POST EMPLOYMENT TRANSITORY AND FINAL PROVISIONS OF

THE LABOR CODE

X. pp. 749-810 azucena vol. II-B (2016)

Duration of the Project or specific undertaking

GADIA, ET AL. VS SKYES ASIA, INC.

Sykes Asia is a corporation engaged in Business Process
Outsourcing (BPO) which provides support to its international clients
from various sectors (e.g., technology, telecommunications, retail
services) by carrying on some of their operations, governed by
service contracts that it enters with them. On September 2,
2003,12 Alltel Communications, Inc. (Alltel), a United States-based
telecommunications firm, contracted Sykes Asia’s services to
accommodate the needs and demands of Alltel clients for its postpaid
and prepaid services (Alltel Project). Thus, on different dates, Sykes
Asia hired petitioners as customer service representatives, team
leaders, and trainers for the Alltel Project.

Sometime in 2009, Alltel informed Sykes that it is terminating its

contract with Sykes. As a result, Sykes sent each of the petitioners
end-of-life notices informing them of their dismissal from service due
to the termination of the contract with Alltel. Aggrieved, they filed a
case for illegal dismissal with the NLRC.

As a defense, Sykes alleged that the petitioners were merely project

employees, which was clearly shown by their respective employment
contracts.

Issue: Whether or not the petitioners are project employees.

YES.

Article 294 (now, Article 195[280]) of the Labor Code provides that an
employee is deemed regular when he has been engaged to perform
activities which are deemed usually necessary and desirable in the
usual business or trade of the employer, except (i) where the
employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time
of the engagement of the employee or (ii) where the work or services
to be performed is seasonal in nature and the employment if for the
duration of the season.

Accordingly, the the principal test for determining whether particular

employees are properly characterised as project employees as
distinguished from "regular employees," is whether or not the
employees were assigned to carry out a "specific project or
undertaking," the duration (and scope) of which were specified at the
time they were engaged for that project. The project could either be
(i) a particular job or undertaking that is within the regular or usual
business of the employer company, but which is distinct and
separate, and identifiable as such, from the other undertakings of the
company; or (ii) a particular job or undertaking that is not within the
regular business of the corporation. In order to safeguard the rights of
workers against the arbitrary use of the word "project" to prevent
employees from attaining a regular status, employers claiming that
their workers are project-based employees should not only prove that
the duration and scope of the employment was specified at the time
they were engaged, but also, that there was indeed a project.

Thus, for an employee to be considered project-based, the employer

must show compliance with two (2) requisites, namely that: (a) the
employee was assigned to carry out a specific project or undertaking;
and (b) the duration and scope of which were specified at the time
they were engaged for such project.

In this case, the Court held that Sykes was able to prove both
requisites.

As regards the first requisite, it held that Sykes adequately informed

the petitioners of their employment status at the time of their
engagement. As was shown by their respective employment
contracts, they were hired for the Alltel Project and their positions
were “project-based and as such is co-terminus to the project.”

As regards the second requisite, it held that “the duration of the

undertaking begins and ends at determined or determinable times”
which means capable of being determined or fixed. As such,
indicating in the contract that their employment is “co-termius with the
project” is sufficient compliance with this requisite.

Burden of Proving fact of dismissal

DIONARTO NOBLEJAS VS ITALIAN MARITIME ACADEMY

IMAPI was a training center for seamen and an assessment center

for determination of the qualifications and competency of seamen and
officers for possible promotion. Capt. Terrei was the Managing
Director of IMAPI while Ferrez was his secretary. Mendoza was the
company’s Administrative Manager.

Record shows that Procerfina SA. Terrei, IMAPI President, wrote a

Letter to Noblejas informing him that he had been appointed as
training instructor/assessor of the company on a contractual basis for
a period of three (3) months effective May 20,2009, with a monthly
salary of 75,000.00 inclusive of tax. After the expiration of the 3-
month period, IMAPI hired Noblejas anew as training
instructor/assessor with the same salary rate, but no written contract
was drawn for his rehiring.

The absence of a written contract to cover the renewal of his

employment became Noblejas’ major concern. To address all his
apprehensions, he wrote Capt. Terrei a letter, dated March 9, 2010,
requesting that a new contract be executed to reflect the following
provisions that they had allegedly agreed upon during their
conversation on May 19, 2009, to wit: 1) that his monthly salary would
be ₱75,000.00, tax excluded, and that 50% of his SSS premium
would be shouldered by the company; and 2) that after the
completion of his 3-month contract, he would be given the option to
choose either - a) to be regularly employed as an instructor of IMAPI;
or b) to go on board a vessel with the company extending him
financial aid for the processing of pertinent documents, which amount
would be later on deducted from his salary. Likewise in the same
letter, Noblejas intimated that he was electing to continue working for
the company as its regular instructor.

Noblejas averred that the company did not act on his letter-request,
so he sought an audience with Capt. Terrei on March 16, 2010.
During the meeting, an altercation between them ensued. He claimed
that after that incident, Capt. Terrei instructed Ferrez to dismiss him
from employment. In their position paper, respondents submitted that
they could not be adjudged guilty of illegal dismissal because there
was no positive and overt act of dismissing Noblejas from
employment.

Respondents presented a different version of what took place on

March 16, 2010. According to respondents, Noblejas got angry,
hurled invectives against Ferrez and even threatened to file a case
against them after she had relayed to him the response of Capt.
Terrei to his March 9, 2010 letter to the effect that there was no
previous agreement to grant him tax refund, health insurance and
food, schooling and gasoline allowances and that he had to render at
least one year of service before the company could decide whether to
accord him the status of a regular employee. The following day,
March 17, 2010, he did not report for work anymore and filed the
complaint against them.

I: W/N Noblejas was illegally dismissed.

H: No. Fair evidentiary rule dictates that before employers are

burdened to prove that they did not commit illegal dismissal, it is
incumbent upon the employee to first establish by substantial
evidence the fact of his or her dismissal. The Court is not unmindful
of the rule in labor cases that the employer has the burden of proving
that the termination was for a valid or authorized cause. It is likewise
incumbent upon the employees, however, that they should first
establish by competent evidence the fact of their dismissal from
employment. It is an age-old rule that the one who alleges a fact has
the burden of proving it and the proof should be clear, positive and
convincing. Mere allegation is not evidence.

Aside from his mere assertion, no corroborative and competent

evidence was adduced by Noblejas to substantiate his claim that he
was dismissed from employment. The record is bereft of any
indication that he was prevented from returning to work or otherwise
deprived of any work assignment. It is also noted that no evidence
was submitted to show that respondent Ferrez, the secretary of Capt.
Terrei, was actually authorized by IMAPI to terminate the employment
of the company’s employees or that Ferrez was indeed instructed by
Capt. Terrei to dismiss him from employment.

The Court finds it odd that, instead of clarifying from Capt. Terrei what
he heard from Ferrez, Noblejas immediately instituted an illegal
dismissal case against the respondents the day following the alleged
incident and never reported back for work since then.

Respondents’ refusal to grant complainant’s demands does not

constitute an overt act of dismissal. On the contrary, it is rather the
apparent disinterest of complainant to continue his employment with
respondent company that may be considered a covert act that
severed his employment when the latter did not grant the litany of his
demands.

Let it be underscored that the fact of dismissal must be established

by positive and overt acts of an employer indicating the intention to
dismiss. Indeed, a party alleging a critical fact must support his
allegation with substantial evidence, for any decision based on
unsubstantiated al legation cannot stand without offending due
process. Here, there is no sufficient proof showing that Noblejas was
actually laid off from work. In any event, his filing of a complaint for
illegal dismissal, irrespective of whether reinstatement or separation
pay was prayed for, could not by itself be the sole consideration in
determining whether he has been illegally dismissed.

Transfer
MORALES VS HARBOR CENTRE POST TERMINAL
FACTS: On 16 May 2000, petitioner Jonathan V. Morales (Morales)
was hired by respondent Harbour Centre Port Terminal, Inc. (HCPTI)
as an Accountant and Acting Finance Officer with a monthly salary
of P18,000.00. Regularized on 17 November 2000, Morales was
promoted to Division Manager of the Accounting Department, for
which he was compensated a monthly salary of P33,700.00, plus
allowances starting 1 July 2002.
Subsequent to HCPTI’s transfer to its new offices at Vitas,
Tondo, Manila on 2 January 2003, Morales received an inter-
office memorandum dated 27 March 2003, reassigning him to
Operations Cost Accounting, tasked with the duty of “monitoring
and evaluating all consumables requests, gears and equipment”
related to the corporation’s operations and of interacting with its sub-
contractor, Bulk Fleet Marine Corporation.
Morales wrote Singson (admin manager), protesting that his
reassignment was a clear demotion since the position to which he
was transferred was not even included in HCPTI’s plantilla. For the
whole of the ensuing month Morales was absent from work and/or
tardy. Singson issued to Morales a 29 April 2003 inter-office
memorandum denominated as a First Warning.
In view of the absences Morales continued to incur, HCPTI issued
a Second Warning dated 6 May 2003 and a Notice to Report for Work
and Final Warning dated 22 May 2003.
LABOR ARBITER: Morales was not constructively dismissed
NLRC: Morales’ reassignment was a clear demotion despite lack of
showing of diminution of salaries and benefits.
CA rendered the herein assailed decision, reversing the NLRC’s 29
July 2005 Decision, upon the following findings and conclusions: (a)
Morales’ reassignment to Operations Cost Accounting was a valid
exercise of HCPTI’s prerogative to transfer its employees as the
exigencies of the business may require; (b) the transfer cannot be
construed as constructive dismissal since it entailed no demotion in
rank, salaries and benefits; and, (c) rather than being terminated,
Morales refused his new assignment by taking a leave of absence
from 4 to 17 April 2003 and disregarding HCPTI’s warnings and
directives to report back for work.
ISSUE: WON Morales was constructively dismissed
HELD: YES
Constructive dismissal exists where there is cessation of work
because “continued employment is rendered impossible,
unreasonable or unlikely, as an offer involving a demotion in
rank or a diminution in pay” and other benefits. Aptly called a
dismissal in disguise or an act amounting to dismissal but made to
appear as if it were not, constructive dismissal may, likewise, exist if
an act of clear discrimination, insensibility, or disdain by an employer
becomes so unbearable on the part of the employee that it could
foreclose any choice by him except to forego his continued
employment. In cases of a transfer of an employee, the rule is settled
that the employer is charged with the burden of proving that its
conduct and action are for valid and legitimate grounds such as
genuine business necessity and that the transfer is not unreasonable,
inconvenient or prejudicial to the employee. If the employer cannot
overcome this burden of proof, the employee’s transfer shall be
tantamount to unlawful constructive dismissal.
Morales was subsequently reassigned by HCPTI “from managerial
accounting to Operations Cost Accounting” on 27 March 2003,
without any mention of the position to which he was actually being
transferred. That the reassignment was a demotion is, however,
evident from Morales’ new duties which, far from being
managerial in nature, were very simply and vaguely described as
inclusive of “monitoring and evaluating all consumables
requests, gears and equipments related to [HCPTI’s]
operations” as well as “close interaction with [its] sub-contractor
Bulk Fleet Marine Corporation.”
Morales’ demotion is evident from the fact that his reassignment
entailed a transfer from a managerial position to one which was not
even included in the corporation’s plantilla.

ALLIED BANKING CORP. VS CA ET AL

FACTS:
Private respondent is an employee of petitioner, hired as an
accountant-bookkeeper and eventually promoted as an assistant
manager, which included his transfer to several branches nine times.
His appointment was covered by a “Notice of Personnel Action” which
provides as one of the conditions of employment the provision on
petitioner’s right to transfer employees on as a regular appointment
as the need arises in the interest of maintaining smooth and
uninterrupted service to the public. Effecting a rotation/movement of
officers assigned in the Cebu home-base, petitioner listed respondent
as second in the order of priority of assistant managers to be
assigned outside of Cebu City. However, private respondent refused
to be transferred to Bacolod City in a letter by reason of parental
obligations, expenses, and the anguish that would result if he were
away from his family. He thereafter filed a complaint before the Labor
Arbiter for constructive dismissal.

Subsequently, petitioner informed private respondent that he was to

report to the Tagbilaran City Branch, however, private respondent
again refused. As a result, petitioner warned and required him to
follow the said orders; otherwise, he shall be penalized under the
company’s discipline policy.
Furthermore, private respondent was required to explain and defend
himself. The latter replied stating that whether the be suspended or
dismissed, it would all the more establish and fortify his complaint
pending before the NLRC and further charges petitioner with
discrimination and favoritism in ordering his transfer. He further
alleges that the management’s discriminatory act of transferring only
the long staying accountants of Cebu in the guise of its exercise of
management prerogative when in truth and in tantamount to an unfair
labor practice as the dismissal undermined the latter’s right to
security of tenure and equal protection of the laws.

The ruling of NLRC was later affirmed by the Court of Appeals.

ISSUES:

1.WHETHER THERE IS LEGAL BASIS IN PETITIONER’S

EXERCISE OF ITS MANAGEMENT PREROGATIVE.

2.WHETHER PRIVATE RESPONDENT’S REFUSAL TO

TRANSFER CONSTITUTES VIOLATIONS OF COMPANY RULES
WARRANTING THE PENALTY OF DISMISSAL.

3.WHETHER PETITIONER DISCRIMINATED AGAINST PRIVATE

RESPONDENT IN DIRECTING HIS TRANSFER.

4.WHETHER PRIVATE RESPONDENT’S TRANSFER

CONSTITUTES A DEMOTION.

5.WHETHER PETITIONER IS COMMITTED ULP.

6.WHETHER ALLIED BANK AFFORDED PRIVATE RESPONDENT

DUE PROCESS.

HELD:

1.Yes. The rule is that the transfer of an employee ordinarily lies

within the ambit of the employer’s prerogatives. The employer
exercises the prerogative to transfer an employee for valid reasons
and according to the requirement of its business, provided the
transfer does not result in demotion in rank or diminution of the
employee’s salary, benefits and other privileges. In illegal dismissal
cases, the employer has the burden of showing that the transfer
is not unnecessary, inconvenient and prejudicial to the displaced
employee.

2.Yes. Private respondent was well aware of petitioner’s policy of

periodically transferring personnel to different branches. The
assignment to the different branches of Allied Bank was a condition of
his employment and he consented to this condition when he
signed the Notice of Personnel Action. The Court cannot accept the
proposition that when an employee opposes his employer’s decision
to transfer him to another work place, there being no bad faith or
underhanded motives on the part of either party, it is the employee’s
wishes that should be made to prevail. The refusal to obey a valid
transfer order constitutes willful disobedience of a lawful order of an
employer. Employees may object to, negotiate and seek redress
against employers for rules or orders that they regard as unjust or
illegal. However, until and unless these rules or orders are declared
illegal or improper by competent authority, the employees ignore or
disobey them at their peril. Therefore, private respondent’s continued
refusal to obey Allied Bank’s transfer orders warrants just cause
in his dismissal in accordance with Article 282 (a) of the Labor
Code and thus not entitled to reinstatement or to separation pay.

3.No. Allied Bank’s letter of 13 June 1994 showed that at least 14

accounting officers and personnel from various branches,
including private respondent, were transferred to other branches.
Allied Bank did not single him out. The same letter explained that he
was second in line for assignment outside Cebu because he had
been in Cebu for seven years already. It must be noted that none of
the other transferees joined private respondents in his complaint or
corroborated his allegations of widespread discrimination and
favoritism.

4.No. No evidence was presented showing that the transfer would

diminish his salary, benefits, or privileges. On the contrary,
petitioner’s letter of 13 June 1994 assured private respondent that
he would not suffer any reduction in rank or grade, and that
the transfer would involve the same rank, duties and obligations.
5.No. Unfair labor practices relate only to violations of “the
constitutional right of workers and employees to self-organization”
and are limited to the acts enumerated in Article 248 of the
Labor Code, none of which applies to the present case. There is
no evidence that private respondent took part in forming a union, or
even that a union existed in Allied Bank.

6.Yes. To be effective, a dismissal must comply with Section 2

(d), Rule 1, Book VI of the Omnibus Rules Implementing the Labor
Code which provides:
For termination of employment based on just causes as defined
in Article 282 of the Labor Code:
(i)A written notice served on the employee specifying the
ground or grounds of termination, and giving said employee
reasonable opportunity within which to explain his side.
(ii)A hearing or conference during which the employee concerned,
with the assistance of counsel if he so desires is given opportunity to
respond to the charge, present his evidence, or rebut the evidence
presented against him.
(iii)A written notice of termination served on the employee
indicating that upon due consideration of all the circumstances,
grounds have been established to justify his termination.

The first written notice was embodied in Allied Bank’s letter of 13

June 1994. The first notice required private respondent to explain
why no disciplinary action should be taken against him for his
refusal to comply with the transfer orders. On the requirement of a
hearing, the Court has held that the essence of due process is
simply an opportunity to be heard. An actual hearing is not
necessary. The
exchange of several letters gave him an opportunity to respond to the
charges against him. The Memo, although captioned “Transfer and
Reassignment,” did not preclude it from being a notice of termination.
The Court has held that the nature of an instrument is characterized
not by the title given to it but by its body and contents. Moreover,
private respondent himself regarded the Memo as a notice of
termination. The Memo shows that it unequivocally informed private
respondent of Allied Bank’s decision to dismiss him and discussed
the findings of the Investigation Committee that served as grounds for
the dismissal. In addition, the Memo also refuted the charges of
discrimination and demotion. However, the Memo suffered from
certain errors. Although the Memo stated that termination was to be
effective as of1 September 1994, the Memo bore the date 8
September 1994. More importantly, private respondent only
received a copy of the Memo on5 October 1994, or more than a
month after the supposed date of his dismissal. To be effective,
a written notice of termination must be served on the employee.
Allied Bank could not terminate him on 1 September 1994 because
he had not received as of that date the notice of Allied Bank’s
decision to dismiss him. The dismissal could only take effect on 5
October 1994, upon his receipt of the Memo. For this reason,
private respondent is
entitled to backwages for the period from1 September 1994to4
October 1994.

Fallo: CA and NLRC affirmed. Case is remanded to the Labor

Arbiter for the computation of the backwages, inclusive of
allowances and other benefits, due to private respondent from1
September 1994 until 4 October 1994. Labor Arbiter Dominador A.
Almirante and Atty. Loreto M. Durano are ADMONISHED to be
more careful in citing the decisions of the Supreme Court in the future
(Dosch v. NLRC).

CONCEPCION VS MINEX IMPORT

XII
Authorized causes:
Dismissal due to redundancy

ARABIT V. JARDINE PACIFIC FINANCE

DOCTRINE: To dismiss the petitioners and hire new contractual
employees as replacements necessarily give rise to the sound conclusion
that the petitioners’ services have not really become in excess of what the
employer’s business requires.

Held: P were illegally dismissed.

These rulings appropriately clarify that redundancy does not need to be

always triggered by a decline in the business. Primarily, employers resort
to redundancy when the functions of an employee have already become
superfluous or in excess of what the business requires. Thus, even if a
business is doing well, an employer can still validly dismiss an employee
from the service due to redundancy if that employee’s position has already
become in excess of what the employer’s enterprise requires.

From this perspective, it is illogical for Jardine to terminate the petitioners’

employment and replace them with contractual employees. The
replacement effectively belies Jardine’s claim that the petitioners’ positions
were abolished due to superfluity. Redundancy could have been justified if
the functions of the petitioners were transferred to other existing
employees of the company.

To dismiss the petitioners and hire new contractual employees as

replacements necessarily give rise to the sound conclusion that the
petitioners’ services have not really become in excess of what Jardine’s
business requires. To replace the petitioners who were all regular
employees with contractual ones would amount to a violation of their right
to security of tenure.

SPI TECHNOLOGIES INC V. MAPUA

DOCTRINE: In cases of redundancy, the management should adduce
evidence and prove that a position which was created in place of a
previous one should pertain to functions which are dissimilar and
incongruous to the abolished office.

Presentation of the new table of the organization and the certification of the
Human Resources Supervisor that the positions occupied by the
retrenched employees are redundant are inadequate as evidence to
support the college’s redundancy program.

Held: Mapua’s termination is illegal.

Even if we disregard Mapua’s affidavit as regards the Prime Manpower

advertisement, SPI admitted that it caused the Inquirer advertisement for a
Marketing Communications Manager position. Mapua alleged that this
advertisement belied the claim of SPI that her position is redundant
because the Corporate Development division was only renamed to
Marketing division.

A change in the job title is not synonymous to a change in the functions. A

position cannot be abolished by a mere change of job title. In cases of
redundancy, the management should adduce evidence and prove that a
position which was created in place of a previous one should pertain to
functions which are dissimilar and incongruous to the abolished office.

Floating status:

EMERITUS SECURITY V. DAILIG

Held: YES. Petitioner admits relieving respondent from his post as security
guard on 10 December 2005. There is also no dispute that respondent
remained on floating status at the time he filed his complaint for illegal
dismissal on 16 June 2006. In other words, respondent was on floating
status from 10 December 2005 to 16 June 2006 or more than six months.
Petitioner’s allegation of sending respondent a notice sometime in January
2006, requiring him to report for work, is unsubstantiated, and thus, self-
serving.

The Court agrees with the ruling of the Labor Arbiter, NLRC and Court of
Appeals that a floating status of a security guard, such as respondent, for
more than six months constitutes constructive dismissal. In Nationwide
Security and Allied Services, Inc. v. Valderama, the Court held:

x x x the temporary inactivity or "floating status" of security guards should

continue only for six months. Otherwise, the security agency concerned
could be liable for constructive dismissal. The failure of petitioner to give
respondent a work assignment beyond the reasonable six-month period
makes it liable for constructive dismissal. x x x.

EXOCET SECURITY VS SERRANO

Held: P isn’t liable for illegal dismissal. The “floating status” or

temporary “off-detail” of security guards employed by private security
agencies is a form of temporary retrenchment or lay-off. The concept
has been defined as that period of time when security guards are in
between assignments or when they are made to wait after being
relieved from a previous post until they are transferred to a new one.
It takes place when the security agency’s clients decide not to renew
their contracts with the agency, resulting in a situation where the
available posts under its existing contracts are less than the number
of guards in its roster. It also happens in instances where contracts
for security services stipulate that the client may request the agency
for the replacement of the guards assigned to it, even for want of
cause, such that the replaced security guard may be placed on
temporary “off-detail” if there are no available posts under the
agency’s existing contracts.
2. As the circumstance is generally outside the control of the security
agency or the employer, the Court has ruled that when a security
guard is placed on a “floating status,” he or she does not receive any
salary or financial benefit provided by law.

In the controversy now before the Court, there is no question that the
security guard, Serrano, was placed on floating status after his relief
from his post as a VIP security by his securityagency’s client. Yet,
there is no showing that his security agency, petitioner Exocet, acted
in bad faith when it placed Serrano on such floating status. What is
more, the present case is not a situation where Exocet did not recall
Serrano to work within the six-month period as required by law and
jurisprudence. Exocet did, in fact, make an offer to Serrano to go
back to work. It is just that the assignment—although it does not
involvea demotion in rank or diminution in salary, pay, benefits or
privileges—was not the security detail desired by Serrano.

Clearly, Serrano’s lack of assignment for more than six months

cannot be attributed to petitioner Exocet. On the contrary, records
show that, as early as September 2006, or one month after Serrano
was relieved as a VIP security, Exocet had already offered Serrano a
position in the general security service because there were no
available clients requiring positions for VIP security. Notably, even
though the new assignment does not involve a demotion in rank or
diminution in salary, pay, or benefits, Serrano declined the position
because it was not the post that suited his preference, as he insisted
on being a VIP Security.

In fact, even during the meeting with the Labor Arbiter, Exocet offered
a position in the general security only to be rebuffed by Serrano. It
was as if Serrano obliged Exocet to look for a client in need of a VIP
security—the availability of which is obviously not within Exocet’s
control, and by nature, difficult to procure as these contracts depend
on the trust and confidence of the client or principal on the security
guard.

Procedural Due process in dismissal due to disease

DEOFERIO V. INTEL TECHNOLOGY
Held: Deoferio is entitled to nominal damages for failure of employer
to observe the procedural due process under authorized causes of
dismissal cases. The present case involves termination due to
disease – an authorized cause for dismissal under Article 284 of the
Labor Code. As substantive requirements, the Labor Code and its
IRR require the presence of the following elements:

(1) An employer has been found to be suffering from any

disease.

(2) His continued employment is prohibited by law or prejudicial

to his health, as well as to the health of his co-employees.

(3) A competent public health authority certifies that the disease

is of such nature or at such a stage that it cannot be cured
within a period of six months even with proper medical
treatment. With respect to the first and second elements, the
Court liberally construed the phrase "prejudicial to his health as
well as to the health of his co-employees" to mean "prejudicial
to his health or to the health of his co-employees." We did not
limit the scope of this phrase to contagious diseases for the
reason that this phrase is preceded by the phrase "any disease"
under Article 284 of the Labor Code

Consistent with this construction, we applied this provision in

resolving illegal dismissal cases due to non-contagious diseases
such as stroke, heart attack, osteoarthritis, and eye cataract, among
others. In Baby Bus, Inc. v. Minister of Labor, we upheld the labor
arbitration’s finding that Jacinto Mangalino’s continued employment –
after he suffered several strokes – would be prejudicial to his health.
In Duterte v. Kingswood Trading Co., Inc., we recognized the
applicability of Article 284 of the Labor Code to heart attacks. In that
case, we held that the employer- company’s failure to present a
certification from a public health authority rendered Roque Duterte’s
termination due to a heart attack illegal. We also applied this
provision in Sy v. Court of Appeals to determine whether Jaime Sahot
was illegally dismissed dueto various ailments such as presleyopia,
hypertensive retinopathy, osteoarthritis, and heart enlargement,
among others. In Manly Express, Inc. v. Payong, Jr., we ruled that the
employer-company’s non-presentment of a certification from a public
health authority with respect to Romualdo Payong Jr.’s eye cataract
was fatal to its defense.

The third element substantiates the contention that the employee has
indeed been suffering from a disease that: (1) is prejudicial to his
health as well as to the health of his co-employees; and (2) cannot be
cured within a period of six months even with proper medical
treatment. Without the medical certificate, there can be no authorized
cause for the employee’s dismissal. The absence of this element thus
renders the dismissal void and illegal.

Simply stated, this requirement is not merely a procedural

requirement, but a substantive one. The certification from a
competent public health authority is precisely the substantial
evidence required by law to prove the existence of the disease itself,
its non-curability within a period of six months even with proper
medical treatment, and the prejudice that it would cause to the health
of the sick employee and to those of his co-employees.

In the current case, we agree with the CA that Dr. Lee’s psychiatric
report substantially proves that Deoferio was suffering from
schizophrenia, that his disease was not curable within a period of six
months even with proper medical treatment, and that his continued
employment would be prejudicial to his mental health. This
conclusion is further substantiated by the unusual and bizarre acts
that Deoferio committed while at Intel’s employ.

The twin-notice requirement applies

to terminations under Article 284 of
the Labor Code

The Labor Code and its IRR are silent on the procedural due process
required in terminations due to disease. Despite the seeming gap in
the law, Section 2, Rule 1, Book VI of the IRR expressly states that
the employee should be afforded procedural due process in all cases
of dismissals.

FUJI TELEVISION NETWORK V ESPIRITU

Held: Arlene was illegally dismissed. The Court held that Fuji failed to
comply w/ the req. of substantive and procedural due process
necessary for her dismissal since she was a regular Ee. Arlene didn’t
sign the non-renewal contract voluntarily and it was mere subterfuge
by Fuji to secure its position that it was her choice to renew her
contract.

For disease to be valid ground for termination under LC the ff req

must be met: (1) is prejudicial to his health as well as to the health of
his co-employees; and (2) cannot be cured within a period of six
months even with proper medical treatment. Without the medical
certificate, there can be no authorized cause for the employee’s
dismissal. The absence of this element thus renders the dismissal
void and illegal.

Failure to provide workable environment as quasi-delict

INDOPHIL TEXTILE V ADVIENTO
Held: Claim for dmgs for failure to provide a healthy workplace falls
w/in the jurisdiction of the regular courts and not the LA. The claim of
the respondent is ground on gross negligence to provide a safe,
healthy and workable environment for its Ees, wc is a case of quasi-
delict. This is based on art. 2176 of the NCC. The cause of action in
this case pertains to the consequence of P’s omission wc led to a
work-related disease suffered by R, causing harm/dmg to his person.
The action is w/in the realm of Civil law and jurisdiction with the
regular courts.

XIII.
Consequences of termination

Preventive suspension and suspension as penalty

MANILA PAVILLION HOTEL V DELADA

Held: We rule that petitioner Manila Pavilion Hotel had the authority to
continue with the administrative proceedings for insubordination and
willful disobedience against Delada and to impose on him the penalty
of suspension. Consequently, petitioner is not liable to pay back
wages and other benefits for the period corresponding to the penalty
of 90-day suspension.
First, it must be pointed out that the basis of the 30-day preventive
suspension imposed on Delada was different from that of the 90-day
penalty of suspension. The 30-day preventive suspension was
imposed by MPH on the assertion that Delada might sabotage hotel
operations if preventive suspension would not be imposed on him. On
the other hand, the penalty of 90-day suspension was imposed on
respondent as a form of disciplinary action. It was the outcome of the
administrative proceedings conducted against him.

Preventive suspension is a disciplinary measure resorted to by the

employer pending investigation of an alleged malfeasance or
misfeasance committed by an employee. The employer temporarily
bars the employee from working if his continued employment poses a
serious and imminent threat to the life or property of the employer or
of his co-workers. The penalty of suspension refers to the disciplinary
action imposed on the employee after an official investigation or
administrative hearing is conducted. The employer exercises its right
to discipline erring employees pursuant to company rules and
regulations. Thus, a finding of validity of the penalty of 90-day
suspension will not embrace the issue of the validity of the 30-day
preventive suspension. In any event, petitioner no longer assails the
ruling of the CA on the illegality of the 30-day preventive suspension.

WUERTH PHILS INC V RODANTE

Held: No P did not dismissed R illegally. P dismissed R under for loss

of trust and confidence under just causes for termination of work. The
medical certificate issued by the attending physician of R showed that
he would have been capable of returning to work. However, despite
notices sent by the P requiring R to attend an investigation and
hearing, R refused to report to his office, either to resume work or
attend the investigations set by the petitioner. Even considering the
directive of R’s doctor to continue with his present regimen for at least
another month and a half, it could be safely deduced that, counted
from June 4, 2003, R’s rehabilitation regimen ended on July 19,
2003. Despite the completion of his treatment, respondent failed to
attend the investigations set on July 25, 2003 and August 18,
2003. Thus, his unexplained absence in the proceedings should be
construed as waiver of his right to be present therein in order to
adduce evidence that would have justified his continued absence
from work.

R failed to provide competent proof that he was actually undergoing

therapy and medications (eg official receipts showing the medical
expenses incurred and physician’s professional fees paid by reason
of such treatment). This casts serious doubt on the true condition of
the respondent during the prolonged period he was absent from work
and investigations. Since there is no more hindrance for him to return
to work and attend the investigations set by petitioner, respondent’s
failure to do so was without any valid or justifiable reason. R’s
conduct shows his indifference and utter disregard of his work and his
employer’s interest, and displays his clear, deliberate, and gross
dereliction of duties.
As a managerial employee, R was tasked to perform important and
crucial functions and, thus, bound by more exacting work ethic. He
should have realized that such sensitive position required the full trust
and confidence of his employer in every exercise of managerial
discretion insofar as the conduct of the latter’s business is
concerned. The power to dismiss an employee is a recognized
prerogative inherent in the employer’s right to freely manage and
regulate his business. The law, in protecting the rights of the
laborers, authorizes neither oppression nor self-destruction of the
employer. The worker’s right to security of tenure is not an absolute
right, for the law provides that he may be dismissed for cause. As a
general rule, employers are allowed wide latitude of discretion in
terminating the employment of managerial personnel. The mere
existence of a basis for believing that such employee has breached
the trust and confidence of his employer would suffice for his
dismissal. An irresponsible employee like respondent does not
deserve a place in the workplace, and it is P’s management
prerogative to terminate his employment.

GENUINO V NLRC
DOCTRINE:

“If the decision of the labor arbiter is later reversed on appeal upon the
finding that the ground for dismissal is valid, then the employer has the
right to require the dismissed employee on payroll reinstatement to refund
the salaries s/he received while the case was pending appeal, or it can be
deducted from the accrued benefits that the dismissed employee was
entitled to receive from his/her employer under existing laws, collective
bargaining agreement provisions, and company practices. However, if the
employee was reinstated to work during the pendency of the appeal, then
the employee is entitled to the compensation received for actual services
rendered without need of refund.”

GARCIA V PAL
DOCTRINE:

While reinstatement pending appeal aims to avert the continuing threat or

danger to the survival or even the life of the dismissed employee and his
family, it does not contemplate the period when the employer-corporation
itself is similarly in a judicially monitored state of being resuscitated in
order to survive. Furthermore, this case overturned the rule on the right on
reimbursement by the employer against the employee when the NLRC
reversed the ruling of LA.

AGABON VS NLRC

Doctrine: Failure to meet the required due process of twin notice rule and
hearing in cases falling under valid dismissal due to just cause, the
employee is entitled to 50k as nominal damages.

Retroactive Application of Agabon Doctrine

SUPERSONIC SERVICES INC V DE JESUS

Although Agabon, being promulgated only on November 17, 2004,

ought to be prospective, not retroactive, in its operation because its
language did not expressly state that it would also operate
retroactively, the Court has already deemed it to be the wise judicial
course to let its abandonment of Serrano be retroactive as its means
of giving effect to its recognition of the unfairness of declaring illegal
or ineffectual dismissals for valid or authorized causes but not
complying with statutory due process. Under Agabon, the new
doctrine is that the failure of the employer to observe the
requirements of due process in favor of the dismissed employee (that
is, the two-written notices rule) should not invalidate or render
ineffectual the dismissal for just or authorized cause.
The Agabon Court plainly saw the likelihood of Serrano producing
unfair but far-reaching consequences, such as, but not limited to,
encouraging frivolous suits where even the most notorious violators
of company policies would be rewarded by invoking due process; to
having the constitutional policy of providing protection to labor be
used as a sword to oppress the employers; and to compelling the
employers to continue employing persons who were admittedly guilty
of misfeasance or malfeasance and whose continued employment
would be patently inimical to the interest of employers.

Effect of reversal of executed judgment

PHIL TRANSMARINE CARRIERS INC VS LAGASPI

In the present case, the Receipt of the Judgment Award with

Undertaking was fair to both the employer and the employee. As
in Leonis Navigation, the said agreement stipulated that respondent
should return the amount to petitioner if the petition
for certiorari would be granted but without prejudice to respondent's
right to appeal. The agreement, thus, provided available remedies to
both parties.

It is clear that petitioner paid respondent subject to the terms and

conditions stated in the Receipt of the Judgment Award with
Undertaking.17chanroblesvirtuallawlibrary

Both parties signed the agreement. Respondent neither refuted the

agreement nor claimed that he was forced to sign it against his will.

Therefore, the petition for certiorari was not rendered moot despite
petitioner's satisfaction of the judgment award, as the respondent had
obliged himself to return the payment if the petition would be granted.

Validity of Release and Quitclaim

RADIO MINDANAO NETWORK INC V YBAROLA

In this case, as the CA noted, the separation pay the respondents

each received was deficient by at least P 400,000.00; thus, they were
given only half of the amount they were legally entitled to. To be sure,
a settlement under these terms is not and cannot be a reasonable
one, given especially the respondents length of service 25 years for
Ybarola and 19 years for Rivera. The CA was correct when it opined
that the respondents were in dire straits when they executed the
release/quitclaim affidavits. Without jobs and with families to support,
they dallied in executing the quitclaim instrument, but were eventually
forced to sign given their circumstances.

PERT/CPM MANPOWER EXPORT 6 INC V VINUYA ET AL

Held: The compromise agreements (with quitclaim and release)

between the respondents and the agency before the POEA did not
foreclose their employer-employee relationship claims before the
NLRC. The respondents, except Ordovez and Enjambre, aver in this
respect that they all paid for their own airfare when they returned
home and that the compromise agreements settled only their claim
for refund of their airfare, but not their other claims. Again, this
submission has not been refuted or denied by the agency.

The agency agreed to pay them a total of P 72,000.00. Although

there was no breakdown of the entitlement for each of the six, but
guided by the compromise agreement signed by Era and Alcantara,
we believe that the agency paid them P 12,000.00 each, just like Era
and Alcantara.

The uniform insubstantial amount for each of the signatories to the

agreement lends credence to their contention that the settlement
pertained only to their claim for refund of the airfare which they
shouldered when they returned to the Philippines. The compromise
agreement, apparently, was intended by the agency as a settlement
with the respondents and others with similar claims, which explains
the inclusion of the two (Nangolinola and Gatchalian) who were not
involved in the case with the NLRC. Under the circumstances, we
cannot see how the compromise agreements can be considered to
have fully settled the respondents claims before the NLRC illegal
dismissal and monetary benefits arising from employment. We thus
find no reversible error nor grave abuse of discretion in the rejection
by the NLRC and the CA of said agreements.

GAPYAO V ROSARIO

Held: Private R’s late husband is the Ee of the P. The most telling
indicia of this relationship is the Compromise Agreement executed by
petitioner and private respondent. It is a valid agreement as long as
the consideration is reasonable and the employee signed the waiver
voluntarily, with a full understanding of what he or she was entering
into. All that is required for the compromise to be deemed voluntarily
entered into is personal and specific individual consent. Once
executed by the workers or employees and their employers to settle
their differences, and done in good faith, a Compromise Agreement is
deemed valid and binding among the parties.[
Petitioner entered into the agreement with full knowledge that he was
described as the employer of the deceased. This knowledge cannot
simply be denied by a statement that petitioner was merely forced or
threatened into such an agreement. His belated attempt to
circumvent the agreement should not be given any consideration or
weight by this Court.

RADIO MINDANAO NETWORK INC V AMURAO II

Held: The quitclaim signed by both parties is valid and binding. RMN
consistently contended that a series of negotiations between Michael
and the management preceded the giving of the settlement pay that
they had considered as reasonable.19 Not once did Michael refute this
contention. Worth noting is that Michael signed the quitclaim to
release RMN from any and all claims that could be due to him by
reason of his employment after he receiving the agreed settlement
pay of P311,922.00.

Not all quitclaims are per se invalid or against public policy. A

quitclaim is invalid or contrary to public policy only: (1) where there is
clear proof that the waiver was wrangled from an unsuspecting or
gullible person; or (2) where the terms of settlement are
unconscionable on their face. In instances of invalid quitclaims, the
law steps in to annul the questionable waiver. Indeed, there are
legitimate waivers that represent the voluntary and reasonable
settlements of laborers’ claims that should be respected by the Court
as the law between the parties. Where the party has voluntarily made
the waiver, with a full understanding of its terms as well as its
consequences, and the consideration for the quitclaim is credible and
reasonable, the transaction must be recognized as a valid and
binding undertaking, and may not later be disowned simply because
of a change of mind.20 A waiver is essentially contractual.
 ESGUERRA V VALLE VERDE COUNTRY CLUB

Held: The dismissal is valid and complied with the substantial and
procedural due process. Dwelling on the substantive aspect of
Esguerras dismissal, We have held that there are two (2) classes of
positions of trust the first class consists of managerial employees, or
those vested with the power to lay down management policies; and
the second class consists of cashiers, auditors, property custodians
or those who, in the normal and routine exercise of their functions,
regularly handle significant amounts of money or property.

Esguerra held the position of Cost Control Supervisor and had the
duty to remit to the accounting department the cash sales proceeds
from every transaction she was assigned to. This is not a routine task
that a regular employee may perform; it is related to the handling of
business expenditures or finances. For this reason, Esguerra
occupies a position of trust and confidence a position enumerated in
the second class of positions of trust. Any breach of the trust imposed
upon her can be a valid cause for dismissal.

PGAEU V NLRC
ISSUE:

 Whether or not a Junior Programmer is a position of trust and confide

nce.
 Whether or not an employee is denied due process when the employ
er denied to conduct administrative hearing on despite his request to
have the same.

1. Yes. Vallota’s position as Jr. programmer is analogus to the 2nd

class of positions of trust and confidence (1st is the managerial Ee).
Though he didn’t physically handle money/property, he became privy
to confidential data or info by the nature of his functions. At a time
when the most sensitive of info is found bot printed on paper but
stored on hard drives and servers, an Ee who handles or has access
to date in electronic form naturally becomes the unwilling recipient of
confidential info.
2. Yes. According to the SC, the ff are the guiding principles in
connection w/ the hearing req in dismissal cases: a) ample
opportunity to be heard mean any meaningful opportunity
(verbal/written) given to the Ee o answer the charges against him; b)
a formal hearing or conference becomes mandatory only when
requested by the Ee in writing, substantial evid disputes exist or
company rule/practice req it or when similar circumstances
justifies it; c) the ample opportunity to be heard stand in the LC
prevails over the hearing/conference req in the IRR. After PGAI failed
to affirmatively respond to such request, it follows that the hearing req
wasn’t complied with and therefore Vallota was denied his right to
procedural dp.

RAYEL V PHIL LUEN THAI HOLDINGS CORP

Jurisprudence provides that an employer has a distinct prerogative

and wider latitude of discretion in dismissing a managerial personnel
who performs functions which by their nature require the employer s
full trust and confidence. As distinguished from a rank and file
personnel, mere existence of a basis for believing that a managerial
employee has breached the trust of the employer justifies
dismissal. Loss of confidence as a ground for dismissal does not
require proof beyond reasonable doubt as the law requires only that
there be at least some basis to justify it.
½l

Petitioner was accorded due process.

l

Petitioner insists that she was not properly apprised of the specific
grounds for her termination as to give her a reasonable opportunity to
explain. This is because the Prerequisite Notice and Notice of
Termination did not mention any valid or authorized cause for
dismissal but rather merely contained general allegations and vague
terms.

We have examined the Prerequisite Notice and contrary to

petitioner’s assertion, find the same to be free from any ambiguity.
The said notice properly advised petitioner to explain through a
written response her failure to perform in accordance with
management directives, which deficiency resulted in the company’s
loss of confidence in her capability to promote its interest. As
correctly explained by the CA, the notice cited specific incidents from
various instances which showed petitioner’s "repeated failure to
comply with work directives, her inclination to make negative remarks
about company goals and her difficult personality," that have
collectively contributed to the company s loss of trust and confidence
in her. Indeed, these specified acts, in addition to her low
performance rating, demonstrated petitioner s neglect of duty and
incompetence which support the termination for loss of trust and
confidence.ary

In this case, petitioner's written response to the Prerequisite Notice

provided her with an avenue to explain and defend her side and thus
served the purpose of due process. That there was no hearing.
investigation or right to appeal. which petitioner opined to be violation
of company policies, is of no moment since the records is bereft of
any showing that there is an existing company policy that requires
these procedures with respect to the termination of a CHR Director
like petitioner or that company practice calls for the same. There was
also no request for a formal hearing on the part of petitioner.

As she was served with a notice apprising her of the changes against
her and also a subsequent notice informing her of the management's
decision to terminate her services alter respondents found her written
response to the first notice unsatisfactory, petitioner was clearly
afforded her right to due process.

NARANJO ET AL V BIOMEDIA HEALTH CARE INC

Notice of intention to terminate employment

ESGUERRA V VALLE VERDE COUNTRY CLUB

Held: No. The law doesn’t req that an intention to terminate one’s
employment should be included in the 1st notice. Its enough that Ee
are properly apprised of the charges brought against them so they
can properly prepare their defenses. Its only during the 2nd notice that
the intention to terminate one’s employment should be explicitly
stated.
The existence of an actual formal trial type hearing, altho preferred,
isn’t absolutely necessary to satisfy the Ee’s right to be heard. P was
able to present her defenses and only upon proper consideration of it
did R send the 2nd memo terminating her employment. Since R
complied w/ the 2 notice req, no procedural defect exists in P’s
termination.

MAQUILING V PHIL TUBERCULOSIS SOCIETY INC

Recent decisions of this Court distinguish the treatment of

managerial from that of rank-and-file personnel insofar as the
application of the doctrine of loss of trust and confidence is concerned.
Thus, with respect to rank-and-file personnel, loss of trust and
confidence as ground for valid dismissal requires proof of involvement in
the alleged events in question and that mere uncorroborated assertions
and accusations by the employer will not suffice. But as regards a
managerial employee, mere existence of a basis for believing that such
employee has breached the trust of his employer would suffice for his
dismissal.
After careful perusal of the factual backdrop of the case, we rule that
Dr. Maquiling was indeed validly dismissed for just cause. However,
PTS was remiss in its duty to observe procedural due process in
effecting the dismissal of Dr. Maquiling.
Under this second requirement, two notices must be sent to the
employee who is the subject of an investigation for acts which may
warrant his eventual dismissal from employment. The notices required
before an employee may be validly dismissed are: (a) a written notice
served on the employee specifying the grounds for termination
and giving the employee reasonable opportunity to explain his/her
side; (b) a hearing or conference wherein the employee, with the
assistance of counsel if so desired, is given opportunity to respond to
the charge, present his evidence or rebut evidence presented against
him/her; and (c) written notice of termination served on the employee
indicating that upon due consideration of all the circumstances, grounds
have been established to justify termination. The twin requirements of
notice and hearing constitute elements of due process in cases of
employees dismissal; the requirement of notice is intended to inform
the employee concerned of the employers intent to dismiss and
the reason for the proposed dismissal; upon the other hand the
requirement of hearing affords the employee an opportunity to answer
his employers charges against him and accordingly to defend himself
therefrom before dismissal is effected.
Clearly, the first notice must inform outright the employee that an
investigation will be conducted on the charges particularized therein
which, if proven, will result to his dismissal. Such notice must not only
contain a plain statement of the charges of malfeasance or misfeasance
but must categorically state the effect on his employment if the charges
are proven to be true.
This notice will afford the employee an opportunity to avail all
defenses and exhaust all remedies to refute the allegations hurled
against him for what is at stake is his very life and limb his employment.
Otherwise, the employee may just disregard the notice as a warning
without any disastrous consequence to be anticipated. Absent such
statement, the first notice falls short of the requirement of due process.
Ones work is everything, thus, it is not too exacting to impose this strict
requirement on the part of the employer before the dismissal process be
validly effected.

ELECTRO SYSTEM INDUSTRIES CORP VS NLRC

In dismissing an employee, the employer has the burden of proving

that the former worker has been served two notices: (1) one to
apprise him of the particular acts or omissions for which his
dismissal is sought, and (2) the other to inform him of his employers
decision to dismiss him. In Tan v. NLRC, it was held that the first
notice must state that dismissal is sought for the act or omission
charged against the employee, otherwise, the notice cannot be
considered sufficient compliance with the rules.

In the instant case, the first notice issued by petitioner fell short of the
requirement of the law because it merely referred to the section of the
company rule allegedly violated by private respondent. The notice
failed to specify the penalty for the charges which is dismissal, and to
indicate the precise act or omission which constituted as the ground
for which dismissal is sought.

There is no showing that private respondent was actually served with

the required two notices. The first notice did not bear the signature of
private respondent. In the second notice, there was a notation that
private respondent refused to sign. This notation is not sufficient proof
that petitioner attempted to serve the second notice to private
respondent.

In sum, other than petitioner’s bare assertions that private respondent

was furnished with copies of the notices and that he attended the
hearing on the charges, it presented no other proof to establish the
same. Mere allegation is not equivalent to proof or evidence. Clearly
therefore, petitioner was not able to discharge the burden of proving
compliance with the employees right to statutory due process in
termination proceedings.

Separation pay in lieu of reinstatement

SARONA VS NLRC

It is well-settled, even axiomatic, that if reinstatement is not

possible, the period covered in the computation of backwages is
from the time the employee was unlawfully terminated until the
finality of the decision finding illegal dismissal.

With respect to the petitioner’s backwages, this Court cannot

subscribe to the view that it should be limited to an amount equivalent
to three (3) months of his salary. Backwages is a remedy affording
the employee a way to recover what he has lost by reason of the
unlawful dismissal.60 In awarding backwages, the primordial
consideration is the income that should have accrued to the
employee from the time that he was dismissed up to his
reinstatement61 and the length of service prior to his dismissal is
definitely inconsequential.

As early as 1996, this Court, in Bustamante, et al. v. NLRC, et al.,

clarified in no uncertain terms that if reinstatement is no longer
possible, backwages should be computed from the time the
employee was terminated until the finality of the decision, finding the
dismissal unlawful.

Therefore, in accordance with R.A. No. 6715, petitioners are entitled

on their full backwages, inclusive of allowances and other benefits or
their monetary equivalent, from the time their actual compensation
was withheld on them up to the time of their actual reinstatement.

As to reinstatement of petitioners, this Court has already ruled that

reinstatement is no longer feasible, because the company would be
adjustly prejudiced by the continued employment of petitioners who at
present are overage, a separation pay equal to one-month salary
granted to them in the Labor Arbiter's decision was in order and,
therefore, affirmed on the Court's decision of 15 March
1996. Furthermore, since reinstatement on this case is no longer
feasible, the amount of backwages shall be computed from the
time of their illegal termination on 25 June 1990 up to the time of
finality of this decision.63 (emphasis supplied)

A further clarification was made in Javellana, Jr. v. Belen:

Article 279 of the Labor Code, as amended by Section 34 of Republic

Act 6715 instructs:

Art. 279. Security of Tenure. - In cases of regular employment, the

employer shall not terminate the services of an employee except for a
just cause or when authorized by this Title. An employee who is
unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his other benefits or their
monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.

Clearly, the law intends the award of backwages and similar benefits
to accumulate past the date of the Labor Arbiter's decision until the
dismissed employee is actually reinstated. But if, as in this case,
reinstatement is no longer possible, this Court has consistently ruled
that backwages shall be computed from the time of illegal dismissal
until the date the decision becomes final.

In case separation pay is awarded and reinstatement is no longer

feasible, backwages shall be computed from the time of illegal
dismissal up to the finality of the decision should separation pay not
be paid in the meantime. It is the employee’s actual receipt of the full
amount of his separation pay that will effectively terminate the
employment of an illegally dismissed employee. Otherwise, the
employer-employee relationship subsists and the illegally dismissed
employee is entitled to backwages, taking into account the increases
and other benefits, including the 13th month pay, that were received
by his co-employees who are not dismissed. It is the obligation of the
employer to pay an illegally dismissed employee or worker the whole
amount of the salaries or wages, plus all other benefits and
bonuses and general increases, to which he would have been
normally entitled had he not been dismissed and had not stopped
working.

In fine, this Court holds Royale liable to pay the petitioner backwages
to be computed from his dismissal on October 1, 2003 until the finality
of this decision. Nonetheless, the amount received by the petitioner
from the respondents in satisfaction of the November 30, 2005
Decision shall be deducted accordingly.

REYES V RP GUARDIAN SECURITY AGENCY INC

Held: P were constructively dismissed. Settled is the rule that that an

employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges, and
to his full backwages, inclusive of allowances and to his other
benefits or their monetary equivalent computed from the time his
compensation was withheld up to the time of actual reinstatement. If
reinstatement is not possible, however, the award of separation pay
is proper.

Backwages and reinstatement are separate and distinct reliefs given

to an illegally dismissed employee in order to alleviate the economic
damage brought about by the employee's dismissal. "Reinstatement
is a restoration to a state from which one has been removed or
separated" while "the payment of backwages is a form of relief that
restores the income that was lost by reason of the unlawful
dismissal." Therefore, the award of one does not bar the other.
Furthermore, the entitlement of the dismissed employee to separation
pay of one month for every year of service should not be confused
with Section 6.5 (4) of DOLE D.O. No. 14 which grants a separation
pay of one-half month for every year service, to wit:
6.5 Other Mandatory Benefits. In appropriate cases, security
guards/similar personnel are entitled to the mandatory benefits as
listed below, although the same may not be included in the monthly
cost distribution in the contracts, except the required premiums for
their coverage:

a. Maternity benefit as provided under the SSS Law;

b. Separation pay if the termination of employment is for authorized

cause as provided by law and as enumerated below:

Half-Month Pay Per Year of Service, but in no case less than One
Month Pay, if separation is due to:

1. Retrenchment or reduction of personnel effected by management

to prevent serious losses;

2. Closure or cessation of operation of an establishment not due to

serious losses or financial reverses;

3. Illness or disease not curable within a period of 6 months and

continued employment is prohibited by law or prejudicial to the
employee's health or that of co-employees; or

4. Lack of service assignment for a continuous period of 6 months.

The said provision contemplates a situation where a security guard is

removed for authorized causes such as when the security agency
experiences a surplus of security guards brought about by lack of
clients. In such a case, the security agency has the option to resort to
retrenchment upon compliance with the procedural requirements of
"two-notice rule" set forth in the Labor Code and to pay separation
pay of one-half month for every year of service.

In this case, respondent would have been liable for reinstatement and
payment of backwages. Reinstatement, however, was no longer
feasible because, as found by the LA, respondent had already
ceased operation of its business. Thus, backwages and separation
pay, in the amount of one month for every year of service, should be
paid in lieu of reinstatement.
Finality of decision

GONZALES V SOLID CEMENT COPR

Held: As a rule, a second motion for reconsideration is a prohibited

pleading under the Rules of Court, and this reason alone is sufficient
basis for us to dismiss the present second motion for reconsideration.
The ruling in the original case, as affirmed by the Court, has been
expressly declared final. A definitive final judgment, however
erroneous, is no longer subject to change or revision.

A decision that has acquired finality becomes immutable and

unalterable. This quality of immutability precludes the modification of
a final judgment, even if the modification is meant to correct
erroneous conclusions of fact and law. And this postulate holds true
whether the modification is made by the court that rendered it or by
the highest court in the land. The orderly administration of justice
requires that, at the risk of occasional errors, the
judgments/resolutions of a court must reach a point of finality set by
the law. The noble purpose is to write finis to dispute once and for all.
This is a fundamental principle in our justice system, without which
there would be no end to litigations. Utmost respect and adherence to
this principle must always be maintained by those who exercise the
power of adjudication. Any act, which violates such principle, must
immediately be struck down. Indeed, the principle of conclusiveness
of prior adjudications is not confined in its operation to the judgments
of what are ordinarily known as courts, but extends to all bodies upon
which judicial powers had been conferred.

After due consideration and further analysis of the case, however, we

believe and so hold that the CA did not only legally err but even acted
outside its jurisdiction when it issued its May 31, 2011 decision.
Specifically, by deleting the awards properly granted by the NLRC
and by reverting back to the LA’s execution order, the CA effectively
varied the final and executory judgment in the original case, as
modified on appeal and ultimately affirmed by the Court, and thereby
acted outside its jurisdiction. The CA likewise, in the course of its
rulings and as discussed below, acted with grave abuse of discretion
amounting to lack or excess of jurisdiction by using wrong
considerations, thereby acting outside the contemplation of law.
The CA’s actions outside its jurisdiction cannot produce legal effects
and cannot likewise be perpetuated by a simple reference to the
principle of immutability of final judgment; a void decision can never
become final. "The only exceptions to the rule on the
immutability of final judgments are (1) the correction of clerical
errors, (2) the so-called nunc pro tunc entries which cause no
prejudice to any party, and (3) void judgments." For these
reasons, the Court sees it legally appropriate to vacate the assailed
Minute Resolutions of November 16, 2011 and February 27, 2012,
and to reconsider its ruling on the current petition.

Pp. 1043-1091

 Ra 7641 – the new retirement law

 Advisory on retirement pay law dated October 24, 1996
 Rules implementing wage order no. 15, definition of “establishment”
 P. 636 (topic 1.5) azucena vol. II, re: state vs. cooper, 122 A.L.R. 727
 Art. 139 [141]- LC
 RA 10361- Batas Kasamabahay re: retirement of kasamabahay

Cases:

SKIPPERS UNITED PACIFIC INC V DOZA

DOCTRINE: Article 285 of the Labor Code recognizes termination by the

employee of the employment contract by serving written notice on the
employer at least one (1) month in advance. Given that provision, the law
contemplates the requirement of a written notice of resignation. In the
absence of a written resignation, it is safe to presume that the employer
terminated the seafarers.

ISSUE: Whether or not the workers’ dismissal is valid

HELD: NO. For a workers dismissal to be considered valid, it must comply

with both procedural and substantive due process. The legality of the
manner of dismissal constitutes procedural due process, while the legality
of the act of dismissal constitutes substantive due process.

Procedural due process in dismissal cases consists of the twin

requirements of notice and hearing. The employer must furnish the
employee with two written notices before the termination of employment
can be effected: (1) the first notice apprises the employee of the particular
acts or omissions for which his dismissal is sought; and (2) the second
notice informs the employee of the employers decision to dismiss him.
Before the issuance of the second notice, the requirement of a hearing
must be complied with by giving the worker an opportunity to be heard. It is
not necessary that an actual hearing be conducted.

Substantive due process, on the other hand, requires that dismissal by the
employer be made under a just or authorized causes.

In this case, there was no written notice furnished to De Gracia, et al.

regarding the cause of their dismissal. Cosmoship furnished a written
notice (telex) to Skippers, the local manning agency, claiming that De
Gracia, et al. were repatriated because the latter voluntarily pre-terminated
their contracts. This telex was given credibility and weight by the Labor
Arbiter and NLRC in deciding that there was pre-termination of the
employment contract akin to resignation and no illegal dismissal. However,
as correctly ruled by the CA, the telex message is a biased and self-
serving document that does not satisfy the requirement of substantial
evidence. If, indeed, De Gracia, et al. voluntarily pre-terminated their
contracts, then DeGracia, et al. should have submitted their written
resignations.

Article 285 of the Labor Code recognizes termination by the employee of

the employment contract by serving written notice on the employer at least
one (1) month in advance. Given that provision, the law contemplates the
requirement of a written notice of resignation. In the absence of a written
resignation, it is safe to presume that the employer terminated the
seafarers. In addition, the telex message relied upon by the Labor Arbiter
and NLRC bore conflicting dates of 22 January 1998 and 22 January 1999,
giving doubt to the veracity and authenticity of the document. In 22
January 1998, De Gracia, et al. were not even employed yet by the foreign
principal. For these reasons, the dismissal of De Gracia, et al. was illegal.

PERT/CPM MANPOWER EXPONENT CO. V VINUYA

ISSUE:
 W/N the Serrano ruling which declared the subject Section 10
of RA 8042 unconstitutional can be given retroactive application
in the present case;
 W/N RA 10022, which was enacted on March 8, 2010 restoring
the subject clause in Section 10 of RA 8042 being amendatory
in nature can be applied retroactively.
RULING: The SC held that the Serrano ruling can be given
retroactive application as resolved in Yap vs. Thenamaris Ship’s
Management in the interest of equity and that the Serrano ruling is an
exemption to the doctrine of operative fact. Moreover, the
SC held that the amendment introduced by R.A. 10022 cannot be
given retroactive effect not only because there is no express
declaration of retroactivity of the law, but because the retroactive
application will result in an impairment of right that had accrued to the
respondents by virtue of the Serrano Ruling. The SC reiterated that
all statutes are to be construed as having only a prospective
application, unless the purpose and intention of the legislature to give
them retrospective effect are expressly declared or are necessarily
implied from the language used. The petition is DENIED.

GAN V GALDERMA PHILS INC

Held: Settle is the rule that factual findings of labor officials, who are
deemed to have acquired expertise in matters w/in their jurisdiction,
are generally accorded not only with respect but even finality by the
courts when supported by substantial evid, e.i., such amount of
relevant evid wc a reasonable mind might accept as adequate to
justify a conclusion. Likewise, factual findings arrived at by a trier of
facts, who is uniquely positioned to observe the demeanor of the
witnesses appearing before him and is most competent in judging the
credibility of the contending parties, are accorded great weight and
certitude.

Admittedly, the above rule isn’t ironclad. There are instances in wc

factual issues may be resolved by this Court to wit:
1. The conclusion is a finding grounded entirely on speculation,
surmise and conjecture;
2. The inference made is manifestly mistaken, absurd or
impossible;
3. There’s a grave abuse of discretion;
4. The judgment is based on misapprehension of facts;
5. The findings of fact are conflicting;
6. The CA goes beyond the issues of the case and its findings are
contrary to the admissions of both appellant and appellees;
7. Findings of fact of the CA are contrary to those of the TC
(LA/NLRC);
 8. Said findings of fact are conclusions w/o citation of specific evid
on which they’re based;
9. The fact set forth in the petition, as well as in the P’s main and
reply brief, are not disputed by the R;
10. The findings of fact of the CA are premised on the
supposed absence of evid and contradicted by the evid on
record.

MINADANAO TERMINAL& BROKERAGE V NAGKAKAISANG

MAMUNO ET AL

At the outset, the Court notes that the petition is fatally defective. The
issue it presents is factual, not legal.

There is a question of fact when the doubt or difference arises as to

the truth or the falsehood of alleged facts. There is a question of fact
if the issue invites a review of the evidence presented.

In this case, this Court is effectively being called upon to determine

who among the parties is asserting the truth regarding the date the
union members were laid-off. Such venture requires the evaluation of
the respective pieces of evidence presented by the parties as well as
the consideration of "the existence and relevancy of specific
surrounding circumstances as well as their relation to each other and
to the whole, and the probability of the situation." However, the nature
of petitioners’ action, a petition for review under Rule 45 of the Rules
of Court, renders that very action inappropriate for this Court to take.
Only questions of law should be raised in a petition for review under
Rule 45. While there are recognized exceptions to that rule, this case
is not among them.

Moreover, this Court finds neither compelling reason nor substantial

argument that will warrant the reversal of the NLRC Decision which
has been affirmed by the Court of Appeals.

Going in depth of the case, in Sebuguero, the Court ruled on a case

regarding layoff or temporary retrenchment, which subsequently
resulted to the separation from employment of the concerned
employee as it lasted for more than six months, as follows:
Article 283 of the Labor Code which covers retrenchment, reads as
follows: xxx

This provision, however, speaks of a permanent retrenchment as

opposed to a temporary lay-off as is the case here. There is no
specific provision of law which treats of a temporary retrenchment or
lay-off and provides for the requisites in effecting it or a period or
duration therefor. These employees cannot forever be temporarily
laid-off. To remedy this situation or fill the hiatus, Article 286 may be
applied but only by analogy to set a specific period that employees
may remain temporarily laid-off or in floating status. u Six months is
the period set by law that the operation of a business or undertaking
may he suspended thereby suspending the employment of the
employees concerned. The temporary lay-off wherein the employees
likewise cease to work should also not last longer than six months.
After six months, the employees should either be recalled to work or
permanently retrenched following the requirements of the law, and
that failing to comply with this would be tantamount to dismissing the
employees and the employer would thus he liable for such dismissal.

As the Court of Appeals did not err in ruling that Sebuguero applies to
this case, the consequences arrived at in Sebuguero also apply. Lay-
off is essentially retrenchment and under Article 283 of the Labor
Code a retrenched employee is entitled to separation pay equivalent
to one (1) month salary or one-half (12) month salary per year of
service, whichever is higher.

INDUSTRIAL & TRANSPORT EQUIPMENT INC V NLRC

Held: LA may cite P in contempt. Sec. 2, Rule X of the new rules of

procedure of the NLRC provides that the Commission or any LA may
cite any person for indirect contempt upon grounds and in the manner
prescribe under s3(b) R71 of the ROC. Said provision provides
indirect contempt to be punished after charge and hearing xxx b)
Disobedience of or resistance to a lawful writ, process, order or
judgment of the court xxx

Contempt is defined as a disobedience to the Court by setting up an

opposition to its authority, justice and dignity. It signifies not only a
willful disregard or disobedience of the court’s orders but such
conduct as tends to bring the authority of the court and the
administration of law into disrepute or in some manner to impede the
due admin of justice. There’s no question that disobedience or
resistance to a lawful writ, process, order, judgment or command of a
court injunction granted by a court or judge constitutes indirect
contempt punishable under R71 of the ROC.

HALAGUENA VS PAL

Held: Yes regular court has jurisdiction of DR. The subject of litigation
is incapable of pecuniary estimation, exclusively cognizable by the
RTC. Being an ordinary civil action, the same is beyond the
jurisdiction of labor tribunals.

Not every controversy or money claim by an employee against the

employer or vice-versa is within the exclusive jurisdiction of the labor
arbiter. Actions between employees and employer where the
employer-employee relationship is merely incidental and the cause of
action precedes from a different source of obligation is within the
exclusive jurisdiction of the regular court.

Being an ordinary civil action, the same is beyond the jurisdiction of

labor tribunals. The said issue cannot be resolved solely by applying
the Labor Code. Rather, it requires the application of the Constitution,
labor statutes, law on contracts and the Convention on the
Elimination of All Forms of Discrimination Against Women, and the
power to apply and interpret the constitution and CEDAW is within the
jurisdiction of trial courts, a court of general jurisdiction. In
GeorgGrotjahn GMBH & Co. v. Isnani, this Court held that not every
dispute between an employer and employee involves matters that
only labor arbiters and the NLRC can resolve in the exercise of their
adjudicatory or quasi-judicial powers. The jurisdiction of labor arbiters
and the NLRC under Article 217 of the Labor Code is limited to
dispute arising from an employer-employee relationship which can
only be resolved by reference to the Labor Code other labor statutes,
or their collective bargaining agreement.

PAZ VS NORTHEN TOBACCO REDRYING CO

A.
Retirement is the result of a bilateral act of the parties, a voluntary
agreement between the employer and the employee whereby the
latter, after reaching a certain age, agrees to sever his or her
employment with the former." Article 287, as amended, allows for
optional retirement at the age of at least 60 years old.

Consequently, if "the intent to retire is not clearly established or if the

retirement is involuntary, it is to be treated as a discharge."

The National Labor Relations Commission considered petitioner

Paz’s amendment of her Complaint on April 27, 2004 akin to an
optional retirement when it determined her as illegally dismissed from
May 18, 2003 to April 27, 2004, thus being entitled to full backwages
from May 19, 2003 until April 26, 2004.

B.

An employer may provide for retirement benefits in an agreement

with its employees such as in a Collective Bargaining Agreement.
Otherwise, Article 287 of the Labor Code, as amended, governs.

Since respondent NTRCI failed to present a copy of a Collective

Bargaining Agreement on the alleged retirement policy, we apply
Article 287 of the Labor Code, as amended by Republic Act No.
7641. This provides for the proper computation of retirement benefits
in the absence of a retirement plan or agreement:

In the absence of a retirement plan or agreement providing for

retirement benefits of employees in the establishment, an employee
upon reaching the age of sixty (60) years or more, but not beyond
sixty-five (65) years which is hereby declared the compulsory
retirement age, who has served at least five (5) years in the said
establishment, may retire and shall be entitled to retirement pay
equivalent to at least one-half (1/2) month salary for every year of
service, a fraction of at least six (6) months being considered as one
whole year.

Unless the parties provide for broader inclusions, the term ‘one half
(1/2) month salary’ shall mean fifteen (15) days plus one-twelfth
(1/12) of the 13th month pay and the cash equivalent of not more
than five (5) days of service incentive leaves.