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G.R. No. L-46892 June 28, 1940


Labor union submitted a letter to management. On the same day, they held a strike. With the help of the Secretary
of Labor, they reached an amicable settlement providing the laborers will be readmitted to work. The amicable settlement
was signed but the workers reported only after 2 days. They were not allowed to enter and they held a strike again. The
CIR investigated the matter.

ISSUE: Whether or not the legal powers of CIR allow deprivation of life, liberty and property without due process of law.


No. Art 20 has not empowered the CIR to investigate and resolve questions and disputes between workers and
employers and tenants and owners in an arbitrary manner. It must be based on justice and equity and must be based on
substantial merits of the case.

University of Immaculate Concepcion Inc. v. Sec. of Labor

G.R. No. 151379 January 14, 2005


The issue stemmed from some of the employees who are holding confidential roles such as cashiers, secretary,
guidance counselors. They were not allowed to be included in the union but they insisted. The Secretary of Labor who
ordered payroll reinstatement. The UNIVERSITY contends that the Secretary cannot take cognizance of an issue involving
employees who are not part of the bargaining unit. It insists that since the individual respondents had already been
excluded from the bargaining unit by a final and executory order by the panel of voluntary arbitrators, then they cannot
be covered by the Secretarys assumption order.

ISSUE: Whether or not the Secretary cannot take cognizance of an issue involving employees who are not part of
the bargaining unit.

This Court finds no merit in the UNIVERSITYs contention. In Metrolab Industries, Inc. v. Roldan-Confessor, this
Court declared that it recognizes the exercise of management prerogatives and it often declines to interfere with the
legitimate business decisions of the employer. However, as expressed in PAL v. National Labor Relations Commission, this
privilege is not absolute, but subject to exceptions. One of these exceptions is when the Secretary of Labor assumes
jurisdiction over labor disputes involving industries indispensable to the national interest under Article 263(g) of the Labor


470 SCRA 125 SEPTEMBER 16, 2005


Capitol Medical Center hired Dr. Meris in 1974 as Chief of its Industrial Service Unit (ISU). In 1992, however, or
after about 18 years of service, Dr. Meris was notified that the ISU will be abolished and that his services will be terminated.

He, however, doubted the closure. The ISU was not, in fact, abolished. It continued to operate with Dr. Clemente as head.
Dr. Meris believed it was a mere ploy for his ouster due to his refusal to retire. He sought reinstatement but was unheeded.
Dr. Meris then filed a complaint for illegal dismissal but the Labor Arbiter dismissed the same and was only granted his
hospital retirement plan.

ISSUE: Was there valid exercise of management prerogative?


No. Although employers have management prerogatives, including the right to close the operation of an
establishment or undertaking, they must comply with the legal requirements and not offend the protected rights of labor.
Requisites: (a) done in good faith to advance the company’s interest; and (b) not for the purpose of defeating or
circumventing the rights of employees under the law.

Capitol failed to prove its good faith in closing the ISU. The “Analysis of Income and Expenses” which showed there
were losses was doubtful since it was prepared by the internal auditor who happened to be a relative of Dr. Clemente.
The accounting records, in fact, showed increasing revenues from 1989 to 1991.


G.R. No. L-41314 November 13, 1992


Company is operating on three (3) shifts. Company is operating on three (3) shifts. The night shift employees filed
a demand to maintain the old working schedule from Monday thru Friday. All night shift operating personnel were allowed
to start their work Monday and on Saturday except employees in the maintenance and preparation crews whose work
schedule is presumed to be maintained from Sunday to Thursday.

ISSUE: Whether or not the complainants could be validly dismissed from their employment on the ground of
insubordination for refusing to comply with the new work schedule.


Management retains the prerogative, whenever exigencies of the service so require, to change the working hours
of its employees. And as long as such prerogative is exercised in good faith for the advancement of the employer's interest
and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid

In the case of Abbott Laboratories (Phil.) Inc. vs. NLRC (154 SCRA 713 [1987]), We ruled: "Even as the law is
solicitous of the welfare of employees, it must also protect the right of an employer to exercise what are clearly
management prerogatives. The free will of management to conduct its own business affairs to achieve its purpose cannot
be denied.


G.R. No. 155098 September 16, 2005



Petitioner closed its industrial service unit due to alleged loss and extinct demand resulting to the termination of the
employment of the respondent. The latter filed an illegal dismissal case but the same was denied by the labor arbiter, and
subsequently by the NLRC contending that the same is part of the management prerogative.

ISSUE: Has employer the right to close its business even without basis resulting to the displacement of the worker?


No. Employers are also accorded with rights and privileges to assure their self-determination and independence and
reasonable return of capital. This mass of privileges is called management prerogatives. Although they may be broad and
unlimited in scope, the State has the right to determine whether an employer's privilege is exercised in a manner that
complies with the legal requirements and does not offend the protected rights of labor.


G.R. No. 192558 February 15, 2012


Javier filed a complaint before the NLRC for underpayment of salaries and other labor standard benefits. He
alleged that he was an employee of Fly Ace since September 2007, performing various tasks at the respondent’s
warehouse such as cleaning and arranging the canned items before their delivery to certain locations, except in instances
when he would be ordered to accompany the company’s delivery vehicles, as pahinante; that he reported for work from
Monday to Saturday from 7:00 o’clock in the morning to 5:00 o’clock in the afternoon; that during his employment, he
was not issued an identification card and payslips by the company; that on May 6, 2008, he reported for work but he was
no longer allowed to enter the company premises by the security guard upon the instruction of Ruben Ong (Mr. Ong), his

ISSUE: Whether or not there was employer employee relationship.


No. Javier was not able to persuade the Court that the above elements exist in his case. He could not submit
competent proof that Fly Ace engaged his services as a regular employee; that Fly Ace paid his wages as an employee, or
that Fly Ace could dictate what his conduct should be while at work. In other words, Javier’s allegations did not establish
that his relationship with Fly Ace had the attributes of an employer-employee relationship on the basis of the above-
mentioned four-fold test.

The Court is of the considerable view that on Javier lies the burden to pass the well-settled tests to determine the
existence of an employer-employee relationship, viz: (1) the selection and engagement of the employee; (2) the payment
of wages; (3) the power of dismissal; and (4) the power to control the employee’s conduct. Of these elements, the most
important criterion is whether the employer controls or has reserved the right to control the employee not only as to the
result of the work but also as to the means and methods by which the result is to be accomplished.


GR No. 192998 2014-04-02


Tenazas and Francisco filed a complaint for illegal dismissal against R. Villegas Taxi Transport. Tenazas alleged that
on 2007, the taxi unit assigned to him was sideswiped by another vehicle, causing a dent on the left fender near the driver


seat. Upon reporting the incident to the company, he was scolded by respondents and was told to leave the garage for he
is already fired. He was even threatened with physical harm should he ever be seen in the company's premises again.
Despite the warning, Tenazas reported for work on the following day but was told that he can no longer drive any of the
company's units as he is already fired. Francisco, on the other hand, averred that his dismissal was brought about by the
company's unfounded suspicion that he was organizing a labor union. He was instantaneously terminated, without the
benefit of procedural due process

ISSUE: Was there the existence of employer-employee relationship and whether there was an illegal dismissal.


Francisco failed to present any proof substantial enough to establish his relationship with the respondents. He
failed to present documentary evidence like attendance logbook, payroll, SSS record or any personnel file that could
somehow depict his status as an employee. The utter lack of evidence is fatal to Francisco's case especially in cases like
his present predicament when the law has been very lenient in not requiring any particular form of evidence or manner
of proving the presence of employer-employee relationship.


G.R. No. 173489 February 25, 2013


Respondent was employed by petitioner as bookkeeper. Petitioner's Board of Directors (the Board) received a
letter from a certain Napoleon Gao-ay (Napoleon) reporting the alleged immoral coaduct and unbecoming behavior of
respondent by having an illicit relationship with Napoleon’s sister, Thelma G. Palma (Thelma). This prompted the Board to
conduct a preliminary investigation.

Respondent, on the other hand, denied the accusation against him. He, instead, claimed that the accusation was
a result of the insecurity felt by some members of the cooperative and of the Board because of his growing popularity
owing to his exemplary record as an employee.

ISSUE:Did petitioner adequately prove that respondent indeed engaged in extra-marital affairs, an act which petitioner
considers as would bring discredit to the cooperative


Yes. The employer’s evidence consists of sworn statements of either relatives or friends of Thelma and
respondent. They either had direct personal knowledge of the illicit relationship or revealed circumstances indicating the
existence of such relationship. As aptly observed by the LA:

Moreover, the credibility of the persons who bore witness against him can hardly be questioned because some of
these persons are relatives or friends of either [respondent] or his lover. In particular, it is hard to see how Napoleon Gao-
ay, the brother of his lover, Thelma, could have resorted to a lie just to destroy him when the same scandal could also
result in tarnishing the reputation of his own family. The motive of Napoleon in bringing the matter to the attention of
the Board of Directors, after all, was based on ethical grounds – he wanted a stop to the affair because it was a disgrace
to the community.

There is also no reason to doubt the statement of Melanie Gao-ay, the wife of Napoleon, who witnessed the
embarrassing "encounter", to borrow the term she used, between respondent and Thelma in her own boarding house.



G.R. No. 178505 September 30, 2008


In the case at bar, petitioners were employed by INNODATA on 17 February 1999 as formatters. The primary business of
INNODATA is data encoding, and the formatting of the data entered into the computers is an essential part of the process
of data encoding. Formatting organizes the data encoded, making it easier to understand for the clients and/or the
intended end users thereof. Undeniably, the work performed by petitioners was necessary or desirable in the business or
trade of INNODATA.


Wheter or not the contracts of employment entered into by petitioners with INNDOATA were valid fixed-term
employment contracts.


The one-year period for which petitioners were hired was simply fixed in the employment contracts without
reference or connection to the period required for the completion of a project. More importantly, there is also a dearth
of evidence that such project or undertaking had already been completed or terminated to justify the dismissal of
petitioners. In fact, petitioners alleged - and respondents failed to dispute that petitioners did not work on just one project,
but continuously worked for a series of projects for various clients of INNODATA.

In Magcalas v. National Labor Relations Commission,the Court struck down a similar claim by the employer therein
that the dismissed employees were fixed-term and project employees. The Court here reiterates the rule that all doubts,
uncertainties, ambiguities and insufficiencies should be resolved in favor of labor. It is a well-entrenched doctrine that in
illegal dismissal cases, the employer has the burden of proof. This burden was not discharged in the present case.


G.R. No. 175678 August 22, 2012


Respondent BPI Employees Union-Metro Manila, a legitimate labor organization and the sole and exclusive
bargaining representative of all the regular rank-and-file employees of petitioner BPI in Metro Manila and petitioner BPI
have an existing CBA which took effect on April 1, 2001. The CBA provides for loan benefits and relatively low interest
rates. Thereafter, petitioner issued a "no negative data bank policy" or the implementation/availment of the manpower
loans which the respondent objected to, thus, resulting into labor-management dialogues. Unsatisfied with the result of
those dialogues, respondent brought the matter to the grievance machinery and afterwards, the issue, not having been
resolved, the parties raised it to the Voluntary Arbitrator.

ISSUE: Does the "No NDB policy" does not violate the parties' Collective Bargaining Agreement?


The CBA in this case contains no provision on the "no negative data bank policy" as a prerequisite in the
entitlement of the benefits it set forth for the employees. In fact, a close reading of the CBA would show that the terms
and conditions contained therein relative to the availment of the loans are plain and clear, thus, all they need is the proper
implementation in order to reach their objective. The CA was, therefore, correct when it ruled that, although it can be
said that petitioner is authorized to issue rules and regulations pertinent to the availment and administration of the loans

under the CBA, the additional rules and regulations, however, must not impose new conditions which are not
contemplated in the CBA and should be within the realm of reasonableness. The "no negative data bank policy" is a new
condition which is never contemplated in the CBA and at some points, unreasonable to the employees because it provides
that before an employee or his/her spouse can avail of the loan benefits under the CBA, the said employee or his/her
spouse must not be listed in the negative data bank, or if previously listed therein, must obtain a clearance at least one
year or six months as the case may be, prior to a loan application.


G.R. No. 192601 June 03, 2013


A conflict has arisen regarding the interpretation of the term legal dependent in connection with the grant of
funeral and bereavement aid to a regular employee under Section 4, Article XIII of the CBA, which stipulates as follows:

SECTION 4. Funeral/Bereavement Aid. The COMPANY agrees to grant a funeral/bereavement aid in the following
instances: XXX c. Death of legal dependent of a regular employee – P15,000.
Petitioner insists that notwithstanding the silence of the CBA, the term legal dependent should follow the definition of
it under Republic Act (R.A.) No. 8282 (Social Security Law), so that in the case of a married regular employee, his or her legal
dependents include only his or her spouse and children, and in the case of a single regular employee, his or her legal dependents
include only his or her parents and siblings, 18 years old and below; and that the term dependents has the same meaning
as beneficiariesas used in Section 5, Article XIII of the CBA.


Whether or not petitioner’s denial of respondents’ claims for funeral and bereavement aid granted under Section 4,
Article XIII of their CBA constituted a diminution of benefits in violation of Article 100 of the Labor Code.


The differentiation among the legal dependents is significant only in the event the CBA has prescribed a hierarchy
among them for the granting of a benefit; hence, the use of the terms primary beneficiaries and secondary beneficiaries for
that purpose. But considering that Section 4, Article XIII of the CBA has not included that differentiation, petitioner had no
basis to deny the claim for funeral and bereavement aid of Alfante for the death of his parent whose death and fact of legal
dependency on him could be substantially proved.

It is further worthy to note that petitioner granted claims for funeral and bereavement aid as early as 1999, then
issued a memorandum in 2000 to correct its erroneous interpretation of legal dependent under Section 4, Article XIII of the
CBA. This notwithstanding, the 2001-2004 CBA35 still contained the same provision granting funeral or bereavement aid in
case of the death of a legal dependent of a regular employee without differentiating the legal dependents according to the
employee’s civil status as married or single. The continuity in the grant of the funeral and bereavement aid to regular employees
for the death of their legal dependents has undoubtedly ripened into a company policy. With that, the denial of Alfante’s
qualified claim for such benefit pursuant to Section 4, Article XIII of the CBA violated the law prohibiting the diminution of