks, No.011728-7232-146, in the not being a valid ground for her dismissal.
amount of US$109,650.00, and No. 011730- Furthermore, she alleged that it would be
7232-146, in the amount of US$115,000.00, self-serving for the PRUDENTIAL to state that
received by PRUDENTIAL on April 6, 1989, she was found guilty of gross misconduct in
drawn, by the Sanford Trading against deliberately withholding the clearing of the
Hongkong and Shanghai Banking two dollar checks. She further alleged that
Corporation, Jurong Branch, Singapore, in she was not afforded due process as she was
favor of Filipinas Tyrom, were not sent out not given the chance to refute the charges
for collection to Hongkong Shanghai Banking mentioned in the letter of dismissal. Hence,
Corporation on the alleged order of CLARITA she was illegally dismissed.
T. REYES until the said checks became stale.
On the other hand, NLRC argues that there
PRUDENTIAL created a committee to were substantial bases for PRUDENTIAL to
investigate the findings of the auditors lose its trust and confidence on CLARITA T.
involving the two checks which were not REYES and, accordingly, had just cause for
collected and became stale. terminating her services.
CLARITA T. REYES failed to attend and Labor Arbiter: Labor Arbiter Cornelio L.
participate in the formal investigation Linsangan finds the dismissal of CLARITA T.
conducted by the Committee on May 24, REYES to be without factual and legal basis,
1991, despite due notice, the Committee judgment is hereby rendered ordering the
proceeded with its hearings and heard the PRUDENTIAL to pay her back wages for three
testimonies of several witnesses. (3) years. In lieu of reinstatement,
PRUDENTIAL is also ordered to pay CLARITA
After a review of the Committee's findings, T. REYES separation pay equivalent to one
the Board of Directors of PRUDENTIAL month salary for every year of service.
resolved not to re-elect CLARITA T. REYES
any longer to the position of assistant NLRC: reversed the Labor Arbiter's decision
president pursuant to PRUDENTIAL's By- in its Resolution dated 24 March 1997. REYES
laws. sought reconsideration which, however, was
denied by the NLRC in its Resolution of 28 HELD: NO. REYES is a regular employee and
July 1998. PRUDENTIAL’s contention is untenable.
Petition for certiorari before the Supreme It appears that CLARITA T. REYES was
Court. The subject petition was referred to appointed Accounting Clerk by PRUDENTIAL
the Court of Appeals for appropriate action on July 14, 1963. From that position she rose
and disposition per resolution of this Court to become supervisor. Then in 1982, she was
dated November 25, 1998, in accordance appointed Assistant Vice-President which
with the ruling in St. Marlin Funeral Homes she occupied until her illegal dismissal on
vs. NLRC. July 19, 1991.
CA: Court of Appeals found that the NLRC PRUDENTIAL's contention that she merely
committed grave abuse of discretion in holds an elective position and that in effect
ruling that the dismissal of Reyes is valid. In she is not a regular employee is belied by the
effect, the Court of Appeals reinstated the nature of her work and her length of service
judgment of the labor arbiter. with PRUDENTIAL. As earlier stated, she rose
from the ranks and has been employed with
Bank also contends that "from the PRUDENTIAL since 1963 until the
beginning, prudential has consistently termination of her employment in 1991.
asserted in all its pleadings at all stages of
the proceedings that REYES held the position As Assistant Vice President of the foreign
of Assistant Vice President, an elective department of PRUDENTIAL, she is tasked,
position which she held by virtue of her among others, to collect checks drawn
having been elected as such by the Board of against overseas banks payable in foreign
Directors. CLARITA T. REYES's tenure was currency and to ensure the collection of
subject to the discretion of the Board of foreign bills or checks purchased, including
Directors and that her non-reelection was a the signing of transmittal letters covering
mere expiration of her term. PRUDENTIAL the same.
insists that CLARITA T. REYES was elected
Assistant Vice President sometime in 1990 to It has been stated that "the primary
serve as such for only one year. standard of determining regular
employment is the reasonable connection
ISSUE: W/N REYES was only holding an between the particular activity performed
elective thus not a regular employee of by the employee in relation to the usual
PRUDENTIAL. trade or business of the employer.
Additionally, "an employee is regular
because of the nature of work and the length Aggrieved, Locsin alleges he is an employee
of service, not because of the mode or even of Nissan, and thus he filed a complaint for
the reason for hiring them." illegal dismissal with prayer for re
instatement, damages, and for Atty’s fees
As Assistant Vice-President of the Foreign with the Labor Arbiter against Nissan Lease
Department of PRUDENTIAL she performs and Banson (President). Nissan Lease filed a
tasks integral to the operations of Motion to Dismiss, on the ground that the
PRUDENTIAL and her length of service with Labor Arbiter did not have jurisdiction over
PRUDENTIAL totaling 28 years speaks the case since the issue of Locsin’s removal
volumes of her status as a regular employee as EVP/Treasurer involves an intra-corporate
of PRUDENTIAL. In fine, as a regular dispute.
employee, she is entitled to security of
tenure; that is, her services may be The Labor Arbiter ruled that she has
terminated only for a just or authorized jurisdiction to arbitrate and/or decide the
cause. instant complaint finding that the case
involves an employer-employee
This being in truth a case of illegal dismissal, relationship. The element of control in the
it is no wonder then that PRUDENTIAL performance of duties was the basis of the
endeavored to the very end to establish loss Labor Arbiter in deciding that Locsin was an
of trust and confidence and serious employee of Nissan.
misconduct on the part of CLARITA T. REYES
but to no avail. Nissan elevated the case to the CA alleging
that the Labor Arbiter committed grave
Arsenio Z. Locsin v Nissan Lease Phils. Inc. abuse of discretion under Rule 65.
and Luis Banson (GR No. 185567;2010)
FACTS: The CA ruled that Locsin was a corporate
In 1992, Locsin was elected as Executive Vice officer; the issue of his removal as
President and Treasurer of Nissan Lease. He EVP/Treasurer is an intra-corporate dispute
held this position for 13 years until 2005 under the RTC’s jurisdiction. The CA defined
when he was elected as chairman of the corporate officers as those officers of a
board of directors. 7 months after, there was corporation who are given that character
a re-election of officers but Locson was not either by the Corporation Code or by the
re-elected nor reinstated in his previous corporations’ by-laws. The CA concluded
position as Treasurer. that Locsin does not have any recourse with
the Labor Arbiter or the NLRC since the
removal of a corporate officer, whether
elected or appointed, is an intra-corporate FACTS: Petitioner Renato Real was the
controversy over which the NLRC has no Manager of respondent corporation Sangu
jurisdiction. Instead, according to the CA, Philippines, Inc., a corporation engaged in
Locsin’s complaint for "illegal dismissal" the business of providing manpower for
should have been filed in the Regional Trial general services, like janitors, janitresses and
Court (RTC) other maintenance personnel, to various
clients. In 2001, petitioner, together with 29
ISSUES: others, all employed by respondent
1. Is Locsin an employee of Nissan or a corporation, filed their respective
corporate officer? Complaints for illegal dismissal against the
latter and respondent Kiichi Abe, the
RULING: No. Locsin was undeniably corporation’s Vice-President and General
Chairman and President, and was elected to Manager.
these positions by the Nissan board
pursuant to its By-laws. As such, he was a These complaints were later on
corporate officer, not an employee. The CA consolidated. With regard to petitioner, he
reached this conclusion by relying on the was removed from his position as Manager
definition of corporate officers as "those through Board Resolution2 001-03 adopted
officers of a corporation who are given that by respondent corporation’s Board of
character either by the Corporation Code or Directors. Petitioner complained that he was
by the corporation’s by-laws. Likewise, neither notified of the Board Meeting during
Section 25 of Batas Pambansa Blg. 69, or the which said board resolution was passed nor
Corporation Code of the Philippines formally charged with any infraction. He just
(Corporation Code) provides that corporate received from respondents a letter dated
officers are the president, secretary, March 26, 2001 stating that he has been
treasurer and such other officers as may be terminated from service effective March 25,
provided for in the by-laws. Even as 2001 for the following reasons: (1)
Executive Vice-President/Treasurer, Locsin continuous absences at his post at Ogino
already acted as a corporate officer because Philippines Inc. for several months which
the position of Executive Vice- was detrimental to the corporation’s
President/Treasurer is provided for in operation; (2) loss of trust and confidence;
Nissan’s By-Laws. and, (3) to cut down operational expenses to
reduce further losses being experienced by
Renato Real v Sangu Philippines Inc. respondent corporation. Respondents, on
(GR No. 168757; 2011) the other hand, refuted petitioner’s claim of
illegal dismissal by alleging that after
petitioner was appointed Manager, he respondents believed to be an act of
committed gross acts of misconduct retaliation, petitioner allegedly encouraged
detrimental to the company since 2000. the employees who had been placed in the
manpower pool to file a complaint for illegal
According to them, petitioner would almost dismissal against respondents. Worse, he
always absent himself from work without later incited those assigned in Epson
informing the corporation of his Precision (Phils.) Inc., Ogino Philippines
whereabouts and that he would come to the Corporation, Hitachi Cable Philippines Inc.
office only to collect his salaries. As he was and Philippine TRC Inc. to stage a strike on
almost always absent, petitioner neglected April 10 to 16, 2001. Not satisfied, petitioner
to supervise the employees resulting in together with other employees also
complaints from various clients about barricaded the premises of respondent
employees’ performance. In one instance, corporation. Such acts respondents posited
petitioner together with a few others, while constitute just cause for petitioner’s
apparently drunk, went to the premises of dismissal and that same was validly effected.
one of respondents’ clients, Epson Precision
(Phils.) Inc., and engaged in a heated The Labor Arbiter in a Decision declared
argument with the employees therein. petitioner and his co-complainants as having
Because of this, respondent Abe allegedly been illegally dismissed. Respondents thus
received a complaint from Epson’s appealed to the National Labor Relations
Personnel Manager concerning petitioner’s Commission (NLRC). The NLRC however,
conduct. modified the appealed decision of the Labor
Arbiter dismissing the complaint for lack of
Respondents likewise averred that jurisdiction.
petitioner established a company engaged in
the same business as respondent ISSUE
corporation’s and even submitted proposals Whether or not petitioners complaint for
for janitorial services to two of the latter’s illegal dismissal constitutes an intra-
clients. Because of all these, the Board of corporate controversy and thus, beyond the
Directors of respondent corporation met on jurisdiction of the Labor Arbiter
March 24,2001 and adopted Board
Resolution No. 2001-03 removing petitioner HELD:
as Manager. Petitioner was thereafter No. With the elements of intra-corporate
informed of his removal through a letter controversy being absent in this case, we
dated March 26, 2001 which he, however, thus hold that petitioners complaint for
refused to receive. Further, in what illegal dismissal against respondents is not
intra-corporate. Rather, it is a termination
dispute and, consequently, falls under the Present controversy does not relate to intra-
jurisdiction of the Labor Arbiter pursuant to corporate dispute
Section 217 of the Labor Code.
We now go to the nature of controversy test.
No intra-corporate relationship between the As earlier stated, respondents terminated
parties the services of petitioner for the following
reasons: (1) his continuous absences at his
As earlier stated, petitioners status as a post at Ogino Philippines, Inc; (2)
stockholder and director of respondent respondents loss of trust and confidence on
corporation is not disputed. What the petitioner; and, (3) to cut down operational
parties disagree on is the finding of the NLRC expenses to reduce further losses being
and the CA that petitioner is a corporate experienced by the corporation. Hence,
officer. An examination of the complaint for petitioner filed a complaint for illegal
illegal dismissal, however, reveals that the dismissal and sought reinstatement,
root of the controversy is petitioners backwages, moral damages and attorneys
dismissal as Manager of respondent fees. From these, it is not difficult to see that
corporation, a position which respondents the reasons given by respondents for
claim to be a corporate office. Hence, dismissing petitioner have something to do
petitioner is involved in this case not in his with his being a Manager of respondent
capacity as a stockholder or director, but as corporation and nothing with his being a
an alleged corporate officer. In applying the director or stockholder. For one, petitioners
relationship test, therefore, it is necessary to continuous absences in his post in Ogino
determine if petitioner is a corporate officer relates to his performance as Manager.
of respondent corporation so as to establish Second, respondents loss of trust and
the intra-corporate relationship between confidence in petitioner stemmed from his
the parties. And albeit respondents claim alleged acts of establishing a company
that the determination of whether engaged in the same line of business as
petitioner is a corporate officer is a question respondent corporations and submitting
of fact which this Court cannot pass upon in proposals to the latters clients while he was
this petition for review on certiorari, we shall still serving as its Manager. While we note
nonetheless proceed to consider the same that respondents also claim these acts as
because such question is not the main issue constituting acts of disloyalty of petitioner as
to be resolved in this case but is merely director and stockholder, we, however, think
collateral to the core issue earlier that same is a mere afterthought on their
mentioned. part to make it appear that the present case
involves an element of intra-corporate
controversy. Cosare sent a confidential memo to Arevalo
to inform him of the following anomalies
which were allegedly being committed by
26. Raul C. Cosare v Broadcom Asia, Inc. and Abiog (the VP for sales, Cosare’s superior)
Dante Arevalo against the company. Apparently, Arevalo
G.R. No. 201298 February 5, 2014 failed to act on Cosare’s accusations. Cosare
claimed that he was instead called for a
RAUL C. COSARE, Petitioner, meeting by Arevalo wherein he was asked to
vs. tender his resignation in exchange for
BROADCOM ASIA, INC. and DANTE "financial assistance" in the amount of
AREVALO, Respondents. ₱300,000.00. Cosare refused.
5. that the employer used fair and In the instant case, private respondents
reasonable criteria in ascertaining who never contested the veracity of the audited
would be dismissed and who would be financial documents proffered by Asian
retained among the employees, such as Alcohol before the Executive Labor Arbiter.
status (i.e., whether they are temporary, Neither did they object their admissibility.
casual, regular or managerial employees), They show that petitioner has accumulated
efficiency, seniority, physical fitness, age, losses amounting to P306,764,349.00 and
and financial hardship for certain workers. showing nary sign of abating in the near
future. The allegation of union busting is
The condition of business losses is normally bereft of proof. Union and non-union
shown by audited financial documents like members were treated alike. The records
yearly balance sheets and profit and loss show that the positions of fifty one (51)
statements as well as annual income tax other non-union members were abolished
returns. It is our ruling that financial due to business losses.
statements must be prepared and signed by
independent auditors. Unless duly audited, It should be observed that Article 283 of the
they can be assailed as self-serving Labor Code uses the phrase retrenchment to
documents. But it is not enough that only the prevent losses. In its ordinary connotation,
financial statements for the year during this phrase means that retrenchment must
which retrenchment was undertaken, are be undertaken by the employer before
presented in evidence. For it may happen losses are actually sustained.[39] We have,
that while the company has indeed been however, interpreted the law to mean that
losing, its losses may be on a downward the employer need not keep all his
trend, indicating that business is picking up employees until after his losses shall have
and retrenchment, being a drastic move, materialized. Otherwise, the law could be
should no longer be resorted to. Thus, the vulnerable to attack as undue taking of
failure of the employer to show its income or property for the benefit of another.
loss for the immediately preceding year or to
prove that it expected no abatement of such In the case at bar, Prior Holdings took over
losses in the coming years, may bespeak the the operations of Asian Alcohol in October
weakness of its cause. It is necessary that the 1991. Plain to see, the last quarter losses in
employer also show that its losses increased 1991 were already incurred under the new
through a period of time and that the management. There were no signs that
these losses would abate. Irrefutable was Employment at least one moth prior to the
the fact that losses have bled Asian Alcohol intended date of retrenchment;
incessantly over a span of several years.
They were incurred under the management 2. payment of separation pay
of the Parsons family and continued to be equivalent to at least one month pay or at
suffered under the new management of least one month pay for every year of service
Prior Holdings. Ultimately, it is Prior Holding whichever is higher;
that will absorb all the losses, including those
incurred under the former owners of the 3. good faith in abolishing the
company. The law gives the new redundant positions; and
management every right to undertake
measures to save the company from 4. fair and reasonable criteria in
bankruptcy. ascertaining what positions are to be
declared redundant and accordingly
Redundancy exist when the service abolished.
capability of the work is in excess of what is
reasonably needed to meet the demands on In the case at bar, private respondent Carias,
the enterprise. A redundant position is one Martinez and Sendon were water pump
rendered superfluous by any number of tenders. They tended the water wells of
factors, such as overhiring of workers, Asian Alcohol located in Ubay, Pulupandan,
decreased volume of business, dropping of a Negros Occidental. However, Asian Alcohol
particular product line previously did not own the land where the wells stood.
manufactured by the company or phasing It only leased them.
out of a service activity priorly undertaken
by the business.[43] Under these conditions, The lease contract which also provided for a
the employer has no legal obligation to keep right of way leading to the site of the wells,
in its payroll more employees than are was terminated. Also, the water from the
necessary for the operation of its business. wells had become salty due to extensive
prawn farming nearby and could no longer
For the implementation of a redundancy be used by Asian Alcohol for its purpose. The
program to be valid, the employer must wells had to be closed and needless to say,
comply with the following requisites: the services of Carias, Martinez and Sendon
had to be terminated on the twin grounds of
1. written notice served on both the redundancy and retrenchment.
employees and the Department of Labor and
Private respondent Verayo was the examined employment records and reports
briquetting plant operator in charge of the to determine the least efficient among them.
coal-fired boiler. Private respondent Tormo It was private respondent Amacio who
was one of the three briquetting helpers. To appeared the least efficient because of his
enhance production efficiency, the new poor health conditions.
management team shifted to the use of
bunker fuel by about seventy percent (70%) Not one of the private respondents refuted
to fire its boiler. The shift meant substantial the foregoing FACTS. They only contend that
fuel cost savings. In the process, however the new management should have followed
the need for a briquetting plant operator the policy of first in, last out in choosing
ceased as the services of only two (2) helpers which positions to declare as redundant or
were all that was necessary to attend to the whom to retrench to prevent further
much lesser amount of coal required to run business losses. No law mandates such a
the boiler. Thus, the positions of private policy. And the reason is simple enough. A
respondent Verayo had to be abolished. Of host of relevant factors come into play in
the three (3) briquetting helpers, Tormo, determining cost efficient measures and in
was the oldest, being already 41 years old. choosing the employees who will be
The other two, Rudy Javier Jr. and Eriberto retained or separated to save the company
Songaling, Jr., were younger, being only 28 from closing shop. In determining these
and 35, respectively. Age, with the physical issues, management has to enjoy a pre-
strength that comes with it, was particularly eminent role. The characterization of
taken into consideration by the positions as redundant is an exercise of
management team in deciding whom to business judgment on the part of the
separate. Hence, it was private respondent employer. It will be upHELD: as long as it
Tormo who was separated from service. The passes the test of arbitrariness.
management choice rested on a rational
basis. Private respondents call our attention to
their allegation that casuals were hired to
Private respondent Amacio was among the replace Carias, Martinez and Sendon as
ten (10) mechanics who manned the water pump tenders at the Ubay wells.
machine shop at the plant site. At their
current production level, the new We have HELD: that an employers good faith
management found that it was more cost in implementing a redundancy program is
efficient to maintain only nine (9) mechanics. not necessarily destroyed by availment of
In choosing whom to separate among the the services of an independent contractor to
ten (10) mechanics, the management replace the services of the terminated
employees. We have previously ruled that and stores where they handled all the
the reduction of the number of workers in a products of P&G. They received their wages
company made necessary by the from Promm-Gem or SAPS.
introduction of the services of an Petitioners thereafter filed a complaint
independent contractor is justified when the against P&G for regularization, service
latter is undertaken in order to effectuate incentive leave pay and other benefits with
more economic and efficient methods of damages. Petitioners insist that they are
production. In the case at bar, private employees of P&G. They claim that they
respondent failed to proffer any proof that were recruited by the salesmen of P&G and
the management acted in a malicious or were engaged to undertake merchandising
arbitrary manner in engaging the services of chores for P&G long before the existence of
an independent contractor to operate the Promm-Gem and/or SAPS. They further
Laura wells. Absent such proof, the Court has claim that when the latter had its so-called
no basis to interfere with the bona fide re-alignment program, petitioners were
decision of management to effect more instructed to fill up application forms and
economic and efficient methods of report to the agencies which P&G created.
production. Petitioners further assert that Promm-Gem
and SAPS are labor-only contractors
providing services of manpower to their
31. Meralco vs. Quisimbing client. They claim that the contractors have
neither substantial capital nor tools and
equipment to undertake independent labor
contracting. Petitioners insist that since they
32. Alviado et. al. vs. Procter & Gamble had been engaged to perform activities
G.R. No. 160506 March 9, 2010 which are necessary or desirable in the usual
JOEB M. ALIVIADO, et al vs. PROCTER & business or trade of P&G, then they are its
GAMBLE PHILS., INC., and PROMM-GEM regular employees.
INC., P&G argues that there is no employment
When EE-ER Relationship does not exist relationship between it and petitioners. That
FACTS: the Labor Code neither defines nor limits
Petitioners worked as merchandisers of P&G which services or activities may be validly
from various dates. They all individually outsourced. It insists that the determination
signed employment contracts with either of whether to engage the services of a job
Promm-Gem or SAPS for periods of more or contractor or to engage in direct hiring is
less five months at a time. They were within the ambit of management
assigned at different outlets, supermarkets prerogative.
ISSUE: paid-in capital of only P31,250.00. There is
Whether P&G is the employer of petitioners no other evidence presented to show how
RULING: much its working capital and assets are.
YES for those contracted by SAPS. But Furthermore, there is no showing of
petitioners employed by Promm-Gem are substantial investment in tools, equipment
not employees of P&G. or other assets.
It is necessary to first determine whether Considering that SAPS has no substantial
Promm-Gem and SAPS are labor-only capital or investment and the workers it
contractors or legitimate job contractors. recruited are performing activities which are
There is labor-only contracting where the directly related to the principal business of
person supplying workers to an employer P&G, we find that the former is engaged in
does not have substantial capital or labor-only contracting. Where labor-only
investment in the form of tools, equipment, contracting exists, the Labor Code itself
machineries, work premises, among others, establishes an employer-employee
and the workers recruited and placed by relationship between the employer and the
such person are performing activities which employees of the labor-only contractor. The
are directly related to the principal business statute establishes this relationship for a
of such employer. comprehensive purpose: to prevent a
In the instant case, the financial statements circumvention of labor laws. The contractor
of Promm-Gem show that it has authorized is considered merely an agent of the
capital stock of P1 million and a paid-in principal employer and the latter is
capital, or capital available for operations, of responsible to the employees of the labor-
P500,000.00 as of 1990.It also has long term only contractor as if such employees had
assets worth P432,895.28 and current assets been directly employed by the principal
of P719,042.32. Promm-Gem has also employer.
proven that it maintained its own warehouse
and office space with a floor area of 870
square meters. It also had under its name 33. Goya vs. Goya Employees Union
three registered vehicles which were used
for its promotional/merchandising business. GOYA, INC.
Under the circumstances, Promm-Gem vs.
cannot be considered as a labor-only GOYA, INC. EMPLOYEES UNION-FFW
contractor. We find that it is a legitimate
independent contractor. G.R. No. 170054 : January 21, 2013
On the other hand, the Articles of
Incorporation of SAPS shows that it has a FACTS:
Sometime in January 2004, petitioner Goya, Section 4. Categories of Employees. The
Inc. (Company), a domestic corporation parties agree on the following categories of
engaged in the manufacture, importation, employees:
and wholesale of top quality food products,
hired contractual employees from PESO (a) Probationary Employee.
Resources Development Corporation (PESO) One hired to occupy a regular rank-and-file
to perform temporary and occasional position in the Company and is serving a
services in its factory in Parang, Marikina probationary period. If the probationary
City. employee is hired or comes from outside the
Company (non-Goya, Inc. employee), he
This prompted respondent Goya, Inc. shall be required to undergo a probationary
Employees UnionFFW (Union) to request for period of six (6) months, which period, in the
a grievance conference on the ground that sole judgment of management, may be
the contractual workers do not belong to the shortened if the employee has already
categories of employees stipulated in the acquired the knowledge or skills required of
existing Collective Bargaining Agreement the job. If the employee is hired from the
(CBA). casual pool and has worked in the same
position at any time during the past two (2)
When the matter remained unresolved, the years, the probationary period shall be three
grievance was referred to the National (3) months.
Conciliation and Mediation Board (NCMB)
for voluntary arbitration. (b) Regular Employee.
The Union asserted that the hiring of An employee who has satisfactorily
contractual employees from PESO is not a completed his probationary period and
management prerogative and in gross automatically granted regular employment
violation of the CBA tantamount to unfair status in the Company.
labor practice (ULP).
(c) Casual Employee.
It noted that the contractual workers One hired by the Company to perform
engaged have been assigned to work in occasional or seasonal work directly
positions previously handled by regular connected with the regular operations of the
workers and Union members, in effect Company, or one hired for specific projects
violating Section 4, Article I of the CBA, which of limited duration not connected directly
provides for three categories of employees with the regular operations of the Company.
in the Company, to wit:
It was averred that the categories of employees and not filling up the vacant
employees had been a part of the CBA since regular positions through the hiring of
the 1970s and that due to this provision, a contractual workers from PESO, and that a
pool of casual employees had been possible scenario could also be created by
maintained by the Company from which it the Company wherein it could "import"
hired workers who then became regular workers from PESO during an actual strike.
workers when urgently necessary to employ
them for more than a year. Likewise, the In countering the Unions allegations, the
Company sometimes hired probationary Company argued that:
employees who also later became regular
workers after passing the probationary (a) the law expressly allows contracting and
period. With the hiring of contractual subcontracting arrangements through
employees, the Union contended that it Department of Labor and Employment
would no longer have probationary and (DOLE) Order No. 18-02;
casual employees from which it could obtain
additional Union members; thus, rendering (b) the engagement of contractual
inutile Section 1, Article III (Union Security) employees did not, in any way, prejudice the
of the CBA, which states: Union, since not a single employee was
terminated and neither did it result in a
Section 1. Condition of Employment. As a reduction of working hours nor a reduction
condition of continued employment in the or splitting of the bargaining unit; and
Company, all regular rank-and-file
employees shall remain members of the (c) Section 4, Article I of the CBA merely
Union in good standing and that new provides for the definition of the categories
employees covered by the appropriate of employees and does not put a limitation
bargaining unit shall automatically become on the Company’s right to engage the
regular employees of the Company and shall services of job contractors or its
remain members of the Union in good management prerogative to address
standing as a condition of continued temporary/occasional needs in its
employment. operation.
35. Alilin vs. Petron On June 1, 2000, Petron and RDG entered
G.R. No. 177592 June 9, 2014 into a Contract for Services whereby RDG
undertook to provide Petron with janitorial,
maintenance, tanker receiving, packaging
and other utility services in its Mandaue Bulk they performed jobs necessary and desirable
Plant. Upon expiration thereof, no further to Petron’s business; Petron provided
renewal of the service contract was done. petitioners with supplies, tools and
equipment used in their jobs; and that
Proceedings before the Labor Arbiter: petitioners’ workplace since the start of their
Alleging that they were barred from employment was at Petron’s bulk plant in
continuing their services Alilin et.al. filed a Mandaue City. RDG denied liability over
Complaint for illegal dismissal, Alilin’s claim of illegal dismissal and further
underpayment of wages, damages and argued that Petron cannot capitalize on the
attorney’s fees against Petron and RDG. The service contract to escape liability.
others also filed for overtime pay, holiday
pay, premium pay for holiday, rest day, 13th Petron, on the other hand, maintained that
month pay, service incentive leave pay, RDG is an independent contractor and the
allowances, separation pay, retirement real employer of the Alilin et.al. It was RDG
benefits, damages and attorney’s fees which hired and selected petitioners, paid
against Petron and RDG. The said complaints their salaries and wages, and directly
were later consolidated. supervised their work. Anent its allegation
that RDG is an independent contractor,
Alilin admitted that RDG hired them and paid Petron presented the following documents:
their salaries. They, however, claimed that (1) RDG’s Certificate of Registration issued
RDG is a labor-only contractor, which merely by the Department of Labor and
acted as an agent of Petron, their true Employment (DOLE) (2) RDG’s Certificate of
employer. They allege that their jobs, which Registration of Business Name issued by the
are directly related to Petron’s business, Department of Trade and Industry (DTI) (3)
entailed them to work inside the premises of Contractor’s Pre-Qualification Statement,
Petron using the required equipment and Social Security System (SSS) Online Inquiry
tools furnished by it and that they were System Employee Contributions and
subject to Petron’s supervision. Claiming to Employee Static Information and, an
be regular employees, Alilin et.al. thus affidavit stating that he had paid the salaries
asserted that their dismissal allegedly in of his employees assigned to Petron. Petron
view of the expiration of the service contract argued that with the expiration of the
between Petron and RDG is illegal. service contract it entered with RDG, Alilin
et.al.’s term of employment has
RDG corroborated Alilin’s claim that they are concomitantly ended. And not being the
regular employees of Petron. It alleged that employer, Petron cannot be HELD: liable for
Petron directly supervised their activities; petitioners’ claim of illegal dismissal.
remitting their contributions thereto. Joint
Labor Arbiter’s decision: affidavits showed that it was Romeo and his
Alilin et.al. are regular employees of Petron. brother Alejandre Gindang who supervised
It found that their jobs were directly related their work, not Petron’s foreman or
to Petron’s business operations; they supervisor. This was even corroborated by
worked under the supervision of Petron’s the Terminal Superintendent of the
foreman and supervisor; and they were Mandaue Bulk Plant. The CA also found RDG
using Petron’s tools and equipment in the to be an independent labor contractor with
performance of their works. The LA also sufficient capitalization and investment as
found no showing that Alilin’s dismissal was shown by its financial statement
for a just and authorized cause, they were
illegally dismissed.
ISSUE:
1. Is RDG a legitimate job contractor?
Proceedings before the National Labor NO. Labor-contracting only.
Relations Commission: 2. Is Petron the employer of Alilin et.al.?
Petron insists that there is no ER-EE YES. They exercised the power of
Rel. between them and Alilin et.al. The NLRC control.
ruled that petitioners are Petron’s regular
employees because they are performing job
assignments which are germane to its main RULING:
business. The prevailing rule on labor-only contracting
at the time Petron and RDG entered into the
Proceedings before the Court of Appeals: Contract for Services in June 2000 is DOLE
The CA found no employer-employee Department Order No. 10, series of 1997,
relationship between the parties. It HELD: the pertinent provision of which reads:
that the records of the case do not show that
Alilin et.al. were directly hired, selected or Section 4. x x x
employed by Petron; that their wages and xxxx
other wage related benefits were paid by the (f) "Labor-only contracting" prohibited
said company; and that Petron controlled under this Rule is an arrangement where the
the manner by which they carried out their contractor or subcontractor merely recruits,
tasks. supplies or places workers to perform a job,
RDG was HELD: to be responsible for paying work or service for a principal and the
Alilin’s wages. In fact, SSS records show that following elements are present:
RDG is their employer and actually the one
(i) The contractor or subcontractor does not work, janitorial, security, landscaping, and
have substantial capital or investment to messengerial services, and work not related
actually perform the job, work or service to manufacturing processes in
under its own account and responsibility; manufacturing establishments;
and (e) Services involving the public display of
(ii) The employees recruited, supplied or manufacturers’ products which do not
placed by such contractor or subcontractor involve the act of selling or issuance of
are performing activities which are directly receipts or invoices;
related to the main business of the principal. (f) Specialized works involving the use of
xxxx some particular, unusual or peculiar skills,
expertise, tools or equipment the
Section 6. Permissible contracting or performance of which is beyond the
subcontracting. - Subject to the conditions competence of the regular workforce or
set forth in Section 3 (d) and (e) and Section production capacity of the principal; and
5 hereof, the principal may engage the (g) Unless a reliever system is in place among
services of a contractor or subcontractor for the regular workforce, substitute services
the performance of any of the following: for absent regular employees, provided that
(a) Works or services temporarily or the period of service shall be coextensive
occasionally needed to meet abnormal with the period of absence and the same is
increase in the demand of products or made clear to the substitute employee at the
services, provided that the normal time of engagement. The phrase "absent
production capacity or regular workforce of regular employees" includes those who are
the principal cannot reasonably cope with serving suspensions or other disciplinary
such demands; measures not amounting to termination of
(b) Works or services temporarily or employment meted out by the principal, but
occasionally needed by the principal for excludes those on strike where all the formal
undertakings requiring expert or highly requisites for the legality of the strike have
technical personnel to improve the been prima facie complied with based on the
management or operations of an enterprise; records filed with the National Conciliation
(c) Services temporarily needed for the and Mediation Board.
introduction or promotion of new products,
only for the duration of the introductory or Permissible job contracting or
promotional period; subcontracting refers to an arrangement
(d) Works or services not directly related or whereby a principal agrees to farm out with
not integral to the main business or a contractor or subcontractor the
operation of the principal, including casual performance of a specific job, work, or
service within a definite or predetermined
period, regardless of whether such job, work "[I]n distinguishing between prohibited
or, service is to be performed or completed labor-only contracting and permissible job
within or outside the premises of the contracting, the totality of the FACTS and the
principal. surrounding circumstances of the case shall
be considered." Generally, the contractor is
Under this arrangement, the following presumed to be a labor-only contractor,
conditions must be met: unless such contractor overcomes the
(a) the contractor carries on a distinct and burden of proving that it has the substantial
independent business and undertakes the capital, investment, tools and the like.
contract work on his account under his own
responsibility according to his own manner However, where the principal is the one
and method, free from the control and claiming that the contractor is a legitimate
direction of his employer or principal in all contractor, as in the present case, said
matters connected with the performance of principal has the burden of proving that
his work except as to the results thereof; supposed status. It is thus incumbent upon
(b) the contractor has substantial capital or Petron, and not upon Alilin as Petron insists,
investment; and to prove that RDG is an independent
(c) the agreement between the principal and contractor.
contractor or subcontractor assures the
contractual employees’ entitlement to all Petron failed to discharge the burden of
labor and occupational safety and health proving that RDG is a legitimate contractor.
standards, free exercise of the right to self- Hence, the presumption that RDG is a labor-
organization, security of tenure, and social only contractor stands.
welfare benefits."
The financial statements and other financial
Labor-only contracting, on the other hand, is documents of RDG shows that it does have
a prohibited act, defined as "supplying sufficient working capital to meet the
workers to an employer who does not have requirements of its service contract (RDG
substantial capital or investment in the form has a maximum financial capability of
of tools, equipment, machineries, work Php4.807 Million, and Php1.611 Million the
premises, among others, and the workers following year).
recruited and placed by such person are
performing activities which are directly The Court stresses that this determination of
related to the principal business of such RDG’s status as an independent contractor is
employer." only with respect to its financial capability
for the period covered by the financial and another factor which negates Petron’s claim
other documents presented. In other words, that RDG is an independent contractor.
the evidence adduced merely proves that Petron’s power of control over petitioners
RDG was financially qualified as a legitimate exists in this case.
contractor but only with respect to its last "[A] finding that a contractor is a ‘labor-only’
service contract with Petron in the year contractor is equivalent to declaring that
2000. there is an employer-employee relationship
SC: between the principal and the employees of
Alilin et.al. have rendered work for the supposed contractor." In this case, the
Petron for a long period of time even before employer employee relationship between
the service contract was executed in 2000. Petron and petitioners becomes all the more
Petron failed to establish the financial apparent due to the presence of the power
capability of RDG at the time when of control on the part of the former over the
petitioners actually started to work for latter.
Petron in 1968, 1979, 1981, 1987, 1990,1992
and 1993. 36. Garden of Memories Park and Life Plan
vs. NLRC
Sections 8 and 9,Rule VIII, Book III of G.R. No. 160278 February 8, 2012
the implementing rules of the Labor Code, in GARDEN OF MEMORIES PARK and LIFE PLAN,
force since 1976 and prior to DOLE INC. and PAULINA T. REQUIÑO Vs. NATIONAL
Department Order No. 10, series of 1997, LABOR RELATIONS COMMISSION, SECOND
provide that for job contracting to be DIVISION, LABOR ARBITER FELIPE T.
permissible, one of the conditions that has GARDUQUE II and HILARIA CRUZ
to be met is that the contractor must have
substantial capital or investment. Petron FACTS:
having failed to show that this condition was
met by RDG, it can be concluded, on this Petitioner Garden of Memories is engaged in
score alone, that RDG is a mere labor-only the business of operating a memorial park
contractor. Otherwise stated, the situated at Calsadang Bago, Pateros, Metro-
presumption that RDG is a labor-only Manila and selling memorial Plan and
contractor stands due to the failure of services.
Petron to discharge the burden of proving Respondent Cruz, on the other hand, worked
the contrary. at the Garden of Memories Memorial Park as
a utility worker from August 1991 until her
2. Works performed by Alilin et.al. were termination in February 1998.
directly related to Petron’s business,
On March 13, 1998, Cruz filed a complaint terminated without just or valid cause. Also,
for illegal dismissal, underpayment of wages, her dismissal was violative of due process as
non-inclusion in the Social Security Services, she was not afforded the opportunity to
and non-payment of legal/special holiday, explain her side before her employment was
premium pay for rest day, 13th month pay terminated.
and service incentive leave pay against
Garden of Memories before the Department Cruz further claimed that as a result of her
of Labor and Employment (DOLE). illegal dismissal, she suffered sleepless
nights, serious anxiety and mental anguish.
Upon motion of Garden of Memories,
Requiño was impleaded as respondent on Garden of Memories denied liability for the
the alleged ground that she was its service claims of Cruz and asserted that she was not
contractor and the employer of Cruz. its employee but that of Requiño, its
independent service contractor, who
In her position paper, Cruz averred that she maintained the park for a contract price. It
worked as a utility worker of Garden of insisted that there was no employer-
Memories with a salary of ₱115.00 per day. employee relationship between them
As a utility worker, she was in charge, among because she was employed by its service
others, of the cleaning and maintenance of contractor, Victoriana Requiño (Victoriana),
the ground facilities of the memorial park. who was later succeeded by her daughter,
Sometime in February 1998, she had a Paulina, when she (Victoriana) got sick.
misunderstanding with a co-worker named Garden of Memories claimed that Requiño
Adoracion Requiño regarding the use of a was a service contractor who carried an
garden water hose. When the independent business and undertook the
misunderstanding came to the knowledge of contract of work on her own account, under
Requiño, the latter instructed them to go her own responsibility and according to her
home and not to return anymore. After own manner and method, except as to the
three (3) days, Cruz reported for work but results thereof.
she was told that she had been replaced by
another worker. She immediately reported The LA ruled that Requiño was not an
the matter of her replacement to the independent contractor but a labor-only
personnel manager of Garden of Memories contractor and that her defense that Cruz
and manifested her protest. abandoned her work was negated by the
filing of the present case. The LA declared
Cruz argued that as a regular employee of both Garden of Memories and Requiño,
the Garden of Memories, she could not be
jointly and severally, liable for the monetary In the present case, the LA, the NLRC,
claims of Cruz. and the CA are one in declaring that
petitioner Requiño was not a legitimate
Garden of Memories and Requiño appealed contractor. Echoing the decision of the LA
the decision to the NLRC. The NLRC affirmed and the NLRC, the CA reasoned out that
the ruling of the LA, stating that Requiño had Requiño was not a licensed contractor and
no substantial capital or investments in the had no substantial capital or investment in
form of tools, equipment, machineries, and the form of tool, equipment and work
work premises, among others, for her to premises, among others.
qualify as an independent contractor. It
declared the dismissal of Cruz illegal There is labor-only contracting where: (a)
reasoning out that there could be no the person supplying workers to an
abandonment of work on her part since employer does not have substantial capital
Garden of Memories and Requiño failed to or investment in the form of tools,
prove that there was a deliberate and equipment, machineries, work premises,
unjustified refusal on the part of the among others; and (b) the workers recruited
employee to go back to work and resume her and placed by such person are performing
employment. activities which are directly related to the
Garden of Memories moved for a principal business of the employer.
reconsideration of the NLRC decision but it
was denied for lack of merit. The Court finds no compelling reason to
deviate from the findings of the tribunals
The CA dismissed the petition and affirmed below. Both the capitalization requirement
the NLRC decision. Hence, this petition, and the power of control on the part of
Requiño are wanting.
Issues:
1. WHETHER OR NOT PETITIONER Generally, the presumption is that the
PAULINA REQUIÑO IS ENGAGED IN LABOR- contractor is a labor-only contracting unless
ONLY CONTRACTING. YES such contractor overcomes the burden of
2. WHETHER OR NOT RESPONDENT proving that it has the substantial capital,
CRUZ ABANDONED HER WORK; NOT investment, tools and the like. In the present
ILLEGALLY DISMISSED. NO case, though Garden of Memories is not the
contractor, it has the burden of proving that
Ruling: Requiño has sufficient capital or investment
1. since it is claiming the supposed status of
Requiño as independent contractor. Garden
of Memories, however, failed to adduce NOW THEREFORE, premises considered, the
evidence purporting to show that Requiño parties hereto have hereunto agreed on the
had sufficient capitalization. Neither did it following terms and conditions:
show that she invested in the form of tools, 1. That the Contractor shall undertake the
equipment, machineries, work premises and maintenance of the above-mentioned works
other materials which are necessary in the in strict compliance with and subject to all
completion of the service contract. the requirements and standards of
GMMPLPI.
Furthermore, Requiño was not a licensed
contractor. Her explanation that her The requirement of the law in determining
business was a mere livelihood program akin the existence of independent contractorship
to a cottage industry provided by Garden of is that the contractor should undertake the
Memories as part of its contribution to the work on his own account, under his own
upliftment of the underprivileged residing responsibility, according to his own manner
near the memorial park proves that her and method, free from the control and
capital investment was not substantial. direction of the employer except as to the
Substantial capital or investment refers to results thereof. In this case, however, the
capital stocks and subscribed capitalization Service Contract Agreement clearly indicates
in the case of corporations, tools, that Requiño has no discretion to determine
equipment, implements, machineries, and the means and manner by which the work is
work premises, actually and directly used by performed. Rather, the work should be in
the contractor or subcontractor in the strict compliance with, and subject to, all
performance or completion of the job, work requirements and standards of Garden of
or service contracted out.Obviously, Memories.
Requiño is a labor-only contractor.
Under these circumstances, there is no
Another determinant factor that classifies doubt that Requiño is engaged in labor-only
petitioner Requiño as a labor-only contracting, and is considered merely an
contractor was her failure to exercise the agent of Garden of Memories. As such, the
right to control the performance of the work workers she supplies should be considered
of Cruz. This can be gleaned from the Service as employees of Garden of Memories.
Contract Agreement between Garden of Consequently, the latter, as principal
Memories and Requiño, to wit: employer, is responsible to the employees of
xxxx the labor-only contractor as if such
employees have been directly employed by
it.
actuations of Cruz. Neither were there overt
Notably, Cruz was hired as a utility worker acts which could be considered
tasked to clean, sweep and water the lawn manifestations of her desire to truly
of the memorial park. She performed abandon her work. On the contrary, her
activities which were necessary or desirable reporting to the personnel manager that she
to its principal trade or business. Thus, she had been replaced and the immediate filing
was a regular employee of Garden of of the complaint before the DOLE
Memories and cannot be dismissed except demonstrated a desire on her part to
for just and authorized causes. continue her employment with Garden of
Memories. As correctly pointed out by the
2. CA, the filing of the case for illegal dismissal
negated the allegation of abandonment.
The Court agrees with the findings of the
tribunals below that respondent Cruz did not 37. Arlene S. Espiritu G.R. No. 204944-45
abandon her work but was illegally
dismissed.
38. Semblante vs. CA, G.R. No. 196426,
As the employer, Garden of Memories has August 15, 2011
the burden of proof to show the employee's
deliberate and unjustified refusal to resume FACTS:
his employment without any intention of Petitioners Marticio Semblante and Dubrick
returning. For abandonment to exist, two Pilar worked in the Gallera de Mandaue
factors must be present: (1) the failure to owned by the respondents-spouses Vicente
report for work or absence without valid or and Maria Luisa Loot. The petitioners
justifiable reason; and (2) a clear intention to rendered their services as the official
sever employer-employee relationship, with massiador and sentenciador in 1993. As the
the second element as the more masiador, Semblante calls and takes the bets
determinative factor being manifested by from the gamecock owners and other
some overt acts. It has been said that bettors and orders the start of the cockfight.
abandonment of position cannot be lightly He also distributes the winnings after
inferred, much less legally presumed from deducting the arriba, or the commission for
certain equivocal acts.Mere absence is not the cockpit. Meanwhile, as the sentenciador,
sufficient. Pilar oversees the proper gaffing of fighting
cocks, determines the fighting cocks'
In this case, no such intention to abandon physical condition and capabilities to
her work can be discerned from the continue the cockfight, and eventually
declares the result of the cockfight. As the latter performed the works necessary
masiador and sentenciador, Semblante and indispensable to the usual trade or
receives PhP2,000 per week or a total of business of the respondents for a number of
PhP8,000 per month, while Pilar gets years. It has ruled that petitioners were
PhP3,500 a week or PhP14,000 per month. illegally dismissed and are entitled to their
They work every Tuesday, Wednesday, backwages and separation pay. However,
Saturday, and Sunday every week, excluding the NLRC reversed the Labor Arbiter’s
monthly derbies and cockfights HELD: on decision. It HELD: that respondents having
special holidays. Their working days start at no power on the selection and engagement
1:00 p.m. and last until 12:00 midnight, or of petitioners and that no separate
until the early hours of the morning individual contract with respondents was
depending on the needs of the cockpit. ever executed by petitioners. In its appeal to
Petitioners had both been issued employees' the CA, the latter ruled in favor for the
identification cards that they wear every respondents and HELD: that referees and
time they report for duty. However on bet-takers in a cockfight need to have the
November 14,1993, petitioners were denied kind of expertise that is characteristic of the
entry into the cockpit upon the instructions game to interpret messages conveyed by
of respondents and were informed of the mere gestures. Hence, petitioners are akin
termination of their employment effective to independent contractors who possess
that date. unique skills , expertise and talent to
distinguish them from ordinary employees.
Respondents denied that petitioners were Further, petitioners were not provided by
their employees and alleged that they were tools and instrumentalities they needed to
associates of respondents’ independent perform their work. They only need their
contractor, Tomas Vega. They claimed that unique skills and talents in the performance
petitioners have no regular working time or of their job as masiador and sentenciador.
day and they are free to decide for
themselves whether to report for work or ISSUE:
not on any cockfighting day. And the Whether the dismissal of the petitioners is
identification card issued was only to free illegal on the ground that that they are
them from the normal entrance fees and to regular employees of the respondents? No.
differentiate them from the general public. There was no employer-employee
relationship.
The Labor Arbiter found that there exist an
employer-employee relationship between HELD:
the petitioner and the respondents because
Respondents had no part in petitioners' provide SONZAs services exclusively to ABS-
selection and management; petitioners' CBN as talent for radio and television.
compensation was paid out of the arriba
(which is a percentage deducted from the ABS-CBN agreed to pay for SONZAs services
total bets), not by petitioners; and a monthly talent fee of P310,000 for the first
petitioners performed their functions as year and P317,000 for the second and third
masiador and sentenciador free from the year of the Agreement. ABS-CBN would pay
direction and control of respondents. In the the talent fees on the 10th and 25th days of
conduct of their work, petitioners relied the month.
mainly on their "expertise that is
characteristic of the cockfight gambling," On 30 April 1996, SONZA filed a complaint
and were never given by respondents any against ABS-CBN before the Department of
tool needed for the performance of their Labor and Employment, National Capital
work. Respondents, not being petitioners' Region in Quezon City. SONZA complained
employers, could never have dismissed, that ABS-CBN did not pay his salaries,
legally or illegally, petitioners, since separation pay, service incentive leave pay,
respondents were without power or 13th month pay, signing bonus, travel
prerogative to do so in the first place. The allowance and amounts due under the
rule on the posting of an appeal bond cannot Employees Stock Option Plan (ESOP).
defeat the substantive rights of respondents
to be free from an unwarranted burden of On 10 July 1996, ABS-CBN filed a Motion to
answering for an illegal dismissal for which Dismiss on the ground that no employer-
they were never responsible. employee relationship existed between the
parties. SONZA filed an Opposition to the
motion on 19 July 1996.
The Labor Arbiter rendered judgment in Not considered regular employees are
favor of Nazareno, et al and declared that "project employees," the completion or
they were regular employees of ABS-CBN as termination of which is more or less
such, they were awarded monetary benefits. determinable at the time of employment,
NLRC affirmed the decision of the Labor such as those employed in connection with a
Arbiter. ABS-CBN filed a motion for particular construction project, and
reconsideration but CA dismissed it. Hence, "seasonal employees" whose employment
this petition. by its nature is only desirable for a limited
period of time. Even then, any employee talent and celebrity status, ABS-CBN would
who has rendered at least one year of not have entered into the Agreement with
service, whether continuous or intermittent, SONZA but would have hired him through its
is deemed regular with respect to the personnel department just like any other
activity performed and while such activity employee.
actually exists. ● All the talent fees and benefits paid
to SONZA were the result of negotiations
In this case, it is undisputed that Nazareno, that led to the Agreement. If SONZA were
et al had continuously performed the same ABS-CBN’s employee, there would be no
activities for an average of five years. Their need for the parties to stipulate on benefits
assigned tasks are necessary or desirable in such as "SSS, Medicare, x x x and 13th month
the usual business or trade of the ABS-CBN. pay which the law automatically
Thus, they are deemed to be regular incorporates into every employer-employee
employees within the meaning of the law. contract. Whatever benefits SONZA enjoyed
In addition, Nazareno, et al cannot be arose from contract and not because of an
considered "talents" because they are not employer-employee relationship.
actors or actresses or radio specialists or
mere clerks or utility employees. They are In the present case:
regular employees who perform several ● First. In the selection and
different duties under the control and engagement of Nazareno, et al, no peculiar
direction of ABS-CBN executives and or unique skill, talent or celebrity status was
supervisors. required from them because they were
merely hired through petitioner’s personnel
It follows then that respondents are entitled department just like any ordinary employee.
to the benefits provided for in the existing ● Second. The so-called "talent fees" of
CBA between petitioner and its rank-and-file Nazareno, et al correspond to wages given as
employees. a result of an employer-employee
relationship. They did not have the power to
NOTE: As Distinguished in the case of Sonza: bargain for huge talent fees, a circumstance
● ABS-CBN engaged SONZA’S services negating independent contractual
to co-host its television and radio programs relationship.
because of SONZA’S peculiar skills, talent ● Third. ABS-CBN could always
and celebrity status. It is a circumstance discharge Nazareno, et al should it find their
indicative, but not conclusive, of an work unsatisfactory, and respondents are
independent contractual relationship. If highly dependent on the company for
SONZA did not possess such unique skills, continued work.
● Fourth. The degree of control and temporary and not regular employees, in
supervision exercised by ABS-CBN over violation of the Labor Code. They claimed
Nazareno, et al through its supervisors they had already rendered more than a year
negates the allegation that the latter are of service in the company and, therefore,
independent contractors. should have been recognized as regular
employees entitled to security of tenure and
to the privileges and benefits enjoyed by
regular employees.
42. Farley Fulache et al vs. ABS CBN
ABS-CBN explained the nature of the
FACTS: petitioners employment within the
Petitioners Farley Fulache, Manolo framework of its operations. It claimed that:
Jabonero, David Castillo, Jeffrey Lagunzad, it operates in several divisions, one of which
Magdalena Malig-on Bigno, Francisco Cabas, is the Regional Network Group (RNG). The
Jr., Harvey Ponce and Alan C. Almendras RNG exercises control and supervision over
(petitioners) and Cresente Atinen (Atinen) all the ABS-CBN local stations to ensure that
filed two separate complaints for ABS-CBN programs are extended to the
regularization, unfair labor practice and provinces. A local station, like the Cebu
several money claims (regularization case) station, can resort to cost-effective and cost-
against ABS-CBN Broadcasting Corporation- saving measures to remain viable; local
Cebu (ABS-CBN). Fulache and Castillo were stations produced shows and programs that
drivers/cameramen; Atinen, Lagunzad and were constantly changing because of the
Jabonero were drivers; Ponce and competitive nature of the industry, the
Almendras were cameramen/editors; Bigno changing public demand or preference, and
was a PA/Teleprompter Operator-Editing, the seasonal nature of media broadcasting
and Cabas was a VTR man/editor. programs.
The petitioners alleged that ABS-CBN and ABS-CBN further claimed that to cope with
the ABS-CBN Rank-and-File Employees fluctuating business conditions, it contracts
Union (Union) executed a collective on a case-to-case basis the services of
bargaining agreement (CBA) effective persons who possess the necessary talent,
December 11, 1999 to December 10, 2002; skills, training, expertise or qualifications to
they only became aware of the CBA when meet the requirements of its programs and
they obtained copies of the agreement; they productions. These contracted persons are
learned that they had been excluded from its called talents and are considered
coverage as ABS-CBN considered them
independent contractors who offer their responded by filing a complaint for illegal
services to broadcasting companies. dismissal (illegal dismissal case).
Instead of salaries, ABS-CBN pointed out that In defense, ABS-CBN alleged that even
talents are paid a pre-arranged before the labor arbiter rendered his
consideration called talent fee taken from decision of January 17, 2002 in the
the budget of a particular program and regularization case, it had already
subject to a ten percent (10%) withholding undertaken a comprehensive review of its
tax. Talents do not undergo probation. Their existing organizational structure to address
services are engaged for a specific program its operational requirements. It then decided
or production, or a segment thereof. Their to course through legitimate service
contracts are terminated once the program, contractors all driving, messengerial,
production or segment is completed. janitorial, utility, make-up, wardrobe and
security services for both the Metro Manila
ABS-CBN alleged that the petitioners and provincial stations, to improve its
services were contracted on various dates by operations and to make them more
its Cebu station as independent economically viable.
contractors/off camera talents, and they
were not entitled to regularization in these Labor Arbiter Rendoque upHELD: the validity
capacities. of ABS-CBN's contracting out of certain work
or services in its operations. The labor
Labor Arbiter Rendoque rendered his arbiter found that petitioners Fulache,
decision holding that the petitioners were Jabonero, Castillo, Lagunzad and Atinen had
regular employees of ABS-CBN, not been dismissed due to redundancy, an
independent contractors, and are entitled to authorized cause under the law.
the benefits and privileges of regular
employees. ABS-CBN appealed the ruling to Again, ABS-CBN appealed to the NLRC which
the National Labor Relations Commission rendered a joint decision on the
(NLRC). regularization and illegal dismissal cases. The
NLRC ruled that there was an employer-
While the appeal of the regularization case employee relationship between the
was pending, ABS-CBN dismissed Fulache, petitioners and ABS-CBN as the company
Jabonero, Castillo, Lagunzad and Atinen (all exercised control over the petitioners in the
drivers) for their refusal to sign up contracts performance of their work; the petitioners
of employment with service contractor Able were regular employees because they were
Services. The four drivers and Atinen engaged to perform activities usually
necessary or desirable in ABS-CBN's trade or scenario and the evidence adduced by both
business; they cannot be considered parties, it is declared that complainants in
contractual employees since they were not these cases are REGULAR EMPLOYEES of
paid for the result of their work, but on a respondent ABS-CBN and not INDEPENDENT
monthly basis and were required to do their CONTRACTORS and thus henceforth they are
work in accordance with the companys entitled to the benefits and privileges
schedule. attached to regular status of their
employment.
The NLRC reversed the labor arbiters ruling
in the illegal dismissal case; it found that This declaration unequivocally settled the
petitioners Fulache, Jabonero, Castillo, petitioners employment status: they are
Lagunzad and Atinen had been illegally ABS-CBNs regular employees entitled to the
dismissed. benefits and privileges of regular employees.
These benefits and privileges arise from
entitlements under the law (specifically, the
ISSUE: Labor Code and its related laws), and from
Whether petitioners entitled to the benefits their employment contract as regular ABS-
if the CBA. (YES) CBN employees, part of which is the CBA if
Whether the dismissal of the petitioners is they fall within the coverage of this
valid. (NO) agreement.
By implication at least under Article 1994 of In fact, results-wise, the principal can impose
the Civil Code, the principal can appoint two production quotas and can determine how
or more agents to carry out the same many agents, with specific territories, ought
assigned tasks, based necessarily on the to be employed to achieve the company’s
specific instructions and directives given to objectives. These are management policy
them. decisions that the labor law element of
control cannot reach.
With particular relevance to the present
case is the provision that "In the execution of Our ruling in these respects in the first
the agency, the agent shall act in accordance Insular Life case was practically reiterated in
with the instructions of the principal." This Carungcong. Thus, as will be shown more
provision is pertinent for purposes of the fully below, Manulife’s codes of conduct, all
of which do not intrude into the insurance employment with another company. BAYER
agents’ means and manner of conducting eventually reemployed GALLEGO, however,
their sales and only control them as to the in 1997 through Product Image and
desired results and Insurance Code norms, Marketing Services, Inc. (PRODUCT IMAGE)
cannot be used as basis for a finding that the of which EDGARDO BERGONIA (BERGONIA)
labor law concept of control existed was the President and General Manager,
between Manulife and Tongko. performing the same task as that of crop
protection technician.
46. Ramy Gallego vs. Bayer Phils. GALLEGO’s Claim: October, 2001, he was
TOPIC: Effect of DOLE Certifcation as directed by Pet Pascual, the newly assigned
Legitimate Job Contractor BAYER sales representative, to submit a
resignation letter, but he refused; and that in
G.R. No. 179807 July 31, 2009 January, 2002, he was summoned by his
immediate supervisors including DANPIN
RAMY GALLEGO, vs. BAYER PHILIPPINES, GUILLERMO (GUILLERMO), BAYER District
INC., DANPIN GUILLERMO, PRODUCT IMAGE Sales Manager for Panay, and was ordered
MARKETING, INC., and EDGARDO to quit his employment which called for him
BERGONIA. to return all pieces of service equipment
issued to him, but that again he refused.
Ponente: CARPIO MORALES, J. GALLEGO received a memorandum that his
area of responsibility would be transferred
FACTS: to Luzon, of which memorandum he sought
reconsideration but to no avail; and that
RAMY GALLEGO was contracted in April Guillermo and Bergonia spread rumors that
1992 by Bayer Philippines, Inc. (BAYER) as reached the dealers in Antique to the effect
crop protection technician to promote and that he was not anymore connected with
market BAYER products. Under the BAYER and any transaction with him would
supervision of Aristeo Filipino, BAYER sales no longer be honored as of April 30, 2002.
representative for Panay Island, GALLEGO
made farm visits to different municipalities Believing that his employment was
in Panay Island to convince farmers to buy terminated, GALLEGO lodged on June 6,
BAYER products. 2002 a complaint for illegal dismissal with
the National Labor Relations Commission
In 1996, GALLEGO’s employment with (NLRC) against herein BAYER, GUILLERMO,
BAYER came to a halt, prompting him to seek PRODUCT IMAGE, AND BERGONIA, with
claims for reinstatement, backwages and/or between BAYER and GALLEGO since BAYER
separation pay, unpaid wages, holiday pay, furnished GALLEGO the needed facilities and
premium pay, service incentive leave and paraphernalia, and fixed the methodology to
allowances, damages and attorney’s fees. be used in the performance of his work.
PRODUCT IMAGE and Bergonia’s NLRC: reversed the Decision of the Labor
CONTENTION: on the other hand, admitted Arbiter and dismissed GALLEGO’s complaint
that GALLEGO was hired as an employee of by Decision of February 22, 2006,11 holding
PRODUCT IMAGE on April 7, 1997 on a that as an independent contractor,
contractual basis to promote and market PRODUCT IMAGE was the employer of
BAYER products pursuant to the Contract of GALLEGO but there was no evidence that
Promotional Services forged between it and GALLEGO was dismissed by either PRODUCT
BAYER. They alleged that GALLEGO was a IMAGE or BAYER.
field worker who had no fixed hours and
worked under minimal supervision, his Legal ISSUE: W/N PRODUCT IMAGE is a
performance being gauged only by his Legitimate Job Contractor.
accomplishment reports duly certified to by
BAYER acting as his de facto supervisor;8 HELD:
that GALLEGO was originally assigned to
Iloilo but later transferred to Antique; that YES. PRODUCT IMAGE is a legitimate job
GALLEGO was not dismissed, but went on contractor.
official leave from January 23 to 31, 2002,
and stopped reporting for work thereafter; The Court notes that PRODUCT IMAGE was
and that GALLEGO was supposed to have issued by the Department of Labor and
been reassigned to South Luzon effective Employment (DOLE) Certificate of
March 15, 2002 in accordance with a Registration Numbered NCR-8-0602-176.
personnel reorganization program, but he
likewise failed to report to his new work The DOLE certificate having been issued by a
station. public officer, it carries with it the
presumption that it was issued in the regular
Labor Arbiter: declared BAYER PHILIPPINES, performance of official duty. GALLEGO’s
INC., DANPIN GUILLERMO, PRODUCT IMAGE bare assertions fail to rebut this
MARKETING, INC., and EDGARDO BERGONIA presumption. Further, since the DOLE is the
guilty of illegal dismissal. Labor Arbiter agency primarily responsible for regulating
found, among other things, that there was the business of independent job contractors,
an employer-employee relationship the Court can presume, in the absence of
evidence to the contrary, that it had vs.
thoroughly evaluated the requirements RICKY E. DELA CRUZ, ROLANDO M. GUASIS,
submitted by PRODUCT IMAGE before MANNY C. PUGAL, RONNIE L. HERMO,
issuing the Certificate of Registration. ROLANDO C. SOMERO, JR., DIBSON D.
DIOCARES, and IAN B. ICHAPARE,
Independently of the DOLE’s Certification,
among the circumstances that establish the Topic: Effect of DOLE Certification as
status of PRODUCT IMAGE as a legitimate legitimate job contractor
job contractor are: (1) PRODUCT IMAGE had,
during the period in question, a contract FACTS:
with BAYER for the promotion and Ricky E. Dela Cruz et. al. filed
marketing of BAYER products;32 (2) complaints for regularization with money
PRODUCT IMAGE has an independent claims against Coca-Cola Bottlers
business and provides services nationwide Philippines, Inc. The complaints were
to big companies such as Ajinomoto consolidated and subsequently amended to
Philippines and Procter and Gamble implead Peerless Integrated Service, Inc.
Corporation;33 and (3) PRODUCT IMAGE’s (Peerless) as a party-respondent.
total assets from 1998 to 2000 amounted to
₱405,639, ₱559,897, and ₱644,728, Before the Labor Arbiter, the Ricky et.al.
respectively.34 PRODUCT IMAGE also alleged that they are route helpers assigned
posted a bond in the amount of ₱100,000 to to work in Coca Cola’s trucks. They go from
answer for any claim of its employees for the Coca- Cola sales offices or plants to
unpaid wages and other benefits that may customer outlets such as sari-sari stores,
arise out of the implementation of its restaurants, groceries, supermarkets and
contract with BAYER. similar establishments; they were hired
either directly by Coca Cola or by its
PRODUCT IMAGE cannot thus be considered contractors, but they do not enjoy the full
a labor-only contractor. remuneration, benefits and privileges
granted to Coca Cola’s regular sales force.
They argued that the services they render
are necessary and desirable in the regular
business of Coca Cola.
ii) The contractor does not exercise the right 48. Coca-Cola vs Agito
to control over the performance of the work
of the contractual-employee.
"Substantial capital or investment" refers to FACTS
capital stocks and subscribed capitalization
Respondents filed before the NLRC two absence of an employer-employee
complaints against petitioner, Interserve, relationship between petitioner and the
Peerless Integrated Services, Inc., Better respondents.
Builders, Inc., and Excellent Partners, Inc. for
reinstatement with backwages, Respondents maintained that contrary to
regularization, nonpayment of 13th month the finding of the Labor Arbiter, their work
pay, and damages. was indispensable to the principal business
of petitioner. Petitioner was "engaged in the
Respondents alleged in their Position Paper manufacture, distribution and sale of soft
that they were salesmen assigned at the drinks and other related products with
Lagro Sales Office of petitioner. They had various plants and sales offices and
been in the employ of petitioner for years, warehouses located all over the Philippines."
but were not regularized. Their employment Moreover, petitioner supplied the tools and
was terminated on 8 April 2002 without just equipment used by respondents in their jobs
cause and due process. such as forklifts, pallet, etc. Respondents
were also required to work in the
Petitioner filed its Motion to Dismiss, where warehouses, sales offices, and plants of
it averred that respondents were employees petitioner. Respondents pointed out that, in
of Interserve (allegedly an independent contrast, Interserve did not own trucks,
contractor) who were tasked to perform pallets cartillas, or any other equipment
contracted services. necessary in the sale of Coca-Cola products.
Petitioner asserted that respondents were Respondents further averred that petitioner
employees of Interserve, since it was the exercised control and discipline over
latter which hired them, paid their wages, workers supplied by various contractors as
and supervised their work, as proven by: (1) well.
respondents’ Personal Data Files in the
records of Interserve; (2) respondents’ W/N there is ER-EE relationship between
Contract of Temporary Employment with petitioner and respondent. Yes because
Interserve; and (3) the payroll records of there is labor-only contracting.
Interserve.
The relations which may arise in a situation,
Petitioner, thus, sought the dismissal of where there is an employer, a contractor,
respondents’ complaint against it on the and employees of the contractor, are
ground that the Labor Arbiter did not identified and distinguished under Article
acquire jurisdiction over the same in the 106 of the Labor Code:
permitted legitimate job contract, or (2) the
Article 106. Contractor or subcontractor. - prohibited labor-only contracting.
Whenever an employer enters into a
contract with another person for the A legitimate job contract, wherein an
performance of the former’s work, the employer enters into a contract with a job
employees of the contractor and of the contractor for the performance of the
latter’s subcontractor, if any, shall be paid in former’s work, is permitted by law. Thus, the
accordance with the provisions of this Code. employer-employee relationship between
the job contractor and his employees is
In the event that the contractor or maintained. In legitimate job contracting,
subcontractor fails to pay the wages of his the law creates an employer-employee
employees in accordance with this Code, the relationship between the employer and the
employer shall be jointly and severally liable contractor’s employees only for a limited
with his contractor or subcontractor to such purpose, i.e., to ensure that the employees
employees to the extent of the work are paid their wages. The employer becomes
performed under the contract, in the same jointly and severally liable with the job
manner and extent that he is liable to contractor only for the payment of the
employees directly employed by him. employees’ wages whenever the contractor
fails to pay the same. Other than that, the
There is "labor-only" contracting where the employer is not responsible for any claim
person supplying workers to an employee made by the contractor’s employees.
does not have substantial capital or
investment in the form of tools, equipment, On the other hand, labor-only contracting is
machineries, work premises, among others, an arrangement wherein the contractor
and the workers recruited and placed by merely acts as an agent in recruiting and
such persons are performing activities which supplying the principal employer with
are directly related to the principal business workers for the purpose of circumventing
of such employer. In such cases, the person labor law provisions setting down the rights
or intermediary shall be considered merely of employees. It is not condoned by law. A
as an agent of the employer who shall be finding by the appropriate authorities that a
responsible to the workers in the same contractor is a "labor-only" contractor
manner and extent as if the latter were establishes an employer-employee
directly employed by him. relationship between the principal employer
The afore-quoted provision recognizes two and the contractor’s employees and the
possible relations among the parties: (1) the former becomes solidarily liable for all the
rightful claims of the employees.
equipment, machineries, work premises,
"Substantial capital or investment" refers to among others, and the workers recruited
capital stocks and subscribed capitalization and placed by such persons are performing
in the case of corporations, tools, activities which are directly related to the
equipment, implements, machineries and principal business of such employer." Thus,
work premises, actually and directly used by performing activities directly related to the
the contractor or subcontractor in the principal business of the employer is only
performance or completion of the job, work, one of the two indicators that "labor-only"
or service contracted out. contracting exists; the other is lack of
substantial capital or investment. The Court
The "right to control" shall refer to the right finds that both indicators exist in the case at
reversed to the person for whom the bar.
services of the contractual workers are
performed, to determine not only the end to Respondents worked for petitioner as
be achieved, but also the manner and means salesmen, with the exception of respondent
to be used in reaching that end. Gil Francisco whose job was designated as
leadman. In the Delivery Agreement32
Labor-only contracting would give rise to: (1) between petitioner and TRMD Incorporated,
the creation of an employer-employee it is stated that petitioner is engaged in the
relationship between the principal and the manufacture, distribution and sale of
employees of the contractor or sub- softdrinks and other related products. The
contractor; and (2) the solidary liability of work of respondents, constituting
the principal and the contractor to the distribution and sale of Coca-Cola products,
employees in the event of any violation of is clearly indispensable to the principal
the Labor Code. business of petitioner. The repeated re-
hiring of some of the respondents supports
The law clearly establishes an employer- this finding.33 Petitioner also does not
employee relationship between the contradict respondents’ allegations that the
principal employer and the contractor’s former has Sales Departments and Sales
employee upon a finding that the contractor Offices in its various offices, plants, and
is engaged in "labor-only" contracting. warehouses; and that petitioner hires
Article 106 of the Labor Code categorically Regional Sales Supervisors and District Sales
states: "There is ‘labor-only’ contracting Supervisors who supervise and control the
where the person supplying workers to an salesmen and sales route helpers.34
employee does not have substantial capital
or investment in the form of tools, W/N Interserve has sufficient capital. No
capital or investment to undertake the job it
At the outset, the Court clarifies that was contracting with petitioner.
although Interserve has an authorized
capital stock amounting to ₱2,000,000.00, We clarify that it was not enough to show
only ₱625,000.00 thereof was paid up. The substantial capitalization or investment in
Court does not set an absolute figure for the form of tools, equipment, machinery and
what it considers substantial capital for an work premises, etc., to be considered an
independent job contractor, but it measures independent contractor. In fact,
the same against the type of work which the jurisprudential holdings were to the effect
contractor is obligated to perform for the that in determining the existence of an
principal. However, this is rendered independent contractor relationship, several
impossible in this case since the Contract factors may be considered, such as, but not
between petitioner and Interserve does not necessarily confined to, whether the
even specify the work or the project that contractor was carrying on an independent
needs to be performed or completed by the business; the nature and extent of the work;
latter’s employees, and uses the dubious the skill required; the term and duration of
phrase "tasks and activities that are the relationship; the right to assign the
considered contractible under existing laws performance of specified pieces of work; the
and regulations." Even in its pleadings, control and supervision of the workers; the
petitioner carefully sidesteps identifying or power of the employer with respect to the
describing the exact nature of the services hiring, firing and payment of the workers of
that Interserve was obligated to render to the contractor; the control of the premises;
petitioner. The importance of identifying the duty to supply premises, tools,
with particularity the work or task which appliances, materials and labor; and the
Interserve was supposed to accomplish for mode, manner and terms of payment.
petitioner becomes even more evident,
considering that the Articles of The contractor, not the employee, has the
Incorporation of Interserve states that its burden of proof that it has the substantial
primary purpose is to operate, conduct, and capital, investment, and tool to engage in job
maintain the business of janitorial and allied contracting. Although not the contractor
services. But respondents were hired as itself (since Interserve no longer appealed
salesmen and leadman for petitioner. the judgment against it by the Labor Arbiter),
said burden of proof herein falls upon
The Court cannot, under such ambiguous petitioner who is invoking the supposed
circumstances, make a reasonable status of Interserve as an independent job
determination if Interserve had substantial contractor. Noticeably, petitioner failed to
submit evidence to establish that value of of petitioner over the conduct of
the service vehicles and equipment of respondents.
Interserve. The Court will not presume that
Interserve had sufficient investment in Also significant was the right of petitioner to
service vehicles and equipment, especially "request the replacement of the
since respondents’ allegation – that they CONTRACTOR’S personnel." The said
were using equipment, such as forklifts and provision left a gap which could enable
pallets belonging to petitioner, to carry out petitioner to demand the removal or
their jobs – was uncontroverted. replacement of any employee in the guise of
his or her inability to complete a project in
In sum, Interserve did not have substantial time or to deliver the desired result. The
capital or investment in the form of tools, power to recommend penalties or dismiss
equipment, machineries, and work workers is the strongest indication of a
premises; and respondents, its supposed company’s right of control as direct
employees, performed work which was employer.
directly related to the principal business of
petitioner. It is, thus, evident that Interserve Interserve warranted to petitioner that the
falls under the definition of a "labor-only" former would provide replacements in case
contractor, under Article 106 of the Labor of absences of its personnel, raises another
Code; as well as Section 5(i) of the Rules red flag. An independent job contractor,
Implementing Articles 106-109 of the Labor who is answerable to the principal only for
Code, as amended. the results of a certain work, job, or service
need not guarantee to said principal the
W/N there is labor-only contracting. Yes. daily attendance of the workers assigned to
the latter. An independent job contractor
The contract specified that the personnel of would surely have the discretion over the
contractor Interserve, which included the pace at which the work is performed, the
respondents, would comply with "CLIENT" as number of employees required to complete
well as "CLIENT’s policies, rules and the same, and the work schedule which its
regulations." It even required Interserve employees need to follow.
personnel to subject themselves to on-the-
spot searches by petitioner or its duly The certification issued by the DOLE stating
authorized guards or security men on duty that Interserve is an independent job
every time the said personnel entered and contractor does not sway this Court to take
left the premises of petitioner. Said it at face value. The delivery and distribution
paragraph explicitly established the control of Coca-Cola products, the work for which
respondents were employed and assigned to
petitioner, were in no way allied to janitorial
services. While the DOLE may have found
that the capital and/or investments in tools 51. Carino vs CHR
and equipment of Interserve were sufficient
for an independent contractor for janitorial HON. ISIDRO CARIÑO, in his capacity as
services, this does not mean that such Secretary of the Department of Education,
capital and/or investments were likewise Culture & Sports, DR. ERLINDA LOLARGA, in
sufficient to maintain an independent her capacity as Superintendent of City
contracting business for the delivery and Schools of Manila, petitioners, vs. THE
distribution of Coca-Cola products. COMMISSION ON HUMAN RIGHTS,
GRACIANO BUDOY, JULIETA BABARAN, ELSA
With the finding that Interserve was IBABAO, HELEN LUPO, AMPARO GONZALES,
engaged in prohibited labor-only LUZ DEL CASTILLO, ELSA REYES and
contracting, petitioner shall be deemed the APOLINARIO ESBER, respondents. G.R. No.
true employer of respondents. As regular 96681 December 2, 1991 NARVASA, J.:
employees of petitioner, respondents
cannot be dismissed except for just or FACTS:
authorized causes, none of which were On September 17, 1990, a Monday and a
alleged or proven to exist in this case, the class day, some 800 public school teachers,
only defense of petitioner against the charge among them members of MPSTA and ACT
of illegal dismissal being that respondents undertook "mass concerted actions" after
were not its employees. Records also failed the protest rally without disrupting classes
to show that petitioner afforded as a last call for the government to negotiate
respondents the twin requirements of the granting of demands had elicited no
procedural due process, i.e., notice and response from the Secretary of Education.
hearing, prior to their dismissal. The "mass actions" consisted in staying away
Respondents were not served notices from their classes, converging at the
informing them of the particular acts for Liwasang Bonifacio, gathering in peaceable
which their dismissal was sought. Nor were assembly. Secretary of Education issued a
they required to give their side regarding the return to work in 24 hours or face dismissal
charges made against them. Certainly, the and a memorandum directing the DECS
respondents’ dismissal was not carried out in officials and to initiate dismissal proceedings
accordance with law and, therefore, illegal. against those who did not comply. After
failure to heed the order, the CHR
complainant (private respondents) were
administratively charged and preventively HELD:
suspended for 90 days. The private
respondents moved "for suspension of the The Commission evidently intends to itself
administrative proceedings pending adjudicate, that is to say, determine with the
resolution by the Supreme Court of their character of finality and definiteness, the
application for issuance of an injunctive same issues which have been passed upon
writ/temporary restraining order. The and decided by the Secretary of Education
motion was denied. The respondent staged and subject to appeal to CSC, this Court
a walkout. The case was eventually decided having in fact, as aforementioned, declared
ordering the dismissal of Esber and that the teachers affected may take appeals
suspension of others. The petition for to the CSC on said matter, if still timely.
certiorari in RTC was dismissed. Petition for
Certiorari to the Supreme Court was also The threshold question is whether or not the
denied. CHR has the power under the constitution to
do so; whether or not, like a court of justice
Respondent complainant filed a complaint or even a quasi-judicial agency, it has
on the Commission of Human Rights alleging jurisdiction or adjudicatory powers over, or
they were denied due process and dismissed the power to try and decide, or dear and
without due notice. The Commission issued determine, certain specific type of cases, like
an order to Cariño to appear and enlighten alleged human rights violations involving
the commission so that they can be civil or political rights.
accordingly guided in its investigation and
resolution of the matter. The Court declares that the CHR to have no
such power, and it was not meant by the
Cariño filed a petition to Supreme Court for fundamental law to be another court or
certiorari and prohibition whether the quasi-judicial agency in this country, or
Commission has the jurisdiction to try and duplicate much less take over the functions
decide on the issue regarding denial of due of the latter.
process and whether or not grievances
justify their mass action or strike. The most that may be conceded to the
Commission in the way of adjudicative
ISSUE: power is that it may investigate, i.e. receive
Whether the CHR has the power to evidence and make findings of fact as
adjudicate alleged human rights violations. regards claimed human rights violations
No. involving civil and political rights. But fact-
finding is not adjudication, and cannot be
likened to judicial function of a court of original charter. MCWD, through its Board of
justice, or even a quasi judicial agency or Directors, issued the following Resolutions
official. The function of receiving evidence giving benefits and privileges to its
and ascertaining therefrom the FACTS of a personnel, one of whom is Dulce M. Abanilla,
controversy is not a judicial function, MCWDs General Manager, petitioner
properly speaking. To be considered such, herein: (1) Board Resolution No. 054-83
the faculty of receiving evidence and making dated May 23, 1983 granting hospitalization
factual conclusions in a controversy must be privileges; (2) Board Resolution Nos. 091-83
accompanied by the authority of applying and 0203-85 dated October 21, 1983 and
the law to those factual conclusions to the November 20, 1985, respectively, allowing
end that the controversy be decided or the monetization of leave credits; (3) Board
determined authoritatively, finally and Resolution No. 0161-86 dated November 29,
definitely, subject to such appeals or modes 1986 granting Christmas bonus; and (4)
of review as may be provided by law. This Board Resolution No. 083-88 granting
function, to repeat, the Commission does longevity allowance.
not have.
MCWD and Metropolitan Cebu Water
Hence it is that the CHR having merely the District Employees Union, petitioner-in-
power to “investigate,” cannot and not “try intervention, executed a collective
and resolve on the merits” (adjudicate) the bargaining agreement (CBA) providing for
matters involved in Striking Teachers HRC the continuous grant to all its regular rank
Case No. 90-775, as it has announced it and file employees of existing benefits, such
means to do; and cannot do so even if there as cash advances, thirteenth month pay,
be a claim that in the administrative mid-year bonus, Christmas bonus, vacation
disciplinary proceedings against the teachers and sick leave credits, hospitalization,
in question, initiated and conducted by the medicare, uniform privileges, and water
DECS, their human rights, or civil or political allowance.
rights had been transgressed.
On November 13, 1995, an audit team
headed by Bernardita T. Jabines of the COA
Regional Office No. VII at Cebu City, one of
52. Abanilla vs Commission on Audit (2005) the herein respondents, conducted an audit
FACTS of the accounts and transactions of MCWD.
Metropolitan Cebu Water District (MCWD),
a local water district was organized as a Thereafter, the Regional Director of COA
government-owned corporation with Regional Office No. VII, also a respondent,
sent MCWD several notices disallowing the In Querubin vs. Regional Cluster Director,
amount of P12,221,120.86 representing Legal and Adjudication Office, COA Regional
hospitalization benefits, mid-year bonus, Office VI, Pavia, Iloilo City, citing De Jesus vs.
13th month pay, Christmas bonus and Commission on Audit, this Court HELD:
longevity pay.
Petitioners here received the additional
In sustaining the disallowance in the amount allowances and bonuses in good faith under
of P12,221,120.86, respondent COA cited the honest belief that LWUA Board
this Courts ruling in Davao City Water District Resolution No. 313 authorized such
vs. Civil Service Commission that a water payment. At the time petitioners received
district is a corporation created pursuant to the additional allowances and bonuses, the
a special law P.D. No. 198, as amended, and Court had not yet decided Baybay Water
as such, its officers and employees are District. Petitioners had no knowledge that
covered by the Civil Service Law. such payment was without legal basis. Thus,
being in good faith, petitioners need not
Petitioner contends that respondent COA refund the allowances and bonuses they
acted with grave abuse of discretion in received but disallowed by the COA.
disallowing the above benefits and privileges
and contravened the Labor Code provision 53. Lumanta vs. NLRC
on non-diminution of benefits. FACTS: On 20 March 1987, petitioner Luz
Lumanta, joined by fifty-four (54) other
ISSUE retrenched employees, filed a complaint for
Whether or not the invocation of the CBA, in unpaid 'd retrenchment or separation pay
justifying the receipt by the MCWD against private respondent Food Terminal,
personnel of benefits and privileges is valid Inc. ("FTI") with the Department of Labor
and Employment. The complaint was later
HELD: amended to include charges of
No. While we sustain the disallowance of the underpayment of wages and non-payment
above benefits by respondent COA, of emergency cost of living allowances
however, we find that the MCWD affected (ECOLA).
personnel who received the above Private respondent FTI moved to dismiss the
mentioned benefits and privileges acted in complaint on the ground of lack of
good faith under the honest belief that the jurisdiction. It argued that being a
CBA authorized such payment. government-owned and controlled
Consequently, they need not refund them. corporation, its employees are governed by
the Civil Service Law not by the Labor Code,
and that claims arising from employment fall
within the jurisdiction of the Civil Service It is the 1987 Constitution, and not the case
Commission and not the Department of law embodied in Juco, which applies in the
Labor and Employment. case at bar, under the principle that
jurisdiction is determined as of the time of
The petitioners opposed the Motion to the filing of the complaint. At the time the
Dismiss contending that although FTI is a complaint against private respondent FTI
corporation owned and controlled by the was filed (i.e., 20 March 1987), and at the
government, it has still the marks of a private time the decisions of the respondent Labor
corporation: it directly hires its employees Arbiter and National Labor Relations
without seeking approval from the Civil Commission were rendered (i.e., 31 August
Service Commission and its personnel are 1987 and 18 March 1988, respectively), the
covered by the Social Security System and 1987 Constitution had already come into
not the Government Service Insurance effect. Letter of Instruction No. 1013, dated
System. Petitioners also argued that being a 19 April 1980, included Food Terminal, Inc. in
government-owned and controlled the category of "government-owned or
corporation without original charter, private controlled corporations." Since then, FTI
respondent FTl clearly falls outside the scope served as the marketing arm of the National
of the civil service as marked out in Section 2 Grains Authority (now known as the National
(1), Article IX of the 1987 Constitution. Food Authority). The pleadings show that FTI
Labor arbiter: Finds the instant case was previously a privately-owned
governed by Civil service law. enterprise, created and organized under the
NLRC: Affirms the decision of LA. general incorporation law, with the
Hence this Petition for Certiorari. corporate name "Greater Manila Food
Terminal Market, Inc." The record does not
ISSUE: Whether or not a labor law claim indicate the precise amount of the capital
against a government-owned and controlled stock of FM that is owned by the
corporation, such as private respondent FTI, government; the petitioners' claim, and this
falls within the jurisdiction of the has not been disputed, that FTl is not
Department of Labor and Employment. hundred percent (100%) government-
owned and that it has some private
HELD: Labor law claims against government shareholders.
owned and controlled corporations without
original charter, fall within the jurisdiction of We conclude that because respondent FTI is
the Department of Labor and Employment government-owned and controlled
and not the Civil Service Commission. corporation without original charter, it is the
Department of Labor and Employment, and capital. This mass of privileges is called
not the Civil Service Commission, which has management prerogatives. Although they
jurisdiction over the dispute arising from may be broad and unlimited in scope, the
employment of the petitioners with private State has the right to determine whether an
respondent FTI, and that consequently, the employer's privilege is exercised in a manner
terms and conditions of such employment that complies with the legal requirements
are governed by the Labor Code and not by and does not offend the protected rights of
the Civil Service Rules and Regulations. labor.
Public respondent National Labor Relations
Commission acted without or in excess of its
jurisdiction in dismissing petitioners 55. San Miguel Brewery Sales vs Ople
complaint. (Soriano)
FACTS:
54. Capitol Medical Center vs Meriz (Roxas) A collective bargaining agreement was
CAPITOL MEDICAL CENTER (CMC) v. MERIS, entered into by petitioner San Miguel
Corporation Sales Force Union (PTGWO),
FACTS: and the private respondent, San Miguel
Capitol Medical Center closed its industrial Corporation, Section 1, of Article IV of which
service unit due to alleged loss and extinct provided as follows:
demand resulting to the termination of the
employment of the Dr. Meris. The latter filed Art. IV, Section 1. Employees within the
an illegal dismissal case but the same was appropriate bargaining unit shall be entitled
denied by the labor arbiter, and to a basic monthly compensation plus
subsequently by the NLRC contending that commission based on their respective sales.
the same is part of the management
prerogative. Hence, this petition. In September 1979, the company introduced
a marketing scheme known as the
ISSUE: Has employer the right to close its "Complementary Distribution System" (CDS)
business even without basis resulting to the whereby its beer products were offered for
displacement of the worker? sale directly to wholesalers through San
Miguel's sales offices.
HELD: No.
Employers are also accorded with rights and The labor union (herein petitioner) filed a
privileges to assure their self-determination complaint for unfair labor practice in the
and independence and reasonable return of Ministry of Labor, with a notice of strike on
the ground that the CDS was contrary to the Whether it is an indirect way of busting the
existing marketing scheme whereby the union. (NO)
Route Salesmen were assigned specific
territories within which to sell their stocks of
beer, and wholesalers had to buy beer Ruling:
products from them, not from the company. Public respondent was correct in holding
It was alleged that the new marketing that the CDS is a valid exercise of
scheme violates Section 1, Article IV of the management prerogatives:
collective bargaining agreement because the
introduction of the CDS would reduce the Except as limited by special laws, an
take-home pay of the salesmen and their employer is free to regulate, according to his
truck helpers for the company would be own discretion and judgment, all aspects of
unfairly competing with them. employment, including hiring, work
assignments, working methods, time, place
The Minister of Labor found: and manner of work, tools to be used,
processes to be followed, supervision of
... We see nothing in the record as to suggest workers, working regulations, transfer of
that the unilateral action of the employer in employees, work supervision, lay-off of
inaugurating the new sales scheme was workers and the discipline, dismissal and
designed to discourage union organization recall of work.
or diminish its influence, but rather it is
undisputable that the establishment of such Every business enterprise endeavors to
scheme was part of its overall plan to increase its profits. In the process, it may
improve efficiency and economy and at the adopt or devise means designed towards
same time gain profit to the highest. While it that goal. In Abbott Laboratories vs. NLRC,
may be admitted that the introduction of 154 SCRA 713, We ruled:
new sales plan somewhat disturbed the
present set-up, the change however was too ... Even as the law is solicitous of the welfare
insignificant as to convince this Office to of the employees, it must also protect the
interpret that the innovation interferred right of an employer to exercise what are
with the worker's right to self-organization. clearly management prerogatives. The free
will of management to conduct its own
business affairs to achieve its purpose
ISSUE: cannot be denied.
Whether the CDS violates the collective
bargaining agreement. (NO)
So long as a company's management dismissal but to no avail. On 18 June 1985,
prerogatives are exercised in good faith for when private respondent again tried to
the advancement of the employer's interest speak with the President of Wiltshire, the
and not for the purpose of defeating or company's security guard handed him a
circumventing the rights of the employees letter which formally informed him that his
under special laws or under valid services were being terminated upon the
agreements, this Court will uphold them. San ground of redundancy.
Miguel Corporation's offer to compensate
the members of its sales force who will be Private respondent filed, on 21 October
adversely affected by the implementation of 1985, a complaint before the Labor Arbiter
the CDS by paying them a so-called "back for illegal dismissal alleging that his position
adjustment commission" to make up for the could not possibly be redundant because
commissions they might lose as a result of nobody (save himself) in the company was
the CDS proves the company's good faith then performing the same duties. Private
and lack of intention to bust their union. respondent further contended that
retrenching him could not prevent further
56. Wiltshire File Co. vs NLRC (Tado) losses because it was in fact through his
G.R. No. 82249 February 7, 1991 remarkable performance as Sales Manager
WILTSHIRE FILE CO., INC., petitioner, vs. THE that the Company had an unprecedented
NATIONAL LABOR RELATIONS increase in domestic market share the
oCOMMISSION and VICENTE T. ONG, preceding year. For that accomplishment, he
respondents. continued, he was promoted to Marketing
Manager and was authorized by the
FACTS President to hire four (4) Sales Executives
five (5) months prior to his termination.
Private respondent Vicente T. Ong was the
Sales Manager of petitioner Wiltshire File In its answer, petitioner company alleged
Co., Inc. ("Wiltshire") from 16 March 1981 up that the termination of respondent's
to 18 June 1985. services was a cost-cutting measure: that in
December 1984, the company had
Upon Ong’s return from a business and experienced an unusually low volume of
pleasure trip abroad, he was informed by the orders: and that it was in fact forced to
President of petitioner Wiltshire that his rotate its employees in order to save the
services were being terminated. Private company. Despite the rotation of
respondent maintains that he tried to get an employees, petitioner alleged; it continued
explanation from management of his to experience financial losses and private
respondent's position, Sales Manager of the Thus, what the letter was in effect saying
company, became redundant. was that because of financial losses,
retrenchment was necessary, which
LABOR ARBITER: termination of private retrenchment in turn resulted in the
respondent's services illegal and ordered redundancy of private respondent's
petitioner to pay private respondent position.
backwages in the amount of P299,000.00,
unpaid salaries in the amount of P22,352.11, In the second place, we do not believe that
accumulated sick and vacation leaves in the redundancy in an employer's personnel
amount of P12,543.91, hospitalization force necessarily or even ordinarily refers to
benefit package in the amount of duplication of work. That no other person
P10,000.00, unpaid commission in the was holding the same position that private
amount of P57,500,00, moral damages in the respondent HELD: prior to the termination
amount of P100,000.00 and attorney's fees of his services, does not show that his
in the amount of P51,639.60. position had not become redundant. Indeed,
in any well-organized business enterprise, it
NLRC: affirmed in toto would be surprising to find duplication of
work and two (2) or more people doing the
ISSUE: Whether or not the termination was work of one person. We believe that
illegal redundancy, for purposes of our Labor Code,
exists where the services of an employee are
RULING: NO in excess of what is reasonably demanded by
the actual requirements of the enterprise.
We are unable to sustain public respondent Succinctly put, a position is redundant where
NLRC's holding that private respondent's it is superfluous, and superfluity of a position
dismissal was not justified by redundancy or positions may be the outcome of a
and hence illegal. In the first place, we note number of factors, such as overhiring of
that while the letter informing private workers, decreased volume of business, or
respondent of the termination of his services dropping of a particular product line or
used the word "redundant", that letter also service activity previously manufactured or
referred to the company having "incur[red] undertaken by the enterprise.4
financial losses which [in] fact has compelled
[it] to resort to retrenchment to prevent The employer has no legal obligation to keep
further losses".3 in its payroll more employees than are
necessarily for the operation of its business.
In the third place, in the case at bar, In D.M. Consunji, Inc. v. National Labor
petitioner Wiltshire, in view of the Relations Commission,5 the Court HELD:
contraction of its volume of sales and in An employer has a much wider discretion in
order to cut down its operating expenses, terminating the employment relationship of
effected some changes in its organization by managerial personnel as compared to rank
abolishing some positions and thereby and file employees. However, such
effecting a reduction of its personnel. Thus, prerogative of management to dismiss or lay
the position of Sales Manager was abolished off an employee must be made without
and the duties previously discharged by the abuse of discretion, for what is at stake is not
Sales Manager simply added to the duties of only the private respondent's position but
the General Manager, to whom the Sales also his means of livelihood . . . .
Manager used to report.
The determination of the continuing
It is of no legal moment that the financial necessity of a particular officer or position in
troubles of the company were not of private a business corporation is management's
respondent's making. Private respondent prerogative, and the courts will not interfere
cannot insist on the retention of his position with the exercise of such so long as no abuse
upon the ground that he had not contributed of discretion or merely arbitrary or malicious
to the financial problems of Wiltshire. The action on the part of management is shown.
characterization of private respondent's
services as no longer necessary or
sustainable, and therefore properly 57. Royal Plant Workers Union vs Coca Cola
terminable, was an exercise of business Bottlers Phils (Tingson)
judgment on the part of petitioner company. G.R. No. 198783, April 15, 2013
The wisdom or soundness of such ROYAL PLANT WORKERS UNION vs. COCA-
characterization or decision was not subject COLA BOTTLERS PHILIPPINES, INC.-CEBU
to discretionary review on the part of the PLANT
Labor Arbiter nor of the NLRC so long, of
course, as violation of law or merely FACTS:
arbitrary and malicious action is not shown. Petitioner Coca-Cola Bottlers Philippines,
It should also be noted that the position Inc. (CCBPI) is a domestic corporation
HELD: by private respondent, Sales engaged in the manufacture, sale and
Manager, was clearly managerial in distribution of softdrink products. It has
character. several bottling plants all over the country,
one of which is located in Cebu City. Under
the employ of each bottling plant are
bottling operators. In the case of the plant in agreement, or general principles of fair play
Cebu City, there are 20 bottling operators and justice.
who work for its Bottling Line 1 while there
are 12-14 bottling operators who man its ISSUE:
Bottling Line 2. All of them are male and they Whether the removal of chairs of the
are members of herein respondent Royal operators assigned at the
Plant Workers Union (ROPWU). production/manufacturing line while
performing their duties and responsibilities
The bottling operators of Bottling Line 1 & 2 is valid or not.
were provided with chairs upon their
request. However, The chairs provided for RULING:
the operators were removed pursuant to a VALID. There is no law that requires
national directive of petitioner, in line with employers to provide chairs for bottling
the "I Operate, I Maintain, I Clean" program operators.
of petitioner for bottling operators. The
bottling operators took issue with the Jurisprudence recognizes the exercise of
removal of the chairs. management prerogatives. Labor Jaws also
discourage interference with an employer's
Petitioner alleged that with this task of judgment in the conduct of its business. For
moving constantly to check on the this reason, the Court often declines to
machinery and equipment assigned to him, interfere in legitimate business decisions of
a bottling operator does not need a chair employers. The law must protect not only
anymore. the welfare of the employees, but also the
right of the employers.
Union argues that there is no connection
between CCBPI’s "I Operate, I Maintain, I The Court has HELD: that management is
Clean" program and the removal of the free to regulate, according to its own
chairs because the implementation of the discretion and judgment, all aspects of
program was in 2006 and the removal of the employment, including hiring, work
chairs was done in 2008. That the removal of assignments, working methods, time, place,
the chairs constitutes violation of the and manner of work, processes to be
Occupational Health and Safety Standards followed, supervision of workers, working
and that management prerogatives are not regulations, transfer of employees, work
absolute but subject to certain limitations supervision, lay-off of workers, and
found in law, a collective bargaining discipline, dismissal and recall of workers.
The exercise of management prerogative,
however, is not absolute as it must be
exercised in good faith and with due regard The CBA between the Union and CCBPI
to the rights of labor. contains no provision whatsoever requiring
the management to provide chairs for the
In the present controversy, it cannot be operators in the production/manufacturing
denied that CCBPI removed the operators’ line while performing their duties and
chairs pursuant to a national directive and in responsibilities.
line with its "I Operate, I Maintain, I Clean"
program, launched to enable the Union to 58. Ymbong vs ABS CBN (Vosotros)
perform their duties and responsibilities
more efficiently. The chairs were not Ernesto G. Ymbong
removed indiscriminately. They were
carefully studied with due regard to the vs
welfare of the members of the Union. The
removal of the chairs was compensated by: ABS-CBN Broadcasting Corporation, Verande
a) a reduction of the operating hours of the Sy, and Dante Luzon
bottling operators from a two-and-one-half
(2 ½)-hour rotation period to a one-and-a- G. R. No. 184885 March 7, 2012
half (1 ½) hour rotation period; and b) an
increase of the break period from 15 to 30
minutes between rotations. FACTS:
On January 1, 1996, the ABS-CBN Head Please be informed that per company policy,
Office in Manila issued Policy No. HR-ER-016 any employee/talent who wants to run for
or the Policy on Employees Seeking Public any position in the coming election will have
Office. The pertinent portions read: to file a leave of absence the moment he/she
files his/her certificate of candidacy.
Respondents alleged in their respective Petitioners also contend that the the
position papers and other related pleadings doctrine of piercing the corporate veil with
that they were employees of Prince respect to Lubas cannot apply to them,
Transport, Inc. (PTI), a company engaged in because the said doctrine is applicable only
the business of transporting passengers by to corporations and Lubas is not a
land; respondents were hired either as corporation but a single proprietorship; that
drivers, conductors, mechanics or Lubas had been found by the Labor Arbiter
inspectors, except for respondent Diosdado and the NLRC to have a personality which is
Garcia (Garcia). separate and distinct from that of PTI; that
PTI had no hand in the management and
PTI caused the transfer of all union members operation as well as control and supervision
and sympathizers to one of its sub- of the employees of Lubas.
companies, Lubas Transport (Lubas); despite
such transfer, the schedule of drivers and W/N PTI is a separate entity from Lubas? No
conductors, as well as their company
identification cards, were issued by PTI; the The Court agrees with the CA that Lubas is a
daily time records, tickets and reports of the mere agent, conduit or adjunct of PTI. A
respondents were also filed at the PTI office; settled formulation of the doctrine of
and, all claims for salaries were transacted at piercing the corporate veil is that when two
the same office; later, the business of Lubas business enterprises are owned, conducted
deteriorated because of the refusal of PTI to and controlled by the same parties, both law
maintain and repair the units being used and equity will, when necessary to protect
the rights of third parties, disregard the legal addition, PTI, in its letters to its employees
fiction that these two entities are distinct who were transferred to Lubas, referred to
and treat them as identical or as one and the the latter as its "New City Operations Bus."
same. In the present case, it may be true that
Lubas is a single proprietorship and not a Moreover, petitioners failed to refute the
corporation. However, petitioners’ attempt contention of respondents that despite the
to isolate themselves from and hide behind latter’s transfer to Lubas of their daily time
the supposed separate and distinct records, reports, daily income remittances of
personality of Lubas so as to evade their conductors, schedule of drivers and
liabilities is precisely what the classical conductors were all made, performed, filed
doctrine of piercing the veil of corporate and kept at the office of PTI. In fact,
entity seeks to prevent and remedy. respondents’ identification cards bear the
name of PTI.
If Lubas were truly a separate entity, how It may not be amiss to point out at this
come that it was Prince Transport who made juncture that in two separate illegal
the decision to transfer its employees to the dismissal cases involving different groups of
former? Besides, Prince Transport never employees transferred by PTI to other
regarded Lubas Transport as a separate companies, the Labor Arbiter handling the
entity. In the aforesaid letter, it referred to cases found that these companies and PTI
said entity as "Lubas operations." Moreover, are one and the same entity; thus, making
in said letter, it did not transfer the them solidarily liable for the payment of
employees; it "assigned" them. Lastly, the backwages and other money claims awarded
existing funds and 201 file of the employees to the complainants therein.
were turned over not to a new company but
a "new management." W/N liable for unfair labor practice. Yes
The Court also agrees with respondents that As to whether petitioners are guilty of unfair
if Lubas is indeed an entity separate and labor practice, the Court finds no cogent
independent from PTI why is it that the latter reason to depart from the findings of the CA
decides which employees shall work in the that respondents’ transfer of work
former? assignments to Lubas was designed by
petitioners as a subterfuge to foil the
What is telling is the fact that in a former’s right to organize themselves into a
memorandum issued by PTI, dated January union. Under Article 248 (a) and (e) of the
22, 1998, petitioner company admitted that Labor Code, an employer is guilty of unfair
Lubas is one of its sub-companies. In labor practice if it interferes with, restrains
or coerces its employees in the exercise of Star Paper Corporation (the company) is a
their right to self-organization or if it corporation engaged in trading principally of
discriminates in regard to wages, hours of paper products
work and other terms and conditions of Josephine Ongsitco is its Manager of the
employment in order to encourage or Personnel and Administration Department
discourage membership in any labor Sebastian Chua is its Managing Director
organization.
FACTS:
Indeed, evidence of petitioners' unfair labor Petitioner’s version: Respondents Ronaldo
practice is shown by the established fact D. Simbol (Simbol), Wilfreda N. Comia
that, after respondents' transfer to Lubas, (Comia) and Lorna E. Estrella (Estrella) were
petitioners left them high and dry insofar as all regular employees of the company.[1]
the operations of Lubas was concerned. The
Court finds no error in the findings and Simbol was employed by the company on
conclusion of the CA that petitioners October 27, 1993. He met Alma Dayrit, also
"withHELD: the necessary financial and an employee of the company, whom he
logistic support such as spare parts, and married on June 27, 1998. Prior to the
repair and maintenance of the transferred marriage, Ongsitco advised the couple that
buses until only two units remained in should they decide to get married, one of
running condition." This left respondents them should resign pursuant to a company
virtually jobless. policy promulgated in 1995, viz.:
62. Manila Pavillion vs Henry Delada 1. New applicants will not be allowed to be
(Dosdos) hired if in case he/she has [a] relative, up to
[the] 3rd degree of relationship, already
63. St. Luke’s Medical Center Employees employed by the company.
Union- AFW vs NLRC (Dulay)
2. In case of two of our employees (both
64. Star Paper vs Simbol (Macatol) singles [sic], one male and another female)
STAR PAPER CORPORATION, JOSEPHINE developed a friendly relationship during the
ONGSITCO & SEBASTIAN CHUA, -versus- course of their employment and then
RONALDO D. SIMBOL, WILFREDA N. COMIA decided to get married, one of them should
& LORNA E. ESTRELLA, G.R. No. 164774 April resign to preserve the policy stated above.
12, 2006 PUNO, J.:
Simbol resigned on June 20, 1998 pursuant
to the company policy.
accident and was advised by the doctor at
Comia was hired by the company on the Orthopedic Hospital to recuperate for
February 5, 1997. She met Howard Comia, a twenty-one (21) days. She returned to work
co-employee, whom she married on June 1, on December 21, 1999 but she found out
2000. Ongsitco likewise reminded them that that her name was on-hold at the gate. She
pursuant to company policy, one must resign was denied entry. She was directed to
should they decide to get married. Comia proceed to the personnel office where one
resigned on June 30, 2000.[5] of the staff handed her a memorandum. The
memorandum stated that she was being
Estrella was hired on July 29, 1994. She met dismissed for immoral conduct. She refused
Luisito Zuiga (Zuiga), also a co-worker. to sign the memorandum because she was
Petitioners stated that Zuiga, a married man, on leave for twenty-one (21) days and has
got Estrella pregnant. The company allegedly not been given a chance to explain. The
could have terminated her services due to management asked her to write an
immorality but she opted to resign on explanation. However, after submission of
December 21, 1999. the explanation, she was nonetheless
dismissed by the company. Due to her
The respondents each signed a Release and urgent need for money, she later submitted
Confirmation Agreement. They stated a letter of resignation in exchange for her
therein that they have no money and thirteenth month pay.[8]
property accountabilities in the company
and that they release the latter of any claim Respondents later filed a complaint for
or demand of whatever nature.[7] unfair labor practice, constructive dismissal,
separation pay and attorneys fees. They
Respondents’ version: Simbol and Comia averred that the aforementioned company
allege that they did not resign voluntarily; policy is illegal and contravenes Article 136
they were compelled to resign in view of an of the Labor Code. They also contended that
illegal company policy. As to respondent they were dismissed due to their union
Estrella, she alleges that she had a membership.
relationship with co-worker Zuiga who
misrepresented himself as a married but LA: Dismissed the complaint for lack of
separated man. After he got her pregnant, merit.
she discovered that he was not separated. NLRC: Affirmed the decision of the Labor
Thus, she severed her relationship with him Arbiter on January 11, 2002.
to avoid dismissal due to the company CA: Reversed the NLRC
policy. On November 30, 1999, she met an
ISSUE: The cases of Duncan and PT&T instruct us
Whether the policy of the employer banning that the requirement of reasonableness
spouses from working in the same company must be clearly established to uphold the
violates the rights of the employee under the questioned employment policy. The
Constitution and the Labor Code or is a valid employer has the burden to prove the
exercise of management prerogative. Yes, it existence of a reasonable business necessity.
is not a valid exercise of MP. The burden was successfully discharged in
Duncan but not in PT&T.
HELD:
The requirement that a company policy must We do not find a reasonable business
be reasonable under the circumstances to necessity in the case at bar.
qualify as a valid exercise of management
prerogative was also at issue in the 1997 Petitioners sole contention that the
case of Philippine Telegraph and Telephone company did not just want to have two (2) or
Company v. NLRC. In said case, the employee more of its employees related between the
was dismissed in violation of petitioners third degree by affinity and/or consanguinity
policy of disqualifying from work any woman is lame. That the second paragraph was
worker who contracts marriage. We HELD: meant to give teeth to the first paragraph of
that the company policy violates the right the questioned rule is evidently not the valid
against discrimination afforded all women reasonable business necessity required by
workers under Article 136 of the Labor Code, the law.
but established a permissible exception, viz.:
It is significant to note that in the case at bar,
[A] requirement that a woman employee respondents were hired after they were
must remain unmarried could be justified as found fit for the job, but were asked to
a bona fide occupational qualification, or resign when they married a co-employee.
BFOQ, where the particular requirements of Petitioners failed to show how the marriage
the job would justify the same, but not on of Simbol, then a Sheeting Machine
the ground of a general principle, such as the Operator, to Alma Dayrit, then an employee
desirability of spreading work in the of the Repacking Section, could be
workplace. A requirement of that nature detrimental to its business operations.
would be valid provided it reflects an Neither did petitioners explain how this
inherent quality reasonably necessary for detriment will happen in the case of
satisfactory job performance. Wilfreda Comia, then a Production Helper in
the Selecting Department, who married
Howard Comia, then a helper in the cutter-
machine. The policy is premised on the mere prejudice or stereotype. Thus, for failure of
fear that employees married to each other petitioners to present undisputed proof of a
will be less efficient. If we uphold the reasonable business necessity, we rule that
questioned rule without valid justification, the questioned policy is an invalid exercise of
the employer can create policies based on an management prerogative.
unproven presumption of a perceived
danger at the expense of an employees right Other discussions:
to security of tenure. Petitioners allege that its policy may appear
to be contrary to Article 136 of the Labor
Petitioners contend that their policy will Code but it assumes a new meaning if read
apply only when one employee marries a co- together with the first paragraph of the rule.
employee, but they are free to marry The rule does not require the woman
persons other than co-employees. The employee to resign. The employee spouses
questioned policy may not facially violate have the right to choose who between them
Article 136 of the Labor Code but it creates a should resign. Further, they are free to marry
disproportionate effect and under the persons other than co-employees. Hence, it
disparate impact theory, the only way it is not the marital status of the employee, per
could pass judicial scrutiny is a showing that se, that is being discriminated. It is only
it is reasonable despite the discriminatory, intended to carry out its no-employment-
albeit disproportionate, effect. The failure of for-relatives-within-the-third-degree-policy
petitioners to prove a legitimate business which is within the ambit of the prerogatives
concern in imposing the questioned policy of management.[16]
cannot prejudice the employees right to be
free from arbitrary discrimination based It is true that the policy of petitioners
upon stereotypes of married persons prohibiting close relatives from working in
working together in one company. the same company takes the nature of an
anti-nepotism employment policy.
Lastly, the absence of a statute expressly Companies adopt these policies to prevent
prohibiting marital discrimination in our the hiring of unqualified persons based on
jurisdiction cannot benefit the petitioners. their status as a relative, rather than upon
The protection given to labor in our their ability.[17] These policies focus upon
jurisdiction is vast and extensive that we the potential employment problems arising
cannot prudently draw inferences from the from the perception of favoritism exhibited
legislatures silence[41] that married persons towards relatives.
are not protected under our Constitution
and declare valid a policy based on a
With more women entering the workforce, from hiring wives of male employees, but
employers are also enacting employment not husbands of female employees, is
policies specifically prohibiting spouses from discriminatory on its face.[22]
working for the same company. We note
that two types of employment policies On the other hand, to establish disparate
involve spouses: policies banning only impact, the complainants must prove that a
spouses from working in the same company facially neutral policy has a disproportionate
(no-spouse employment policies), and those effect on a particular class. For example,
banning all immediate family members, although most employment policies do not
including spouses, from working in the same expressly indicate which spouse will be
company (anti-nepotism employment required to transfer or leave the company,
policies).[18] the policy often disproportionately affects
one sex.
Unlike in our jurisdiction where there is no
express prohibition on marital The state courts rulings on the issue depend
discrimination,[19] there are twenty state on their interpretation of the scope of
statutes[20] in the United States prohibiting marital status discrimination within the
marital discrimination. Some state meaning of their respective civil rights acts.
courts[21] have been confronted with the Though they agree that the term marital
issue of whether no-spouse policies violate status encompasses discrimination based on
their laws prohibiting both marital status a person's status as either married, single,
and sex discrimination. divorced, or widowed, they are divided on
whether the term has a broader meaning.
In challenging the anti-nepotism Thus, their decisions vary.[24]
employment policies in the United States,
complainants utilize two theories of The courts narrowly interpreting marital
employment discrimination: the disparate status to refer only to a person's status as
treatment and the disparate impact. Under married, single, divorced, or widowed
the disparate treatment analysis, the reason that if the legislature intended a
plaintiff must prove that an employment broader definition it would have either
policy is discriminatory on its face. No- chosen different language or specified its
spouse employment policies requiring an intent. They hold that the relevant inquiry is
employee of a particular sex to either quit, if one is married rather than to whom one is
transfer, or be fired are facially married. They construe marital status
discriminatory. For example, an discrimination to include only whether a
employment policy prohibiting the employer person is single, married, divorced, or
widowed and not the identity, occupation, employer may not discriminate against an
and place of employment of one's spouse. employee based on the identity of the
These courts have upHELD: the questioned employees spouse. This is known as the
policies and ruled that they did not violate bona fide occupational qualification
the marital status discrimination provision of exception.
their respective state statutes.
We note that since the finding of a bona fide
The courts that have broadly construed the occupational qualification justifies an
term marital status rule that it encompassed employers no-spouse rule, the exception is
the identity, occupation and employment of interpreted strictly and narrowly by these
one's spouse. They strike down the no- state courts. There must be a compelling
spouse employment policies based on the business necessity for which no alternative
broad legislative intent of the state statute. exists other than the discriminatory
They reason that the no-spouse practice.[32] To justify a bona fide
employment policy violate the marital status occupational qualification, the employer
provision because it arbitrarily discriminates must prove two factors: (1) that the
against all spouses of present employees employment qualification is reasonably
without regard to the actual effect on the related to the essential operation of the job
individual's qualifications or work involved; and, (2) that there is a factual basis
performance.These courts also find the no- for believing that all or substantially all
spouse employment policy invalid for failure persons meeting the qualification would be
of the employer to present any evidence of unable to properly perform the duties of the
business necessity other than the general job.[33]
perception that spouses in the same
workplace might adversely affect the The concept of a bona fide occupational
business. They hold that the absence of such qualification is not foreign in our jurisdiction.
a bona fide occupational qualification We employ the standard of reasonableness
invalidates a rule denying employment to of the company policy which is parallel to the
one spouse due to the current employment bona fide occupational qualification
of the other spouse in the same office. Thus, requirement. In the recent case of Duncan
they rule that unless the employer can prove Association of Detailman-PTGWO and Pedro
that the reasonable demands of the business Tecson v. Glaxo Wellcome Philippines, Inc.,
require a distinction based on marital status we passed on the validity of the policy of a
and there is no better available or pharmaceutical company prohibiting its
acceptable policy which would better employees from marrying employees of any
accomplish the business purpose, an competitor company. We HELD: that
Glaxohas a right to guard its trade secrets,
manufacturing formulas, marketing The contention of petitioners that Estrella
strategies and other confidential programs was pressured to resign because she got
and information from competitors. We impregnated by a married man and she
considered the prohibition against personal could not stand being looked upon or talked
or marital relationships with employees of about as immoral[43] is incredulous. If she
competitor companies upon Glaxos really wanted to avoid embarrassment and
employees reasonable under the humiliation, she would not have gone back
circumstances because relationships of that to work at all. Nor would she have filed a suit
nature might compromise the interests of for illegal dismissal and pleaded for
Glaxo. In laying down the assailed company reinstatement. We have HELD: that in
policy, we recognized that Glaxo only aims to voluntary resignation, the employee is
protect its interests against the possibility compelled by personal reason(s) to
that a competitor company will gain access dissociate himself from employment. It is
to its secrets and procedures.[35] done with the intention of relinquishing an
office, accompanied by the act of
As to respondent Estrella, the Labor Arbiter abandonment. [44] Thus, it is illogical for
and the NLRC based their ruling on the Estrella to resign and then file a complaint
singular fact that her resignation letter was for illegal dismissal. Given the lack of
written in her own handwriting. Both ruled sufficient evidence on the part of petitioners
that her resignation was voluntary and thus that the resignation was voluntary, Estrellas
valid. The respondent court failed to dismissal is declared illegal.
categorically rule whether Estrella
voluntarily resigned but ordered that she be
reinstated along with Simbol and Comia. 65. Duncan Association of Detailman -
PGTWO and Tecson vs Glaxo Wellcome Phils
Estrella claims that she was pressured to (Pacquiao, L)
submit a resignation letter because she was G.R. No. 162994 September 17, 2004
in dire need of money. We examined the
records of the case and find Estrellas DUNCAN ASSOCIATION OF DETAILMAN-
contention to be more in accord with the PTGWO and PEDRO A. TECSON, petitioners,
evidence. While findings of fact by vs.
administrative tribunals like the NLRC are GLAXO WELLCOME PHILIPPINES, INC.,
generally given not only respect but, at Respondent.
times, finality, this rule admits of
exceptions,[42] as in the case at bar. FACTS
City-Agusan del Sur sales area. After his
Tecson was hired by Glaxo as a medical request against transfer was denied, Tecson
representative on October 1995. Contract of brought the matter to Glaxo's Grievance
employment signed by Tecson stipulates, Committee and while pending, he continued
among others, that he agrees to study and to act as medical representative in the
abide by the existing company rules; to Camarines Sur-Camarines Norte sales area.
disclose to management any existing future On Nov. 15, 2000, the National Conciliation
relationship by consanguinity or affinity with and Mediation Board ruled that Glaxo's
co-employees or employees with competing policy was valid.
drug companies and should management
find that such relationship poses a possible ISSUES
conflict of interest, to resign from the 1. Whether or not the policy of a
company. Company's Code of Employee pharmaceutical company in prohibiting its
Conduct provides the same with stipulation employees from marrying employees of any
that management may transfer the competitor company is valid (YES)
employee to another department in a non- 2. Whether or not there Tecson was
counterchecking position or preparation for constructively dismissed (NO)
employment outside of the company after 6
months. HELD:
1. Yes. Glaxo’s policy prohibiting an
Tecson was initially assigned to market employee from having a relationship with an
Glaxo's products in the Camarines Sur- employee of a competitor company is a valid
Camarines Norte area and entered into a exercise of management prerogative. Glaxo
romantic relationship with Betsy, an has a right to guard its trade secrets,
employee of Astra, Glaxo's competition. manufacturing formulas, marketing
Before getting married, Tecson's District strategies, and other confidential programs
Manager reminded him several times of the and information from competitors. The
conflict of interest but marriage took place prohibition against personal or marital
in Sept. 1998. In January 1999, Tecson's relationships with employees of competitor
superiors informed him of conflict of companies upon Glaxo's employees is
interest. Tecson asked for time to comply reasonable under the circumstances
with the condition (that either he or Betsy because relationships of that nature might
resign from their respective positions). compromise the interests of the company.
That Glaxo possesses the right to protect its
Unable to comply with condition, Glaxo economic interest cannot be denied.
transferred Tecson to the Butuan-Surigao
It is the settled principle that the commands
of the equal protection clause are addressed After Tecson married Bettsy, Glaxo gave him
only to the state or those acting under color time to resolve the conflict by either
of its authority. Corollarily, it has been HELD: resigning from the company or asking his
in a long array of US Supreme Court wife to resign from Astra. Glaxo even
decisions that the equal protection clause expressed its desire to retain Tecson in its
erects to shield against merely privately employ because of his satisfactory
conduct, however, discriminatory or performance and suggested that he ask
wrongful. Bettsy to resign from her company instead.
Glaxo likewise acceded to his repeated
The company actually enforced the policy requests for more time to resolve the
after repeated requests to the employee to conflict of interest. When the problem could
comply with the policy. Indeed the not be resolved after several years of
application of the policy was made in an waiting, Glaxo was constrained to reassign
impartial and even-handed manner, with Tecson to a sales area different from that
due regard for the lot of the employee. handled by his wife for Astra. Notably, the
Court did not terminate Tecson from
2. No. Constructive dismissal is defined as a employment but only re-assigned him to
quitting, an involuntary resignation resorted another area where his home province,
to when continued employment becomes Agusan del Sur, was included. In effecting
impossible, unreasonable or unlikely; when Tecson’s transfer, Glaxo even considered the
there is demotion in rank, or diminution in welfare of Tecson’s family. Clearly, the
pay; or when a clear discrimination, foregoing dispels any suspicion of unfairness
insensibility, or disdain by an employer and bad faith on the part of Glaxo.
becomes unbearable to the employee. None
of these conditions are present in the instant 66. Ollendorf vs Abrahamson
case. FACTS: Plaintiff is and for a long time past
has been engaged in the city of Manila and
The challenged policy has been elsewhere in the Philippine Islands in the
implemented by Glaxo impartially and business of manufacturing ladies
disinterestedly for a long period of time. In embroidered underwear for export. Plaintiff
the case at bar, the record shows that Glaxo imports the material from which this
gave Tecson several chances to eliminate the underwear is made and adopts decorative
conflict of interest brought about by his designs which are embroidered upon it by
relationship with Betsy, but he never availed Filipino needle workers from patterns
of any of them. selected and supplied by him. On September
10, 1915, plaintiff and defendant entered five years . . ." from the date of the
into a contract. agreement. The lower court granted a
preliminary injunction, and upon trial the
Under the terms of this agreement injunction was made perpetual.
defendant entered the employ of plaintiff
and worked for him until April, 1916, when Defendant, as appellant, argues that plaintiff
defendant, on account of ill health, left failed to substantiate the averments of his
plaintiff's employ and went to the United complaints to the effect that the business in
States. Some months after his departure for which the defendant is employed is
the United States, defendant returned to competitive with that of plaintiff. The court
Manila as the manager of the Philippine below found from the evidence that the
Underwear Company, a corporation. This business was "very similar." We have
corporation does not maintain a factory in examined the evidence and rare of the
the Philippine Islands, but send material and opinion that the business in which
embroidery designs from New York to its defendant is engaged is not only very similar
local representative here who employs to that of plaintiff, but that it is conducted in
Filipino needle workers to embroider the open competition with that business within
designs and make up the garments in their the meaning of the contract in question.
homes. The only difference between
plaintiff's business and that of the firm by ISSUE: W/N the contract is void for lack of
which the defendant is employed, is the mutuality; W/N the contract is void as
method of doing the finishing work. constituting an unreasonable restraint of
trade
Shortly after defendant's return to Manila
and the commencement by him of the HELD: NO. The contention that the contract
discharge of the duties of his position as local is void for lack of mutuality is based upon
manager of the Philippine Embroidery that part of the agreement which authorizes
Company, plaintiff commenced this action, plaintiff to discharge the defendant before
the principal purpose of which is to prevent the expiration of the stipulated term, should
by injunction, any further breach of that part defendant fail to comply with its conditions
of defendant's contract of employment by to plaintiff's satisfaction. It is argued that by
plaintiff, by which he agreed that he would these contracts it was sought to impose
not "enter into or engage himself directly or upon defendant the absolute obligation of
indirectly . . . in a similar or competitive rendering service, while reserving to plaintiff
business to that of (plaintiff) anywhere the right to rescind it at will. We are of the
within the Philippine Islands for a period of opinion that this question is largely
academic. It is admitted that defendant left We adopt the modern rule that the validity
plaintiff's employ at his own request before of restraints upon trade or employment is to
the expiration of the stipulated terms of the be determined by the intrinsic
contract. Had plaintiff sought to discharge reasonableness of restriction in each case
defendant without just cause, before the and that such restrictions may be upHELD:
expiration of the term of the employment, it when not contrary to afford a fair and
might have been a serious question whether reasonable protection to the party in whose
he could lawfully do so, notwithstanding the favor it is imposed.
terms in which the contract was drawn. (Civil
Code, art. 1256.) But even assuming this Examining the contract here in question
particular clause of the contract to be from this standpoint, it does not seem so
invalid, this would not necessarily affect the with respect to an employee whose duties
rest of the agreement. The inclusion is an are such as of necessity to give him an insight
agreement of one or more pacts which are into the general scope and details of his
invalid does not of necessity invalidate the employer’s business. A business enterprise
whole contract. may and often does depend for its success
upon the owner's relations with other
We are of the opinion that the contract was dealers, his skill in establishing favorable
not void as constituting an unreasonable connections, his methods of buying and
restraint of trade. The rule in this jurisdiction selling -- a multitude of details, none vital if
is that the obligations created by contracts considered alone, but which in the aggregate
have the force of law between the constitute the sum total of the advantages
contracting parties and must be enforce in which the result of the experience or
accordance with their tenor. (Civil Code, art individual aptitude and ability of the man or
1091.) The only limitation upon the freedom men by whom the business has been built
of contractual agreement is that the pacts up. Failure or success may depend upon the
established shall not be contrary to "law, possession of these intangible but all-
morals or public order." (Civil Code, Art. important assets, and it is natural that their
1255.) The industry of counsel has failed to possessor should seek to keep them from
discover any direct expression of the falling into the hands of his competitors. It is
legislative will which prohibits such a with this object in view that such restrictions
contract as that before us. It certainly is not as that now under consideration are written
contrary to any recognized moral precept, into contracts of employment. Their purpose
and it therefore only remains to consider is the protection of the employer, and if they
whether it is contrary to "public order." do not go beyond what is reasonably
necessary to effectuate this purpose they
should be upHELD:. We are of the opinion, certificate of public convenience and is
and so hold, that in the light of the rendering adequate and satisfactory service;
established FACTS the restraint imposed that the granting of the application of the
upon defendant by his contract is not Rural Transit Company, Ltd., would not serve
unreasonable. public convenience but would constitute a
ruinous competition for the oppositor over
67. Red Line Transportation Co. vs Bachrach said route.
Motor Co. (Roxas)
The Commission approved the application of
RED LINE TRANSPORTATION CO., petitioner- the Rural Transit Company, Ltd., and issued
appellant, a certificate of public convenience with the
vs. condition, among others, that "all the other
RURAL TRANSIT CO., LTD., respondent- terms and conditions of the various
appellee. certificates of public convenience of the
herein applicant and herein incorporated are
FACTS: made a part hereof."
On June 4, 1932, the Rural Transit Company,
Ltd., a Philippine corporation, filed with the Red Line Transportation Company filed a
Public Company Service Commission an motion for rehearing and reconsideration in
application in which it is stated in substance which it called the commission's attention to
that it is the holder of a certificate or public the fact that there was pending in the Court
convenience to operate a passenger bus of First Instance of Manila case N. 42343, an
service between Manila and Tuguegarao; application for the voluntary dissolution of
that it is the only operator of direct service the corporation, Rural Transit Company, Ltd.
between said points and the present
authorized schedule of only one trip daily is A motion for postponement was filed by
not sufficient; that it will be also to the public Rural Transit as verified by M. Olsen who
convenience to grant the applicant a swears "that he was the secretary of the
certificate for a new service between Rural Transit Company, Ltd. During the
Tuguegarao and Ilagan. hearing before the Public Service
Commission, the petition for dissolution and
On July 22, 1932, the appellant, Red Line the CFI’s decision decreeing the dissolution
Transportation Company, filed an opposition of Rural Transit were admitted without
to the said application alleging in substance objection. At the trial of this case before the
that as to the service between Tuguegarao Public Service Commission an issue was
and Ilagan, the oppositor already holds a raised as to who was the real party in
interest making the application, whether the it and protected by the law. If any
Rural Transit Company, Ltd., as appeared on corporation could assume at pleasure as an
the face of the application, or the Bachrach unregistered trade name the name of
Motor Company, Inc., using name of the another corporation, this practice would
Rural Transit Company, Ltd., as a trade result in confusion and open the door to
name. frauds and evasions and difficulties of
administration and supervision.
However, PSC granted Rural Transit’s
application for certificate of public In this case, the order of the commission
convenience and ordered that a certificate authorizing the Bachrach Motor Co.,
be issued on its name. Incorporated, to assume the name of the
Rural Transit Co., Ltd. likewise incorporated,
ISSUE: Can the Public Service Commission as its trade name being void. Accepting the
authorize a corporation to assume the name order of December 21, 1932, at its face as
of another corporation as a trade name? granting a certificate of public convenience
to the applicant Rural Transit Co., Ltd., the
Ruling: NO said order last mentioned is set aside and
The Rural Transit Company, Ltd., and the vacated on the ground that the Rural Transit
Bachrach Motor Co., Inc., are Philippine Company, Ltd., is not the real party in
corporations and the very law of their interest and its application was fictitious.
creation and continued existence requires
each to adopt and certify a distinctive name. 68. Dator vs UST, Rev. Frs. Tamerlane Lana
The incorporators "constitute a body politic and Rodel Aligan (Soriano)
and corporate under the name stated in the
certificate." Topic: Terms and conditions upon hiring:
non-compete clause
A corporation has the power "of succession
by its corporate name." It is essential to its FACTS:
existence and cannot change its name Petitioner Roque D.A. Dator was hired by
except in the manner provided by the respondent University of Santo Tomas (UST).
statute. By that name alone is it authorized Petitioner was also hired as Graft
to transact business. The law gives a Investigation Officer II with the Office of the
corporation no express or implied authority Ombudsman but he failed to disclose such
to assume another name that is other employment to respondents, who
unappropriated: still less that of another discovered the same only during the first
corporation, which is expressly set apart for semester of School Year 2000-2001.
Likewise, he argued that the UST Faculty
Petitioner was informed that his teaching Code which respondents relied upon to
load would be reduced to 12 hours per week, reduce his teaching load has been
pursuant to Section 5, Article III of the UST superseded by the CBA.
Faculty Code which states that faculty
members who have a full time outside On the other hand, respondents maintained
employment other than teaching may not be that petitioners teaching load was reduced
given a teaching load in excess of 12 hours in accordance with Sections 5 and 6 of Article
per week. III of the Faculty Code which provide:
Petitioner asked for reconsideration of the SEC. 5 Faculty members who have a full time
reduction in his teaching load which was outside employment other than teaching
granted. He was given an additional load of may not be given a teaching load in excess of
three teaching hours. 12 hours per week. The maximum load of
part time employees should be arranged in
Petitioner again requested for an additional accordance with the following table:
load of three units but his request was
denied by respondent Rev. Fr. Aligan on the Hours of Weekly Work Load
ground that [t]o grant the request when one 40-48 12 Units
was already made before for humanitarian 30-39 15 Units
and equitable reasons would reduce the 20-29 18 Units
subject policy to naught and the granting 10-19 21 Units
might become the general rather than the
exception to the policy. SEC. 6 All faculty members shall submit each
semester in writing to their respective Deans
Petitioner thus filed a complaint for Illegal a statement of the number of teaching hours
Reduction of Teaching Load and Illegal per week to be rendered in other institutions
Change of Employment Status, Damages, and/or daily hours of work or employment,
Unpaid Benefits and Attorneys Fees and inside or outside the University.
illegal constructive dismissal before the
Labor Arbiter. The Labor Arbiter ruled in favor of
respondents holding that the situation
Petitioner claimed that his arbitrary contemplated in Section 5, Article III of the
demotion from full-time to part-time faculty Faculty Code, when evaluated together with
member violated the provisions of the CBA, the provisions of the CBA, constitutes a
as well as his right to security of tenure. ground for teaching load reduction.
On appeal, the NLRC ordered the restoration The provisions of the Faculty Code of 1981,
of petitioners faculty member status to full- as amended, which are not otherwise
time. incorporated in the CBA and which are not in
conflict with any provisions of the latter shall
remain in full force and effect.
ISSUE:
Whether the reduction of petitioners In the event of conflict between a faculty
teaching load was justified. (YES) code provision and the CBA, the provision of
the latter shall prevail.
Separation pay, however, should be Labor Arbiter: Wherefore, for lack of merit,
awarded in favor of the employee as an act the complaint for unfair labor practice on
grounds of discrimination, forced leave and GRAPHIC ARTS INC.'s contentions that the
reduction of working days is hereby, reduction of work schedule was temporary,
DISMISSED. that it was taken only after notice and
consultations with the workers and
The private PULPULAAN AND SALONGA filed supervisors, that a consensus was reached
a "partial appeal" with the National Labor on how to deal with deteriorating economic
Relations Commission (NLRC) questioning conditions and reduced sales and that the
the Labor Arbiter's dismissal of their temporary reduction of working days was a
complaint for unfair labor practice and the more humane solution instead of a
resultant forced vacation leaves which were retrenchment and reduction of personnel.
actually without pay. The PHILIPPINE GRAPHIC ARTS INC. further
points out that this is in consonance with the
NLRC: “Be that as it may, since as intimated collective bargaining agreement between
at the outset, the vacation leave forced upon the employer and its employees. The Court,
the complainants was visited with therefore, agrees with the Solicitor General
arbitrariness not amounting to unfair labor in his submission that:
practice, a refund of the amount equivalent
to the earned leave of each of the There is also no showing that the imposition
complainants treated as their pay during of forced leave was exercised for the
their vacation is believed in order.” purpose of defeating or circumventing the
rights of employees under special laws or
Legal ISSUE: W/N the forced vacation leave under valid agreements. As the records
an act of unfair labor practice. show, PHILIPPINE GRAPHIC ARTS INC.s
instituted the forced leave due to economic
HELD: crisis, which private PULPULAAN AND
SALONGA do not even question.
NO. It is a valid exercise of management
prerogative. Likewise the forced leave was enforced
neither in a malicious, harsh, oppressive,
The Court is convinced from the records now vindictive nor wanton manner, nor out of
before it, that there was no unfair labor malice or spite. Apart from private
practice. As found by the NLRC, the private PULPULAAN AND SALONGA concurrence
PULPULAAN AND SALONGA themselves that the forced leave was implemented due
never questioned the existence of an to economic crisis, what only "hurts" them
economic crisis but, in fact, admitted its "is that said management's plan was not
existence. There is basis for the PHILIPPINE even discussed in the grievance procedure
so that the Union members thereof may well FACTS:
be apprised of the reason therefore." Sometime in January 2004, petitioner Goya,
Inc. (Company), a domestic corporation
However, to rule that PHILIPPINE GRAPHIC engaged in the manufacture, importation,
ARTS INC.s' failure to bring the question of and wholesale of top quality food products,
necessity in the imposition of forced leave hired contractual employees from PESO
and the distribution of work availability Resources Development Corporation (PESO)
before the grievance machinery, as a prior to perform temporary and occasional
requisite for the implementation of the services in its factory in Parang, Marikina
forced leave scheme, constitutes City. This prompted respondent Goya, Inc.
arbitrariness is erroneous. Employees UnionFFW (Union) to request for
a grievance conference on the ground that
The decision to resort to forced leaves was, the contractual workers do not belong to the
under the circumstances, a management categories of employees stipulated in the
prerogative. The workers' claim of non- existing Collective Bargaining Agreement
resort. to the grievance machinery is (CBA).
negated by their failure to initiate steps for
its employment. The Union asserted that the hiring of
contractual employees from PESO is not a
73. Linton Comml. Co. vs Herrera (Caubang) management prerogative and in gross
violation of the CBA tantamount to unfair
74. Jonathan Morales vs Harbour Port labor practice (ULP). It noted that the
Terminal (Chiu) contractual workers engaged have been
assigned to work in positions previously
75. Natl. Federation of Labor vs NLRC handled by regular workers and Union
(Dosdos) members, in effect violating Section 4,
Article I of the CBA, which provides for three
76. Pier 8 Arrastre vs Roldan-Confessor categories of employees in the Company, to
(Dulay) wit:
77. Goya Inc. vs Goya Employees Union Section 4. Categories of Employees. The
(Macatol) parties agree on the following categories of
GOYA, INC., Petitioner, v. GOYA, INC. employees:
EMPLOYEES UNION-FFW, Respondent. G.R.
No. 170054 : January 21, 2013 PERALTA, J.: (a) Probationary Employee. One hired to
occupy a regular rank-and-file position in the
Company and is serving a probationary Company sometimes hired probationary
period. If the probationary employee is hired employees who also later became regular
or comes from outside the Company (non- workers after passing the probationary
Goya, Inc. employee), he shall be required to period. With the hiring of contractual
undergo a probationary period of six (6) employees, the Union contended that it
months, which period, in the sole judgment would no longer have probationary and
of management, may be shortened if the casual employees from which it could obtain
employee has already acquired the additional Union members; thus, rendering
knowledge or skills required of the job. If the inutile Section 1, Article III (Union Security)
employee is hired from the casual pool and of the CBA, which states:
has worked in the same position at any time
during the past two (2) years, the Section 1. Condition of Employment. As a
probationary period shall be three (3) condition of continued employment in the
months. Company, all regular rank-and-file
employees shall remain members of the
(b) Regular Employee. An employee who has Union in good standing and that new
satisfactorily completed his probationary employees covered by the appropriate
period and automatically granted regular bargaining unit shall automatically become
employment status in the Company. regular employees of the Company and shall
remain members of the Union in good
(c) Casual Employee, One hired by the standing as a condition of continued
Company to perform occasional or seasonal employment.
work directly connected with the regular
operations of the Company, or one hired for The Union moreover advanced that
specific projects of limited duration not sustaining the Companys position would
connected directly with the regular easily weaken and ultimately destroy the
operations of the Company. former with the latters resort to
retrenchment and/or retirement of
It was averred that the categories of employees and not filling up the vacant
employees had been a part of the CBA since regular positions through the hiring of
the 1970s and that due to this provision, a contractual workers from PESO, and that a
pool of casual employees had been possible scenario could also be created by
maintained by the Company from which it the Company wherein it could "import"
hired workers who then became regular workers from PESO during an actual strike.
workers when urgently necessary to employ
them for more than a year. Likewise, the
In countering the Unions allegations, the however, that such act is a valid exercise
Company argued that: (a) the law expressly thereof. Obviously, this is due to the
allows contracting and subcontracting recognition that the CBA provisions agreed
arrangements through Department of Labor upon by the Company and the Union delimit
and Employment (DOLE) Order No. 18-02; the free exercise of management
(b) the engagement of contractual prerogative pertaining to the hiring of
employees did not, in any way, prejudice the contractual employees. is Indeed, the VA
Union, since not a single employee was opined that "the right of the management to
terminated and neither did it result in a outsource parts of its operations is not
reduction of working hours nor a reduction totally eliminated but merely limited by the
or splitting of the bargaining unit; and (c) CBA," while the CA HELD: that "this
Section 4, Article I of the CBA merely management prerogative of contracting out
provides for the definition of the categories services, however, is not without limitation.
of employees and does not put a limitation x x x These categories of employees
on the Companys right to engage the particularly with respect to casual
services of job contractors or its employees serve as limitation to the
management prerogative to address Companys prerogative to outsource parts of
temporary/occasional needs in its its operations especially when hiring
operation. contractual employees."
It turned out that the ex-Padcal supervisors This is shown by the fact that the maximum
were maintained under a confidential rate for S-4 at P18,065 per month is higher
payroll, receiving a different set of benefits than the minimum rate for S-5, the highest
and higher salaries compared to the locally category at P13,295 a month only. The rate
hired supervisors of similar rank and difference between the maximum rate of S-
classification doing parallel duties and 4 and the minimum rate for S-5 is P4,770, the
functions. maximum rate of S-4 being higher than the
minimum rate of S-5.
Philex Supervisors Union filed a Complaint[2]
against Philex Gold with the National Simply stated, an S-4 employee getting the
Conciliation and Mediation Board (NCMB), maximum salary of P18,065 a month will
Bacolod City, for the payment of wage merely get a reduced or diminished salary of
differential and damages and the P13,295 upon his promotion to S-5, the
rectification of the discriminatory salary highest class or category of supervisors upon
structure and benefits between the ex- his promotion. This condition is not an ideal
Padcal supervisors and the local-hires. labor relation but a situation which will
surely ignite labor conflicts and disputes in
After the submission of the parties the work place.
respective position papers and
rejoinders/supplemental position papers,
the Voluntary Arbitrator rendered a decision
on January 14, 2000 in favor of respondent In whatever shade or color that we shall look
Union. upon the issue of whether or not the herein
employer can be HELD: liable to pay the
As regards the supervisors wage rates[3] wage differential pay to the LOCALLY HIRED
which was submitted by Philex Gold, the SUPERVISORS due to its obvious
Voluntary Arbitrator HELD: discriminatory wage policy, one thing stands
outsupervisors of the same ranks are not
paid the same rates of pay.
This inequitable rates of pay being to the date of the Decision to all affected
implemented by respondents result locally hired supervisors.
naturally into the herein employers
discriminatory wage policy which Article 248
(e) of the LABOR CODE prohibits and defines
as UNFAIR LABOR PRACTICE OF 2. To revise or modify its existing
EMPLOYERS.[4] wage rates per supervisory ranking, making
the maximum rate of a lower category lower
The dispositive portion of the Decision than the minimum rate of the next higher
reads: category; and,
RULING: YES Under the Labor Code, six (6) months is the
general probationary period ' but the
Generally, the probationary period of probationary period is actually the period
employment is limited to six (6) months. The needed to determine fitness for the job. This
exception to this general rule is When the period, for lack of a better measurement is
parties to an employment contract may deemed to be the period needed to learn the
agree otherwise, such as when the same is job.
established by company policy or when the The purpose of this policy is to protect the
same is required by the nature of work to be worker at the same time enable the
performed by the employee. In the latter employer to make a meaningful employee
case, there is recognition of the exercise of selection. This purpose should be kept in
managerial prerogatives in requiring a mind in enforcing this provision of the Code.
longer period of probationary employment, This issuance shall take effect immediately.
such as in the present case where the
probationary period was set for eighteen In the case at bar, it is shown that private
(18) months, i.e. from May, 1980 to October, respondent Company needs at least
1981 inclusive, especially where the eighteen (18) months to determine the
employee must learn a particular kind of character and selling capabilities of the
work such as selling, or when the job petitioners as sales representatives. The
requires certain qualifications, skills, Company is engaged in advertisement and
experience or training. publication in the Yellow Pages of the PLDT
Telephone Directories. Publication of master's degree as a minimum educational
solicited ads are only made a year after the qualification for acquiring regular status.
sale has been made and only then win the
company be able to evaluate the efficiency, UE hired respondents Bueno and Pepanio,
conduct, and selling ability of its sales both on a semester-to-semester basis to
representatives, the evaluation being based teach in its college. They could not qualify for
on the published ads. Moreover, an eighteen probationary or regular status because they
month probationary period is recognized by lacked postgraduate degrees.
the Labor Union in the private respondent
company, which is Article V of the Collective UE and the UE Faculty Association entered
Bargaining Agreement into a new CBA that would have the school
extend probationary full-time appointments
And as indicated earlier, the very contracts to full-time faculty members who did not yet
of employment signed and acquiesced to by have the required postgraduate degrees
the petitioners specifically indicate that "the provided that the latter comply with such
company hereby employs the employee as requirement within their probationary
telephone sales representative on a period.
probationary status for a period of eighteen
(18) months, i.e. from May 1980 to October The Dean of the UE College of Arts and
1981, inclusive. This stipulation is not Sciences, petitioner Eleanor Javier, sent
contrary to law, morals and public policy. notices to probationary faculty members,
reminding them of the expiration of the
83. University of the East, Dean Eleanor probationary status. Pepanio replied that
Javier et. al. vs Analiz Pepanio and Mariti she was enrolled at the Polytechnic
Bueno (Tingson) University of the Philippines Graduate
G.R. No. 193897 January 23, 2013 School. Bueno, on the other hand, replied
UNIVERSITY OF THE EAST, DEAN ELEANOR that she was not interested in acquiring
JAVIER, RONNIE GILLEGO and DR. JOSE C. tenure as she was returning to her province.
BENEDICTO vs. ANALIZA F. PEPANIO and
MARITI D. BUENO Pepanio requested a three-semester
extension but Dean Javier denied this
FACTS: request and directed Pepanio to ask for just
In 1992, DECS issued the Revised Manual of a two-semester extension.
Regulations for Private Schools, Article IX,
Section 44, paragraph 1 (a), of which Respondents filed cases of illegal dismissal
requires college faculty members to have a against the school before the Labor Arbiter
demanding that they be considered regular
employees. Respondents were each given only
semester-to-semester appointments from
They argue that since that CBA did not yet the beginning of their employment with UE
require a master’s degree for acquiring a precisely because they lacked the required
regular status and since respondents had master's degree. The school extended
already complied with the three petitioners a conditional probationary status
requirements of the CBA, namely, (a) that subject to their obtaining a master's degree
they served full-time; (b) that they rendered within their probationary period.
three consecutive years of service; and (c)
that their services were satisfactory, they UE gave respondents Bueno and Pepanio
should be regarded as having attained more than ample opportunities to acquire
permanent or regular status. the postgraduate degree required of them.
But they did not take advantage of such
ISSUE: opportunities.
Whether UE illegally dismissed Bueno and
Pepanio? 84. Holiday Inn Manila vs NLRC (Vosotros)
Labor Arbiter:
FACTS:
Dismissed the complaint hat her separation
Elena Honasan applied for employment with was justified under Article 281 of the Labor
the Holiday Inn and was on April 15, 1991, Code providing as follows:
accepted for "on-the-job training" as a
telephone operator for a period of three Probationary employment shall not exceed
weeks. On May 13, 1992, after completing six (6) months from the date the employee
her training, she was employed on a started working, unless it is covered by an
"probationary basis" for a period of six apprenticeship agreement stipulating a
months ending November 12, 1991. longer period. The services of an employee
who has been engaged on a probationary
Her employment contract stipulated that basis may be terminated for a just cause or
the Hotel could terminate her probationary when he fails to qualify as a regular
employment at any time prior to the employee in accordance with reasonable
expiration of the six-month period in the standards made known by the employer to
event of her failure (a) to learn or progress in the employee at the time of his engagement.
her job; (b) to faithfully observe and comply An employee who is allowed to work after a
with the hotel rules and the instructions and probationary period shall be considered a
orders of her superiors; or (c) to perform her regular employee.
duties according to hotel standards.
G.R. No. 164532 July 24, 2007 After the usual interview for the second
telephone operator slot, PDI chose to hire
PHILIPPINE DAILY INQUIRER, INC., vs. LEON Magtibay on a probationary basis for a
M. MAGTIBAY, JR. and PHILIPPINE DAILY period of six (6) months. The signing of a
INQUIRER EMPLOYEES UNION (PDIEU). written contract of employment followed.
Magtibay anchored his case principally on Labor Arbiter: ruled in favor of PDI. Labor
the postulate that he had become a regular Arbiter further ruled that Magtibay’s
employee by operation of law, considering dismissal from his probationary employment
that he had been employed by and had was for a valid reason. Albeit the basis for
worked for PDI for a total period of ten termination was couched in the abstract,
months, i.e., four months more than the i.e., "you did not meet the standards of the
maximum six-month period provided for by company," there were three specific reasons
law on probationary employment. He also for Magtibay’s termination, to wit: (1) he
claimed that he was not apprised at the repeatedly violated the company rule
beginning of his employment of the prohibiting unauthorized persons from
performance standards of the company, entering the telephone operator’s room; (2)
hence, there was no basis for his dismissal. he intentionally omitted to indicate in his
Finally, he described his dismissal as tainted application form his having a dependent
with bad faith and effected without due child; and (3) he exhibited lack of sense of
process. responsibility by locking the door of the
telephone operator’s room on March 10,
PDI, for its part, denied all the factual 1996 without switching the proper lines to
allegations of Magtibay, adding that his the company guards so that incoming calls
previous contractual employment was may be answered by them.
validly terminated upon the expiration of the
period stated therein. Pressing the point, PDI NLRC: reversed and set aside said decision,
alleged that the period covered by the effectively ruling that Magtibay was illegally
contractual employment cannot be counted dismissed. According to the NLRC,
with or tacked to the period for probation, Magtibay’s probationary employment had
inasmuch as there is no basis to consider ripened into a regular one.
Magtibay a regular employee. PDI
additionally claimed that Magtibay was With the NLRC’s denial of its motion for
dismissed for violation of company rules and reconsideration, PDI went to the CA on a
policies, such as allowing his lover to enter petition for certiorari.
and linger inside the telephone operator’s
booth and for failure to meet prescribed
Court of Appeals: PDI failed to prove that known by the employer to the employee at
such rules and regulations were included in the time of his engagement.
or form part of the standards that were
supposed to be made known to MAGTIBAY PDI invokes the second ground under the
at the time of his engagement as telephone premises. In claiming that it had adequately
operator. apprised Magtibay of the reasonable
standards against which his performance
Legal ISSUE: W/N there is a need to inform a will be gauged for purposes of permanent
probationary employee to comply with the employment, PDI cited the one-on-one
Company’s rules and regulations. seminar between Magtibay and its
Personnel Assistant, Ms. Rachel Isip-Cuzio.
HELD: PDI also pointed to Magtibay’s direct
superior, Benita del Rosario, who diligently
NO. There is no need as it is expected to be briefed him about his responsibilities in PDI.
part of their responsibilities as an employee These factual assertions were never denied
of the company. nor controverted by Magtibay. Neither did
he belie the existence of a specific rule
It is well settled that the employer has the prohibiting unauthorized persons from
right or is at liberty to choose who will be entering the telephone operator’s booth nor
hired and who will be denied employment. that did he violate that prohibition. This
In that sense, it is within the exercise of the notwithstanding, the NLRC and the CA
right to select his employees that the proceeded nonetheless to rule that the
employer may set or fix a probationary records of the case are bereft of any
period within which the latter may test and evidence showing that these rules and
observe the conduct of the former before regulations form part of the so-called
hiring him permanently. x x x. company standards.
Within the limited legal six-month We do not agree with the appellate court
probationary period, probationary when it cleared the NLRC of commission of
employees are still entitled to security of grave abuse of discretion despite the latter’s
tenure. It is expressly provided in the afore- disregard of clear and convincing evidence
quoted Article 281 that a probationary that there were reasonable standards made
employee may be terminated only on two known by PDI to Magtibay during his
grounds: (a) for just cause, or (b) when he probationary employment. It is on record
fails to qualify as a regular employee in that Magtibay committed obstinate
accordance with reasonable standards made infractions of company rules and
regulations, which in turn constitute 87. Lacuesta vs Ateneo de Manila (Chiu)
sufficient manifestations of his inadequacy
to meet reasonable employment norms. The 88. Woodbridge vs Pe Benito (Dosdos)
suggestion that Magtibay ought to have
been made to understand during his briefing 89. Yolanda Mercado vs AMA Computer
and orientation that he is expected to obey College Paranaque (Dulay)
and comply with company rules and
regulations strains credulity for acceptance. 90. Colegio del Santissimo Rosario vs Rojo
(Macatol)
The CA’s observation that "nowhere can it COLEGIO DEL SANTISIMO ROSARIO v.
be found in the list of Basic Responsibility EMMANUEL ROJO GR No. 170388, Sep 04,
and Specific Duties and Responsibilities of 2013 DEL CASTILLO, J.:
MAGTIBAY that he has to abide by the
duties, rules and regulations that he has FACTS:
allegedly violated" is a strained Petitioner Colegio del Santisimo Rosario
rationalization of an unacceptable conduct (CSR) hired respondent as a high school
of an employee. Common industry practice teacher on probationary basis for the school
and ordinary human experience do not years 1992-1993, 1993-1994[7] and 1994-
support the CA’s posture. All employees, be 1995.[8]
they regular or probationary, are expected
to comply with company-imposed rules and On April 5, 1995, CSR, through petitioner Sr.
regulations, else why establish them in the Zenaida S. Mofada, OP (Mofada), decided
first place. Probationary employees not to renew respondent's services.
unwilling to abide by such rules have no right
to expect, much less demand, permanent Thus, on July 13, 1995, respondent filed a
employment. We, therefore find sufficient Complaint for illegal dismissal. He alleged
factual and legal basis, duly established by that since he had served three consecutive
substantial evidence, for PDI to legally school years which is the maximum number
terminate Magtibay’s probationary of terms allowed for probationary
employment effective upon the end of the 6- employment, he should be extended
month probationary period. permanent employment. Citing paragraph
75 of the 1970 Manual of Regulations for
Private Schools (1970 Manual), respondent
86. Pines CIty Educational Center vs NLRC asserted that "full- time teachers who have
(Caubang) rendered three (3) consecutive years of
satisfactory services shall be considered
permanent." An example given of a fixed-term contract
specifically used for the fixed term it offers is
On the other hand, petitioners argued that a replacement teacher or a reliever
respondent knew that his Teacher's Contract contracted for a period of one year to
for school year 1994-1995 with CSR would temporarily take the place of a permanent
expire on March 31, 1995. Accordingly, teacher who is on leave. The expiration of
respondent was not dismissed but his the reliever's fixed-term contract does not
probationary contract merely expired and have probationary status implications as he
was not renewed. Petitioners also claimed or she was never employed on probationary
that the "three years" mentioned in basis. This is because his or her employment
paragraph 75 of the 1970 Manual refer to is for a specific purpose with particular focus
"36 months," not three school years. And on the term. There exists an intent to end his
since respondent served for only three or her employment with the school upon
school years of 10 months each or 30 expiration of this term.
months, then he had not yet served the
"three years" or 36 months mentioned in However, for teachers on probationary
paragraph 75 of the 1970 Manual. employment, in which case a fixed term
contract is not specifically used for the fixed
ISSUE: term it offers, it is incumbent upon the
WHETHER A BASIC EDUCATION school to have not only set reasonable
(ELEMENTARY) TEACHER HIRED FOR THREE standards to be followed by said teachers in
(3) CONSECUTIVE SCHOOL YEARS AS A determining qualification for regular
PROBATIONARY EMPLOYEE employment, the same must have also been
AUTOMATICALLY AND/OR BY LAW communicated to the teachers at the start of
BECOMES A PERMANENT EMPLOYEE UPON the probationary period, or at the very least,
COMPLETION OF HIS THIRD YEAR OF at the start of the period when they were to
PROBATION PERIOD. Yes, in this case. be applied. These terms, in addition to those
expressly provided by the Labor Code, would
HELD: serve as the just cause for the termination of
It is HELD: that "in a situation where the the probationary contract. The specific
probationary status overlaps with a fixed- details of this finding of just cause must be
term contract not specifically used for the communicated to the affected teachers as a
fixed term it offers, Article 281 should matter of due process.[42] Corollarily,
assume primacy and the fixed-period should the teachers not have been apprised
character of the contract must give way." of such reasonable standards at the time
specified above, they shall be deemed provided by law, and subject to the
regular employees. requirements of due process.
In Tamson's Enterprises, Inc. v. Court of (b) The foregoing shall also apply in cases of
Appeals,[43] we HELD: that "[t]he law is probationary employment; provided,
clear that in all cases of probationary however, that in such cases, termination of
employment, the employer shall [convey] to employment due to failure of the employee
the employee the standards under which he to qualify in accordance with the standards
will qualify as a regular employee at the time of the employer made known to the former
of his engagement. Where no standards are at the time of engagement may also be a
made known to the employee at that time, ground for termination of employment.
he shall be deemed a regular employee.
(d) In all cases of termination of
In this case, glaringly absent from employment, the following standards of due
petitioners' evidence are the reasonable process shall be substantially observed:
standards that respondent was expected to
meet that could have served as proper If the termination is brought about by the
guidelines for purposes of evaluating his completion of a contract or phase thereof, or
performance. Nowhere in the Teacher's by failure of an employee to meet the
Contract could such standards be found. standards of the employer in the case of
Neither was it mentioned that the same probationary employment, it shall be
were ever conveyed to respondent. Even sufficient that a written notice is served the
assuming that respondent failed to meet the employee, within a reasonable time from
standards set forth by CSR and made known the effective date of termination.
to the former at the time he was engaged as
a teacher on probationary status, still, the Curiously, despite the absence of standards,
termination was flawed for failure to give Mofada mentioned the existence of alleged
the required notice to respondent. This is performance evaluations in respondent's
because Book VI, Rule I, Section 2 of the IRR case. We are, however, in a quandary as to
of the Labor Code provides: what could have been the basis of such
evaluation, as no evidence were adduced to
Section 2. Security of Tenure. (a) In cases of show the reasonable standards with which
regular employment, the employer shall not respondent's performance was to be
terminate the services of an employee assessed or that he was informed thereof.
except for just or authorized causes as Notably too, none of the supposed
performance evaluations were presented.
These flaws violated respondent's right to renew his contract. However, no resignation
due process. As such, his dismissal is, for all letter was presented. Besides, this is
intents and purposes, illegal. contrary to respondent's act of immediately
filing the instant case against petitioners.
As a matter of due process, teachers on
probationary employment, just like all Other discussions:
probationary employees, have the right to In Mercado v. AMA Computer College-
know whether they have met the standards Parañaque City, Inc., we had occasion to rule
against which their performance was that cases dealing with employment on
evaluated. Should they fail, they also have probationary status of teaching personnel
the right to know the reasons therefor. are not governed solely by the Labor Code as
the law is supplemented, with respect to the
It should be pointed out that absent any period of probation, by special rules found in
showing of unsatisfactory performance on the Manual of Regulations for Private
the part of respondent, it can be presumed Schools (the Manual). With regard to the
that his performance was satisfactory, probationary period, Section 92 of the 1992
especially taking into consideration the fact Manual provides:
that even while he was still more than a year
into his probationary employment, he was Section 92. Probationary Period. Subject in
already designated Prefect of Discipline. In all instances to compliance with the
such capacity, he was able to uncover the Department and school requirements, the
existence of a drug syndicate within the probationary period for academic personnel
school and lessen the incidence of drug use shall not be more than three (3) consecutive
therein. Yet despite respondent's substantial years of satisfactory service for those in the
contribution to the school, petitioners chose elementary and secondary levels, six (6)
to disregard the same and instead consecutive regular semesters of
terminated his services; while most of those satisfactory service for those in the tertiary
who were involved in drug activities within level, and nine (9) consecutive trimesters of
the school were punished with a slap on the satisfactory service for those in the tertiary
wrist as they were merely made to write level where collegiate courses are offered on
letters promising that the incident will not a trimester basis.
happen again.
In this case, petitioners' teachers who were
Mofada would also have us believe that on probationary employment were made to
respondent chose to resign as he feared for enter into a contract effective for one school
his life, thus, the school's decision not to year. Thereafter, it may be renewed for
another school year, and the probationary teacher remains under probation. Upon the
employment continues. At the end of the expiration of his contract of employment,
second fixed period of probationary being simply on probation, he cannot
employment, the contract may again be automatically claim security of tenure and
renewed for the last time. compel the employer to renew his
employment contract. It is when the yearly
Such employment for fixed terms during the contract is renewed for the third time that
teachers' probationary period is an accepted Section 93 of the Manual becomes
practice in the teaching profession. In Magis operative, and the teacher then is entitled to
Young Achievers' Learning Center v. regular or permanent employment status.
Manalo,[34] we noted that:
However, this scheme "of fixed-term
The common practice is for the employer contract is a system that operates during the
and the teacher to enter into a contract, probationary period and for this reason is
effective for one school year. At the end of subject to Article 281 of the Labor Code,"
the school year, the employer has the option which provides:
not to renew the contract, particularly
considering the teacher's performance. If x x x The services of an employee who has
the contract is not renewed, the been engaged on a probationary basis may
employment relationship terminates. If the be terminated for a just cause or when he
contract is renewed, usually for another fails to qualify as a regular employee in
school year, the probationary employment accordance with reasonable standards made
continues. Again, at the end of that period, known by the employer to the employee at
the parties may opt to renew or not to renew the time of his engagement. An employee
the contract. If renewed, this second who is allowed to work after a probationary
renewal of the contract for another school period shall be considered a regular
year would then be the last year since it employee.
would be the third school year of
probationary employment. At the end of this In Mercado, we HELD: that "[u]nless this
third year, the employer may now decide reconciliation is made, the requirements of
whether to extend a permanent [Article 281] on probationary status would
appointment to the employee, primarily on be fully negated as the school may freely
the basis of the employee having met the choose not to renew contracts simply
reasonable standards of competence and because their terms have expired."[36] This
efficiency set by the employer. For the entire will have an unsettling effect in the
duration of this three-year period, the equilibrium vis-a-vis the relations between
labor and management that the Constitution permanent status. [However, it must be
and Labor Code have worked hard to emphasized that] mere rendition of service
establish. for three consecutive years does not
automatically ripen into a permanent
That teachers on probationary employment appointment. It is also necessary that the
also enjoy the protection afforded by Article employee be a full-time teacher, and that
281 of the Labor Code is supported by the services he rendered are satisfactory."
Section 93 of the 1992 Manual which
provides: In Mercado, this Court, speaking through J.
Brion, HELD: that:
Sec. 93. Regular or Permanent Status. - The provision on employment on
Those who have served the probationary probationary status under the Labor Code is
period shall be made regular or permanent. a primary example of the fine balancing of
Full-time teachers who have satisfactorily interests between labor and management
completed their probationary period shall be that the Code has institutionalized pursuant
considered regular or permanent. to the underlying intent of the Constitution.
The above provision clearly provides that On the one hand, employment on
full-time teachers become regular or probationary status affords management
permanent employees once they have the chance to fully scrutinize the true worth
satisfactorily completed*556 the of hired personnel before the full force of
probationary period of three school the security of tenure guarantee of the
years.[37] The use of the term satisfactorily Constitution comes into play. Based on the
necessarily connotes the requirement for standards set at the start of the probationary
schools to set reasonable standards to be period, management is given the widest
followed by teachers on probationary opportunity during the probationary period
employment. For how else can one to reject hirees who fail to meet its own
determine if probationary teachers have adopted but reasonable standards. These
satisfactorily completed the probationary standards, together with the just and
period if standards therefor are not authorized causes for termination of
provided? employment [which] the Labor Code
expressly provides, are the grounds available
As such, "no vested right to a permanent to terminate the employment of a teacher
appointment shall accrue until the employee on probationary status. x x x
has completed the prerequisite three-year
period necessary for the acquisition of a
Labor, for its part, is given the protection more apparent than real when the
during the probationary period of knowing respective nature of fixed-term employment
the company standards the new hires have and of employment on probationary status
to meet during the probationary period, and are closely examined.
to be judged on the basis of these standards,
aside from the usual standards applicable to The fixed-term character of employment
employees after they achieve permanent essentially refers to the period agreed upon
status. Under the terms of the Labor Code, between the employer and the employee;
these standards should be made known to employment exists only for the duration of
the teachers on probationary status at the the term and ends on its own when the term
start of their probationary period, or at the expires. In a sense, employment on
very least under the circumstances of the probationary status also refers to a period
present case, at the start of the semester or because of the technical meaning
the trimester during which the probationary "probation" carries in Philippine labor law a
standards are to be applied. Of critical maximum period of six months, or in the
importance in invoking a failure to meet the academe, a period of three years for those
probationary standards, is that the school engaged in teaching jobs. Their similarity
should show as a matter of due process how ends there, however, because of the
these standards have been applied. This is overriding meaning that being "on
effectively the second notice in a dismissal probation" connotes, i.e., a process of
situation that the law requires as a due testing and observing the character or
process guarantee supporting the security of abilities of a person who is new to a role or
tenure provision, and is in furtherance, too, job.
of the basic rule in employee dismissal that
the employer carries the burden of justifying Understood in the above sense, the
a dismissal. These rules ensure compliance essentially protective character of
with the limited security of tenure guarantee probationary status for management can
the law extends to probationary employees. readily be appreciated. But this same
protective character gives rise to the
When fixed-term employment is brought countervailing but equally protective rule
into play under the above probationary that the probationary period can only last for
period rules, the situation as in the present a specific maximum period and under
case may at first blush look muddled as reasonable, well-laid and properly
fixed-term employment is in itself a valid communicated standards. Otherwise stated,
employment mode under Philippine law and within the period of the probation, any
jurisprudence. The conflict, however, is employer move based on the probationary
standards and affecting the continuity of the those contained in the original contract of
employment must strictly conform to the July 18, 1971.
probationary rules.
On April 20,1976, Alegre was given a copy of
x x x If we pierce the veil, so to speak, of the the report filed by Brent School with the
parties' so-called fixed-term employment Department of Labor advising of the
contracts, what undeniably comes out at the termination of his services effective on July
core is a fixed-term contract conveniently 16, 1976. The stated ground for the
used by the school to define and regulate its termination was "completion of contract,
relations with its teachers during their expiration of the definite period of
probationary period. employment." Although protesting the
announced termination stating that his
91. Brent School vs Zamora (Pacquiao, L) services were necessary and desirable in the
G.R. No. L-48494 February 5, 1990 usual business of his employer, and his
employment lasted for 5 years - therefore he
BRENT SCHOOL, INC., and REV. GABRIEL had acquired the status of regular employee
DIMACHE, petitioners, - Alegre accepted the amount of P3,177.71,
vs. and signed a receipt therefor containing the
RONALDO ZAMORA, the Presidential phrase, "in full payment of services for the
Assistant for Legal Affairs, Office of the period May 16, to July 17, 1976 as full
President, and DOROTEO R. ALEGRE, payment of contract."
respondents.
The Regional Director considered Brent
FACTS School's report as an application for
Private respondent Alegre was engaged as clearance to terminate employment (not a
athletic director by petitioner Brent School, report of termination), and accepting the
Inc. at a yearly compensation of P20,000.00. recommendation of the Labor Conciliator,
The contract fixed a specific term for its refused to give such clearance and instead
existence, five (5) years, i.e., from July 18, required the reinstatement of Alegre, as a
1971, the date of execution of the "permanent employee," to his former
agreement, to July 17, 1976. Subsequent position without loss of seniority rights and
subsidiary agreements dated March 15, with full back wages.
1973, August 28, 1973, and September 14,
1974 reiterated the same terms and ISSUE
conditions, including the expiry date, as Whether or not the provisions of the Labor
Code as amended (regarding
probationary/regular employees), have It is plain then that when the employment
anathematized "fixed period employment" contract was signed between Brent School
or employment for a term and Alegre, it was perfectly legitimate for
them to include in it a stipulation fixing the
(anathematized- curse; condemn) duration thereof Stipulations for a term
were explicitly recognized as valid by this
HELD: Court.
No. Before the Labor Code, there was no
doubt about the validity of term The status of legitimacy continued to be
employment. It was implied but clearly enjoyed by fixed-period employment
recognized by the Termination Pay law, RA contracts under the Labor Code (PD 442),
1052.The employment contract between which went into effect on November 1,
Brent School and Alegre was executed on 1974. The Code contained explicit
July 18, 1971, at a time when the Labor Code references to fixed period employment, or
of the Philippines (P.D. 442) had not yet been employment with a fixed or definite period.
promulgated. Indeed, the Code did not come Nevertheless, obscuration of the principle of
into effect until November 1, 1974, some licitness of term employment began to take
three years after the perfection of the place at about this time.
employment contract, and rights and
obligations there under had arisen and been Article 320 originally stated that the
mutually observed and enforced.At that "termination of employment of
time, i.e., before the advent of the Labor probationary employees and those
Code, there was no doubt whatever about employed WITH A FIXED PERIOD shall be
the validity of term employment. It was subject to such regulations as the Secretary
impliedly but nonetheless clearly recognized of Labor may prescribe." Article 321
by the Termination Pay Law, R.A. 1052, 11 as prescribed the just causes for which an
amended by R.A. 1787. employer could terminate "an employment
without a definite period." And Article 319
Respondent Alegre's contract of undertook to define "employment without a
employment with Brent School having fixed period" in the following manner:
lawfully terminated with and by reason of …where the employee has been engaged to
the expiration of the agreed term of period perform activities which are usually
thereof, he is declared not entitled to necessary or desirable in the usual business
reinstatement. or trade of the employer, except where the
employment has been fixed for a specific
project or undertaking the completion or
termination of which has been determined alternative payment of their salaries for the
at the time of the engagement of the remainder of the 3-year period stating that
employee or where the work or service to be they have attained status of regular
performed is seasonal in nature and the employees, the provision stipulating a three-
employment is for the duration of the year period of employment is null and void
season. for violating Labor Code provisions on
92. Pakistan Air Line vs Ople regular employment Deputy Minister
FACT: Pakistan International Airline (PIA) is a affirmed the RD’s order. PIA filed a petition
foreign corporation licensed to do business for certiorari before the SC.
in the PH. 2 separate contracts of
employment with Farrales and Mamasig ISSUE: What law governs the relationship of
were entered into by PIA in Manila. The the parties to the contract? PHILIPPINE LAW.
contracts became effective in 1979. After
their training period, Farrales and Mamasig HELD: A contract freely entered into should,
commenced their services as flight of course, be respected, as PIA argues, since
attendants with base station in Manila. 1 a contract is the law between the parties.
year and 4 months before the lapse of the 3- The principle of party autonomy in contracts
year period, counsel for the local branch of is not, however, an absolute principle. The
PIA sent Farrales and Mamasig notices rule in Article 1306, of our Civil Code is that
expressing that their services will be the contracting parties may establish such
terminated a month thereafter. Farrales and stipulations as they may deem convenient,
Mamasig filed a joint complaint for illegal "provided they are not contrary to law,
termination and non-payment of company morals, good customs, public order or public
benefits before the then Ministry of Labor policy." Thus, counter-balancing the
and Employment (MOLE) PIA submitted a principle of autonomy of contracting parties
position paper claiming that Farrales and is the equally general rule that provisions of
Mamasig were habitual absentees; that both applicable law, especially provisions relating
were in the habit of bringing in from abroad to matters affected with public policy, are
sizeable quantities of "personal effects"; and deemed written into the contract. Put a little
that PIA personnel at the Manila differently, the governing principle is that
International Airport had been discreetly parties may not contract away applicable
warned by customs officials to advise private provisions of law especially peremptory
respondents to discontinue that practice. provisions dealing with matters heavily
impressed with public interest. The law
Regional Director ordered reinstatement relating to labor and employment is clearly
and payment of full back wages or in the such an area and parties are not at liberty to
insulate themselves and their relationships THE HONORABLE NATIONAL LABOR
from the impact of labor laws and RELATIONS COMMISSION, HENRY LEI and/or
regulations by simply contracting with each HENRY LEI TRUCKING respondents.
other. It is thus necessary to appraise the
contractual provisions invoked by petitioner FACTS
PIA in terms of their consistency with
applicable Philippine law and regulations. Henry Lei Trucking hired Zosimo Cielo as a
truck driver under 6-month Agreement with
The employment contracts were stipulations that the term is can be earlier
inconsistent with Arts. 280-281 of the Labor terminated at the option of either party. The
Code. In the case of Brent School vs Zamora, Agreement also stipulated that there was no
the Court ruled that contracts of employer-employee relationship between
employment providing for a fixed period are the parties and that the nature of the
not necessarily unlawful. The presence or relationship is merely contractual. Lei asked
absence of a substantial indication that the Cielo to sign an affidavit of having received
period specified in an employment full payment of wages, which Cielo refused
agreement was designed to circumvent the to sign. A week before the Agreement was
security of tenure of regular employees supposed to end, Lei notified Cielo of the
which is provided for in Articles 280 and 281 termination of his services. Apparently in the
of the Labor Code is crucial. The provision in Agreements with the drivers, Lei merely fills
the contracts with PIA allowing for in the blanks with the corresponding data
termination of services upon notice or such as the driver’s name and address, etc.
payment of one month’s salary was intended
to prevent any security of tenure from ISSUE: WON the Agreement was valid
accruing in favor of private respondents
even during the limited period of three (3) RULING: NO
years, and thus to escape completely the Where from the circumstances it is apparent
thrust of Articles 280 and 281 of the Labor that the periods were imposed in order to
Code by rendering their employment at the preclude the acquisition of tenurial security
pleasure of PIA. by the employee, they should be struck
down or disregarded for being contrary to
93. Cielo vs NLRC (Roxas) public policy, morals,etc.
ZOSIMO CIELO, petitioner,
vs. The Agreement is void ab initio for having a
purpose contrary to public policy. The
agreement was a clear attempt to exploit the
employee and deprive him of the protection petitioner a complaint for separation pay,
of the Labor Code by making it appear that unfair labor practice and illegal lock-out.
the stipulations are governed by the Civil
Code as in ordinary private transactions. In On February 1, 1989, petitioner decided to
reality the agreement was a contract of have a one (1) month dry-run operation to
employment into which were read the ascertain the feasibility of resuming its
provisions of the Labor Code and the social business operations. In order to carry out its
justice policy of the Constitution. That Cielo dry-run operation, petitioner hired casual
refused to sign the affidavit was not a just workers, including private respondents, for a
cause for his termination as he was only one (1) month period, or from February 1,
protecting his interest against unguarded 1989 to March 1, 1989, as evidenced by the
waiver of the benefits due him under the latter's Contract of Employment.
Labor Code. Said affidavit which stipulated
payment of wages even suggested that there After evaluating the individual performance
was indeed an employer-employee of all the employees and upon the lapse of
relationship. the contractual one-month period or on
March 2, 1989, petitioner terminated the
94. Phil Village Hotel vs NLRC (Soriano) services of private respondents.
FACTS:
It appears on record that private On April 6, 1989, private respondents and
respondents Juanito Acuin, Mamerta Tupas Local Chapter No. 1362 filed a
Mangubat, Raul Sonon, Elgar Pemis, Orlando complaint against petitioner for illegal
Paraguison, Ferdinand Velasco, Mike dismissal and unfair labor practice with the
Astulero, Magno Decalso, Nenita Orosea, NLRC-NCR Arbitration Branch.
Jose Timing, Antonio Manalili, Rodelio
Queria and Reynaldo Santos were
employees of petitioner Philippine Village ISSUE:
Hotel. However, on May 19, 1986, petitioner Whether respondents were validly
had to close and totally discontinue its dismissed. (YES)
operations due to serious financial and
business reverses resulting in the
termination of the services of its employees. Ruling:
An examination of the contents of the
Thereafter, the Philippine Village Hotel private respondents' contracts of
Employees and Workers Union filed against employment shows that indeed private
respondents voluntarily and knowingly
agreed to be employed only for a period of ruling is only in consonance with Article 280
one (1) month or from February 1, 1989 to of the Labor Code which provides:
March 1, 1989.
Art. 280. Regular and Casual
The fact that private respondents were Employment. — The provisions of written
required to render services usually agreement to the contrary notwithstanding
necessary or desirable in the operation of and regardless of the oral agreement of the
petitioner's business for the duration of the parties, an employment shall be deemed to
one (1) month dry-run operation period be regular where the employee has been
does not in any way impair the validity of the engaged to perform activities which are
contractual nature of private respondents' usually necessary or desirable in the usual
contracts of employment which specifically business or trade of the employer, except
stipulated that the employment of the where the employment has been fixed for a
private respondents was only for one (1) specific project or undertaking the
month. completion or termination of which has
been determined at the time of the
In upholding the validity of a contract of engagement of the employee or where the
employment with a fixed or specific period, work or services to be performed is seasonal
we have HELD: that the decisive in nature and the employment is for the
determinant in term employment should not duration of the season.
be the activities that the employee is called
upon to perform, but the day certain agreed An employment shall be deemed to be
upon by the parties for the commencement casual if it is not covered by the preceding
and termination of their employment paragraph: Provided, That, any employee
relationship, a day certain being understood who has rendered at least one year of
to be that which must necessarily come, service, whether such service is continuous
although it may not be known when. The or broken, shall be considered a regular
term period was further defined to be the employee with respect to the activity in
length of existence; duration. A point of time which he is employed and his employment
marking a termination as of a cause or an shall continue while such actually exists.
activity; an end, a limit, a bound; conclusion;
termination. A series of years, months or Inasmuch as private respondents' contracts
days in which something is completed. A of employment categorically provided a
time of definite length or the period from fixed period and their termination had
one fixed date to another fixed date. This already been agreed upon at the time of
their engagement, private respondents'
employment was one with a specific period which they had enjoyed before their
or day certain agreed upon by the parties. In aforementioned termination due to
Philippine National Oil Company-Energy petitioner's financial losses. As stated by the
Development Corporation vs. NLRC, we Labor Arbiter in his decision:
HELD: that:
It should be borne in mind that when
As can be gleaned from the said case (Brent complainants were first terminated as a
School, Inc. vs. Zamora, 181 SCRA 702), the result of the company's cessation from
two guidelines by which fixed contracts of operation in May, 1986 the employer-
employments can be said NOT to circumvent employee relationship between the parties
security of tenure, are either: herein was totally and completely severed.
Such being the case, respondent acted well
1. The fixed period of employment was within its discretion when in rehiring the
knowingly and voluntarily agreed upon by complainants (herein private respondents) it
the parties, without any force, duress or made them casual and for a specific period.
improper pressure being brought to bear The complainants are no better than the
upon the employee and absent any other new employees of respondent (petitioner)
circumstances vitiating his consent; or for the matter of what status or designation
to be given them exclusively rests in the
2. It satisfactorily appears that the employer discretion of management.8
and employee dealt with each other on more
or less equal terms with no moral dominance
whatever being exercised by the former on
the latter."
95. Anderson vs NLRC (Tado)
In the instant case, private respondents [G.R. No. 111212. January 22, 1996]
were validly terminated by the petitioner GEORGE ANDERSON, petitioner, vs. THE
when the latter had to close its business due LABOR RELATIONS COMMISSION, PACIFIC
to financial losses. Following the directives BUSINESS VENTURES INC. and KAMAL AL
of the NLRC to give priority in hiring private BITAR, respondents.
respondents should it resume its business,
petitioner hired private respondents during FACTS:
their one (1) month dry-run operation.
However, this does not mean that private Petitioner was recruited by respondent
respondents were deemed to have Pacific Business Ventures, Inc. to work as
continued their regular employment status, foreman of the Fiberglass Division of the
Bitar Metal Fabrication Factory in Damman, with respect to the unexpired portion of his
Kingdom of Saudi Arabia. The period of contract
employment was two (2) years, starting
February 16, 1988, and the salary was RULING: No. He is entitled to be paid his
SR1,000.00 a month, plus food allowance of salary for 15 months corresponding the
SR200.00 a month, or the equivalent of balance of the contract.
US$320.00 in all.
There is no dispute that loss of confidence
After nine (9) months on the job, petitioner constitutes a just cause for terminating an
was told on November 6, 1988 by the employer-employee relationship.[4] Proof
proprietor and general manager, beyond reasonable doubt is not even
respondent Kamal Al Bitar, that his services required to terminate employment on this
were being terminated. Four days after his ground.[5] But the loss of confidence cited in
lay off, petitioner returned to the this case to justify the dismissal of petitioner
Philippines. is not based on any act of dishonesty or
disloyalty[6] on the part of petitioner but on
On March 30, 1989, petitioner filed with the alleged lack of leadership, and technical
POEA a complaint for illegal dismissal. know-how and on the allegation that worse,
he exhibited a negative attitude toward his
Private respondents denied petitioners work.
allegations. They alleged that petitioner had
been dismissed for loss of confidence.[1] In Kamal Al Bitars affidavit cites no specific acts
a supplemental position paper filed by them or omissions constituting unsatisfactory
on July 6, 1989, private respondents claimed performance by petitioner of his work.[7]
that petitioner lacked the leadership and What qualities of leadership and technical
motivation required of the head of the knowledge petitioner was required to
fiberglass division. possess as supervisor of a fiberglass
company has not been specified. On the
POEA: petitioner to have been illegally contrary, what is established is that before
dismissed petitioner was hired, Kamal Al Bitar required
him to demonstrate his knowledge and skill
NLRC set aside the decision of the POEA and and it was only after he had done so was he
dismissed petitioners complaint. hired for the job of supervisor of the
fiberglass division. In fact petitioner had
ISSUE: whether or not the termination was already been on the job for nine months
valid. If not, what is the employee entitled to when Kamal Al Bitar terminated petitioners
employment. On the other hand, what G.R. No. 164078, November 23, 2007
negative attitude petitioner had shown AMA COMPUTER COLLEGE, PARAAQUE, et.
toward his work is anybodys guess. There al vs. ROLANDO A. AUSTRIA
are no specific instances cited to show
petitioners negative attitude toward his FACTS:
work. Petitioner AMA Computer College, Paraaque
(AMA) is an educational institution duly
The rule is that an employee cannot be organized under the laws of the Philippines.
dismissed except for cause as provided by Respondent Austria was hired by AMA on
law (i.e., Labor Code, Arts. 282-283) and only probationary employment as a college dean.
after due notice and hearing.[12] If an Thereafter, respondent’s appointment as
employee is dismissed without cause, he has dean was confirmed by AMAs Officer-in-
a right to be reinstated without loss of Charge (OIC), Academic Affairs effective
seniority rights and other privileges and to April 17, 2000 to September 17, 2000.
be paid full backwages, inclusive of
allowances and other benefits.[13] If he is Respondent was charged with violating
dismissed without notice and hearing, AMAs Employees Conduct and Discipline
although for a just cause, he will be entitled provided in its Orientation Handbook
to the payment of indemnity.[14] (Handbook), as follows:
If the contract is for a fixed term and the (1) leaking of test questions; (2) failure to
employee is dismissed without just cause, he monitor general requirements vital to the
is entitled to the payment of his salaries operations of the company; and (3) gross
corresponding to the unexpired portion of inefficiency.
his contract.[15] In this case, as petitioners
contract was for two years and his dismissal Eventually, respondent was informed of his
was not for a just cause, he is entitled to be dismissal and he filed a Complaint for Illegal
paid his salary for 15 months corresponding Dismissal, Illegal Suspension, Non-Payment
the balance of the contract. The grant to him of Salary.
of a termination pay under his employment
contract may be considered indemnity for Petitioners argue that respondent's
his dismissal without prior notice and employment was for a fixed term as found
hearing. by the Labor Arbiter but the same was
terminated earlier due to just causes.
96. AMA Computer College Paranaque vs
Austria (Tingson)
respondent counters that he is a regular being understood to be "that which must
employee and that he was illegally necessarily come, although it may not be
dismissed. known when."
The CA (Court of Appeals) upHELD: the NLRC. Art. 280. Regular and Casual Employment. -
It observed that the desirability and The provisions of written agreement to the
necessity of the functions being discharged contrary notwithstanding and regardless of
by the petitioners did not make them regular the oral agreements of the parties, an
employees; that Innodata and the employment shall be deemed to be regular
employees could still validly enter into their where the employee has been engaged to
contracts of employment for a fixed period perform activities which are usually
provided they had agreed upon the same at necessary or desirable in the usual business
the time of the employees' engagement; or trade of the employer except where the
that Innodata's operations were contingent employment has been fixed for a specific
on job orders or undertakings for its foreign project or undertaking the completion or
clients; and that the availability of contracts termination of which has been determined
from foreign clients, and the duration of the at the time of the engagement of the
employments could not be treated as employee or where the work or service to be
permanent, but coterminous with the performed is seasonal in nature and the
projects. employment is for the duration of the
season.
98. VIernes, et. al. vs NLRC (Banuelos) You are hereby appointed as METER READER
TOPIC: Term Employment (contra) (APPRENTICE) under BENECO-NEA
Management with compensation at the rate
G.R. No. 108405 April 4, 2003 of SIXTY-SIX PESOS AND SEVENTY-FIVE
CENTAVOS (P66.75) per day from October 08
to 31, 1990.
to prevent losses or the closing or cessation
The said term notwithstanding, the of operation of the establishment or
complainants were allowed to work beyond undertaking x x x x.
October 31, 1990, or until January 2, 1991.
On January 3, 1991, they were each served Legal ISSUE: W/N the said illegal dismissed
their identical notices of termination dated employees are considered to be regular.
December 29, 1990. The same read:
HELD:
Please be informed that effective at the
close of office hours of December 31, 1990, YES. VIERNES, et. al., notwithstanding only
your services with the BENECO will be serving hardly a month’s duration, are
terminated. Your termination has nothing to considered regular employees in the
do with your performance. Rather, it is BENGUET ELECTRIC COOPERATIVE.
because we have to retrench on personnel
as we are already overstaffed. Reinstatement means restoration to a state
or condition from which one had been
On the same date, the complainants filed removed or separated.10 In case of
separate complaints for illegal dismissal. And probationary employment, Article 281 of the
following the amendment of said Labor Code requires the employer to make
complaints, they submitted their joint known to his employee at the time of the
position paper on April 4, 1991. latter’s engagement of the reasonable
standards under which he may qualify as a
It is the contention of the complainants that regular employee.
they were not apprentices but regular
employees whose services were illegally and A review of the records shows that VIERNES,
unjustly terminated in a manner that was ET. AL. have never been probationary
whimsical and capricious. On the other employees. There is nothing in the letter of
hand, BENGUET ELECTRIC COOPERATIVE, appointment, to indicate that their
INC. invokes Article 283 of the Labor Code in employment as meter readers was on a
defense of the questioned dismissal. probationary basis. It was not shown that
VIERNES, ET. AL. were informed by the
x x x x ART. 283. Closure of establishment BENGUET ELECTRIC COOPERATIVE, INC., at
and reduction of personnel. - The employer the time of the latter’s employment, of the
may also terminate the employment of any reasonable standards under which they
employee due to the installation of labor- could qualify as regular employees. Instead,
saving devices, redundancy, retrenchment VIERNES, ET. AL. were initially engaged to
perform their job for a limited duration, their The principle we have enunciated in Brent
employment being fixed for a definite applies only with respect to fixed term
period, from October 8 to 31, 1990. employments. While it is true that VIERNES,
ET. AL. were initially employed on a fixed
BENGUET ELECTRIC COOPERATIVE, INC.’s term basis as their employment contracts
reliance on the case of Brent School, Inc. vs. were only for October 8 to 31, 1990, after
Zamora, wherein we HELD: as follows is October 31, 1990, they were allowed to
misplaced: continue working in the same capacity as
meter readers without the benefit of a new
Accordingly, and since the entire purpose contract or agreement or without the term
behind the development of legislation of their employment being fixed anew. After
culminating in the present Article 280 of the October 31, 1990, the employment of
Labor Code clearly appears to have been, as VIERNES, ET. AL. is no longer on a fixed term
already observed, to prevent circumvention basis. The complexion of the employment
of the employee’s right to be secure in his relationship of VIERNES, ET. AL. and
tenure, the clause in said article BENGUET ELECTRIC COOPERATIVE, INC. is
indiscriminately and completely ruling out all thereby totally changed. VIERNES, ET. AL.
written or oral agreements conflicting with have attained the status of regular
the concept of regular employment as employees.
defined therein should be construed to refer
to the substantive evil that the Code itself Under Article 280 of the Labor Code, a
has singled out: agreements entered into regular employee is one who is engaged to
precisely to circumvent security of tenure. It perform activities which are necessary or
should have no application to instances desirable in the usual business or trade of
where a fixed period of employment was the employer, or a casual employee who has
agreed upon knowingly and voluntarily by rendered at least one year of service,
the parties, without any force, duress or whether continuous or broken, with respect
improper pressure being brought to bear to the activity in which he is employed.
upon the employee and absent any other In De Leon vs. NLRC, and Abasolo vs. NLRC,
circumstances vitiating his consent, or we laid down the test in determining regular
where it satisfactorily appears that the employment, to wit:
employer and employee dealt with each
other on more or less equal terms with no The primary standard, therefore, of
moral dominance whatever being exercised determining regular employment is the
by the former over the latter. reasonable connection between the
particular activity performed by the
employee in relation to the usual trade or BENGUET ELECTRIC COOPERATIVE, INC.
business of the employer. The test is because unless a meter reader records the
whether the former is usually necessary or electric consumption of the subscribing
desirable in the usual business or trade of public, there could not be a valid basis for
the employer. The connection can be billing the customers of BENGUET ELECTRIC
determined by considering the nature of the COOPERATIVE, INC.. The fact that the
work performed and its relation to the VIERNES, ET. AL. were allowed to continue
scheme of the particular business or trade in working after the expiration of their
its entirety. Also if the employee has been employment contract is evidence of the
performing the job for at least a year, even if necessity and desirability of their service to
the performance is not continuous and BENGUET ELECTRIC COOPERATIVE, INC.’s
merely intermittent, the law deems business. In addition, during the preliminary
repeated and continuing need for its hearing of the case on February 4, 1991,
performance as sufficient evidence of the BENGUET ELECTRIC COOPERATIVE, INC.
necessity if not indispensability of that even offered to enter into another
activity to the business. Hence, the temporary employment contract with
employment is considered regular, but only VIERNES, ET. AL.. This only proves BENGUET
with respect to such activity and while such ELECTRIC COOPERATIVE, INC.’s need for the
activity exists.15 services of herein VIERNES, ET. AL.. With the
continuation of their employment beyond
Clearly therefrom, there are two separate the original term, VIERNES, ET. AL. have
instances whereby it can be determined that become full-fledged regular employees. The
an employment is regular: (1) The particular fact alone that VIERNES, ET. AL. have
activity performed by the employee is rendered service for a period of less than six
necessary or desirable in the usual business months does not make their employment
or trade of the employer; or (2) if the status as probationary.
employee has been performing the job for at
least a year. Since VIERNES, ET. AL. are already regular
employees at the time of their illegal
Herein VIERNES, ET. AL. fall under the first dismissal from employment, they are
category. They were engaged to perform entitled to be reinstated to their former
activities that are necessary to the usual position as regular employees, not merely
business of BENGUET ELECTRIC probationary.
COOPERATIVE, INC.. We agree with the labor 99. Cocomangas Hotel Beach Resort vs Visca
arbiter’s pronouncement that the job of a (Caubang)
meter reader is necessary to the business of
100. HANJIN HEAVY INDUSTRIES AND Petitioners maintained that respondents
CONSTRUCTION CO. LTD., HAK KON KIM were hired as project employees for the
and/or JHUNIE ADAJAR, vs. FELICITO IBAÑEZ, construction of the LRT/MRT Line 2 Package
ALIGWAS CAROLINO, ELMER GACULA, 2 and 3 Project. HANJIN and respondents
ENRIQUE DAGOTDOT AND RUEL CALDA purportedly executed contracts of
Petitioner HANJIN is a foreign company duly employment, in which it was clearly
registered with the Securities and Exchange stipulated that the respondents were to be
Commission to engage in the construction hired as project employees for a period of
business. Petitioners Hak Kon Kim and only three months, but that the contracts
Jhunie Adajar were employed as Project may be renewed.
Director and Supervisor, respectively, by
HANJIN. Petitioners emphasized that the project
director notified respondents of the
Respondents filed a complaint before the company's intention to reduce its manpower
NLRC for illegal dismissal with prayer for due to the completion of the LRT/MRT Line
reinstatement and full backwages against 2 Package 2 and 3 Project. Respondents
petitioners. were among the project employees who
were thereafter laid off.
Respondents stated that their tasks were
usual and necessary or desirable in the usual Petitioners attached copies of the
business or trade of HANJIN. Respondents Quitclaims,12 executed by the respondents,
additionally averred that they were which uniformly stated that the latter
employed as members of a work pool from received all wages and benefits that were
which HANJIN draws the workers to be due them and released HANJIN and its
dispatched to its various construction representatives from any claims in
projects; with the exception of Ruel Calda, connection with their employment. These
who as a warehouseman was required to Quitclaims also contained Clearance
work in HANJIN's main office. Certificates which confirmed that the
employees concerned were cleared of all
Hanjin dismissed respondents from accountabilities at the close of the working
employment. Respondents claimed that at hours on 15 April 2002.
the time of their dismissal, HANJIN had
several construction projects that were still W/N they were project employees.
in progress.
No. Article 280 of the Labor Code "project employees" as distinguished from
distinguishes a "project employee" from a "regular employees" is whether or not the
"regular employee" thus: project employees were assigned to carry
out a "specific project or undertaking," the
Article 280. Regular and Casual duration and scope of which were specified
Employment-The provisions of written at the time the employees were engaged for
agreement to the contrary notwithstanding that project.
and regardless of the oral agreement of the
parties, an employment shall be deemed to Employees who are hired for carrying out a
be regular where the employee has been separate job, distinct from the other
engaged to perform activities which are undertakings of the company, the scope and
usually necessary or desirable in the usual duration of which has been determined and
business or trade of the employer, except made known to the employees at the time of
where the employment has been fixed for a the employment, are properly treated as
specific project or undertaking the project employees and their services may be
completion or termination of which has lawfully terminated upon the completion of
been determined at the time of the a project.26 Should the terms of their
engagement of the employee or where the employment fail to comply with this
work or services to be performed is seasonal standard, they cannot be considered project
in nature and the employment is for the employees.
duration of the season.
During the proceedings before the Labor
An employment shall be deemed to be Arbiter, the petitioners' failure to produce
casual if it is not covered by the preceding respondents' contracts of employment was
paragraph: Provided, That, any employee already noted, especially after they alleged
who has rendered at least one year service, in their pleadings the existence of such
whether such service is continuous or contracts stipulating that respondents'
broken, shall be considered a regular employment would only be for the duration
employee with respect to the activity in of three months, automatically renewed in
which he is employed and his employment the absence of notice, and terminated at the
shall continue while such activity exists. completion of the project. Respondents
(Emphasis supplied.) denied having executed such contracts with
HANJIN. In their appeal before the NLRC until
From the foregoing provision, the principal the present, petitioners now claim that due
test for determining whether particular to a lapse in management procedure, no
employees are properly characterized as such employment contracts were executed;
nonetheless, the absence of a written proof that the project employees were
contract does not remove respondents from informed of their status as such, it will be
the ambit of being project employees.30 presumed that they are regular employees
in accordance with Clause 3.3(a) of
While the absence of a written contract does Department Order No. 19, Series of 1993,
not automatically confer regular status, it which states that:
has been construed by this Court as a red flag
in cases involving the question of whether a) Project employees whose aggregate
the workers concerned are regular or project period of continuous employment in a
employees. In cases where this Court ruled construction company is at least one year
that construction workers repeatedly shall be considered regular employees, in
rehired retained their status as project the absence of a "day certain" agreed upon
employees, the employers were able to by the parties for the termination of their
produce employment contracts clearly relationship. Project employees who have
stipulating that the workers' employment become regular shall be entitled to
was coterminous with the project to support separation pay.
their claims that the employees were
notified of the scope and duration of the A "day" as used herein, is understood to be
project. that which must necessarily come, although
it may not be known exactly when. This
Hence, even though the absence of a written means that where the final completion of a
contract does not by itself grant regular project or phase thereof is in fact
status to respondents, such a contract is determinable and the expected completion
evidence that respondents were informed of is made known to the employee, such
the duration and scope of their work and project employee may not be considered
their status as project employees. In this regular, notwithstanding the one-year
case, where no other evidence was offered, duration of employment in the project or
the absence of an employment contract puts phase thereof or the one-year duration of
into serious question whether the two or more employments in the same
employees were properly informed at the project or phase of the project. (Emphasis
onset of their employment status as project provided.)
employees. It is doctrinally entrenched that Petitioners were not able to offer evidence
in illegal dismissal cases, the employer has to refute or controvert the respondents'
the burden of proving with clear, accurate, claim that they were assigned to various
consistent and convincing evidence that a construction projects. Had respondents'
dismissal was valid.35 Absent any other allegations been false, petitioners could
simply present as evidence documents and to protest but was settled through a
records in their custody to disprove the memorandum of agreement which
same, i.e., payroll for such projects or contained a list of those considered as
termination reports, which do not bear regular employees for the payroll.
respondents' names. Petitioners, instead,
chose to remain vague as to the The NLRC HELD: that there was illegal
circumstances surrounding the hiring of the dismissal and this was affirmed by the Court
respondents. This Court finds it unusual that of Appeals.
petitioners cannot even categorically state
the exact year when HANJIN employed ISSUE:
respondents. Whether respondents, admittedly seasonal
101. PNOC Energy Development vs NLRC workers, were regular employees.
(Dosdos) Respondents were regular employees.
103. Hacienda Fatima vs Natl Federation of Article 280 of the Labor Code, as amended,
Sugarcane Workers (Macatol) states:
HACIENDA FATIMA and/or PATRICIO
VILLEGAS, ALFONSO VILLEGAS and CRISTINE Art. 280. Regular and Casual Employment. -
SEGURA, petitioners, vs. NATIONAL The provisions of written agreement to the
FEDERATION OF SUGARCANE WORKERS- contrary notwithstanding and regardless of
FOOD AND GENERAL TRADE, respondents. the oral agreement of the parties, an
G.R. No. 149440. January 28, 2003 employment shall be deemed to be regular
PANGANIBAN, J.: where the employee has been engaged to
perform activities which are usually
FACTS: necessary or desirable in the usual business
The petitioner disfavored the fact that the or trade of the employer, except where the
private respondent employees have formed employment has been fixed for a specific
a union. When the union became the project or undertaking the completion or
collective bargaining representative in the termination of which has been determined
certification election, the petitioner refused at the time of the engagement of the
to sit down to negotiate a CBA. Moreover, employee or where the work or services to
the respondents were not given work for a be performed is seasonal in nature and the
month amounting to unjustified dismissal. employment is for the duration of the
As a result, the complainants staged a strike season.
The primary standard, therefore, of
An employment shall be deemed to be determining regular employment is the
casual if it is not covered by the preceding reasonable connection between the
paragraph: Provided, That, any employee particular activity performed by the
who has rendered at least one year of employee in relation to the usual trade or
service, whether such service is continuous business of the employer. The test is
or broken, shall be considered a regular whether the former is usually necessary or
employee with respect to the activity in desirable in the usual trade or business of
which he is employed and his employment the employer. The connection can be
shall continue while such activity exist. determined by considering the nature of the
work performed and its relation to the
For respondents to be excluded from those scheme of the particular business or trade in
classified as regular employees, it is not its entirety. Also if the employee has been
enough that they perform work or services performing the job for at least a year, even if
that are seasonal in nature. They must have the performance is not continuous and
also been employed only for the duration of merely intermittent, the law deems
one season. The evidence proves the repeated and continuing need for its
existence of the first, but not of the second, performance as sufficient evidence of the
condition. The fact that respondents -- with necessity if not indispensability of that
the exception of Luisa Rombo, Ramona activity to the business. Hence, the
Rombo, Bobong Abriga and Boboy Silva -- employment is considered regular, but only
repeatedly worked as sugarcane workers for with respect to such activity and while such
petitioners for several years is not denied by activity exists.
the latter. Evidently, petitioners employed
respondents for more than one season. x x x [T]he fact that [respondents] do not
Therefore, the general rule of regular work continuously for one whole year but
employment is applicable. only for the duration of the x x x season does
not detract from considering them in regular
In Abasolo v. National Labor Relations employment since in a litany of cases this
Commission,[13] the Court issued this Court has already settled that seasonal
clarification: workers who are called to work from time to
time and are temporarily laid off during off-
[T]he test of whether or not an employee is season are not separated from service in said
a regular employee has been laid down in De period, but merely considered on leave until
Leon v. NLRC, in which this Court HELD: re-employed.
The sudden changes in work assignments the widow of Jaime Fulo, filed a claim for
reeked of bad faith. These changes were death benefits before the SSS (Social
implemented immediately after Security System). It turned out however that
respondents had organized themselves into Jaime Fulo was never registered with the
a union and started demanding collective SSS. Eventually, SSS ordered Gapayao, as the
bargaining. Those who were union members employer, to pay the SSS contributions due
were effectively deprived of their jobs. with penalty.
Petitioners move actually amounted to
unjustified dismissal of respondents, in Gapayao averred he cannot be made liable
violation of the Labor Code. to pay the SSS contributions because
according to him there was no employer-
Where there is no showing of clear, valid and employee relationship between him and
legal cause for the termination of Jaime Fulo. He argued, among others, that
employment, the law considers the matter a Jaime Fulo was not his employee because:
case of illegal dismissal and the burden is on
the employer to prove that the termination 1. he did not work regular hours as he was
was for a valid and authorized cause. In the only called when needed and that Fulo can
case at bar, petitioners failed to prove any even look for other jobs elsewhere if he
such cause for the dismissal of respondents wanted to. In fact, Fulo also worked for some
who, as discussed above, are regular other people;
employees. 2. he was only an “extra” in the farm;
3. Gapayao had no control over him (lack of
104. Gapayao vs Fulo and SSS (Pacquiao, L) control);
G.R. No. 193493 June 13, 2013
Petitioner alleges that the deceased is a
JAIME N. GAPAYAO, Petitioner, freelance worker. Since he was engaged on
Vs. ROSARIO FULO, SOCIAL SECURITY a pakyaw basis and worked for a short period
SYSTEM and SOCIAL SECURITY of time, in the nature of a farm worker every
COMMISSION, Respondents. season, he was not precluded from working
with other persons and in fact worked for
FACTS: them. Under Article 280 of the Labor Code,
Jaime Fulo had been working in a farm seasonal employees are not covered by the
owned by Jaime Gapayao since 1983. In definitions of regular and casual employees.
November 1997, Jaime Fulo was Petitioner cites Mercado, Sr. v. NLRC, in
electrocuted while working in the said farm. which the Court HELD: that seasonal workers
Jaime Fulo died. Thereafter, Rosario Fulo, do not become regular employees by the
mere fact that they have rendered at least calls for the existence of the right to control,
one year of service, whether continuous or and not necessarily the exercise thereof. It is
broken. not essential that the employer actually
supervises the performance of duties by the
ISSUES employee. It is enough that the former has a
1. Whether or not Jaime Fulo was an right to wield the power.
employee of Jaime Gapayao (YES)
2. Whether or not farm workers may be 2. Yes. Farm workers generally fall under the
considered regular seasonal employees definition of seasonal employees. We have
(YES) consistently HELD: that seasonal employees
may be considered as regular employees.
HELD: Regular seasonal employees are those called
1. Yes. Fulo was a regular employee and was to work from time to time. The nature of
thus entitled to receive SSS benefits, among their relationship with the employer is such
others. The Supreme Court agreed with the that during the off season, they are
Court of Appeals in ruling that it “does not temporarily laid off; but reemployed during
follow that a person who does not observe the summer season or when their services
normal hours of work cannot be deemed an may be needed. They are in regular
employee.” It is also not material that employment because of the nature of their
Gapayao never supervised Fulo. job,and not because of the length of time
they have worked.
In this case, the number of hours worked is
not material. Gapayao is considered a The rule, however, is not absolute.
pakyaw worker. Pakyaw workers are
considered regular employees for as long as A reading of the records reveals that the
their employers have control over them. The deceased was indeed a farm worker who
power of the employer to control the work was in the regular employ of petitioner.
of the employee is considered the most From year to year, starting January 1983 up
significant determinant of the existence of until his death, the deceased had been
an employer-employee relationship. This is working on petitioner’s land by harvesting
the so-called control test and is premised on abaca and coconut, processing copra, and
whether the person for whom the services clearing weeds. His employment was
are performed reserves the right to control continuous in the sense that it was done for
both the end achieved and the manner and more than one harvesting season.
means used to achieve that end.” It should Moreover, no amount of reasoning could
be remembered that the control test merely detract from the fact that these tasks were
necessary or desirable in the usual business
of petitioner. Regular employment means that there was
an arrangement between the employee and
the employer that the former will be
engaged to perform activities which are
105. Universal Robina Sugar Milling necessary or desirable to the usual business
Corporation and Rene (GR No. 186439) or trade of the latter. On the other hand, a
FACTS:FERDINAND ACIBO, et al. were project employment is an arrangement for a
employees of UNIVERSAL ROBINA SUGAR specific project or undertaking whose
MILLING CORPORATION (URSUMCO). Acibo, termination is determined by the
et al. signed contracts of employment for a completion of the project.
given period and after its expiration,
URSUMCO repeatedly hired these The nature of the employment does not
employees to perform the same duties and depend solely on the will or word of the
obligations. employer or on the procedure for hiring and
the manner of designating the employee.
Acibo, et al. filed a complaint before the Rather, the nature of the employment
Labor Arbiter for regularization however it depends on the nature of the activities to be
was denied because the LA argued that they performed by the employee, considering the
were seasonal employees. Seven of the 22 nature of the employer’s business, the
complainants filed an appeal to the NLRC. duration and scope to be done. Accordingly,
The latter reversed the LA’s ruling claiming Acibo, et al. are neither project nor seasonal
that they were regular employees. The CA employees.
affirmed NLRC’s decision but excluded the
Acibo, et al. from monetary benefits under Acibo, et al. were made to perform tasks that
the CBA. does not pertain to milling operations of
URSUMCO. However, their duties are
ISSUE: Whether or not Acibo, et al. are regularly and habitually needed in
regular employees of URSUMCO. URSUMCO’s operation. Moreover, they
were regularly and repeatedly hired to
HELD: Plantation workers or mill employees perform the same tasks. Being repeatedly
only work on seasonal basis. This, however, hired for the same purpose makes them
does not exclude them from the benefits of regularized employees.
regularization. Being in such nature, Acibo,
et al. are considered to be regular The plantation workers or the mill
employees. employees do not work continuously for 1
whole year but only for the duration of the Julve agreed to accept the appointment, but
growing or the sugarcane or the milling eventually, he changed his mind and
season. Their seasonal work, however, does withdrew because he felt that this was a
not detract from considering them in regular demotion.
employment.
Julve filed with the Regional Arbitration
106. Rural Bank of Cantilan vs Julve (Roxas) Branch, NLRC a complaint for constructive
RURAL BANK OF CANTILAN, INC., and dismissal against Rural Bank.
WILLIAM HOTCHKISS III, Petitioners,
vs. ISSUE: WON the transfer was valid
ARJAY RONNEL H. JULVE, Respondent.
Ruling: Yes
FACTS: Under the doctrine of management
On August 1, 1997, the Rural Bank of prerogative, every employer has the
Cantilan, Inc., petitioner, hired Arjay Ronnel inherent right to regulate, according to his
H. Julve as a management trainee. Later, he own discretion and judgment, all aspects of
was appointed as planning and marketing employment, including hiring, work
officer. assignments, working methods, the time,
place and manner of work, work supervision,
On June 18, 2001, William Hotchkiss III (also transfer of employees, lay-off of workers,
a petitioner), president of petitioner bank, and discipline, dismissal, and recall of
issued a memorandum addressed to all its employees. The only limitations to the
branch managers informing them of the exercise of this prerogative are those
abolition of the positions of planning and imposed by labor laws and the principles of
marketing officer and remedial officer; that equity and substantial justice.
this was undertaken in accordance with the
bank’s Personnel Streamlining Program; and While the law imposes many obligations
that the operations officer shall absorb the upon the employer, nonetheless, it also
functions of the abolished offices. protects the employer’s right to expect from
its employees not only good performance,
On July 18, 2001, Hotchkiss sent Julve a adequate work, and diligence, but also good
memorandum stating that he has been conduct and loyalty. In fact, the Labor Code
appointed bookkeeper I at the bank’s branch does not excuse employees from complying
in Madrid, Surigao del Sur effective with valid company policies and reasonable
immediately with the same salary regulations for their governance and
corresponding to his old position. Initially, guidance.
Under any standard, these are supervisory
Concerning the transfer of employees, these and administrative tasks which entail great
are the following jurisprudential guidelines: responsibility. Moreover, respondent’s
(a) a transfer is a movement from one transfer did not decrease his pay.
position to another of equivalent rank, level
or salary without break in the service or a Nor was respondent’s transfer motivated by
lateral movement from one position to ill-will or prejudice on the part of petitioners.
another of equivalent rank or salary; (b) the His position was not the only one abolished
employer has the inherent right to transfer pursuant to the bank’s Personnel
or reassign an employee for legitimate Streamlining Program. We recall that the
business purposes; (c) a transfer becomes position of remedial officer was likewise
unlawful where it is motivated by abolished. Petitioners’ reason was to acquire
discrimination or bad faith or is effected as a savings from the salaries it would pay to full-
form of punishment or is a demotion time personnel in these positions.
without sufficient cause; (d) the employer
must be able to show that the transfer is not Finally, we note that despite respondent’s
unreasonable, inconvenient, or prejudicial refusal to accept the new appointment,
to the employee. petitioners did not dismiss him. Rather, it
was he who opted to terminate his
Constructive dismissal is defined as "quitting employment when he purposely failed to
when continued employment is rendered report for work
impossible, unreasonable, or unlikely as the
offer of employment involves a demotion in
rank and diminution of pay." 107. Echevarria vs Venutek Medika (Soriano)
On June 21, 1985 Beneco Worker's Labor BENECO, on the other hand, filed a motion
Union-Association of Democratic Labor to dismiss the petition claiming that it is a
Organizations (hereinafter referred to as non-profit electric cooperative engaged in
BWLU- ADLO) filed a petition for direct providing electric services to its members
certification as the sole and exclusive and patron-consumers in the City of Baguio
bargaining representative of all the rank and and Benguet Province; and, that the
file employees of Benguet Electric employees sought to be represented by
Cooperative, Inc. (hereinafter referred to as BWLU-ADLO are not eligible to form, join or
BENECO) at Alapang, La Trinidad, Benguet assist labor organizations of their own
alleging, inter alia, that BENECO has in its choosing because they are members and
employ two hundred and fourteen (214) joint owners of the cooperative.
rank and file employees; that one hundred
and ninety-eight (198) or 92.5% of these BENECO asserts that the certification
employees have supported the filing of the election HELD: on October 1, 1986 was null
petition; that no certification election has and void since members-employees of
been conducted for the last 12 months; that BENGUET ELECTRIC COOPERATIVE, INC. who
there is no existing collective bargaining are not eligible to form and join a labor union
representative of the rank and file for purposes of collective bargaining were
employees sought to represented by BWLU- allowed to vote therein.
ADLO; and, that there is no collective
bargaining agreement in the cooperative. HON. CALLEJA and BELU on the other hand
submit that members of a cooperative who
An opposition to the petition was filed by the are also rank and file employees are eligible
Beneco Employees Labor Union (hereinafter to form, assist or join a labor union.
referred to as BELU) contending that it was
certified as the sole and exclusive bargaining HON. CALLEJA argues that to deny the
representative of the subject workers members of BENGUET ELECTRIC
COOPERATIVE, INC. the right to form, assist COOPERATIVE, INC. is only nominal, the rank
or join a labor union of their own choice for and file employees who are members
purposes of collective bargaining would thereof should not be deprived of their right
amount to a patent violation of their right to to self-organization.
self-organization. She points out that:
Legal ISSUE: W/N members of the
Albeit a person assumes a dual capacity as cooperative, who are also part-owners
rank and file employee and as member of a thereof, is eligible to form a union.
certain cooperative does not militate, as in
the instant case, against his/her exercise of HELD:
the right to self-organization and to
collective bargaining guaranteed by the NO. Cooperative members, being part-
Constitution and Labor Code because, while owners, are not entitled to the right of
so doing, he/she is acting in his/her capacity forming a union.
as rank and file employee thereof. It may be
added that while the employees concerned Under Article 256 of the Labor Code [Pres.
became members of BENGUET ELECTRIC Decree 442] to have a valid certification
COOPERATIVE, INC., their status election, "at least a majority of all eligible
employment as rank and filers who are hired voters in the unit must have cast their votes.
for fixed compensation had not changed. The labor union receiving the majority of the
They still do not actually participate in the valid votes cast shall be certified as the
management of the cooperative as said exclusive bargaining agent of all workers in
function is entrusted to the Board of the unit."
Directors and to the elected or appointed
officers thereof. They are not vested with The issue of whether or not employees of a
the powers and prerogatives to lay down cooperative are qualified to form or join a
and execute managerial policies; to hire, labor organization for purposes of collective
transfer, suspend, lay-off, recall, discharge, bargaining has already been resolved and
assign or discipline employees; and/or to clarified in the case of Cooperative Rural
effectively recommend such managerial Bank of Davao City, Inc. vs. Ferrer Calleja, et
functions [Comment of HON. CALLEJA, p. 4; al. [G.R. No. 7795, September 26,1988] and
Rollo, p. 125.] reiterated in the cases of Batangas-Electric
Cooperative Labor Union v. Young, et al.
BELU concurs with the above contention of [G.R. Nos. 62386, 70880 and 74560
HON. CALLEJA and, additionally, claims that November 9, 1988] and San Jose City Electric
since membership in BENGUET ELECTRIC Service Cooperative, Inc. v. Ministry of Labor
and Employment, et al. [G.R. No. 77231, May
31, 1989] wherein the Court had stated that Thus, irrespective of the degree of their
the right to collective bargaining is not participation in the actual management of
available to an employee of a cooperative the cooperative, all members thereof cannot
who at the same time is a member and co- form, assist or join a labor organization for
owner thereof. With respect, however, to the purpose of collective bargaining.
employees who are neither members nor
co-owners of the cooperative they are
entitled to exercise the rights to self-
organization, collective bargaining and
negotiation as mandated by the 1987
Constitution and applicable statutes. 109. Republic of the Philippines represented
by SSS vs. AsiaPro Cooperative,
Contrary to HON. CALLEJA AND BELU's claim, G.R. No. 172101, 23 Nov 2007 (Caubang)
the fact that the members-employees of
BENGUET ELECTRIC COOPERATIVE, INC. do FACTS:
not participate in the actual management of Respondent Asiapro, as a cooperative, is
the cooperative does not make them eligible composed of owners-members. Under its
to form, assist or join a labor organization for by-laws, owners-members are of two
the purpose of collective bargaining with categories, to wit: (1) regular member, who
BENGUET ELECTRIC COOPERATIVE, INC. The is entitled to all the rights and privileges of
Court's ruling in the Davao City case that membership; and (2) associate member,
members of cooperative cannot join a labor who has no right to vote and be voted upon
union for purposes of collective bargaining and shall be entitled only to such rights and
was based on the fact that as members of privileges provided in its by-laws. Its primary
the cooperative they are co-owners thereof. objectives are to provide savings and credit
As such, they cannot invoke the right to facilities and to develop other livelihood
collective bargaining for "certainly an owner services for its owners-members. In the
cannot bargain with himself or his co- discharge of the aforesaid primary
owners." [Cooperative Rural Bank of Davao objectives, respondent cooperative entered
City, Inc. v. Ferrer-Calleja, et al., supra]. It is into several Service Contracts with Stanfilco.
the fact of ownership of the cooperative,
and not involvement in the management The owners-members do not receive
thereof, which disqualifies a member from compensation or wages from the
joining any labor organization within the respondent cooperative. Instead, they
cooperative. receive a share in the service surplus which
the respondent cooperative earns from Respondent cooperative, through its
different areas of trade it engages in, such as counsel, sent a reply to petitioner SSSs letter
the income derived from the said Service asserting that it is not an employer because
Contracts with Stanfilco. The owners- its owners-members are the cooperative
members get their income from the service itself; hence, it cannot be its own employer.
surplus generated by the quality and amount Again, petitioner SSS sent a letter to
of services they rendered, which is respondent cooperative ordering the latter
determined by the Board of Directors of the to register as an employer and report its
respondent cooperative. owners-members as employees for
compulsory coverage with the petitioner
In order to enjoy the benefits under the SSS. Respondent cooperative continuously
Social Security Law of 1997, the owners- ignored the demand of petitioner SSS.
members of the respondent cooperative,
who were assigned to Stanfilco requested Accordingly, petitioner SSS filed a Petition
the services of the latter to register them before petitioner SSC against the
with petitioner SSS as self-employed and to respondent cooperative and Stanfilco
remit their contributions as such. praying that the respondent cooperative or,
in the alternative, Stanfilco be directed to
However, petitioner SSS through its Vice- register as an employer and to report
President for Mindanao Division, Atty. Eddie respondent cooperatives owners-members
A. Jara, sent a letter to the respondent as covered employees under the compulsory
cooperative, addressed to its Chief Executive coverage of SSS and to remit the necessary
Officer (CEO) and General Manager Leo G. contributions in accordance with the Social
Parma, informing the latter that based on Security Law of 1997. Respondent
the Service Contracts it executed with cooperative filed its Answer with Motion to
Stanfilco, respondent cooperative is actually Dismiss alleging that no employer-employee
a manpower contractor supplying relationship exists between it and its
employees to Stanfilco and for that reason, owners-members, thus, petitioner SSC has
it is an employer of its owners-members no jurisdiction over the respondent
working with Stanfilco. Thus, respondent cooperative.
cooperative should register itself with
petitioner SSS as an employer and make the Petitioner SSC issued an Order denying the
corresponding report and remittance of Motion to Dismiss filed by the respondent
premium contributions in accordance with cooperative. Respondent cooperative filed a
the Social Security Law of 1997. Petition for Certiorari before the Court of
Appeals.
Section 1. Jurisdiction. Any dispute arising
The Court of Appeals rendered a Decision under the Social Security Act with respect to
granting the petition filed by the respondent coverage, entitlement of benefits, collection
cooperative. Hence, this Petition. In its and settlement of contributions and
Memorandum, petitioners raise the issue of penalties thereon, or any other matter
whether or not the Court of Appeals erred in related thereto, shall be cognizable by the
not finding that the SSC has jurisdiction over Commission after the SSS through its
the subject matter and it has a valid basis in President, Manager or Officer-in-charge of
denying respondents Motion to Dismiss. the Department/Branch/Representative
Office concerned had first taken action
thereon in writing.
ISSUE:
Whether the petitioner SSC has jurisdiction It is important to note, though, that the
over the petition-complaint filed before it by mandatory coverage under the SSS Law is
petitioner SSS against the respondent premised on the existence of an employer-
cooperative. (YES) employee relationship except in cases of
compulsory coverage of the self-employed.
GTZ itself provides a more helpful clue, x x x Going by the principle of sustainable
inadvertently, through its own official development, the German Technical
Internet website. In the Corporate Profile Cooperation (Deutsche Gesellschaft fr
section of the English language version of its Technische Zusammenarbeit GmbH, GTZ)
site. takes on non-profit projects in international
technical cooperation. The GTZ is a private
GTZs own website elicits that petitioner is company owned by the Federal Republic of
federally owned, a federal enterprise, and Germany.
founded in 1975 as a company under private
law. GTZ clearly has a very meaningful Again, we are uncertain of the
relationship with the Federal Republic of corresponding legal implications under
Germany, which apparently owns it. At the German law surrounding a private company
same time, it appears that GTZ was actually owned by the Federal Republic of Germany.
organized not through a legislative public Yet taking the description on face value, the
apparent equivalent under Philippine law is This absence of basis in fact leads to another
that of a corporation organized under the important point, alluded to by the Labor
Corporation Code but owned by the Arbiter in his rulings. Our ruling in Holy See
Philippine government, or a government- v. Del Rosario provided a template on how a
owned or controlled corporation without foreign entity desiring to invoke State
original charter. And it bears notice that immunity from suit could duly prove such
Section 36 of the Corporate Code states that immunity before our local courts. The
every corporation incorporated under this principles enunciated in that case were
Code has the power and capacity x x x to sue derived from public international law. We
and be sued in its corporate name. stated then:
It is entirely possible that under German law, In Public International Law, when a state or
an entity such as GTZ or particularly GTZ international agency wishes to plead
itself has not been vested or has been sovereign or diplomatic immunity in a
specifically deprived the power and capacity foreign court, it requests the Foreign Office
to sue and/or be sued. Yet in the of the state where it is sued to convey to the
proceedings below and before this Court, court that said defendant is entitled to
GTZ has failed to establish that under immunity.
German law, it has not consented to be sued
despite it being owned by the Federal In the United States, the procedure followed
Republic of Germany. We adhere to the rule is the process of "suggestion," where the
that in the absence of evidence to the foreign state or the international
contrary, foreign laws on a particular subject organization sued in an American court
are presumed to be the same as those of the requests the Secretary of State to make a
Philippines, and following the most determination as to whether it is entitled to
intelligent assumption we can gather, GTZ is immunity. If the Secretary of State finds that
akin to a governmental owned or controlled the defendant is immune from suit, he, in
corporation without original charter which, turn, asks the Attorney General to submit to
by virtue of the Corporation Code, has the court a "suggestion" that the defendant
expressly consented to be sued. At the very is entitled to immunity.
least, like the Labor Arbiter and the Court of
Appeals, this Court has no basis in fact to In the Philippines, the practice is for the
conclude or presume that GTZ enjoys foreign government or the international
immunity from suit. organization to first secure an executive
endorsement of its claim of sovereign or
diplomatic immunity.
that the rule in public international law
It is to be recalled that the Labor Arbiter, in quoted in Holy See referred to endorsement
both of his rulings, noted that it was by the Foreign Office of the State where the
imperative for petitioners to secure from the suit is filed, such foreign office in the
Department of Foreign Affairs a certification Philippines being the Department of Foreign
of respondents diplomatic status and Affairs. Nowhere in the Comment of the OSG
entitlement to diplomatic privileges is it manifested that the DFA has endorsed
including immunity from suits. The GTZs claim, or that the OSG had solicited the
requirement might not necessarily be DFAs views on the issue. The arguments
imperative. However, had GTZ obtained raised by the OSG are virtually the same as
such certification from the DFA, it would the arguments raised by GTZ without any
have provided factual basis for its claim of indication of any special and distinct
immunity that would, at the very least, perspective maintained by the Philippine
establish a disputable evidentiary government on the issue. The Comment
presumption that the foreign party is indeed filed by the OSG does not inspire the same
immune which the opposing party will have degree of confidence as a certification from
to overcome with its own factual evidence. the DFA would have elicited.
We do not see why GTZ could not have
secured such certification or endorsement Holy See made reference to Baer v. Tizon,
from the DFA for purposes of this case. and that in the said case, the United States
Certainly, it would have been highly Embassy asked the Secretary of Foreign
prudential for GTZ to obtain the same after Affairs to request the Solicitor General to
the Labor Arbiter had denied the motion to make a suggestion to the trial court,
dismiss. Still, even at this juncture, we do not accomplished by way of a Manifestation and
see any evidence that the DFA, the office of Memorandum, that the petitioner therein
the executive branch in charge of our enjoyed immunity as the Commander of the
diplomatic relations, has indeed endorsed Subic Bay Naval Base. Such circumstance is
GTZs claim of immunity. It may be possible actually not narrated in the text of Baer itself
that GTZ tried, but failed to secure such and was likely supplied in Holy See because
certification, due to the same concerns that its author, Justice Camilio Quiason, had
we have discussed herein. appeared as the Solicitor in behalf of the
OSG in Baer. Nonetheless, as narrated in
Would the fact that the Solicitor General has Holy See, it was the Secretary of Foreign
endorsed GTZs claim of States immunity Affairs which directed the OSG to intervene
from suit before this Court sufficiently in behalf of the United States government in
substitute for the DFA certification? Note the Baer case, and such fact is manifest
enough of the endorsement by the Foreign ASSOCIATION-KAISAHAN NG
Office. We do not find a similar circumstance MANGGAWANG PILIPINO (KAMPIL-
that bears here. KATIPUNAN), respondents. G.R. No. 96566
January 6, 1992
The Court is thus holds and so rules that GTZ
consistently has been unable to establish FACTS:
with satisfaction that it enjoys the immunity
from suit generally enjoyed by its parent On July 16, 1990, the supervisory,
country, the Federal Republic of Germany. administrative personnel, production,
Consequently, both the Labor Arbiter and accounting and confidential employees of
the Court of Appeals acted within proper the petitioner Atlas Lithographic Services,
bounds when they refused to acknowledge Inc. (ALSI) affiliated with private respondent
that GTZ is so immune by dismissing the Kaisahan ng Manggagawang Pilipino, a
complaint against it. Our finding has national labor organization. The local union
additional ramifications on the failure of GTZ adopted the name Atlas Lithographic
to properly appeal the Labor Arbiters Services, Inc. Supervisory, Administrative,
decision to the NLRC. As pointed out by the Personnel, Production, Accounting and
OSG, the direct recourse to the Court of Confidential Employees Association or ALSI-
Appeals while bypassing the NLRC could SAPPACEA-KAMPIL in short and which we
have been sanctioned had the Labor Arbiters shall hereafter refer to as the "supervisors"
decision been a patent nullity. Since the union.
Labor Arbiter acted properly in deciding the
complaint, notwithstanding GTZs claim of Shortly thereafter, private respondent
immunity, we cannot see how the decision Kampil-Katipunan filed on behalf of the
could have translated into a patent nullity. "supervisors" union a petition for
certification election so that it could be the
118. Atlas Lithographic vs, Usec Laguesma. sole and exclusive bargaining agent of the
205 SCRA 12 (Tado) supervisory employees.
ATLAS LITHOGRAPHIC SERVICES, INC.,
petitioner, vs. UNDERSECRETARY The petitioners opposed the private
BIENVENIDO E. LAGUESMA (Department of respondent's petition claiming that under
Labor and Employment) and ATLAS Article 245 of the Labor bode the private
LITHOGRAPHIC SERVICES, INC. respondent cannot represent the
SUPERVISORY, ADMINISTRATIVE, supervisory employees for collective
PERSONNEL, PRODUCTION, ACCOUNTING bargaining purposeless because the private
AND CONFIDENTIAL EMPLOYEES
respondent also represents the rank-and-file a similar provision on the right of supervisors
employees' union. to organize.ll
In the sixth CBA, it was agreed upon, among Whether the NLRC committed grave abuse
others, that the subject of inclusion or of discretion in holding that the mentioned
exclusion of service engineers, sales employees are qualified to be included in the
personnel and confidential employees in the existing bargaining unit?
coverage of the bargaining unit would be
submitted for arbitration. RULING:
1. NO
At the outset, respondent NLRC did not quite Art. 245. Right of employees in the public
accurately comprehend the issue raised service. — 10
before it. Indeed, the issue is not whether xxx xxx x
the subject employees may join or form a xx
union, but rather, whether or not they may By virtue of such repeal and substitution,
be part of the existing bargaining unit for the security guards became eligible for
rank and file employees of PIDI. membership in any labor organization.
San Miguel Corp [Mandaue PPP] (4) a certification signifying that respondent
had just been organized and no amount had
vs. yet been collected from its members,
signed by respondent’s treasurer Chita D.
Mandaue Packing Products Plants - San Rodriguez and attested by Sagun;
Miguel Corporation Monthlies and Rank- and
and-File Union - FFW,
(5) a list of all the rank-and-file monthly paid
467 SCRA 107 [2005] employees of the Mandaue Packaging
Products Plants and Mandaue Glass
Plant prepared by Bathan and attested by
FACTS: Sagun.
Federation of Free Workers (FFW/
respondent) filed a petition for certification
election with the DOLE Regional Office No. SMC (Petitioner) filed a motion to dismiss
VII. It sought to be certified and to represent the petition for certification election on the
sole ground that herein respondent union is
not listed or included in the roster of rank-and-file employees, two of
legitimate labor organizations based on the respondents officers, namely Vice-President
certification issued by the Officer-In Emannuel L. Rosell and Secretary Bathan,
representative, then right to be represented were actually supervisory employees.
by a bargaining agent should not be denied
to other members of the bargaining unit.” In support of this allegation, SMC attached
various documents evidencing the
Respondent Union submitted to the Bureau designation of these two officers in
of Labor Relations the same documents supervisory roles, as well as their exercise of
earlier attached to its petition for various supervisory functions. Petitioner
certification. The accompanying letter, cited Article 245 of the Labor Code, which
signed by respondents president Sagun, provides that supervisory employees shall
stated that such documents were submitted not be eligible for membership in a labor
in compliance with the requirements for the organization of the rank-and-file employees.
creation of a local/chapter pursuant to the
Labor Code and its Implementing Rules; and
it was hoped that the submissions would ISSUE:
facilitate the listing of respondent under the
roster of legitimate labor organizations. Whether or not respondent union has
acquired legal personality. (YES)
On 3 August 1998, the Chief of Labor
Relations Division of DOLE Regional Office HELD:
No. VII issued a Certificate of Creation of
Local/Chapter No. ITD. I-ARFBT-058/98, Yes. Respondent Union has acquired legal
certifying that from 30 July 1998, personality
respondent has acquired legal personality as
a labor organization/workers association, it In this case, Petitioner SMC erroneously cites
having submitted all the required the case of Toyota Motor Philippines v.
documents. Toyota Motor Philippines Corporation Labor
Union, and the purported holding therein
In turn, petitioner SMC filed a Comment, that [if] it is true that at the time of the filing
stating that respondent was not a legitimate of the petition, the said registration
labor organization at the time of the filing of certificate has not been approved yet, then,
the petition. SMC also propounded that petitioner lacks the legal personality to file
contrary to respondents objectives of the petition.
establishing an organization representing
However, an examination of the case In regular order, it is the federation or
actually reveals that the cited portion was national union, already in possession of legal
lifted from one of the antecedent rulings of personality, which initiates the creation of
the Med-Arbiter in that case which had not the local/chapter. It issues a charter
even been affirmed or reinstated by the certificate indicating the creation or
Court on review. Moreover, such establishment of the local/chapter. It then
pronouncement made prior to the submits this charter certificate, along with
enactment of Department Order No. 9 the names of the local/chapters officers,
squarely contradicts Section 3, Rule VI constitution and by-laws to the Regional
thereof, which provides that legal Office or Bureau. It is the submission of
personality of the local/chapter is vested these documents, certified under oath by
upon the submission of the complete the Secretary or Treasurer of the
documentary requirements. local/chapter and attested by the President,
which vests legal personality in the
It is also worth noting that petitioner union local/chapter, which is then free to file on its
in Toyota was an independent labor union, own a petition for certification election.
and not a local/chapter, and under
Department Order No. 9, independent labor In this case, the federation in question, the
unions, unlike local/chapters, acquire legal FFW, did not submit any of these
personality only upon issuance of the documentary requirements to the Regional
certificate of registration by the Bureau or Office or Bureau. It did however issue a
Regional Office. charter certificate to the putative
local/chapter (herein respondent).
Still, petitioner cites in its favor Section 5, Respondent then submitted the charter
Rule V of Dept. Order No. 9, which states certificate along with the other
that the labor organization or workers documentary requirements to the Regional
association shall be deemed registered and Office, but not for the specific purpose of
vested with legal personality on the date of creating the local/chapter, but for filing the
issuance of its certificate of registration. petition for certification election.
Again, the citation is obviously misplaced, as The Court likewise sees no impediment in
respondent herein is a local/chapter, the deeming respondent as having acquired
acquisition of its legal personality being legal personality as of 15 June 1998, the fact
governed instead by Section 3, Rule VI. that it was the local/chapter itself, and not
the FFW, which submitted the documents
required under Section 1, Rule VI of This being the case, we consider it
Department Order No. 9. permissible for respondent to have
submitted the required documents itself to
The evident rationale why the rule states the Regional Office, and proper that
that it is the federation or national union respondents legal personality be deemed
that submits said documents to the Bureau existent as of 15 June 1998, the date the
or Regional Office is that the creation of the complete documents were submitted.
local/chapter is the sole prerogative of the
federation or national union, and not of any
other entity. Certainly, a putative 121. Sarnahang Manggagawa Sa Charter
local/chapter cannot, without the Chemical Soidariiy of Union in the
imprimatur of the federation or national Philippines for Empowerment and Reforms
union, claim affiliation with the larger unit or {SMCC-SUPER} vs. Charter Chemical and
source its legal personality therefrom. Coating Corp., GR 169717, 16 March 2011.
(Banuelos)
In the ordinary course, it should have been TOPIC: Union Registration and Procedure
FFW, and not respondent, which should (Attestation Requirements)
have submitted the subject documents to
the Regional Office. Nonetheless, there is no G.R. No. 169717 March 16, 2011
good reason to deny legal personality or
defer its conferral to the local/chapter if it is SAMAHANG MANGGAGAWA SA CHARTER
evident at the onset that the federation or CHEMICAL SOLIDARITY OF UNIONS IN THE
national union itself has already through its PHILIPPINES FOR EMPOWERMENT AND
own means established the local/chapter. REFORMS (SMCC-SUPER), ZACARRIAS JERRY
VICTORIO-Union President, vs. CHARTER
In this case, such is evidenced by the Charter CHEMICAL and COATING CORPORATION.
Certificate dated 9 June 1998, issued by
FFW, and attached to the petition for Ponente: DEL CASTILLO, J.
certification election. The Charter Certificate
expressly states that respondent has been FACTS:
issued the said certificate to operate as a
local or chapter of the [FFW]. The Charter On February 19, 1999, Samahang
Certificate expressly acknowledges FFWs Manggagawa sa Charter Chemical Solidarity
intent to establish respondent as of 9 June of Unions in the Philippines for
1998. Empowerment and Reforms (petitioner
union) filed a petition for certification
election among the regular rank-and-file expressly requires that the charter
employees of Charter Chemical and Coating certificate be certified under oath.
Corporation (respondent company) with the
Mediation Arbitration Unit of the DOLE, In the main, the CA ruled that petitioner
National Capital Region. union failed to comply with the requisite
documents for registration under Article 235
On April 14, 1999, respondent company filed of the Labor Code and its implementing
an Answer with Motion to Dismiss4 on the rules. It agreed with the Med-Arbiter that
ground that petitioner union is not a the Charter Certificate, Sama-samang
legitimate labor organization because of (1) Pahayag ng Pagsapi at Authorization, and
failure to comply with the documentation Listahan ng mga Dumalo sa Pangkalahatang
requirements set by law. Pulong at mga Sumang-ayon at Nagratipika
sa Saligang Batas were not executed under
SMCC-SUPER CONTENTION: It argues that oath. Thus, petitioner union cannot be
the lack of verification of its charter accorded the status of a legitimate labor
certificate and the alleged illegal organization.
composition of its membership are not
grounds for the dismissal of a petition for Legal ISSUE: W/N the failure to attest the
certification election under Section 11, Rule said document requirements will be fatal for
XI of D.O. No. 9, series of 1997, as amended, its registration.
nor are they grounds for the cancellation of
a union’s registration under Section 3, Rule HELD:
VIII of said issuance. It contends that what is
required to be certified under oath by the NO. It is not necessary for national union to
local union’s secretary or treasurer and attest the labor certificate. And Listahan ng
attested to by the local union’s president are mga dumalo sa pangkalahatang pulong at
limited to the union’s constitution and by- mga sumang-ayon at nagratipika sa saligang
laws, statement of the set of officers, and bata is not included among those needed to
the books of accounts. be executed under oath.
The then prevailing Section 1, Rule VI of the As to the charter certificate, the above-
Implementing Rules of Book V, as amended quoted rule indicates that it should be
by D.O. No. 9, series of 1997, provides: executed under oath. Petitioner union
concedes and the records confirm that its
Section 1. Chartering and creation of a local charter certificate was not executed under
chapter — A duly registered federation or oath. However, in San Miguel Corporation
national union may directly create a (Mandaue Packaging Products Plants) v.
local/chapter by submitting to the Regional Mandaue Packing Products Plants-San
Office or to the Bureau two (2) copies of the Miguel Corporation Monthlies Rank-and-File
following: Union-FFW (MPPP-SMPP-SMAMRFU-
(a) A charter certificate issued by the FFW),22 which was decided under the
federation or national union indicating the auspices of D.O. No. 9, Series of 1997, we
creation or establishment of the ruled –
local/chapter;
(b) The names of the local/chapter’s officers, In San Miguel Foods-Cebu B-Meg Feed Plant
their addresses, and the principal office of v. Hon. Laguesma, 331 Phil. 356 (1996), the
the local/chapter; and Court ruled that it was not necessary for the
(c) The local/chapter’s constitution and by- charter certificate to be certified and
laws provided that where the local/chapter’s attested by the local/chapter officers. Id.
constitution and by-laws [are] the same as While this ruling was based on the
[those] of the federation or national union, interpretation of the previous Implementing
this fact shall be indicated accordingly. Rules provisions which were supplanted by
All the foregoing supporting requirements the 1997 amendments, we believe that the
shall be certified under oath by the Secretary same doctrine obtains in this case.
or the Treasurer of the local/chapter and Considering that the charter certificate is
attested to by its President. prepared and issued by the national union
and not the local/chapter, it does not make
sense to have the local/chapter’s officers x x Manggagawa ng Takata (SALAMAT) on the
x certify or attest to a document which they ground that the latter is guilty of
had no hand in the preparation of. misrepresentation, false statement and
fraud with respect to the number of those
In accordance with this ruling, petitioner who participated in the organizational
union’s charter certificate need not be meeting, the adoption and ratification of its
executed under oath. Consequently, it Constitution and By-Laws, and in the
validly acquired the status of a legitimate election of its officers.
labor organization upon submission of (1) its Salamat denied the charge and claimed that
charter certificate, (2) the names of its there were enough union members which
officers, their addresses, and its principal was more than the 20% requirement for
office, and (3) its constitution and by-laws— union registration.
the last two requirements having been
executed under oath by the proper union Salamat also contended that Takata was
officials as borne out by the records. estopped from assailing its legal personality
as it agreed to a certification election and
122. Takata (Philippines) Corporation vs actively participated in the pre-election
Bureau of Labor Relations and Samahang conference of the certification election
Lakas proceedings. Salamat argued that the union
Manggagawa Ng Takata (Salamat), members were informed of the contents of
Respondents. G.R. No. 196276, June 04, the documents they signed and that the
2014 (Caubang) attendees to the organizational meeting
constituted more than 50% of the total
TAKATA (PHILIPPINES) CORPORATION, union membership, hence, a quorum existed
Petitioner, for the conduct of the said meeting.
vs.
BUREAU OF LABOR RELATIONS and DOLE Regional Director granted the petition
SAMAHANG LAKAS MANGGAGAWA NG to cancel Salamat’s certificate of
TAKATA (SALAMAT), registration. It found that the 68 who
G.R. No. 196276 June 4, 2014 attended the organizational meeting was
obviously less than 20% of the total number
FACTS: of 396 regular rank-and-file employees
Takata filed with the Department of Labor which Salamat sought to represent, hence,
and Employment (DOLE) a Petition for short of the union registration requirement.
Cancellation of the Certificate of Union The Regional Director also found that the
Registration of Samahang Lakas proceedings in the cancellation of
registration and certification elections are entitled to the rights and privileges granted
two different and entirely separate and by law to legitimate labor organizations
independent proceedings which were not upon issuance of the certificate of
dependent on each other. registration based on the following
requirements:
Salamat appealed with the Bureau of Legal (a) Fifty pesos (₱50.00)registration fee;
Relations (BLR) (Office of the DOLE (b) The names of its officers, their addresses,
Secretary). The BLR granted Salamat’s the principal address of the labor
appeal and reversed the decision of the organization, the minutes of the
DOLE Regional Director. It found that Takata organizational meetings and the list of the
failed to prove that Salamat deliberately and workers who participated in such meetings;
maliciously misrepresented the number of (c) In case the applicant is an independent
rank-and-file employees. The BLR found that union, the names of all its members
the list of employees who participated in the comprising at least twenty percent (20%) of
organizational meeting was a separate and all the employees in the bargaining unit
distinct requirement from the list of the where it seeks to operate;
names of members comprising at least 20% (d) If the applicant union has been in
of the employees in the bargaining unit; and existence for one or more years, copies of its
that there was no requirement for annual financial reports; and
signatures opposite the names of the union (e) Four copies of the constitution and by-
members; and there was no evidence laws of the applicant union, minutes of its
showing that the employees assailed their adoption or ratification, and the list of the
inclusion in the list of union members. members who participated in it."
ART. 239. Grounds for Cancellation of Union Indeed, Article 234 (b) and (c) provide for
Registration. - The following may constitute separate requirements, which must be
grounds for cancellation of union submitted for the union's registration, and
registration: which Salamat did submit. Here, the total
(a) Misrepresentation, false statement or number of employees in the bargaining unit
fraud in connection with the adoption or was 396, and 20% of which was about 79.
ratification of the constitution and by-laws Salamat submitted a document entitled
or amendments thereto, the minutes of "Pangalan ng Mga Kasapi ng Unyon"
ratification, and the list of members who showing the names of 119 employees as
took part in the ratification; union members, thus they sufficiently
(b) Misrepresentation, false statements or complied even beyond the 20% minimum
fraud in connection with the election of membership requirement. Salamat also
officers, minutes of the election of officers, submitted the attendance sheet of the
and the list of voters; organizational meeting which contained the
(c) Voluntary dissolution by the members. names and signatures of the 68 union
members who attended the meeting.
Takata’s allegations were not supported Considering that there are 119 union
with evidence to prove such members which are more than 20% of all the
misrepresentation by Salamat. employees of the bargaining unit, and since
It does not appear in Article 234 (b) of the the law does not provide for the required
Labor Code that the attendees in the number of members to attend the
organizational meeting must comprise 20% organizational meeting, the 68 attendees
of the employees in the bargaining unit. In which comprised at least the majority of the
fact, even the Implementing Rules and 119 union members would already
Regulations of the Labor Code does not so constitute a quorum for the meeting to
provide. proceed and to validly ratify the Constitution
It is only under Article 234 (c) that requires and By-laws of the union.
the names of all its members comprising at
least twenty percent (20%) of all the There is no basis for Takata to contend that
employees in the bargaining unit where it grounds exist for the cancellation of
seeks to operate. Clearly, the 20% minimum Salamat's union registration. For fraud and
requirement pertains to the employees’ misrepresentation to be grounds for
cancellation of union registration under filed a Petition for Cancellation of Union
Article 239 of the Labor Code, the nature of Registration against respondent, claiming
the fraud and misrepresentation must be that respondent did not comply with the
grave and compelling enough to vitiate the 20% requirement (Art. 234 Labor Code), and
consent of a majority of union members. that it committed fraud and
misrepresentation (Art. 239).
In this case, we agree with the BLR and the
CA that respondent could not have possibly All other allegations made by the petitioner
committed misrepresentation, fraud, or were not given credit since there was no
false statements. The alleged failure of evidence presented by the petitioner or such
respondent to indicate with mathematical evidence were self-serving.
precision the total number of employees in
the bargaining unit is of no moment, W/N respondent union’s registration should
especially as it was able to comply with the be cancelled due to the alleged violations
20% minimum membership requirement. committed by it.
Even if the total number of rank-and-file
employees of petitioner is 528, while No. The legitimacy of respondent as a labor
respondent declared that it should only be organization must be affirmed. While it is
455, it still cannot be denied that the latter true that the withdrawal of support may be
would have more than complied with the considered as a resignation from the union,
registration requirement. the fact remains that at the time of the
union’s application for registration, the
affiants were members of respondent and
they comprised more than the required 20%
123. MARIWASA SIAM CERAMICS, INC. vs. membership for purposes of registration as
THE SECRETARY OF THE DEPARTMENT OF a labor union. Article 234 of the Labor Code
LABOR AND EMPLOYMENT, CHIEF OF THE merely requires a 20% minimum
BUREAU OF LABOR RELATIONS, membership during the application for union
DEPARTMENT OF LABOR AND registration. It does not mandate that a
EMPLOYMENT, REGIONAL DIRECTOR OF union must maintain the 20% minimum
DOLE REGIONAL OFFICE NUMBER IV-A & membership requirement all throughout its
SAMAHAN NG MGA MANGGAGAWA SA existence.
MARIWASA SIAM CERAMICS, INC. (SMMSC- i1
INDEPENDENT) Respondent asserts that it had a total of 173
Respondent SMMSC is a legitimate labor union members at the time it applied for
organization. Mariwasa Siam Ceramics, Inc. registration. Two names were repeated in
respondent’s list and had to be deducted,
but the total would still be 171 union EAGLE RIDGE GOLF & COUNTRY CLUB,
members. Petitioner, - versus - COURT OF APPEALS and
EAGLE RIDGE EMPLOYEES UNION (EREU),
Further, out of the four names alleged to be Respondents.
no longer connected with petitioner, only
two names should be deleted from the list
since the other two have only resigned after FACTS:
respondent’s registration had already been
granted. Thus, the total union membership On December 6, 2005, at least 20% of Eagle
at the time of registration was 169. Since the Ridges rank-and-file employees the
total number of rank-and-file employees at percentage threshold required under Article
that time was 528, 169 employees would be 234(c) of the Labor Code for union
equivalent to 32% of the total rank-and-file registration had a meeting where they
workers complement, still very much above organized themselves into an independent
the minimum required by law. labor union, named Eagle Ridge Employees
Union (EREU or Union),[5] elected a set of
Furthermore, respondent could not have officers,[6] and ratified[7] their constitution
possibly committed misrepresentation, and by-laws.[8]
fraud, or false statements. The alleged
failure of respondent to indicate with Department of Labor and Employment
mathematical precision the total number of (DOLE) Regional Office IV granted the
employees in the bargaining unit is of no application and issued EREU Registration
moment, especially as it was able to comply Certificate.
with the 20% minimum membership
requirement. Even if the total number of The EREU then filed a petition for
rank-and-file employees of petitioner is 528, certification election in Eagle Ridge Golf &
while respondent declared that it should Country Club. In opposition, Eagle Ridges
only be 455, it still cannot be denied that the petition ascribed misrepresentation, false
latter would have more than complied with statement, or fraud to EREU in connection
the registration requirement. with the adoption of its constitution and by-
laws, the numerical composition of the
124. Eagle Ridge Golf and Country Club vs. Union, and the election of its officers.
Court of ,Appeals and Eagle Ridge Employees
Union EAGLE RIDGE: EREU declared in its
G.R, no. 178989, 18 March 2010 (Dosdos) application for registration having 30
members, when the minutes of its credible evidence considering the joint
December 6, 2005 organizational meeting affidavits of the other members attesting to
showed it only had 26 members. The the orderly conduct of the organizational
misrepresentation was exacerbated by the meeting;
discrepancy between the certification issued (b) the retracting members did not deny
by the Union secretary and president that 25 signing the union documents;
members actually ratified the constitution (c) following, Belyca Corporation v. Ferrer-
and by-laws on December 6, 2005 and the Calleja[15]and Oriental Tin Can Labor Union
fact that 26 members affixed their v. Secretary of Labor and Employment,[16] it
signatures on the documents, making one can be presumed that duress, coercion or
signature a forgery. valuable consideration was brought to bear
Eagle Ridge contended that five employees on the retracting members; and
who attended the organizational meeting (d) citing La Suerte Cigar and Cigarette
had manifested the desire to withdraw from Factory v. Director of Bureau of Labor
the union. The five executed individual Relations,[17]Belyca Corporation and
affidavits. Oriental Tin Can Labor Union, where the
The withdrawal of the five, effectively Court ruled that once the required
reduced the union membership to 20 or 21, percentage requirement has been reached,
either of which is below the mandatory the employees withdrawal from union
minimum 20% membership requirement membership taking place after the filing of
under Art. 234(c) of the Labor Code. the petition for certification election will not
Reckoned from 112 rank-and-file employees affect the petition, it asserted the
of Eagle Ridge, the required number would applicability of said ruling as the petition for
be 22 or 23 employees. certification election was filed on January 10,
2006 or long before February 15, 2006 when
EREU: the alleged discrepancies are not real the affidavits of retraction were executed by
for before filing of its application on the five union members, thus contending
December 19, 2005, four additional that the retractions do not affect nor be
employees joined the union on December 8, deemed compelling enough to cancel its
2005, thus raising the union membership to certificate of registration.
30 members as of December 19, 2005; the
retraction of 5 union members should not be DOLE Regional Director: favored Eagle Ridge
given any credence for the reasons that: and delisted EREU rom the roster of
(a) the affidavits of the five retracting union legitimate labor organizations.
members sans other affirmative evidence
presented hardly qualify as clear and
BLR: reversed Dole RD decisions. EREU shall 19, 2005 for registration. The Union thereby
remain in the roster of legitimate labor complied with the mandatory minimum 20%
organizations. membership requirement under Art. 234(c).
CA: dismissed Eagle Ridges appeal for being Of note is the undisputed number of 112
deficient rank-and-file employees in Eagle Ridge.
Issues: 1. whether or not THERE WAS Third. The Union has sufficiently explained
FRAUD, MISREPRESENTATION AND/OR the discrepancy between the number of
FALSE STATEMENT WHICH WARRANT THE those who attended the organizational
CANCELLATION OF CERTIFICATE OF meeting and the list of union members.
REGISTRATION OF EREU. Consequently, the total number of union
2. whether such separation from the Union members, as of December 8, 2005, was 30,
can detrimentally affect the registration of which was truthfully indicated in its
the Union. application for registration on December 19,
2005.
As aptly found by the BLR Director, the Union
RULING: 1. NO already had 30 members when it applied for
registration, for the admission of new
No Fraud in the Application members is neither prohibited by law nor
A scrutiny of the records fails to show any was it concealed in its application for
misrepresentation, false statement, or fraud registration. Eagle Ridges contention is
committed by EREU to merit cancellation of flawed when it equated the requirements
its registration. under Art. 234(b) and (c) of the Labor Code.
Par. (b) clearly required the submission of
First. The Union submitted the required the minutes of the organizational meetings
documents attesting to the FACTS of the and the list of workers who participated in
organizational meeting on December 6, the meetings, while par. (c) merely required
2005, the election of its officers, and the the list of names of all the union members
adoption of the Unions constitution and by- comprising at least 20% of the bargaining
laws. It submitted before the DOLE Regional unit. The fact that EREU had 30 members
Office with its Application for Registration when it applied for registration on
and the duly filled out BLR Reg. Form No. I- December 19, 2005 while only 26 actually
LO, s. 1998 participated in the organizational meeting is
borne by the records.
Second. The members of the EREU totaled
30 employees when it applied on December
Fourth. Any seeming infirmity in the proceedings and the conduct of the
application and admission of union organizational meeting on December 6,
membership, most especially in cases of 2005.
independent labor unions, must be viewed The six affiants of the affidavits of retraction
in favor of valid membership. were not presented in a hearing before the
Hearing Officer (DOLE Regional Director), as
The right of employees to self-organization required under the Rules Implementing
and membership in a union must not be Book V of the Labor Code covering Labor
trammeled by undue difficulties. In this case, Relations. Said Rules is embodied in
when the Union said that the four employee- Department Order No. (DO) 40-03 which
applicants had been admitted as union was issued on February 17, 2003 and took
members, it is enough to establish the fact of effect on March 15, 2003 to replace DO 9 of
admission of the four that they had duly 1997. Sec. 11, Rule XI of DO 40-03
signified such desire by accomplishing the
membership form. The fact, as pointed out Seventh. The fact that six union members,
by Eagle Ridge, that the Union, owing to its indeed, expressed the desire to withdraw
scant membership, had not yet fully their membership through their affidavits of
organized its different committees evidently retraction will not cause the cancellation of
shows the direct and valid acceptance of the registration on the ground of violation of Art.
four employee applicants rather than deter 234(c) of the Labor Code requiring the
their admissionas erroneously asserted by mandatory minimum 20% membership of
Eagle Ridge. rank-and-file employees in the employees
union.
Fifth. The difference between the number of
26 members, who ratified the Unions
constitution and by-laws, and the 25
members shown in the certification of the 2. We answer in the negative.
Union secretary as having ratified it, is a
typographical error. Twenty percent (20%) of 112 rank-and-file
employees in Eagle Ridge would require a
Sixth. In the more meaty issue of the union membership of at least 22 employees
affidavits of retraction executed by six union (112 x 205 = 22.4). When the EREU filed its
members, we hold that the probative value application for registration on December 19,
of these affidavits cannot overcome those of 2005, there were clearly 30 union members.
the supporting affidavits of 12 union Thus, when the certificate of registration
members and their counsel as to the was granted, there is no dispute that the
Union complied with the mandatory 20% made before the filing of the petition for
membership requirement. certification election is presumed voluntary,
while withdrawal after the filing of such
With the withdrawal of six union members, petition is considered to be involuntary and
there is still compliance with the mandatory does not affect the same. Now then, if a
membership requirement under Art. 234(c), withdrawal from union membership done
for the remaining 24 union members after a petition for certification election has
constitute more than the 20% membership been filed does not vitiate such petition, is it
requirement of 22 employees. not but logical to assume that such
withdrawal cannot work to nullify the
Indeed, where the company seeks the registration of the union?
cancellation of a unions registration during
the pendency of a petition for certification 125. The Heritage Hotel Manila vs. National
election, the same grounds invoked to Union of Workers in Allied lndustries-
cancel should not be used to bar the Heritage Hotel Manila Supervisors Chapter
certification election. A certification election GR 178296 (Dulay)
is the most expeditious and fairest mode of THE HERITAGE HOTEL MANILA, acting
ascertaining the will of a collective through its owner, GRAND PLAZA HOTEL
bargaining unit as to its choice of its CORPORATION, Vs. NATIONAL UNION OF
exclusive representative.[57] It is the fairest WORKERS IN THE HOTEL, RESTAURANT AND
and most effective way of determining ALLIED INDUSTRIES-HERITAGE HOTEL
which labor organization can truly represent MANILA SUPERVISORS CHAPTER
the working force. It is a fundamental (NUWHRAIN-HHMSC) G.R. No. 178296
postulate that the will of the majority, if January 12, 2011
given expression in an honest election with
freedom on the part of the voters to make FACTS:
their choice, is controlling.[58] The respondent UNION’s petition for
certification election was granted.
In S.S. Ventures International, Inc. v. S.S. The petitioner HOTEL then discovered that
Ventures Labor Union (SSVLU) on the effect respondent had failed to submit to the
of the withdrawal from union membership Bureau of Labor Relations (BLR) its annual
right before or after the filing of a petition financial report for several years and the list
for certification election: of its members since it filed its registration
papers in 1995.
We have in precedent cases said that the
employees withdrawal from a labor union
Consequently, the HOTEL filed a Petition for 239 of the Labor Code provide that failure to
Cancellation of Registration of respondent, file financial reports and the list of its
on the ground of the non-submission of the members are grounds for the cancellation of
said documents; and prayed that Union Organization. However, consideration
respondent’s Certificate of Creation of must be taken of the fundamental rights
Local/Chapter be cancelled and its name be guaranteed by Article XIII, Section 3 of the
deleted from the list of legitimate labor Constitution, i.e., the rights of all workers to
organizations. It further requested the self-organization, collective bargaining and
suspension of the certification election negotiations, and peaceful concerted
proceedings. activities. Labor authorities should bear in
mind that registration confers upon a union
Nevertheless, the certification election the status of legitimacy and the concomitant
pushed through and the respondent UNION right and privileges granted by law to a
won. legitimate labor organization, particularly
the right to participate in or ask for
The Regional Director of DOLE-NCR and certification election in a bargaining unit.
DOLE Secretary both HELD: that Thus, the cancellation of a certificate of
constitutionally guaranteed freedom of registration is the equivalent of snuffing out
association and right of workers to self- the life of a labor organization. For without
organization outweighed respondent’s such registration, it loses – as a rule – its
noncompliance with the statutory rights under the Labor Code.
requirements to maintain its status as a
legitimate labor organization. Furthermore, that the Labor Code’s
provisions on cancellation of union
ISSUE: registration and on reportorial requirements
have been recently amended by Republic Act
Whether or not the failure to comply with (R.A.) No. 9481, An Act Strengthening the
the statutory requirement(filing financial Workers’ Constitutional Right to Self-
reports and the list of its members) sufficient Organization, Amending for the Purpose
ground for the cancellation of registration of Presidential Decree No. 442, As Amended,
the respondent as a labor union. Otherwise Known as the Labor Code of the
Philippines, which says that failure to file
HELD: NO. financial reports and list of union members
shall not be a ground for cancellation of
No, the non-compliance should not be a union registration but shall subject the
ground for the cancellation. Articles 238 and erring officers or members to suspension,
expulsion from membership, or any
appropriate penalty. With the appointment of one Benefredo
Quinto to the position of internal auditor,
which position he had HELD: since January 1,
126. Rural Bank of Alaminos Employees 1976, Ismael P. Tamayo, Sr., who had been
Union vs. NLRC, 317 SCRA 669 (1999) with Rural Bank of Alaminos, Inc. (RBAI for
[Macatol] brevity) since it started operations in
September of 1956, feeling shortchanged,
RURAL BANK OF ALAMINOS EMPLOYEES filed on June 3, 1988 a complaint against
UNION (RBAEU) and ISMAEL TAMAYO, SR., RBAI for illegal dismissal.
petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION, Third Division, Exec. Labor RBAI agreed on a compromise agreement
Arbiter JOSE B. BOLISAY and RURAL BANK OF dated July 13, 1988 to reinstate Ismael P.
ALAMINOS, Inc., respondents. [G.R. No. Tamayo, Sr. to the position of internal
100342-44. October 29, 1999] PURISIMA, J.: auditor.
When the term of the union's regular On the same day, the president of the Union
officers expired on February 11, 1987 the submitted to the Company the ratification
election of officers should have been HELD:, by the union members of the new CBA and
in accordance with the provision of the authorization for the Company to deduct
union constitution and by laws. With the union dues equivalent to P10.00 every
expiration of the term of the regular officers, payday or P20.00 every month and, in
the term of the ABEU-Interim Board, expired addition, 10% by way of special assessment,
too. In calling the referendum therefore, the from the CBA lump-sum pay granted to the
ABEU-Interim Board clearly overstepped its union members
bounds. The purpose of the special assessment
sought to be levied is "to put up a
cooperative and credit union; purchase
131. Palacol vs. Calleja, 182 SCRA 710 (Tado) vehicles and other items needed for the
CARMELITO L. PALACOL, ET AL., petitioners, benefit of the officers and the general
vs. PURA FERRER-CALLEJA, Director of the membership; and for the payment for
Bureau of Labor Relations, MANILA CCBPI services rendered by union officers,
SALES FORCE UNION, and COCA-COLA consultants and others." 2 There was also an
BOTTLERS (PHILIPPINES), INC., respondents additional proviso stating that the "matter of
G.R. No. 85333 February 26, 1990 allocation ... shall be at the discretion of our
incumbent Union President."
FACTS:
On October 12, 1987, the respondent Subsequently however, a total of members
Manila CCBPI Sales Force Union (the Union), of the Union submitted documents to the
as the collective bargaining agent of all Company stating that although they have
regular salesmen, regular helpers, and relief ratified the new CBA, they are withdrawing
helpers of the Manila Plant and Metro or disauthorizing the deduction of any
Manila Sales Office of the respondent Coca- amount from their CBA lump sum. These
Cola Bottlers (Philippines), Inc. (the members, numbering 355 in all (170 + 185),
Company) concluded a new collective added to the original oppositors of 173,
bargaining agreement with the latter. 1 turned the tide in favor of disauthorization
Among the compensation benefits granted for the special assessment, with a total of
to the employees was a general salary 528 objectors and a remainder of 272
increase to be given in lump sum including supporters. 5
and consent" 8 is in accord with the
Petitioners assailed the 10% special constitutional principle of the State
assessment as a violation of Article 241(o) in affording full protection to labor. 9
relation to Article 222(b) of the Labor Code.
The respondent-Union brushed aside the
Med-Arbiter Manases T. Cruz ruled in favor defects pointed out by petitioners in the
of petitioners manner of compliance with the legal
Bureau of Labor Relations, however, the requirements as "insignificant
order of the Med-Arbiter was reversed and technicalities." On the contrary, the failure
set aside of the Union to comply strictly with the
requirements set out by the law invalidates
the questioned special assessment.
ISSUE: Substantial compliance is not enough in view
Can a special assessment be validly deducted of the fact that the special assessment will
by a labor union from the lump-sum pay of diminish the compensation of the union
its members, granted under a collective members. Their express consent is required,
bargaining agreement (CBA), and this consent must be obtained in
notwithstanding a subsequent accordance with the steps outlined by law,
disauthorization of the same by a majority of which must be followed to the letter. No
the union members? shortcuts are allowed.
Private respondents are members of said The Secretary of Labor, on appeal, ordered
union. that the refund shall be limited to those
union members who have not signified their
The unions Executive Board decided to conformity to the check-off of attorneys
retain anew the service of Atty. Ignacio P. fees.
Lacsina (now deceased) as union counsel in
connection with the negotiations for a new Petitioners argue that the General
Collective Bargaining Agreement (CBA). Membership Resolution authorizing the
Majority of all union members approved and bank to check-off attorneys fee from the first
signed a resolution confirming the decision lump sum payment of the benefits to the
of the executive board. employees under the new CBA satisfies the
As approved, the resolution provided that legal requirements for such assessment.
ten percent (10%) of the total economic
benefits that may be secured through the Private respondents, on the other hand,
negotiations be given to Atty. Lacsina as claim that the check-off provision in
attorneys fees and to check-off said question is illegal because it was never
attorneys fees from the first lump sum submitted for approval at a general
payment of benefits to the employees under membership meeting called for the purpose
the new CBA and to turn over said amount and that it failed to meet the formalities
to Atty. Lacsina. mandated by the Labor Code
Article 241 of the labor code has three (3) 133. Volkschel Labor Union vs. BLR, 137
requisites for the validity of the special SCRA 42 (Vosotros)
assessment for union’s incidental expenses,
attorney’s fees and representation Volkschel Labor Union
expenses. These are: 1) authorization by a
written resolution of the majority of all the vs.
members at the general membership
meeting called for the purpose; (2) Bureau of Labor Relations;
secretarys record of the minutes of the
meeting; and (3) individual written G.R. No. L-45824; 19 Jan 1985; 137 SCRA 42
authorization for check off duly signed by the
employees concerned.
FACTS:
After a thorough review of the records, we
find that the General Membership Petitioner was once affiliated with the
Resolution did not satisfy the requirements Associated Labor Union for Metal Workers
laid down by law and jurisprudence for the (ALUMETAL for short).
validity of the ten percent (10%) special
assessment for unions incidental expenses, On August 1, 1975, both unions, using the
attorneys fees and representation expenses. name Volkschel Labor Union Associated
There were no individual written check off Labor Union for Metal Workers, jointly
authorizations by the employees concerned entered into a collective bargaining
and so the assessment cannot be legally agreement with respondent companies.
deducted by their employer.
One of the subjects dealt with is the
The obligation to pay the attorneys fees payment of union dues which is provided for
belongs to the union and cannot be shunted in Section 3, Article 1, of the CBA, which
to the workers as their direct responsibility. reads:
Neither the lawyer nor the union itself may
require the individual worker to assume the Section 3. CHECK-OFF. — The
obligation to pay attorneys fees from their COMPANY agrees to make payroll
deductions not softener than twice a month Whether or not petitioner union’s
of UNION membership dues and such special disaffiliation from respondent federation
assessments fees or fines as may be duly valid.
authorized by the UNION, provided that the
same is covered by the individual check-off RULING:
authorization of the UNION members. All
said deductions shall be promptly YES. A local union, being a separate and
transmitted within five (5) days by the voluntary association, is free to serve the
COMPANY to the UNION Treasurer. The interest of all its members including the
COMPANY shall prepare two (2) checks. One freedom to disaffiliate when circumstances
(1) check will be under the name of the local warrant.
union as their local fund including local
special assessment funds and the other The right of a local union to disaffiliate from
check will be for the ALU Regional Office its mother union is well-settled. In previous
regarding the remittance of the UNION dues cases, it has been repeatedly HELD: that a
deduction. local union, being a separate and voluntary
association, is free to serve the interest of all
After some time, a majority of petitioner’s its members including the freedom to
members decided to disaffiliate from disaffiliate when circumstances warrant. 4
respondent federation in order to operate This right is consistent with the
on its own as an independent labor group Constitutional guarantee of freedom of
pursuant to Article 241 (formerly Article 240) association (Article IV, Section 7, Philippine
of the Labor Code of the Philippines, the Constitution).
pertinent portion of which reads:
In the case at bar, it would go against the
Incumbent affiliates of existing federations spirit of the labor law to restrict petitioner's
or national unions may disaffiliate only for right to self-organization due to the
the purpose of joining a federation or existence of the CBA. We agree with the
national union in the industry or region in Med-Arbiter's opinion that "A disaffiliation
which it properly belongs or for the purpose does not disturb the enforceability and
of operating as an independent labor group. administration of a collective agreement; it
does not occasion a change of
ISSUE(S): administrators of the contract nor even an
amendment of the provisions thereof."
Side Ruling: (EFFECT OF DISAFFLIATION) petitioner's members. "A local union which
has validly withdrawn from its affiliation
Under Section 3, Article I, of the CBA, the with the parent association and which
obligation of the respondent companies to continues to represent the employees of an
deduct and remit dues to ALUMETAL is employer is entitled to the check-off dues
conditioned on the individual check-off under a collective bargaining contract."
authorization of petitioner's members, In
other words, ALUMETAL is entitled to
receive the dues from respondent 134. Philippine Skylanders lnc. vs. NLRC, G.R.
companies as long as petitioner union is 177374,31Jan. 2002 (Banuelos)
affiliated with it and respondent companies TOPIC: Right to Disaffiliate from Mother
are authorized by their employees Union
(members of petitioner union) to deduct
union dues. Without said affiliation, the G.R. No. 127374 January 31, 2002
employer has no link to the mother union.
The obligation of an employee to pay union PHILIPPINE SKYLANDERS, INC., MARILES C.
dues is coterminous with his affiliation or ROMULO and FRANCISCO DAKILA, vs.
membership. "The employees' check-off NATIONAL LABOR RELATIONS COMMISSION,
authorization, even if declared irrevocable, LABOR ARBITER EMERSON TUMANON,
is good only as long as they remain members PHILIPPINE ASSOCIATION OF FREE LABOR
of the union concerned." UNIONS (PAFLU) SEPTEMBER (now UNIFIED
PAFLU) and SERAFIN AYROSO.
A contract between an employer and the
parent organization as bargaining agent for Ponente: BELLOSILLO, J.
the employees is terminated by the
disaffiliation of the local of which the FACTS:
employees are members. Respondent
companies therefore were wrong in In November 1993 the Philippine Skylanders
continuing the check-off in favor of Employees Association (PSEA), a local labor
respondent federation since they were duly union affiliated with the Philippine
notified of the disaffiliation and of Association of Free Labor Unions (PAFLU)
petitioner's members having already September (PAFLU), won in the certification
rescinded their check-off authorization. election conducted among the rank and file
employees of Philippine Skylanders, Inc.
Suffice it to state that respondent federation (PSI). Its rival union, Philippine Skylanders
is not entitled to union dues payments from Employees Association-WATU (PSEA-WATU)
immediately protested the result of the the time was ripe for the parties to enter into
election before the Secretary of Labor. a collective bargaining agreement.
Several months later, pending settlement of On 30 July 1994 PSI through its personnel
the controversy, PSEA sent PAFLU a notice of manager Francisco Dakila denied the
disaffiliation citing as reason PAFLU's request citing as reason PSEA's disaffiliation
supposed deliberate and habitual dereliction from PAFLU and its subsequent affiliation
of duty toward its members. Attached to the with NCW.
notice was a copy of the resolution adopted
and signed by the officers and members of Agitated by PSI's recognition of PSEA-NCW,
PSEA authorizing their local union to PAFLU through Serafin Ayroso filed a
disaffiliate from its mother federation. complaint for unfair labor practice against
PSI, its president Mariles Romulo and
PSEA subsequently affiliated itself with the personnel manager Francisco Dakila. PAFLU
National Congress of Workers (NCW), alleged that aside from PSI's refusal to
changed its name to Philippine Skylanders bargain collectively with its workers, the
Employees Association - National Congress company through its president and
of Workers (PSEA-NCW), and to maintain personnel manager, was also liable for
continuity within the organization, allowed interfering with its employees' union
the former officers of PSEA-PAFLU to activities.
continue occupying their positions as
elected officers in the newly-forged PSEA- On 1 February 1995 PAFLU amended its
NCW. complaint by including the elected officers of
PSEA-PAFLU as additional parties to the
On 17 March 1994 PSEA-NCW entered into a case. PAFLU averred that the local officers of
collective bargaining agreement with PSI PSEA-PAFLU, namely Macario Cabanias,
which was immediately registered with the Pepito Rodillas, Sharon Castillo, Danilo
Department of Labor and Employment. Carbonel, Manuel Eda, Rolando Felix,
Jocelyn Fronda, Ricardo Lumba, Joseph
Meanwhile, apparently oblivious to PSEA's Mirasol, Nerisa Mortel, Teofilo Quirong,
shift of allegiance, PAFLU Secretary General Leonardo Reyes, Manuel Cadiente, and
Serafin Ayroso wrote Mariles C. Romulo Herminia Riosa, were equally guilty of unfair
requesting a copy of PSI's audited financial labor practice since they brazenly allowed
statement. Ayroso explained that with the themselves to be manipulated and
dismissal of PSEA-WATU's election protest influenced by FRANCISCO DAKILA.
PSI, its president Mariles C. Romulo, and its separate and voluntary associations, local
personnel manager Dakila moved for the unions do not owe their creation and
dismissal of the complaint on the ground existence to the national federation to which
that the issue of disaffiliation was an inter- they are affiliated but, instead, to the will of
union conflict which lay beyond the their members. The sole essence of
jurisdiction of the Labor Arbiter. On the affiliation is to increase, by collective action,
other hand, PSEA-NCW took the cudgels for the common bargaining power of local
its officers who were being sued in their unions for the effective enhancement and
capacities as former officers of PSEA-PAFLU protection of their interests. Admittedly,
and asserted that since PSEA was no longer there are times when without succor and
affiliated with PAFLU, Ayroso or PAFLU for support local unions may find it hard,
that matter had no personality to file the unaided by other support groups, to secure
instant complaint. In support of this justice for themselves.
assertion, PSEA-NCW submitted in evidence
a Katunayan signed by 111 out of 120 rank Yet the local unions remain the basic units of
and file employees of PSI disauthorizing association, free to serve their own interests
Ayroso or PAFLU from instituting any action subject to the restraints imposed by the
in their behalf. constitution and by-laws of the national
federation, and free also to renounce the
Legal ISSUE: W/N the act of PSEA affiliation upon the terms laid down in the
disaffiliating with PAFLU is an act of unfair agreement which brought such affiliation
labor practice. into existence.
In view of the significant number of CA: affirmed the ruling of the SOLE
segregated votes, contending unions,
petitioner, NUHWHRAIN-MPHC, and ISSUE: 1. whether employees on
respondent Holiday Inn Manila Pavillion probationary status at the time of the
Hotel Labor Union (HIMPHLU), referred the certification elections should be allowed to
case back to Med-Arbiter Ma. Simonette vote, and
Calabocal to decide which among those 2. whether HIMPHLU was able to obtain the
votes would be opened and tallied. Eleven required majority for it to be certified as the
(11) votes were initially segregated because exclusive bargaining agent.
they were cast by dismissed employees,
albeit the legality of their dismissal was still RULING:
pending before the Court of Appeals. Six 1. YES
other votes were segregated because the
employees who cast them were already The inclusion of Gatbontons vote was proper
occupying supervisory positions at the time not because it was not questioned but
of the election. Still five other votes were because probationary employees have the
segregated on the ground that they were right to vote in a certification election.
cast by probationary employees and,
pursuant to the existing Collective Airtime Specialists, Inc. v. Ferrer-Calleja
Bargaining Agreement (CBA), such holds:
employees cannot vote. It bears noting early
on, however, that the vote of one Jose In a certification election, all rank and file
Gatbonton (Gatbonton), a probationary employees in the appropriate bargaining
employee, was counted. unit, whether probationary or permanent
are entitled to vote. This principle is clearly charters established under the Corporation
stated in Art. 255 of the Labor Code which Code, as well as employees of religious,
states that the labor organization designated charitable, medical or educational
or selected by the majority of the employees institutions whether operating for profit or
in an appropriate bargaining unit shall be the not, shall have the right to self-organization
exclusive representative of the employees in and to form, join or assist labor unions for
such unit for purposes of collective purposes of collective bargaining: provided,
bargaining. Collective bargaining covers all however, that supervisory employees shall
aspects of the employment relation and the not be eligible for membership in a labor
resultant CBA negotiated by the certified union of the rank-and-file employees but
union binds all employees in the bargaining may form, join or assist separate labor
unit. Hence, all rank and file employees, unions of their own. Managerial employees
probationary or permanent, have a shall not be eligible to form, join or assist any
substantial interest in the selection of the labor unions for purposes of collective
bargaining representative. The Code makes bargaining. Alien employees with valid
no distinction as to their employment status working permits issued by the Department
as basis for eligibility in supporting the may exercise the right to self-organization
petition for certification election. The law and join or assist labor unions for purposes
refers to all the employees in the bargaining of collective bargaining if they are nationals
unit. All they need to be eligible to support of a country which grants the same or similar
the petition is to belong to the bargaining rights to Filipino workers, as certified by the
unit. (Emphasis supplied) Department of Foreign Affairs.
Rule II, Sec. 2 of Department Order No. 40- For purposes of this section, any employee,
03, series of 2003, which amended Rule XI of whether employed for a definite period or
the Omnibus Rules Implementing the Labor not, shall beginning on the first day of
Code, provides: his/her service, be eligible for membership
in any labor organization.
Rule II
All other workers, including ambulant,
Section 2. Who may join labor unions and intermittent and other workers, the self-
workers' associations. - All persons employed, rural workers and those without
employed in commercial, industrial and any definite employers may form labor
agricultural enterprises, including organizations for their mutual aid and
employees of government owned or protection and other legitimate purposes
controlled corporations without original
except collective bargaining. (Emphasis appeal has been filed fromthe Order of the
supplied) Med-Arbiter, the date when the Order of the
Secretary of Labor and
Employment,whether affirming or denying
The provision in the CBA disqualifying the appeal, becomes final and executory
probationary employees from voting cannot
override the Constitutionally-protected right
of workers to self-organization, as well as the In the present case, records show that the
provisions of the Labor Code and its probationary employees, including
Implementing Rules on certification Gatbonton, were included in the list of
elections and jurisprudence thereon. employees in the bargaining unit submitted
by the Hotel on May 25, 2006 in compliance
A law is read into, and forms part of, a with the directive of the Med-Arbiter after
contract. Provisions in a contract are valid the appeal and subsequent motion for
only if they are not contrary to law, morals, reconsideration have been denied by the
good customs, public order or public policy. SOLE, rendering the Med-Arbiters August 22,
2005 Order final and executory 10 days after
Rule XI, Sec. 5 of D.O. 40-03, on which the the March 22, 2007 Resolution (denying the
SOLE and the appellate court rely to support motion for reconsideration of the January 22
their position that probationary employees Order denying the appeal), and rightly so.
hired after the issuance of the Order Because, for purposes of self-organization,
granting the petition for the conduct of those employees are, in light of the
certification election must be excluded, discussion above, deemed eligible to vote.
should not be read in isolation and must be
harmonized with the other provisions of A certification election is the process of
D.O. Rule XI, Sec. 5 of D.O. 40-03. determining the sole and exclusive
bargaining agent of the employees in an
appropriate bargaining unit for purposes of
In light of the immediately-quoted collective bargaining. Collective bargaining,
provisions, and prescinding from the refers to the negotiated contract between a
principle that all employees are, from the legitimate labor organization and the
first day of their employment, eligible for employer concerning wages, hours of work
membership in a labor organization, it is and all other terms and conditions of
evident that the period of reckoning in employment in a bargaining unit.
determining who shall be included in the list
of eligible voters is, in cases where a timely
But while the Court rules that the votes of all cast is for it to serve as basis for computing
the probationary employees should be the required majority, and not just to
included, under the particular circumstances determine which union won the elections.
of this case and the period of time which it The opening of the segregated but valid
took for the appeal to be decided, the votes votes has thus become material. To be sure,
of the six supervisory employees must be the conduct of a certification election has a
excluded because at the time the two-fold objective: to determine the
certification elections was conducted, they appropriate bargaining unit and to ascertain
had ceased to be part of the rank and file, the majority representation of the
their promotion having taken effect two bargaining representative, if the employees
months before the election. desire to be represented at all by anyone.
FACTS: ISSUE:
Respondent Samahan Ng Mga Manggagawa Whether the Union registration be
Sa Mariwasa Siam Ceramics, Inc. (SMMSC- cancelled?
Independent) was issued a Certificate of
Registration as a legitimate labor RULING:
organization by the Department of Labor NO.
and Employment (DOLE), Region IV-A.
For the purpose of de-certifying a union such
Petitioner Mariwasa Siam Ceramics, Inc. as respondent, it must be shown that there
filed a Petition for Cancellation of Union was misrepresentation, false statement or
Registration against respondent, claiming fraud in connection with the adoption or
that the latter violated Article 234 of the ratification of the constitution and by-laws
Labor Code for not complying with the 20% or amendments thereto; the minutes of
requirement, and that it committed massive ratification; or, in connection with the
fraud and misrepresentation in violation of election of officers, the minutes of the
Article 239 of the same code. election of officers, the list of voters, or
failure to submit these documents together
The petitioner insists that respondent failed with the list of the newly elected-appointed
to comply with the 20% union membership officers and their postal addresses to the
requirement for its registration as a BLR.
legitimate labor organization because of the
disaffiliation from the total number of union In the instant case, the affidavits of
members of 102 employees who executed recantation were executed after the
affidavits recanting their union membership. identities of the union members became
public, i.e., after the union filed a petition for
The second allegation ostensibly bares the certification election on May 23, 2005, since
affiants regret for joining respondent union the names of the members were attached to
and expresses the desire to abandon or the petition.
renege from whatever agreement he may
The purported withdrawal of support for the a resignation from the union, the fact
registration of the union was made after the remains that at the time of the unions
documents were submitted to the DOLE, application for registration, the affiants were
Region IV-A. The logical conclusion, members of respondent and they comprised
therefore, following jurisprudence, is that more than the required 20% membership for
the employees were not totally free from the purposes of registration as a labor union.
employers pressure, and so the
voluntariness of the employees execution of The bare fact that two signatures appeared
the affidavits becomes suspect. twice on the list of those who participated in
the organizational meeting would not, to our
Accordingly, we cannot give full credence to mind, provide a valid reason to cancel
these affidavits, which were executed under respondent’s certificate of registration.
suspicious circumstances, and which contain 138. TOYOTA MOTOR PHILIPPINES
allegations unsupported by evidence. At CORPORATION
best, these affidavits are self-serving. They
possess no probative value. vs.
The CA ruled that only 17 votes can be The filing of an appeal to the SOLE from the
disregarded and the probationary Med-Arbiter’s Order stays its execution, in
employees should be counted since the vote accordance with Sec. 21, and rationally, the
cast by Gatbonton was not questioned. Med-Arbiter cannot direct the employer to
furnish him/her with the list of eligible voters
ISSUE: W/N employees on probationary pending the resolution of the appeal.
status at the time of the certification
elections should be allowed to vote. During the pendency of the appeal, the
employer may hire additional employees. To
exclude the employees hired after the reckoning the date of the issuance of the
issuance of the Med-Arbiter’s Order but Med-Arbiter’s Order as the cut-off date
before the appeal has been resolved would would render inutile the remedy of appeal to
violate the guarantee that every employee the SOLE.1avvph!1
has the right to be part of a labor
organization from the first day of their But while the Court rules that the votes of all
service. the probationary employees should be
included, under the particular circumstances
In the present case, records show that the of this case and the period of time which it
probationary employees, including took for the appeal to be decided, the votes
Gatbonton, were included in the list of of the six supervisory employees must be
employees in the bargaining unit submitted excluded because at the time the
by the Hotel on May 25, 2006 in compliance certification elections was conducted, they
with the directive of the Med-Arbiter after had ceased to be part of the rank and file,
the appeal and subsequent motion for their promotion having taken effect two
reconsideration have been denied by the months before the election.
SOLE, rendering the Med-Arbiter’s August
22, 2005 Order final and executory 10 days It bears reiteration that the true importance
after the March 22, 2007 Resolution of ascertaining the number of valid votes
(denying the motion for reconsideration of cast is for it to serve as basis for computing
the January 22 Order denying the appeal), the required majority, and not just to
and rightly so. Because, for purposes of self- determine which union won the elections.
organization, those employees are, in light of The opening of the segregated but valid
the discussion above, deemed eligible to votes has thus become material. To be sure,
vote. the conduct of a certification election has a
two-fold objective: to determine the
Even if the Implementing Rules gives the appropriate bargaining unit and to ascertain
SOLE 20 days to decide the appeal from the the majority representation of the
Order of the Med-Arbiter, experience shows bargaining representative, if the employees
that it sometimes takes months to be desire to be represented at all by anyone. It
resolved. To rule then that only those is not simply the determination of who
employees hired as of the date of the between two or more contending unions
issuance of the Med-Arbiter’s Order are won, but whether it effectively ascertains
qualified to vote would effectively the will of the members of the bargaining
disenfranchise employees hired during the unit as to whether they want to be
pendency of the appeal. More importantly,
represented and which union they want to
represent them. Due to the brewing conflict between the two
factions, petitioner thru a letter to the
Having declared that no choice in the respondent informed the latter that the
certification election conducted obtained intra-union dispute between the incumbent
the required majority, it follows that a run- set of officers of the Union on one hand and
off election must be HELD: to determine a sizeable number of its members on the
which between HIMPHLU and petitioner other hand has reached serious levels. By
should represent the rank-and-file virtue of the 19 March 2001 Decision and the
employees. 06 July 2001 Order of the Department of
Labor and Employment (DOLE), the hold-
142. G.R. No. 169254 August 23, 2012 over authority of Union’s incumbent set of
officers has been considered extinguished
DE LA SALLE UNIVERSITY vs. DE LA SALLE and an election of new union officers, to be
UNIVERSITY EMPLOYEES ASSOCIATION conducted and supervised by the DOLE, has
(DLSUEA-NAFTEU) been directed to be held. Until the result of
this election [come] out and a declaration by
FACTS: the DOLE of the validly elected officers is
made, a void in the Union leadership exists.
Respondent DLFSUEA-NAFTEU has two
opposing factions. The Aliazas faction filed a In light of these circumstances, the
petition for election of union officers in the University has no other alternative but to
Bureau of Labor Relations. They alleged that temporarily do the following:
there has been no election for respondent’s 1. Establish a savings account for the Union
officers since 1992 in supposed violation of where all the collected union dues and
the respondent union’s constitution and by- agency fees will be deposited and HELD: in
laws which provided for an election of trust; and
officers every three years. It would appear 2. Discontinue normal relations with any
that the respondent’s members repeatedly group within the Union including the
voted to approve the hold-over of the incumbent set of officers.
previously elected officers led by Baylon R.
Banez (Banez faction) and to defer the In view of the foregoing decision of
elections to expedite the negotiations of the petitioner, respondent filed a complaint for
economic terms covering the last two years unfair labor practice in the National Labor
of the 1995-2000 collective bargaining Relations Commission (NLRC) on August 21,
agreement. 2001. It alleged that petitioner committed a
violation of Article 248(a) and (g) of the validity of petitioner’s view that there was a
Labor Code which provides: void in the leadership of respondent.
Article 248. Unfair labor practices of
employers. It shall be unlawful for an The Secretary of Labor assumed jurisdiction
employer to commit any of the following over the matter pursuant to Article 263 of
unfair labor practice: the Labor Code as petitioner, an educational
institution, was considered as belonging to
(a) To interfere with, restrain or coerce an industry indispensable to national
employees in the exercise of their right to interest.
self-organization.
(d) To initiate, dominate, assist or otherwise The Secretary of Labor issued a Decision,
interfere with the formation or finding petitioner guilty of violating Article
administrator of any labor organization, 248(g) in relation to Article 252 of the Labor
including the giving of financial or other Code. The salient portion thereof stated:
support to it or its organizers or supporters.
The University is guilty of refusal to bargain
Respondent union asserted that the creation amounting to an unfair labor practice under
of escrow accounts was not an act of Article 248(g) of the Labor Code. Indeed
neutrality as it was influenced by the Aliazas there was a requirement on both parties of
factions’s letter and was an act of the performance of the mutual obligation to
interference with the internal affairs of the meet and convene promptly and
union. Thus, petitioner’s non-remittance of expeditiously in good faith for the purpose of
union dues and discontinuance of normal negotiating an agreement. Undoubtedly,
relations with it constituted unfair labor both [petitioner] and [respondent] entered
practice. into a [CBA] on [March 20, 2001. The term of
the said CBA commenced on [June 1, 2000
Petitioner, for its defense, denied the and with the expiration of the economic
allegations of respondent and insisted that provisions on the third year, [respondent]
its actions were motivated by good faith. initiated negotiation by sending a letter
dated March 15, 2003, together with the
The Labor Arbiter dismissed the complaint CBA proposal. In reply to the letter of
for unfair labor practice against petitioner [respondent], [petitioner] in its letter dated
for lack of merit affirming the need to [March 20, 2003 refused.
conduct an election of the union’s officers.
The labor arbiter, in effect, upHELD: the Such an act constituted an intentional
avoidance of a duty imposed by law. There
was nothing in the [March 19, 2001 and July officers is already extinguished." The present
6, 2001 orders] of Director Maraan and controversy involves petitioner’s actions
Cacdac which restrained or enjoined subsequent to (1) the clarification of said
compliance by the parties with their March 19, 2001 Maraan Decision by BLR
obligations under the CBA and under the Director Cacdac who opined in a May 16,
law. The issue of union leadership is distinct 2003 memorandum that the then
and separate from the duty to bargain. incumbent union officers (i.e., the Bañez
faction) continued to hold office until their
ISSUE: successors have been elected and qualified,
and (2) the July 28, 2003 Decision of the
Whether the petitioner’s refusal to bargain Secretary of Labor in OS-AJ-0015-2003 ruling
amount to unfair labor practice under the that the very same intra-union dispute
Labor Code. (subject of several notices of strike) is
insufficient ground for the petitioner to
RULING: suspend CBA negotiations with respondent
YES. Petitioner erred in unilaterally union. We take notice, too, that the
suspending negotiations with respondent aforesaid Decision of Labor Arbiter Pati has
since the pendency of the intra-union since been set aside by the Court of Appeals
dispute was not a justifiable reason to do so. and such reversal was upheld by this Court’s
Second Division in its Decision dated April 7,
The continued refusal by the 2009 in G.R. No. 177283, wherein petitioner
University to negotiate amounts to unfair was found liable for unfair labor practice.
labor practice. The non-proclamation of the
newly elected union officers cannot be used Neither can petitioner seek refuge in its
as an excuse to fulfill the duty to bargain defense that as early as November 2003 it
collectively. had already released the escrowed union
dues to respondent and normalized relations
Petitioner’s reliance on the July 12, 2002 with the latter. The fact remains that from its
Decision of Labor Arbiter Pati, and the receipt of the July 28, 2003 Decision of the
NLRC’s affirmance thereof, is misplaced. The Secretary of Labor in OS-AJ-0015-2003 until
unfair labor practice complaint dismissed by its receipt of the November 17, 2003
Labor Arbiter Pati questioned petitioner’s Decision of the Secretary of Labor in OS-AJ-
actions immediately after the March 19, 0033-2003, petitioner failed in its duty to
2001 Decision of BLR Regional Director collectively bargain with respondent union
Maraan, finding that "the reason for the without valid reason. At most, such
hold-over of the previously elected union subsequent acts of compliance with the
issuances in OS-AJ-0015-2003 and OS-AJ-
0033-2003 merely rendered moot and
academic the Secretary of Labor’s directives
for petitioner to commence collective
bargaining negotiations within the period
provided.