MAXIMO CALALANG, PETITIONER, VS. A. D. WILLIAMS, ET AL.

,
RESPONDENTS.
[ G.R. No. 47800, December 02, 1940]
LAUREL, J.:

FACTS:

The National Traffic Commission, in its resolution of July 17, 1940, resolved to
recommend to the Director of the Public Works and to the Secretary of Public Works
and Communications that animal-drawn vehicles be prohibited from passing along the
following for a period of one year from the date of the opening of the Colgante Bridge
to traffic:

1) Rosario Street extending from Plaza Calderon de la Barca to Dasmariñas

Street from 7:30Am to 12:30 pm and from 1:30 pm to 530 pm; and

2) along Rizal Avenue extending from the railroad crossing at Antipolo Street to

Echague Street from 7 am to 11pm

The Chairman of the National Traffic Commission on July 18, 1940 recommended
to the Director of Public Works with the approval of the Secretary of Public Works the
adoption
ofthethemeasure proposed in the resolution aforementioned in pursuance of the provisi
ons of theCommonwealth Act No. 548 which authorizes said Director with the approval
from theSecretary of the Public Works and Communication to promulgate rules and reg
ulations to regulate and control the use of and traffic on national roads.
On August 2, 1940, the Director recommended to the Secretary the approval of the
recommendations made by the Chairman of the National Traffic Commission with
modifications. The Secretary of Public Works approved the recommendations on August
10,1940. The Mayor of Manila and the Acting Chief of Police of Manila have enforced
and caused to be enforced the rules and regulation. As a consequence, all animal-
drawn vehicles are not allowed to pass and pick up passengers in the places above
mentioned to the detriment not only of their owners but of the riding public as well.

ISSUES:

1) Whether the rules and regulations promulgated by the respondents pursuant

to the provisions of Commonwealth Act NO. 548 constitute an unlawful inference with
legitimate business or trade and abridged the right to personal liberty and freedom of
locomotion?

1
 2) Whether the rules and regulations complained of infringe upon the
constitutional precept regarding the promotion of social justice to insure the well-being
and economic security of all the people?

RATIO DECIDENDI:

1) No. The promulgation of the Act aims to promote safe transit upon and avoid
obstructions on national roads in the interest and convenience of the public. In enacting
said law, the National Assembly was prompted by considerations of public convenience
and welfare. It was inspired by the desire to relieve congestion of traffic, which is a
menace to the public safety. Public welfare lies at the bottom of the promulgation of the
said law and the state in order to promote the general welfare may interfere with
personal liberty, with property, and with business and occupations. Persons and
property may be subject to all kinds of restraints and burdens in order to secure the
general comfort, health, and prosperity of the State. To this fundamental aims of the
government, the rights of the individual are subordinated. Liberty is a blessing which
should not be made to prevail over authority because society will fall into anarchy.
Neither should authority be made to prevail over liberty because then the individual will
fall into slavery. The paradox lies in the fact that the apparent curtailment of liberty is
precisely the very means of insuring its preserving.

2) No. Social justice is “neither communism, nor despotism, nor atomism, nor
anarchy,” but the humanization of laws and the equalization of social and economic
forces by the State so that justice in its rational and objectively secular conception may
at least be approximated. Social justice means the promotion of the welfare of all the
people, the adoption by the Government of measures calculated to insure economic
stability of all the competent elements of society, through the maintenance of a proper
economic and social equilibrium in the interrelations of the members of the community,
constitutionally, through the adoption of measures legally justifiable, or extra-
constitutionally, through the exercise of powers underlying the existence of all
governments on the time-honored principles of salus populi estsuprema lex.

Social justice must be founded on the recognition of the necessity of

interdependence among divers and diverse units of a society and of the protection that
should be equally and evenly extended to all groups as a combined force in our social
and economic life, consistent with the fundamental and paramount objective of the
state of promoting health, comfort and quiet of all persons, and of bringing about “the
greatest good to the greatest number.”

FALLO:

In view of the foregoing, the writ of prohibition prayed for is hereby denied, with
costs against the petitioner. So ordered.

2
 PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC., PETITIONER
VS. HON. FRANKLIN DRILON, RESPONDENT
G.R. NO. 81958 JUNE 30, 1988
SARMIENTO, J.:

FACTS:
The petitioner, engaged principally in the recruitment of Filipino workers, male
and female, for overseas placement, challenges the Constitutional validity of
Department Order No. 1, Series of 1988, of the Department of Labor and Employment,
in the character of “Guidelines Governing the Temporary Suspension of Deployment of
Filipino Domestic and Household Workers,” in this petition for certiorari and prohibition.
Specifically, the measure is assailed for “discrimination against males or females;” that
it “does not apply to all Filipino workers but only to domestic helpers and females with
similar skills;” and that it is violative of the right to travel. It is held likewise to be an
invalid exercise of the lawmaking power, police power being legislative, and not
executive, in character.
Further, PASEI invokes Sec 3 of Art 13 of the Constitution, providing for worker
participation in policy and decision-making processes affecting their rights and benefits
as may be provided by law. Thereafter the Solicitor General on behalf of DOLE
submitting to the validity of the challenged guidelines involving the police power of the
State and informed the court that the respondent have lifted the deployment ban in
some where there exists bilateral agreement with the Philippines and existing
mechanism providing for sufficient safeguards to ensure the welfare and protection of
the Filipino workers.
Department Order No. 1, it is contended, was passed in the absence of prior
consultations. It is claimed, finally, to be in violation of the Charter’s non-impairment
clause, in addition to the “great and irreparable injury” that PASEI members face should
the Order be further enforced.
ISSUE:

Whether the Department Order of the Respondent is in violation of the Equal

Protection Clause and Discriminatory against Sexes

RATIO DECIDENDI:

No, the petitioner has shown no satisfactory reason why the contested measure
should be nullified. There is no question that Department Order No. 1 applies only to
“female contract workers,” but it does not thereby make an undue discrimination
between the sexes. It is well-settled that “equality before the law” under the
Constitution does not import a perfect Identity of rights among all men and women. It
admits of classifications, provided that (1) such classifications rest on substantial
distinctions; (2) they are germane to the purposes of the law; (3) they are not confined
to existing conditions; and (4) they apply equally to all members of the same class. The
Court is well aware of the unhappy plight that has befallen our female labor force
abroad, especially domestic servants, amid exploitative working conditions marked by,
in not a few cases, physical and personal abuse. The sordid tales of maltreatment
suffered by migrant Filipina workers, even rape and various forms of torture, confirmed
by testimonies of returning workers, are compelling motives for urgent Government
action. As precisely the caretaker of Constitutional rights, the Court is called upon to
protect victims of exploitation. In fulfilling that duty, the Court sustains the
3
Government’s efforts. The State through the labor Secretary Exercise the police power
which is a power coextensive with self- protection, and it is not inaptly termed the “law
of overwhelming necessity.” It may be said to be that inherent and plenary power in
the State which enables it to prohibit all things hurtful to the comfort, safety, and
welfare of society.”

FALLO:

For the foregoing reasons, the Court finds that the Government has not
indiscriminately made use of its authority. It is not contested that it has in fact removed
the prohibition with respect to certain countries as manifested by the Solicitor General.
The non-impairment clause of the Constitution, invoked by the petitioner, must yield to
the loftier purposes targeted by the Government. Freedom of contract and enterprise,
like all other freedoms, is not free from restrictions, more so in this jurisdiction,
where laissez faire has never been fully accepted as a controlling economic way of life.

The interest of the State is to provide a decent living to its citizens. The
Government has convinced the Court in this case that this is its intent. We do not find
the impugned Order to be tainted with a grave abuse of discretion to warrant the
extraordinary relief prayed for. Wherefore, the petition is dismissed. No costs.

4
 PASEI. VS. HON. FRANKLIN M DRILON AND TOMAS D ACHACOSO
G.R. NO. 81958 JUNE 30, 1988
SARMIENTO, J.:

FACTS:

The Philippine Association of Service Exporters, Inc. challenged the Constitutional

validity of Department Order No. 1, Series of 1988, of the Department of Labor and
Employment, in the character of "GUIDELINES GOVERNING THE TEMPORARY
SUSPENSION OF DEPLOYMENT OF FILIPINO DOMESTIC AND HOUSEHOLD WORKERS,"
in a petition for certiorari and prohibition. It was assailed for "discrimination against
males or females;" that it "does not apply to all Filipino workers but only to domestic
helpers and females with similar skills;" and that it was violative of the right to travel. It
is held likewise to be an invalid exercise of the lawmaking power, police power being
legislative, and not executive, in character.

PASEI invoked Section 3, of Article XIII, of the Constitution, providing for worker
participation "in policy and decision-making processes affecting their rights and benefits
as may be provided by law." It was contended that Department Order No. 1 was
passed in the absence of prior consultations. It was also claimed to be in violation of
the Charter's non-impairment clause, in addition to the "great and irreparable injury"
that PASEI members face should the Order be further enforced.

On May 25, 1988, the Solicitor General, on behalf of the respondents Secretary
of Labor and Administrator of the Philippine Overseas Employment Administration, filed
a Comment informing the Court that on March 8, 1988, the respondent Labor Secretary
lifted the deployment ban in the states of Iraq, Jordan, Qatar, Canada, Hongkong,
United States, Italy, Norway, Austria, and Switzerland. In submitting the validity of the
challenged "guidelines," the Solicitor General invoked the police power of the Philippine
State.

ISSUE:

Whether or not Department Order No. 1 is a valid exercise of police power under
the Constitution.

RATIO DECIDENDI:

Yes, Department Order No. 1 is a valid exercise of police power. The scope of
police power, ever-expanding to meet the exigencies of the times, even to anticipate
the future where it could be done, provides enough room for an efficient and flexible
response to conditions and circumstances thus assuring the greatest benefits. It finds
no specific Constitutional grant for the plain reason that it does not owe its origin to the
Charter. Along with the taxing power and eminent domain, it is inborn in the very fact
of statehood and sovereignty.
Police Power constitutes an implied limitation on the Bill of Rights. It is not,
however, without its own limitations. It may not be exercised arbitrarily or
unreasonably.

As a general rule, official acts enjoy a presumed validity. In the absence of clear
and convincing evidence to the contrary, the presumption logically stands. PASEI has
shown no satisfactory reason why the contested measure should be nullified. There is

5
no question that Department Order No. 1 applies only to "female contract workers," but
it does not thereby make an undue discrimination between the sexes. It is well-settled
that "equality before the law" under the Constitution does not import a perfect Identity
of rights among all men and women. It admits of classifications, provided that (1) such
classifications rest on substantial distinctions; (2) they are germane to the purposes of
the law; (3) they are not confined to existing conditions; and (4) they apply equally to
all members of the same class.

The Court is satisfied that the classification made-the preference for female
workers — rests on substantial distinctions. As a matter of judicial notice, the Court is
well aware of the unhappy plight that has befallen our female labor force abroad,
especially domestic servants, amid exploitative working conditions marked by, in not a
few cases, physical and personal abuse.

The consequence the deployment ban has on the right to travel does not impair
the right. The right to travel is subject, among other things, to the requirements of
"public safety," "as may be provided by law." Department Order No. 1 is a valid
implementation of the Labor Code, in particular, its basic policy to "afford protection to
labor," pursuant to the respondent Department of Labor's rule-making authority vested
in it by the Labor Code.

There is no merit in the contention that Department Order No. 1 constitutes an

invalid exercise of legislative power. It is true that police power is the domain of the
legislature, but it does not mean that such an authority may not be lawfully delegated.
The Labor Code itself vests the Department of Labor and Employment with rulemaking
powers in the enforcement whereof.

The petitioners's reliance on the Constitutional guaranty of worker participation

"in policy and decision-making processes affecting their rights and benefits" was not
well-taken. The right granted by this provision must submit to the demands and
necessities of the State's power of regulation. Protection to labor" does not signify the
promotion of employment alone. What concerns the Constitution more paramountly is
that such an employment be above all, decent, just, and humane. The non-impairment
clause of the Constitution, invoked by the petitioner, must yield to the loftier purposes
targeted by the Government. Freedom of contract and enterprise, like all other
freedoms, is not free from restrictions, more so in this jurisdiction, where laissez
faire has never been fully accepted as a controlling economic way of life.

In the light of the foregoing, the petition must be dismissed.

FALLO:

WHEREFORE, the petition is DISMISSED. No costs.

SO ORDERED.

6
 C. ALCANTARA & SONS, INC., PETITIONER, VS. COURT OF APPEALS
G.R. NO. 179220, MARCH 14, 2012
PERALTA, J.

FACTS:

C. Alcantara & Sons, Inc. (CASI) is a domestic corporation engaged in the

manufacture and processing of plywood. The other parties to the case were the
Nagkahiusang Mamumuo sa Alsons-SPFL (the Union) and the Union officers The
Company and the Union entered into a CBA that bound them to hold no strike and no
lockout in the course of its life. The negotiation between CASI and the Union on the
economic provisions of the CBA ended in a deadlock prompting the Union to stage a
strike, but the strike was later declared by the LA to be illegal in violation of the CBAs
no strike-no lockout provision.

Consequently, the Union officers were deemed to have forfeited their

employment while the Union members were ordered to be reinstated without
backwages there being no proof that they actually committed illegal acts during the
strike. Notwithstanding the provision of the Labor Code mandating that the
reinstatement aspect of the decision be immediately executory, the LA refused to
reinstate the dismissed Union members.

On November 8, 1999, the NLRC affirmed the LA decision insofar as it declared

the strike illegal and ordered the Union officers dismissed from employment and liable
for damages but modified the same by considering the Union members to have been
validly dismissed from employment for committing prohibited and illegal acts.

On petition for certiorari, the CA annulled the NLRC decision and reinstated that
of the LA.

ISSUE:

Whether or not the Union members committed illegal acts during the strike.

RATIO DECIDENDI:

The provision is perfectly applicable. Article 264 (a) of the Labor Code provides
for the liabilities of the Union officers and members participating in illegal strikes and/or
committing illegal acts. Thus, there is substantial evidence presented to show that the
striking Union members committed the following prohibited acts: (a) They threatened,
coerced, and intimidated non-striking employees, officers, suppliers and customers;(b)
They obstructed the free ingress to and egress from the company premises; and (c)

7
 They resisted and defied the implementation of the writ of preliminary injunction
issued against the strikers.
The court held that not only did the strike illegal, rather, it also found the Union
officers to have knowingly participated in the illegal strike. Worse, the Union members
committed prohibited acts during the strike which warrants their dismissal from
employment. Therefore, the Union members’ termination is justified as to the grounds
for termination.

FALLO:

WHEREFORE, premises considered, the motion for reconsideration of the Union,

its officers and members are DENIED for lack of merit, while the motion for partial
reconsideration filed by C. Alcantara & Sons, Inc. is PARTLY GRANTED. The Decision of
the Court dated September 29, 2010 is hereby PARTLY RECONSIDERED by deleting the
award of separation pay.

SO ORDERED.

8
 ST. MARY'S ACADEMY OF DIPOLOG CITY, PETITIONER VS. TERESITA
PALACIO, MARIGEN CALIBOD, LEVIE LAQUIO, ELAINE MARIE SANTANDER,
ELIZA SAILE, AND MA. DOLORES MONTEDERAMOS, RESPONDENTS.
G.R. NO. 164913, SEPTEMBER 8, 2010
DEL CASTILLO, J.:

FACTS:

On different dates in the late 1990’s, petitioner hired respondents Calibod,

Laquio, Santander, Saile and Montederamos, as classroom teachers, and respondent
Palacio, as guidance counselor. In separate letters dated March 31, 2000, however,
petitioner informed them that their re-application for school year 2000-2001 could not
be accepted because they failed to pass the Licensure Examination for Teachers (LET).
According to petitioner, as non-board passers, respondents could not continue
practicing their teaching profession pursuant to the Department of Education, Culture
and Sports (DECS) Memorandum No. 10, S. 19987 which requires incumbent teachers
to register as professional teachers pursuant to Section 27of Republic Act (RA) No.
7836, otherwise known as the Philippine Teachers Professionalization Act of 1994.

The DECS Memorandum, pursuant to PRC Resolution No. 600, S. 1997 fixed the
deadline for teachers to register on September 19, 2000. Further, as the aforesaid law
provides for exceptions to the taking of examination, some of them possessed civil
service eligibilities and special permits to teach. Also, it was established the petitioner
retained other teachers who did not also possess the required eligibility.

Together with four other classroom teachers namely Gail Josephine Padilla
(Padilla), Virgilio Andalahao (Andalahao), Alma Decipulo (Decipulo), and Marlynn
Palacio, who were similarly dismissed by petitioner on the same ground, respondents
filed a complaint contesting their termination as highly irregular and premature.

Petitioner claimed that it decided to terminate their services as early as March

31, 2000 because it would be prejudicial to the school if their services will be
terminated in the middle of the school year.

ISSUE:

Whether or not there was illegal dismissal.

RATIO DECIDENDI:

The dismissal of Teresita Palacio, Calibod, Laquio, Santander, and Montederamos

was premature and defeated their right to security of tenure. Saile’s dismissal has legal
basis for lack of the required qualification needed for continued practice of teaching

9
 Pursuant to RA7836, its resolution and subsequent memorandum, effective
September 20, 2000, only holders of valid certificates of registration, valid professional
licenses and valid special/temporary permits can engage in teaching in both public and
private schools.24 Clearly, respondents, in the case at bar, had until September 19, 2000
to comply with the mandatory requirement to register as professional teachers. As
respondents are categorized as those not qualified to register without examination, the
law requires them to register by taking and passing the licensure examination.

Petitioner claims that it terminated respondents’ employment as early as March

2000 because it would be highly difficult to hire professional teachers in the middle of
the school year as replacements for respondents without compromising the operation of
the school and education of the students. Petitioner’s intention and desire not to put
the students’ education and school operation in jeopardy is neither a decisive
consideration for respondents’ termination prior to the deadline set by law. Again, by
setting a deadline for registration as professional teachers, the law has allowed
incumbent teachers to practice their teaching profession until September 19, 2000,
despite being unregistered and unlicensed. The prejudice that respondents’ retention
would cause to the school’s operation is only trivial if not speculative as compared to
the consequences of respondents’ unemployment.

Incidentally, petitioner did not dispute that it hired and retained other teachers
who do not likewise possess the qualification and eligibility and even allowed them to
teach during the school year 2000-2001. This indicates petitioner’s ulterior motive in
hastily dismissing respondents.

It is incumbent upon this Court to afford full protection to labor. Thus, while we
take cognizance of the employer’s right to protect its interest, the same should be
exercised in a manner which does not infringe on the workers’ right to security of
tenure. "Under the policy of social justice, the law bends over backward to
accommodate the interests of the working class on the humane justification that those
with less privilege in life should have more in law.

FALLO:

The petition is partially GRANTED. The Decision of the Court of Appeals dated
September 24, 2003 in CA-G.R. SP No. 67691 finding respondents Teresita Palacio,
Marigen Calibod, Levie Laquio, Elaine Marie Santander and Ma. Dolores Montederamos
to have been illegally dismissed and awarding them separation pay and limited
backwages is AFFIRMED. As regards respondent Eliza Saile, we find her termination
valid and legal. Consequently, the awards of separation pay and limited backwages in
her favor are DELETED.

10
 MATERNITY CHILDREN'S HOSPITAL vs. SECRETARY OF LABOR
G.R. No. 78909 June 30, 1989
MEDIALDEA, J.:

FACTS:

Petitioner is a semi-government hospital, managed by the Board of Directors of

the Cagayan de Oro Women's Club and Puericulture Center, derives its finances from
the club itself as well as from paying patients, averaging 130 per month. It is also partly
subsidized by the Philippine Charity Sweepstakes Office and the Cagayan De Oro City
government.

Petitioner has forty-one (41) employees. Aside from salary and living allowances,
the employees are given food, but the amount spent therefor is deducted from their
respective salaries.

On May 23, 1986, ten (10) employees of the petitioner employed in different
capacities/positions filed a complaint with the Office of the Regional Director of Labor
and Employment, Region X, for underpayment of their salaries and ECOLAS and that it
covers not only the hospital employees who signed the complaints, but also those (a)
who are not signatories to the complaint, and (b) those who were no longer in the
service of the hospital at the time the complaints were filed. On June 16, 1986, the
Regional Director directed two of his Labor Standard and Welfare Officers to inspect the
records of the petitioner to ascertain the truth of the allegations in the complaints.
Payrolls covering the periods of May, 1974, January, 1985, November, 1985 and May,
1986, were duly submitted for inspection.

Based on this inspection report and recommendation by the Labor Standard and
Welfare Officers, the Regional Director issued an Order dated August 4, 1986, directing
the payment of P723,888.58, representing underpayment of wages and ECOLAs to all
the petitioner's employees.

Petitioner appealed and filed a motion for reconsideration to the Secretary, that
deficiency wages and ECOLAs should be computed only from May 23, 1983 to May 23,
1986 which was denied by the Secretary of Labor in his Order dated May 13, 1987, for
lack of merit.

Petitioner further questions the authority of the Regional Director to award salary
differentials and ECOLAs to private respondents alleging that the original and exclusive
jurisdiction over money claims is properly lodged in the Labor Arbiter, based on Article
217, paragraph 3 of the Labor Code.

11
ISSUE:
Whether or not the Regional Director had jurisdiction over the case.

RATIO DECIDENDI:
This is a labor standards case, and is governed by Art. 128-b of the Labor Code,
as amended by E.O. No. 111. Labor standards refer to the minimum requirements
prescribed by existing laws, rules, and regulations relating to wages, hours of work,
cost of living allowance. Under the present rules, a Regional Director
exercises both visitorial and enforcement power over labor standards cases, and is
therefore empowered to adjudicate money claims, providedt here still exists an
employer-employee relationship, and the findings of the regional office is not
contested by the employer concerned.

Prior to the promulgation of E.O. No. 111 on December 24, 1986, the Regional
Director's authority over money claims was unclear. The complaint in the present case
was filed on May 23, 1986 when E.O. No. 111 was not yet in effect, however, that even
in the absence of E. O. No. 111, Regional Directors already had enforcement powers
over money claims, effective under P.D. No. 850, issued on December 16, 1975, which
transferred labor standards cases from the arbitration system to the enforcement
system.

With the promulgation of PD 850, Regional Directors were given enforcement

powers, in addition to visitorial powers. Article 127, as amended. Labor Arbiters, on the
other hand, lost jurisdiction over labor standards cases. Article 216, as then amended
by PD 850.

In the present case, petitioner admitted the charge of underpayment of wages to

workers still in its employ; in fact, it pleaded for time to raise funds to satisfy its
obligation. There was thus no contest against the findings of the labor inspectors.
However, there is no legal justification for the award in favor of those employees
who were no longer connected with the hospital at the time the complaint was filed,
having resigned therefrom in 1984.

Social justice legislation, to be truly meaningful and rewarding to our workers,

must not be hampered in its application by long-winded arbitration and litigation. Rights
must be asserted and benefits received with the least inconvenience. Labor laws are
meant to promote, not defeat, social justice.

FALLO:

ACCORDINGLY, this petition should be dismissed, as it is hereby DISMISSED, as regards

all persons still employed in the Hospital at the time of the filing of the complaint, but
GRANTED as regards those employees no longer employed at that time.

12
SO ORDERED.
PHILIPPINE AIRLINES, INC., petitioner,
vs.
ALBERTO SANTOS, JR., HOUDIEL MAGADIA, GILBERT ANTONIO, REGINO
DURAN, PHILIPPINE AIRLINES EMPLOYEES ASSOCIATION, and THE
NATIONAL LABOR RELATIONS COMMISSION, respondents.
G.R. No. 77875 February 4, 1993
REGALADO, J.

FACTS:

Individual respondents are all Port Stewards of Catering Sub-Department,

Passenger Services Department of petitioner. Their duties and responsibilities, among
others, to wit;

Prepares meal orders and checklists, setting up standard equipment in

accordance with the requirements of the type of service for each flight; skiing,
binning, and inventorying of Commissary supplies and equipment.

On various occasions, several deductions were made from their salary. The
deductions represented losses of inventoried items charged to them for mishandling of
company properties, which respondents resented. Such that on August 21, 1984,
individual respondents, represented by the union, made a formal notice regarding the
deductions to petitioner thru Mr. Reynaldo Abad, Manager for Catering.

As there was no action taken on said representation, private respondents filed a

formal grievance on November 4, 1984 pursuant to the grievance machinery Step 1 of
the Collective Bargaining Agreement between petitioner and the union.The topics which
the union wanted to be discussed in the said grievance were the illegal/questionable
salary deductions and inventory of bonded goods and merchandise being done by
catering service personnel which they believed should not be their duty.

The said grievance was submitted on November 21, 1984 to the office of Mr.
Reynaldo Abad, Manager for Catering, who at the time was on vacation
leave.Subsequently, the grievants (individual respondents) thru the shop steward wrote
a letter on December 5, 1984 addressed to the office of Mr. Abad, who was still on
leave at the time, that inasmuch as no reply was made to their grievance which "was
duly received by your secretary" and considering that petitioner had only five days to
resolve the grievance as provided for in the CBA, said grievance as believed by them
(private respondents) was deemed resolved in their favor. . . .

Upon Mr. Abad's return on December 7, 1984, he immediately informed the

grievants and scheduled a meeting on December 12, 1984.

Thereafter, the individual respondents refused to conduct inventory works

namely, Alberto Santos, Jr.,Gilbert Antonio, Regino Duran and Houdiel Magadia.

At the grievance meeting which was attended by some union representatives,

Mr. Abad resolved the grievance by denying the petition of individual respondents and
adopted the position that inventory of bonded goods is part of their duty as catering
service personnel, and as for the salary deductions for losses.

13
 As there was no ramp inventory conducted as required by Mr Abad specific date,
the latter, on January 3, 1985 wrote by an inter-office memorandum addressed to the
grievants, individual respondents herein, for them to explain on (sic) why no disciplinary
action should be taken against them for not conducting ramp inventory

The directive was complied with by the respondents for not conducting ramp
inventory by stating reason for was put forth as:

”Since the grievance step 1 was not decided and no action was done by
your office within 5 days from November 21, 1984, per provision of the PAL-
PALEA CBA, Art. IV, Sec. 2, the grievance is deemed resolved in PALEA's favor.”

Going over the explanation, Mr. Abad found the same unsatisfactory. Thus, a
penalty of suspension ranging from 7 days to 30 days were imposed depending on the
number of infractions committed.

After the penalty of suspension was meted down, PALEA filed another grievance
asking for lifting of, or at least, holding in abeyance the execution of said penalty. The
said grievance was forthwith denied but the penalty of suspension with respect to
respondent Ramos was modified, such that his suspension which was originally from
January 15, 1985 to April 5, 1985 was shortened by one month and was lifted on March
5, 1985. The union, however, made a demand for the reimbursement of the salaries of
individual respondents during the period of their suspension.

Petitioner stood on the validity of the suspensions. Hence, a complaint for illegal
suspension was lodged before the Arbitration Branch of the Commission. Labor Arbiter
Ceferina J. Diosana, on March 17, 1986, ruled in favor of petitioner by dismissing the
complaint.

ISSUE:

Whether or not the suspension imposed by Mr. Abad, manager of catering is

tenable?

RATIO DECIDENDI:

It is a fact that the sympathy of the Court is on the side of the laboring classes,
not only because the Constitution imposes such sympathy, but because of the one-
sided relation between labor and capital. The constitutional mandate for the promotion
of labor is as explicit as it is demanding. The purpose is to place the workingman on an
equal plane with management — with all its power and influence — in negotiating for
the advancement of his interests and the defense of his rights. Under the policy of
social justice, the law bends over backward to accommodate the interests of the
working class on the humane justification that those with less privileges in life should
have more privileges in law.

It is clear that the grievance was filed with Mr. Abad's secretary during his
absence. Under Section 2 of the CBA aforequoted, the division head shall act on the
grievance within five (5) days from the date of presentation thereof, otherwise "the
grievance must be resolved in favor of the aggrieved party." It is not disputed that the
grievants knew that division head Reynaldo Abad was then "on leave" when they filed
their grievance which was received by Abad's secretary. This knowledge, however,
should not prevent the application of the CBA.

14
 Contrary to petitioner's submission,15 the grievance of employees is not a matter
which requires the personal act of Mr. Abad and thus could not be delegated. Petitioner
could at least have assigned an officer-in-charge to look into the grievance and possibly
make his recommendation to Mr. Abad. It is of no moment that Mr. Abad immediately
looked into the grievance upon returning to work, for it must be remembered that the
grievants are workingmen who suffered salary deductions and who rely so much on
their meager income for their daily subsistence and survival. Besides, it is noteworthy
that when these employees first presented their complaint on August 21, 1984,
petitioner failed to act on it. It was only after a formal grievance was filed and after Mr.
Abad returned to work on December 7, 1984 that petitioner decided to turn an ear to
their plaints.

As respondent NLRC has pointed out, Abad's failure to act on the matter may
have been due to petitioner's inadvertence,16 but it is clearly too much of an injustice if
the employees be made to bear the dire effects thereof. Much as the latter were willing
to discuss their grievance with their employer, the latter closed the door to this
possibility by not assigning someone else to look into the matter during Abad's absence.
Thus, private respondents should not be faulted for believing that the effects of the CBA
in their favor had already stepped into the controversy.

If the Court were to follow petitioner's line of reasoning, it would be easy for
management to delay the resolution of labor problems, the complaints of the workers in
particular, and hide under the cloak of its officers being "on leave" to avoid being
caught by the 5-day deadline under the CBA. If this should be allowed, the workingmen
will suffer great injustice for they will necessarily be at the mercy of their employer.
That could not have been the intendment of the pertinent provision of the CBA, much
less the benevolent policy underlying our labor laws.

FALLO:

ACCORDINGLY, on the foregoing premises, the instant petition is hereby DENIED

and the assailed decision of respondent National Labor Relations Commission is
AFFIRMED. This judgment is immediately executory.

SO ORDERED.

15
 ANTONIO M. SERRANO
vs.
Gallant MARITIME SERVICES, INC. and MARLOW NAVIGATION CO., INC.
G.R.No.167614, March 24,2009
Austria-Martinez, J.:

FACTS:

Petitioner was hired by Gallant Maritime Services, Inc. and Marlow Navigation
Co., Ltd. under a Philippine Overseas Employment Administration (POEA)- approved
Contract of Employment for 12 months as a Chief Officer with basic monthly salary of
US$1,400.00, a working 48.0 hours per week, an overtime of $700.00 per month and
vacation leave with pay of $7.00 per month. On March 19, 1998, the date of
hisdeparture, petitioner was constrained to accept a downgraded employment
contract for the position of Second Officer with a monthly salary of US$1,000.00, upon
the assurance and representation of respondents that he would be made Chief Officer
by the end of April 1998. Respondents did not deliver on their promise to make
petitioner Chief Officer. Hence, petitioner refused to stay on as Second Officer and
was repatriated to the Philippines on May 26, 1998. Petitioner's employment contract
was for a period of 12 months or from March 19, 1998 up to March 19, 1999, but at
the time of his repatriation on May 26, 1998, he had served only two (2) months and
seven (7) days of his contract, leaving an unexpired portion of nine (9) months and
twenty-three (23) days. Petitioner filed with the Labor Arbiter (LA) a Complaint
against respondents for constructive dismissal and for payment of his money claims in
the total amount ofUS$26,442.73.

The LA rendered a Decision dated July 15, 1999, declaring the dismissal of
petitioner illegal and awarding him the amount of EIGHT THOUSAND SEVEN
HUNDRED SEVENTY U.S. DOLLARS(US $8,770.00), representing the complainant’s
salary for three (3) months of the unexpired portion of the aforesaid contract of
employment. rather than the entire unexpired portion of nine months and 23 days of
petitioner's employment contract - applying the last clause in the 5th paragraph
of Section 10, R.A. No. 8042. Petitioner contends that the subject clause is
unconstitutional because it unduly impairs the freedom of OFWs to negotiate for and
stipulate in their overseas employment contracts a determinate employment period
and a fixed salary package. It also impinges on the equal protection clause, for it
treats OFWs differently from local Filipino workers (local workers) by putting a cap
on the amount of lump- sum salary to which OFWs are entitled in case of illegal
dismissal, while setting no limit to the same monetary award for local workers when
their dismissal is declared illegal; that the disparate treatment is not reasonable as
there is no substantial distinction between the two groups; and that it defeats
Section 18, Article II of the Constitution which guarantees the protection of the
rights and welfare of all Filipino workers, whether deployed locally or overseas.
Lastly, petitioner claims that the subject clause violates the due process clause, for it
deprives him of the salaries and other emoluments he is entitled to under his fixed-
period employment contract

ISSUE:

Whether or not the last paragraph of Section 10, R.A. No. 8042 is unconstitutional?

16
RATIO DECIDENDI:

Yes.Upon cursory reading, the subject clause appears facially neutral, for it
applies to all OFWs. However, a closer examination reveals that the subject clause
has a discriminatory intent against, and an invidious impact on, OFWs at two levels:

First, OFWs with employment contracts of less than one year vis-à-vis OFWs
with employment contracts of one year or more;

Second, among OFWs with employment contracts of more than one year; and

Third, OFWs vis-à-vis local workers with fixed-period employment;

The Court notes that the subject clause "or for three (3) months for every year
of the unexpired term, whichever is less" contains the qualifying phrases "every
year" and "unexpired term." By its ordinary meaning, the word "term" means a
limited or definite extent of time.

Additionally, that "every year" is but part of an "unexpired term" is significant

in many ways: first, the unexpired term must be at least one year, for if it were any
shorter, there would be no occasion for such unexpired term to be measured by
every year; and second, the original term must be more than one year, for
otherwise, whatever would be the unexpired term thereof will not reach even a year.
Consequently, the more decisive factor in the determination of when the subject
clause "for three (3) months for every year of the unexpired term, whichever is less"
shall apply is not the length of the originalcontract period as held in Marsaman,106
but the length of the unexpired portion of the contract period -- the subject clause
applies in cases when the unexpired portion of the contract period is at least one
year, which arithmetically requires that the original contract period be more than one
year.

To concretely illustrate the application of the foregoing interpretation of the

subject clause, the Court assumes hypothetical OFW-C and OFW-D, who each have a
24-month contract at a salary rate of US$1,000.00 per month. OFW-C is illegally
dismissed on the 12th month, and OFW-D, on the 13th month. Considering that there
is at least 12 months remaining in the contract period of OFW-C, the subject clause
applies to the computation of the latter's monetary benefits. Thus, OFW-C will be
entitled, not to US$12,000,00 or the latter's total salaries for the 12 months unexpired
portion of the contract, but to the lesser amount of US$3,000.00 or the latter's salaries
for 3 months out of the 12-month unexpired term of the contract. On the other hand,
OFW-D is spared from the effects of the subject clause, for there are only 11 months
left in the latter's contract period. Thus, OFW-D will be entitled to US$11,000.00,
which is equivalent to his/her total salaries for the entire 11-month unexpired portion.

The Court concludes that the subject clause contains a suspect classification in
that, in the computation of the monetary benefits of fixed-term employees who are
illegally discharged, itimposesa3-monthcapontheclaim of OFWs with an unexpired
portion of one year or more in their contracts, but none on the claims of other OFWs
or local workers with fixed-term employment. The subject clause singles out one
classification of OFWs and burdens it with a peculiar disadvantage.

FALLO:
17
 WHEREFORE, the Court GRANTS the Petition. The subject clause "or for three
months for every year of the unexpired term, whichever is less" in the 5th paragraph
of Section 10 of Republic Act No. 8042 is DECLARED UNCONSTITUTIONAL; and the
December 8, 2004 Decision and April 1, 2005 Resolution of the Court of Appeals are
MODIFIED to the effect that petitioner is AWARDED his salaries for the entire
unexpired portion of his employment contract consisting of nine months and 23 days
computed at the rate of US$1,400.00 per month.

No costs.

So ordered.

18
 ANG TIBAY, represented by TORIBIO TEODORO, manager and proprietor,
and NATIONAL WORKERS' BROTHERHOOD, petitioners, vs. THE COURT OF
INDUSTRIAL RELATIONS and NATIONAL LABOR UNION, INC., respondents.
No. L- 46496. February 27, 1940
LAUREL, J.:

FACTS:

Toribio Teodoro is the proprietor and manager of Ang Tibay, a company that
manufactures shoes and slippers. There was a shortage of leather soles, making it
necessary for Teodoro to temporarily lay off 89 members of the National Labor Union
Inc. The private respondent union, however, claimed that the supposed lack of leather
materials is not true and unsupported by the records of the Bureau of Customs and the
Books of Accounts. It claimed that Teodoro was guilty of unfair labor practice for
discriminating against the National Labor Union, Inc., and unjustly favoring the National
Workers' Brotherhood.

The Court of Industrial Relations, which is a special court with jurisdiction to

settle any question or controversy arising between, and/or affecting employers and
employees or laborers, elevated the case to the SC. The labor union filed a motion for
new trial, claiming that there are documents that are so inaccessible to them at the
time of the trial that even with the exercise of due diligence they could not be expected
to have obtained and offered as evidence in the CIR but are of far-reaching importance
that their admission would necessarily mean the reversal/modification of judgment
rendered.

ISSUE:

Whether or not the Union was denied due process by the CIR

RATIO DECIDENDI:

Yes. While the CIR may be free from the rigidity of certain procedural requirements, it
does not mean that it can, in justiciable cases coming before it, entirely ignore or
disregard the fundamental and essential requirements of due process in trials and
investigations of an administrative character.

Here the rights that must be respected even in proceedings of this character:

(1) the right to a hearing, which includes the right of the party interested or affected to
present his own case and submit evidence in support thereof.
(2) the tribunal must consider the evidence presented
(3) there be some evidence to support a finding or conclusion

19
(4) the evidence must be substantial
(5) the decision must be rendered on the evidence presented at the hearing, or at least
contained in the record and disclosed to the parties affected
(6) The CIR or any of its judges must act on its or his own independent consideration of
the law and facts of the controversy, and not simply accept the views of a subordinate
in arriving at a decision.
(7) The Court of Industrial Relations should, in all controversial questions, render its
decision in such a manner that the parties to the proceeding can know the various
issues involved, and the reasons for the decisions rendered.

FALLO:

There was a failure to grasp the fundamental issue involved. Wherefore, the
motion for new trial was granted and the case is remanded to the CIR. Basis for new
trial: newly discovered evidence or documents obtained by NLU.

20
 FEDERICO LEDESMA, JR. vs. NLRC
G.R. No. 174585, OCTOBER 19, 2007
CHIC-NAZARIO, J.:

FACTS:

On 4 December 1998, petitioner was employed as a bus/service driver by the

private respondent on probationary basis, as evidenced by his appointment.3 As such,
he was required to report at private respondent’s training site in Dasmariñas, Cavite,
under the direct supervision of its site administrator, Pablo Manolo de Leon (de Leon).

On 11 November 2000, petitioner filed a complaint against de Leon for allegedly

abusing his authority as site administrator by using the private respondent’s vehicles
and other facilities for personal ends. In the same complaint, petitioner also accused de
Leon of immoral conduct allegedly carried out within the private respondent’s premises.
A copy of the complaint was duly received by private respondent’s Chief Accountant,
Nita Azarcon (Azarcon).

On 27 November 2000, de Leon filed a written report against the petitioner

addressed to private respondent’s Vice-President for Administration, Ricky Ty (Ty),
citing his suspected drug use.

In view of de Leon’s report, private respondent’s Human Resource Manager,

Trina Cueva (HR Manager Cueva), on 29 November 2000, served a copy of a Notice to
petitioner requiring him to explain within 24 hours why no disciplinary action should be
imposed on him for allegedly violating Section 14, Article IV of the private respondent’s
Code of Conduct.

On December 2000, petitioner filed a complaint for illegal dismissal against

private respondent before the Labor Arbiter. In his position paper, petitioner alleged
that he filed a complaint for illegal dismissal on the grounds that the latter falsely
accusing private petitioner as a drug user, and for his abusive conduct as a site
administrator. Petitioner alleged that he was asked to report at the private respondent’s
main office in Espana. Petitioner was served a copy of Notice to Explain together with
the copy of De Leon’s report citing his suspected drug used. HR Manager Cueva took
back earlier Notice to explain since his drug test result revealed that he was positive.

Petitioner was then asked by the HR Manager Cueva to sign a resignation letter
and also convinced by the VP for administration Ty, to voluntarily resign with the
assurance that he would still get separation pay. Petitioner did not yet sign the
resignation paper to think over the offer. On the following day, petitioner went to St.
Dominic Medical center for drug test and he found out that he is negative for any drug
substance. Petitioner went back to private respondent to show them his drug result and
he can continue to work for private respondent. Petitioner reported for work but he was
no longer allowed to enter the training site for he was alleged banned therefrom

21
according to the guard on duty. The incident prompted the petitioner to file the
complaint for illegal dismissal against the private respondent before the Labor Arbiter.

Private respondent denied the allegations that it banned the latter from entering
the premises. it was petitioner who failed or refused to report to work after he was
made to explain his alleged drug use. Indeed, on 3 December 2000, petitioner was able
to claim at the training site his salary for the period of 16-30 November 2000, as
evidenced by a copy of the pay voucher bearing petitioner’s signature. Petitioner’s
accusation that he was no longer allowed to enter the training site was further belied by
the fact that he was able to claim his 13th month pay thereat on 9 December 2000,
supported by a copy of the pay voucher signed by petitioner.

The Labor Arbiter rendered decision in favor of the petitioner declaring that the
latter was illegally dismissed. NLRC granted appeal raised by both parties and reversed
the Labor Arbiter’s Decision. The NLRC declared that petitioner failed to establish the
fact of dismissal for his claim that he was banned from entering the training site was
rendered impossible by the fact that he was able to subsequently claim his salary and
13th month pay. Motion for reconsideration filed by the petitioner was likewise denied
by the NLRC. Court of Appeals dismissed the petitioners Petition for Certiorari and
affirmed the decision of NLRC. Hence, the petitioner filed Petition for Review on
Certiorari before this court.

ISSUE:

Whether or not the petitioner was illegally dismissed from employment.

RATIO DECIDENDI:

No. Petitioner was not illegally. Well-entrenched is the principle that in order to
establish a case before judicial and quasi-administrative bodies, it is necessary that
allegations must be supported by substantial evidence. Substantial evidence is more
than a mere scintilla. It means such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion. In the present case, there is hardly any
evidence on record so as to meet the quantum of evidence required, i.e., substantial
evidence. Petitioner’s claim of illegal dismissal is supported by no other than his own
bare, uncorroborated and, thus, self-serving allegations, which are also incoherent,
inconsistent and contradictory.

Petitioner himself narrated that when his presence was requested on 29

November 2000 at the private respondent’s main office where he was served with the
Notice to Explain his superior’s report on his suspected drug use, VP for Administration
Ty offered him separation pay if he will just voluntarily resign from employment. While
we do not condone such an offer, neither can we construe that petitioner was
dismissed at that instance. Petitioner was only being given the option to either resign
and receive his separation pay or not to resign but face the possible disciplinary charges
against him. The final decision, therefore, whether to voluntarily resign or to continue
working still, ultimately rests with the petitioner. In fact, by petitoner’s own admission,

22
he requestedfrom VP for Administration Ty more time to think over the offer. Hence,
petitioner was not illegally dismissed for lack of substantial evidence.

FALLO:

WHEREFORE, premises considered, the instant Petition is DENIED.

23
 LUZ G. CRISTOBAL VS. ECC AND GSIS
G.R NO. L-49280 FEBRUARY 26, 1981
MAKASIAR, J.:

FACTS:

Respondents filed a motion for reconsideration from the decision rendered on

April 30, 1980 based on the grounds that the ailment of the deceased was not a listed
diseases, proof should be shown that the cause was the working condition, further
stated that the court only found a case of aggravation which is different from proof or
increased risk of the contracting ailment, assuming that the ailment is compensable
under the new law the benefits awarded are not in accordance with the said law and
the grant of attorneys fee equivalent of ten percent of the death benefits are not
proper.

ISSUE:

Whether or not the deceased cause of death is compensable and the benefits
awarded are not in accordance with the law as well as the ten percent Attorney’s fee.

RATIO DECIDENDI:

Yes, the respondents claim that the petitioner must establish the direct causal
relation between the disease and the employment of the deceased, such a strict
requirement which even medical experts in the field cannot support considering the
uncertainty of the nature of such disease would negate the principle of liberty in the
matter of evidence, apparently what law merely requires is reasonable work connection
and not a direct causal relation, under article 4 of the new Labor code stated that “all
doubts in the implementation and interpretation of the provision of this code, including
its implementing rules and regulation shall be resolve in favor of labor. Further the
award of medical benefits is lawful under article 166 of the labor code provides that
state shall promote develop a tax exempt employees compensation program whereby
employees and their dependents in the event of work connected disability or death may
promptly secure adequate income benefit and medical or related benefits.

FALLO:

Wherefore, the decision is modified, that the respondent must pay the petitioner
P12, 000 of death benefits, to reimburse petitioners medical and hospital expenses with
proper receipt plus P 1,000 burial expenses and attorney’s fee equivalent to ten percent
of death benefits, the motion for reconsideration is denied and this is final.

24
 ERNESTO G. YMBONG vs.ABS-CBN BROADCASTING CORPORATION,
VENERANDA SY AND DANTE LUZON
G.R. No. 184885, March 7, 2012
VILLARAMA, JR., J.:

FACTS:

Petitioner Ernesto G. Ymbong started working for ABS-CBN Broadcasting

Corporation (ABS-CBN) in 1993 at its regional station in Cebu as a television talent, co-
anchoring Hoy Gising and TV Patrol Cebu.

On January 1, 1996, the ABS-CBN Head Office in Manila issued Policy No. HR-ER-
016 or the "Policy on Employees Seeking Public Office." The pertinent portions read:

1. Any employee who intends to run for any public office position, must file his/her
letter of resignation, at least thirty (30) days prior to the official filing of the certificate
of candidacy either for national or local election.
xxxx

3. Further, any employee who intends to join a political group/party or even with no
political affiliation but who intends to openly and aggressively campaign for a candidate
or group of candidates (e.g. publicly speaking/endorsing candidate, recruiting campaign
workers, etc.) must file a request for leave of absence subject to management’s
approval. For this particular reason, the employee should file the leave request at least
thirty (30) days prior to the start of the planned leave period.

Because of the impending May 1998 elections and based on his immediate
recollection of the policy at that time, Dante Luzon, Assistant Station Manager of DYAB
issued the following memorandum:

Please be informed that per company policy, any employee/talent who wants to
run for any position in the coming election will have to file a leave of absence the
moment he/she files his/her certificate of candidacy.
The services rendered by the concerned employee/talent to this company will
then be temporarily suspended for the entire campaign/election period.

After the issuance of the March 25, 1998 Memorandum, Ymbong got in touch
with Luzon. Luzon claims that Ymbong approached him and told him that he would
leave radio for a couple of months because he will campaign for the administration
ticket. It was only after the elections that they found out that Ymbong actually ran for
public office himself at the eleventh hour. Ymbong, on the other hand, claims that in
accordance with the March 25, 1998 Memorandum, he informed Luzon through a letter
that he would take a few months leave of absence from March 8, 1998 to May 18, 1998
since he was running for councilor of Lapu-Lapu City.

Unfortunately, both Ymbong and Patalinghug lost in the May 1998 elections.
Later, Ymbong and Patalinghug both tried to come back to ABS-CBN Cebu. According to
Luzon, he informed them that they cannot work there anymore because of company
policy.

On September 14, 1998, he received a memorandum stating that his services are
being terminated immediately, much to his surprise. Thus, he filed an illegal dismissal
complaint8 against ABS-CBN, Luzon and DYAB Station Manager Veneranda Sy. He

25
argued that the ground cited by ABS-CBN for his dismissal was not among those
enumerated in the Labor Code, as amended.

Ymbong averred that it was necessary that the company policy meet certain
requirements before willful disobedience of the policy may constitute a just cause for
termination. Ymbong further argued that the company policy violates his constitutional
right to suffrage.9

ABS-CBN prayed for the dismissal of the complaints arguing that there is no
employer-employee relationship between the company and Ymbong and Patalinghug.
ABS-CBN contended that they are not employees but talents as evidenced by their
talent contracts.

On July 14, 1999, the Labor Arbiter rendered a decision12 finding the dismissal of
Ymbong and Patalinghug illegal.

In its memorandum of appeal14 before the National Labor Relations Commission

(NLRC), ABS-CBN contended that the Labor Arbiter has no jurisdiction over the case
because there is no employer-employee relationship between the company and Ymbong
and Patalinghug, and that Sy and Luzon mistakenly assumed that Ymbong and
Patalinghug could just file a leave of absence since they are only talents and not
employees.

ABS-CBN further contended that Ymbong and Patalinghug’s "reinstatement" is

legally and physically impossible as the talent positions they vacated no longer exist.

On March 8, 2004, the NLRC rendered a decision17 modifying the labor arbiter’s
decision. The NLRC dismissed ABS-CBN’s Supplemental Appeal for being filed out of
time.

ABS-CBN moved to reconsider the NLRC decision, but the same was denied in a
Resolution dated June 21, 2004.19
Imputing grave abuse of discretion on the NLRC, ABS-CBN filed a petition for
certiorari20 before the CA alleging tha

On August 22, 2007, the CA rendered the assailed decision reversing and setting
aside the March 8, 2004 Decision and June 21, 2004 Resolution of the NLRC. The CA
declared Ymbong resigned from employment and not to have been illegally dismissed.
The award of full back wages in his favor was deleted accordingly.

Here, Policy No. HR-ER-016 itself states that it was issued "to protect the
company from any public misconceptions" and "[t]o preserve its objectivity, neutrality
and credibility." Thus, it cannot be denied that it is reasonable under the
circumstances.29

ABS-CBN likewise opposes Ymbong’s claim that he was terminated. ABS-CBN

argues that on the contrary, Ymbong’s unilateral act of filing his certificate of candidacy
is an overt act tantamount to voluntary resignation on his part by virtue of the clear
mandate found in Policy No. HR-ER-016. Ymbong, however, failed to file his resignation
and in fact misled his superiors by making them believe that he was going on leave to
campaign for the administration candidates but in fact, he actually ran for councilor. He
also claims to have fully apprised Luzon through a letter of his intention to run for
public office, but he failed to adduce a copy of the same

26
ISSUE:

Essentially, the issues to be resolved in the instant petition are: (1) whether
Policy No. HR-ER-016 is valid; (2) whether the March 25, 1998 Memorandum issued by
Luzon superseded Policy No. HR-ER-016; and (3) whether Ymbong, by seeking an
elective post, is deemed to have resigned and not dismissed by ABS-CBN.

RATIO DECIDENDI:

1. Policy No. HR-ER-016 is valid.

Working for the government and the company at the same time is clearly
disadvantageous and prejudicial to the rights and interest not only of the company but
the public as well. In the event an employee wins in an election, he cannot fully serve,
as he is expected to do, the interest of his employer. The employee has to serve two
(2) employers, obviously detrimental to the interest of both the government and the
private employer.

In the event the employee loses in the election, the impartiality and cold
neutrality of an employee as broadcast personality is suspect, thus readily eroding and
adversely affecting the confidence and trust of the listening public to employer’s station

ABS-CBN BROADCASTING CORPORATION strongly believes that it is to the best

interest of the company to continuously remain apolitical. While it encourages and
supports its employees to have greater political awareness and for them to exercise
their right to suffrage, the company, however, prefers to remain politically independent
and unattached to any political individual or entity.

Therefore, employees who [intend] to run for public office or accept political
appointment should resign from their positions, in order to protect the company from
any public misconceptions. To preserve its objectivity, neutrality and credibility, the
company reiterates the following policy guidelines for strict implementation.

2. Policy No. HR-ER-016 was not superseded by the March 25, 1998
Memorandum

Clearly, the March 25, 1998 Memorandum issued by Luzon which only requires
employees to go on leave if they intend to run for any elective position is in absolute
contradiction with Policy No. HR-ER-016 issued by the ABS-CBN Head Office in Manila
which requires the resignation, not only the filing of a leave of absence, of any
employee who intends to run for public office. Having been issued beyond the scope of
his authority, the March 25, 1998 Memorandum is therefore void and did not supersede
Policy No. HR-ER-016.

3. Ymbong is deemed resigned when he ran for councilor.

As Policy No. HR-ER-016 is the subsisting company policy and not Luzon’s March
25, 1998 Memorandum, Ymbong is deemed resigned when he ran for councilor.
Ymbong most likely than not, is fully aware that the subsisting policy is Policy No. HR-
ER-016 and not the March 25, 1998 Memorandum and it was for this reason that, as
stated by Luzon in his Sworn Statement, he only told the latter that he will only
campaign for the administration ticket and not actually run for an elective post.

27
FALLO/WHEREFORE CLAUSE:

WHEREFORE, the petition for review on certiorari is DENIED for lack of merit.
With costs against petitioner.

28
 DUNCAN ASSOCIATION OF DETAILMAN – PTGWO and PEDRO A. TECSON,
petitioners, vs. GLAXO WELLCOME PHILIPPINES, INC., respondent,
G.R. No. 162994, September 4, 2004
JUSTICE TINGA, ponente.

FACTS:

Petitioner Tecson was hired by respondent Glaxo Wellcome Philippines, Inc. as a

medical representative on October 24, 1995, after Tecson had undergone training and
orientation. Tecson signed a contract of employment which stipulates, among
others, that he agress to study and abide by existing company rules; to
disclose to management any existing or future relationship by consanguinity
or affinity with co-employees or employees of competing drug companies
and should management find that such relationship poses a possible conflict
of interest, to resign from the company. The employee code of conduct to Glaxo
likewise provides similar company rules. In case of conflict between such relationship
and the employee’s employment in the company, the management and the employee
will wxplore the possibility of a “transfer to another department in a non-counter
checking position” or preparation for employment outside the company after 6 months.
Tecson was initially assigned to market Glaxo’s products in the Camarines Norte-
Camarines Sur sales area.

Subsequently, Tecson entered into a romantic relationship with Betsy, an

employee of Astra Pharmaceuticals, a competitor of Glaxo. Betsy was Astra’s Branch
coordinator in Albay. Ever before they got married on 1998, Tecson received several
reminders from his district manager regarding the conflict of interest which his
relationship with Betsy might engender.

In January 1999, Tecson’s superiors informed him that his marriage to Betsy
gave rise to a conflict of interest. Tecson’s superiors reminded him that he and Betsy
should decide which of them should resign from their jobs. In November 1999, Glaxo
transferred Tecson to the Butuan City-Surigao City sales area. Tecson sought Glaxo’s
reconsideration regarding his transfer and brought the matter to Glaxo’s grievance
committee but the latter denied it. Because the partied failed to resolve the issue at the
grievance machinery level, they submitted the matter for voluntary arbitration. Glaxo
offered Tecson a separation pay but he declined the offer.

On Novermber 15, 2000, the National Conciliation and Mediation Board (NCMB)
rendered its decision declaring as valid Glaxo’s policy on relationship between its
employees and persons employed with the competitor companies, and affirming Glaxo’s
right to transfer Tecson to another sales territory. Tecson filed a petition for review with
the CA assailing the NCMB decision. The CA denied the petition and likewise the motion
for reconsideration. Hence, this instant petition.

29
 Petitioners contend that Glaxo’s policy against employees marrying employees of
competitor companies violates the equal protection clause of the constitution because it
creates invalid distinction among employees on account only of marriage. They claim
that the policy restricts the employees right to marry. Further, petitioners content that
Tecson was constructively dismissed.

ISSUE:

1) Whether the CA erred in ruling that Glaxo’s policy against employees marrying
employees from competitor companies is valid, and in not holding that said policy
violates the equal protection clause of the constitution;

2) Whether Tecson was constructively dismissed.

RATIO DECIDENDI:

The SC finds no merit in the petition.

The contract entered into by Glaxo and Tecson stipulates that thelatter will abide
by the existing company rules. In this regard, the Employee Handbook of Glaxo
expressly informs its employees of its rules regarding conflict of interest.

No reversible error can be ascribed to the CA when it ruled that Glaxo’s policy
prohibiting an employee from having a relationship with an employee of a competitor
company is a valid exercise of management prerogative. The prohibition only aims to
protect its interests against the possibility that a competitor company will gain access to
its secrets and procedures. Indeed, while our laws endeavor to give life to the
constitutional policy on social justice and the protection to labor, it does not mean that
every labor dispute will be decided in favor of the workers. The law also recognizes that
management has rights which are also entitled to respect and enforcement in the
interest of fair play.

Since Tecson knowingly and voluntarily entered into a contract of employment

with Glaxo, he should have complied with it in good faith. Tecson is therefore stooped
from questioning said policy.

Tecson was not constructively dismissed. Constructive dismissal is defined as

quitting, an involuntary resignation, resorted to when continued employment becomes
impossible, unreasonable, or disdain by an employer becomes unbearable to the
employee. The record does not show that Tecson was demoted or unduly discriminated
upon by reason of such transfer. Glaxo properly exercised its management prerogative
in reassigning Tecson to the Butuan sales area. The challenged policy has been

30
implementd by Glaxo impartially and disinterestingly for a long period of time. The
foregoing dispels any suspicion of unfairness and bad faith on the part of Glaxo.

FALLO/WHEREFORE CLAUSE:

WHEREFORE, the petition is DENIED for lack of merit.

31
 BRICCIO "Ricky" A. POLLO, Petitioner,
vs.
CHAIRPERSON KARINA CONSTANTINO-DAVID, DIRECTOR IV RACQUEL DE
GUZMAN BUENSALIDA, DIRECTOR IV LYDIA A. CASTILLO, DIRECTOR III
ENGELBERT ANTHONY D. UNITE AND THE CIVIL SERVICE
COMMISSION, Respondents.
G.R. No. 181881 October 18, 2011
VILLARAMA, JR., J.:

FACTS:
An anonymous letter-complaint was received by the respondent Civil Service
Commission Chairperson alleging that an officer of the CSC has been lawyering for
public officials with pending cases in the CSC. Chairperson David immediately formed a
team with background in information technology and issued a memorandum directing
them “to back up all the files in the computers found in the [CSC-ROIV] Mamamayan
Muna (PALD) and Legal divisions.”
The team proceeded at once to the office and backed up all files in the hard disk
of computers at the PALD and the Legal Services Division. Within the same day, the
investigating team finished the task. It was found that most of the files copied from the
computer assigned to and being used by the petitioner were draft pleadings or letters in
connection with administrative cases in the CSC and other tribunals. Chairperson David
thus issued a Show-Cause Order requiring the petitioner to submit his explanation or
counter-affidavit within five days from notice.
Petitioner denied that he is the person referred to in the anonymous letter-
complaint. He asserted that he had protested the unlawful taking of his computer done
while he was on leave, and that the files in his computer were his personal files and
those of his relatives and associates, and that he is not authorize the activities as they
are in violation of his constitutional right to privacy and protection against self-
incrimination and warrantless search and seizure. Also, the files/documents copied
from his computer without his consent are inadmissible as evidence, being “fruits of a
poisonous tree.”
The CSC found prima facie case against the petitioner and charged him with
Dishonesty, Grave Misconduct, Conduct Prejudicial to the Best Interest of the Service
and Violation of R.A. No. 6713 (Code of Conduct and Ethical Standards for Public
Officials and Employees). On 24 July 2007, the CSC issued a Resolution finding
petitioner GUILTY of the same merits and meted the penalty of DISMISSAL FROM THE
SERVICE with all its accessory penalties. This Resolution was also brought to the CA by
herein petitioner.
By a Decision dated 11 October 2007, the CA dismissed the petitioner’s petition
for certiorari after finding no grave abuse of discretion committed by respondents CSC
officials. His motion for reconsideration having been denied by the CA, petitioner
brought this appeal before the Supreme Court.
ISSUE:
Whether or not the search conducted and the copying of petitioner’s files without his
knowledge and consent lawful?
RATIO DECIDENDI:
The search authorized by the respondent CSC Chair was reasonable since it was
conducted in connection with investigation of work-related misconduct. A search by a
government employer of an employee’s office is justified when there are reasonable

32
grounds for suspecting that it will turn up evidence that the employee is guilty of work-
related misconduct.
FALLO:

WHEREFORE, the petition for review on certiorari is DENIED. The Decision dated
October 11, 2007 and Resolutiondated February 29, 2008 of the Court of Appeals in CA-
G.R. SP No. 98224 are AFFIRMED.

33
 MANSION PRINTING CENTER AND CLEMENT CHENG., PETITIONER
VS
DIOSDADO BITARA., RESPONDENT
G.R. NO. 168120, JANUARY 25, 2012
PEREZ, J.:

FACTS:
Petitioners engaged the service of respondent as a helper. Respondent was later
promoted as the company’s sole driver tasked to pick-up raw materials for the
printingbusiness, collect account receivables and deliver the productsto the clients
within the delivery schedules.
Petitioners aver that the timely delivery of the products to theclients is one of the
notable considerations material to theoperation of the business. It being so, they
monitoredthe attendance of respondent. The Petitioners noted his habitualtardiness and
absenteeism.Then, petitioners issued a Memorandum requiring respondentto submit a
written explanation why no administrativeanction should be imposed on him for his
usual tardiness.Despite respondents undertaking to report on time, however,he
continued to disregard attendance policies. Thus, Davis Chengand son of petitioner
Cheng, issued anotherMemorandum requiring respondent toexplain why his services
should not be terminated.
Hepersonally handed the Notice to Explain to respondent but the latter, after
reading the directive, refused to acknowledgereceipt thereof. Respondent did not
submit any explanation and never reported for work.Petitioner Davis Cheng personally
served another Noticeof Termination upon the Respondent informing him that the
companyfound him grossly negligent of his duties, for which reason,his services were
terminated.
The respondent met with the managementrequesting for reconsideration of his
termination from theservice. However, after hearing his side, the managementdecided
to implement the Memorandum. However, themanagement, out of generosity, offered
respondent financialassistance in the amount of P6,110.00 equivalent to his onemonth
salary. Respondent demanded that he be given theamount equivalent to two months
salary but themanagement declined his demand, in effect, rewardrespondent for being
negligent of his duties.
Respondent filed a complaint for illegal dismissal against thepetitioners before
the Labor Arbiter. Later on, the Labor Arbiter dismissed the complaint for lack of merit.
On appeal to the National Labor Relations Commission, Thefindings of the Labor
Arbiter was AFFIRMED.
Before the Court of Appeals, respondent sought theannulment of the
Commissions Resolution on the ground thatthey were rendered with grave abuse of
discretion and/orwithout or in excess of jurisdiction. The Court of Appeals found for the
respondent and reversedthe findings of the Commission.
ISSUE:

34
Whether or not respondent is illegally dismissed?

RATIO DECIDENDI:
In order to validly dismiss an employee, the employer isrequired to observe both
substantive and procedural aspectsthe termination of employment must be based on a
just or authorized cause of dismissal and the dismissal must beeffected after due notice
and hearing.
The Supreme Court agree with the Labor Arbiters findings:
The imputed absence and tardiness of the complainant aredocumented. He faltered on
his attendance 38 times of the 66working days. His last absences on 11, 13, 14, 15
and 16March 2000 were undertaken without even notice/permissionfrom management.
These attendance delinquencies may becharacterized as habitual and are sufficient
justifications toterminate the complainant employment.
As provided in the case of Valiao v. Court of Appeal, where it defined gross
negligence as want of care in theperformance of ones duties and habitual neglect as
repeatedfailure to perform ones duties for a period of time, dependingupon the
circumstances.51 These are not overly technicalterms, which, in the first place, are
expressly sanctioned bythe Labor Code of the Philippines, to wit:
ART. 282. Termination by employer.- An employer mayterminate an employment
for any of the following causes:
(b)Gross and habitual neglect by the employee of his duties;
Evidently, even in the absence of a written company ruledefining gross and habitual
neglect of duties, respondentsomissions qualify as such warranting his dismissal from
theservice.
Therefore, irresponsible an employee like petitionerdoes not deserve a place in
the workplace, and it is within themanagement prerogative to terminate his
employment. Even as the law is solicitous of the welfare of employees, itmust also
protect the rights of an employer to exercise whatare clearly management prerogatives.
FALLO:
WHEREFORE, the Resolution dated 29 June 2001 and theOrder dated 21
February 2002 of the National Labor RelationsCommission in NLRC NCR CASE No.
027871-01 are herebyREINSTATED with the MODIFICATION that petitioners
areORDERED to pay respondent the money equivalent of thefive-day service incentive
leave for every year of servicecovering his employment period from August 1988 to 1
April2000. This case is hereby REMANDED to the Labor Arbiter forthe computation of
respondent’s service incentive leave pay.

35
 SMART COMMUNICATIONS, INC. v. REGINA ASTORGA
G.R. No. 148132, January 28, 2008
Nachura, J.

FACTS:

Regina M. Astorga was employed by respondent Smart Communications,

Incorporated (SMART) on May 8, 1997 as District Sales Manager of the Corporate Sales
Marketing Group/ Fixed Services Division (CSMG/FSD). She was receiving a monthly
salary of P33,650.00. As District Sales Manager, Astorga enjoyed additional benefits,
namely, annual performance incentive equivalent to 30% of her annual gross salary, a
group life and hospitalization insurance coverage, and a car plan in the amount
of P455,000.00.

In February 1998, SMART entered into a joint venture agreement with NTT of
Japan, and formed SMART-NTT Multimedia, Incorporated (SNMI). Since SNMI was
formed to do the sales and marketing work, SMART abolished the CSMG/FSD, Astorga’s
division.

SNMI agreed to absorb the CSMG personnel who would be recommended by

SMART, Astorga landed last in the performance evaluation, thus, she was not
recommended by SMART. SMART, nonetheless, offered her a supervisory position in the
Customer Care Department, but she refused the offer because the position carried
lower salary rank and rate.

Despite the abolition of the CSMG/FSD, Astorga continued reporting for work.
But on March 3, 1998, SMART issued a memorandum advising Astorga of the
termination of her employment on ground of redundancy, effective April 3, 1998.
Astorga received it on March 16, 1998.

Astorga then file a Complaint for illegal dismissal, non-payment of salaries and
other benefits with prayer for moral and exemplary damages. She also claimed that
abolishing CSMG and terminating her employment was illegal for it violated her right to
security of tenure.

SMART responded that there was valid termination. It argued that Astorga was
dismissed by reason of redundancy, which is an authorized cause for termination of
employment, and the dismissal was effected in accordance with the requirements of the
Labor Code. The redundancy of Astorga’s position was the result of the abolition of
36
CSMG and the creation of a specialized and more technically equipped SNMI, which is a
valid and legitimate exercise of management prerogative.

In the meantime, on May 18, 1998, SMART sent a letter to Astorga demanding
that she pay the current market value of the Honda Civic Sedan which was given to her
under the company’s car plan program, or to surrender the same to the company for
proper disposition. Astorga, however, failed and refused to do either, thus prompting
SMART to file a suit for replevin with the Regional Trial Court of Makati (RTC) on August
10, 1998. The case was docketed as Civil Case No. 98-1936 and was raffled to Branch
57.

Astorga moved to dismiss the complaint on grounds of (a) lack of jurisdiction; (b)
failure to state a cause of action; (c) litis pendentia; and (d) forum-shopping. Astorga
posited that the regular courts have no jurisdiction over the complaint because the
subject thereof pertains to a benefit arising from an employment contract; hence,
jurisdiction over the same is vested in the labor tribunal and not in regular courts. But
the RTC denied Astorga’s motion to dismiss.

On August 20, 1998, the Labor Arbiter rendered its decision that the dismissal of
Astorga was illegal and unjust and SMART is hereby ordered to reinstate Astorga to her
former position without loss of seniority rights and other privileges with full backwages
inclusive of allowances and other benefits from the time of her dismissal to the date of
reinstatement amounting to Php. 211,415.52. Jointly and severally pay moral and
exemplary damages in the amount of Php. 500,000.00 and Php. 300,000.00,
respectively. And jointly and severally pay 10% of the amount due as attorney’s fees.

Astorga elevated the denial of her motion via certiorari to the CA, which, in its
February 28, 2000 Decision, reversed the RTC ruling. Granting the petition and,
consequently, dismissing the replevin case, the CA held that the case is intertwined with
Astorga’s complaint for illegal dismissal; thus, it is the labor tribunal that has rightful
jurisdiction over the complaint. SMART’s motion for reconsideration having been
denied, it elevated the case to this Court, now docketed as G.R. No. 148132.

ISSUE:

Whether or not dismissal of Regina Astorga is legal and valid.

RATIO DECIDENDI:

Yes. Astorga was terminated due to redundancy, which is one of the authorized
causes for the dismissal of an employee. Redundancy in an employer’s personnel force
necessarily or even ordinarily refers to duplication of work. The characterization of an
employee’s services as superfluous or no longer necessary and, therefore, properly

37
terminable, is an exercise of business judgment on the part of the employer. An
employer is not precluded from adopting a new policy conducive to a more economical
and effective management even if it is not experiencing economic reverses. Neither
does the law require that the employer should suffer financial losses before he can
terminate the services of the employee on the ground of redundancy. But while tilting
the scales of justice in favor of workers, the fundamental law also guarantees the right
of the employer to reasonable returns for his investment.

In this light, we must acknowledge the prerogative of the employer to adopt

such measures as will promote greater efficiency, reduce overhead costs and enhance
prospects of economic gains, albeit always within the framework of existing laws.
However, SMART failed to comply with the mandated one (1) month notice prior to
termination. The record is clear that Astorga received the notice of termination only on
March 16, 1998 or less than a month prior to its effectively on April 3, 1998. Likewise,
the Department of Labor and Employment was notified of the redundancy program only
on March 6, 1998. Article 283 of the Labor Code clearly provides Closure of
establishment and reduction of personnel.

FALLO / WHEREFORE CLAUSE:

The petitions of SMART and Astorga docketed as G.R. Nos. 151079 and 151372
are denied. The decision and resolution in CA-G.R. SP. No. 57065, are affirmed with
modification. Astorga is declared validly dismissed. However, SMART is ordered to pay
Astorga P50,000.00 as indemnity for its non-compliance with procedural due process,
her separation pay equivalent to one (1) month pay, and her salary from February 15,
1998 until the effective date of her termination on April 3, 1998. The award of
backwages is deleted for lack of basis.

38
 STAR PAPER CORPORATION, JOSEPHINE ONGSITCO & SEBASTIAN CHUA,
Petitioners,
vs.
RONALDO D. SIMBOL, WILFREDA N. COMIA & LORNA E. ESTRELLA,
Respondents.
G.R. No. 164774 April 12, 2006
PUNO, J.:

FACTS:

The Petitioner, Star Paper Corporation is a corporation engaged in trading –

principally of paper products and Josephine Ongsitco is its Manager of the Personnel
and Administration Department while Sebastian Chua is its Managing Director. Herein
respondents were all regular employees of the company. Simbol, Comia, and Estrella
were employed by the company on October 27, 1993, February 5, 1997, July 29, 1994,
respectively. They were resigned pursuant to a company policy promulgated in 1995
that an employee should resign once decided to marry a co-employee. Respondents
offer a different version of their dismissal. Simbol and Comia allege that they did not
resign voluntarily; they were compelled to resign in view of an illegal company policy.
As to respondent Estrella, she received a memorandum stating that she was being
dismissed for immoral conduct but later later submitted a letter of resignation in
exchange for her thirteenth month pay due to her urgent need for money.

Respondents later filed a complaint for unfair labor practice, constructive

dismissal, separation pay and attorney’s fees. They averred that the aforementioned
company policy is illegal and contravenes Article 136 of the Labor Code. They also
contended that they were dismissed due to their union membership.The Labor Arbiter
Melquiades Sol del Rosario dismissed the complaint for lack of merit. The NLRC affirmed
the decision of the Labor Arbiter but the Court of Appeals reversed the NLRC decision
declaring that the dismissal is illegal and ordering to reinstate to their former positions
without loss of seniority rights with full backwages from the time of their dismissal until
actual reinstatement. Hence, present petition.

ISSUE:

Whether the policy of the employer banning spouses from working in the same
company violates the rights of the employee under the Constitution and the Labor Code
or is a valid exercise of management prerogative.

RATIO DECIDENDI:

The questioned rule is evidently not the valid reasonable business necessity
required by the law. Pursuant to Article II, Section 18 and Article XIII, Sec. 3 of the
1987 Constitution states our policy towards the protection of labor. The Civil Code

39
likewise protects labor under Art. 1700 and Art. 1702. The questioned policy may not
facially violate Article 136 of the Labor Code but it creates a disproportionate effect, the
marital status of the employee that is being discriminated. The failure of petitioners to
prove a legitimate business concern in imposing the questioned policy cannot prejudice
the employee’s right to be free from arbitrary discrimination based upon stereotypes of
married persons working together in one company. Also, the absence of a statute
expressly prohibiting marital discrimination in our jurisdiction cannot benefit the
petitioners. Thus, for failure of petitioners to present undisputed proof of a reasonable
business necessity, the court rule that the questioned policy is an invalid exercise of
management prerogative. The issue as to whether respondents Simbol and Comia
resigned voluntarily has become moot and academic. As to respondent Estrella, given
the lack of sufficient evidence on the part of petitioners that the resignation was
voluntary, Estrella’s dismissal is declared illegal.

FALLO:

IN VIEW WHEREOF, the Decision of the Court of Appeals in CA-G.R. SP No. 73477
dated August 3, 2004 is AFFIRMED.

“Article II, Section 18. The State affirms labor as a primary social economic force. It
shall protect the rights of workers and promote their welfare.”

“Article XIII, Sec. 3. The State shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and equality of employment
opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to strike in
accordance with law. They shall be entitled to security of tenure, humane conditions of
work, and a living wage. They shall also participate in policy and decision-making
processes affecting their rights and benefits as may be provided by law.
The State shall promote the principle of shared responsibility between workers and
employers, recognizing the right of labor to its just share in the fruits of production and
the right of enterprises to reasonable returns on investments, and to expansion and
growth.”

The Civil Code likewise protects labor with the following provisions:
Art. 1700. The relation between capital and labor are not merely contractual. They are
so impressed with public interest that labor contracts must yield to the common good.
Therefore, such contracts are subject to the special laws on labor unions, collective
bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor
and similar subjects.
Art. 1702. In case of doubt, all labor legislation and all labor contracts shall be
construed in favor of the safety and decent living for the laborer.

The Labor Code is the most comprehensive piece of legislation protecting labor. The
case at bar involves Article 136 of the Labor Code which provides:

40
Art. 136. It shall be unlawful for an employer to require as a condition of employment
or continuation of employment that a woman employee shall not get married, or to
stipulate expressly or tacitly that upon getting married a woman employee shall be
deemed resigned or separated, or to actually dismiss, discharge, discriminate or
otherwise prejudice a woman employee merely by reason of her marriage.

41
 ARMANDO G. YRASUEGUI vs. PHILIPPINE AIRLINES, INC.
G.R. No. 168081, October 17, 2008
REYES, R.T., J.:

FACTS:

THIS case portrays the peculiar story of an international flight steward who was
dismissed because of his failure to adhere to the weight standards of the airline
company.

Petitioner Armando G. Yrasuegui was a former international flight steward of

Philippine Airlines, Inc. (PAL). He stands five feet and eight inches (5’8") with a large
body frame. The proper weight for a man of his height and body structure is from 147
to 166 pounds, the ideal weight being 166 pounds, as mandated by the Cabin and Crew
Administration Manual1 of PAL. The weight problem of petitioner dates back to 1984.
Back then, PAL advised him to go on an extended vacation leave to address his weight
concerns from December 29,1984 to March 4, 1985. Apparently, petitioner failed to
meet the company’s weight standards, prompting another leave without pay for another
eight (8) months. After meeting the required weight, petitioner was allowed to return to
work. But petitioner’s weight problem recurred. He again went on leave without pay
from October 17, 1988 to February 1989.

On April 26, 1989, petitioner weighed 209 pounds, 43 pounds over his ideal
weight and was removed from flight duty effective May 6, 1989 to July 3, 1989 and
formally requested to trim down to his ideal weight and report for weight checks on
several dates and that he may avail of the services of the company physician should he
wish to do so. He was advised that his case will be evaluated on July 3, 1989. It was
discovered that he gained, instead of losing, weight. He was overweight at 215 pounds,
which is 49 pounds beyond the limit. Consequently, his off-duty status was retained. On
October 17, 1989, PAL Line Administrator Gloria Dizon personally visited petitioner at
his residence to check on the progress of his effort to lose weight. Petitioner weighed
217 pounds, gaining 2 pounds from his previous weight. After the visit, petitioner made
a commitment to reduce weight in a letter addressed to Cabin Crew Group Manager
Augusto Barrios.

Despite the lapse of a ninety-day period given him to reach his ideal weight,
petitioner remained overweight. On January 3, 1990, he was informed of the PAL
decision for him to remain grounded until such time that he satisfactorily complies with
the weight standards. Again, he was directed to report every two weeks for weight
checks. Petitioner failed to report for weight checks. Despite that, he was given one

42
more month to comply with the weight requirement. As usual, he was asked to report
for weight check on different dates. He was reminded that his grounding would
continue pending satisfactory compliance with the weight standards. Again, petitioner
failed to report for weight checks, although he was seen submitting his passport for
processing at the PAL Staff Service Division. On April 17, 1990, petitioner was formally
warned that a repeated refusal to report for weight check would be dealt with
accordingly. He was given another set of weight check dates.6 Again, petitioner ignored
the directive and did not report for weight checks.

On November 13, 1992, PAL finally served petitioner a Notice of Administrative

Charge for violation of company standards on weight requirements. He was given ten
(10) days from receipt of the charge within which to file his answer and submit
controverting evidence. On December 7, 1992, petitioner submitted his Answer.9
Notably, he did not deny being overweight. What he claimed, instead, is that his
violation, if any, had already been condoned by PAL since "no action has been taken by
the company" regarding his case "since 1988." He also claimed that PAL discriminated
against him because "the company has not been fair in treating the cabin crew
members who are similarly situated."

On June 15, 1993, petitioner was formally informed by PAL that due to his
inability to attain his ideal weight, "and considering the utmost leniency" extended to
him "which spanned a period covering a total of almost five (5) years," his services
were considered terminated "effective immediately." His motion for reconsideration
having been denied, petitioner filed a complaint for illegal dismissal against PAL.

On November 18, 1998, Labor Arbiter Valentin C. Reyes ruled that petitioner was
illegally dismissed and ordering the respondent to reinstate him to his former position
or to pay him his backwages and Attorney’s Fees. Both parties appealed to the National
Labor Relations Commission (NLRC) affirmed the decision of the Labor Arbiter and later
on dismissed the appeals of PAL. According to the NLRC, "obesity, or the tendency to
gain weight uncontrollably regardless of the amount of food intake, is a disease in
itself." As a consequence, there can be no intentional defiance or serious misconduct by
petitioner to the lawful order of PAL for him to lose weight.

PAL moved for reconsideration to no avail. Thus, PAL elevated the matter to the
Court of Appeals. The CA opined that there was grave abuse of discretion on the part of
the NLRC because it "looked at wrong and irrelevant considerations" in evaluating the
evidence of the parties and said, “the relevant question to ask is not one of willfulness
but one of reasonableness of the standard and whether or not the employee qualifies or
continues to qualify under this standard."

ISSUE:

43
 Whether or not the dismissal was valid.

RATIO DECIDENDI:

SC upheld the legality of dismissal. The obesity of petitioner is a ground for

dismissal under Article 282(e) of the Labor Code which provides that an employee may
be dismissed the moment he is unable to comply with his ideal weight as prescribed by
the weight standards. These "qualifying standards" are norms that apply prior to and
after an employee is hired. They apply prior to employment because these are the
standards a job applicant must initially meet in order to be hired. They apply after
hiring because an employee must continue to meet these standards while on the job in
order to keep his job.

In the case at bar, the evidence on record militates against petitioner’s claims
that obesity is a disease. That he was able to reduce his weight from 1984 to 1992
clearly shows that it is possible for him to lose weight given the proper attitude,
determination, and self-discipline. True, petitioner claims that reducing weight is costing
him "a lot of expenses." However, petitioner has only himself to blame. He could have
easily availed the assistance of the company physician, per the advice of PAL. He chose
to ignore the suggestion. In fact, he repeatedly failed to report when required to
undergo weight checks, without offering a valid explanation. Thus, his fluctuating
weight indicates absence of willpower rather than an illness. The business of PAL is air
transportation. As such, it has committed itself to safely transport its passengers. In
order to achieve this, it must necessarily rely on its employees, most particularly the
cabin flight deck crew who are on board the aircraft. The weight standards of PAL
should be viewed as imposing strict norms of discipline upon its employees. In other
words, the primary objective of PAL in the imposition of the weight standards for cabin
crew is flight safety. The task of a cabin crew or flight attendant is not limited to serving
meals or attending to the whims and caprices of the passengers. The most important
activity of the cabin crew is to care for the safety of passengers and the evacuation of
the aircraft when an emergency occurs. Passenger safety goes to the core of the job of
a cabin attendant. Truly, airlines need cabin attendants who have the necessary
strength to open emergency doors, the agility to attend to passengers in cramped
working conditions, and the stamina to withstand grueling flight schedules. Petitioner is
also in estoppel. He does not dispute that the weight standards of PAL were made
known to him prior to his employment. He is presumed to know the weight limit that he
must maintain at all times. In fact, never did he question the authority of PAL when he
was repeatedly asked to trim down his weight. Exceptionally, separation pay is granted
to a legally dismissed employee as an act "social justice," or based on "equity." In both
instances, it is required that the dismissal (1) was not for serious misconduct; and (2)
does not reflect on the moral character of the employee and grant petitioner separation

44
pay equivalent to one-half (1/2) month’s pay for every year of service.104 It should
include regular allowances which he might have been receiving.105 We are not blind to
the fact that he was not dismissed for any serious misconduct or to any act which
would reflect on his moral character. We also recognize that his employment with PAL
lasted for more or less a decade.
FALLO:

WHEREFORE, the appealed Decision of the Court of Appeals is AFFIRMED but

MODIFIED in that petitioner Armando G. Yrasuegui is entitled to separation pay in an
amount equivalent to one-half (1/2) month’s pay for every year of service, which should
include his regular allowances.

45
 MANILA PAVILION HOTEL VS. HENRY DELADA
G.R. NO. 189947 : JANUARY 25, 2012
SERENO J.

FACTS:
Henry Delada was the Union President of the Manila Pavilion Supervisors
Association at the Manila Pavilion Hotel. He was originally assigned as the head waiter
of Rotisserie, a fine dining restaurant operated by petitioner. Because of a personnel
reorganization program, MPH assigned him as head waiter of Seasons Coffee Shop,
another restaurant operated by the petitioner at the same hotel. Delada declined the
transfer and instead asked for a grievance meeting on the matter.
Pending resolution of the grievance meeting involving the transfer MPH
instructed respondent to report to his new assignment, to which Delada refused to
assume his new post in the Seasons Coffee Shop but instead continue to report as head
waiter of Rotisserie. To which MPH sent him a memorandum requiring him to explain
why he should not be penalized for not obeying the transfer order. According to Delada,
since the grievance machinery under their CBA had already been initiated, his transfer
must be held in abeyance.Because of the disobedience of Delada to the transfer order,
petitioner placed him on a preventive suspension.
When the parties failed to reach a settlement regarding the validity of the
transfer order, Delada filed a complaint before the National Conciliation and Mediation
Board regarding the validity of the transfer.

ISSUE:
Whether or not the transfer of the Union President from head waiter at Rotisserie
to head waiter at Seasons Restaurant is valid and justified.
RATIO DECIDENDI:
Yes, the transfer of the Union President from head waiter at Rotisserie to head
waiter at Seasons Restaurant is valid and justified.
The transfer of Delada was a valid exercise of management prerogative. An
employer has the perfectright to transfer, reduce or lay off personnel in order to
minimize expenses and to insure the stability of the business, and even to close the
business, and this right has been consistently upheld even in the present era of
multifarious reforms in the relationship of capital and labor, provided the transfer or
dismissal is not abused but is done in good faith and is due to causes beyond control.
The Panel of Voluntary Arbitrators ruled that the transfer order was done in the
interest of the efficient and economic operations of the MPH, and that there was no
malice, bad faith or improper motive attendant to the transfer of Delada to Seasons
Coffee Shop.

46
FALLO/ WHEREFORE CLAUSE:
Wherefore, it is ruled that the Manila Pavilion Hotel has the right to transfer
Delada and to impose on him the penalty of suspension for willful disobedience.
PRINCE TRANSPORT, INC. VS. GARCIA ET AL
G.R. NO. 167291, 12 JANUARY 2011
PERALTA, J.:

FACTS:

This is a petition for review on certiorari under Rule 45 of the Rules of Court
asking for the Court of Appeals (CA) decision and resolution dated December 20, 2004
and February 24, 2005, respectively be annulled.

The petition arose from complaints filed by respondents Diosdado Garcia & his
co-workers charging petitioner Prince Transport, Inc. (PTI) with illegal dismissal, unfair
labor practice and illegal deductions and praying for the award of premium pay for
holiday and rest day, holiday pay, service leave pay, 13th month pay, moral and
exemplary damages and attorney's fees. Respondents' claim that in addition to their
regular monthly income, they also received commissions equivalent to 8 to 10% of their
wages & that sometime in October 1997, the said commissions were reduced to 7 to
9% thus led respondents and other employees of PTI to hold a series of meetings to
discuss the protection of their interests as employees which later on resulted in the
formation a union for their mutual aid and protection.

PTI President Renato Claros had expressed his objection to the formation of a
union so in order to block the continued formation of the union, PTI caused the transfer
of all union members and sympathizers to one of its sub-companies, Lubas Transport
(Lubas). But despite such transfer, the management and operations of Lubas as well as
the control and supervision of the latter's employees are still handled by PTI.

In due course, Lubas' business deteriorated because of PTI's refusal to maintain

and repair the units being used therein which resulted in the virtual stoppage of its
operations and respondents' loss of employment. Subsequently, the complaints filed by
respondents were consolidated.

On October 25, 2000, the Labor Arbiter ruled that petitioners are not guilty of
unfair labor practice in the absence of evidence to show that they violated respondents’
right to self-organization. The Labor Arbiter also held that Lubas is guilty of illegally
dismissing respondents from their employment.

In a Resolution dated May 30, 2003, the NLRC modified the Decision of the
Labor Arbiter after respondents filed a Partial Appeal with the NLRC praying that PTI
should also be held equally liable as Lubas.

ISSUES:

Whether or not the Court of Appeals committed grave abuse of discretion in

giving due course to respondents' petition for certiorari &ordering the reinstatement of
respondents to their previous position when it is not one of the issues raised in
respondents' petition for certiorari.

47
 Whether or not the Court of Appeals seriously erred in declaring that petitioner’s
Prince Transport, Inc. and Mr. Renato Claros and Lubas Transport are one and the
same corporation and thus, liable in solidum to respondents.

RATIO DECIDENDI:

The Court agrees with respondents’ when they asserted that CA neither
exceeded its jurisdiction nor committed error in re-evaluating the NLRC’s factual
findings since pursuant to the exercise of its original jurisdiction over petitions for
certiorari under Section 9 of Batas Pambansa Blg. 129, as amended by Republic Act No.
7902, the Court of Appeals shall have the power to try cases and conduct hearings,
receive evidence and perform any and all acts necessary to resolve factual issues raised
in cases falling within its original and appellate jurisdiction, including the power to grant
and conduct new trials or further proceedings.

The Court is not persuaded when petitioners asserted that the CA erred and
committed grave abuse of discretion when it ordered petitioners to reinstate
respondents to their former positions, considering that the issue of reinstatement was
never brought up before it and respondents never questioned the award of separation
pay to them. The Court argued that it's clear from the complaints filed by respondents
that they are seeking reinstatement thus it ruled that even without the prayer for a
specific remedy, proper relief may be granted by the court if the facts alleged in the
complaint and the evidence introduced so warrant pursuant to Section 2 (c), Rule 7 of
the Rules of Court which provides that a pleading shall specify the relief sought, but
may add a general prayer for such further or other reliefs as may be deemed just and
equitable.

The Court agrees with the CA that Lubas is a mere agent, conduit or adjunct of
PTI. A settled formulation of the doctrine of piercing the corporate veil is that when two
business enterprises are owned, conducted and controlled by the same parties, both
law and equity will, when necessary to protect the rights of third parties, disregard the
legal fiction that these two entities are distinct and treat them as identical or as one and
the same. In the present case, it may be true that Lubas is a single proprietorship and
not a corporation. However, petitioners’ attempt to isolate themselves from and hide
behind the supposed separate and distinct personality of Lubas so as to evade their
liabilities is precisely what the classical doctrine of piercing the veil of corporate entity
seeks to prevent and remedy.

In the light of the foregoing,the petition must be denied.

FALLO:

WHEREFORE, the instant petition is denied. The assailed decision and desolution
of the Court of Appeals are AFFIRMED.

SO ORDERED.

48
 PRODUCERS BANK OF THE PHILIPPINES VS. NLRC CASE DIGEST
PRODUCERS BANK OF THE PHILIPPINES VS. NLRC
G.R. NO. 118069. NOVEMBER 16, 1998
ROMERO, J.

FACTS:

Petitioner was placed by Central Bank of the Philippines (Bangko Sentral ng

Pilipinas) under a conservator for the purpose of protecting its assets. When the
respondents ought to implement the CBA (Sec. 1, Art. 11) regarding the retirement plan
and pertaining to uniform allowance, the acting conservator of the petition expressed
objection resulting an impasse between the petitioner bank and respondent union. The
deadlock continued for at least six months. The private respondent, to resolve the issue
filed a case against petitioner for unfair labor practice and flagrant violation of the CBA.
The Labor Arbiter dismissed the petition. NLRC reversed the findings and ordered
the implementation of the CBA.

ISSUE:

Whether or not the employees who have retired have no personality to file an action
since there is no longer an employer-employee relationship.

RATIO DECIDENDI:

The Court rules that employees who have retired still have the personality to file
a complaint.

Retirement results from a voluntary agreement between the employer and the
employee whereby the latter after reaching a certain age agrees to sever his
employment with the former. The very essence of retirement is the termination of
employer-employee relationship.
Retirement of the employee does not in itself affect his employment status
especially when it involves all rights and benefits due to him, since these must be
protected as though there had been no interruption of service. It must be borne in mind
that the retirement scheme was part of the employment package and the benefits to be
derived therefrom constituted as it were a continuing consideration of services rendered
as well as an effective inducement foe remaining with the corporation. It is intended to
help the employee enjoy the remaining years of his life.
When the retired employees were requesting that their retirement benefits be
granted, they were not pleading for generosity but merely demanding that their rights,
embodied in the CBA, be recognized. When an employee has retired but his benefits
under the law or CBA have not yet been given, he still retains, for the purpose of

49
prosecuting his claims, the status of an employee entitled to the protection of the Labor
Code, one of which is the protection of the labor union.

FALLO:

WHEREFORE, in view of the foregoing, the instant petition is DISMISSED and

the decision of the National Labor Relations Commission dated August 31, 1994 is
AFFIRMED. Costs against petitioner.

SO ORDERED.

50
 PAL VS. NLRC AND QUIJANO
G.R. NO. 123294: OCTOBER 20, 2010
LEONARDO DE CASTRO J, J.:

FACTS:
An investigating committee chaired by Leslie W. Espino formally charged Quijano
as Manager-ASAD in connection with the processing and payment of commission claims
to Goldair Pty. Ltd. wherein PAL overpaid commissions to the latter.
Pending further investigation, the Espino Committee placed Quijano under
preventive suspension and at the same time required her to submit her answer to the
charges.
Another Administrative charge involving the same Goldair anomaly was filed, this
time including Committee Chairman Leslie W. Espino and Committee Member Romeo R.
Ines and several others, for "gross incompetence and inefficiency, negligence,
imprudence, mismanagement, dereliction of duty, failure to observe and/or implement
administrative and executive policies, and related acts or omissions." Pending the result
of investigation by another committee chaired by Judge Martin S. Ocampo, the PAL
Board of Directors suspended respondents.
The Ocampo Committee having submitted its findings to the PAL Board of
Directors, the latter considered respondents resigned from the service effective
immediately, for loss of confidence and for acts inimical to the interest of the company.
Her motion for reconsideration having been denied by the Board, Quijano filed
the instant case against PAL for illegal suspension and illegal dismissal.
The Labor Arbiter dismissed private respondents’ complaint. Undeterred, private
respondent filed an appeal before the NLRC which rendered the assailed Decision
vacated and set aside. Petitioner filed a Motion for Reconsideration but this was denied
by the NLRC.

ISSUE:

Whether or not respondent is illegally dismissed?

RATIO DECIDENDI:

At the onset, it should be noted that the parties do not dispute the validity of
private respondents’ dismissal from employment for loss of confidence and acts inimical
to the interest of the employer. The assailed September 29, 1995 Decision of the NLRC
was emphatic in declaring that it was "not prepared to rule as illegal the preventive
suspension and eventual dismissal from the service of [private respondent]" and
rightfully so because the last position that private respondent held, Manager-ASAD

51
(Agents Services Accounting Division), undeniably qualifies as a position of trust and
confidence.
Loss of confidence as a just cause for termination of employment is premised
from the fact that an employee concerned holds a position of trust and confidence. This
situation holds where a person is entrusted with confidence on delicate matters, such as
the custody, handling, or care and protection of the employers’ property. But, in order
to constitute a just cause for dismissal, the act complained of must be "work-related"
such as would show the employee concerned to be unfit to continue working for the
employer.
As a general rule, employers are allowed a wider latitude of discretion in
terminating the employment of managerial personnel or those who, while not of similar
rank, perform functions which by their nature require the employers full trust and
confidence. This must be distinguished from the case of ordi
Serious misconduct as a valid cause for the dismissal of an employee is defined
simply as improper or wrong conduct. It is a transgression of some established and
definite rule of action, a forbidden act, a dereliction of duty, willful in character, and
implies wrongful intent and not mere error of judgment. To be serious within the
meaning and intendment of the law, the misconduct must be of such grave and
aggravated character and not merely trivial or unimportant. However serious such
misconduct, it must, nevertheless, be in connection with the employees work to
constitute just cause for his separation. The act complained of must be related to the
performance of the employees’ duties such as would show him to be unfit to continue
working for the employer. On the other hand, moral turpitude has been defined as
"everything which is done contrary to justice, modesty, or good morals; an act of
baseness, vileness or depravity in the private and social duties which a man owes his
fellowmen, or to society in general, contrary to justice, honesty, modesty, or good
morals."nary rank and file employees, whose termination on the basis of these same
grounds requires a higher proof of involvement in the events in question; mere
uncorroborated assertions and accusations by the employer will not suffice.
The language of Article 279 of the Labor Code is pregnant with the implication
that a legally dismissed employee is not entitled to separation pay, to wit:
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.
However, in exceptional cases, this Court has granted separation pay to a legally
dismissed employee as an act of "social justice" or based on "equity." In both instances,
it is required that the dismissal (1) was not for serious misconduct; and (2) does not
reflect on the moral character of the employee or would involve moral turpitude. This
equitable and humanitarian principle was first discussed by the Court in the landmark
case of Philippine Long Distance Telephone Co. (PLDT) v. National Labor Relations
Commission.
In the case at bar, the transgressions imputed to private respondent have never
been firmly established as deliberate and willful acts clearly directed at making
petitioner lose millions of pesos. At the very most, they can only be characterized as
unintentional, albeit major, lapses in professional judgment. Likewise, the same cannot
be described as morally reprehensible actions. Thus, private respondent may be
granted separation pay on the ground of equity which this Court had defined as "justice
outside law, being ethical rather than jural and belonging to the sphere of morals than
of law. It is grounded on the precepts of conscience and not on any sanction of positive
law, for equity finds no room for application where there is law."

52
FALLO:

WHEREFORE, the assailed NLRC Decision dated September 29, 1995 as well as
the Resolution dated November 14, 1995 are AFFIRMED with
the MODIFICATION that petitioner Philippine Airlines, Inc. pay private respondent
Aida Quijano one-half (1/2) month salary for every year of service as separation pay on
equitable grounds.

LEPANTO CERAMICS, INC., PETITIONER, V. LEPANTO CERAMICS EMPLOYEES

ASSOCIATION, RESPONDENT.
G.R. NO. 180866, MARCH 2, 2010
PEREZ, J.

FACTS:

Respondent Lepanto Ceramics Employees Association (respondent Association) is

a legitimate labor organization duly registered with the Department of Labor and
Employment. It is the sole and exclusive bargaining agent in the establishment of
petitioner. In December 1998, petitioner gave a P3,000.00 bonus to its employees,
members of the respondent Association. Subsequently, in September 1999, petitioner
and respondent Association entered into a Collective Bargaining Agreement (CBA) which
provides for, among others, the grant of a Christmas gift package/bonus to the
members of the respondent Association.

The Christmas bonus was one of the enumerated existing benefit, practice of
traditional rights which shall remain in full force and effect. In the succeeding years,
1999, 2000 and 2001, the bonus was not in cash. Instead, petitioner gave each of the
members of respondent Association Tile Redemption Certificates equivalent to
P3,000.00. The bonus for the year 2002 is the root of the present dispute. Petitioner
gave a year-end cash benefit of Six Hundred Pesos (P600.00) and offered a cash
advance to interested employees equivalent to one (1) month salary payable in one
year. The respondent Association objected to the P600.00 cash benefit and argued that
this was in violation of the CBA it executed with the petitioner. The parties failed to
amicably settle the dispute. The respondent Association filed a Notice of Strike with the
National Conciliation Mediation Board. The efforts to conciliate failed.

The case was then referred to the Voluntary Arbitrator for resolution where the
Complaint was docketed as Case No. LAG-PM-12-095-02.The Voluntary Arbitrator
rendered a Decision declaring that petitioner is bound to grant each of its workers a
Christmas bonus of P3,000.00 for the reason that the bonus was given prior to the
affectivity of the CBA between the parties and that the financial losses of the company
is not a sufficient reason to exempt it from granting the same. It stressed that the CBA
is a binding contract and constitutes the law between the parties. The Voluntary
Arbitrator further expounded that since the employees had already been given P600.00
cash bonus, the same should be deducted from the claimed amount of P3,000.00, thus
leaving a balance of P2,400.00. Petitioner elevated the case to the Court of Appeals
which affirmed in toto the decision of the Voluntary Arbitrator.

ISSUE:

Is the petitioner obliged to give the members of the respondent Association a

Christmas bonus?
53
RACIO DECIDENDI:

YES, although generally, a bonus is not a demandable and enforceable

obligation. For a bonus to be enforceable, it must have been promised by the employer
and expressly agreed upon by the parties. Given that the bonus in this case is
integrated in the CBA, the same partakes the nature of a demandable obligation. Verily,
by virtue of its incorporation in the CBA, the Christmas bonus due to respondent
Association has become more than just an act of generosity on the part of the
petitioner but a contractual obligation it has undertaken.
A CBA refers to a negotiated contract between a legitimate labor organization
and the employer, concerning wages, hours of work and all other terms and conditions
of employment in a bargaining unit. As in all other contracts, the parties to a CBA may
establish such stipulations, clauses, terms and conditions as they may deem convenient,
provided these are not contrary to law, morals, good customs, public order or public
policy. It is a familiar and fundamental doctrine in labor law that the CBA is the law
between the parties and they are obliged to comply with its provisions. This principle
stands strong and true in the case at bar. A reading of the provision of the CBA reveals
that the same provides for the giving of a Christmas gift package/bonus without
qualification. Terse and clear, the said provision did not state that the Christmas
package shall be made to depend on the petitioner's financial standing. The records are
also bereft of any showing that the petitioner made it clear during CBA negotiations
that the bonus was dependent on any condition. Indeed, if the petitioner and
respondent Association intended that the P3,000.00 bonus would be dependent on the
company's earnings, such intention should have been expressed in the CBA.

All given, business losses are a feeble ground for petitioner to repudiate its
obligation under the CBA. The rule is settled that any benefit and supplement being
enjoyed by the employees cannot be reduced, diminished, discontinued or eliminated
by the employer. The principle of non-diminution of benefits is founded on the
constitutional mandate to protect the rights of workers and to promote their welfare
and to afford labor full protection. Hence, absent any proof that petitioners consent was
vitiated by fraud, mistake or duress, it is presumed that it entered into the CBA
voluntarily and had full knowledge of the contents thereof and was aware of its
commitments under the contract.

FALLO/ WHEREFORE CLAUSE:

WHEREFORE, premises considered, the petition is denied for lack of merit. The
Decision of the Court of Appeals dated 5 April 2006 and the Resolution of the same
court dated 13 December 2007 in CA-G.R. SP No. 78334 are affirmed.

SO ORDERED.

54
 CASE DIGEST: PHILIPPINE LONG DISTANCE TELEPHONE COMPANY
VS.
JOEY B. TEVES
G.R. NO. 143511 NOVEMBER 15, 2010
PERALTA, J.:

FACTS:

Respondent was employed as Clerk of PLDT until he was terminated because he

violated the (3) unauthorized leaves of absence committed within 3 years, contrary to
the policy of PLDT. From 1990 and 1992, there were 3 instances of unauthorized leaves
of absence from the Respondent. On the final instance, the explanation of Teves was
unmeritorious, which led to his dismissal. He filed a complaint of illegal dismissal before
the Labor Arbiter.

The Arbiter found out that the dismissal was legal, but it ordered PLDT to give
20,000 php to Teves. Teves appealed to the NLRC, which reversed the Arbiters
decision. It upheld the validity of the absence on account of Teves wife having
complications during childbirth.

PLDT filed a petition for Certiorari with the CA, which affirmed the decision of the
NLRC. The CA found that respondent's comportment cannot be characterized as grave
so as to constitute grave misconduct; that his first two leaves of absence were
satisfactorily justified.

ISSUE:

Does the conduct of Teves warrant and justify dismissal?

RATIO DECIDENDI:

Even assuming that respondent's absenteeism constitutes willful disobedience,

such offense does not warrant respondent's dismissal.Not every case of insubordination
or willful disobedience by an employee reasonably deserves the penalty of dismissal.

55
There must be a reasonable proportionality between the offense and the penalty.

While management has the prerogative to discipline its employees and to impose
appropriate penalties on erring workers, pursuant to company rules and regulations,
however, such management prerogatives must be exercised in good faith for the
advancement of the employers interest and not for the purpose of defeating or
circumventing the rights of the employees under special laws and valid agreements.
The Court is wont to reiterate that while an employer has its own interest to protect,
and pursuant thereto, it may terminate an employee for a just cause, such prerogative
to dismiss or lay off an employee must be exercised without abuse of discretion.Its
implementation should be tempered with compassion and understanding.The employer
should bear in mind that, in the execution of said prerogative, what is at stake is not
only the employees position, but his very livelihood,his very breadbasket.

However, since one of the instances is unjustified, it is to be subtracted from the

reinstatement.

FALLO:

WHEREFORE, the Decision dated April 24, 2000 and the Resolution dated May
31, 2000 of the Court of Appeals in CA-G.R. SP No. 50852, are
hereby AFFIRMED with MODIFICATION that the amount equivalent to respondent's
thirty-day suspension is deducted from the award of backwages from the time his
compensation was withheld up to his reinstatement on November 12, 1997.

56
 SAN MIGUEL BREWERY SALES FORCE UNION (PTGWO), PETITIONER, VS.
HON. BLAS F. OPLE, AS MINISTER OF LABOR AND SAN MIGUEL
CORPORATION, RESPONDENTS.
G.R. NO. L-53515 FEBRUARY 8, 1989
GRIÑO-AQUINO, J.

FACTS:

A collective bargaining agreement (effective on May 1, 1978 until January 31,

1981) was entered into by petitioner San Miguel Corporation Sales Force Union
(PTGWO), and the private respondent, San Miguel Corporation, Section 1, of Article IV
of which provided as follows:

Art. IV, Section 1. Employees within the appropriate bargaining unit shall
be entitled to a basic monthly compensation plus commission based on
their respective sales.

In 1979, the company introduced a marketing scheme known as the

"Complementary Distribution System" (CDS) whereby its beer products were offered for
sale directly to wholesalers through San Miguel's sales offices. The labor union (herein
petitioner) filed a complaint for unfair labor practice in the Ministry of Labor, with a
notice of strike on the ground that the CDS was contrary to the existing marketing
scheme whereby the Route Salesmen were assigned specific territories within which to
sell their stocks of beer, and wholesalers had to buy beer products from them, not from
the company.

It was alleged that the new marketing scheme violates Section 1, Article IV of
the collective bargaining agreement because the introduction of the CDS would reduce
the take-home pay of the salesmen and their truck helpers for the company would be
unfairly competing with them.

The Minister of labor ordered the dismissal of the notice of strike filed by
petitioner. Management however is hereby ordered to pay an additional three (3)
months back adjustment commissions over and above the adjusted commission under
the complementary distribution system.

ISSUE:

Whether or not the CDS is a valid exercise of management prerogatives.

RATIO DECIDENDI:

57
 Public respondent was correct in holding that the CDS is a valid exercise of
management prerogatives:

Except as limited by special laws, an employer is free to regulate, according to

his own discretion and judgment, all aspects of employment, including hiring, work
assignments, working methods, time, place and manner of work, tools to be used,
processes to be followed, supervision of workers, working regulations, transfer of
employees, work supervision, lay-off of workers and the discipline, dismissal and recall
of work (NLU vs. Insular La Yebana Co., 2 SCRA 924;

Every business enterprise endeavors to increase its profits. In the process, it may
adopt or devise means designed towards that goal.

So long as a company's management prerogatives are 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
agreements, this Court will uphold them (LVN Pictures Workers vs. LVN, 35 SCRA 147;
Phil. American Embroideries vs. Embroidery and Garment Workers, 26 SCRA 634; Phil.
Refining Co. vs. Garcia, 18 SCRA 110). San Miguel Corporation's offer to compensate
the members of its sales force who will be adversely affected by the implementation of
the CDS by paying them a so-called "back adjustment commission" to make up for the
commissions they might lose as a result of the CDS proves the company's good faith
and lack of intention to bust their union.

FALLO:

WHEREFORE, the petition for certiorari is dismissed for lack of merit.

58
 MANUEL SOSITO VS. AGUINALDO DEVELOPMENT CORPORATION
G.R. NO. L- 48926 DECEMBER 14, 1987
CRUZ, J.

FACTS:

Manuel Sosito was employed by Aguinaldo Development Corporation in 1964. He

is receiving P675.00 as his salary until he went on indefinite leave with the consent of
the company on January 16, 1976. On the other hand, Aguinaldo Development is a
logging company and was in charge of logging importation.

Consequently, due to worldwide decline in the demand for and prices of logs and
wood products; Aguinaldo Development Corporation has to reduce its tremendous and
excessive overhead expense in order to prevent an ultimate closure. With that,
Aguinaldo Development Corporation adopted a retrenchment program whereby
employees who are in the active service as of June 30, 1976 will be paid separation
benefits in an amount equivalent to the employee's one-half (1/2) month's basic salary
multiplied by his/her years of service with the Company. Employees interested in
availing of the separation benefits offered by the Company must manifest such
intention by submitting written letters of resignation to the Management not later than
July 31, 1976. Those whose resignations are accepted shall be informed accordingly
and shall be paid their separation benefits.

Manuel Sosito decided to accept the "offer" and so submitted his resignation on
July 29, 1976, "to avail himself of the gratuity benefits." However, his resignation was
not acted upon and he was never given the separation pay he expected. Hence, he
complained to the Department of Labor, where he was sustained by the labor
arbiter. Aguinaldo Development Corporation was ordered to pay Sosito the sum of P
4,387.50, representing his salary for six and a half months. On appeal to the National
Labor Relations Commission, this decision was reversed and it was held that the Sosito
was not covered by the retrenchment program. Hence, this case.

ISSUE:

Whether or not the Sosito is entitled to separation pay under the retrenchment
program of Aguinaldo Development Corporation while he was on indefinite leave.

RATIO DECIDENDI:

No. It is clear from the memorandum that the offer of separation pay was extended
only to those who were in the active service of the company as of June 30, 1976. It is
equally clear that the petitioner was not eligible for the promised gratuity as he was not
actually working with the company as of the said date. Being on indefinite leave, he
was not in the active service of the private respondent although, if one were to be
technical, he was still in its employ.

There is no claim that the petitioner was temporarily laid off or forced to go on
leave; on the contrary, the record shows that he voluntarily sought the indefinite leave
which the private respondent granted. It is strange that the company should agree to
such an open-ended arrangement, which is obviously one-sided. The company would
not be free to replace the petitioner but the petitioner would have a right to resume his
work as and when he saw fit.

59
 We note that under the law then in force the private respondent could have
validly reduced its work force because of its financial reverses without the obligation to
grant separation pay. This was permitted under the original Article 272(a), of the Labor
Code, 7 which was in force at the time. To its credit, however, the company voluntarily
offered gratuities to those who would agree to be phased out pursuant to the terms
and conditions of its retrenchment program, in recognition of their loyalty and to tide
them over their own financial difficulties. The Court feels that such compassionate
measure deserves commendation and support but at the same time rules that it should
be available only to those who are qualified therefore. We hold that the petitioner is not
one of them.

While the Constitution is committed to the policy of social justice and the
protection of the working class, it should not be supposed that every labor dispute will
be automatically decided in favor of labor. Management also has its own rights which,
as such, are entitled to respect and enforcement in the interest of simple fair play.

Justice is in every case for the deserving, to be dispensed in the light of the
established facts and the applicable law and doctrine.

FALLO:

WHEREFORE, the petition is DISMISSED and the challenged decision AFFIRMED,

with costs against the petitioner.

60
 UNION OF FILIPRO EMPLOYEES (UFE), PETITIONER, VS. BENIGNO VIVAR,
JR., NATIONAL LABOR RELATIONS COMMISSION AND NESTLE PHILIPPINES,
INC. (formerly FILIPRO, INC.), RESPONDENTS.
G.R. No. 79255, January 20, 1992
GUTIERREZ, JR., J:

FACTS:
On November 8, 1985, respondent Filipro, Inc. (now Nestle Philippines, Inc.)
filed with the National Labor Relations Commission (NLRC) a petition for claims of its
monthly paid employees for holiday pay.
Abitrator Vivar: Filipro to pay its monthly paid employees holiday pay pursuant to
Art 94 of Labor Code, subject to exclusions and limitations in Art 82.
Filipro filed a motion for clarification seeking (1) the limitation of the award to
three years, (2) the exclusion of salesmen, sales representatives, truck drivers,
merchandisers and medical representatives (hereinafter referred to as sales personnel)
from the award of the holiday pay, and (3) deduction from the holiday pay award of
overpayment for overtime, night differential, vacation and sick leave benefits due to the
use of 251 divisors.
Petitioner UFE answered that the award should be made effective from the date
of effectivity of the Labor Code, that their sales personnel are not field personnel and
are therefore entitled to holiday pay, and that the use of 251 as divisor is an established
employee benefit which cannot be diminished.
Arbitrator Vivar: On January 14, 1986, the respondent arbitrator issued an order
declaring that the effectivity of the holiday pay award shall retroact to November 1,
1974, the date of effectivity of the Labor Code. He adjudged, however, that the
company’s sales personnel are field personnel and, as such, are not entitled to holiday
pay. He likewise ruled that with the grant of 10 days’ holiday pay, the divisor should be
changed from 251 to 261 and ordered the reimbursement of overpayment for overtime,
night differential, vacation and sick leave pay due to the use of 251 days as divisor.
ISSUES:
1) Whether or not Nestle’s sales personnel are entitled to holiday pay; and
2) Whether or not, concomitant with the award of holiday pay, the divisor should be
changed from 251 to 261 days and whether or not the previous use of 251 as divisor
resulted in overpayment for overtime, night differential, vacation and sick leave pay.
RATIO DECIDENDI:
1. Sales personnel are not entitled to holiday pay.
Under Article 82, field personnel are not entitled to holiday pay. Said article defines field
personnel as “non-agricultural employees who regularly perform their duties away from
the principal place of business or branch office of the employer and whose actual hours
of work in the field cannot be determined with reasonable certainty.”
The law requires that the actual hours of work in the field be reasonably ascertained.
The company has no way of determining whether or not these sales personnel, even if
they report to the office before 8:00 a.m. prior to field work and come back at 4:30
p.m, really spend the hours in between in actual field work.

61
Moreover, the requirement that “actual hours of work in the field cannot be determined
with reasonable certainty” must be read in conjunction with Rule IV, Book III of the
Implementing Rules which provides:
Rule IV Holidays with Pay
Sec. 1. Coverage — This rule shall apply to all employees except:
xxx xxx xxx
(e) Field personnel and other employees whose time and performance is unsupervised
by the employer . . . (Emphasis supplied)
Hence, in deciding whether or not an employee’s actual working hours in the field can
be determined with reasonable certainty, query must be made as to whether or not
such employee’s time and performance is constantly supervised by the employer.
2. The divisor in computing the award of holiday pay should still be 251 days.
While in that case the issue was whether or not salesmen were entitled to overtime
pay, the same rationale for their exclusion as field personnel from holiday pay benefits
also applies.
The petitioner union also assails the respondent arbitrator’s ruling that, concomitant
with the award of holiday pay, the divisor should be changed from 251 to 261 days to
include the additional 10 holidays and the employees should reimburse the amounts
overpaid by Filipro due to the use of 251 days’ divisor.
The 251 working days’ divisor is the result of subtracting all Saturdays, Sundays and the
ten (10) legal holidays from the total number of calendar days in a year. If the
employees are already paid for all non-working days, the divisor should be 365 and not
251.
In the petitioner’s case, its computation of daily ratio since September 1, 1980, is as
follows:
monthly rate x 12 months / 251 days
The use of 251 days’ divisor by respondent Filipro indicates that holiday pay is
not yet included in the employee’s salary, otherwise the divisor should have been 261.
It must be stressed that the daily rate, assuming there are no intervening salary
increases, is a constant figure for the purpose of computing overtime and night
differential pay and commutation of sick and vacation leave credits. Necessarily, the
daily rate should also be the same basis for computing the 10 unpaid holidays.
The respondent arbitrator’s order to change the divisor from 251 to 261 days
would result in a lower daily rate which is violative of the prohibition on non-diminution
of benefits found in Article 100 of the Labor Code. To maintain the same daily rate if
the divisor is adjusted to 261 days, then the dividend, which represents the employee’s
annual salary, should correspondingly be increased to incorporate the holiday pay.
To illustrate, if prior to the grant of holiday pay, the employee’s annual salary is
P25,100, then dividing such figure by 251 days, his daily rate is P100.00 After the
payment of 10 days’ holiday pay, his annual salary already includes holiday pay and
totals P26,100 (P25,100 + 1,000). Dividing this by 261 days, the daily rate is still
P100.00. There is thus no merit in respondent Nestle’s claim of overpayment of
overtime and night differential pay and sick and vacation leave benefits, the
computation of which are all based on the daily rate, since the daily rate is still the
same before and after the grant of holiday pay.

62
SC Decision:
The Court thereby resolves that the grant of holiday pay be effective, not from
the date of promulgation of the Chartered Bank case nor from the date of effectivity of
the Labor Code, but from October 23, 1984, the date of promulgation of the IBAA case
(Insular Bank of Asia and America Employees’ Union (IBAAEU) v. Inciong, where the
court declared that Sec 2, Rule IV, Book III of IRR which excluded monthly paid
employees from holiday pay benefits, are null and void).
FALLO:
WHEREFORE, the order of the voluntary arbitrator in hereby MODIFIED. The
divisor to be used in computing holiday pay shall be 251 days. The holiday pay as
above directed shall be computed from October 23, 1984. In all other respects, the
order of the respondent arbitrator is hereby AFFIRMED.

63
INSULAR HOTEL EMPLOYEES UNION-NFL VS. WATERFRONT INSULAR HOTEL
DAVAO
G.R. NOS. 174040-41, SEPTEMBER 22, 2010
PERALTA, J.:

FACTS:

Respondent Waterfront Insular Hotel Davao notified Department of Labor and

Employment that it will suspend its operation for a period of six months due to severe
and serious business losses. Domy R. Rojas (Rojas), he President of Davao Insular
Hotel Free Employees Union (DIHFEU-NFL), the recognized labor organization in
Waterfront Davao, sent respondent several letters asking management to reconsider its
decision. Rojas sent respondent more proposals as a form of the Union's gesture of
their intention to help the company.

After series of negotiations, respondent and DIHFEU-NFL, represented by its

President, Rojas, and Vice-Presidents, signed a Memorandum of Agreementwherein
respondent agreed to re-open the hotel subject to certain concessions offered by
DIHFEU-NFL in its Manifesto. Accordingly, respondent downsized its manpower
structure to 100 rank-and-file employees as set forth in the terms of the MOA.
Moreover, as agreed upon in the MOA, a new pay scale was also prepared by
respondent.

The retained employees individually signed a "Reconfirmation of

Employment"which embodied the new terms and conditions of their continued
employment. Each employee was assisted by Rojas who also signed the document. On
June 15, 2001, respondent resumed its business operations.

However, on August 22, 2002, Darius Joves (Joves) and Debbie Planas, claiming
to be local officers of the National Federation of Labor (NFL), filed a Notice of
Mediationbefore the National Conciliation and Mediation Board (NCMB), raising the issue
that the "Diminution of wages and other benefits through unlawful Memorandum of
Agreement."

After two preliminary conferences, the parties where directed to AVA Olvida, who
directed respondent to file a formal motion to withdraw its submission to voluntary
arbitration.

AVA Montejo, the new voluntary arbitrator, after AVA Olvida voluntarily inhibited
himself, rendered a Decision ruling against the respondent. Both parties appealed the
Decision to the Court of Appeals. Respondent, questioned the jurisdiction of the NCMB
whereas Cullo, the reckoning of the differentials in wages of the covered workers.

ISSUE(S):

1 Whether or not CA erred when it ruled that the voluntary arbitrator had no
jurisdiction over the case simply because the Notice of Mediation did not state
the name of the local union thereby disregarding the Submission Agreement
which states the names of local union as Insular Hotel Employees Union-NFL.

64
 2 Whether or not CA have erred in concluding that Article 100 of the Labor Code
applies only to benefits already enjoyed at the time of the promulgation of the
Labor Code.

RATIO DECIDENDI:

1 No, the petition warrants no merit.

While it is undisputed that a submission agreement was signed by respondent

and "IHEU-NFL," the Court finds that there are two circumstances which affect its
validity: first, the Notice of Mediation was filed by a party who had no authority to do
so; second, that respondent had persistently voiced out its objection questioning the
authority of Joves, Cullo and the individual members of the Union to file the complaint
before the NCMB.

Procedurally, the first step to submit a case for mediation is to file a notice of
preventive mediation with the NCMB. It is only after this step that a submission
agreement may be entered into by the parties concerned.

Section 3, Rule IV of the NCMB Manual of Procedure provides who may file a notice of
preventive mediation, to wit:

Who may file a notice or declare a strike or lockout or request preventive

mediation. -

Any certified or duly recognized bargaining representativemay file a

notice or declare a strike or request for preventive mediation in cases of
bargaining deadlocks and unfair labor practices. The employer may file a notice
or declare a lockout or request for preventive mediation in the same cases. In the
absence of a certified or duly recognized bargaining representative, any legitimate labor
organization in the establishment may file a notice, request preventive mediation or
declare a strike, but only on grounds of unfair labor practice.
From the foregoing, it is clear that only a certified or duly recognized bargaining
agent may file a notice or request for preventive mediation. It is curious that even Cullo
himself admitted, in a number of pleadings, that the case was filed not by the Union but
by individual members thereof. Clearly, therefore, the NCMB had no jurisdiction to
entertain the notice filed before it.
Even though respondent signed a Submission Agreement, it had, however,
immediately manifested its desire to withdraw from the proceedings after it became
apparent that the Union had no part in the complaint. As a matter of fact, only four
days had lapsed after the signing of the Submission Agreement when respondent called
the attention of AVA Olvida in a "Manifestation with Motion for a Second Preliminary
Conference" that the persons who filed the instant complaint in the name of Insular
Hotel Employees Union-NFL had no authority to represent the Union. Respondent
cannot be estopped in raising the jurisdictional issue, because it is basic that the issue
of jurisdiction may be raised at any stage of the proceedings, even on appeal, and is
not lost by waiver or by estoppel.
2 The same is without merit.
As instructed in Apex Mining Company, Inc. v. NLRC, the prohibition against elimination
or diminution of benefits set out in Article 100 of the Labor Code is specifically
concerned with benefits already enjoyed at the time of the promulgation of the Labor

65
Code. Article 100 does not, in other words, purport to apply to situations arising after
the promulgation date of the Labor Code.
Even assuming arguendo that Article 100 applies to the case at bar, this Court
agrees with respondent that the same does not prohibit a union from offering and
agreeing to reduce wages and benefits of the employees. In Rivera v. Espiritu, this
Court ruled that the right to free collective bargaining, after all, includes the right to
suspend it
FALLO:
WHEREFORE, premises considered, the petition is DENIED. The Decision dated
October 11, 2005, and the Resolution dated July 13, 2006 of the Court of Appeals in
consolidated labor cases docketed as CA-G.R. SP No. 83831 and CA-G.R. SP No. 83657,
are AFFIRMED.

66
NORBERTO SORIANO, PETITIONER VS. OFFSHORE SHIPPING AND MANNING
CORPORATION, KNUT KNUTSEN O.A.S. AND NATIONAL LABOR RELATIONS
COMMISSION (SECOND DIVISION), RESPONDENTS
G.R. NO. 78409 SEPTEMBER 14, 1989
FERNAN, C.J.

FACTS:

Norberto Soriano, a licensed Second Marine Engineer, sought employment and

was hired by private respondent Knut Knutsen O.A.S. through its authorized shipping
agent in the Philippines, Offshore Shipping and Manning Corporation. As evidenced by
the Crew Agreement, petitioner was hired to work as Third Marine Engineer on board
Knut Provider" with a salary of US$800.00 a month on a conduction basis for a period
of fifteen (15) days. He admitted that the term of the contract was extended to six (6)
months by mutual agreement on the promise of the employer to the petitioner that he
will be promoted to Second Engineer. Thus, while it appears that petitioner joined the
aforesaid vessel on July 23, 1985 he signed off on November 27, 1985 due to the
alleged failure of private respondent-employer to fulfill its promise to promote petitioner
to the position of Second Engineer and for the unilateral decision to reduce petitioner's
basic salary from US$800.00 to US$560.00. Petitioner was made to shoulder his return
airfare to Manila.
In the Philippines, petitioner filed with the Philippine Overseas Employment
Administration (POEA), a complaint against private respondent for payment of salary
differential, overtime pay, unpaid salary for November, 1985 and refund of his return
airfare and cash bond allegedly in the amount of P20,000.00 contending therein that
private respondent unilaterally altered the employment contract by reducing his salary
of US$800.00 per month to US$560.00, causing him to request for his repatriation to
the Philippines.
POEA ruled in favor of the petitioner but with some modifications. Dissatisfied,
both parties appealed the aforementioned decision to the National Labor Relations
Commission (NLRC). Complainant-petitioner's appeal was dismissed for lack of merit
while respondents' appeal was dismissed for having been filed out of time. Petitioner’s
Motion for Reconsideration was likewise denied. Hence this petition for certiorari.
ISSUE:
Whether or not NLRC committed grave abuse of discretion and/or acted without
or in excess of jurisdiction by disregarding the alteration of the original employment
contract.
RATIO DECIDENDI:
Laws should be given a reasonable interpretation, not one which defeats the
very purpose for which they were passed. The Court has in many cases involving the
construction of statutes always cautioned against narrowly interpreting a statute as to
defeat the purpose of the legislator and stressed that it is of the essence of judicial duty
to construe statutes so as to avoid such a deplorable result (of injustice or absurdity)
and that therefore "a literal interpretation is to be rejected if it would be unjust or lead
to absurd results." There is no dispute that an alteration of the employment contract
without the approval of the Department of Labor is a serious violation of law.
Specifically, the law provides Article 34 paragraph (i) of the Labor Code:
Prohibited Practices. — It shall be unlawful for any individual, entity, licensee, or holder
of authority:

67
 (i) To substitute or alter employment contracts approved and verified by the
Department of Labor from the time of actual signing thereof by the parties up to and
including the period of expiration of the same without the approval of the Department
of Labor.
In the case at bar, both the Labor Arbiter and the National Labor Relations
Commission correctly analyzed the questioned annotations as not constituting an
alteration of the original employment contract but only a clarification thereof which by
no stretch of the imagination can be considered a violation of the above-quoted law.
Under similar circumstances, this Court ruled that as a general proposition, exceptions
from the coverage of a statute are strictly construed. But such construction
nevertheless must be at all times reasonable, sensible and fair. Hence, to rule out from
the exemption amendments set forth, although they did not materially change the
terms and conditions of the original letter of credit, was held to be unreasonable and
unjust, and not in accord with the declared purpose of the Margin Law.
The purpose of Article 34, paragraph 1 of the Labor Code is clearly the protection
of both parties. In the instant case, the alleged amendment served to clarify what was
agreed upon by the parties and approved by the Department of Labor. To rule
otherwise would go beyond the bounds of reason and justice.
As recently laid down by this Court, the rule that there should be concern,
sympathy and solicitude for the rights and welfare of the working class, is meet and
proper. That in controversies between a laborer and his master, doubts reasonably
arising from the evidence or in the interpretation of agreements and writings should be
resolved in the former's favor, is not an unreasonable or unfair rule. But to disregard
the employer's own rights and interests solely on the basis of that concern and
solicitude for labor is unjust and unacceptable.
Finally, it is well-settled that factual findings of quasi-judicial agencies like the
NLRC which have acquired expertise because their jurisdiction is confined to specific
matters are generally accorded not only respect but at times even finality if such
findings are supported by substantial evidence. In fact since the Madrigal vs. Rafferty
case, great weight has been accorded to the interpretation or construction of a statute
by the government agency called upon to implement the same.
DISPOSITIVE PORTION:
WHEREFORE, the instant petition is DENIED. The assailed decision of the
National Labor Relations Commission is AFFIRMED in toto.

68
 THE HONGKONG AND SHANGHAI BANKING CORPORATION, PETITIONER,
VS.
NATIONAL LABOR RELATIONS COMMISSION AND EMMANUEL A. MENESES,
RESPONDENTS.
G.R. NO. 116542 JULY 30, 1996
PANGANIBAN, J.:

FACTS:

On February 3, 1993, complainant called his bank/employer to inform the latter

that he had an upset stomach and would not be able to report for work. His superior,
however, requested him to report for work but complainant insisted that he could go on
sick leave on that day.

Later on that day, the bank called complainant at his house in order to obtain
vital information from him, but the bank was informed by the answering party that the
complainant had left early that morning.

When complainant reported for work the following day, February 4, 1993, he
was asked by his superior to explain why he was not at his residence on February 3,
1993 when he was on sick leave because of an upset stomach. Complainant explained
that he indeed suffered from an upset stomach and that he even consulted Dr. Arthur
Logos at 4:00 o'clock in the afternoon of the same day

On February 4, 1993 the bank called up Dr. Logos to know the truth but the
doctor denied that he examined or attended to complainant on February 3, 1993 and
the last time complainant consulted him was in December 1992. For this reason, the
bank directed complainant to explain his acts of dishonesty.

On February 16, 1993, the complainant made a written statement, explaining his
side to his employer, but the bank still came out with a memorandum from Human
Resources Department, terminating his services effective March 16, 1993, pursuant to
Article 13, Section VI of the Collective Bargaining Agreement between the union of the
rank and file employees of the bank and the company and the bank's Code of Conduct.
A memorandum was also sent to him demanding for the full payment of his outstanding
loan (PH P179,834.00) with the bank/employer.

ISSUE:

Whether or not the NLRC committed grave abuse of discretion in ruling that
private respondent's act of making a false statement as to the real reason for his
absence on February 3, 1993 did not constitute such dishonesty as would warrant his
termination from service.

69
RATIO DECIDENDI:

Under Art. 282 of the Labor Code, "an employer may terminate an employment
for any of the following causes:

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of
his employer or representative in connection with his work;

(b) Gross and habitual neglect by the employee of his duties;

(c) Fraud or willful breach by the employee of the trust reposed in him by his employer
or duly authorized representative;

(d) Commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly authorized representative;
and

(e) Other causes analogous to the foregoing.

The private respondent's acts of dishonesty — his first offense in his seven years
of employment, as noted by the respondent NLRC — did not show deceit nor constitute
fraud and did not result in actual prejudice to petitioner. To be lawful, the cause for
termination must be a serious and grave malfeasance to justify the deprivation of a
means of livelihood.

Petitioner even contends that the NLRC arbitrarily imposed its value judgment
and standard on petitioner's disciplinary rules, thereby unilaterally restricting the Bank's
power and prerogative to discipline its employees according to reasonable rules and
regulations. The employer's prerogative and power to discipline and terminate an
employee's services may not be exercised in an arbitrary or despotic manner as to
erode or render meaningless the constitutional guarantees of security of tenure and due
process.7 The labor laws, both substantive and procedural, require strict compliance
before an employee may be dismissed. It is the NLRC's right and duty to review
employers' exercise of their prerogative to dismiss so as to prevent abuse and
arbitrariness.

Petitioner's argument (that the NLRC cannot review petitioner's disciplinary rules)
would mean upsetting the entire labor arbitral machinery, depriving the labor arbiter
and the NLRC of their jurisdiction to determine the justness of a cause for dismissal as
granted by Arts. 217 and 218 of the Labor Code.

The labor arbiter, on her decision dated August 13, 1993, declared the
termination illegal and ordered petitioner bank to reinstate private respondent to his
former position without loss of seniority rights and with backwages.

70
 On appeal, the respondent Commission sustained the arbiter's findings and ruled
that such act of dishonesty cannot be considered so serious (as) to warrant
complainant's outright dismissal. The dishonesty that complainant had committed
cannot be considered depraved. It was a simple kind of dishonesty that was committed
not in connection with his job.

FALLO:

WHEREFORE, the instant petition is hereby DISMISSED, there being no showing of

grave abuse of discretion on the part of the respondent NLRC.

71
 COLGATE PALMOLIVE PHILIPPINES, INC., PETITIONERS
VS. HONORABLE BLAS F. OPLE, COLGATE PALMOLIVE SALES UNION,
RESPONDENTS.
G.R. NO.73681 JUNE 30,1988
JUSTICE PARAS

FACTS:

Petitioners filed a petition for certiorari before the supreme Court assailing the
decision of the ministry of labor and employment. Honorable Blas f. Ople certifying
respondents as sole recognized union representative of the sales force union.
Petitioners contends that respondents and MOLE Minister committed grave abuse of
discretion, by directly certifying respondents’ union as the sole representative of the the
entire sales force personnel’s based on the self-pronouncement of respondents that
they embody the majority vote of the entire sales force members. And ordering the
reinstatement of the dismissed erring personnel’s previously dismissed by the petitioner
company.

ISSUE:

Whether or not the minister of labor and employment committed grave abuse of
discretion when he certified the respondent union as the sole representative for the
sales force sector.

RATIO DECIDENDI:

The rules of the labor code are formulated to ensure that the certified representative
for collective bargaining is the true choice of all employees against all contenders. The
Constitution mandates that the state assure the rights of workers to self-organization
and collective bargaining.

FALLO:

Whereby, judgement is hereby rendered reversing and setting aside the order of
respondent Minister for grave abuse of discretion.

72
 CARLOS C. DE CASTRO, PETITIONER, VS. LIBERTY BROADCASTING
NETWORK, INC. AND EDGARDO QUIOGUE, RESPONDENT.
G.R. NO. 165153, SEPTEMBER 23, 2008
BRION, J.:

FACTS:

De Castro commenced his employment with the Liberty Broadcasting as a

Building Administrator. The respondent company sent a notice to De Castro requiring
him to explain within 48 hours why he should not be liable for violation of the company
code of conduct for acts constituting serious misconduct, fraud and willful breach of the
trust reposed in him as a managerial employee. De Castro then denied the allegations
against him contained in the affidavits of his co-employees contending that the
accusations are completely baseless and sham. The respondent company issued him a
notice of Dismissal on the following grounds:

1. Soliciting/receiving money for his own benefit from the

suppliers/dealers/traders Aying and Samarita;
2. Diversion of company fund;
3. Theft of company property;
4. Disrespect/discourtesy towards cp-employee for using offensive words;
5. Disorderly behaving for challenging a fight within the company
premises and thereby creating disturbance;
6. Threat and coercion;
7. Abuse and authority; and
8. Slander.

The De Castro filed a complaint for illegal dismissal against the Liberty Broadcasting
with the NLRC and denied committing the offenses charged against him. The Labor
Arbiter favored the petitioner, holding the respondent liable for illegal dismissal and
disbelieved the allegations in the affidavits of the co-employees and that of Aying and
Samarita. However, the NLRC reversed the Labor Arbiter’s decision for disregarding the
affidavits of the respondent’s witnesses. De Castro filed a motion for reconsideration
which the NLRC granted and turned down the motion for reconsideration filed by the
respondent, Liberty Broadcasting. The respondent company elevated the case to the
Court of Appeals via a petition for certiorari under Rule 65 of the Rules of Court where
the petitioner’s dismissal effectively confirmed its validity.

ISSUE:

WON the decision should be granted in favor of the petitioner, De Castro, for
having illegally dismissed and charged with allegations against him.

73
RATIO DECIDENDI:

The NLRC believes that the motion for reconsideration by the petitioner should be
granted. The Respondents’ charges against De Castro were never substantiated by any
evidence other than barefaced allegations in the affidavits of the respondent’s witnesses
which are the employees who had altercation with De Castro and contractors having
business deals with the respondent company. In fact, Aying, one alleging that the
petitioner asked commission from him has made a turn around and denied such
allegation.

The NLRC also concluded that the employer failed to prove a just cause for the
termination of the pertitioner’s employment. Also considering the decision in Prangan vs
NLRC abd in Nicario vs NLRC which stated that:

“If doubt exist between the evidence presented by the employer and the
employee, the scales of justice must be tilted in favor of the latter. It is a time-
honoredrule in controversies between a laborer and his master, doubts
reasonably arising fron the evidence, or in the interpretation of agreements and
writing should be resolved in the former’s favor.”

FALLO/WHEREFORE CLAUSE:

WHEREFORE, premises considered, we hereby GRANT the petition. Accordingly,

we REVERSE and SET ASIDE the Decision and Resolution of the CA promulgated on
May 25, 2004 and Auguts 30, 2004, respectively, and REINSTATE in all respects the
Resolution of the National Labor Relations Commissions dated September 20, 2002.
Costs against the respondents.

74
 MANOLO A. PEÑAFLOR, petitioner, VS.OUTDOOR CLOTHING
MANUFACTURING CORPORATION, respondent.
G.R. No. 177114 April 13, 2010
BRION, J.:

FACTS:

Manolo A. Peñaflor was hired as probationary HRD Manager of Outdoor Clothing

on September 2, 1999. On March 13, 2000, more than six months from the time he was
hired, Outdoor Clothing’s President, Nathaniel Syfu, appointed Edwin Buenaobra as the
concurrent HRD and Accounting Manager. After enduring what he claimed as
discriminatory treatment at work, Peñaflor considered the appointment of Buenaobra to
his position as the last straw, and thus filed his irrevocable resignation from Outdoor
Clothing effective at the close of office hours on March 15, 2000. He thereafter filed an
illegal dismissal complaint with the labor arbiter claiming that he had been
constructively dismissed. The labor arbiter agreed with Peñaflor and issued a decision
in his favor. On appeal, the NLRC reversed the earlier decision. The CA likewise
affirmed the decision of the NLRC.

The court decision focused on resolving the issue of whether Peñaflor’s

resignation from Outdoor Clothing was voluntary or a forced one, the latter making it a
constructive dismissal equivalent to an illegal dismissal. If the resignation was
submitted before Syfu’s appointment of Buenaobra, little support would exist for
Peñaflor’s allegation of constructive dismissal, as the appointment would merely be
intended to cover the vacancy created by Peñaflor’s resignation. If however the
resignation was made after the appointment of Buenaobra, then factual basis exists to
consider Peñaflor as constructively dismissed by Outdoor Clothing, as the resignation
would be a response to the unacceptable appointment of another person to a position
he still occupied.

ISSUE:

Can Peñaflor’s resignation be considered as constructive dismissal equivalent to

an illegal dismissal?

RATIO DECIDENDI:

Yes. While the letter states that Peñaflor’s resignation was irrevocable, it does
not necessarily signify that it was also voluntarily executed. Precisely because of the
attendant hostile and discriminatory working environment, Peñaflor decided to
permanently sever his ties with Outdoor Clothing. This falls squarely within the concept
of constructive dismissal that jurisprudence defines, among others, as involuntarily
resignation due to the harsh, hostile, and unfavorable conditions set by the employer. It
arises when a clear discrimination, insensibility, or disdain by an employer exists and
has become unbearable to the employee. The gauge for constructive dismissal is
whether a reasonable person in the employee’s position would feel compelled to give up
his employment under the prevailing circumstances. With the appointment of
Buenaobra to the position he then still occupied, Peñaflor felt that he was being eased
out and this perception made him decide to leave the company.

The fact of filing a resignation letter alone does not shift the burden of proving
that the employee’s dismissal was for a just and valid cause from the employer to the
employee. In Mora v. Avesco, we ruled that should the employer interpose the defense

75
of resignation, it is still incumbent upon the employer to prove that the employee
voluntarily resigned. To our mind, Outdoor Clothing did not discharge this burden by
belatedly presenting the three memoranda it relied on. If these memoranda were
authentic, they would have shown that Peñaflor’s resignation preceded the appointment
of Buenaobra. Thus, they would be evidence supporting the claim of voluntariness of
Peñaflor’s resignation and should have been presented early on in the case. Outdoor
Clothing however raised them only before the NLRC when they had lost the case before
the labor arbiter. Whatever doubts that remain in our minds on the credibility of the
parties’ evidence should, by the law’s dictate, be settled in favor of the working man.
Our ruling that Peñaflor was constructively dismissed from his employment with
Outdoor Clothing therefore stands.

FALLO:

The court modifies the ruling on the extent of liability of Outdoor Clothing and its
co-respondents. A corporation, as a juridical entity, may act only through its directors,
officers and employees. Obligations incurred as a result of the directors’ and officers’
acts as corporate agents, are not their personal liability but the direct responsibility of
the corporation they represent. As a rule, they are only solidarily liable with the
corporation for the illegal termination of services of employees if they acted with malice
or bad faith. In the present case, malice or bad faith on the part of the Syfu,
Demogena, and Lee, as corporate officers of Outdoor Clothing, was not sufficiently
proven to justify a ruling holding them solidarily liable with Outdoor Clothing.

Wherefore, the court partially grants respondents’ motion for reconsideration

and modify the Decision dated January 21, 2010. Respondent Outdoor Clothing is
hereby ordered to pay petitioner the following:

a. back wages computed from the time of constructive dismissal up to the time
of the finality of the Court’s Resolution;

b. separation pay, due to the strained relations between the parties, equivalent
to the petitioner’s one month’s salary;

c. illegally deducted salary for six days, as computed by the labor arbiter;

d. proportionate 13th month pay;

e. attorney’s fees, moral and exemplary damages in the amount of ₱100,000.00;

and

f. costs against the respondent corporation.

76
 FEM'S ELEGANCE LODGING HOUSE, INC. V. HON. MURILLO
G.R. NO. 117442-43 JANUARY 11, 1995
QUIASON, J.:

FACTS:

Fem’s Elegance Lodging House terminated the services of private respondents

between March and April, 1994. Private respondents separately filed two cases against
petitioners before the National Labor Relations Commission (NLRC), Regional Arbitration
Branch No. X, Cagayan de Oro City. They sought for unpaid benefits such as minimum
wage, overtime pay, rest day pay, holiday pay, full thirteenth-month pay and separation
pay.
On May 31, 1994, a pre-arbitration conference of the cases took place before the
Labor Arbiter. It was agreed therein: (1) that both labor cases should be consolidated;
and (2) that the parties would file their respective position papers within thirty days
from said date or until June 30, 1994, after which the cases would be deemed
submitted for resolution.
On June 29, petitioners filed their position paper. On July 7, they inquired from
the NLRC whether private respondents had filed their position paper. The receiving
clerk of the NLRC confirmed that as of said date private respondents had not yet filed
their position paper.
On July 8, petitioners filed a Motion to dismiss for failure of private respondents
to file their position paper within the agreed period. On July 15, private respondents
belatedly filed their position paper. On July 18, petitioners filed a Motion to Expunge
[private respondents'] Position Paper from the records of the case and on August 23,
the Labor Arbiter issued a notice of clarificatory hearing, which was set for September
7. Prior to the hearing, petitioners filed a Motion to Resolve [petitioners'] Motion to
Dismiss and Motion to Expunge [private respondent'] Position Paper from the Records
of the Case.
On September 21, the Labor Arbiter issued the order denying the motions filed
by petitioners. He held that a fifteen-day delay in filing the position paper was not
unreasonable considering that the substantive rights of litigants should not be sacrificed
by technicality. He cited Article 4 of the Labor Code of the Philippines, which provides
that all doubts in the interpretation thereof shall be resolved in favor of labor. He said
that even under Section 15, Rule 5 of the Revised Rules of Court, a delay in the filing of
a position paper is not a ground for a motion to dismiss.
Petitioners charged the Labor Arbiter with grave abuse of discretion for issuing
the order in contravention of Section 3, Rule V of The New Rules of Procedure of the
NLRC which directs both parties to submit simultaneously their position
papers/memorandum with the supporting documents and affidavits within fifteen (15)
calendar days from the date of the last conference. Petitioners claimed that they were
denied due process and that the Labor Arbiter should have cited private respondents in
contempt for their failure to comply with their agreement in the pre-arbitration
conference.

ISSUE:

Whether or not the Labor Arbiter committed grave abuse of discretion in denying
the motions filed by the petitioners.

77
RATIO DECIDENDI:

No. The Labor Arbiter did not commit grave abuse of discretion. The petitioners
failed to exhaust their remedies. Article 223 of the Labor code of the Philippines
provides that decisions, awards or orders of the Labor Arbiter are appealable to the
NLRC. Thus, petitioners should have first appealed the questioned order of the Labor
Arbiter to the NLRC, and not to the Supreme Court. Their omission is fatal to their
cause.
Even if the petition was given due course, there is no merit in petitioners'
arguments. The delay of private respondents in the submission of their position paper is
a procedural flaw, and the admission thereof is within the discretion of the Labor
Arbiter. Well-settled is the rule that technical rules of procedure are not binding in labor
cases, for procedural lapses may be disregarded in the interest of substantial justice,
particularly where labor matters are concerned.
The failure to submit a position paper on time is not one of the grounds for the
dismissal of a complaint in labor cases. This stance is in accord with Article 4 of the
Labor Code of the Philippines, which resolves that all doubts in the interpretation of the
law and its implementing rules and regulations shall be construed in favor of labor.

FALLO:

IN VIEW OF THE FOREGOING, the Court Resolved to DISMISS the petition for
lack of merit.

SO ORDERED.

78
 VILLAVERT VS. ECC & GSIS (PHILIPPINE CONSTABULARY)
G.R. NO. L-48605 DECEMBER 14, 1981
FERNANDEZ, J.:

FACTS:

This is a petition to review the decision of the Employees' Compensation

Commission in ECC Case versus Government Service Insurance System (Philippine
Constabulary)," affirming the decision of the Government Service Insurance System
denying the claim for death benefits.

Marcellino N. Villavert, son of the petitioner, was an employee in the Philippine

Constabulary as a code verifier. He performed his duties not only as code verifier but
also handled administrative functions, computer operation and typing jobs due to the
shortage of civilian personnel.

On December 11, 1975, Marcelino reported to his work as usual. He was

complaining chest pain and headache in the late afternoon but because of the
voluminous work, he was still required to render overtime service for computing
allowance and preparing checks for the salary of the Philippine Constabulary and
Integrated National Police personnel throughout the country on or before December 15,
1975. When he came home due to fatigue he went to his bed, shortly after, his mother,
the petitioner, noticed that Marcellino was grasping for breath, perspiring profusely and
mumbling incoherent words. She therefore rushed him to the hospital but he never
regained consciousness and pronounced that the case of death was acute hemorrhagic
pancreatitis.

Petitioner filed claim for the death benefits of Marcelino to the GSIS together
with the affidavit of Lt. Colonel Felino C. Pacheco attesting that he worked as code
verifier and performed other additional duties. He also testified that the deceased was
computer operator consequently subject to excessive heat and cold and that the
deceased never drinks alcohol liquor nor smokes nor engages on immoral habits.

To corroborate Pacheco’s affidavit, Rustico P. Valenzuela, Chief Clerk of the

Constabulary Computer Center also certified that the deceased was performing
additional work load due to the shortage of qualified civilian personnel. That although
the deceased was already complaining of chest pain and headache he still was
obligated to carry on work because of deadline. Marcelino was also not able to consult
for his routine physical check-up due to the rotation of his duties.

The petition was denied by GSIS on the ground that acute hemorrhagic
pancreatitis is not an occupational disease and the petitioner failed to show that there

79
was causal connection between the fatal ailment of Marcellino and the nature of his
work.
Medico-Legal of the NBI also stated that the exact cause of acute hemorrhagic
pancreatitis.

ISSUE:

Whether in claiming death benefits of an employee in GSIS, the causal

connection of occupational disease that caused death and the nature of work should be
clearly established?

RATIO DECIDENDI:

As stated by the Medico Legal Officer of NBI that although the cause of acute
hemorrhagic pancreatitis is unknown, researches points out that physical and mental
stresses are strong causal factors in the development of the disease and the nature of
the work of that deceased directly caused or at least aggravates by the duties he
performed as coder verifier, computer operator and clerk typist of the Philippine
Constabulary. Also, there is no evidence at all that Marcelino N. Villavert had a "bout of
alcoholic intoxication" shortly before he died. Neither is there a showing that he used
drugs.

Nonetheless, as mandated in Art. 4 of the Labor Code, all doubts in the

implementation and interpretation of this Code, including its rules and implementation
shall be resolved in favor of the laborer.

FALLO:

WHEREFORE, the decision of the Employees' Compensation Commission sought

to be reviewed is set aside and judgment is hereby rendered ordering the Government
Service Insurance System to pay the petitioner death benefits in the amount of SIX
THOUSAND PESOS (P6,000.00).

SO ORDERED.

80
 RUTH JIMENEZ vs. EMPLOYEES’ COMPENSATION COMMISSION and
GOVERNMENT SERVICE INSURANCE SYSTEM
G.R. No. 58176, March 23, 1984
MAKASIAR, J.:

FACTS:
This is a petition to review the decision of respondent Employees Compensation
Commission (ECC) dated August 20, 1981 in ECC Case No. 1587, which affirmed the
decision of respondent Government Service Insurance System (GSIS), denying
petitioner’s claim for death benefits under Presidential Decree No. 626, as amended.
The petitioner is the widow of the late Alfredo Jimenez, who joined the
government service in June, 1696 as a constable in the Philippine Constabulary. After
rendering service for one year, he was promoted to the rank of constable second class
then on he was again promoted to the rank of sergeant. He and his wife boarded a bus.
While on their way, Sgt. Jimenez, who was seated on the left side of the bus, fell down
from the bus because of the sudden stop of the vehicle. As a result, he was confined at
the Cagayan Provincial Hospital for about one week, and thereafter, released. There
has been series of hospital confinement. He complained of off-and-on back pains,
associated with occasional cough and also the swelling of the right forearm and was
later on diagnosed with “aortic aneurysm, medrastinal tumor.” His condition improved
somewhat after treatment and he was released. He was advised to have complete rest
and to continue medication. He was then given light duty inside the barracks of their
company.
Unfortunately, his ailment continued and became more serious. On May 12,
1980, he died in his house. He was barely 35 years old at the time of his death. The
cause of death, as found by the doctors is “bronchogenic carcinoma” which is a
malignant tumor of the lungs.
The petitioner filed a claim for PD NO. 626 with GSIS which was denied for
having no causal link on his duties. The said decision was affirmed by respondent
Employees Compensation Commission in its decision dated August 21, 1981.
ISSUE:
Whether or not the petitioner’s husband’s death is not compensable for the
reason that the injury/sickness that caused his death is not due to the circumstances of
the employment or in the performance of the duties and responsibilities of said
employment.
RATIO DECIDENDI:
Admittedly, cancer of the lungs (bronchogenic carcinoma) is one of those
borderline cases where a study of the circumstances of the case is mandated to fully
appreciate whether the nature of the work of the deceased increased the possibility of
contracting such an ailment. WE have ruled in the case of Dator v. Employees
Compensation Commission (111 SCRA 634, L-57416, January 30, 1982) that. Until now,
the cause of cancer is not known. Indeed, the respondent has provided an opening
through which petitioner can pursue and did pursue the possibility that the deceased’s
ailment could have been caused by the working conditions while employed with the
Philippine Constabulary. Respondents maintain that the deceased was a smoker and the
logical conclusion is that the cause of the fatal lung cancer could only be smoking which
cannot in any way be justified as work-connected. However, medical authorities support
the conclusion that up to now, the etiology or cause of cancer of the lungs is still largely
unknown.

81
FALLO:
THE DECISION APPEALED FROM IS HEREBY SET ASIDE AND THE GOVERNMENT
SERVICE INSURANCE SYSTEM IS HEREBY ORDERED.
1. TO PAY THE PETITIONER THE SUM OF TWELVE THOUSAND (P12,000.00) PESOS
AS DEATH BENEFITS;
2. TO REIMBURSE THE PETITIONER’s MEDICAL AND HOSPITAL EXPENSES DULY
SUPPORTED BY PROPER RECEIPTS; AND
3. TO PAY THE PETITIONER THE SUM OF ONE THOUSAND TWO HUNDRED
(P1,200.00) PESOS FOR BURIAL EXPENSES.
SO ORDERED.

82
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC., PETITIONER, VS.
HON. RUBEN D. TORRES, AS SECRETARY OF THE DEPARTMENT OF LABOR &
EMPLOYMENT, AND JOSE N. SARMIENTO, AS ADMINISTRATOR OF THE
PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION, RESPONDENTS
G. R. NO. 101279, AUGUST 6, 1992

GRIÑO-AQUINO, J.:

FACTS:

As a result of published stories regarding the abuses suffered by Filipino

housemaids employed in Hong Kong, then DOLE Secretary Ruben Torres issued
Department Order No.16, Series of 1991, temporarily suspending the recruitment by
private employment agencies of Filipino domestic helpers going to Hong Kong.
The DOLE itself, through the POEA took over the business of deploying such Hong
Kong-bound workers. The POEA Administrator also issued Memorandum Circular
No. 37, Series of 1991, on the processing of employment contracts of domestic
workers for Hong Kong.

PASEI filed a petition for prohibition to annul the aforementioned DOLE and
POEA circulars and to prohibit their implementation on the grounds that DOLE and
POEA acted with grave abuse of discretion and/or in excess of their rule-making
authority in issuing said circulars, that the assailed DOLE and POEA circulars are
contrary to the Constitution, unreasonable, unfair and oppressive; and that the
requirements of publication and filing with the Office of the National Administrative
Register were not complied with.

ISSUES:

(1) Whether or not respondents acted with grave abuse of discretion and/or in excess
of their rule-making authority in issuing said circulars;
(2) Whether or not the assailed DOLE and POEA circulars are contrary to the
Constitution, are unreasonable, unfair and oppressive; and
(3) Whether or not requirements of publication and filing with the Office of the
National Administrative Register were not complied with.

RATIO DECIDENDI:

1. No. The respondents acted well within their authority and did not commit
grave abuse of discretion. This is because article 36 of the Labor Code grants the Labor
Secretary the power to restrict and regulate recruitment and placement activities of all
agencies within the coverage of this title, the Regulation of recruitment and placement
activities.

2. The assailed circulars did not prohibit the petitioner from engaging in the
recruitment and deployment of Filipino land based workers for overseas employment. A
careful reading of the challenged administrative issuances discloses that the same fall
within the “administrative and policing powers expressly or by necessary implication
conferred” upon the respondents. The power to restrict and regulate conferred by
article 36 of the labor code involves the grant of police power. Said administrative

83
issuances intended to curtail, if not to end, rampant violations of the rule against
excessive collections of placement and documentation fees, travel fees and other
charges committed by private employment agencies recruiting and deploying domestic
helpers to Hongkong. They are, therefore, valid and justified under the general welfare
clause of the Constitution, since the recruitment and deployment business, as it is
conducted today, is affected with public interest.

3. Yes. The questioned circulars are legally invalid, defective and unenforceable
for lack of proper publication and filing in the Office of the National Administrative
Register as required in article 2 of the Civil Code, article 5 of the Labor Code and
Sections 3 (1) and 4, Chapter 2, Book VII of the Administrative Code of 1987. The court
agreed that publication must be in full or it is no publication at all since its purpose is to
inform the public of the content of the laws.

FALLO:

Wherefore, the writ of prohibition is granted. The implementation of DOLE

Department Order No. 16, series of 1991 and POEA Memorandum Circulars Nos. 30 and
37, series of 1991, by public respondents is hereby suspended pending compliance with
the statutory requirements of publication and filing under the aforementioned laws of
the land.

84
 SHELL PHILIPPINES, INC., PLAINTIFF-APPELLEE,
VS.
CENTRAL BANK OF THE PHILIPPINES, DEFENDANT-APPELLANT.
G.R. NO. L-51353 JUNE 27, 1988
GUTIERREZ, JR., J.:

FACTS:

On May 1, 1970, Congress approved the Act imposing a stabilization tax on

consignments abroad (RA 6125). Section 1 of the statute, in part, provided as follows:

Section 1. There shall be imposed, assessed and collected a stabilization

tax on the gross F.O.B. peso proceeds, based on the rate of exchange prevailing
at the time of receipt of such proceeds, whether partial or total, of any
exportation of the following schedule:

"Any export products the aggregate annual F.O.B. value of which shall
exceed five million United States dollars in any one calendar year during the
effectivity of this Act shall likewise be subject to the rates of tax in force during
the fiscal years following its reaching the said aggregate value."

On August, 1970, the Central Bank, through its Circular No. 309 provided that:

The stabilization tax shall begin to apply on January 1st following the
calendar year during which such export products shall have reached the
aggregate F.O.B. value of more than US $5 million, and the applicable tax rates
shall be the rates prescribed in Schedule (b) of Section 1 of Republic Act No.
6125 for the fiscal year following the reaching of the said aggregate value.

During 1971, appellee Shell, Philippines, Inc. exported seria residues, a by-
product of petroleum refining, to an extent reaching $5 million. On January 7, 1972, the
Monetary Board issued its Resolution No. 47 "subjecting petroleum pitch and other
petroleum residues" to the stabilization tax effective January 1, 1972. Under the Central
Bank Circular No. 309, implemented by Resolution No. 47, appellee had to pay the
stabilization tax beginning January 1, 1972, which it did under protest.

On September 14, 1972, appellee filed suit against the Central Bank before the
Court of First Instance of Manila, praying that Monetary Board Resolution No. 47 be
declared null and void, and that Central Bank be ordered to refund the stabilization tax
it paid during the first semester of 1972. Its position was that, pursuant to the
provisions of RA 6125, it had to pay the stabilization tax only from July 1, 1972.

The lower court sustained appellee, and it declared Monetary Board Resolution
No. 47 as void and it ordered refund of the stabilization tax paid by appellee during the
period January 1 to June 30, 1972. Central Bank has appealed from the judgment.

ISSUE:
Whether or not the Central Bank has the authority to promulgate rules and
regulation in the implementation of the stabilization tax law?

85
RATIO DECIDENDI:

First, the petitioner's allegation that the trial court gave undue weight to the
deliberations of the Senate on the stabilization tax law is not supported by either the
records or the decision itself. It is clear in the decision that the trial court found no
ambiguity in the provision of law governing the dispute and accordingly applied it in its
ordinary sense. The cited Senate deliberations merely corroborated the fact that the tax
commences on the following fiscal year after the aggregate value is reached. However,
even if the lower court was influenced by the Senate deliberations, we see nothing
wrong in courts' examining and following the intent of the legislature when an act of
Congress has to be interpreted.

Second, while it is true that under the same law the Central Bank was given the
authority to promulgate rules and regulations to implement the statutory provision in
question, we reiterate the principle that this authority is limited only to carrying into
effect what the law being implemented provides.

In People v. Maceren (79 SCRA 450, 458 and 460), this Court ruled that:

Administrative regulations adopted under legislative authority by a

particular department must be in harmony with the provisions of the law,
and should be for the sole purpose of carrying into effect its general
provisions. By such regulations, of course, the law itself cannot be
extended. (U.S. v. Tupasi Molina, supra). An administrative agency cannot
amend an act of Congress (Santos v. Estenzo, 109 Phil. 419, 422; Teoxon
v. Members of the Board of Administrators, L-25619, June 30, 1970, 33
SCRA 585; Manuel v. General Auditing Office, L-28952, December 29,
1971,42 SCRA 660; Deluao v. Casteel, L-21906, August 29, 1969, 29
SCRA 350).

The rule-making power must be confined to details for regulating the

mode or proceeding to carry into effect the law as it has been enacted.
The power cannot be extended to amending or expanding the statutory
requirements or to embrace matters not covered by the statute. Rules
that subvert the statute cannot be sanctioned. (University of Santo Tomas
v. Board of Tax Appeals, 93 Phil. 376, 382, citing 12 C.J. 845-46. As to
invalid regulations, see Collector of Internal Revenue v. Villamor, 69 Phil.
319; Wise & Co. v. Meer, 78 Phil. 665, 676; Del Mar v. Phil. Veterans
Administration, L-27299, June 27, 1973, 51 SCRA 340, 349).

xxx xxx xxx

... The rule or regulation should be within the scope of the statutory
authority granted by the legislature to the administrative agency. (Davis,
Administrative Law, p. 194, 197, cited in Victorias Milling Co., Inc. v.
Social Security Commission, 114 Phil. 555, 558).

In case of discrepancy between the basic law and a rule or regulation

issued to implement said law, the basic law prevails because said rule or
regulation cannot go beyond the terms and provisions of the basic law
(People v. Lim, 108 Phil. 1091)

Considering the foregoing, we rule that the trial court was correct in declaring
that "Monetary Board Resolution No. 47 is void insofar as it imposes the tax mentioned

86
in Republic Act No. 6125 on the export seria residue of (plaintiff) the aggregate annual
F.O.B., value of which reached five million United States dollars in 1971 effective on
January 1, 1972." The said resolution runs counter to the provisions of R.A. 6125 which
provides that "(A)ny export product the aggregate annual F.O.B. value of which shall
exceed five million United States dollars in any one calendar year during the effectivity
of this Act shall likewise be subject to the rates of tax in force during the fiscal year
following its reaching the said aggregate value."

We note that under the same provision of law the tax accrues when the
aggregate annual F.O.B. value of the export product has exceeded five million United
States dollars during any calendar year. The imposition of the tax is only deferred until
the "fiscal year following its reaching the said aggregate value." It is only then that the
rates in force are ascertained.

In this case, there is no question that in 1971, the appellee exported seria
residue with an F.O.B. value of more than five million US dollars. The appellee's
objection lies in the collection of the tax thereon as of January 1972 rather than in July
1972.

It is, therefore, undeniable that the respondent was liable to pay the tax and that
the Central Bank merely collected the said tax prematurely. There is likewise no
controversy over the rate of tax in force when payment became due. Thus, the tax
refund granted by the trial court was not proper because the tax paid was in fact, and
in law due to the government at the correct time.

We decline to grant to the respondent an amount equivalent to the interest on the

prematurely collected tax because of the well-entrenched rule that in the absence of a
statutory provision clearly or expressly directing or authorizing payment of interest on
the amount to be refunded to the taxpayer, the Government cannot be required to pay
interest. Likewise, it is the rule that interest may be awarded only when the collection
of tax sought to be refunded was attended with arbitrariness (Atlas Fertilizer Corp. v.
Commission on Internal Revenue, 100 SCRA 556). There is no indication of arbitrariness
in the questioned act of the appellant.

FALLO:

WHEREFORE, in view of the foregoing, the assailed decision is hereby AFFIRMED

but MODIFIED to the effect that the tax refund granted by the trial court is ordered
retained by or reverted to, as the case may be, the Central Bank.

SO ORDERED.

87
 INSULAR BANK OF ASIA AND AMERICA EMPLOYEES' UNION
(IBAAEU), PETITIONER, VS.
HON. AMADO G. INCIONG, DEPUTY
MINISTER, MINISTRY OF LABOR AND INSULAR BANK OF ASIA AND
AMERICA,
G.R. NO. L-52415, OCTOBER 23, 1984
MAKASIAR, J.:

FACTS:

On June 20, 1975, petitioner filed a complaint against the respondent bank for
the payment of holiday pay before the then Department of Labor, National Labor
Relations Commission, Regional Office No. IV in Manila. Conciliation having failed,
and upon the request of both parties, the case was certified for arbitration on July 7,
1975. The Labor Arbiter rendered a decision granting the petitioner’s complaint for
the payment of the holiday pay. The respondent bank did not appeal from the said
decision. Instead it complied with the order of Labor Arbiter by paying holiday pay
up to January 1976.
The respondent bank filed an opposition to the motion for a writ of execution
alleging, among others, 1.) its refusal to pay the corresponding unworked holiday pay
in accordance withtheawardofLaborArbiterRicarte T. Soriano is based on and justified
by Policy Instruction No. 9 which interpreted the rules implementing P. D. 850; 2.)
that the said award is already repealed by P.D. 850 which took effect on December
16, 1975, and by said Policy Instruction No. 9 of the Department of Labor, considering
that its monthly paid employees are not receiving less than P240.00 and their monthly
pay is uniform from January to December, and that no deductions are made from the
monthly salaries of its employees on account of holidays in months.

ISSUE:

WON holiday pay does not apply to monthly- paid employees.

RATIO DECIDENDI:

No. The rules in favor of the petitioner. By stating that The Section 2, Rule IV,
Book III of the implementing rules and Policy Instruction No. 9 issued by the then
Secretary of Labor are null and void since in the guise of clarifying the Labor Code's
provisions on holiday pay, they in effect amended them by enlarging the scope of
theirexclusion.Accordingly, public respondent Deputy Minister of Labor Amado G.
Inciong had no basis at all to deny the members of petitioner union their regular
holiday pay as directed by the Labor Code.

Article 94 of the Labor Code, as amended by P.D. 850, provides: Every worker
shall be paid his regular daily wage during regular holidays, except in retail and
service establishments regularly employing less than ten (10) workers. The coverage
and scope of exclusion of the Labor Code's holiday pay provisions is spelled out
under Article 82 thereof which reads:

The provision of this Title shall apply to employees in all establishments and

88
undertakings, whether for profit or not, but not to government employees,
managerial employees, field personnel members of the family of the employer who
are dependent on him for support domestic helpers, persons in the personal service
of another, and workers who are paid by results as determined by the Secretary of
Labor in appropriateregulations.

From the above-cited provisions, it is clear that monthly paid employees are
not excluded from the benefits of holidaypay.However, the implementing rules on
holiday pay promulgated by the then Secretary of Labor excludes monthly paid
employees from the said benefits by inserting, under Rule IV, Book Ill of the
implementing rules, Section 2, which provides that: "employees who are uniformly
paid by the month, irrespective of the number of working days therein, with a salary
of not less than the statutory or established minimum wage shall be presumed to be
paid for all days in the month whether worked or not. "

Public respondent maintains that "(T)he rules implementing P. D. 850 and

Policy Instruction No. 9 were issued to clarify the policy in the implementation of the
ten (10) paid legal holidays. As interpreted, 'unworked' legal holidays are deemed
paid insofar as monthly paid employees are concerned if (a) they are receiving not
less than the statutory minimum wage, (b) their monthly pay is uniform from
January to December, and (c) no deduction is made from their monthly salary on
account of holidays in months where they occur. As explained in Policy Instruction
No, 9, 'The ten (10) paid legal holidays law, to start with, is intended to benefit
principally daily paid employees. In case of monthly, only those whose monthly
salary did not yet include payment for the ten (10) paid legal holidays are entitled to
the benefit' " (pp. 340-341, rec.). This contention is untenable.

It is elementary in the rules of statutory construction that when the language

of the law is clear and unequivocal the law must be taken to mean exactly what it
says. In the case at bar, the provisions of the Labor Code on the entitlement to the
benefits of holiday pay are clear and explicit - it provides for both the coverage of
and exclusion from the benefits. In Policy Instruction No. 9, the then Secretary of
Labor went as far as to categorically state that the benefit is principally intended for
daily paid employees, when the law clearly states that every worker shall be paid
their regular holiday pay. This is a flagrant violation of the mandatory directive of
Article 4 of the Labor Code, which states that "All doubts in the implementation and
interpretation of the provisions of this Code, including its implementing rules and
regulations, shall be resolved in favor of labor." Moreover, it shall always be
presumed that the legislature intended to enact a valid and permanent statute which
would have the most beneficial effect that its language permits

FALLO:

WHEREFORE, THE PETITION IS HEREBY GRANTED, THE ORDER OF PUBLIC

RESPONDENT IS SET ASIDE, AND THE DECISION OF LABOR ARBITER RICARTE T.
SORIANO DATED AUGUST 25, 1975, IS HEREBY REINSTATED. COSTS AGAINST
PRIVATE RESPONDENT INSULAR BANK OF ASIA ANDAMERICA.

SO ORDERED.

89
 LASCO VS. UNITED NATIONS REVOLVING FUND FOR NATURAL RESOURCES
EXPLORATION
G.R. NOS. 109095-109107, FEBRUARY 23, 1995
QUIASON, J.:

FACTS:

Petitioners Eldepio Lasco et al were dismissed from their employment with

respondent United Nations Revolving Fund for Natural Resources Explorations
(UNRFNRE), an international organization entitled to diplomatic immunity. They filed a
complaint in the NLRC for illegal dismissal and damages, invoking the constitutional
mandate that the State shall afford full protection to labor and promote full employment
and equality of employment opportunities for all.

UNRFNRE, however, claims that the Labor Arbiter had no jurisdiction over its
personality since it enjoyed diplomatic immunity pursuant to the 1946 Convention on
the Privileges and Immunities of the United Nations.

ISSUE:

Is labor code applicable in an international organization entitled to diplomatic

immunity?

RATIO DECIDENDE:

No. The respondent, being a special fund administered by the United Nations,
was covered by the 1946 Convention on the Privileges and Immunities of the United
Nations of which the Philippine Government was an original signatory. As a matter of
state policy as expressed in the Constitution, the Philippine Government adopts the
generally accepted principles of international law (1987 Constitution, Art. II. Sec. 2).

Our courts can only assume jurisdiction over private respondent if it expressly waived
its immunity, which is not so in the case at bench.

FALLO:

Wherefore, there is no conflict between the constitutional duty of the State to

protect the rights of workers and to promote their welfare, and the grant of immunity to
international organizations. Clauses on jurisdictional immunity are now standard in the
charters of international organizations to guarantee the smooth discharge of their
functions.

This is not to say that petitioners have no recourse. Section 31 of the Convention
on the Privileges and Immunities of the Specialized Agencies of the United Nations
states that "each specialized agency shall make a provision for appropriate modes of
settlement of: (a) disputes arising out of contracts or other disputes of private character
to which the specialized agency is a party."

90
 REPUBLIC VS. COURT OF APPEALS
G.R. NO. 87676, DEC. 20, 1989
GRINO-AQUINO, J.:

FACTS:
The NPDC was originally created in 1963 under Executive Order No. 30, as the
Executive Committee for the development of the Quezon Memorial, Luneta and other
national parks, and later renamed as the National Parks Development Committee under
Executive Order No. 68, on September 21, 1967, it was registered in the Securities and
Exchange Commission (SEC) as a non-stock and non-profit corporation, known as "The
National Parks Development Committee, Inc." However, in August, 1987, the NPDC was
ordered by the SEC to show cause why its Certificate of Registration should not be
suspended for: (a) failure to submit the General Information Sheet from 1981 to 1987;
(b) failure to submit its Financial Statements from 1981 to 1986; (c) failure to register
its Corporate Books; and (d) failure to operate for a continuous period of at least five
(5) years since September 27, 1967. On August 18, 1987, the NPDC Chairman, Amado
Lansang, Jr., informed SEC that his Office had no objection to the suspension,
cancellation, or revocation of the Certificate of Registration of NPDC.
By virtue of Executive Order no. 120, the NPDC was attached to the ministry of
Tourism. On September 10, 1987, the Civil Service Commission notified NPDC that
pursuant to Executive Order No. 120, all appointments and other personnel actions shall
be submitted through the Commission. Meanwhile, the Rizal Park Supervisory
Employees Association, consisting of employees holding supervisory positions in the
different areas of the parks, was organized and it affiliated with the Trade Union of the
Philippines and Allied Services (TUPAS) under Certificate No. 1206.
On June 15, 1987, two collective bargaining agreements were entered into
between NPDC and NPDCEA (TUPAS local Chapter No. 967) and NPDC and NPDCSA
(TUPAS Chapter No. 1206), for a period of two years or until June 30, 1989.
On March 20, 1988, these unions staged a stake at the Rizal Park, Fort Santiago,
Paco Park, and Pook ni Mariang Makiling at Los Banos, Laguna, alleging unfair labor
practices by NPDC.
On March 21, 1988, NPDC filed in the Regional Trial Court in Manila, Branch III,
a complaint against the union to declare the strike illegal and to restrain it on the
ground that the strikers, being government employees, have no right to strike although
they may form a union. The lower court dismissed the complaint and lifted restraining
order for lack of jurisdiction. Petitioner went to the Court of Appeals on certiorari (CA-
G.R. SP No. 14204), but the CA affirmed the order of the trial court. The petitioner filed
a petition for review.
ISSUE:
Whether or not the petitioner, National Parks Development Committee is a
government agency and if the employee is covered by Civil Service law, for on this issue
depends the right of its employees to strike.
RATIO DECIDENDI:
Yes, NPDC is a government agency and covered by civil service rules and
regulations.
The National Parks Development Committee was created originally as an
Executive Committee on January 14,1963, for the development of the Quezon
Memorial, Luneta and other national parks (Executive Order No. 30). It was later

91
designated as the National Parks Development Committee (NPDC) on February 7, 1974
(E.O. No. 69). On January 9, 1966, Mrs. Imelda R. Marcos and Teodoro F. Valencia
were designated Chairman and Vice- Chairman respectively (E.O. No. 3). Despite an
attempt to transfer it to the Bureau of Forest Development, Department of Natural
Resources, on December 1, 1975 (Letter of Implementation No. 39, issued pursuant to
PD No. 830, dated November 27, 1975), the NPDC has remained under the Office of
the President (E.O. No. 709, dated July 27, 1981).
Since 1977 to 1981, the annual appropriations decrees listed NPDC as a regular
government agency under the Office of the President and allotments for its
maintenance and operating expenses were issued direct to NPDC. While NPDC
employees are allowed to organized and join unions of their choice, there is as yet no
law permitting them to strike.
FALLO:
WHEREFORE, the petition for review is granted. The decision of the Court of
Appeals in CA-G.R. SP No. 14204 is hereby set aside. The private respondents'
complaint should be filed in the Public Sector Labor-Management Council as provided in
Section 15 of Executive Order No. 180. Costs against the private respondents.

92
 PNOC EDC AND MARCELINO TONGCO VS. NLRC AND MANUEL S PINEDA
G.R. NO. 100947 MAY 31, 1993
NARVASA, C.J.:

FACTS:

Manuel S. Pineda was employed with the PNOC-EDC from September 1981 to
January 1989.

In November 1987 Pineda decided to run as a councilor for the local election
scheduled in January 1988 and filed certificate of candidacy.

On February 1, 1988 Pineda proclaimed elected as a councilor but he withdraws

to that said position and continued working for PNOC EDC.

ISSUE:

Whether or not the respondents automatically resigned when he filed his

candidacy as councilor and whether or not he could continue to work to any corporate
offspring of a government owned or controlled corporation.

RATIO DECIDENDI:

Yes, under section 66 of the omnibus election code applies any person holding a
public appointive office or position including members of the AFP and officers and
employees in government owned or controlled corporations shall be ipso facto resigned
from the office upon filing of his certicate of candidacy for election hence, Pineda is
covered by these rules, further, he cannot continue or to hold any position or office in
any government owned or controlled corporation.

FALLO:

Wherefore, the petition is granted the decision of NLRC dated April 24, 1991 and
its resolution are nullified.

93
 BENJAMIN C. JUCO VS.NATIONAL LABOR RELATIONS COMMISSION AND
NATIONAL HOUSING CORPORATION
G.R. NO. 98107, AUGUST 18, 1997
HERMOSISIMA, JR., J.:

FACTS:
Petitioner Benjamin C. Juco was hired as a project engineer of respondent
National Housing Corporation (NHC) from November 16, 1970 to May 14, 1975. On May
14, 1975, he was separated from the service for having been implicated in a crime of
theft and/or malversation of public funds.

On March 25, 1977, petitioner filed a complaint for illegal dismissal against the
NHC with the Department of Labor.

On September 17, 1977, the Labor Arbiter rendered a decision dismissing the
complaint on the ground that the NLRC had no jurisdiction over the case.

On May 21, 1990, respondent NLRC thru Labor Arbiter Manuel R. Caday ruled
that petitioner was illegally dismissed from his employment by respondent as there was
evidence in the record that the criminal case against him was purely fabricated,
prompting the trial court to dismiss the charges against him. Hence, he concluded that
the dismissal was illegal as it was devoid of basis, legal or factual.

Thereafter, the Labor Arbiter rendered a decision, the dispositive portion of

which reads:

Premises considered, judgment is hereby rendered declaring the dismissal

of the complainant as illegal and ordering the respondent to immediately
reinstate him to his former position without loss of seniority rights with full
back wages inclusive of allowance and to his other benefits or equivalent
computed from the time it is withheld from him when he was dismissed
on March 27, 1977, until actually reinstated.

On June 1, 1990, respondent NHC filed its appeal before the NLRC and on March
14, 1991, the NLRC promulgated a decision which reversed the decision of Labor Arbiter
Manuel R. Caday on the ground of lack of jurisdiction.
ISSUE:
Whether or not public respondent committed grave abuse of discretion in holding
that petitioner is not governed by the Labor Code.

RATIO DECIDENDI:

The NLRC has jurisdiction over the case.

In National Housing Corporation vs. Juco, this ruling has been supplanted by the
1987 Constitution. Thus, the said Constitution now provides:

The civil service embraces all branches, subdivisions, instrumentalities,

and agencies of the Government, including government owned or
controlled corporations with original charter. Article IX-B, Section 2[1])

94
 Considering the fact that the NHA had been incorporated under Act 1459, the
former corporation law, it is but correct to say that it is a government-owned or
controlled corporation whose employees are subject to the provisions of the Labor
Code.
This observation is reiterated in the recent case of Trade Union of the Philippines
and Allied Services (TUPAS) v. National Housing Corporation, 14 where we held that the
NHA is now within the jurisdiction of the Department of Labor and Employment, it being
a government-owned and/or controlled corporation without an original charter.
Furthermore, we also held that the workers or employees of the NHC (now NHA)
undoubtedly have the right to form unions or employee's organization and that there is
no impediment to the holding of a certification election among them as they are
covered by the Labor Code.
15Having been incorporated under the Corporation Law, its relations with its
personnel are governed by the Labor Code and come under the jurisdiction of
the National Labor Relations Commission.

FALLO:

WHEREFORE, the decision of the NLRC in NLRC NCR-04-02036089 dated March

14, 1991 is hereby REVERSED and the Decision of the Labor Arbiter dated May 21,
1990 is REINSTATED.

95
 PEOPLE OF THE PHILIPPINES, PETITIONER, VS. HON. DOMINGO PANIS,
PRESIDING JUDGE OF THE COURT OF FIRST INSTANCE OF ZAMBALES &
OLONGAPO CITY, BRANCH III AND SERAPIO ABUG, RESPONDENTS
G.R. NOS. 58674-77, JULY 11, 1986
JUSTICE CRUZ, PONENTE

FACTS:

Four information were filed on January 9, 1981, in the above-mentioned court

alleging that respondent Serapio Abug “without first securing a license from the Ministry
of Labor as a holder of authority to operate a fee-charging employment agency, did
then and there willfully, unlawfully and criminally operate a private fee-charging
employment agency by charging fees and expenses and promising employment in Saudi
Arabia” to four separate individuals named therein, in violation of Art 16 in relation to
Art 39 of the Labor Code.

Abug filed a motion to quash on the ground that the information did not charge
an offense because he was accused of illegally recruiting only one person in each of the
four information. Under the provision in Art 13 (b), he claimed that, that there would be
illegal recruitment only “whenever two or more persons are in any manner promised or
offered any employment for a fee.” Denied at first, the motion was reconsidered and
finally granted in the orders of trial court dated June 24 and September 17, 1981. The
prosecution filed before the Supreme Court a certiorari.

The posture of the petitioner is that the private respondent is being prosecuted
under Art 39 in relation to Art 16 of the Labor Code; hence, Art 13 (b) is not applicable.
The view of the private respondents is that to constitute recruitment and placement, all
the acts mentioned in this article should involve dealing with two or more person as an
indispensable requirement. The petitioner argues that the requirement of two or more
persons is imposed only where the recruitment and placement consists of an offer or
promise of employment to such persons and always in considerate of a fee. The other
acts mentioned in the body of the article may involve even only one person and are not
necessarily for profit.

ISSUE:

WON the number of persons dealt with is an essential ingredient of an act

recruitment and placement of workers.

RATIO DECIDENDI:

The number of persons dealt with is not an essential ingredient of the act of
recruitment and placement of workers. Any of the acts mentioned in the basic rule in

96
Art 13(b) will constitute recruitment and placement even if only one prospective worker
is involved. The proviso merely lays down a rule of evidence that where a fee is
collected in consideration of promise or offer of employment to two or more prospective
workers, the individual or entity dealing with them shall be deemed to be engaged in
the act of recruitment and placement. The words “shall be deemed” create that
presumption and it should by the same token be given the force of a disputable
presumption or of a prima facie evidence of engaging in recruitment and placement.

At any rate, the interpretation here adopted should give more force to the
campaign against illegal recruitment and placement, which has victimized many Filipino
workers seeking a better life in foreign land, and investing hard-earned savings or even
borrowed funds in pursuit of their dream, only to be awakened to the reality or cynical
deception at the hands of their own countrymen.

FALLO/WHEREFORE CLAUSE:

WHEREFORE, the orders of June 24, 1981, and September 17, 1981, are set
aside and the four information against private respondent reinstated.

97
HELLENIC PHILIPPINE SHIPPING, INC., PETITIONER, VS. EPIFANIO C. SIETE
AND NATIONAL LABOR RELATIONS COMMISSION (NLRC), RESPONDENTS
G.R. NO. 84082, MARCH 13, 1991
CRUZ, J.:

FACTS:

Through crewing agent, Hellenic Philippine Shipping, Inc., (petitioner), M/V

Houda G by Sultan Shipping Co., Ltd. employed Siete (respondent) and boarded the
vessel. The petitioner dismissed Siete for failure to complete with the instruction of
Sultan Shipping to erase the timber load line on the vessel and for his negligence in the
discharge of the cargo at Tripolo that endangered the vessel and stevedores. Siete filed
a complaint against the petitioner for illegal dismissal and non-payment of his salary
and other benefits under their employment contract. The POEA then dismissed Siete’s
complaint, holding that there was indeed a valid cause for Siete’s dismissal after the
petitioner presented records to show that the respondent was indeed guilty of the
charges.

Siete appealed to the NLRC. He contended that the records presented were
prepared long after his dismissal and he insisted that he was dismissed without even
being informed of the charges against him or given opportunity to refute them. The
respondent reversed the POEA Administrator, holding that the dismissal violated due
process and that the documents submitted by the petitioner were hearsay, self-serving
and not verified.

ISSUE:

WON there has been a grave abuse of discretion on the part of the petitioner for
violating due process on the dismissal.

RATIO DECIDENDI:

There is. Substantial evidence has established that the private respondent was
indeed not notified of the charges against him and that no investigation was conducted
to justify his dismissal. The petitioner cannot contend that being a mere crewing agent
it has no liability over the complaint charged by Siete against Sultan Shipping. As a
requirement for the issuance of license to operate a private recruiting agency, the
applicant must undertake and “assume joint and solidarity liability with the employer for
all claims and liabilities which might arise in connection with the implementation of the
contract of employment.”

98
FALLO:

WHEREFORE, the challenged decision as above modified is AFFIRMED and the

petition DISMISSED, with costs against the petitioner. The temporary restraining order
dated August 3, 1988, is LIFTED.

99
 DELIA D. ROMERO, PETITIONER,
VS
PEOPLE OF THE PHILIPPINES, ROMULO PADLAN AND
ARTURO SIAPNO, RESPONDENTS
G.R. NO. 171644 NOVEMBER 23, 2011
PERALTA, J.:

FACTS:

The Regional Trial Court of Dagupan City, foundpetitioner guilty beyond

reasonable doubt of the crime ofIllegal Recruitment as defined in paragraph (a) of
Article 38of Presidential Decree No. 2018.

In August 2000, Respondent Arturo Siapno went topetitioner's stall and he was
convinced by the petitioner that if hecould give her US$3,600.00 for the processing of
his papers,he could leave the country within 1 to 2 weeks for a jobplacement in Israel.
Respondent was able to secure the amountneeded through the help of his relatives
then petitioner processedRespondent's papers and contacted Jonney Erez Mokra.
Jonneyinstructed Arturo to attend a briefing in Dau, Mabalacat,Pampanga.

Sometime in September 2000, Respondent left for Israel for the said
employment. Respondent was able to work and receive US$800.00 salary permonth.
Three months after of stay in Israel, respondent was caught bythe immigration officials,
imprisoned for ten days and waseventually deported.

After arriving in the country, Respondentimmediately sought the petitioner who

then promised him thatshe would send him back to Israel, which did not happen.

In September 2000, ROMULO PADLAN (respondent)went to petitioner's stall at

Calasiao, Pangasinan to inquire about securing a job in Israel. Convinced by petitioner's
wordsof encouragement and inspired by a high potential salary,Romulo asked petitioner
the amount of money required inorder for him to be able to go to Israel. Petitioner
informedhim that as soon as he could give her US$3,600.00, his paperswould be
immediately processed. When he was able to raisethe amount, Romulo went back to
petitioner and handed herthe money.

Petitioner contacted Jonney Erez Mokra whoinstructed Romulo to attend a

briefing at his house in Dau,Mabalacat, Pampanga. Respondent Romulo was able to
leave for Israel onOctober 26, 2000 and was able to secure a job. Unfortunately, after
two and a half months, he was caught byIsrael's immigration police and detained for 25
days. He wassubsequently deported because he did not possess a workingvisa. On his
return, Romulo demanded from petitioner thereturn of his money, but the petitioner
refused and failed to do so.Petitioner also claims that the testimony of the other
Respondent Arturo Siapnosaying that he paid a certain amount of money to the
formermust not be given any credence due to the absence of anyreceipt or any other
documentary evidence proving such.

100
ISSUE:

Whether or not the Petitioner Delia Romero is guilty of Illegal Recruitment?

RATIO DECIDENDI:

Yes, the act of the Petitioner Delia Romero without a doubt, falls within the
meaning ofrecruitment and placement as defined in Article 13 (b) of theLabor Code
Article 13 (b) of the Labor Code defines recruitment andplacement as:

Any act of canvassing, enlisting, contracting,transporting, utilizing, hiring or

procuring workers, andincludes referrals, contract services, promising or advertisingfor
employment, locally or abroad, whether for profit or not:Provided, that any person or
entity which, in any manner.

And this was shown in the testimonies of the two respondents that the petitioner
was able to convince the private respondents toapply for work in Israel after parting
with their money inexchange for the services she would render. In the case at bar the
court ruled in illegal recruitment cases, as provided in “Art. 38. Illegal Recruitment. —
(a) Any recruitmentactivities, including the prohibited practices enumerated underArticle
34 of this Code, to be undertaken by non-licensees ornon-holders of authority shall be
deemed illegal andpunishable under Article 39 of this Code. The Ministry of Laborand
Employment or any law enforcement officers may initiate complaints under this Article.”

Thus, Failure topresent receipts for money that was paid in connection with the
recruitment process will not affect the strength of the evidence presented by the
prosecution as long as the paymentcan be proved through clear and convincing
testimonies ofcredible witnesses.

FALLO:

WHEREFORE, the Petition for Review on Certiorari ofpetitioner Delia D. Romero

is hereby DENIED. Consequently,the Decision and Resolution of the Court of Appeals,
affirmingthe Decision of the Regional Trial Court, finding petitionerguilty beyond
reasonable doubt of the crime of IllegalRecruitment as defined in paragraph (a) of
Article 38 ofPresidential Decree (P.D.) No. 2018, are hereby AFFIRMEDwith the
MODIFICATION on the penalty to be imposed.

101
 PEOPLE OF THE PHILIPPINES
VS.
MELISSA CHUA A.K.A. CLARITA NG CHUA
G.R. NO. 187052, SEPTEMBER 13, 2012
VILLAMA, JR., J.

FACTS:

Private petitioners Rey Tajadao, Billy Danan, Alberto Aglanao and Roylan
Ursulum filed a complaint for illegal recruitment before the Philippine Overseas
Employment Agency (POEA) against respondent Melissa Chua. Petitioners claim that
respondent offered them a job as factory worker to be deployed in Taiwan. The
respondent then requires petitioners to secure passports, undergo medical examination
and a pay of placement fee amounting to Php. 80,000.00. Respondent Chua assured
the petitioners that whoever pays the application fee the earliest can leave sooner.

Private petitioners pay the amount of Php. 80,000.00 to Melissa Chua. Rey
Tajadao, Billy Danan and Alberto Aglanao were able to secure a voucher for their
payment of placement fee from respondent. However, Roylan Ursulum failed to secure
the same.

Billy Danan, upon follow up on the status of their deployment, respondent Chua
informed Danan that his departure was re-scheduled as Taiwan had suspended
admission of overseas workers until after the festival. Hence, petitionersonly learned
that respondent was not authprized and licensed to recruit workers for overseas
employment.

The prosecution likewise presented as witness Severino Maranan, Senior Labor

Employment Officer of the POEA. Maranan confirmed that respondent Chua was neither
licensed nor authorized to recruit workers for overseas employment. In support, he
presented to the court a certification issied by the POEA to that effect.

In the defense of the respondent, she denies having recruited complainants for
overseas employment. According to her, she was only a cashier at Golden Gate which is
owned by Marilen Callueng.

The Regional Trials Courts's found that Melissa Chua is guilty beyond reasonable
doubt of illegal recruitment in large scale and four counts of estafa. The Court of
Appeals affirmed the decision of the trial court. Hence, Chua elevated the case by filing
a Notice of Appeal.

ISSUE:

Whether or not the prosecution was able to prove that Melissa Chua is guilty for
the crime of illegal recruitment in large scale.

RATIO DECIDENDI:

102
 Yes. In order to hold a person liable for illegal recruitment, the following
elements must concur:

1. The offender undertakes any of the activities within the meaning of "recruitment and
placement" under Article 13(b) of the Labor Code, or any of the prohibited practices
enumerated under Article 34 of the Labor Code (now Section 6 of Republic Act 8042);
and

2. The offender has no valid license or authority required by law to enable him to
lawfully engage in recruitment and placement of workers.

In the case of illegal recruitment in large scale a third element is added: that the
offender ckmmits any of the acts of recruitment and placement against three or more
persons, individually or as a group. All three elements are present in the case at bar.

FALLO / WHEREFORE CLAUSE:

The decision of the Court of Appeals is hereby affirmed with modification in that
the appellant os ordered to pay a fine of Php. 1,000,000.00 and to indemnify each of
the private complainants Alberto Aglanao, Billy Danan and Rey Tajadal in the amount of
Php. 80,000.00. With costs against accused-appellant.

103
 IMELDA DARVIN, PETITIONER,
VS.
HON. COURT OF APPEALS AND PEOPLE OF THE PHILIPPINES,
RESPONDENTS.
G.R. NO. 125044. JULY 13, 1998
ROMERO, J.:

FACTS:

The private respondent, Macaria Toledo met accused-appellant Darvin in the

latters residence at Dimasalang, Imus, Cavite, through the introduction of their common
friends, Florencio Jake Rivera and Leonila Rivera. In said meeting, accused-appellant
allegedly convinced Toledo that by giving her P150,000.00, the latter can immediately
leave for the United States without any appearance before the U.S. embassy as
evidenced by a receipt stating that the amount of P150,000.00 was for U.S. Visa and Air
fare. After a week as agreement, there was no word from Darvin, Toledo went to her
residence to inquire about any development, but could not find Darvin. Thereafter, on
May 7, 1992, Toledo filed a complaint with the Bacoor Police Station against Imelda
Darvin. Upon further investigation, a certification was issued by the Philippine Overseas
Employment Administration (POEA) stating that Imelda Darvin is neither licensed nor
authorized to recruit workers for overseas employment. Accused-appellant was then
charged for estafa and illegal recruitment by the Office of the Provincial Prosecutor of
Cavite.

Herein accused-appellant testified that she used to be connected with Dale

Travel Agency and that in 1992, or thereabouts, she was assisting individuals in
securing passports, visa, and airline tickets. She claims that she did not promise any
employment in the U.S. to Toledo but admits receiving the amount of P150,000.00 from
the latter on April 13, 1992 and contends that it was used for necessary expenses of an
intended trip to the United States of Toledo and her friend, Florencio Rivera. Accused
alleged that she was not engaged in illegal recruitment but merely acted as a travel
agent in assisting individuals to secure passports and visa.

The RTC Bacoor, Cavite found accused-appellant guilty of the crime of simple
illegal recruitment but acquitted her of the crime of estafa on June 17, 1993. The Court
of Appeals affirmed the decision of the trial court in toto, hence this petition.

ISSUE:

Whether the accused-appellant is engaged in recruitment activities?

RATIO DECIDENDI:

No, the Court find no sufficient evidence to prove that accused-appellant offered
a job to private respondent. Article 13 (b) of the Labor Code provides the definition of
recruitment and placement. The claim of the accused that the P150,000.00 was for
payment of private respondents’ air fare and US visa, had the amount been for
something else in addition to said expenses, such as work placement abroad, the
receipt should have so stated. Thus, procuring a passport, airline tickets and foreign
visa for another individual, without more, can hardly qualify as recruitment activities.

In criminal cases, the burden is on the prosecution to prove, beyond reasonable

doubt, the essential elements of the offense with which the accused is charged. In the
present case, the evidence proffered by the prosecution only goes so far as to create a

104
suspicion but suspicion alone is insufficient, the required quantum of evidence being
proof beyond reasonable doubt.

FALLO:

WHEREFORE, the appeal is hereby GRANTED and the decision of the Court of
Appeals in CA-G.R. CR No. 15624 dated January 31, 1996, is REVERSED and SET
ASIDE. Accused-appellant Imelda Darvin is hereby ACQUITTED on ground of
reasonable doubt. Accordingly, let the accused be immediately released from her place
of confinement unless there is reason to detain her further for any other legal or valid
cause. No pronouncement as to costs.

Article 13 (b) of the Labor Code provides the definition of recruitment and
placement as: b) any act of canvassing, enlisting, contracting, transporting, utilizing,
hiring, or procuring workers, and includes referrals, contract services, promising or
advertising for employment. locally or abroad, whether for profit or not: Provided , that
any person or entity which, in any manner, offers or promises for a fee employment to
two or more persons shall be deemed engaged in recruitment and placement.

On the other hand, Article 38 of the Labor Code provides: a) Any recruitment
activities, including the prohibited practices enumerated under Article 34 of this Code,
to be undertaken by non-licensees or non-holders of authority shall be deemed illegal
and punishable under Article 39 of this Code. The Ministry of Labor and Employment or
any law enforcement officer may initiate complaints under this Article.

105
EDGARDO M. PANGANIBAN VS. TARA TRADING SHIPMANAGEMENT INC. AND
SHINLINE SDN BHD
G.R. NO. 187032: OCTOBER 18, 2010
MENDOZA, J.:

FACTS:

This is a petition for review under Rule 45 of the Rules of Court challenging the
Decision of the Court of Appeals (CA) in reversing the decisions of the National Labor
Relations Commission (NLRC) which affirmed the decision of the Labor Arbiter (LA)
favoring the petitioner.

In November 2005, petitioner was hired by respondent Tara Trading

Shipmanagement, Inc. (Tara), in behalf of its foreign principal, respondent Shinline SDN
BHD (Shinline) to work as an Oiler on board MV "Thailine 5"6cra1aw with a monthly
salary of US$409.00.

Sometime in April 2006, petitioner began exhibiting signs of mental instability.

He was repatriated on May 24, 2006 for further medical evaluation and management.
Petitioner was referred by respondents to the Metropolitan Medical Center where he
was diagnosed to be suffering from "brief psychotic disorder." Despite his supposed
total and permanent disability and despite repeated demands for payment of disability
compensation, respondents allegedly failed and refused to comply with their contractual
obligations. Hence, petitioner filed a Complaint against respondents praying for the
payment of US$60,000.00 as total and permanent disability benefits, reimbursement of
medical and hospital expenses, moral and exemplary damages, and attorney’s fees
equivalent to 10% of total claims.

Respondents, on the other hand, maintained that petitioner requested for an

early repatriation and arrived at the point of hire on May 24, 2006; that while on board
the vessel, he confided to a co-worker, Henry Santos, that his eating and sleeping
disorders were due to some family problems; that Capt. Zhao, the master of the vessel,
even asked him if he wanted to see a doctor; that he initially declined; that on May 22,
2006, petitioner approached Capt. Zhao and requested for a vacation and early
repatriation; that the said request was granted; that upon arrival, petitioner was
subjected to a thorough psychiatric evaluation; and that after a series of check-ups, it
was concluded that his illness did not appear to be work-related. Respondents argued
that petitioner was not entitled to full and permanent disability benefits under the
Philippine Overseas Employment Administration Standard Employment Contract (POEA
SEC) because there was no declaration from the company-designated physician that he
was permanently and totally disabled and that the claim for damages was without basis
as no bad faith can be attributed to them.

106
 On September 17, 2007, the LA ruled in favor of the petitioner and held that it is
not therefore right to bluntly claim that the same is not work-related because it is also
possible that the illness may be caused by or aggravated by his employment. There is
therefore the risk that seamen, not only complainant, are prone to contract brief
psychotic disorder since they are most of the time at sea and away from their loved
ones. As early as 27 June 2006, respondents designated physicians have declared that
complainants condition does not appear to be work-related. With this declaration,
respondents are bound to deny complainants claim for disability benefits. LA ordered to
pay complainant Edgardo M. Panganiban his total and permanent disability benefit in
the amount of US$60,000.00 plus US$6,000.00 attorney’s fees, in Philippine Currency,
at the prevailing rate of exchange at the time of payment.

Respondents appealed to the NLRC. On March 25, 2008, the NLRC affirmed the
decision of the LA and dismissed the appeal for lack of merit. Aggrieved, respondents
filed a Petition for Certiorari with prayer for the issuance of a writ of preliminary
injunction and/or temporary restraining order with the Court of Appeals (CA).

On October 29, 2008, the CA reversed the decision of the NLRC as the findings
of both the Labor Arbiter and the NLRC (Sixth Division) are not anchored on substantial
evidence. Private respondent is neither entitled to a total and permanent disability of
US$60,000.00 nor to attorney’s fees of US$6,000.00. Petitioners did not act with gross
or evident bad faith in denying the claim of private respondent. Thus, We find that the
NLRC (Sixth Division) acted with grave abuse of discretion in dismissing petitioners
appeal, affirming the Decision of Labor Arbiter Cellan, and denying petitioners Motion
for Reconsideration. While it is true that labor contracts are impressed with public
interest and the provisions of the POEA Standard Employment Contract must be
construed fairly, reasonably and liberally in favor of Filipino seamen in the pursuit of
their employment on board ocean-going vessels, we should always be mindful that
justice is in every case for the deserving, to be dispensed with in the light of established
facts, the applicable law, and existing jurisprudence. However, solely for humanitarian
considerations, petitioners are hereby ORDERED to grant private respondent the
amount of Php50,000.00 by way of financial assistance, and to continue, at their
expense, the medical treatment of private respondent until the final evaluation or
assessment could be made, with regard to private respondent’s medical condition.

Petitioners Motion for Reconsideration was denied by the CA in its Resolution

dated March 4, 2009, hence, filed this petition with the Supreme Court.

ISSUE:

Whether or not, the Court of Appeals gravely abused its discretion and
committed serious error in ruling in reversing the Decision of the LA and NLRC that
petitioner has a rightful claim for the payment of US$60,000.00 as total and permanent

107
disability benefits, reimbursement of medical and hospital expenses, moral and
exemplary damages, and attorney’s fees equivalent to 10% of total claims.

RATIO DECIDENDI:

The Court denies the petition.

It need not be overemphasized that in the absence of substantial evidence,

working conditions cannot be accepted to have caused or at least increased the risk of
contracting the disease, in this case, brief psychotic disorder. Substantial evidence is
more than a mere scintilla. The evidence must be real and substantial, and not merely
apparent; for the duty to prove work-causation or work-aggravation imposed by law is
real and not merely apparent. Even in case of death of a seafarer, the grant of benefits
in favor of the heirs of the deceased is not automatic. Petitioner points out that his
illness is work-related simply because had it been a land-based employment, petitioner
would have easily gone home and attended to the needs of his family. The fact is that
the petitioner failed to establish, by substantial evidence, that his brief psychotic
disorder was caused by the nature of his work as oiler of the company-owned vessel. In
fact, he failed to elaborate on the nature of his job or to specify his functions as oiler of
respondent company. The Court, therefore, has difficulty in finding any link between his
position as oiler and his illness. The Court cannot give less importance either to the fact
that petitioner was a seaman for 10 years serving 10 to 18-month contracts and never
did he have any problems with his earlier contracts.28cra1aw The Court can only
surmise that the brief psychotic disorder suffered by him was brought about by a family
problem. His daughter was sick and, as a seafarer, he could not just decide to go home
and be with his family. Even the psychiatric report prepared by the evaluating private
psychiatrist of petitioner shows that the hospitalization of petitioner’s youngest
daughter caused him poor sleep and appetite. Later, he started hearing voices and
developed fearfulness.

In this case, the findings of respondents designated physician that petitioner has
been suffering from brief psychotic disorder and that it is not work-related must be
respected. The Court commiserates with the petitioner, but absent substantial evidence
from which reasonable basis for the grant of benefits prayed for can be drawn, the
Court is left with no choice but to deny his petition, lest an injustice be caused to the
employer. Otherwise stated, while it is true that labor contracts are impressed with
public interest and the provisions of the POEA SEC must be construed logically and
liberally in favor of Filipino seamen in the pursuit of their employment on board ocean-
going vessels, still the rule is that justice is in every case for the deserving, to be
dispensed with in the light of established facts, the applicable law, and existing
jurisprudence. Lastly, it appears premature at this time to consider petitioner’s disability
as permanent and total because the severity of his ailment has not been established
with finality to render him already incapable of performing the work of a seafarer. In

108
fact, the medical expert termed his condition as brief psychotic disorder. The Court also
takes note, as the CA correctly did, that petitioner did not finish his treatment with the
company-designated physician, hence, there is no final evaluation yet on petitioner.

All told, no reversible error was committed by the CA in rendering the assailed
Decision and issuing the questioned Resolution.

FALLO:

WHEREFORE, the October 29, 2008 Decision of the Court of Appeals and its
March 4, 2009 Resolution in CA-G.R. SP No. 104343, are AFFIRMED.

109
 PEOPLE OF THE PHILIPPINES VS. LAPIS ET. AL
G.R. NOS. 145734-35; OCTOBER 15,2002
PANGANIBAN, J.

FACTS:

On March 1998, accused’s Vicenta Medina Lapis, Angel Mateo, Aida De Leon and
Jean Am-amlaw, conspiring and confederating with each other unlawfully and
feloniously recruited private complainants Melchor F. Degsi and Perpetua Degsi for
employment as an office worker and as a cook or mechanic in Japan to which they
were required to pay the amount of P 158,600.00 as alleged placement and processing
fees. After paying such amount the accused failed to deploy the complainants despite
the lapse of several months.

That on March 24, 1998 Jane Am-amlao approached them and assured them
that she knew a legal recruiter who had the capacity to send them abroad. Jane
accompanied petitioners to Aida, as the person she was referring to whom can send
private petitioners abroad. Aida then introduced them to Angel Mateo, referring as their
contact for Japan bound workers. Mateo represented himself as having the capacity to
send people abroad and showed petitioner various documents to convince them of his
legitimate recruitment operations. Convinced that Mateo had the capacity to facilitate
their employment in Japan, they handed Mateo the required processing fees. Later on,
they met Vicenta Lapis who volunteered her assistance in the processing of their
employment papers and assured that Mateo could easily send them abroad. After such,
a series of collection of money was extracted from petitioners as necessary expenses
for the job but respondents failed to deploy them to the promised job. Hence private
petitioner filed a case of estafa and illegal recruitment committed by a syndicate against
the respondents.

Respondents alleged that they did not commit syndicated illegal recruitment as
the prosecution failed to prove beyond reasonable doubt that they had conspired and
confederated in illegally recruiting private petitioners. Respondents also argue that in
order for estafa to prosper there must be an element of deceit, consisting of fraudulent
representations or false statements of the accused and that it be made prior or
simultaneous with the delivery of the thing, and that such misrepresentations is what
induced petitioners to part with their money. That the prosecution failed to prove that
the misrepresentations or false statements were made prior to or at least simultaneous
with the delivery of money.

ISSUE:

Whether or not respondents are liable for syndicated illegal recruitment and
estafa.

110
RATIO DECIDENDI:

Yes, respondents are liable for syndicated illegal recruitment and estafa.

Illegal recruitment is committed when an offender who has no valid license or

authority required by law to enable them to lawfully engage in the recruitment and
placement of workers, undertake any activity within the meaning of recruitment and
placement defined in Article 13(b) or any prohibited practices enumerated in Article 34
of the Labor Code. Article 13(b) provides that recruitment and placement refers to any
act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring
workers, and includes referrals, contract services, promising or advertising for
employment locally or abroad, whether for profit or not. It is committed by persons
who, without authority from the government, give the impression that they have the
power to send workers abroad for employment purposes.

Syndicated illegal recruitment is committed if it is carried out by a group of three

or more persons conspiring or confederating with each other in carrying out any
unlawful activity under Article 38(b) of the Labor Code.

It is shown that respondents do not have a license to recruit for employment

abroad and that the respondents engage in recruitment and placement by promising
private petitioners for an employment in Japan and that they received money in
consideration of such. To which illegal recruitment is established to be committed by
respondents. In addition, evidence shows that all respondents participated in the illegal
recruitment in a network of deception. The interaction of respondents among
themselves show unity of action towards illegally recruiting the petitioners.
Hence, syndicated illegal recruitment is deemed committed by the respondents.

Respondents are also liable for the commission of estafa. Estafa is commited by
any person who defrauds another by using a fictitious name; or by falsely pretending to
possess power, influence, qualifications, property, credit agency, business; by imaginary
transactions or similar forms of deceit executed prior to or simultaneous with the fraud.
Petitioner’s delivery of money was made after the promise made by respondents that
for an employment in Japan. This misrepresentation is what convinced petitioner to part
with their money.

FALLO/ WHEREFORE CLAUSE:

Wherefore, respondents are liable for the commission of syndicated illegal

recruitment ad estafa.

111
 PEOPLE VS. LOGAN
G.R. NOS. 135030-33, JULY 20, 2001
DE LEON, JR., J.:

FACTS:

This is an appeal regarding the joint decision of the Regional Trial Court of
Quezon City in Criminal Cases Nos. Q-96-66231 to Q-96-66234 convicting the accused-
appellant, Mercy Logan y Calderon of the crimes of estafa and large scale illegal
recruitment. The said accused-appellant during the period January to August 1994 in
Quezon City willfully, unlawfully and feloniously defrauded Rodrigo Acorda by means of
false manifestation and fraudulent representations that she had the power and capacity
to recruit and employ factory and construction worker for Japan and could facilitate the
processing of the pertinent papers if given the necessary amount to meet the
requirements thereof. Later on, Rodrigo discovered that the appellant was not duly
licensed to recruit applicants for overseas employment.

On the other hand, the information charging Logan with the crime of illegal
recruitment in large scale, under Article 38(b) in relation to Article 39(a) of the Labor
Code of the Philippines stated that during the period the year 1993 to August 199 in
Quezon City, without securing the required license or authority from the Department of
Labor and Employment, for a fee, enlisted recruited and promised job placement
abroad to 3 persons namely Rodrigo Acorda, Orlando Velasco & Florante Casia.

Upon being arraigned on October 1, 1996, the appellant, entered separate pleas
of not guilty to each of the informations in the instant criminal cases denying that she
swindled the private complainants of their money nor promised them any overseas
employment. Thereafter, joint trial on the merits ensued. On February 10, 1998, the
trial court rendered a decision finding Mercy Logan guilty beyond reasonable doubt in
all 4 cases (3 for Estafa and 1 for Large- scale Illegal Recruitment).

ISSUES:

Whether or not guilty the appellant is guilty beyond reasonable doubt of the
crimes of estafa and illegal recruitment in large scale.

RATIO DECIDENDI:

Yes, the Court finds appellant guilty & ruled by enumerating the essential
elements of the crime of illegal recruitment in large scale which is punishable with life
imprisonment and a fine of One Hundred Thousand Pesos (P100,000.00) under Article
39(a) of the Labor Code, as amended, are as follows: 1) the accused engages in the
recruitment and placement of workers, as defined under Article 13(b) or in any
prohibited activities under Article 34 of the Labor Code; 2) the accused has not
complied with the guidelines issued by the Secretary of Labor and Employment,
particularly with respect to the securing of a license or an authority to recruit and
deploy workers, whether locally or overseas; and 3) the accused commits the same
against three (3) or more persons, individually or as a group.

It has been established that the 3 complainants met with the appellant in her
office to apply for overseas employment and on the said occasions promised them
employment in Japan for a fee. Despite the complainants’ continuous payment, she
failed to secure them overseas employment which according to the Court clearly shows
that the appellant was engaged in large scale recruitment and placement activities

112
which were illegal for the reason that she had no license nor authority from the
Secretary of Labor and Employment.

In addition, the Court find the acts of the appellant of deliberately

misrepresenting herself to the private complainants as having the necessary authority
or license to recruit applicants for overseas employment so that she could collect money
from them allegedly for processing fees and travel documents only to renege on her
promise to get them overseas employment and for failure to return the money she
collected from the private complainants, despite several demands, clearly amount to
estafa punishable under Article 315, paragraph 2(a), of the Revised Penal Code.

Thus, in the light of the foregoing, the appellant is guilty beyond reasonable
doubt of the crimes of three (3) counts of estafa and one count of illegal recruitment in
large scale.

FALLO:

WHEREFORE, Criminal Cases Nos. Q-96-66231 to Q-96-66234 is AFFIRMED.

Costs against accused-appellant.

SO ORDERED.

113
 PEOPLE OF THE PHILIPPINES VS. MELISSA CHUA
G.R. NO. 187052; 13 SEPTEMBER 2012
VILLARAMA, JR.

FACTS:

Within the period of 29 July 2002 up to 20 August 2002, accused personally met
the complainants individually and on separate dates where she represented herself to
have the capacity to contract, enlist and transport the complainants as Filipino Overseas
Workers, particularly Taiwan. She personally received various amounts as placement
fees in consideration for their overseas employment and personally issued receipts to
the complainants. Accused represented herself that she is an employee of Gate
International (Golden Gate) Office located in Paragon Tower, Ermita, Manila. She
also assured them that the earlier complainants would be able to pay their placement
fees then the earlier that they could leave. After the complainants completed payment
of their placement fees, they were made to sign a contract containing stipulations as to
salary and conditions of work. On several occasions thereafter, they returned to
appellant’s office to follow-up on their application. After several visits, however, they
noticed that all the properties of Golden Gate in its Paragon Tower Office were already
gone. Thus, the complainants filed a complaint for Illegal Recruitment and Estafa
against the accused. During trial, accused denied that she was the one who recruited
the complainants and that she is merely a cashier of Golden Gate.

ISSUE:

Whether or not the prosecution was able to sufficiently prove the crime of Illegal
Recruitment and Four (4) Estafa

RATIO DECIDENDE:

Yes, the accused cannot escape liability by conveniently limiting her participation
as a cashier of Golden Gate. Article 13(b) of the Labor Code and Section 6 of R.A. No.
8042 are unequivocal that illegal recruitment may or may not be for profit. It is
immaterial, therefore, whether appellant remitted the placement fees to the agency’s
treasurer or appropriated them. The same provision likewise provides that the persons
criminally liable for illegal recruitment are the principals, accomplices and accessories.
Just the same, therefore, appellant can be held liable as a principal by direct
participation since she personally undertook the recruitment of private complainants
without a license or authority to do so.

It is well-established in jurisprudence that a person may be charged and

convicted for both illegal recruitment and estafa. The reason therefor is not hard to
discern: illegal recruitment is malum prohibitum, while estafa is mala in se. In the first,
the criminal intent of the accused is not necessary for conviction. In the second,
such intent is imperative. Estafa under Article 315, paragraph 2(a) of the Revised Penal
Code is committed by any person who defrauds another by using fictitious name, or
114
falsely pretends to possess power, influence, qualifications, property, credit, agency,
business or imaginary transactions, or by means of similar deceits executed prior to or
simultaneously with the commission of fraud.

However, the Supreme Court held that the prosecution failed to establish the
presence of the third and fourth elements of estafa as to the case of private
complainant Ursulum. While Ursulum claims that he delivered to the accused
some amounts, he failed to produce receipts to substantiate the same. Instead,
Ursulum relies only on ten text messages allegedly sent by the accused as evidence of
their transaction. Said text messages alone does not constitute proof beyond
reasonable doubt that appellant was able to obtain an amount from Ursulum as a result
of her false pretenses.

Unlike in illegal recruitment where profit is immaterial, a conviction

for estafa requires a clear showing that the offended party parted with his money or
property upon the offender’s false pretenses, and suffered damage thereby. In every
criminal prosecution, the State must prove beyond reasonable doubt all the elements of
the crime charged and the complicity or participation of the accused.32 It is imperative,
therefore, that damage as an element of estafa under Article 315, paragraph 2(a) be
proved as conclusively as the offense itself. The failure of the prosecution to discharge
this burden concerning the estafa allegedlycommitted against Ursulum warrants the
acquittal of appellant on the said charge.

FALLO:

WHEREFORE, the Court AFFIRMS the appealed decision in toto, with costs
against appellant.

SO ORDERED.

115
 PEOPLE VS MERIS
G.R. NOS. 117145-50 & 117447 MARCH 28, 2000
KAPUNAN, J.:

FACTS:

Leonida Meris was convicted of six counts of estafa and one count of illegal
recruitment for defrauding the six complainants, Meris town mates in Pampanga and
relatives in large scale in the amount of P30,000.00 each for five complainants and one
complainant for P30,000.00 for alleged overseas employnment which did not
materialize.

Evidence for the prosecution, however, disclosed, that complainants would have
not known Julie Micua were if not for appellant who even accompanied them to Manila
to see Julie Micua. It was appellant and her husband who received almost all the
payments of complainants and who issued receipts signed by Julie Micua. Certification
from the POEA showed that Meris and Julie Micua were not licensed to recruit for
overseas employment.

ISSUE:

Whether or not Meris the crime large-scale illegal recruitment and estafa.

RATIO DECIDENDE:

The prosecution undoubtedly proved that Meris, without license or authority,

engaged in recruitment and placement activities. This was done in collaboration Julie
Micua, when they promised complainant employment in Hong Kong. Art. 13 (b) of the
Labor Code defines recruitment and placement as “any act of canvassing enlisting,
contracting, transforming, utilizing, hiring or procuring workers, and includes referrals,
contract services, promising or advertising for employment locally or abroad whether
for profit or not; Provided that any person or entity which in any manner, offers or
promise foe fee employment to two or more persons shall be deemed engage in
recruitment and placement.

Although Meris was not an employee of the alleged illegal recruiter Julie Micua,
the evidence show that she was the one who approach the complainants and prodded
them to seek employment abroad. It was through her that they met Julie Micua. This is
clearly and act of referral. Worse, accuse appellant declared that she was capable of
placing them in job overseas. Suffice it to say that complainant’s recruitment would not
have been consummated were it not for the direct participation of accused appellant in
recruitment process.

FALLO:

WHEREFORE, the decision in question is hereby AFFIRMED subject to the

modification that in each of the six (6) estafa cases, the indeterminate sentence that
appellant Leonida Meris y Padilla must serve is two (2) year and four (4) months
of prision correccional as minimum to six (6) year and one (1) day of prision
mayor maximum. Costs against appellant.

SO ORDERED.

116
117
 DOUGLAS MILLARES AND ROGELIO LAGDA, PETITIONERS
VS NLRC, TRANS-GLOBAL MARITIME AGENCY, INC., AND ESSO
INTERNATIONAL SHIPPING CO., LTD., RESPONDENTS
G.R. NO. 110524, JULY 29, 2002
KAPUNAN, J.

FACTS:

On March 14, 2000, the court promulgated its decision ruling in favor of the
petitioners setting aside and reversing the decision of NLRC over the case of the case
between parties.

A motion for reconsideration was filed by the private respondents to which

petitioners filed an opposition.

Court resolve to deny the motion for reconsideration with finality. Subsequently,
FAME filed a motion for leave to intervene and to admit a motion for reconsideration in
intervention. Private respondents also filed a motion for leave to file a second motion
for reconsideration of our decision.

In both petitions of respondent and FAME pray to reconsider the court's ruling
that "Filipino seafarers are considered regular employees within the context of Article
280 of the Labor Code." They claim that the decision may establish a precedent that will
adversely affect the maritime industry.

Millares was employed by ESSO through its local manning agency, Trans-global
on November 1968 as a machinist, in 1975 he was promoted as chief engineer until he
retired in 1989.

On June 1989, Millares applied for leave of absence for one month which was
approved by trans-global. Then Millares wrote to the operations manager informing him
of his intention to avail the optional retirement considering that he rendered more than
20 years of service to the company. But ESSO denied the retirement for the following
grounds: (1) he was employed on a contractual basis (2) his contract of enlistment did
not provide for retirement before age of 60 and (3) he did not comply with requirement
for claiming benefits under CEIP.

On August 1989, Millares requested for an extension of his leave of absence and
the crewing manager then wrote to Millares advising him that respondent ESSO “has
corrected the deficiency in its manpower requirement specifically in the Chief Engineer
rank by promoting a First Assistant Engineer to this position as a result of (his) previous
leave of absence which expired last August 8, 1989. The adjustment in said rank was
required in order to meet manpower schedules as a result of (his) inability."

On September 26, 1989, ESSO advised MIllares that in view of his absence
without leave, which is equivalent to abandonment of his position, he had been
dropped from the roster of crew members effective September 1, 1989.

On the other hand, Lagda was employed by ESSO as wiper in June 1969,
promoted as Chief engineer in 1980 until his last COE expired on April 10, 1989. On
May 1989, Lagda applied for a leave of absence which was approved by Trans-global
and advised him to report for re-assignment on July 21, 1989.

118
 On June 26, 1989 Lagda wrote to ESSO through Trans-global president informing
him of his intention to avail of the optional retirement plan in view of his 20 years of
service. It was denied by Trans-global on the same grounds as with Millares. He
requested to extend his leave of absence and was approved but later informed by ESSO
that in view of his "unavailability for contractual sea service" he had been dropped from
the roster of crew members effective September 1, 1989.

On October 5, 1989, Millares and Lagda filed a complaint-affidavit before POEA

for illegal dismissal and non-payment of employee benefits against ESSO and Trans-
global. POEA dismissed the complaint for lack of merit, which was affirmed by NLRC. So
petitioners elevated their case to this court and obtained favorable action.

ISSUES:

(1) Are the petitioners regular or contractual employees?

(2) Assuming that they are regular employees, were they dismissed without just cause
so as to be entitled to reinstatement and back wages, including payment of 100% of
their total CEIP?
(3) Does provision of POEA standard contract for sea farers on board foreign vessels
preclude the attainment by seamen of the status of regular employees?

RULING:

It is clear that seafarers are considered contractual employees. They cannot be

considered as regular employees under Article 280 of the Labor Code. Their
employment is governed by the contracts they sign every time they are rehired and
their employment is terminated when the contract expires. Their employment is
contractually fixed for a certain period of time. They fall under the exception of Article
280 whose employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of engagement of
the employee or where the work or services to be performed is seasonal in nature and
the employment is for the duration of the season.

While it may be true that petitioners should be considered regular employees

since they have rendered services which are usually necessary and desirable to the
business of their employer, and that they have rendered more than twenty (20) years
of service , the case of Brent School Inc vs Zamora has, however, held that there are
certain forms of employment which also require the performance of usual and desirable
functions and which exceed one year but do not necessarily attain regular employment
status under Article 280. Overseas workers including seafarers fall under this type of
employment which is governed by the mutual agreements of the parties.

Filipino seamen are governed by the Rules and Regulations of the POEA. The
Standard Employment Contract governing the employment of All Filipino seamen on
Board Ocean-Going Vessels of the POEA, particularly in Part I, Sec. C specifically
provides that the contract of seamen shall be for a fixed period and in no case should
the contract of seamen be longer than 12 months. Moreover, it is an accepted maritime
industry practice that employment of seafarers is for a fixed period only.

From all the foregoing, we hereby state that petitioners are not considered
regular or permanent employees under Article 280 of the Labor Code. Petitioners
employment have automatically ceased upon the expiration of their contracts of
enlistment (COE). Since there was no dismissal to speak of, it follows that petitioners
are not entitled to reinstatement or payment of separation pay or back wages, as

119
provided by law but with respect to the benefits under the Consecutive Enlistment
Incentive Plan (CEIP), we hold that the petitioners are still entitled to receive 100% of
the total amount credited to him under the CEIP. Considering that we have declared
that petitioners are contractual employees, their compensation and benefits are covered
by the contracts they signed and the CEIP is part and parcel of the contract.

The CEIP provides that an employee becomes covered under the Plan when he
completes thirty-six (36) months or an equivalent of three (3) years of credited service
with respect to employment after June 30, 1973.

Anent the letters dated June 21, 1989 (for Millares) and June 26, 1989 (for
Lagda) which private respondent considered as belated written notices of termination,
we find such assertion specious. Notwithstanding, we could conveniently consider the
petitioners eligible under Section III-B of the CEIP (Voluntary Termination), but this
would, however, award them only a measly amount of benefits which to our mind, the
petitioners do not rightfully deserve under the facts and circumstances of the case.
Since petitioners’ termination of employment under the CEIP do not fall under Section
III-A (Retirement, Death and Disability) or Section III-B (Voluntary Termination), nor
could they be considered under the second paragraph of Section III-C, as earlier
discussed; it follows that their termination falls under the first paragraph of Section III-
C for which they are entitled to 100% of the total amount credited to their accounts.
The private respondents cannot now renege on their commitment under the CEIP to
reward deserving and loyal employees as the petitioners in this case.

FALLO/ WHEREFORE CLAUSE:

IN VIEW OF THE FOREGOING, THE COURT Resolved to Partially

GRANT Private Respondents Second Motion for Reconsideration and Intervenor FAMES
Motion for Reconsideration in Intervention. The Decision of the National Labor Relations
Commission dated June 1, 1993 is hereby REINSTATED with MODIFICATION. The
Private Respondents, Trans-Global Maritime Agency, Inc. and ESSO International
Shipping Co.,Ltd. are hereby jointly and severally ORDERED to pay petitioners One
Hundred Percent (100%) of their total credited contributions as provided under the
Consecutive Enlistment Incentive Plan(CEIP).

SO ORDERED.

120
 MARCIAL GU-MIRO VS. ROLANDO C. ADORABLE
G.R. NO. 160952, AUGUST 20, 2004
YNARES-SANTIGAO, J.

FACTS:

Petitioner services as radio officer on board respondent’s different vessels were

terminated due to the installation of labor saving devices which made his services
redundant. Peitioner argued that asidefrom the incentive bonus and additional
allowances that he is entitled, he should be considered a regular employee of
respondent company, having been employed on board the latter’s different
vessels for the span of 10 years and thus , entitled to back wages and
separation pay.

ISSUE:

Whether or not seafarers are considered regular employees.

RATIO DECIDENDI:

No. Petitioner caannot be considered as regular employee notwithstanding

that the work he performs is necessary and desirable in the business of the
respondent company. The exigencies of thework of seafarers necessitates that they
be employed on contractual basis. Thus, even with the continued re-hiring by
respondent company of petitioner to serve as radio officer onboard the former’s
different vessels, this should be interpreted not as a basis for regularization but
rather a series of contract renewals.

With respect to the claim for backwages and separation pay, it is now well-
settled that the award of backwages and separation pay in lieu of reinstatement are
reliefs that are awarded to an employee who is unjustly dismissed.In the instant case,
petitioner was separated from his employment due to the termination of an impliedly
renewed contract with respondent company. Hence, there is no illegal or unjust
dismissal.

FALLO:

WHEREFORE, premises considered, the petition is GRANTED IN PART. The

Decision of the Court of Appeals in CA-G.R. SP No. 66131 dated May 29, 2003
is MODIFIED in that the award of incentive bonus is increased from US$1189.12 to
US$1,486.40. Petitioner’s claim that he be declared a regular employee and awarded
backwages and separation pay is DENIED for lack of merit.

121
 ROBERTO RAVAGO, PETITIONER, VS. ESSO EASTERN MARINE, LTD. AND
TRANS-GLOBAL MARITIME AGENCY, INC., RESPONDENTS.
G.R. NO. 158324. MARCH 14, 2005
CALLEJO, SR., J.:
FACTS:

Petitioner Roberto Ravago was hired by Trans-Global to work as a seaman on

board various Esso vessels. On February 13, 1970, Ravago commenced his duty as S/N
wiper on board the Esso Bataan under a contract that lasted until February 10, 1971.
Thereafter, he was assigned to work in different Esso vessels where he was designated
diverse tasks, such as oiler, then assistant engineer. He was employed under a total of
34 separate and unconnected contracts, each for a fixed period, by three different
companies, namely, Esso Tankers, Inc. (ETI), EEM and Esso International Shipping
(Bahamas) Co., Ltd. (EIS), Singapore Branch. Ravago worked with Esso vessels until
August 22, 1992, a period spanning more than 22 years.

After completing his latest contract with EIS, Ravago was granted a vacation
leave with pay. Preparatory to his embarkation under a new contract, he was ordered
to reportfor a Medical Pre-Employment Examination. He passed the medical
examination conducted by the O.P. Jacinto Medical Clinic, Inc.. He, likewise, attended a
Pre-Departure Orientation Seminar conducted by the Capt. I.P. Estaniel Training Center,
a division of Trans-Global.

On the night of October 12, 1992, a stray bullet hit Ravago on the left leg while
he was waiting for a bus ride in Cubao, Quezon City. He fractured his left proximal tibia
and was hospitalized at the Philippine Orthopedic Hospital. Ravagos wife, Lolita,
informed Trans-Global and EIS of the incident on October 13, 1992 for purposes of
availing medical benefits. As a result of his injury, Ravagos doctor opined that he would
not be able to cope with the job of a seaman and suggested that he be given a desk
job. Ravagos left leg had become apparently shorter, making him walk with a limp. For
this reason, the company physician, Dr. Virginia G. Manzo, found him to have lost his
dexterity, making him unfit to work once again as a seaman.

Petitioner filed a complaint for illegal dismissal with prayer for reinstatement,
backwages, damages and attorney’s fees against Trans-Global and EIS with the
Philippine Overseas Employment Administration Adjudication Office.

Labor Arbiter Ramon Valentin C. Reyes ruled that Ravago was a regular
employee because he was engaged to perform activities which were usually necessary
or desirable in the usual trade or business of the employer.

The NLRC, likewise, declared that Ravago was illegally dismissed.

The CA reversed and set aside the assailed decision of NLRC.

ISSUE:

Whether or not petitioner was a regular employee.

RATIO DECIDENDI:

Seafarers are considered contractual employees. They cannot be considered as

regular employees under Article 280 of Labor Code. Their employment is governed by
122
the contracts they sign every time they are rehired and their employment is terminated
when the contract expires. Their employment is contractually fixed for a certain period
of time. They fall under the exception of Article 280 whose 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 where the nature of the
work or services to be performed is seasonal in nature and employment is for the
duration of the season.

The Court ruled that seamen and overseas contract workers are not covered by
the term "regular employment" as defined in Article 280 of the Labor Code.
Furthermore, petitioner’s contract did not provide for separation benefits. In this
connection, it is important to note that neither does the POEA standard employment
contract for Filipino seamen provide for such benefits. As a Filipino seaman, petitioner is
governed by the Rules and Regulations Governing Overseas Employment and the said
Rules do not provide for separation or termination pay.

FALLO:

IN LIGHT OF ALL THE FOREGOING, the petition is hereby DENIED. The

assailed Decision dated August 28, 2002 of the Court of Appeals is hereby AFFIRMED.
No pronouncement as to costs.

123
 OSM SHIPPING PHILIPPINES, INC. VS. NLRC AND FERMIN GUERRERO
G.R. NO. 138193 MARCH 5, 2003
PANGANIBAN, J

FACTS:

Fermin Guerrero was hired by OSM Shipping for and in behalf of its principal, Phil
Carrier Shipping Agency Service Co., to board its vessel MN (Princess) Hoa as a Master
Mariner for a contract period of 10 months. His basic monthly salary is US$1,070.00,
US$220.00 allowance; US$321.00 fixed overtime, US$89 vacation leave pay per month
for 44 hours of work per week. He boarded the vessel on July 21, 1994 and complied
faithfully with the duties assigned to him. However, he alleged that from the start of his
work with MN Princess Hoa, he was not paid any compensation as at all and was forced
to disembark the vessel sometime in January 1995 because he cannot even buy his
basic personal necessities. Hence, Guerrero filed this complaint for illegal dismissal with
NLRC.
OSM explained that the initial plan of Phil Carrier Shipping Agency was to use the
vessel in overseas trade, particularly the East Asian Growth Area. Hence, Guerrero's
contract was processed to work as overseas and was approved by POEA. However,
instead of using it for overseas trade, Phil Carrier Shipping Agency decided to use it in
the coastwise trade, thus, the crew member hired never left the Philippines. Thus, it
was converted it into Philippine registry. Phil Carrier allegedly terminated its crew
agreement with OSM Shipping, hence, it is only Phil Carrier Shipping Agency that is now
responsible for the payment of Guerrero's wages.
NLRC favored Guerrero and ordered OSM and Phil Shipping Agency to jointly and
severally paid Guerrero. Hence, this case.

ISSUE:

Whether or not Fermin Guerrero should get the wages he is claiming despite the
changes with the use of the vessels and with the management.

RATIO DECIDENDI:

Yes.

As approved by the Philippine Overseas Employment Agency (POEA), petitioner

was the legitimate manning agent of PC-SASCO. As such, it was allowed to select,
recruit, hire and deploy seamen on board the vessel M/V Princess Hoa, which was
managed by its principal, PC-SASCO. It was in this capacity that petitioner hired private
respondent as master mariner. They then executed and agreed upon an employment
contract.

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 An employment contract, like any other contract, is perfected at the moment (1)
the parties come to agree upon its terms; and (2) concur in the essential elements
thereof: (a) consent of the contracting parties, (b) object certain which is the subject
matter of the contract and (c) cause of the obligation. Based on the perfected contract,
Private Respondent Guerrero complied with his obligations thereunder and rendered his
services on board the vessel. Contrary to petitioner's contention, the contract had an
object, which was the rendition of service by private respondent on board the vessel.
The non-deployment of the ship overseas did not affect the validity of the perfected
employment contract. After all, the decision to use the vessel for coastwise shipping
was made by petitioner only and did not bear the written conformity of private
respondent. A contract cannot be novated by the will of only one party. The claim of
petitioner that it processed the contract of private respondent with the POEA only after
he had started working is also without merit. Petitioner cannot use its own misfeasance
to defeat his claim.

Petitioner, as manning agent, is jointly and severally liable with its principal, PC-
SASCO, for private respondent's claim. This conclusion is in accordance with Section 1
of Rule II of the POEA Rules and Regulations. Joint and solidary liability is meant to
assure aggrieved workers of immediate and sufficient payment of what is due them.
The fact that petitioner and its principal have already terminated their agency
agreement does not relieve the former of its liability. The reason for this ruling was
given by this Court in Catan v. National Labor Relations Commission, which we
reproduce in part as follows:

"This must be so, because the obligations covenanted in the [manning]

agreement between the local agent and its foreign principal are not coterminus with the
term of such agreement so that if either or both of the parties decide to end the
agreement, the responsibilities of such parties towards the contracted employees under
the agreement do not at all end, but the same extends up to and until the expiration of
the employment contracts of the employees recruited and employed pursuant to the
said recruitment agreement. Otherwise, this will render nugatory the very purpose for
which the law governing the employment of workers for foreign jobs abroad was
enacted."

Unilateral decisions to alter the use of a vessel from overseas service to

coastwise shipping will not affect the validity of an existing employment contract validly
executed. Workers should not be prejudiced by actions done solely by employers
without the former's consent or participation.

FALLO:

125
 WHEREFORE, the assailed Resolutions are hereby SET ASIDE, and the
September 10, 1998 NLRC Decision REINSTATED and AFFIRMED. Costs against
petitioner.

126
 TRANS ACTION OVERSEAS CORPORATION, PETITIONER, VS. THE
HONORABLE SECRETARY OF LABOR RESPONDENTS.
[ G.R. No. 109583, September 5, 1997]
ROMERO, J.:

FACTS:
A group of individuals sought employment as domestic helpers and paid
placement fee ranging form P1,000.00 to P14,000.00 but Trans Action Overseas
Corporation failed to deploy them. Their demands for refund proved unavailing, thus
they were constrained to institute complaints against petitioner for violation Art. 32 and
34 (a) of the Labor Code, as amended.
Petitioner denied having received the amounts allegedly collected from
respondents and averred that the company’s employee whose only duty was to pre-
screen and interview applicants. Petitioner maintains that it even warned respondents
not to give any money to unauthorized individuals.
ISSUES:
Whether or not the Secretary of Labor and Employment has jurisdiction to cancel
or revoke the license of a private free-charging employment agency.
RATIO DECIDENDI:
Yes, the power to suspend or cancel any license or authority to recruit
employees for overseas employment is vested upon the secretary of Labor and
Employment under Art. 35 of the Labor Code as amended. This is in connection in the
case of Eastern Assurance and Surety Corp. v. Secretary of Labor. The Secretary of
Labor has also the authority conferred by Section 36, not only to restrict and regulate
the recruitment and placement of activities of all agencies, but also to promulgate rules
and regulations to carry out the objectives and implement provisions governing said
activities.
In view of the Court's disposition on the matter, we rule that the power to
suspend or cancel any license or authority to recruit employees for overseas
employment is concurrently vested with the POEA and the Secretary of Labor.
FALLO:
WHEREFORE, in view of the foregoing, the instant petition is hereby DISMISSED.
Accordingly, the decision of the Secretary of Labor dated April 5, 1991, is AFFIRMED.
No costs.

127
 MANUELA S. CATAN/M.S. CATAN PLACEMENT AGENCY VS. THE NATIONAL
LABOR RELATIONS COMMISSION, PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION AND FRANCISCO D. REYES
G.R. NO. 77279, APRIL 15, 1988
CORTES, J.:

FACTS

Francisco D. Reyes was recruited by petitioner M.S. Catan Placement Agency to

work in Saudi Arabia as a Steelman.

The term of the contract was for one year and automatically renewable
thereafter if neither party notifies the other party of its termination. Thus, the contract
was automatically renewed when private respondent was not repatriated by his Saudi
employer but instead was assigned to work as a crusher plant operator.

On March 30, 1983, while he was working as a crusher plant operator, private
respondent's right ankle was crushed under the machine he was operating.

After the expiration of the renewed term, Reyes returned to the Philippines and
had his ankle operated for which he incurred expenses. He then returned to Saudi
Arabia to resume his work.

On May 15, 1984, he was repatriated. Upon his return, he had his ankle treated
for which he incurred further expenses.

ISSUE(s)

1. Whether or not the petitioner is liable to private respondent for disability

benefits since at the time he was injured, his original employment contract had already
expired.

2. Whether or not the NLRC gravely abused its discretion in awarding

reimbursement of medical expenses to private respondent despite the latter’s
negligence in returning to work when he knew that he was not yet medically fit to do
so.

RATIO DECIDENDI

1. The petitioner agency is liable to private respondent for disability benefits.

Private respondent’s contract of employment cannot be said to have expired on May 14,
1982 as it was automatically renewed since no notice of its termination was given by
either or both of the parties at least a month before its expiration, as so provided in the
contract itself. Therefore, private respondent's injury was sustained during the lifetime
of the contract.

2. Petitioner’s contention has no merit.

No evidence was introduced to prove that private respondent was not medically
fit to work when he returned to Saudi Arabia. Further, since petitioner even assisted
private respondent in returning to work in Saudi Arabia by purchasing his ticket for him
it is as if petitioner had certified his fitness to work.

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FALLO:

WHEREFORE, in view of the foregoing, the petition is DISMISSED for lack of

merit, with costs against petitioner.

129
 ROYAL CROWN INTERNATIONALE, PETITIONER VS. NATIONAL LABOR
RELATIONS COMMISSION AND VIRGILIO P. NACIONALES, RESPONDENTS
G.R. NO. 78085 OCTOBER 16, 1989
CORTES, J.:

FACTS:

In May 25, 1983, Royal Crown International, a duly licensed private employment
agency, recruited and deployed Virgilio P. Nacionales for employment with ZAMEL as an
architectural draftsman in Saudi Arabia. A service agreement was executed whereby Mr.
Nacionales was to receive per month a salary of US$500 plus US$100 as allowance for a
period of one (1) year commencing from the date of his arrival in Saudi Arabia. Mr.
Nacionales departed for Saudi Arabia on June 28, 1983.
On February 13, 1984, ZAMEL terminated the employment of private respondent
on the ground that his performance was below par. For three (3) successive days
thereafter, he was detained at his quarters and was not allowed to report to work until
his exit papers were ready. On February 16, 1984, he was made to board a plane
bound for Philippines.
On April 23, 1984, Private respondent filed a complaint for illegal termination
against petitioner and ZAMEL with POEA, docketed as POEA Case no. (L) 84-04-401.
Petitioner filed a motion for reconsideration but the NLRC denied it for lack of
merit. Hence, this petition for review.
ISSUES:
1. Whether or not petitioner as private employment agency may be held jointly
and severally liable with the foreign-based employer for any claim which may
arise in connection with the implementation of the employment contracts of
the employees recruited and deployed abroad?

2. Whether or not sufficient evidence was presented by petitioner to establish

the termination of private respondent’s employment to justified valid cause?

RATIO DECIDENDI:
1) Yes, Petitioner conveniently overlooks the fact that it had voluntarily
assumed solidary liability under the various contractual undertakings it
submitted to the Bureau of Employment Services. In applying for its license to
operate a private employment agency for overseas recruitment and
placement, petitioner was required to submit, among others, a document or
verified undertaking whereby it assumed all responsibilities for the proper use
of its license and the implementation of the contracts of employment with the
workers it recruited and deployed for overseas employment [Section 2(e),
Rule V, Book 1, Rules to Implement the Labor Code (1976)]. It was also
required to file with the Bureau a formal appointment or agency contract
executed by the foreign-based employer in its favor to recruit and hire
personnel for the former, which contained a provision empowering it to sue
and be sued jointly and solidarily with the foreign principal for any of the
violations of the recruitment agreement and the contracts of employment
[Section 10 (a) (2), Rule V, Book 1 of the Rules to Implement the Labor
Code].

In the case at bar, it cannot be denied that the petitioner is an agent of

130
 ZAMEL. The Service Agreement was executed in the Philippines between
private respondent and ZAMEL. Moreover, one of the documents presented
by the petitioner as evidence contains an admission that it is the
representative and agent of ZAMEL.
2) No, the NLRC upheld the POEA finding that the petitioner’s evidence was
insufficient to prove termination of employment for just cause and valid
cause. It must be borne in mind that the basic principle in termination cases
is that the burden of proof rests upon the employer to show that the
dismissal is for just and valid cause, and failure to do so would necessarily
mean that the dismissal was not justified and, therefore, was illegal. When
termination cases involve a Filipino worker recruited and deployed for
overseas employment, the burden naturally devolves upon both the foreign
based employer and the employment agency or recruitment entity which
recruited the worker, for the latter is not only the agent of the former, but is
also solidary liable with its foreign principal for any claims or liabilities arising
from the dismissal of the worker.
DISPOSITIVE PORTION:
The Court holds, therefore, that the NLRC committed no grave abuse of
discretion amounting to lack or excess of jurisdiction in upholding the POEA’s finding of
insufficiency of evidence to prove termination for just and valid cause.
WHEREFORE, the Court Resolved to DISMISS the instant petition.

131
 PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLEE,
VS.
REYDANTE CALONZO Y AMBROSIO, ACCUSED-APPELLANT.
G.R. NOS. 115150-55 SEPTEMBER 27, 1996
BELLOSILLO, J.:

REYDANTE CALONZO Y AMBROSIO was charged with Illegal Recruitment in

Large Scale and five (5) counts of Estafa by Bernardo Miranda, Danilo de los Reyes,
Elmer Clamor, Belarmino Torregrosa and Hazel de Paula. On 5 April 1994 the Regional
Trial Court of Pasig found the accused guilty as charged and sentenced.

Accused-appellant in this appeal assails his conviction by the trial court. He

claims that the court below erred in disregarding the testimony of Nenita Mercado, an
employee of the Philippine Overseas Employment Administration (POEA), who
categorically stated that their records indicated that Calonzo never processed
complainants' applications for employment abroad. He concludes from that fact alone
that he cannot be deemed to have engaged in the recruitment of workers for
employment abroad.

As regards the estafa cases, accused-appellant contends that the court a quo
erred in giving credence to the testimonies of prosecution witnesses considering that
the amounts claimed to have been collected by him did not correspond to the amounts
indicated in the receipts presented by the complaining witnesses.

FACTS:

Sometime in February 1992, Danilo de los Reyes and his brother-in-law

Belarmino Torregrosa met Reydante Calonzo in the house of Loreta Castañeda at No.
10 P. Burgos Street, Pasig, Metro Manila. In that meeting Calonzo lost no time in
informing them that he could provide them employment abroad, particularly Italy, for a
fee. Three other people were also convinced by Calonzo, made payments for the
processing fees and other miscellaneous expenses.

After a number of unfulfilled romises made by Calonzo to deploy them for work
abroad, they decided to make verification from POEA. They verified from the POEA
whether Calonzo or his R.A.C. Business Agency was duly authorized and licensed to
recruit people for employment abroad. The POEA certified that R.A.C. Business Agency
was not licensed to recruit workers for overseas employment.

Senior Labor Employment Office Nenita Mercado of the POEA confirmed that neither
Reydante Calonzo nor his R.A.C. Business Agency was authorized to recruit workers for
employment abroad.

Calonzo admits being engaged in the consultancy business through his R.A.C.
Business Agency but denies any involvement in recruitment activities. He admits

132
knowing Loreta Castañeda and Leticia Solis as the two have sought his assistance
regarding their real estate business. He denies knowing the complaining witnesses
except Danilo de los Reyes and Belarmino Torregrosa who once visited him in his office.
While he disclaims the receipts presented by the prosecution as official receipts of his
R.A.C. Business Agency he admits that the signatures thereon were similar to his.

ISSUE:

Whether or not Calonzo is guilty of Illegal Recruitment in Large Scale.

RATIO DECIDENDI:

Illegal recruitment in large scale is committed when a person "(a) undertakes

any recruitment activity defined under Article 13(b) or any prohibited practice
enumerated under Article 34 of the Labor Code; (b) does not have a license or authority
to lawfully engage in the recruitment and placement of workers; and (c) commits the
same against three Article 13, par. (b), of the Labor Code defines recruitment and
placement as —

Any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or

procuring workers, and includes referrals, contract services, promising or advertising for
employment, locally or abroad, whether for profit or not; Provided, that any person or
entity which, in any manner, offers or promises for a fee employment to two or more
persons shall be deemed engaged in recruitment and placement.

Illegal recruitment is specifically defined in Art. 38 of the Code thus —

(a) Any recruitment activities, including the prohibited practices enumerated under
Article 34 of this Code, to be undertaken by non-licensees or non-holders of authority
shall be deemed illegal and punishable under Article 39 of this Code . . .

(b) Illegal recruitment when committed by a syndicate or in large scale shall be

considered an offense involving economic sabotage and shall be penalized in
accordance with Article 39 hereof.

Illegal recruitment in large scale is committed when a person "(a) undertakes

any recruitment activity defined under Article 13(b) or any prohibited practice
enumerated under Article 34 of the Labor Code; (b) does not have a license or authority
to lawfully engage in the recruitment and placement of workers; and (c) commits the
same against three or more persons, individually or as a group."

FALLO:

WHEREFORE, the judgment of the court a quo finding acccused-appellant

REYDANTE CALONZO Y AMBROSIO guilty of Illegal Recruitment in Large Scale in Crim.
Case No. 98855 (G.R. No. 115155), and of Estafa in Crim. Case No. 98850 (G.R. No.

133
115150), Crim. Case No. 98851 (G.R. No. 115151), Crim. Case No. 98852 (G.R. No.
115152), Crim. Case No. 98853 (G.R. No. 115153) and Crim. Case No. 98854 (G.R. No.
115154) as well as the corresponding penalties imposed by the court a quo is
AFFIRMED, with costs against accused-appellant.

In the service of the various prison terms herein imposed upon accused-
appellant, the provisions of Art. 70 of the Revised Penal Code shall be observed.

134
 SALAZAR, PETITIONER VS HON. TOMAS ACHACOSO
G.R. NO. 81510., MARCH 14,1990
PONENTE JUSTICE SARMIENTO

FACTS:

On October 21,1987 a certain Rosalie Tesoro fled a complain at POEA

Against Hannalie dance studio owned by Horty Salazar,for non returning of her PECC
card.
Neeeded in Japan. On Nov 3,1987 the respondent issued a closure and seizure
order No.1205
Then on Jan 26,1988 POEA director on licensing and regulation implemented the
order.On Feb 2,1988 the petitioner filed for prohibition and certiorari in view of public
interest involve in the suit.

RATIO DECIDENDI:

The court ruled that the respondents orderis unconstitutional and null and void
because based on the judicial process only the judge can issue a search a warrant
which specifically specifies the place and item to be search. A protection given upon the
citizens enshrined in the 1987 Constitution.

FALLO:

Wherefore,the petition is granted art 38 paragraph c of the labor code is

declared unconstitutional and null and void.And the respondents are hereby ordered to
return all materials seized. No cost. So ordered.

135
 PEOPLE OF THE PHILIPPINES VS. SAMINA ANGELES Y CALMA
G.R. NO. 132376 DATE: APRIL 11,2002
PONENTE: YNARES-SANIAGO J.:

FACTS:
Maria Tolosa Sardena was working in Saudi Arabia when she received a call from her sister,
Priscilla Agoncillo, who was in Paris, France. Priscilla advised advised Maria to return to the Philippines
and await the arrival of her friend, accused-appellant Samina Angeles, who will assist in processing her
travel and employment documents to Paris, France.Heeding her sister’s advice, Maria
immediately returned to the Philippines. Marceliano Tolosa who at that time was in the
Philippines likewise received instructions from his sister Priscilla to meet the accused-
apellant Samina Angeles, who will assist in processing her travel and
employmentdocuments to Paris, France.
Maria and Marceliano eventually met accused-appellant. Duringtheir meeting,
accused-appellant asked if they had the money required for the processing of their
documents. Maria gave P107,000.00 to accused-appellant at Expert Travel
Agency.Subsequently, she gave another P46,000.00 and US$1,500.00 as additional
payments to accused-appellant. Marceliano, on the other hand, initially gave
P100,000.00 to accused-appellant and he gave an additional P46,000.00 and
US$1,500.00 at the United Coconut Planters Bank in Makati.
Analyn Olpindo met accusedappellant in Belgium. At that time,Analyn was
working in Canada but she went to Belgium to visither in-laws. After meeting accused-
appellant, Analyn Olpindo called up her sister, Precila Olpindo, in the Philippines and
told her to meet accused-appellant upon the latter’s arrival in thePhilippines because
accused-appellant can help process her documents for employment in Canada. Precila
Olpindo eventuallymet accused-appellant at the Expert Travel Agency. Accused-
appellant asked for the amount of $4,500.00, but Precila was onlyable to give
$2,500.00.
No evidence was adduced in relation to the complaint of Vilma Brina since she
did not testify in court.
Accused-appellant told Precila Olpindo and Vilma Brina that it was easier to
complete the processing of their papers if they start from Jakarta, Indonesia rather than
from Manila. Precila Olpindo, Vilma Brina and accused-appellant flew to Jakarta,
Indonesia. However, accused-appellant returned to the Philippines after two days,
leaving behind Precila and Vilma. They waited for accused-appellant in Jakarta but the
latter never returned. Precila and Vilma eventually came home to the Philippines. They
started looking for her but they could not reach her.
Elisa Campanianos of the Philippine Overseas Employment Agency presented a
certification to the effect that accused-appellant was not duly licensed to recruit
workers here and abroad.
In her defense, accused-appellant averred that she never represented to the
complainants that she can provide them with work abroad. She insisted that she was a
marketing consultant and an international trade fair organizer. She met Priscilla
Agoncillo inFrance and they became friends. Priscilla asked her to assist her siblings,
Maria and Marceliano, particularly in the processing of their travel documents for
France. Accused-appellant told Priscilla that she can only help in the processing of travel
documents and nothing more. It was Priscilla who promised employment to Maria and
Marceliano. She received money from complainants not in the form of placement fees
but tickets, hotel accommodations and other travel requirements. She has the same

136
defense for Analyn Olpindo whom she met in Belgium. After trial on the merits, the trial
court found accused-appellant guilty of illegal recruitment and four counts of estafa.
ISSUE:
Whether or not Angeles is guilty with four (4) counts of estafa and one (1)
count of illegal recruitment.
RATIO DECIDENDI:
Illegal recruitment is committed when two (2) elements concur, 1) that the
offender has no valid license or autority required by law to enabale one to lawfully
engage in recruitement and placement of workers, and 2) that the offender undertakes
either any activity within the meaning of recruitment and palcement defined under
Article 13(b) or any prohibited practices enumerated under Article 34.
Art 13(b) Recruitment and placement refers to any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring or procuring workers, and includes referrals,
contract services, promising or advertising for employment locally or abroad, whether
for profit or not: Provided that any person or entity which, in any manner, offers or
promises for a fee employment to two or more persons shall be deemed engaged in
recruitment and placement.
To prove illegal recruitment, it must be shown that acussed-appellant gave
complainants the distinct impression that he had the power or ability to send
complainants abroad for work such that the latter were convinced to part with their
money in order to be employed.
Plainly, there is not testimony that accused-appellant offered complainants jobs
abroad. Hence, accussed-appellant cannot be lawfully convicted of illegal recruitment.
2. Under Article 315, paragraph 2(a) of the Revised Penal Code, the elements of
estafa are: 1) the accused has defrauded another by abuse of confidence or by means
of deceit and 2) damnage or prejudice capable of pecuniary estimation is caused to the
offended party or third person. Clearly, these elements are present in these case.
Although Samina Angeles did not deceive complainants into believing that she
could find employment for them abroad, nonetheless, she made them believe that she
was processing their travel documents for France and Canada. They parted with their
money believing that Samina Angeles would use it to pay for their plane tickets, hotel
accommodations and other travel requirements. Upon receiving various amounts from
complainants, Samina used it for other purposes and then conveniently disappeared.
Complainants trusted Samina Angeles because she was referred to them by their own
relatives. She abused their confidence when she led them to believe that she can
process their travel documents abroad, thus including them to part with their money.
When they demanded from Samina their travel documents, she failed to produce them.
Likewise, she failed to return the amounts entrusted to her.
Clearly, Samina Angeles defrauded complainants by falsely pretending to possese
the power and capacity to process their travel documents.
FALLO:
WHEREFORE, in view of the foregoing, the appealed Decision is MODIFIED as
follows:
(1) In Criminal Case No. 94-140485, accused-appellant Samina Angeles is found
GUILTY beyond reasonable doubt of the crime of Estafa and sentenced to suffer a
prison term of four (4) years and two (2) months of prision correccional, as minimum,

137
to sixteen (16) years of reclusion temporal, as maximum, and is ORDERED to indemnify
Maria Sardeña the amount of P107,000.00.
(2) In Criminal Case No. 94-140486, accused-appellant Samina Angeles is found
GUILTY beyond reasonable doubt of the crime of Estafa and sentenced to suffer a
prison term of four (4) years and two (2) months of prision correccional, as minimum,
to twenty (20) years of reclusion temporal, as maximum, and is ORDEREDto indemnify
Marceliano Tolosa the amount of P190,000.00.
(3) In Criminal Case No. 94-140487, accused-appellant Samina Angeles is found
GUILTY beyond reasonable doubt of the crime of Estafa and sentenced to suffer a
prision term of four (4) years and two (2) months of prision correccional, as minimum,
to eleven (11) years of prision mayor, as maximum, and is ORDERED to indemnify
Precila Olpindo the amount of P61,200.00.
(4) In Criminal Case No. 94-140488 for Estafa, accused-appellant Samina
Angeles is ACQUITTED for failure of the prosecution to prove her guilt beyond
reasonable doubt.
(5) In Criminal Case No. 94-140489 for Illegal Recruitment, accused-appellant
Samina Angeles is ACQUITTED for failure of the prosecution to prove her guilt beyond
reasonable doubt.

138
 PEOPLE OF THE PHIL., PLAINTIFF-APPELLEE VS
LOMA GOCE, ET. AL., ACCUSED-APPELLANT
G.R. NO. 113161, AUGUST 29, 1995

FACTS:
On January 1988, an information for illegal recruitment committed by a syndicate
and in large scale, punishable under Articles 38 and 39 of the labor code as amended
by PD 2018, filed against Dan and Loma Goce and Nelly Agustin in the RTC of Manila,
alleging that in or about during the period comprised between May 1986 and June 25,
1987, both dates inclusive in the City of Manila, the accused conspired and represent
themselves to have the capacity to recruit Filipino workers for employment abroad.
January 1987, a warrant of arrest was issued against the 3 accused bot none of them
was arrested. Hence, on February 1989, the RTC ordered the case archived but issued
a standing warrant of arrest against the accused.
Thereafter, knowing the whereabouts of the accused, Rogelio Salado requested
for a copy of the warrant of arrest and eventually Nelly Agustin was apprehended by
the Paranaque Police. Agustin's counsel filed a motion to revive the case and requested
to set a hearing for purpose of due process and for accused to immediately have her
day in court. On the arraignment, Agustin pleaded not guilty and the trial went on with
four complainants testified for the prosecution and reciepts of the processing fees they
paid. Agustin for the defense asserted that Goce couple were licensed recruiters but
denied her participation in the recruitment and denied knowledge of the receipts as
well.
Denying any participation in the illegal recruitment and maintaining that the
recruitment was perpetrated only by the Goce couple, Agustin denied any knowledge of
the receipts presented by the prosecution. She insisted that the complainants included
her in the complaint thinking that this would compel her to reveal the whereabouts of
the Goce spouses. She failed to do so because in truth, so she claims, she does not
know the present address of the couple.
On November 1993, trial court rendered judgment finding that Agustin as a
principal in the crime of illegal recruitment in large scale with sentence of life
imprisonment and pay P100,000.00.
ISSUES:
Agustin appealed with the following arguments: (1) her act of introducing the
complainants to the couple does not fall within the meaning of illegal recruitment and
placement under Article 13 in relation to Article 34 of the labor code; (2) there is no
proof of conspiracy and (3) there is no proof that appellant offered/promised overseas
employment to the complainants.
RATIO DECIDENDI:

The testimonial evidence shows that Agustin indeed further committed acts
constitutive of illegal recruitment because, the complainants had a previous interview
with Agustin (as employee of the Goce couple) about fees and papers to submit that
may constitute as referral. Agustin collected the payments of the complainants as well
as their passports, training fees, medical tests and other expenses. On the issue of

139
proof, the court held that the receipts exhibited by the claimants are clear enough to
prove the payments and transaction made.

At the outset, it should be made clear that all the accused in this case were not
authorized to engage in any recruitment activity, as evidenced by a certification issued
by Cecilia E. Curso, Chief of the Licensing and Regulation Office of the Philippine
Overseas Employment Administration, on November 10, 1987. Said certification states
that Dan and Loma Goce and Nelly Agustin are neither licensed nor authorized to
recruit workers for overseasemployment. Appellant does not dispute this. As a matter
of fact her counsel agreed to stipulate that she was neither licensed nor authorized to
recruit applicants for overseas employment. Appellant, however, denies that she was in
any way guilty of illegal recruitment.
FALLO:
There is illegal recruitment when one gives the impression of having the ability to
send a worker abroad." It is undisputed that appellant gave complainants the distinct
impression that she had the power or ability to send people abroad for work such that
the latter were convinced to give her the money she demanded in order to be so
employed. Wherefore, the appealed judgment of the court a quo is hereby affirmed in
toto, with costs against accused-appellant Nelly D. Agustin.

140
 PEOPLE OF THE PHILIPPINES VS AVENDAÑO
G.R. NOS. 96277-82 DECEMBER 2, 1992
GRIÑO-AQUINO, J.:

FACTS:

Six (6) separate information for Illegal Recruitment of some 38 workers were
filed against appellant Abelardo Avendaño y Crespo. In Criminal Case No. 6113, the
accused collected the amount of Php 5, 500.00 each from three persons in exchange of
a promise of job in Papua New Guinea. In Criminal Case No. 6114 the accused collected
the amount of Php 5, 500.00 each from three persons in exchange of a promise of job
in Papua New Guinea. In Criminal Case No. 6125 the accused collected the amount of
Php 5, 500.00 each from five persons in exchange for the assurance that they could
leave for Papua New Guinea. In Criminal Case No. 6131 the accused collected the
amount of Php 5, 000.00 each from two persons in exchange for the assurance that
they could leave for abroad. In Criminal Case No. 6143, the accused asked for the
amount of Php 5, 500.00 from a victim and told him that he could leave after three
months. In Criminal Case No. 6148, the accused asked for the amount of Php 4, 000.00
from a victim and told him that he could leave within three to six months.

It appears that the receipts issued by the accused to the complaints show that
the payments made by them were in the form of trust deposit for one unit of share in
the company. The receipts were subsequently surrendered to the company in exchange
of certificates of common share in MCARM Agro-Industrial Development Corporation,
making the complainants stockholders of the corporation. It was admitted that
MAINDECO is not licensed or authorized by the Department of Labor and Employment
to engage in recruitment of persons for overseas employment. Consequently, the
recruitment activities undertaken by MAINDECO are illegal.

Upon arraignment, Avendaño pleaded not guilty to the six (6) informations. The
cases were consolidated and jointly tried. On October 2, 1990, the trial court rendered a
single decision convicting Avendaño of Illegal Recruitment committed in large scale,
constituting economic sabotage in Criminal Case Nos. 6113, 6114 and 6125 and Illegal
Recruitment in Criminal Case Nos. 6131, 6143 and 6148. Because the accused was
sentenced to suffer the penalty of life imprisonment in three (3) of the Six (6) cases, he
appealed to the Supreme Court.

ISSUE:

Whether or not the trial court erred in convicting the accused-appellant of the
crime charged.

RATIO DECIDENDI:

No. The trial court erred in convicting the accused-appellant of the crime
charged. The trial court correctly found Avendaño to have conspired with his co-
accused Carmelito Soriano, Jr., Manuel Calanog and Renato M. Soriano, to illegally
recruit some 38 persons for overseas employment, charging and collecting a fee of P5,
500.00 from each job applicant although they (the accused) did not have the required
license and authority from the Department of Labor to engage in recruiting workers for
overseas employment. Appellant's pretext that the fee of P5, 500.00 paid by each job
applicant was not a placement fee but payment for a share of stock in MAINDECO,
supposedly a prerequisite for the deployment of the "stockholder" in Papua, New
Guinea, must be rejected for the simple reason that those who purchased the "shares"

141
did not intend to invest, but to obtain a job placement, in Papua, New Guinea.
Appellant's pretense that he was a "victim" like the complainants is absurd for it was he
who collected the placement fees of the complainants.

Appellant and his co-accused committed Illegal Recruitment on a Large Scale as

defined and penalized in Articles 38(b) and 39(a) of the Labor Code, because they had
victimized more than three (3) job applications — thirty eight (38) in fact. In Crim. Case
Nos. 6113-MN and 6114-MN where Avendaño acted in conspiracy with his co-accused
to fleece three (3) job applicants in each case of their placement fees for non-existent
overseas jobs, and in Crim, Case No. 6125-MN where they victimized five (5) persons,
the crimes committed were illegal recruitment by a syndicate (Art. 38 Labor Code).
When illegal recruitment is committed by a syndicate or in large scale, it becomes an
offense involving economic sabotage (Art. 38, Labor Code) and shall be penalized with
life imprisonment and a fine of P100,000 (Art. 39, par. [a], Labor Code ). In Crim. Case
No. 6131-MN where only two persons were defrauded, and in Crim. Case Nos. 6143-MN
and 6148-MN where there was only one victim in each case, the crimes committed were
simple illegal recruitment penalized in par. (c), Art. 39.

FALLO:

WHEREFORE, as the trial court did not commit any reversible error in finding
Avendaño guilty of large scale illegal recruitment in Criminal Cases Nos. 6113, 6114 and
6125, and of simple illegal recruitment in Criminal Case Nos. 6131, 6143 and 6148, and
as the penalties imposed are in accordance with the law, the appealed decision is
hereby AFFIRMED in toto.

SO ORDERED.

142
 PEOPLEVSJOEY BODOZO
G.R. NO. 96621 OCTOBER 21, 1992
CAMPOS, JR., J.:

FACTS:

Accused-appellants were charged before the Regional Trial Court with five (5)
counts of Estafa which they are aquitted and a separate charge for Illegal Recruitment.

On July 6, 1990, the Court finds both Accused guilty, beyond reasonable doubt,
of the crime of illegal recruitment defined in and penalized by Article 13 in relation to
Article 38 of the Labor Code, hence the instant appeal.

Accused-appellant’s argument is that theywere merely helping private

complainants apply for overseas employment. However, evidences on recordshow they
not only asked private complainants to fill up application forms but also to submit to
them their NBI clearances, passports and medical certificates. In addition thereto, they
collected payment for processing fee and other sundry expenses from private
complainants.

ISSUE:

Whether the acts of the accused to help complainants applied for job abroad
constitute illegal recruitment.

RATIO DECIDENDI:

In the case at bar, the acts of the accused are merely superficial as recruitment
activities were made against complainants, all which constitutes acts of recruitment
within the meaning of the law as defined under Article 38 (a) in relation to Article 13 (b)
and 34, and penalized under Article 39 of the Labor Code as amended by PD 1920 and
PD 2018. Also, under Article 38 of the Labor Code, as amended, the crime of illegal
recruitment is qualified when the same is committed against three (3) or more persons,
individually or as a group.

Consequently, accused-appellant having committed the crime of illegal

recruitment against Prudencio Renon, Fernando Gagtan, Angelino Obiacoro and
Ludovico Gagtan, the penalty of life imprisonment and the fine of P100,000.00 (Article
39 (a) Labor Code of the Philippines as amended) was alsocorrectly imposed by the trial
court.

FALLO:

In the light of foregoing findings and for reasons indicated, We hold that the
evidence was sufficient to sustain the verdict finding the accused guilty of the crime of
143
illegal recruitment as charged. Accordingly, the judgment of the Regional Trial Court is
hereby AFFIRMED with no pronouncement to costs.

SO ORDERED.

144
 PEOPLE OF THE PHILIPPINES VS. TAN TIONG MENG ALIAS "TOMMY TAN"
G.R. NO. 120835-40, APRIL 10, 1997

FACTS:
Accused-appellant Tan Tiong Mengalias"Tommy Tan" was charged with Illegal
Recruitment in Large Scale. As his defense, he testified that he is a Singaporean
national married to Estelita Oribiana, a Filipino-Chinese. He added that he works as a
sales representative for Oribiana Laboratory Supplies, a company owned by his brother-
in-law which sells laboratory equipment to various schools in Cavite. Tan alleged that
Jose Percival Borja was introduced to him by a certain Malou Lorenzo at the office of
their laboratory supplies in Sta. Cruz, Manila Lorenzo allegedly told him that Borja
needed his help in processing job applications for abroad. When he talked to Borja, the
latter told him that he could help in convincing applicants that they could work in
Taiwan. Borja offered him a P1,000.00 commission from the amount paid by each
applicant. Six complainants went to Borja’s house to meet the accused. The accused
promised to complainants that they could get jobs as factory worker in Taiwan with a
monthly salary of P20k. Accused required them to submit their passports, bio-data and
their high school diploma as well as to pay P15K each for placement and processing
fees. Accused kept on promising to complainants that they would be able to leave, but
the promises were never fulfilled. When complainants knew that accused was not a
licensed overseas recruiter, they filed for complaints for illegal recruitment and estafa
against accused.
Tan admitted having received money from all the complainants but he said that
all the money was turned over to Borja after deducting his commission. He contended
that he merely acted as a collector of money for the principal recruiter Borja who made
the representations that the accused could give the applicants jobs in Taiwan.
ISSUE:
Whether or not accused is guilty of the offense of illegal recruitment in large
scale and 6 counts of estafa.
RATIO DECIDENDI:
The accused’s acts of accepting placement fees from job applicants and
representing to said applicants that he could get them jobs in Taiwan constitute
recruitment and placement under the Labor Code and is deemed illegal and punishable
under Art. 39 of the Labor Code.
The offense committed against the 6 complainants is illegal recruitment in large
scale. Accused is also guilty of 6 separate crimes of estafa. A person convicted for illegal
recruitment under the Labor Code can be convicted for violation of the RPC provisions
on estafa provided the elements are resent: (1) the accused defrauded another by
abuse of confidence or by means of deceit; and (2) damage or prejudice capable of
pecuniary estimation is caused to the offended party or third person.
FALLO:
The judgment appealed from finding accused-appellant Tan Tiong Meng alias
"Tommy Tan" guilty of illegal recruitment in large scale and six (6) counts of estafa, is
hereby AFFIRMED. Costs against accused-appellant.

145
 PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLEE, VS. DELIA SADIOSA Y
CABENTA, ACCUSED-APPELLANT.
G.R. NO. 107084, MAY 15, 1998
ROMERO, J.:

FACTS:

In early 1992, Arsenia Conse went to Bayombong, Nueva Ecija where she met
the four complainants, Cely Navarro, Marcela Manzano, Erly Tuliao and Benilda
Domingo and enticed them to apply for overseas employment. She informed them that
she had a cousin who could send them to Kuwait as domestic helpers. Apparently
convinced by Arsenia Conse, the four went with her on 5 February 1992 to Manila,
where Arsenia Conse introduced the group to Delia Sadiosa. The four then applied for
work as domestic helpers. On that occasion, Sadiosa assured the four that she could
dispatch them to Kuwait and forthwith demanded P8,000.00 from each of them for
processing fee and P1,000.00 for passport (P1,500.00 from Cely Navarro). She assured
the group that she would facilitate the processing of all the necessary documents
needed by them. She further promised them that upon payment of the required fees,
they would be able to leave for Kuwait immediately. The four did give Sadiosa the
money demanded although on different dates. The latter issued the corresponding
receipts. However, not one of them was able to leave for Kuwait.

When they asked for the return of their money, Sadiosa refused and ignored
their demand. Consequently, the four filed the complaint for illegal recruitment against
Sadiosa.

Upon arraignment, Sadiosa pleaded "not guilty." The trial court found Sadiosa
guilty of illegal recruitment in large scale defined by Article 38 (b) and penalized under
Article 39 (a) of the Labor Code, as amended by Presidential Decree 1920 and 2018,
and sentenced her to life imprisonment and to pay a fine of P100,000.00. The court
also ordered Sadiosa to indemnify the complainants with P8,000.00 each.

Sadiosa appealed, focusing on the validity and sufficiency of both the information
filed against her and the decision rendered in due course by the court.

ISSUE:
Whether the information was sufficient to allege illegal recruitment, and that
said charge will not be confused with estafa by the facts stated.

RATIO DECIDENDI:

Yes. The information is sufficient where it clearly states the designation of the
offense by the statute and the acts or omissions complained of as constituting the
offense. However, there is no need to specify or refer to the particular section or
subsection of the statute that was violated by the accused. No law requires that in
Constitutional Law II, 2005 (21) Narratives (Berne Guerrero) order that an accused may

146
be convicted, the specific provision penalizing the act charged should be mentioned in
the information. What identifies the charge is the actual recital of the facts and not that
designated by the fiscal in the preamble thereof. It is not even necessary for the
protection of the substantial rights of the accused, nor the effective preparation of his
defense, that the accused be informed of the technical name of the crime of which he
stands charged. He must look to the facts alleged. Herein, the information filed against
Sadiosa sufficiently shows that it is for the crime of illegal recruitment in large scale, as
defined in Art. 38 (b) of the Labor Code and penalized in Art. 39 of the same Code
although it is designated as for "illegal recruitment" only. Under the Code, the essential
elements of the crime of illegal recruitment in large scale are as follows: (1) the
accused engages in the recruitment and placement of workers, as defined under Article
13 (b) or in any prohibited activities under Article 34 of the Labor Code; (2) accused
has not complied with the guidelines issued by the Secretary of Labor and Employment,
particularly with respect to the securing of a license or an authority to recruit and
deploy workers, whether locally or overseas; and (3) accused commits the same against
three (3) or more persons, individually or as a group." All these elements are to be
found in the information. It alleges that Sadiosa, knowing fully well that she was "not a
duly licensed job recruiter," falsely represented that she could "secure employment as
domestic helpers abroad" for the four complainants. As such, the purpose of the
requirement under Sec. 8, Rule 110 to inform and apprise the accused of the true crime
of which she was charged, has been complied with. The main purpose of the
requirement that the acts or omissions complained of as constituting an offense must
be stated in ordinary and concise language is to enable a person of common
understanding to know what offense is intended to be charged so that he could suitably
prepare for his defense. It is also required so that the trial court could pronounce the
proper judgment. This gives substance to the constitutional guarantee that in all
criminal prosecutions, the accused shall be informed of the nature and cause of the
accusation against him. Herein, Sadiosa was fully accorded the right to be informed of
the charges against her. The fact that she put up the defense of having accepted the
money only in her capacity as an officer of the recruitment agency shows that she fully
understood the nature and cause of the accusation against her. Furthermore, it is
incorrect for Sadiosa to maintain that the information filed against her contained
conflicting and irreconcilable charges of illegal recruitment, estafa under Article 315 par.
1(b) of the Revised Penal Code and estafa under the same article but under par. 2 (a)
thereof. While on its face the allegations in the information may constitute estafa, it
merely describes how Sadiosa was able to consummate the act of illegal recruitment —
through false and fraudulent representation by pretending that she was a duly-licensed
recruiter who could secure employment for complainants in Kuwait. These allegations in
the information therefore do not render the information defective or multiplicitous.
Sadiosa could have been validly charged separately with estafa under the same set of
facts in the illegal recruitment case, but she was fortunate enough not to have been so
charged. Nevertheless, there is no doubt from a reading of the information, that it
accurately and clearly avers all of the ingredients that constitute illegal recruitment in

147
large scale. The prosecutor simply captioned the information with the generic name of
the offense under the Labor Code — illegal recruitment. Hence, to avoid misconception
and misinterpretation of the information, the prosecutor should have indicated in its
caption, the offense he had clearly alleged in its body, that the crime charged was for
illegal recruitment in large scale. However, such omission or lack of skill of the
prosecutor who crafted the information should not deprive the people of the right to
prosecute a crime with so grave a consequence against the economic life of the
aggrieved parties. What is important is that he did allege in the information the facts
sufficient to constitute the offense of illegal recruitment in large scale.

FALLO:

The appealed decision of the Regional Trial Court of Pasay City, Branch 113
finding appellant Delia Sadiosa y Cabenta GUILTY beyond reasonable doubt of the
crime of illegal recruitment in large scale and imposing on her life imprisonment, the
payment of the fine of P100,000.00 and the reimbursement of the amounts defrauded
from complainants is hereby affirmed. Costs against accused-appellant.

148
 PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLEE, V. ANITA BAUTISTA Y
LATOJA, ACCUSED-APPELLANT.
G.R. NO. 113547. FEBRUARY 9, 1995
PUNO, J.

FACTS:

Sometime in August 1991, Accused Anita Bautista approached Romeo Paguio at

the latter's restaurant at 565 Padre Faura St., Manila, and offered job openings abroad.
At that time, Paguio had relatives who were interested to work abroad. Accused, who
also operated a restaurant nearby at Padre Faura, informed Paguio that she knew
somebody who could facilitate immediate employment in Taiwan for Paguio's relatives.
Accused Anita Bautista introduced Rosa Abrero to Paguio. Abrero informed him that the
applicants could leave for Taiwan within a period of one-month from the payment of
placement fees. They informed Paguio that the placement fee was P40,000.00 for each
person. Paguio contacted his relatives, complainants Remigio Fortes and Dominador
Costales who were his brothers-in-law, and Anastacio Amor, a cousin, who lost no time
raising the needed money and gave the same to Paguio. The three were to work as
factory workers and were to be paid $850.00 monthly salary each. Paguio gave Rosa
Abrero P20,000.00, which would be used in following up the papers of the
complainants; later he gave accused P40,000.00 and P60,000.00 in separate amounts,
totalling P100,000.00, as the remaining balance.

Abrero and accused Bautista promised Paguio and complainants that the latter
could leave for Taiwan before September 25, 1991. As September 25, 1991
approached, Accused Bautista informed Paguio and complainants that there was a delay
in the latter's departure because their tickets and visas had not yet been released.
Accused re-scheduled the complainants' departure to October 10, 1991. Came October
10, 1991, and complainants were still not able to leave. Paguio then required accused
Bautista to sign the "Acknowledgment Receipt," dated October 11, 1991, in which
accused admitted having received the sum of P100,000.00 from Paguio, representing
payment of plane tickets, visas and other travel documents (Exhibit A). Paguio asked
accused to return complainants' money; accused, however, promised that complainants
could leave for Taiwan before Christmas. From POEA, Paguio secured a certification,
dated January 9, 1992 attesting that Annie Bautista and Rosa Abrero are not licensed or
authorized to recruit workers for overseas employment (Exhibit B). Complainants
Fortes, Amor and Costales, as well as Paguio, gave their written statements at the
Office of the Assistant Chief Directorial Staff for Intelligence of the WPDC, complaining
about their being victims of illegal recruitment by Rosa Abrero and Annie Bautista

ISSUE:

Whether or not reasonable doubt exist to warrant the acquittal of accused Anita
Bautista?

RATIO DECIDENDI:

The Labor Code defines recruitment and placement as referring to "any act of
canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers,
and includes referrals, contract services, promising or advertising for employment,
locally or abroad, whether for profit or not: Provided that any person or entity which, in
any manner, offers or promises for a fee employment to two or more persons shall be
deemed engaged in recruitment and placement."

149
 It is settled that the essential elements of the crime of illegal recruitment in large
scale are: (1) the accused engages in the recruitment and placement of workers, as
defined under Article 13 (b) or in any prohibited activities under Article 34 of the Labor
Code; (2) accused has not complied with the guidelines issued by the Secretary of
Labor and Employment, particularly with respect to securing of a license or an authority
to recruit and deploy workers, either locally or overseas; and (3) accused commits the
same against three (3) or more persons, individually or a group.

Appellant's active participation in the recruitment process of complainants belies

her claim of innocence. Complainants' recruitment was initiated by appellant during her
initial meeting with Romeo Paguio. She gave the impression to Romeo Paguio and the
complainants that her cohort, Rosa Abrero, could send workers for employment abroad.
She introduced Rosa Abrero to Romeo Paguio. Both women assured the departure of
complainants to Taiwan within one month from payment of the placement fee of
P40,000.00 per person. They even claimed that complainants could work as factory
workers for a monthly salary of $850.00 per person. Moreover, it was appellant who
informed Romeo Paguio that complainants' scheduled trip to Taiwan would be on
October 10, 1991, instead of the original departure date of September 25, 1991, due to
some problems on their visas and travel documents. Her close association with Rosa
Abrero is further strengthened by the Acknowledgment Receipt, dated October 11,
1991, which was prepared by Romeo Paguio for the protection of complainants.

Said receipt shows that appellant collected the P100,000.00 for and in behalf of
Rosa Abrero, and bolsters Romeo Paguio's allegation that he gave P20,000.00 to Rosa
Abrero, while the rest was received by appellant. Notably, in its Decision, dated
February 14, 1992, the trial court observed:

"The denial(s) made by the accused of any participation in the recruitment of the
complainants do not persuade. The evidence at hand shows that she acknowledged in
writing the receipt of P100,000.00 from witness Romeo Paguio who was all along
representing the complainants in securing employment for them in Taiwan. Her denial
of having actually received the money in the sum of P100,000.00, the receipt of which
she voluntarily signed is not convincing. By her own admission, she is a restaurant
operator. In other words, she is a business woman. As such, she ought to know the
consequences in signing any receipt. That she signed Exh. "A" only goes to show that
fact, as claimed by Romeo Paguio, that she actually received the same."

It is uncontroverted that appellant and Rosa Abrero are not authorized or

licensed to engage in recruitment activities. Despite the absence of such license or
authority, appellant participated in the recruitment of complainants. Since there are at
least three (3) victims in this case, appellant is correctly held criminally liable for illegal
recruitment in large scale.

We shall now discuss appellant's culpability under the Revised Penal Code,
specifically Article 315 thereof, inasmuch as her conviction for offenses under the Labor
Code does not avert punishment for offenses punishable by other laws.

The elements of estafa are as follows: (1) that the accused defrauded another
(a) by abuse of confidence, or (b) by means of deceit; and (2) that damage or
prejudice capable of pecuniary estimation is caused by the offended party or third
party.

In the case at bench, it is crystal clear that complainants were deceived by

appellant and Rosa Abrero into believing that there were, indeed, jobs waiting for them

150
in Taiwan. The assurances given by these two (2) women made complainants part with
whatever resources they have, in exchange for what they thought was a promising job
abroad. Thus, they sold their carabaos, mortgaged or sold their parcels of land and
even contracted loans to raise the much needed money, the P40,000.00 placement fee,
required of them by accused and Rosa Abrero.

FALLO:

WHEREFORE, premises considered, the decision of the Court of Appeals, finding

appellant ANITA BAUTISTA guilty beyond reasonable doubt of the crimes of Illegal
Recruitment in Large Scale (Criminal Case Nos. 92-102377) and Estafa (Criminal Case
Nos. 92-102378, 92-102379, 92-102380) is AFFIRMED. No Cost

SO ORDERED.

151
 PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLEE, VS.
NELIA CORONACION Y NOQUE AND EDUARDO AQUINO Y
AQUINO, ACCUSED-APPELLANTS.
G.R. NO. 97845, SEPTEMBER 29, 1994
KAPUNAN, J.:

FACTS:

Nelia Coronacion, Eduardo Aquino, and June Mendez were charged with the
crime of illegal recruitment in large scale and by a syndicate for falsely representing
themselves to have the capacity to contract, enlist and transport Filipino workers
without first having secured the required license or authority from the Ministry of Labor
for employment in Saudi Arabia. The Supreme Court was asked to adjudge them guilty
or not.

The Court finds the two (2) accused, NELIA CORONACION y NOQUE and
EDUARDO AQUINO y AQUINO, guilty beyond reasonable doubt of the crime of Illegal
Recruitment, committed in large scale, as defined in Article 38 (a) & (b) of Presidential
Decree No. 442, otherwise known as the Labor Code of the Philippines, as amended by
Presidential Decrees Nos. 1693 and 1920 and further amended by Presidential Decree
No. 2018, in relation to Article 13 (b) and (c), and penalized under Article 39 (a), same
Code, and as charged in the information and, accordingly, hereby sentences each of
them to suffer the penalty of life imprisonment (reclusion perpetua), with the accessory
penalties provided for by law.

The prosecution likewise proved that Nelia Coronacion and Eduardo Aquino do
not have any license or authority from POEA to recruit workers for overseas
employment. After promulgation of the judgment, both accused appealed.

ISSUE:

Whether the accused are liable for the large recruitment in a large scale.

RATIO:

Yes. Evidently, the crime of illegal recruitment in large scale is committed when a
person (a) undertakes any recruitment activity defined under Article 13(b) or any
prohibited practice enumerated under Article 34 of the Labor Code; (b) does not have a
license or authority to lawfully engage in the recruitment and placement of workers;
and (c) commits the same against three or more persons, individually or as a group. 10

Articles 38 and 39 of the Labor Code, as amended by P.D. No. 2018, read as follows:

Art. 38. Illegal Recruitment.— (a) Any recruitment activities, including the
prohibited practices enumerated under Article 34 of this Code, to be undertaken by
non-licensees or non-holders of authority shall be deemed illegal and punishable under
Article 39 of this Code. The Ministry of Labor and Employment or any law enforcement
officer may initiate complaints under this Article.

(b) Illegal recruitment when committed by a syndicate or in large scale shall be

considered an offense involving economic sabotage and shall be penalized in
accordance with Article 39 hereof.

152
 Illegal recruitment is deemed committed by a syndicate if carried out by a group
of three (3) or more persons conspiring and/or confederating with one another in
carrying out any unlawful or illegal transaction, enterprise or scheme defined under the
first paragraph hereof. Illegal recruitment is deemed committed in large scale if
committed against three (3) or more persons individually or as a group.

In the case at bench, the appellants are neither licensees nor holders of any
authority from POEA to engage in recruitment and placement activities as evidenced by
a certification of the said agency. It was likewise established that the private
complainants were unaware of the appellants' lack of authority when they transacted
business with them. It was only later, upon inquiry at POEA, that they discovered the
appellants' lack of authority. Finally, the number of private complainants, certainly more
than three, is beyonddispute.

RULING:

WHEREFORE, the judgment of conviction rendered by the trial court is hereby

AFFIRMED, with thesole modification that the penalty properly imposable and hereby
imposed is life imprisonment and not reclusion perpetua. Costs against appellants.

SO ORDERED.

153
 PEOPLE VS. COMIA
G.R. NO. 109761. SEPTEMBER 1, 1994
DAVIDE, JR., J.:

FACTS:

Carmelita Puertollano Comia was charged with illegal recruitment in large scale
for falsely representing herself to have the capacity and power to contract, enlist, and
recruit workers for employment abroad. This is based on paragraphs (a) and (b) of
Article 38, in relation to paragraph (a) of Article 39, of the Labor Code.

Fe Dadap et al were the complaining victims of the illegal recruitment activities.

They testified in open court that the accused defrauded each of them a sizeable cash
on the assurance that they would be given janitorial jobs in Hong Kong. They were
instructed by Comia that a certain Doctora will be coming from Hong Kong to pick them
at the airport. But Doctora did not arrive. When the complainants inquired the
Immigration Office, it said that there was no person by the name of Dra. Zenaida
Andres.

ISSUE:

Whether or not the case is an illegal recruitment in large scale involving

economic sabotage

RATIO DECIDENDE:

Yes.
There is illegal recruitment in large scale when a person
(a) undertakes any recruitment activity defined under Article 13
(b) or any prohibited practice enumerated under Article 34 of the Labor Code;
(c) does not have a license or authority to lawfully engage in the recruitment and
placement of workers; and
(d) commits the same against three or more persons, individually or as a group.

Article 38 of the Labor Code also provides:

(b) Illegal recruitment when committed by a syndicate or in large scale shall be
considered an offense involving economic sabotage and shall be penalized in
accordance with Article 39 hereof. Illegal recruitment is deemed committed by a
syndicate if carried out by a group of three (3) or more persons conspiring and/or
confederating with one another in carrying out any unlawful or illegal transaction,
enterprise or scheme defined under the first paragraph hereof. Illegal recruitment is
deemed committed in large scale if committed against three (3) or more persons
individually or as a group.

FALLO:

Wherefore, lack of the necessary license or permit that renders the recruitment
activities unlawful or criminal, which is qualified into large scale recruitment when three
or more persons were victimized. Costs against accused Carmelita Puertollano Comia.

154
 MILLARES VS. NLRC
G.R. NO. 110524, JULY 29, 2002
KAPNUNAN,J:

FACTS:
Petitioner Douglas Millares and Lagda were employed by private respondent
ESSO International Shipping Company Ltd. (Esso International, for brevity) through its
local manning agency, private respondent Trans-Global Maritime Agency, Inc.
Petitioner Millares applied for a leave of absence and Michael J. Estaniel,
President of private respondent Trans-Global, approved the request for leave of
absence. Subsequently,informing him of his intention to avail of the optional retirement
plan under the Consecutive Enlistment Incentive Plan (CEIP) considering that he had
already rendered more than twenty (20) years of continuous service but denied
petitioner Millares' request for optional retirement on the following grounds, to wit: (1)
he was employed on a contractual basis; (2) his contract of enlistment (COE) did not
provide for retirement before the age of sixty (60) years; and (3) he did not comply
with the requirement for claiming benefits under the CEIP, i.e., to submit a written
advice to the company of his intention to terminate his employment within thirty (30)
days from his last disembarkation date.
Petitioner Millares requested for an extension of his leave of absence and C.
Palomar, Crewing Manager, Ship Group A, Trans-Global, wrote petitioner Millares
advising him that respondent Esso International "has corrected the deficiency in its
manpower requirements specifically in the Chief Engineer rank by promoting a First
Assistant Engineer to this position as a result of (his) previous leave of absence which
expired last August 8, 1989. The adjustment in said rank was required in order to meet
manpower schedules as a result of (his) inability." Personnel Administrator, advised
petitioner Millares that in view of his absence without leave, which is equivalent to
abandonment of his position, he had been dropped from the roster of crew members
effective September 1, 1989.
On October 5, 1989, petitioners Millares and Lagda filed a complaint-affidavit,
docketed as POEA (M) 89-10-9671, for illegal dismissal and non-payment of employee
benefits against private respondents Esso International and Trans-Global, before the
POEA.
On July 17, 1991, the POEA rendered a decision dismissing the complaint for lack of
merit. 12Petitioners appealed the decision to the NLRC dismissing petitioners' appeal
and denying their motion for new trial for lack of merit. Hence, the instant petition for
certiorari.
ISSUE:
Whether or not the petitioners are regular or contractual employees.
Whether or not petitioners were dismissed without just cause so as to be entitled
to reinstatement and backwages, including payment of 100% of their total credited
contributions to the CEIP.

155
RATIO DECIDENDI:

Petitioners are contractual employees. Petitioners were only given priority or

preference because of their experience and qualifications but this does not detract the
fact that herein petitioners are contractual employees. They cannot be considered
regular employees. We quote with favor the explanation of the NLRC in this wise:

xxx The reference to "permanent" and "probationary" masters and employees in

these papers is a misnomer and does not alter the fact that the contracts for
enlistment between complainants-appellants and respondent-appellee Esso
International were for a definite periods of time, ranging from 8 to 12 months.
Although the use of the terms "permanent" and "probationary" is unfortunate,
what is really meant is "eligible for-re-hire". This is the only logical conclusion
possible because the parties cannot and should not violate POEA's requirement
that a contract of enlistment shall be for a limited period only; not exceeding
twelve (12)months.23

From all the foregoing, we hereby state that petitioners are not considered
regular or permanent employees under Article 280 of the Labor Code. Petitioners'
employment has automatically ceased upon the expiration of their contracts of
enlistment (COE). Since there was no dismissal to speak of, it follows that petitioners
are not entitled to reinstatement or payment of separation pay or backwages, as
provided by law.

With respect to the benefits under the Consecutive Enlistment Incentive Plan
(CEIP), we hold that the petitioners are still entitled to receive 100% of the total
amount credited to him under the CEIP. Considering that we have declared that
petitioners are contractual employees, their compensation and benefits are covered by
the contracts they signed and the CEIP is part and parcel of the contract.

FALLO:

Wherefore, the petitioners Millares and Lagda are considered as contractual

employees, and they are entitled to receive 100% of total amount credit to him under
CEIP.

156
 PENTAGON SHIPPING INC. V.S. WILLIAM B ADELANTAR
G.R. NO. 157373 JULY 27, 2004

FACTS:

Respondent hired by Dubai Ports Authority of Jebi Ali on August 16, 1977 for an
unlimited period of employment (first contract) on September 3, 1977 Adelantar and
the Petitioner in behalf of DPA of Jebi Ali entered into a POEA standard employment
contract (second contract) for 12 months period, after the respondent completed the
probationary period on April 5, 1998 his basic salary and overtime was increased
effective April 1, 1998 however Adelantar was banned by the management for the that
he assaulted his superior, although he was promised to be employed to another
company, after 9 months and 7 days or almost a year of waiting Adelantar filed a
complaint for illegal dismissal.

Labor arbiter ordered the Pentagon to pay the 3-months basis salary but other
claims were denied.

Adelantar appealed that the labor arbiter erred for granting only 3 months of his
basic salary and for denying the grant of attorney’s fee, moral and exemplary damages
and reinstatement for his previous work, however NLRC affirmed the first decision on
the basis of section 10 of RA 8042 The Migrant workers and Overseas Filipino Act of
1995.

Adelantar filed a petition before the Court of Appeals and the court rendered
judgment modifying the labor Arbiter and the NLRC ruling awarding the full back wages
to respondent, the CA ruled that section 10 of RA 8042 is not applicable and article 279
is the applicable based on the first contract of the respondent

Pentagon filed a petition for review arguing the error of judgement rendered by
the CA.

ISSUE:

Whether or not the Court of Appeal properly used article 279 of the labor code
as the basis of the decision rendered, for awarding the full back wages of the
Respondent.

RATIO DECIDENDI:

No, Adelantar a seafarer is not a regular employee and considered as a

contractual worker under article 280 of the Labor Code, therefore, respondent is not
entitled to full back wages and separation pay in lieu of reinstatement as provided in
Article 279 of the labor Code, a contractual employee whose rights and obligations are
governed primarily by RA 8042 The Migrants Workers and Overseas Filipino Act of
1995.

FALLO:

157
 The petition is granted and the decision of CA is reverse and set aside, Pentagon
is ordered to pay the amount equivalent to the unexpired portion of the September 3,
1997 POEA Standard Contract of Employment plus the 10 percent of the total death
benefits for the attorney’s fee.

SKIPPERS UNITED PACIFIC, INC. AND SKIPPERS MARITIME SERVICES, INC.,

LTD., VS.
NATHANIEL DOZA, NAPOLEON DE GRACIA, ISIDRO L. LATA, AND CHARLIE
APROSTA
G.R. NO. 175558 FEBRUARY 8, 2012
CARPIO, J.:

FACTS:

Skippers United Pacific, Inc. deployed, in behalf of Skippers, De Gracia, Lata, and
Aprosta to work on board the vessel MV Wisdom Star, under the following terms and
conditions:

Name : Napoleon O. De Gracia

Position : 3rd Engineer
Contract Duration : 10 months
Basic Monthly Salary : US$800.00
Contract Date : 17 July 199814

Name : Isidro L. Lata

Position : 4th Engineer
Contract Duration : 12 months
Basic Monthly Salary : US$600.00
Contract Date : 17 April 199815

Name : Charlie A. Aprosta

Position : Third Officer
Contract Duration : 12 months
Basic Monthly Salary : US$600.00
Contract Date : 17 April 199816

De Gracia, et al. claimed that Skippers failed to remit their respective allotments
for almost five months, compelling them to air their grievances with the Romanian
Seafarers Free Union.18 On 16 December 1998, ITF Inspector Adrian Mihalcioiu of the
Romanian Seafarers Union sent Captain Savvas of Cosmos Shipping a fax letter,
relaying the complaints of his crew, namely: home allotment delay, unpaid salaries
(only advances), late provisions, lack of laundry services (only one washing machine),
and lack of maintenance of the vessel (perforated and unrepaired deck).

158
 However, Skippers only failed to remit the home allotment for the month of
December 1998.20 On 28 January 1999, De Gracia, et al. were unceremoniously
discharged from MV Wisdom Stars and immediately repatriated.21 Upon arrival in the
Philippines, De Gracia, et al. filed a complaint for illegal dismissal with the Labor Arbiter
on 4 April 1999 and prayed for payment of their home allotment for the month of
December 1998, salaries for the unexpired portion of their contracts, moral damages,
exemplary damages, and attorney’s fees.

Skippers, on the other hand, claims that at around 2:00 a.m. on 3 December
1998, De Gracia, smelling strongly of alcohol, went to the cabin of Gabriel Oleszek,
Master of MV Wisdom Stars, and was rude, shouting noisily to the master. 23 De Gracia
left the master’s cabin after a few minutes and was heard shouting very loudly
somewhere down the corridors.24 This incident was evidenced by the Captain’s Report
sent via telex to Skippers on said date.25

Skippers also claims that at 12:00 noon on 22 January 1999, four Filipino
seafarers, namely Aprosta, De Gracia, Lata and Doza, arrived in the master’s cabin and
demanded immediate repatriation because they were not satisfied with the ship. 26 De
Gracia, et al. threatened that they may become crazy any moment and demanded for
all outstanding payments due to them.27 This is evidenced by a telex of Cosmoship MV
Wisdom to Skippers, which however bears conflicting dates of 22 January 1998 and 22
January 1999.28

Skippers also claims that, due to the disembarkation of De Gracia, et al., 17

other seafarers disembarked under abnormal circumstsances.29 For this reason, it was
suggested that Polish seafarers be utilized instead of Filipino seamen.

Skippers, in its Position Paper, admitted non-payment of home allotment for the
month of December 1998, but prayed for the offsetting of such amount with the
repatriation expenses

Since De Gracia, et al. pre-terminated their contracts, Skippers claims they are
liable for their repatriation expenses33 in accordance with Section 19(G) of Philippine
Overseas Employment Administration (POEA) Memorandum Circular No. 55, series of
1996 which states:

G. A seaman who requests for early termination of his contract shall be liable for
his repatriation cost as well as the transportation cost of his replacement. The employer
may, in case of compassionate grounds, assume the transportation cost of the
seafarer’s replacement.

Skippers also prayed for payment of moral damages and attorney’s fees.

The Decision of the Labor Arbiter

The Labor Arbiter dismissed De Gracia, et al.’s complaint for illegal dismissal because
the seafarers voluntarily pre-terminated their employment contracts by demanding for
immediate repatriation due to dissatisfaction with the ship.36 The Labor Arbiter held that
such voluntary pre-termination of employment contract is akin to resignation,37 a form
of termination by employee of his employment contract under Article 285 of the Labor
Code.

Lastly, Skippers’ claim for reimbursement of repatriation expenses was likewise denied,
since Article 19(G) of POEA Memorandum Circular No. 55, Series of 1996 allows the

159
employer, in case the seafarer voluntarily pre-terminates his contract, to assume the
repatriation cost of the seafarer on compassionate grounds.

The Decision of the NLRC

The NLRC, on 28 October 2002, dismissed De Gracia, et al.’s appeal for lack of merit
and affirmed the Labor Arbiter’s decision.44

The Decision of the Court of Appeals

The CA, on 5 July 2006, granted De Gracia, et al.’s petition and reversed the decisions
of the Labor Arbiter and NLRC, its dispositive portion reading as follows:

WHEREFORE, the instant petition for certiorari is GRANTED. The Resolution dated
October 28, 2002 and the Order dated August 31, 2004 rendered by the public
respondent NLRC are ANNULLED and SET ASIDE. Let another judgment be entered
holding private respondents jointly and severally liable to petitioners for the payment
of:

1. Unremitted home allotment pay for the month of December, 1998 or the
equivalent thereof in Philippine pesos:
a. De Gracia = US$900.00
b. Lata = US$600.00
c. Aprosta = US$600.00
2. Salary for the unexpired portion of the employment contract or for 3 months
for every year of the unexpired term, whichever is less, or the equivalent thereof
in Philippine pesos:
a. De Gracia = US$2,400.00
b. Lata = US$1,800.00
c. Aprosta = US$1,800.00
3. Attorney’s fees and litigation expenses equivalent to 10% of the total claims.

ISSUE:

Skippers, in its Petition for Review on Certiorari, assigned the following errors in
the CA Decision:

a) The Court of Appeals seriously erred in not giving due credence to the
master’s telex message showing that the respondents voluntarily requested to be
repatriated.

b) The Court of Appeals seriously erred in finding petitioners liable to pay

backwages and the alleged unremitted home allotment pay despite the finding of
the Labor Arbiter and the NLRC that the claims are baseless.

c) The Court of Appeals seriously erred in awarding attorney’s fees in favor of

respondents despite its findings that the facts attending in this case do not
support the claim for moral and exemplary damages.55

RATIO DECIDENDI:

In this case, there was no written notice furnished to De Gracia, et al. regarding
the cause of their dismissal.

160
a.) 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 De Gracia, et al. should have submitted their written resignations.

b.) On the issue of home allotment pay, Skippers effectively admitted non-remittance of
home allotment pay for the month of December 1998 in its Position Paper. Skippers
sought the repatriation expenses to be offset with the home allotment pay. However,
since De Gracia, et al.’s dismissal was illegal, their repatriation expenses were for the
account of Skippers and could not be offset with the home allotment pay.

Contrary to the claim of the Labor Arbiter and NLRC that the home allotment pay is in
"the nature of extraordinary money where the burden of proof is shifted to the worker
who must prove he is entitled to such monetary benefit," Section 8 of POEA
Memorandum Circular No. 55, series of 1996, states that the allotment actually
constitutes at least eighty percent (80%) of the seafarer’s salary.

c.)In all cases, the attorney’s fees and expenses of litigation must be reasonable.

Article 111 of the Labor Code provides for a maximum award of attorney’s fees in cases
of recovery of wages:

Art. 111. Attorney’s fees.

a. In cases of unlawful withholding of wages, the culpable party may be

assessed attorney’s fees equivalent to ten percent of the amount of wages
recovered.

b. It shall be unlawful for any person to demand or accept, in any judicial or

administrative proceedings for the recovery of wages, attorney’s fees which
exceed ten percent of the amount of wages recovered.

Since De Gracia, et al. had to secure the services of the lawyer to recover their unpaid
salaries and protect their interest, we agree with the CA’s imposition of attorney’s fees
in the amount of ten percent (10%) of the total claims.1âwphi1

FALLO:

WHEREFORE, we AFFIRM the Decision of the Court of Appeals dated 5 July

2006 with MODIFICATION. Petitioners Skippers United Pacific, Inc. and Skippers
Maritime Services Inc., Ltd. are jointly and severally liable for payment of the following:

1) Unremitted home allotment pay for the month of December 1998 in its
equivalent rate in Philippine Pesos at the time of termination on 28 January
1999:

a. De Gracia = US$900.00

b. Lata = US$600.00

c. Aprosta = US$600.00

161
2) Salary for the unexpired portion of the employment contract or its current
equivalent in Philippine Pesos:

a. De Gracia = US$2,933.34

b. Lata = US$1,600.00

c. Aprosta = US$1,600.00

3) Attorney’s fees and litigation expenses equivalent to 10% of the total claims.

162
 ELIZABETH M. GAGUI, PETITIONER, VS SIMEON DEJERO AND TEODORO R.
PERMEJO, RESPONDENTS.
GR NO. 196036, OCTOBER 23, 2013.
SERENO, J., PONENTE.

FACTS:

On December 14, 1993, respondents Simeon Dejeroand Teodoro Permejo filed

separate complaints for illegal dismissal, non-payment of salaries and overtime pay,
refund of transportation expenses, damages, and attorney’s fees against PRO Agency
Manila, Inc., and Abdul Rahman Al Mahwas. After due proceedings, on May 1997, Labor
Arbiter Pedro Ramos rendered Decision ordering respondents Pro Agency Manila, Inc;
and Abdul Rahman Al Mahwes to jointly and severally pay complainants. Pursuant to
this Decision, Labor Arbiter Ramos issued a writ of execution on October 10 1997 but
the writ was returned unsatisfied. Subsequently Alias Writ of execution also remained
unsatisfied.

On October 30, 2002, respondents filed a motion to implead respondent pro

agency manila, Inc., corporate officers and directors as judgment debtors. It included
petitioner as the Vice-President/stockholder/director of Pro Agency, Manila, Inc.

After due hearing, executive labor arbiter Voltaire A. Balitaan issued an order on
April 25, 2003 granting respondents’ motion. On June 10, 2003, a 2 nd Alia Writ of
Execution was issued, which resulted in the garnishment of petitioner’s bank deposit in
the amount of Php 85, 430.48. On June 6, 2005, a 3 rd Alias Writ of Execution was
issued which resulted in the levying of 2 parcels of lot owned by the petitioner located
in San Fernando City, Pampanga.
On September 14, 2005, petitioner filed a motion to quash 3 rd Alias Writ of
Execution; and on June 29, 2006, Supplemental motion to quash Alias Writ of
execution. In these motions, petitioner alleged that apart from not being made aware
that she was impleaded as one of the parties to the case, the dispositive portion of the
May 7, 1997 decision did not hold her liable in any form whatsoever. More importantly,
impleading her for the purpose of execution was tantamount to modifying a decision
that had long become final and executor.

On June 26, 2006, theexecutive labor arbiter issued an order denying petitioner’s
motions. Aggrieved, the petitioner appaled to the National Labor Relations Commission
(NLRC) but the latter affirmed the decision of the executive labor arbiter. The NLRC
ruled that “in so far as overseas migrant workers are concerned, it is RA 8042 itself that
describes the nature of the liability and the corporation and its officers and directors. It
is not essential that the individual officers and directors be impleaded as party
respondents to the case instituted by the worker. A finding of liability on the part of the

163
corporation will necessarily mean the liability of the corporate officers or directors. The
CA affirmed the NLRC.
Petition for review was filed on March 30, 2011. On August 1, 2011, respondents
filed their comments, alleging that the petition had been filed 15 days after the
prescriptive period of appeal under Section 2, Rule 45 of the rules of court.

On February 14, 2013, petitioner filed a reply, countering that she has a fresh
period of 15 days from March 16, 2011 (the date she received the resolution of the CA)
or up to March 31, 2011 to file the petition.

ISSUE:

1) WON this petition was filed on time

2) WON petitioner may be held jointly and severally liable with PRO Agency
Manila Inc., in accordance with Section 1- or RA 8042, despite not having been
impleaded in the complaint and named in the Decision.

RATIO DECIDENDI:

We agree with the petitioner that starting from the date she received the
resolution denying her motion for reconsideration; she had a “fresh period” of 15 days
within which to appeal to this court. To standardized the appeal [periods provided in
the Rules] and to afford litigants fair opportunity to appeal their cases, the court deems
it practical to allow as fresh period of 15 days within which to file the notice of appeal in
the Regional Trial Court, counted from receipt of the order dismissing a motion for a
new trial or motion for reconsideration. Since petitioner received the CA Resolution
denying her two motions for reconsideration only on March 16, 2011, she had another
15 days within which to file her petition, or until March 31, 2011. This petition, filed on
March 30, 2011, fell within the prescribed 15-day period.

Petitioner may not be held jointly and severally liable, absent a finding that she
was remiss in directing the affairs of the agency. Examination of the records would
reveal that there was no finding of neglect in the part of the petitioner in directing the
affairs of the agency that contributed to their illegal dismissal. Moreover, holding the
petitioner liable despite not being ordained as such by the decision, both the CA and
NLRC violated the doctrine on immutability of judgments. In other words, once the
decision or order becomes final and executor, it is removed from the power of
jurisdiction of the court which rendered it to further alter or amend it. It thereby
becomes immutable and unalterable and any amendment which substantially affects a
final and executor judgment is null and void for lack of jurisdiction, including the whole
proceedings held for that purpose.

164
 While labor laws should be construed liberally in favor of labor, we must be able
to balance it with equally important right of petitioner to due process. Because the 1997
decision of Labor Arbiter was not appealed, it became final and executor and was
therefore removed from his jurisdiction. Modifying the tenor of the judgment via a
motion impleading petitioner and filed only in 2002 runs contrary to settled
jurisprudence, rendering such action a nullity.

FALLO/WHEREFORE CLAUSE:

WHEREFORE, the petition for review on certiorari is hereby GRANTED. The

assailed decision dated November 15, 2010 and Resolution dated February 25, 2011 of
the Court of Appeals in CA-GR SP No. 104292 are hereby REVERSED.

165
 ATCI OVERSEAS CORPORATION, AMALIA G. IKDAL AND MINISTRY OF
PUBLIC HEALTH-KUWAIT, PETITIONERS, VS. MA. JOSEFINA ECHIN,
RESPONDENT.
G.R. NO. 178551, OCTOBER 11, 2010
CARPIO MORALES, J.:

FACTS:

Echin was hired by ATCI Overseas Corporation under a two-year contract to

undergo a probationary period of one (1) year and covered by Kuwait’s Civil Service
Board Employment Contract No. 2. However, the Echin was terminated from
employment without passing the probationary period for failure to meet the
performance rating within one-year period as required under the Kuwait’s Civil Service
Laws.

Echin returned to the Philippines and filed with the NLRC a complaint for illegal
dismissal against ATCI. The Labor Arbiter found that ATCI, Ikdal and the Ministry
neither showed that there was just cause to warrant Echin’s dismissal nor that she
failed to qualify as a regular employee, and therefore they are ordered by the Labor
Arbiter to pay her salary for the three months unexpired portion of her contract.

The ATCI and Ikdal appealed to the Court of Appeals that their Principal, the
Ministry, as a foreign government agency is immune from suit and that immunity is
extended to them, and that they only acted as agent of the Ministry in which they
cannot be held jointly and solidarily liable with it.

ISSUE:

WON the petitioners should not be held liable for Echin’s illegal dismissal.
WON Philippine Labor Laws on probationary employment are not applicable in
this case.

RATIO DECIDENDI:

The petition fails. The petitioner ATCI, as a private recruitment agency, cannot
evade responsibility for the money claims of Overseas Filipino Workers (OFWs) which it
deploys abroad by the mere expediency of claiming that its foreign principal is a
government clthed with immunity from suit, or that such foreign principal’s liability must
first be established before it, as agent, can be held jointly and solidarily liable. Republic
Act No. 8042 precisely affords the OFWs with a recourse and ssures them of immediate
and sufficient payment of what is due them.

Moreover, as explained in Skippers United Pacific vs Maguad:

166
 “Recruitment agreement entered into by and between the local
agent and its foreign principal are not coterminous… if either or
both of the parties decide to end the agreement, the
responsibilities of such parties towards the contracted employee
under the agreement do not at all end, but the same extends up to
and until the expiration of the employment contracts.”

Since it was expressly provided in respondent’s employment contract that

the terms of shall engagement shall govern by Kuwait Civil Service Laws and
Regulations as in fact POEA rules accord respect to such rules, customs and
practices and the host country. However, the party to a have a foreign law
applied it has to be proven not merely alleged otherwise the presumption is that
the foreign law is the same as ours. Unfortunately, it did not prove the pertinent
Saudi Laws on the matter. Thus, the Philippine labor laws applied in the case.

FALLO/WHEREFORE CLAUSE:

WHEREFORE, the petition is DENIED.

167
 ANTONIO M. SERRANO, PETITIONER,
VS.
GALLANT MARITIME SERVICES, INC AND MARLOW NAVIGATION CO., INC
RESPONDENT
G.R. NO. 167614 MARCH 24, 2009

FACTS:
Petitioner was hired by Gallant Maritime Services, Inc. and Respondent Marlow
Navigation Co, Ltd under Philippine Overseas Employment Administration (POEA)-
approved contract of Employment with the following terms and conditions:
Duration of Contract: 12 months
Position: Chief Officer
Basic Monthly Salary : US$ 1,400.00
Hours of Work: 48Hrs per week
Overtime: US$700.00 per month
Vacation leave with pay: 7.00 days per month
On March 19, 1998, the date of his departure, petitioner wasconstrained to
accept a downgraded employment contract forthe position of Second Officer with a
monthly salary ofUS$1,000.00, upon the assurance and representation ofrespondents
that he would be made Chief Officer by the endof April 1998. Respondents did not
deliver on their promise to make petitioner Chief Officer. Hence, petitioner refused
tostay on as Second Officer and was repatriated to thePhilippines on May 26, 1998.
Petitioner’s employment contract was for a period of 12 months or from March 19,1998
up to March 19, 1999, but at the time of his repatriationon May 26, 1998, he had
served only two months andseven days of his contract, leaving an unexpired portionof
nine months and twenty-three days.Petitioner filed with the Labor Arbiter (LA) a
Complaint againstrespondents for constructive dismissal and for payment of hismoney
claims in the total amount of US$26,442.73.
The LArendered a Decision, declaring the dismissal of petitionerillegal and
awarding him monetary benefits, declaring that thedismissal of the complainant by the
respondentsin the above-entitled case was illegal and the respondents are hereby
ordered to pay the complainant [petitioner], jointlyand severally, in Philippine Currency,
based on the rate ofexchange prevailing at the time of payment, the amount ofEIGHT
THOUSAND SEVEN HUNDRED SEVENTY U.S. DOLLARS(US $8,770.00), representing the
complainant’s salary forthree (3) months of the unexpired portion of the
aforesaidcontract of employment.Respondents appealed to the National Labor
RelationsCommission (NLRC) to question the finding of the LA thatpetitioner was
illegally dismissed.
The NLRC modified the LADecision and corrected the LA’s computation of the
lump-sumsalary awarded to petitioner by reducing the applicable salaryrate from
US$2,590.00 to US$1,400.00 because R.A. No. 8042“does not provide for the award of
overtime pay, which shouldbe proven to have been actually performed, and for vacation
leave pay.Petitioner filed a Motion for Partial Reconsideration, but thistime he
questioned the constitutionality of the subject clause.The NLRC denied the
motion.Petitioner filed a Petition for Certiorari with the CA, reiteratingthe constitutional
168
challenge against the subject clause. Afterinitially dismissing the petition on a
technicality, the CAeventually gave due course to it, as directed by this Court inits
Resolution which granted the petition for certiorari, filed The CA affirmed the NLRC
ruling on the reduction of theapplicable salary rate; however, the CA skirted
theconstitutional issue raised by petitioner.
His Motion for Reconsideration having been denied by the CA,petitioner brings
his cause to this Court on the followinggrounds:
The Court of Appeals and the labor tribunals have decided thecase in a way not
in accord with applicable decision of theSupreme Court involving similar issue of
granting unto themigrant worker back wages equal to the unexpired portion ofhis
contract of employment instead of limiting it to three (3)months. Even without
considering the constitutional limitations [of]Sec. 10 of Republic Act No. 8042, the Court
of Appeals gravelyerred in law in excluding from petitioner’s award the overtimepay and
vacation pay provided in his contract since under thecontract they form part of his
salary.The Court now takes up the full merit of the petition mindfulof the extreme
importance of the constitutional questionraised therein.
ISSUES:

1. Is proper computation of the Lump-sum salary to beawarded to petitioner by

reason of his illegal dismissal?

2. Is overtime and leave pay should form part ofthe salary basis in the computation
of his monetaryaward?

3. Is Section 10 (par 5) of RA 8042 isunconstitutional?

RULING:
1. Is proper computation of the Lump-sum salary to be awarded to petitioner by reason
of his illegal dismissal?
Prior to R.A. No. 8042, all OFWs, irrespective ofcontract periods or the
unexpired portions thereof, weretreated identical in terms of the computation of their
monetarybenefits in case of illegal dismissal. Their claims weresubjected to a uniform
rule of computation:
Their basicsalaries multiplied by the entire unexpired portion of theiremployment
contracts.The enactment of the subject clause in R.A. No. 8042introduced a
differentiated rule of computation of the moneyclaims of illegally dismissed OFWs
based on their employmentperiods, in the process singling out one category
whosecontracts have an unexpired portion of one year or more andsubjecting them to
the peculiar disadvantage of having theirmonetary awards limited to their salaries for 3
months or forthe unexpired portion thereof, whichever is less, but all thewhile sparing
the other category from such prejudice, simplybecause the latter’s unexpired contracts
fall short of one year.Prior to R.A. No. 8042, a uniform system of computation ofthe
monetary awards of illegally dismissed OFWs was in place.This uniform system
was applicable even to local workers withfixed-term employment.The subject
clause does not state or imply any definitivegovernmental purpose; and it is for that
precise reason thatthe clause violates not just petitioner’s right to equalprotection,
but also her right to substantive due process under Section 1, Article III of the

169
Constitution. The subject clause being unconstitutional, petitioner isentitled to his
salaries for the entire unexpired period of ninemonths and 23 days of his employment
contract, pursuant tolaw and jurisprudence prior to the enactment of R.A. No.8042.
2. Is overtime and leave pay should form part ofthe salary basis in the computation of
his monetaryaward?
Petitioner contends that his overtime and leave pay shouldform part of the salary
basis in the computation of hismonetary award, because these are fixed benefits that
havebeen stipulated into his contract.Petitioner is mistaken.The word salaries in Section
10(5) does not include overtimeand leave pay. For seafarers like petitioner, DOLE
DepartmentOrder No. 33, series 1996, provides a Standard EmploymentContract of
Seafarers, in which salary is understood as thebasic wage, exclusive of overtime, leave
pay and otherbonuses; whereas overtime pay is compensation for all workperformed in
excess of the regular eight hours, and holiday pay is compensation for any work
performed on designatedrest days and holidays.In the same vein, the claim for the
day’s leave pay for theunexpired portion of the contract is unwarranted since thesame
is given during the actual service of the seamen.WHEREFORE, the Court GRANTS the
Petition.
The subjectclause “or for three months for every year of the unexpiredterm,
whichever is less” in the 5th paragraph of Section 10 ofRepublic Act No. 8042 is
DECLARED UNCONSTITUTIONAL;and the December 8, 2004 Decision and April 1,
2005Resolution of the Court of Appeals are MODIFIED to the effectthat petitioner is
AWARDED his salaries for the entireunexpired portion of his employment contract
consisting ofnine months and 23 days computed at the rate ofUS$1,400.00 per month.
3. Is Section 10 (par 5) of RA 8042 isunconstitutional?
The answer is in the affirmative.
Section 1, Article III of the Constitution guarantees:

No person shall be deprived of life, liberty, or property withoutdue process of law nor
shall any person be denied the equalprotection of the law.

Section 18, Article II and Section 3, Article XIII accord allmembers of the labor
sector, without distinction as to place ofdeployment, full protection of their rights and
welfare.To Filipino workers, the rights guaranteed under the
foregoingconstitutional provisions translate to economic security andparity:

All monetary benefits should be equally enjoyed byworkers of similar category,

while all monetary obligationsshould be borne by them in equal degree; none should
bedenied the protection of the laws which is enjoyed by, orspared the burden imposed
on, others in like circumstances.Imbued with the same sense of “obligation to
affordprotection to labor,” the Court in the present case alsoemploys the standard of
strict judicial scrutiny, for it perceivesin the subject clause a suspect classification
prejudicial toOFWs.The subject clause appears neutral, because it applies to all OFWs.
Although, a closerexamination reveals that the subject clause has adiscriminatory
intent against, and an offensive impact onOFWs.

The subject clause does not state or imply any definitivegovernmental purpose;
and it is for that precise reasonthat the clause violates not just petitioner’s right to
equalprotection, but also her right to substantive due process underSection 1, Article

170
 III of the Constitution.

CLAUDIO S. YAP VS. THENAMARIS SHIPS MANAGEMENT AND INTERMARE

MARITIME AGENCIES, INC.
G.R. NO. 179532, MAY 30, 2011
NACHURA, J.

FACTS:

Petitioner Claudio S. Yap was employed as electrician of the vessel, M/T

SEASCOUT on August 14, 2001 by Intermare Maritime Agencies, Inc. in behalf of its
principal, Vulture Shipping Limited. The contract of employment entered into by Yap
and Capt. Francisco B. Adviento, General Manager of Intermare, was for a duration of
12 months. However, the said vessel was sold on November 8, 2001. The Philippine
Overseas Employment Administration (POEA) was informed about the sale on
December 6, 2001 in a letter signed by Capt. Adviento. Yap, along with the other
crewmembers, was informed by the Master of the vessel that the same was sold and
will be scrapped.

Yap received his seniority bonus, vacation bonus, extra bonus along with the
scrapping bonus. But he refused to accept the payment of one-month basic wage. He
insisted that he was entitled to the payment of the unexpired portion of his contract
since he was illegally dismissed from employment. He alleged that he opted for
immediate transfer but to no avail.

Respondents contended that the dismissal of Yap was valid and insisted that
following the sale of the vessel, Yap signed off from the vessel on November 10, 2001
and was paid with his wages corresponding to the months he work until the day he
signed off plus other bonuses he received.

Petitioner filed a complaint for Illegal Dismissal with Damages and Attorneys Fee
before the Labor Arbiter claiming that he was entitled to the corresponding to the
unexpired portion of his contract.

The Labor Arbiter rendered its decision in favour of petitioner finding the latter to
have been constructively and illegally dismissed by the respondents. The Labort Arbiter
also found that respondents acted in bad faith when they assured petitioner of re-
embarkation but he was not able to board one despite making several follow ups.

The Labor Arbiter hereby ordered respondents Thenamaris Ships Management,

Intermare Maritime Agencies, Inc. and Vulture Shipping Limited to pay jointly and
severally complainant the sum of $12,870.00 or equivalent in peso. A moral and

171
exemplary damages amounting to $100,000.00 and $50,000.00, repectively shall be
awarded plus ten percent (10%) of total award as attorney’s fees.

Respondents file a motion for reconsideration which the National Labor and
Relations Commission (NLRC) denied. Hence, a petition for certiorari filed before the
Court of Appeals.

CA affirmed the decision of the National Labor and Relations Commission

(NLRC)and the Labor Arbiter with the modification that Claudio Yap be entitled to three
(3) months of basic salary in the amount of $4,290.00 or its peso equivalent at the time
of actual payment as provided under Section 10 of R.A. No. 8042. Petitioner however
questions the award of wages and assails that Section 10 as unconstitutional.

ISSUE:

Whether or not Section 10 paragraph 5 of R.A. 8042 is violative of substantive

due process.

RATIO DECIDENDI:

Yes. The Court declared that the clause “or for three months for every year of
the unexpired term, whichever is less” provided in the paragraph 5 of Section 10 of the
R.A. 8042 is unconstitutional for being violative of the rights of Overseas Filipino
Workers (OFW’s) to equal protection of the laws.

FALLO / WHEREFORE CLAUSE:

The petition is granted. The Court of Appeals decision and resolution is hereby
modified to the effect that petitioner is awarded his salaries for the entire unexpired
portion of his employment contract consisting of nine months computed at the rate of
$1,430.00 per month. All other awards are hereby affirmed. No costs.

172
 SAMEER OVERSEAS PLACEMENT AGENCY, INC., PETITIONER,
V.
JOY C. CABILES, RESPONDENT.
G.R. NO. 170139 AUGUST 05, 2014
LEONEN, J.:

FACTS:

The Petitioner, Sameer Overseas Placement Agency, Inc., is a recruitment and

placement agency.Responding to an ad it published, respondent, Joy C. Cabiles,
submitted her application for a quality control job in Taiwa. Later, Joy was later asked
to sign a one-year employment contract and deployed to work for Taiwan Wacoal, Co.
Ltd. (Wacoal) on June 26, 1997.She alleged that in her employment contract, she
agreed to work as quality control for one year. In Taiwan, she was asked to work as a
cutter.Petitioner claims that on July 14, 1997, a certain Mr. Huwang from Wacoal
informed Joy, without prior notice, that she was terminated and that “she should
immediately report to their office to get her salary and passport.” She was asked to
“prepare for immediate repatriation”. Joy claims that she was told that from June 26 to
July 14, 1997, she only earned a total of NT$9,000.According to her, Wacoal deducted
NT$3,000 to cover her plane ticket to Manila.

On October 15, 1997, Joy filed a complaint with the NLRC against petitioner and
Wacoal. She claimed that she was illegally dismissed, a claim as well as moral and
exemplary damages.But petitioner alleged that respondent's termination was due to her
inefficiency, negligence in her duties, and her “failure to comply with the work
requirements of her foreign [employer].”On July 29, 1998, the Labor Arbiter dismissed
Joy’s complaint as it was based on mere allegations.On appeal, the NLRC declared that
Joy was illegally dismissed and awarded respondent only three (3) months worth of
salary in the amount of NT$46,080, the reimbursement of the NT$3,000 withheld from
her, and attorney’s fees of NT$300.The CA affirmed the decision of the NLRCand
remanded the case to the National Labor Relations Commission to address the validity
of petitioner's allegations against Pacific.Dissatisfied, this present petition of petitioner.

ISSUE:

Whether the Court of Appeals erred when it affirmed the ruling of the National
Labor Relations Commission finding respondent illegally dismissed and awarding her
three months’ worth of salary, the reimbursement of the cost of her repatriation, and
attorney’s fees despite the alleged existence of just causes of termination.

RATIO DECIDENDI:

The petitioner failed to show that there was just cause for causing Joy’s
dismissal. The employer, Wacoal, also failed to accord her due process of law.The
provisions of the Constitution as well as the Labor Code which afford
protection to labor apply to Filipino employees whether working within the
Philippines or abroad. Moreover, the principle of lex loci contractus (the law

173
of the place where the contract is made) governs in this jurisdiction . The
Contract of Employment entered into by and between petitioners and private
respondent was executed here in the Philippines with the approval of the Philippine
Overseas Employment Administration (POEA). Hence, the Labor Code together with its
implementing rules and regulations and other laws affecting labor apply in this
case.Likewise, Petitioner failed to comply with the due process requirements. A
valid dismissal requires both a valid cause and adherence to the valid procedure of
dismissal. The employer is required to give the charged employee at least two written
notices before termination. One is to inform the employee of the particular acts that
may cause his or her dismissal ad to “[inform] the employee of the employer’s
decision.”.

The Court uphold the finding that respondent is entitled to all of these awards.
The award of the three-month equivalent of respondent’s salary should,
however, be increased to the amount equivalent to the unexpired term of the
employment contract.

In case of termination of overseas employment without just, valid or authorized

cause as defined by law or contract, or any unauthorized deductions from the migrant
worker’s salary, the worker shall be entitled to the full reimbursement if his placement
fee and the deductions made with interest at twelve percent (12%) per annum, plus his
salaries for the unexpired portion of his employment contract or for three (3) months
for every year of the unexpired term, whichever is less.

Respondent Joy Cabiles is entitled to her salary for the unexpired portion of her
contract, in accordance with Section 10 of Republic Act No. 8042. The award of the
three-month equivalence of respondent’s salary must be modified accordingly. Since
she started working on June 26, 1997 and was terminated on July 14, 1997, respondent
is entitled to her salary from July 15, 1997 to June 25, 1998.

FALLO:

WHEREFORE, the petition is DENIED. The decision of the Court of Appeals is

AFFIRMED with modification. Petitioner Sameer Overseas Placement Agency is
ORDERED to pay respondent Joy C. Cabiles the amount equivalent to her salary for
the unexpired portion of her employment contract at an interest of 6% per annum from
the finality of this judgment. Petitioner is also ORDERED to reimburse respondent the
withheld NT$3,000.00 salary and pay respondent attorney’s fees of NT$300.00 at an
interest of 6% per annum from the finality of this judgment.

The clause, “or for three (3) months for every year of the unexpired term,
whichever is less” in Section 7 of Republic Act No. 10022 amending Section 10 of
Republic Act No. 8042 is declared unconstitutional and, therefore, null and void.

174
 GENERAL MILLING CORPORATION AND EARL TIMOTHY CONE VS. HON.
RUBEN D. TORRES, IN HIS CAPACITY AS SECRETARY OF LABOR AND
EMPLOYMENT, HON. BIENVENIDO E. LAGUESMA, IN HIS CAPACITY AS
ACTING SECRETARY OF LABOR AND EMPLOYMENT, AND BASKETBALL
COACHES ASSOCIATION OF THE PHILIPPINES
G.R. NO. 93666: APRIL 22, 1991
FELICIANO, J.:

FACTS:

On 1 May 1989, the National Capital Region of the Department of Labor and
Employment issued Alien Employment Permit No. M-0689-3-535 in favor of petitioner
Earl Timothy Cone, a United States citizen, as sports consultant and assistant coach for
petitioner General Milling Corporation ("GMC"). On 27 December 1989, petitioners GMC
and Cone entered into a contract of employment whereby the latter undertook to coach
GMC's basketball team. On 15 January 1990, the Board of Special Inquiry of the
Commission on Immigration and Deportation approved petitioner Cone's application for
a change of admission status from temporary visitor to pre-arranged employee. On 9
February 1990, petitioner GMC requested renewal of petitioner Cone's alien
employment permit. GMC also requested that it be allowed to employ Cone as full-
fledged coach. The DOLE Regional Director, Luna Piezas, granted the request on 15
February 1990. Private respondent Basketball Coaches Association of the Philippines
("BCAP") appealed the issuance of said alien employment permit to the respondent
Secretary of Labor who, on 23 April 1990, issued a decision ordering cancellation of
petitioner Cone's employment permit on the ground that there was no showing that
there is no person in the Philippines who is competent, able and willing to perform the
services required nor that the hiring of petitioner Cone would redound to the national
interest. Petitioner GMC filed a Motion for Reconsideration and two (2) Supplemental
Motions for Reconsideration but said Motions were denied by Acting Secretary of Labor
Bienvenido E. Laguesma in an Order dated 8 June 1990.

Petitioners are now before the Court on a Petition for Certiorari, dated 14 June
1990.

ISSUE:

Whether or not respondent Secretary of Labor gravely abused his discretion

when he revoked petitioner Cone's alien employment permit and Section 6 (c), Rule
XIV, Book I of the Omnibus Rules Implementing the Labor Code is null and void as it is
in violation of the enabling law as the Labor Code does not empower respondent
Secretary to determine if the employment of an alien would redound to national
interest.

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RATIO DECIDENDI:

Deliberating on the present Petition for Certiorari, the Court considers that
petitioners have failed to show any grave abuse of discretion or any act without or in
excess of jurisdiction on the part of respondent Secretary of Labor in rendering his
decision, dated 23 April 1990, revoking petitioner Cone's Alien Employment Permit. The
alleged failure to notify petitioners of the appeal filed by private respondent BCAP was
cured when petitioners were allowed to file their Motion for Reconsideration before
respondent Secretary of Labor. Petitioner GMC's claim that hiring of a foreign coach is
an employer's prerogative has no legal basis at all. Under Article 40 of the Labor Code,
an employer seeking employment of an alien must first obtain an employment permit
from the Department of Labor. Petitioner GMC's right to choose whom to employ is, of
course, limited by the statutory requirement of an alien employment permit.

The provisions of the Labor Code and its Implementing Rules and Regulations
requiring alien employment permits were in existence long before petitioners entered
into their contract of employment. Private parties cannot constitutionally contract away
the otherwise applicable provisions of law. In short, the Department of Labor is the
agency vested with jurisdiction to determine the question of availability of local workers.
The constitutional validity of legal provisions granting such jurisdiction and authority
and requiring proof of non-availability of local nationals able to carry out the duties of
the position involved, cannot be seriously questioned. Petitioners apparently suggest
that the Secretary of Labor is not authorized to take into account the question of
whether or not employment of an alien applicant would "redound to the national
interest" because Article 40 does not explicitly refer to such assessment. This argument
(which seems impliedly to concede that the relationship of basketball coaching and the
national interest is tenuous and unreal) is not persuasive. In the first place, the second
paragraph of Article 40 says: "[t]he employment permit may be issued to a non-
resident alien or to the applicant employer after a determination of the non-availability
of a person in the Philippines who is competent, able and willing at the time of
application to perform the services for which the alien is desired." The permissive
language employed in the Labor Code indicates that the authority granted involves the
exercise of discretion on the part of the issuing authority. In the second place, Article
12 of the Labor Code sets forth a statement of objectives that the Secretary of Labor
should, and indeed must, take into account in exercising his authority and jurisdiction
granted by the Labor Code.

FALLO:

Thus, we find petitioners' arguments on the above points of constitutional law

too insubstantial to require further consideration.

176
 ACCORDINGLY, the Court Resolved to DISMISS the Petition for certiorari for lack
of merit. Costs against petitioners.
ATLANTA INDUSTRIES INC. VS. SEBOLINO ET.AL
G.R. NO. 187320; JANUARY 26, 2011
BRION, J.

FACTS:
In the year 2004, respondents Aprilito Sebolino, Khim V. Costales, Alvin Almoite
and Joseph Sagun entered into an apprenticeship program with Atlanta Industries for a
period of six months. After such lapse of the six months period, a second
apprenticeship program was entered for the training of a second skill for another five
months. In 2005, respondents filed a complaint for illegal dismissal when Atlanta
Industries INC. dismissed them, alleging that they had attained regular status as they
were allowed to work with Atlanta Industries for more than six months from the start of
the first apprenticeship agreement. And that the apprenticeship program was defective
as they were made to undergo apprenticeship for occupation different from those
allegedly approved by TESDA.
Petitioner avers that they are not entitled to regularization as they were engaged
as apprentices under a government approved apprenticeship program.
ISSUE:
Whether or not respondents are apprentices at the time they were dismissed.
RATIO DECIDENDI:
No, respondents are not apprentices at the time they are dismissed.
Article 61 of the Labor Code provides that the apprenticeship period shall not
exceed six months. Only the first apprenticeship program by Atlanta Industries is
considered valid, and with the expiration of the first agreement, the apprentice acquires
the status of the regular employee. Hence, respondents are deemed regular employees,
not apprentices at the time they were dismissed.
FALLO:
Wherefore, respondents acquire the status of regular employees after the
expiration of the first apprenticeship program and are illegally dismissed due to
unauthorized cause.

177
 PROFESSIONAL VIDEO, INC VS. TESDA
G.R. NO. 155504, JUNE 26, 2009
BRION, J.

FACTS:

Petitioner Professional Video, Inc. (PROVI) entered a contract / agreement with

respondent Technical Education and Skills Development Authority (TESDA) for the
provision of goods and services in the printing and encoding of security-printed
certification and/or identification polyvinyl (PVC) cards.

Furthermore, PROVI alleged that out of TESDA’s liability of ₱39,475,000.00,

TESDA only paid ₱3,739,500.00 and that despite the two demand letters they’ve sent to
TESDA dated March 8 and April 27, 2001, TESDA's outstanding balance remained
unpaid.

On July 11, 2001, PROVI filed with the RTC a complaint for sum of money with
damages against TESDA & prayed for the issuance of a writ of preliminary attachment
or garnishment against TESDA. In an order dated July 16, 2001, the RTC granted
PROVI’s prayer and issued a writ of preliminary attachment against the properties of
TESDA not exempt from execution in the amount of ₱35,000,000.00. TESDA responded
by filing a Motion to Discharge or Quash the Writ of Attachment, arguing that public
funds cannot be the subject of garnishment.

The RTC denied TESDA’s motion which resulted to TESDA filing a Petition for
Certiorari with the Court of Appeals to question the RTC's orders, imputing grave abuse
of discretion amounting to lack or excess of jurisdiction on the trial court for issuing a
writ of preliminary attachment against TESDA’s public funds.

The Court of Appeals ruled setting aside the RTC’s orders after finding that: (a)
TESDA’s funds are public in nature and, therefore, exempt from garnishment; and (b)
TESDA’s purchase of the PVC cards was a necessary incident of its governmental
function; consequently, it ruled that there was no legal basis for the issuance of a writ
of preliminary attachment/garnishment. The CA subsequently denied PROVI’s motion
for reconsideration.

ISSUES:

Whether or not the writ of attachment against TESDA and its funds, to cover
PROVI’s claim against TESDA, is valid.

RATIO DECIDENDI:

The Court supports the appellate court’s conclusion that no valid ground exists to
support the grant of the writ of attachment against TESDA.

The Court ruled that TESDA is an instrumentality of the government undertaking

governmental functions operating under its own charter pursuant to R.A. No. 7796.
Within TESDA’s structure, as provided by R.A. No. 7769, is a Skills Standards and
Certification Office expressly tasked, among others, to develop and establish a national
system of skills standardization, testing and certification in the country; and to conduct
research and development on various occupational areas in order to recommend

178
policies, rules and regulations for effective and efficient skills standardization, testing
and certification system in the country.

Furthermore, The Court stated that as an unincorporated instrumentality

operating under a specific charter, TESDA is equipped with both express and implied
powers and all State immunities fully apply to it. Thus, TESDA, as an agency of the
State, cannot be sued without its consent. The rule that a state may not be sued
without its consent is embodied in Section 3, Article XVI of the 1987 Constitution.

The Court also contends that even without the benefit of any immunity from suit,
the attachment of TESDA funds should not have been granted, as PROVI failed to prove
that TESDA "fraudulently misapplied or converted funds allocated under the Certificate
as to Availability of Funds." Section 1, Rule 57 of the Rules of Court sets forth the
grounds for issuance of a writ of preliminary attachment.

In the light of the foregoing, the petition must be denied.

FALLO:

WHEREFORE, the petition is denied. Costs against the petitioner.

SO ORDERED.

179
 CENTURY CANNING CORPORATION V. COURT OF APPEALS
G.R. NO. 152894, AUG. 17, 2007
CARPIO. J.

FACTS:

On 15 July 1997, Century Canning Corporation (petitioner) hired Gloria C. Palad

(Palad) as “fish cleaner” at petitioner’s tuna and sardines factory. Palad signed on 17
July 1997 an apprenticeship agreement with petitioner. Palad received an apprentice
allowance of P138.75 daily. On 25 July 1997, petitioner submitted its apprenticeship
program for approval to the Technical Education and Skills Development Authority
(TESDA) of the Department of Labor and Employment (DOLE). On 26 September 1997,
the TESDA approved petitioner’s apprenticeship program.

According to petitioner, a performance evaluation was conducted on 15

November 1997, where petitioner gave Palad a rating of N.I. or “needs improvement”
since she scored only 27.75% based on a 100% performance indicator. Furthermore,
according to the performance evaluation, Palad incurred numerous tardiness and
absences. As a consequence, petitioner issued a termination notice5 dated 22
November 1997 to Palad, informing her of her termination effective at the close of
business hours of 28 November 1997.
Palad then filed a complaint for illegal dismissal, underpayment of wages, and non-
payment of pro-rated 13th month pay for the year 1997.

The Labor Arbiter dismissed the complaint for lack of merit but ordered petitioner
to pay Palad her last salary and her pro-rated 13th month pay.
On appeal, the National Labor Relations Commission (NLRC) affirmed with modification
the Labor Arbiter’s decision, thus:

WHEREFORE, premises considered, the decision of the Arbiter dated 25 February

1999 is hereby MODIFIED in that, in addition, respondents are ordered to pay
complainant’s backwages for two (2) months in the amount of P7,176.00 (P138.75 x 26
x 2 mos.). All other dispositions of the Arbiter as appearing in the dispositive portion of
his decision are AFFIRMED.
Upon denial of Palad’s motion for reconsideration, Palad filed a special civil action for
certiorari with the Court of Appeals. On 12 November 2001, the Court of Appeals
rendered a decision, the dispositive portion of which reads:
WHEREFORE, in view of the foregoing, the questioned decision of the NLRC is hereby
SET ASIDE and a new one entered, to wit:

(a) finding the dismissal of petitioner to be illegal;

(b) ordering private respondent to pay petitioner her underpayment in wages;
(c) ordering private respondent to reinstate petitioner to her former position without
loss of seniority rights and to pay her full backwages computed from the time
compensation was withheld from her up to the time of her reinstatement;
(d) ordering private respondent to pay petitioner attorney’s fees equivalent to ten
(10%) per cent of the monetary award herein; and
(e) ordering private respondent to pay the costs of the suit.

180
The Ruling of the Court of Appeals

The Court of Appeals held that the apprenticeship agreement which Palad signed
was not valid and binding because it was executed more than two months before the
TESDA approved petitioner’s apprenticeship program.

The Court of Appeals also held that petitioner illegally dismissed Palad. The Court
of Appeals ruled that petitioner failed to show that Palad was properly apprised of the
required standard of performance. The Court of Appeals likewise held that Palad was
not afforded due process because petitioner did not comply with the twin requirements
of notice and hearing.

ISSUES:

Petitioner raises the following issues:

1. WHETHER OR NOT THE PRIVATE RESPONDENT WAS AN APPRENTICE; and

2. WHETHER THERE WAS A VALID CAUSE IN TERMINATING THE SERVICE OF
PRIVATE RESPONDENT.

The Ruling of the Court

The petition is without merit.

Registration and Approval by the TESDA of Apprenticeship Program Required Before

Hiring of Apprentices

In the case at bench, the apprenticeship agreement between petitioner and

private respondent was executed on May 28, 1990 allegedly employing the latter as an
apprentice in the trade of “care maker/molder.” On the same date, an apprenticeship
program was prepared by petitioner and submitted to the Department of Labor and
Employment. However, the apprenticeship agreement was filed only on June 7, 1990.
Notwithstanding the absence of approval by the Department of Labor and Employment,
the apprenticeship agreement was enforced the day it was signed.

Prior approval by the Department of Labor and Employment of the proposed

apprenticeship program is, therefore, a condition sine qua non before an apprenticeship
agreement can be validly entered into.

The act of filing the proposed apprenticeship program with the Department of
Labor and Employment is a preliminary step towards its final approval and does not
instantaneously give rise to an employer-apprentice relationship.

Hence, since the apprenticeship agreement between petitioner and private

respondent has no force and effect in the absence of a valid apprenticeship program
duly approved by the DOLE, private respondent’s assertion that he was hired not as an
apprentice but as a delivery boy (“kargador” or “pahinante”) deserves credence. He
should rightly be considered as a regular employee of petitioner as defined by Article
280 of the Labor Code x x x.

Republic Act No. 779615 (RA 7796), which created the TESDA, has
transferred the authority over apprenticeship programs from the Bureau of Local

181
Employment of the DOLE to the TESDA. RA 7796 emphasizes TESDA’s approval of the
apprenticeship program as a pre-requisite for the hiring of apprentices.

Since Palad is not considered an apprentice because the apprenticeship

agreement was enforced before the TESDA’s approval of petitioner’s apprenticeship
program, Palad is deemed a regular employee performing the job of a “fish cleaner.”
Clearly, the job of a “fish cleaner” is necessary in petitioner’s business as a tuna and
sardines factory. Under Article 28021 of the Labor Code, an employment is deemed
regular where the employee has been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer.

Illegal Termination of Palad

To constitute valid dismissal from employment, two requisites must concur: (1)
the dismissal must be for a just or authorized cause; and (2) the employee must be
afforded an opportunity to be heard and to defend himself.
When the alleged valid cause for the termination of employment is not clearly proven,
as in this case, the law considers the matter a case of illegal dismissal.
Furthermore, Palad was not accorded due process. Even if petitioner did conduct a
performance evaluation on Palad, petitioner failed to warn Palad of her alleged poor
performance. In fact, Palad denies any knowledge of the performance evaluation
conducted and of the result thereof. Petitioner likewise admits that Palad did not
receive the notice of termination because Palad allegedly stopped reporting for
work. The records are bereft of evidence to show that petitioner ever gave Palad the
opportunity to explain and defend herself. Clearly, the two requisites for a valid
dismissal are lacking in this case.

FALLO:

WHEREFORE, we AFFIRM the Decision and the Resolution of the Court of Appeals.

182
 NITO ENTERPRISES VS NLRC
G.R. NOS. 117145-50 & 117447 MARCH 28, 2000
KAPUNAN, J.:

FACTS:

Petitioner Nito Enterprises hired Capili as an apprentice machinist under an

apprenticeship agreement for six months for a daily wage, which was 75% of applicable
minimum wage. However, shortly 2 months after he started work, Capili was asked to
resign for the reason that he had been causing accidents, that he has been doing
certain things beyond the scope of his duty, and that he had even injured himself in
handling one of the machines, to the financial prejudice of the company as his
medication would be shouldered by Nito Enterprises.
Capili later filed a complaint for illegal dismissal, which the Labor Arbiter
dismissed. This decision was reversed by the NLRC, holding that Capili was a regular
employee. With this, Nito came to the Supreme Court. Nito Enterprises assails the NLRC
decision on the ground that no apprenticeship program had yet been filed and
approved at the time the agreement was executed.

ISSUE:

Is Capili a regular employee or an apprentice?

RATIO DECIDENDE:

Capili is a regular employee. Apprenticeship needs DOLE’s prior approval, or

apprentice becomes regular employee.
Petitioner did not comply with the requirements of the law. It is mandated that
apprenticeship agreements entered into by the employer and apprentice shall be
entered only in accordance with the apprenticeship program duly approved by the
Minister of Labor and Employment.
Prior approval by the Department of Labor and Employment of the proposed
apprenticeship program is, therefore, a condition sine quo nonbefore an apprenticeship
agreement can be validly entered into.
The act of filing the proposed apprenticeship program with the Department of
Labor and Employment is a preliminary step towards its final approval and does not
instantaneously give rise to an employer-apprentice relationship.
Hence, since the apprenticeship agreement between petitioner and private
respondent has no force and effect in the absence of a valid apprenticeship program
duly approved by the DOLE, private respondent’s assertion that he was hired not as an
apprentice but as a delivery boy (“kargador” or “pahinante”) deserves credence. He
should rightly be considered as a regular employee of petitioner as defined by Article
280 of the Labor Code and pursuant to the constitutional mandate to protect the rights
of workers and promote their welfare.
FALLO:
WHEREFORE, finding no abuse of discretion committed by public respondent
National Labor Relations Commission, the appealed decision is hereby AFFIRMED.

183
MARITES BERNARDO, ET.AL, PETITIONERS VS NATIONAL LABOR RELATIONS
COMMISSION & FAR EAST BANK AND TRUST COMPANY, RESPONDENTS.
GR 122917 JULY 12, 1999
PANGANIBAN, J.

FACTS:

Petitioners numbering 43 are deaf–mutes who were hired on various periods

from 1988 to 1993 by respondent Far East Bank and Trust Co. as Money Sorters and
Counters through a uniformly worded agreement called ‘Employment Contract for
Handicapped Workers. Subsequently, they are dismissed.

Petitioners maintain that they should be considered regular employees, because

their task as money sorters and counters was necessary and desirable to the business
of respondent bank. They further alleged that their contracts served merely to preclude
the application of Article 280 and to bar them from becoming regular employees.

Private respondent, on the other hand, submits that petitioners were hired only
as “special workers and should not in any way be considered as part of the regular
complement of the Bank.”[12] Rather, they were “special” workers under Article 80 of
the Labor Code.

ISSUE:

Whether or not petitioners have become regular employees.

RACIO DECIDENDI:

YES, 27 of the 43 petitioners should be deemed regular employees and are

entitled to security of tenure but because the other 16 worked only for 6 months, they
are not deemed regular employees and hence not entitled to the same benefits.

The fact that the employees were qualified disabled persons necessarily removes
the employment contracts from the ambit of Article 80. Since the Magna Carta accords
them the rights of qualified able-bodied persons, they are thus covered by Article 280 of
the Labor Code, which provides:

“ART. 280. Regular and Casual Employment. — The provisions of written

agreement to the contrary notwithstanding and regardless of the oral agreement of the
parties, an employment shall be deemed to be regular where the employee has been
engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer, x x x”

184
In De Leon v. NLRC, the court laid down the test of whether an employee is regular and
held that:

“The primary standard, therefore, of determining regular employment is the

reasonable connection between the particular activity performed by the employee in
relation to the usual trade or business of the employer. The test is whether the former
is usually necessary or desirable in the usual business or trade of the employer. The
connection can be determined by considering the nature of the work performed and its
relation to the scheme of the particular business or trade in its entirety. Also if the
employee has been performing the job for at least one year, even if the performance is
not continuous and merely intermittent, the law deems repeated and continuing need
for its performance as sufficient evidence of the necessity if not indispensability of that
activity to the business. Hence, the employment is considered regular, but only with
respect to such activity, and while such activity exists.”

Without a doubt, the task of counting and sorting bills is necessary and desirable
to the business of respondent bank. With the exception of sixteen of them, petitioners
performed these tasks for more than six months.

As held by the Court, Articles 280 and 281 of the Labor Code put an end to the
pernicious practice of making permanent casuals of our lowly employees by the simple
expedient of extending to them probationary appointments, ad infinitum. The contract
signed by the petitioners is akin to a probationary employment, during which the bank
determined the employees’ fitness for the job. When the bank renewed the contract
after the lapse of the six-month probationary period, the employees thereby became
regular employees. No employer is allowed to determine indefinitely the fitness of its
employees.

FALLO/ WHEREFORE CLAUSE:

IN VIEW OF THE FOREGOING, the Petition is hereby GRANTED. The June 20,
1995 Decision and the August 4, 1995 Resolution of the NLRC are REVERSED
and SETASIDE. Respondent Far East Bank and Trust Company is hereby ORDERED to
pay back wages and separation pay to each of the following twenty-seven (27)
petitioners, namely, Marites Bernardo, Elvira Go Diamante, Rebecca E. David, David P.
Pascual, Raquel Estiller, Albert Hallare, Edmund M. Cortez, Joselito O. Agdon, George P.
Ligutan Jr., Lilibeth Q. Marmolejo, Jose E. Sales, Isabel Mamauag, Violeta G. Montes,
Albino Tecson, Melody V. Gruela, Bernadeth D. Agero, Cynthia de Vera, Lani R. Cortez,
Ma. Isabel B. Concepcion, Margaret Cecilia Canoza, Thelma Sebastian, Ma. Jeanette
Cervantes, Jeannie Ramil, Rozaida Pascual, Pinky Baloloa, Elizabeth Ventura and Grace
S. Pardo. The NLRC is hereby directed to compute the exact amount due each of said
employees, pursuant to existing laws and regulations, within fifteen days from the
finality of this Decision. No costs.

185
186
 BROTHERHOOD LABOR UNITY MOVEMENT OF THE PH, ET AL VS ZAMORA
G. R. NO. L-48645, JANUARY 7, 1987
GUTIERREZ, JR., J.:

FACTS:

Petitioners, Brotherhood Labor Unity Movement (BLUM) filed a complaint

charging San Miguel Corporation and some of its officers of unfair labor practice as set
forth in Section 4 (a), sub-sections (1) and (4) of R.A. No. 875 and of illegal dismissal.
Respondents, on their part, moved for the dismissal of the complaint on the grounds
that the complainants are not and have never been employees of respondent company
but employees of the independent contractor. The hearing of the case was then
referred to the National Labor Relations Commission and rendered decision to award
backwages, however, it was reduced to the equivalent of one (1) year salary.

The ruling of NLRC was set aside by the Secretary, stressing the absence of an
employer-employee relationship as reflected in the records of the case. Petitioners
argue that they are workers who have been employed at the San Miguel Glass Factory
since 1961, as “pahinantes” or “kargadors” for about seven years. They worked
exclusively at the SMC plant, never having been assigned to other companies or
departments of SMC plant, even when the volume of work was at its minimum. Their
work was neither regular nor continuous, depending on the volume of bottles to be
loaded and unloaded, as well as the business activity of the company. However, work,
at times, exceeded the eight-hour day and necessitated work on Sundays and holidays.
As a result, they were neither paid overtime nor compensation for work on Sundays and
holidays.

Sometime in January, 1969, the petitioners organized and affiliated themselves

with BLUM and engaged in union activities. They wanted to be paid of the overtime and
holiday pay, petitioners pressed management to hear their gripes and grievances.
BLUM, then filed a notice of strike with the Bureau of Labor Relations in connection with
the dismissal of some of its members. Conciliation conferences were scheduled to
thresh out their differences, however, SMC refused to bargain with the union alleging
that the workers were not their employees but the employees of an independent labor
contracting firm, Guaranteed Labor Contractor.

All the petitioners were dismissed from their jobs and denied entrance to
respondent company’s glass factory despite their regularly reporting for work. A
complaint for illegal dismissal and unfair labor practice was filed by the petitioners.

ISSUE:

Whether or not there was an employer-employee relationship exists between

petitioners and respondent San Miguel Corporation.

RATIO DECIDENDI:

187
 In determining the existence of an employer-employee relationship, the elements
that are generally considered are the following: (a) the selection and engagement of
the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the
employer’s power to control the employee with respect to the means and methods by
which the work is to be accomplished. The control test is the most important element
which is the employer’s means and methods/manner to control the work to be
accomplished.

The evidence indicates the existence of an employer-employee relationship

between petitioner workers and respondent SMC. The respondent asserts that the
petitioners are employees of the Guaranteed Labor Contractor, an independent labor
contracting firm.

The existence of an independent contractor relationship is generally established

by the following criteria: "whether or not the contractor is carrying on an independent
business; the nature and extent of the work; the skill required; the term and duration of
the relationship; the right to assign the performance of a specified piece of work; the
control and supervision of the work to another; the employer's power with respect to
the hiring, firing and payment of the contractor's workers; the control of the premises;
the duty to supply the premises tools, appliances, materials and labor; and the mode,
manner and terms of payment".

In the case, the records fail to show that San Miguel entered into mere oral
agreements of employment with the workers. Considering the length of time that the
petitioners have worked with the company, there is justification to conclude that they
were engaged to perform activities necessary in the usual business or trade. Despite
past shutdowns of the glass plant, the workers promptly returned to their jobs. The
term of the petitioner’s employment appears indefinite and the continuity and
habituality of the petitioner’s work bolsters the claim of an employee status.

As for the payment of the workers’ wages, the contention that the independent
contractors were paid a lump sum representing only the salaries the workers where
entitled to have no merit. The amount paid by San Miguel to the contracting firm is no
business expense or capital outlay of the latter.

The power of dismissal by the employer was evident when the petitioners had
already been refused entry to the premises. It is apparent that the closure of the
warehouse was a ploy to get rid of the petitioners, who were then agitating the
company for reforms and benefits. The inter-office memoranda submitted in evidence
prove the company’s control over the workers. That San Miguel has the power to
recommend penalties or dismissal is the strongest indication of the company’s right of
control over the workers as direct employer.

The respondent's shutdown was merely temporary, one of its furnaces needing
repair. Operations continued after such repairs, but the petitioners had already been
refused entry to the premises and dismissed from respondent's service. New workers
manned their positions. It is apparent that the closure of respondent's warehouse was

188
merely a ploy to get rid of the petitioners, who were then agitating the respondent
company for benefits, reforms and collective bargaining as a union. There is no showing
that petitioners had been remiss in their obligations and inefficient in their jobs to
warrant their separation.

As to the charge of unfair labor practice because of SMC's refusal to bargain with
the petitioners, it is clear that the respondent company had an existing collective
bargaining agreement with the IBM union which is the recognized collective bargaining
representative at the respondent's glass plant.

There being a recognized bargaining representative of all employees at the

company's glass plant, the petitioners cannot merely form a union and demand
bargaining. The Labor Code provides the proper procedure for the recognition of unions
as sole bargaining representatives. This must be followed.

FALLO:

WHEREFORE, IN VIEW OF THE FOREGOING, the petition is GRANTED. The San

Miguel Corporation is hereby ordered to REINSTATE petitioners, with three (3) years
backwages. However, where reinstatement is no longer possible, the respondent SMC is
ordered to pay the petitioners separation pay equivalent to one (1) month pay for every
year of service.

SO ORDERED.

189
 GRANDTEQ INDUSTRIAL STEEL PRODUCTS, INC. AND ABELARDO M.
GONZALES,
VS.
EDNA MARGALLO
G.R. NO. 181393, JULY 28, 2009

FACTS:
Margallo was employed by Grandteg Steel Industrial Products Inc. as Sales
Engineer on 3 August 1999. Margallo claimed that on an unstated date, she availed
herself of the car loan program offered to her by Grandteq as a reward for being
Salesman of the Year. (Toyota Corolla, she paid downpayment, amortization to be
shared by her and the company). On Dec 29, 2003, Margallo received a letter signed by
Gonzales and de Leon (Pres and VP of Grandteq), accusing her of moonlighting,
sabotage, and breach of trust and confidence, as she was seen working or with
connection to other companies concurrent to her being an employee of Grandteg.
Margallo also works with JVM Industrial Supply and Allied Services,who supplies steel
products to Moog Control Corp. Phils. Branchwhich is also a client of Grandteq.
Margallo replied to the letter, claiming that she did nothing wrong, she just
followed the instruction of her boss and she denied the allegations. Margallo claimed
that De Leon asked her to just resign, promising that if she did, she would still be paid
her commissions and other benefits, as well as be reimbursed of her car loan payments.
However, Margallo was never paid her benefits and other claims. She then filed a
complaint before the Labor Arbitera complaint against Gonzales and Grandteg.
Grandteq maintained that Margallo was not entitled to sales commissions because the
computation thereof, according to company policy, should be based on actual
collections within 180 days from invoice date. However, all of Margallos credit sales
transactions were unpaid, outstanding, and past due.
The Labor Arbiter denied her complaint for lack of merit.
She was not able to prove by substantial evidence her entitlement to the sales
commission, cash incentives and other benefits.
She then appealed to the NLRC. The NLRC reversed the decision of Labor
Arbiter. That she be granted claims for sales commission, reimbursement ofher car loan
payments, and attorney’s fees.
Grandted appealed to the CA. The CA affirmed the decision of NLRC.
Hence, this petition.
ISSUE:
Whether or not Margallo is entitled to Sales Commission.
RATIO DECIDENDI:
The court finds no error in the grant by the CA and and NLRC of Margallo’s claim
for sales commission.
In cases involving money claim of employees, the employer has the burden of proving
that the employees did receive their wages and benefits and that the same were
paid in accordane with law.

190
It is settled that once the employee has set out with particularity in his complaint,
position paper, affidavits and other documents the labor standard benefits he is
entitled to, and the employer failed to pay him, it becomes the employer’s burden to
prove that it has paid these money claims. One who pleads payment has the burdern
of proving it, rather than the one receiving it to prove non-payment.
Under terms and conditions of Margallo’s employemnt with Granteq, it is provided that
she will do field sales with commission on sales made after a month’s training. On this
basis, Margallo’s entitlement to sales commission is unrebuted.
Grandteq and Gonzales have the burden of proof to show by substantial evidence, their
claim that Margallo was not entitled to sales commission because the sales made by
the latter remained outstanding and unpaid, rendering these sales as bad debts and
thus nullifying Margallo’s right to monetary benefit. Grandteq ad Gonzales could have
presented pertinent company records to prove this claim. It is a rule that failure of
employers to submit the necessary documents that are in their possession as
employers give rise to the presumption that the presentation thereof is prejudicial to
its cause.
FALLO:
Wherefore, premises considered, the petition is denied for lack of merit. The
decision of Court of Appeals was affirmed. With cost against petitioners.

191
 SANDIGAN SAVINGS AND LOAN BANK, INC., AND SANDIGAN REALTY
DEVELOPMENT CORPORATION
VS.
NATIONAL LABOR RELATIONS COMMISSION AND ANITA M. JAVIER
G.R. NO. 112877 FEBRUARY 26, 1996
HERMOSISIMA, JR., J.:

FACTS:

Private respondent Javier (hereinafter referred to as Javier) worked as a realty

sales agent of the petitioner Sandigan Realty Development Corporation (hereinafter
called the Sandigan Realty) from November 2, 1982 (or November 9, 1982) to
November 30, 1986. Their agreement was that Javier would receive a 5% commission
for every sale, or if no sale was made, she would receive a monthly allowance of
P500,00.

Subsequently, that is, on 1 December 1986, Javier was hired as a marketing

collector of petitioner Sandigan Savings and Loan Bank (hereinafter called the Sandigan
Bank) by Angel Andan, the President of both the Sandigan Bank and Sandigan Realty.
Javier's monthly salary and allowance were initially in the amount of P788.00 and
P585.00, respectively. These were adjusted thereafter (the latest adjustment having
been made on 1 July 1989), to P1,840.00 per month as salary and to P510.00 as
monthly allowance, per "Notice of Salary Adjustment."

Meanwhile, respondent Javier continued to be a realty sales agent of Sandigan

Realty on the side, and while she still received the 5% commission on her sales, she no
longer enjoyed the P500,00 monthly allowance.

On 20 April 1990, Javier was advised by Angel Andan not to report for work
anymore. This in effect was a notice of dismissal.

The advice of her termination notwithstanding, Javier reported for work at the
bank on the next working day or on 23 April 1990. Though she signed the attendance
sheet, she left when she could not find her table.

On 18 May 1990, Javier filed a complaint against petitioners and Angel Andan
with the NLRC Regional Arbitration Branch No. III at San Fernando, Pampanga, for
illegal dismissal, seeking reinstatement and payment of backwages and moral and
exemplary damages.

192
 On 6 October 1992, the labor arbiter rendered judgment in private respondent's
favor.

On appeal, the NLRC affirmed the decision of the Labor Arbiter in its Resolution,
dated 24 September 1993, but, deleting the award of damages and attorney's fees.

The petitioners' Motion for Reconsideration of the said Resolution, and that of
the private respondent, were denied by the NLRC in its Resolution, dated 19 November
1993.

The petitioners, thus, instituted this petition for certiorari.

ISSUE:

Whether or not public respondent Javier is a regular employee of both Sandigan

Realty and Sandigan Bank and entitled to backwages and separation pay from both;

RATIO DECIDENDI:

In determining the existence of an employer-employee relationship, the following

elements are generally considered: (1) the selection and engagement of the employee;
(2) the payment of wages; (3) the power of dismissal; and (4) the employer's power to
control the employee with respect to the means and methods by which the work is to
be accomplished. This Court has generally relied on the so called "right of control test"
in making such a determination. Where the person for whom the services are
performed reserves a right to control not only the end to be achieved but also the
means by which such end is reached, the relationship is deemed to exist. Stated
differently, it is the power of control which is the most determinative factor.

It is deemed to be such an important factor that the other requisites may even
be disregarded. Thus, in the case of Cosmopolitan Funeral Homes, Inc. v. Maalat, it was
held that "to determine whether a person who performs work for another is the latter's
employee or is all independent contractor, the prevailing test is 'the right of control
test'." In the said case, the petitioner therein failed to prove that the contract with
private respondent was that of a mere agency, an indication that subject person is free
to accomplish his work on his own terms and may engage in other means of livelihood.

Viewed in the light of the foregoing criteria, the features of the relationship between
Javier and the Sandigan Realty, as may be gleaned from the facts described herein

193
below by the Office of the Solicitor General, readily negate the existence of an
employer-employee relationship between them, the element of control being noticeably
absent.

Javier was hired in 1982 to sell houses or lots owned by the Realty. She was paid
5% commission for every lot or house sold. From 1982 up to 1986 when she was
hired as a marketing collector of petitioner bank, she received from the Realty
P500.00 monthly allowance if she was unable to make any sale. The P500.00
allowance ceased when she became a regular employee of the petitioner bank.

Javier sold houses or lots according to the manner or means she chose to. The
petitioner realty firm, while interested in the result of her work, had no control
with respect to the details of how the sale of a house or lot was achieved. She
was free to adopt her own selling methods or free to sell at her own time.
(cf. Insular Life Assurance Co., Ltd. v. NLRC, 179 SCRA 459 [1989]). Her
obligation was merely to turn over the proceeds of each sale to the Realty and,
in turn, the Realty paid her by the job, i.e., her commission, not by the hour.

Moreover, selling houses and lots was merely her sideline or extra work for a
sister company.

As it appears that Sandigan Realty had no control over the conduct of Javier as a
realty sales agent since its only concern or interest was in the result of her work and
not in how it was achieved, there cannot now be any doubt that Javier was not an
employee, much less a regular employee of the Sandigan Realty. Hence, she cannot be
entitled to the right to security of tenure nor to backwages and separation pay as a
consequence of her separation therefrom.

Evidently, the legal relation of Javier to the Sandigan Realty can be that of an
independent contractor, where the control of the contracting party is only with respect
to the result of the work, as distinguished from an employment relationship where the
person rendering service is under the control of the hirer with respect to the details and
manner of performance.

As we hold that private respondent was not a regular employee of the Sandigan
Realty and that she could not, therefore, be entitled to backwages and separation pay,
we will necessarily have to limit our treatment of the alleged errors committed by the
NLRC in the computation of the monetary award to that adjudged against the petitioner

194
Sandigan Bank. But, first, we have to settle the question as to whether reinstatement or
payment of separation pay in its stead is the proper relief to be accorded the private
respondent, it appearing that neither the labor arbiter nor the NLRC made a definitive
ruling on the matter. This has become especially more significant since private
respondent, in her Comment and Memorandum, presses for an order of reinstatement
to her former position, claiming that there is no sufficient basis for a grant of separation
pay in lieu thereof.

We agree with the private respondent in this respect.

Private respondent Anita Javier, by virtue of her employment status, is, under
the law entitled to security of tenure, which means that she has the right to continue in
employment until the same is terminated under conditions required by law. Article 279
of the Labor Code, as amended, clearly provides that:

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 the 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.

There being a finding of illegal dismissal of private respondent Anita Javier, her
reinstatement should follow as a matter of course, unless it be shown that the same is
no longer possible, in which case, payment of separation pay will be ordered, in lieu
thereof. In this case, we do not find any such showing or basis to preclude private
respondent's reinstatement.

In effect, the petitioner bank is liable to private respondent only for backwages,
inclusive of allowances, and other benefits or their monetary equivalent computed from
the time her compensation was withheld from her up to the time of her actual
reinstatement, at the rate of her latest monthly salary and allowance which was in the
total amount of P2,350,00 as shown by Javier's latest "Notice of Salary Adjustment".
However, earnings derived elsewhere by Javier from the date of dismissal up to the
date of reinstatement, if there be any, should be deducted from said backwages.

195
 In this connection, it must be pointed out that the NLRC applied the old rule,
otherwise known as the "Mercury Drug Rule", and so, as to the rate of P2,400.00, no-
evidence was presented as basis. The rule that should apply in this case is that
provided in Article 279 of the Labor Code, as amended by Section 34, Republic Act No.
6715, as aforequoted, which took effect on March 21, 1989, considering that the private
respondent's dismissal occurred thereafter, or on April 20, 1990.

FALLO:

WHEREFORE, the petition is GRANTED. The assailed resolutions of the National

Labor Relations Commission, dated 24 September 1993 and 19 November 1993, are
hereby modified to conform both to our finding that private respondent was not a
regular employee of Sandigan Realty Development Corporation but of the Sandigan
Savings and Loan Bank, Inc. and to our determination respecting the monetary award
to which the private respondent is entitled. The petitioner Sandigan Savings and Loan
Bank, Inc. is hereby ordered to reinstate private respondent Anita Javier and to pay her
backwages from April 20, 1990 up to the date of her actual reinstatement, less earnings
derived elsewhere, if any.

SO ORDERED.

196
 SMART COMMUNICATIONS, INC. VS. REGINA ASTORGA
G.R. NO. 148132 JANUARY 28, 2008
NACHURA, J.

FACTS:
Regina Astorga (Astorga) was employed by Smart Communications, Inc. (Smart)
as District Sales Manager of the Corporate Sales Marketing Group/ Fixed Services
Division (CSMG/FSD). She is receiving a monthly salary of P33,650 and enjoyed
additional benefits such as, annual performance incentive, group life and hospitalization
insurance coverage, and a car plan.
In February 1998, Smart launched an organizational realignment to achieve more
efficient operations and thus, part of the reorganization was the outsourcing of
marketing and sales force. This was made known to the employees on February 27,
1998. With that, Smart entered into a joint venture agreement with NTT of Japan, and
formed Smart-NTT Multimedia, Inc. (SNMI). SNMI was formed to do sales and
marketing work, hence, Smart abolished CSMG/FSD, which is Astorga's division.
To soften the blow of the realignment, SNMI agreed to absorb the CSMG
personnel who would be recommended by SMART. SMART then conducted a
performance evaluation of CSMG personnel and those who garnered the highest ratings
were favorably recommended to SNMI. Astorga landed last in the performance
evaluation, thus, she was not recommended by SMART. SMART, nonetheless, offered
her a supervisory position in the Customer Care Department, but she refused the offer
because the position carried lower salary rank and rate.
Astorga continued reporting for work but on March 3, 1998, Smart issued a
memorandum advising Astorga of the termination of her employment on the ground of
redundancy, effective April 3, 1998. Astorga received it on March 16, 1998. Due to this,
Astorga file a Complaint for Illegal Dismissal, Non-payment of Salaries and other
benefits and prayed for moral and exemplary damages against Smart. She claimed that
terminating her employment was illegal as it violated her right to security of tenure. She
also averred that it was illegal for Smart to contract out services which will displace the
employees, especially, if the contractor is an in-house agency.
SMART responded that there was valid termination. It argued that Astorga was
dismissed by reason of redundancy, which is an authorized cause for termination of
employment, and the dismissal was effected in accordance with the requirements of the
Labor Code. The redundancy of Astorga’s position was the result of the abolition of
CSMG and the creation of a specialized and more technically equipped SNMI, which is a
valid and legitimate exercise of management prerogative.
Labor Arbiter ruled in favor of Astorga and declared that she was illegally
dismissed from employment. While recognizing SMART’s right to abolish any of its
departments, the Labor Arbiter held that such right should be exercised in good faith
and for causes beyond its control. The Arbiter found the abolition of CSMG done neither
in good faith nor for causes beyond the control of SMART, but a ploy to terminate
Astorga’s employment. The Arbiter also ruled that contracting out the functions
performed by Astorga to an in-house agency like SNMI was illegal, citing Section 7(e),
Rule VIII-A of the Rules Implementing the Labor Code.
Smart appealed the unfavorable ruling of Labor Arbiter to NLRC. NLRC reversed
Labor Arbiter's decision and declared that the abolition of CSMG and the creation of
SNMI to do sales and marketing services for Smart is a valid organizational action. It
overruled the Labor Arbiter’s ruling that SNMI is an in-house agency, holding that it
lacked legal basis. It also declared that contracting, subcontracting and streamlining of

197
operations for the purpose of increasing efficiency are allowed under the law. The NLRC
further found erroneous the Labor Arbiter’s disquisition that redundancy to be valid
must be impelled by economic reasons, and upheld the redundancy measures
undertaken by SMART.
Astorga appealed to CA via certiorari. CA affirmed NLRC's decision with
modification. CA agreed with the NLRC that the reorganization undertaken by SMART
resulting in the abolition of CSMG was a legitimate exercise of management
prerogative. It rejected Astorga’s posturing that her non-absorption into SNMI was
tainted with bad faith. However, the CA found that SMART failed to comply with the
mandatory one-month notice prior to the intended termination. Accordingly, the CA
imposed a penalty equivalent to Astorga’s one-month salary for this non-compliance.
Hence, this case.
ISSUE:
Whether or not Astorga was illegally dismissed from employment.
RATIO DECIDENDI:
No. Astorga was validly dismissed.
Astorga was terminated due to redundancy, which is one of the authorized
causes for the dismissal of an employee. The nature of redundancy as an authorized
cause for dismissal is explained in the leading case of Wiltshire File Co., Inc. v. National
Labor Relations Commission, viz.
x x x redundancy in an employer’s personnel force necessarily or even ordinarily
refers to duplication of work. That no other person was holding the same position that
private respondent held prior to termination of his services does not show that his
position had not become redundant. Indeed, in any well organized business enterprise,
it would be surprising to find duplication of work and two (2) or more people doing the
work of one person. We believe that redundancy, for purposes of the Labor Code, exists
where the services of an employee are in excess of what is reasonably demanded by
the actual requirements of the enterprise. Succinctly put, a position is redundant where
it is superfluous, and superfluity of a position or positions may be the outcome of a
number of factors, such as over hiring of workers, decreased volume of business, or
dropping of a particular product line or service activity previously manufactured or
undertaken by the enterprise.
Astorga claims that the termination of her employment was illegal and tainted
with bad faith. She asserts that the reorganization was done in order to get rid of her.
But except for her barefaced allegation, no convincing evidence was offered to prove it.
This Court finds it extremely difficult to believe that SMART would enter into a joint
venture agreement with NTT, form SNMI and abolish CSMG/FSD simply for the sole
purpose of easing out a particular employee, such as Astorga. Moreover, Astorga never
denied that SMART offered her a supervisory position in the Customer Care
Department, but she refused the offer because the position carried a lower salary rank
and rate. If indeed SMART simply wanted to get rid of her, it would not have offered
her a position in any department in the enterprise.
Astorga also states that the justification advanced by SMART is not true because
there was no compelling economic reason for redundancy. But contrary to her claim, an
employer is not precluded from adopting a new policy conducive to a more economical
and effective management even if it is not experiencing economic reverses. Neither
does the law require that the employer should suffer financial losses before he can
terminate the services of the employee on the ground of redundancy.

198
 We agree with the CA that the organizational realignment introduced by SMART,
which culminated in the abolition of CSMG/FSD and termination of Astorga’s
employment was an honest effort to make SMART’s sales and marketing departments
more efficient and competitive.
Indeed, out of our concern for those lesser circumstanced in life, this Court has
inclined towards the worker and upheld his cause in most of his conflicts with his
employer. This favored treatment is consonant with the social justice policy of the
Constitution. But while tilting the scales of justice in favor of workers, the fundamental
law also guarantees the right of the employer to reasonable returns for his
investment.38 In this light, we must acknowledge the prerogative of the employer to
adopt such measures as will promote greater efficiency, reduce overhead costs and
enhance prospects of economic gains, albeit always within the framework of existing
laws. Accordingly, we sustain the reorganization and redundancy program undertaken
by SMART. However, as aptly found by the CA, SMART failed to comply with the
mandated one (1) month notice prior to termination. The record is clear that Astorga
received the notice of termination only on March 16, 1998 or less than a month prior to
its effectivity on April 3, 1998. Likewise, the Department of Labor and Employment was
notified of the redundancy program only on March 6, 1998.
Thus, we find the need to modify, by increasing, the indemnity awarded by the
CA to Astorga, as a sanction on SMART for non-compliance with the one-month
mandatory notice requirement.
We deem it proper to increase the amount of the penalty on SMART
to P50,000.00. As provided in Article 283 of the Labor Code, Astorga is, likewise,
entitled to separation pay equivalent to at least one (1) month salary or to at least one
(1) month’s pay for every year of service, whichever is higher. The records show that
Astorga’s length of service is less than a year. She is, therefore, also entitled to
separation pay equivalent to one (1) month pay. However, the award of backwages to
Astorga by the CA should be deleted for lack of basis. Backwages is a relief given to an
illegally dismissed employee. Thus, before backwages may be granted, there must be a
finding of unjust or illegal dismissal from work.
FALLO:
WHEREFORE, the petition of SMART docketed as G.R. No. 148132
is GRANTED. The February 28, 2000 Decision and the May 7, 2001 Resolution of the
Court of Appeals in CA-G.R. SP. No. 53831 are SET ASIDE. The Regional Trial Court of
Makati City, Branch 57 is DIRECTED to proceed with the trial of Civil Case No. 98-1936
and render its Decision with reasonable dispatch.
On the other hand, the petitions of SMART and Astorga docketed as G.R. Nos.
151079 and 151372 are DENIED. The June 11, 2001 Decision and the December 18,
2001 Resolution in CA-G.R. SP. No. 57065, are AFFIRMED with MODIFICATION.
Astorga is declared validly dismissed. However, SMART is ordered to pay
Astorga P50,000.00 as indemnity for its non-compliance with procedural due process,
her separation pay equivalent to one (1) month pay, and her salary from February 15,
1998 until the effective date of her termination on April 3, 1998. The award of
backwages is DELETED for lack of basis.
SO ORDERED.

199
 ANGELINA FRANCISCO, PETITIONER, VS.NATIONAL LABOR RELATIONS
COMMISSION,KASEI CORPORATION, SEIICHIRO TAKAHASHI,
TIMOTEO ACEDO, DELFIN LIZA, IRENEBALLESTEROS, TRINIDAD LIZA AND
RAMON ESCUETA, RESPONDENTS.
G.R. NO. 170087, AUGUST 31, 2006
YNARES-SANTIAGO, J.:

FACTS:
Petitioner Angelina Francisco was hired by Kasei Corporation as Accountant and
Corporate Secretary, although her designation as the latter was only for convenience.
She was also designated as Liaison Officer to the City of Makati to secure business
permits, construction permits and other licenses for the initial operation of the
company.
She was then designated as Acting Manager and performed her duties for five
years. However, she was replaced in January 2001 and her salaries were reduced by
P2,500.00 a month beginning January to September 2001.
Petitioner did not report to work since she was no longer paid her salary despite
repeated follow-ups and consequently filed an action for constructive dismissal before
the labor arbiter.
The Labor Arbiter held that petitioner was illegally dismissed and the NLRC
affirmed with modification. But upon appeal, the CA reversed the NLRC decision.
ISSUE:
(1) Whether there was an employer-employee relationship between petitioner
and private respondent Kasei Corporation; and if in the affirmative,
(2) Whether petitioner was illegally dismissed
RATIO DECIDENDI:
1. There exist an employer-employee relationship between petitioner and private
respondent.
Generally, courts have relied on the so-called right of control test where the
person for whom the services are performed reserves a right to control not only the end
to be achieved but also the means to be used in reaching such end. In addition to the
standard of right-of-control, the existing economic conditions prevailing between the
parties, like the inclusion of the employee in the payrolls, can help in determining the
existence of an employer-employee relationship.
However, there are certain cases where the control test is not sufficient to
determine the relationship between the parties due to the complexity of such
relationship where several positions have been held.
The better approach would therefore be to adopt a two-tiered test involving:
(1) the putative employer's power to control the employee with respect to the
means and methods by which the work is to be accomplished; and
(2) the underlying economic realities of the activity or relationship.
This two-tiered test would provide us with a framework of analysis, which would
take into consideration the totality of circumstances surrounding the true nature of the
200
relationship between the parties. This is especially appropriate in this case where there
is no written agreement or terms of reference to base the relationship on; and due to
the complexity of the relationship based on the various positions and responsibilities
given to the worker over the period of the latter's employment.
The determination of the relationship between employer and employee depends
upon the circumstances of the whole economic activity, such as: (1) the extent to which
the services performed are an integral part of the employer's business; (2) the extent of
the worker's investment in equipment and facilities; (3) the nature and degree of
control exercised by the employer; (4) the worker's opportunity for profit and loss; (5)
the amount of initiative, skill, judgment or foresight required for the success of the
claimed independent enterprise; (6) the permanency and duration of the relationship
between the worker and the employer; and (7) the degree of dependency of the worker
upon the employer for his continued employment in that line of business.
By applying the control test, there is no doubt that petitioner is an employee of
Kasei Corporation. She was selected and engaged by the company for compensation
and is economically dependent upon respondent for her continued employment in that
line of business. Her main job function involved accounting and tax services rendered to
respondent corporation on a regular basis over an indefinite period of engagement.
Respondent corporation hired and engaged petitioner for compensation, with the power
to dismiss her for cause. More importantly, respondent corporation had the power to
control petitioner with the means and methods by which the work is to be
accomplished.
Also, under the broader economic reality test, the petitioner can likewise be said
to be an employee of respondent corporation because she had served the company for
six years before her dismissal, receiving check vouchers indicating her salaries/wages,
benefits, 13th month pay, bonuses and allowances, as well as deductions and Social
Security contributions from August 1, 1999 to December 18, 2000. The foregoing
further shows that petitioner is economically dependent on respondent corporation for
her continued employment in the latter's line of business.
2. The Court ruled that where an employee ceases to work due to a demotion of
rank or a diminution of pay, an unreasonable situation arises which creates an adverse
working environment rendering it impossible for such employee to continue working for
her employer. Hence, her severance from the company was not of her own making and
therefore amounted to an illegal termination of employment.
The corporation constructively dismissed petitioner when it reduced her salary by
P2,500 a month from January to September 2001. This amounts to an illegal
termination of employment, where the petitioner is entitled to full backwages. Since the
position of petitioner as accountant is one of trust and confidence, and under the
principle of strained relations, petitioner is further entitled to separation pay, in lieu of
reinstatement.
A diminution of pay is prejudicial to the employee and amounts to constructive
dismissal. Constructive dismissal is an involuntary resignation resulting in cessation of
work resorted to when continued employment becomes impossible, unreasonable or
unlikely; when there is a demotion in rank or a diminution in pay; or when a clear
discrimination, insensibility or disdain by an employer becomes unbearable to an
employee.
FALLO:

201
 WHEREFORE, the petition is GRANTED. The Decision and Resolution of the
Court of Appeals dated October 29, 2004 and October 7, 2005, respectively, in CA-G.R.
SP No. 78515 are ANNULLED and SET ASIDE. The Decision of the National Labor
Relations Commission dated April 15, 2003 in NLRC NCR CA No. 032766-02, is
REINSTATED. The case is REMANDED to the Labor Arbiter for the recomputation of
petitioner Angelina Francisco's full backwages from the time she was illegally
terminated until the date of finality of this decision, and separation pay representing
one-half month pay for every year of service, where a fraction of at least six months
shall be considered as one whole year.

202
 ABS-CBN BROADCASTING CORPORATION, PETITIONER,
VS.
MARLYN NAZARENO, MERLOU GERZON, JENNIFER DEIPARINE, AND
JOSEPHINE LERASAN, RESPONDENTS.
G.R. NO. 164156 SEPTEMBER 26, 2006
CALLEJO, SR., J.:

FACTS:
ABS-CBN employed respondents Nazareno, Gerzon, Deiparine, and Lerasan as
production assistants (PAs) on different dates. They were assigned at the news and
public affairs, for various radio programs in the Cebu Broadcasting Station, with a
monthly compensation of P4,000. They were issued ABS-CBN employees’ identification
cards and were required to work for a minimum of eight hours a day, including Sundays
and holidays.
Petitioner declined to recognize PAs as part of the CBA unit. Respondents filed a
Complaint for Recognition of Regular Employment Status, Underpayment of Overtime
Pay, Holiday Pay, Premium Pay, Service Incentive Pay, Sick Leave Pay, and 13th Month
Pay with Damages. They averred that they been continuously serving the company for
five years; they attached copies of their Employee’s Identification Card and salary
vouchers as evidence to substantiate their claims.
Petitioner alleged that the respondents are considered as "program employees".
They are basically engaged by the station for a particular or specific program
broadcasted by the radio station. As program employees, a PA’s engagement is
coterminous with the completion of the program, and may be extended provided that
the program is on-going; a PA may also be assigned to new programs upon the
cancellation of one program and the commencement of another. Therefore, their
compensation is computed on a program basis, a fixed amount for services irrespective
of the time consumed.
Petitioner assailed that the Labor Arbiter had no jurisdiction to involve the CBA
and interpret the same, especially since respondents were not covered by the
bargaining unit. Labor Arbiter rendered judgment in favor of the respondents, and
declared that they were regular employees of petitioner.
Petitioner averred that Labor Arbiter erred when he ruled that the complainants
are regular employees of the respondent. The NLRC declared that the Labor Arbiter
acted conformably with the Labor Code.
Petitioner appealed to the Court of Appeals and said that the NLRC acted with
grave abuse of discretion when it awarded monetary benefits to respondents under the
CBA. The appellate court stated that respondents are not mere project employees, but
regular employees who perform tasks necessary and desirable in the usual trade and
business of petitioner.
ISSUE:
1. Whether or not PAs are regular employees
2. Whether or not there is employee-employer relationship between
petitioner and respondents.

RATIO DECIDENDI:
1. Yes, they are regular employees. The Labor Code provides that an
employment shall be deemed to be regular where the employee has been

203
 engaged to perform activities which are usually necessary or desirable in the
usual business or trade of the employer except where the employment has
been fixed for a specific project or undertakingthe completion or termination
of which has been determined at the time of the engagement of the
employee or where the work or services to be performed is seasonal in
nature and the employment is for the duration of the season.

In the case at bar, it is clear that respondents had continuously performed

the same activities for several years. The need for their services is a sufficient
evidence of the necessity and indispensability of such services to the
petitioner’s business.
2. Yes, there is an Employer-Employeerelationship. First, in the selection of
respondents, no peculiar or unique skill was required from them because they
were hired just like any ordinary employee. Second, salaries were plainly
given as a result of their employment. Third, the respondents are highly
dependent on the petitioner for continued work. Fourth, the degree of control
and supervision exercised by petitioner over the respondents contradicts the
allegation that they are independent contractors.

FALLO:
1. IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit.
The assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP
No. 76582 are AFFIRMED. Costs against petitioner.

204
 TITLE: DANILO TABAS ET AL,PETITIONERS VS CMC CALIFORNIA
MANUFACTURING COMPANY,RESPONDENTS
G.R. NO. L-80680, JANUARY 36,1989
PONENTE JUSTICE SARMIENTO

FACTS:

On the following dates of July 21,23,28 year 1986 petitioners filed for
reinstatement and payment of various labor related money claim benefits against
respondent at NLRC. On October 7,1986 the cases were consolidated then the
respondents filed a motion to dismiss coupled with position paper denying the existence
of employee and employer relations and non liability for money claims. Then the NLRC
ruled and affirmed on appeal the previous ruling of the labor arbiter denying the
existence of any employer- employee relations between petitioners and CMC due to the
manpower contract with Livi Manpower Services who originally contracted the services
of the petitioners. The petitioners insist they should be considered employees of
respondent. So this case was elevated for petition to the Supreme Court.

ISSUE:

1. Whether or not the petitioners were to be considered as employee of the

respondent it the manpower services? 2. Who will pay for their labor related money
claims the manpower services or the respondent manufacturing company?

RATIO DECIDENDI:

To prove the existence of employee employer relation is a question of law and

not a subject of an agreement. Article 106 of the labor code clearly states the definition
of contractor or subcontractor. The employer and the contractor/subcontractor are
jointly and severally liable to pay money claims.In case the latter fails to pay their
employees wages based on the extent of the work performed under the contract, in the
similar manner that the employer is liable to his own employees.

FALLO:

The petition is granted setting aside the decision dated March 20,1987 and the
resolution dated August 19,1987. Ordering respondent CMC and Livi Manpower Services
to pay jointly and severally the petitioner’s backwages and benefits from CBA. And
ordering private respondents to pay petitioners attorneys fee equivalent to 10 percent
money claims and the cost of suit .and petitioners were reinstated to CMC company.

205
 LOPEZ VS. BODEGA CITY DIGEST
G.R. NO. 155731, SEPTEMBER 3, 2007
AUSTRIA-MARTINEZ, J.:

FACTS:

Respondent Bodega City (Bodega City) is a corporation duly registered and

existing under and by virtue of the laws of the Republic of the Philippines, while
respondent Andres C. Torres-Yap (Yap) is its owner/ manager. Petitioner was the “lady
keeper” of Bodega City tasked with manning its ladies’ comfort room.

In a letter signed by Yap dated February 10, 1995, petitioner was made to
explain why the concessionaire agreement between her and respondents should not be
terminated or suspended in view of an incident that happened on February 3, 1995,
wherein petitioner was seen to have acted in a hostile manner against a lady customer
of Bodega City who informed the management that she saw petitioner sleeping while
on duty.

Yap informed petitioner that because of the incident that happened respondents
had decided to terminate the concessionaire agreement between them.Petitioner filed a
complaint for illegal dismissal against respondents contending that she was dismissed
from her employment without cause and due process.

In their answer, respondents contended that no employer-employee relationship

ever existed between them and petitioner; that the latter’s services rendered within the
premises of Bodega City was by virtue of a concessionaire agreement she entered into
with respondents.

Labor Arbiter rendered judgment finding that petitioner was an employee of

respondents and that the latter illegally dismissed her.3
NLRC SET ASIDE AND VACATED LA Decision.

ISSUE:

Whether or not petitioner is an employee of respondents.

RATIO DECIDENDI:

In an illegal dismissal case, the onus probandi rests on the employer to prove
that its dismissal of an employee was for a valid cause. However, before a case for
illegal dismissal can prosper, an employer-employee relationship must first be
established.

In filing a complaint before the Labor Arbiter for illegal dismissal based on the
premise that she was an employee of respondent, it is incumbent upon petitioner to
prove the employee-employer relationship by substantial evidence.

The NLRC and the CA found that petitioner failed to discharge this burden, and
the Court finds no cogent reason to depart from their findings.
The Court applies the four-fold test expounded in Abante v. Lamadrid Bearing and
Parts Corp., to wit:

To ascertain the existence of an employer-employee relationship, jurisprudence

has invariably applied the four-fold test, namely: (1) the manner of selection and

206
engagement; (2) the payment of wages; (3) the presence or absence of the power of
dismissal; and (4) the presence or absence of the power of control. Of these four, the
last one is the most important. The so-called “control test” is commonly regarded as the
most crucial and determinative indicator of the presence or absence of an employer-
employee relationship. Under the control test, an employer-employee relationship exists
where the person for whom the services are performed reserves the right to control not
only the end achieved, but also the manner and means to be used in reaching that end.
To prove the element of payment of wages, petitioner presented a petty cash voucher
showing that she received an allowance for five (5) days. The CA did not err when it
held that a solitary petty cash voucher did not prove that petitioner had been receiving
salary from respondents or that she had been respondents’ employee for 10 years.
Indeed, if petitioner was really an employee of respondents for that length of time, she
should have been able to present salary vouchers or pay slips and not just a single
petty cash voucher. The Court agrees with respondents that petitioner could have easily
shown other pieces of evidence such as a contract of employment, SSS or Medicare
forms, or certificates of withholding tax on compensation income; or she could have
presented witnesses to prove her contention that she was an employee of respondents.
Petitioner failed to do so.

Anent the element of control, petitioner’s contention that she was an employee
of respondents because she was subject to their control does not hold water.
Petitioner failed to cite a single instance to prove that she was subject to the control of
respondents insofar as the manner in which she should perform her job as a “lady
keeper” was concerned.

It is true that petitioner was required to follow rules and regulations prescribing
appropriate conduct while within the premises of Bodega City. However, this was
imposed upon petitioner as part of the terms and conditions in the concessionaire
agreement embodied in a 1992 letter of Yap addressed to petitioner.

Petitioner does not dispute the existence of the letter; neither does she deny that
respondents offered her the subject concessionaire agreement. However, she contends
that she could not have entered into the said agreement with respondents because she
did not sign the document evidencing the same.

Petitioner is likewise estopped from denying the existence of the subject

concessionaire agreement. She should not, after enjoying the benefits of the
concessionaire agreement with respondents, be allowed to later disown the same
through her allegation that she was an employee of the respondents when the said
agreement was terminated by reason of her violation of the terms and conditions
thereof.

The principle of estoppel in pais applies wherein — by one’s acts, representations

or admissions, or silence when one ought to speak out — intentionally or through
culpable negligence, induces another to believe certain facts to exist and to rightfully
rely and act on such belief, so as to be prejudiced if the former is permitted to deny the
existence of those facts.

Hence, going back to the element of control, the concessionaire agreement

merely stated that petitioner shall maintain the cleanliness of the ladies’ comfort room
and observe courtesy guidelines that would help her obtain the results they wanted to
achieve. There is nothing in the agreement which specifies the methods by which
petitioner should achieve these results.

207
 Lastly, the Court finds that the elements of selection and engagement as well as
the power of dismissal are not present in the instant case.It has been established that
there has been no employer-employee relationship between respondents and petitioner.
Their contractual relationship was governed by the concessionaire agreement embodied
in the 1992 letter. Thus, petitioner was not dismissed by respondents. Instead, as
shown by the letter of Yap to her dated February 15, 1995, their contractual
relationship was terminated by reason of respondents’ termination of the subject
concessionaire agreement, which was in accordance with the provisions of the
agreement in case of violation of its terms and conditions.

In fine, the CA did not err in dismissing the petition for certiorari filed before it by
petitioner.

FALLO:

WHEREFORE, the instant petition is DENIED. The assailed Decision and

Resolution of the Court of Appeals are AFFIRMED. Costs against petitioner.
SO ORDERED.

208
 VICTORY LINER, INC., PETITIONER, VS. PABLO M. RACE, RESPONDENT.
G.R. NO. 164820, MARCH 28, 2007
CHICO-NAZARIO, J.:

FACTS:

In June 1993, respondent was employed by the petitioner as a bus driver. As a

requisite for his hiring, the respondent deposited a cash bond in the amount of
₱10,000.00 to the petitioner. Respondent was assigned to the Alaminos, Pangasinan -
Cubao, Quezon City, route on the evening schedule. On the night of 24 August 1994,
respondent drove his assigned bus from Alaminos, Pangasinan, destined to Cubao,
Quezon City. While traversing Moncada, Tarlac, the bus he was driving was bumped by
a Dagupan-bound bus. As a consequence, respondent suffered a fractured left leg and
was rushed to the Country Medical and Trauma Center in Tarlac City where he was
operated on and confined from 24 August 1994 up to 10 October 1994. One month
after his release from the said hospital, the respondent was confined again for a month
for further treatment of his fractured left leg at the Specialist Group Hospital in
Dagupan City. Petitioner shouldered the doctor’s professional fee and the operation,
medication and hospital expenses of the respondent.

In January 1998, the respondent, still limping heavily, went to the petitioner’s
office to report for work. However, he was informed that he was considered resigned
from his job. Respondent refused to accede and insisted on having a dialogue with the
petitioner’s officer named Yolanda Montes (Montes). During their meeting, Montes told
him that he was deemed to have resigned from his work and to accept a consideration
of ₱50,000.00. Respondent rejected the explanation and offer. Thereafter, before
Christmas of 1998, he again conversed with Montes who reiterated to him that he was
regarded as resigned but raised the consideration therein to ₱100,000.00. Respondent
rebuffed the increased offer. On 30 June 1999, respondent, through his counsel, sent a
letter to the petitioner demanding employment-related money claims. There being no
response from the petitioner, the respondent filed before the Labor Arbiter on 1
September 1999 a complaint for (1) unfair labor practice; (2) illegal dismissal; (3)
underpayment of wages; (4) nonpayment of overtime and holiday premium, service
incentive leave pay, vacation and sick leave benefits, 13th month pay; (5) excessive
deduction of withholding tax and SSS premium; and (6) moral and exemplary damages
and attorney’s fees.

On 31 July 2001, Labor Arbiter Nambi rendered his Decision dismissing the
complaint of respondent for lack of merit. He stated that the prescriptive period for
filing an illegal dismissal case is four years from the dismissal of the employee
concerned. Since the respondent stated in his complaint that he was dismissed from
work on 24 August 1994 and he filed the complaint only on 1 September 1999, Labor
Arbiter Nambi concluded that respondent’s cause of action against petitioner had
already prescribed. He also noted that respondent committed several labor-related

209
offenses against the petitioner which may be considered as just causes for the
termination of his employment under Article 282 of the Labor Code. Further, Labor
Arbiter Nambi opined that respondent was not a regular employee but a mere field
personnel and, therefore, not entitled to service incentive leave, holiday pay, overtime
pay and 13th month pay. He also ruled that respondent failed to present evidence
showing that the latter was entitled to the abovestated money claims.

Respondent appealed to the NLRC which reversed the decision of Labor Arbiter
Nambi. It ordered the reinstatement of the respondent to his former position without
loss of seniority rights and other privileges and benefits with full back-wages computed
from the time of his illegal dismissal in January 1998 up to his actual reinstatement. It
held that the respondent’s cause of action accrued, not on 24 August 1994, but in
January 1998, when the respondent reported for work but was rejected by the
petitioner. It also ruled that respondent was illegally dismissed by the petitioner as the
latter failed to accord him due process. It found that the petitioner did not give the
respondent a written notice apprising him of acts or omissions being complained of and
a written notice informing him of the termination of his employment.

Petitioner assailed the NLRC Decision and Resolution, dated 30 July 2002 and 30
August 2002, respectively, via a Petition for Certiorari to the Court of Appeals. On 26
April 2004, the Court of Appeals dismissed the Petition, and found no grave abuse of
discretion on the part of the NLRC. It ruled that the respondent’s filing of complaint on
1 September 1999 was within the four-year prescriptive period since the cause of action
accrued when the respondent reported for work in January 1998 and was informed that
he was considered resigned. It ratiocinated that respondent did not abandon his work
and, instead, continued to be an employee of petitioner after he was discharged from
the hospital, viz:

Race did not abandon his work and continued to be an employee of Victory
Liner, and their contemporaneous conduct show this. He has his pay slip covering the
period of August 1-15, 1998, he was consulting the company physician who issued him
receipts dated October 28, 1996 and July 21 1997, and he wrote a letter dated March
18, 1996 addressed to Gerarda Villa, Vice-President for Victory Liner, signifying his
intention to be a dispatcher or conductor due to his injured leg. Further, annexed to
Victory Liner’s Consolidated Supplemental Position Paper and Formal Offer of Evidence
with Erratum is Exhibit "6-A-Race" is submitted before the Labor Arbiter, where Race
stated before the investigator that after his release from the hospital he reported to
Victory Liner twice a month. He also said that he filed for a sick leave which was
approved for the maximum of 120 days. After his sick leave, he filed for disability leave,
and this was also approved and ran until sometime in May 1997.

Petitioner insisted that respondent had already abandoned his work and ceased
to be its employee since November 1994. The alleged "pay slip" for the period August
1-15, 1998 was not actually a pay slip but a mere cash advance/monetary aid extended
to the respondent as the large amount of ₱65,000.00 was clearly inconsistent and

210
disproportionate to the respondent’s low salary of ₱192.00 a day. The petitioner merely
accommodated the respondent as its former employee when the latter consulted the
petitioner’s physician on 28 October 1996 and 21 July 1997. The respondent’s letter
dated 18 March 1996 to the petitioner’s Vice-President Gerarda Villa was only an
application for the position of dispatcher or conductor and that such application was not
granted. The foregoing circumstances cannot be considered as an indication of
employer-employee relationship between the petitioner and respondent. Petitioner also
asseverated that, based on the four-fold tests in determining the employer-employee
relationship which includes the payment of wages and power to control the conduct of
the employees, the respondent was no longer its employee upon the latter’s discharge
from the hospital in November 1994 because at such time, the respondent was no
longer fit to work as a bus driver and respondent did not render services to the
petitioner. Thus, petitioner reasoned that it had no more power to control the conduct
of, and it no longer paid any wages to, the respondent.

ISSUE(s):

1. Whether or not there is an employee-employer relationship between the

petitioner and the respondent;

RATIO DECIDENDI:

The employer-employee relationship between the petitioner and respondent

cannot be deemed to have been extinguished on 10 November 1994. It should be
borne in mind that there are four tests in determining the existence of employer-
employee relationship: (1) the manner of selection and engagement; (2) the payment
of wages; (3) the presence or absence of the power of dismissal; and (4) the presence
or absence of the power of control. The so-called "control test" is commonly regarded
as the most crucial and determinative indicator of the presence or absence of an
employer-employee relationship. Under the control test, an employer-employee
relationship exists where the person for whom the services are performed reserves the
right to control not only the end achieved, but also the manner and means to be used
in reaching that end.

Applying the aforecited tests, the employer-employee relationship between

petitioner and respondent continued even after the latter’s discharge from the hospital
in December 1994 up to 1997. Respondent had reported for work to the petitioner after
his release from the hospital in December 1994. Subsequently, respondent was also
granted a 120-day sick leave and disability leave by the petitioner. Respondent also
availed himself of the services of the petitioner’s physician on two occasions after his
release from the hospital in December 1994. On the other hand, the petitioner failed to
establish the fact that the respondent ceased to be its employee on 10 November 1994.
Except for its flimsy reason that the sick leave, disability leave and physician
consultations were given to the respondent as mere accommodations for a former

211
employee, the petitioner did not present any evidence showing that its employer-
employee relationship with the respondent was extinguished on 10 November 1994.

Evidently, these circumstances clearly manifest that petitioner exercised control

over the respondent and that the latter was still under the employment of the petitioner
even after December 1994.

FALLO:

WHEREFORE, the petition is PARTLY GRANTED insofar as it prays for the non-
reinstatement of respondent. The Decision of the Court of Appeals dated 26 April 2004
in CA-G.R. SP No. 74010, is hereby AFFIRMED with the following MODIFICATIONS:
Petitioner is ordered to pay the respondent, in lieu of reinstatement, separation pay of
ONE (1) MONTH PAY for every year of service, and full backwages inclusive of
allowances and other benefits or their monetary equivalent from 1 January 1998 up to
the finality of this Decision. No costs.

SO ORDERED.

212
 [G.R. NO. 160905: JULY 4, 2008]
BIENVENIDO D. GOMA, PETITIONER, V. PAMPLONA PLANTATION
INCORPORATED, RESPONDENT.

FACTS:

Petitioner commenced the instant suit by filing a complaint for illegal dismissal,
underpayment of wages, non-payment of premium pay for holiday and rest day, five
(5) days incentive leave pay, damages and attorney’s fees, against the respondent. The
case was filed with the Sub-Regional Arbitration Branch No. VII of Dumaguete City.
Petitioner claimed that he worked as a carpenter at the Hacienda Pamplona since 1995;
that he worked from 7:30 a.m. to 12:00 noon and from 1:00 p.m. to 5:00 p.m. daily
with a salary rate of P90.00 a day paid weekly; and that he worked continuously until
1997 when he was not given any work assignment. On a claim that he was a regular
employee, petitioner alleged to have been illegally dismissed when the respondent
refused without just cause to give him work assignment. Thus, he prayed for
backwages, salary differential, service incentive leave pay, damages and attorney’s
fees.

On the other hand, respondent denied having hired the petitioner as its regular
employee. It instead argued that petitioner was hired by a certain Antoy Cañaveral, the
manager of the hacienda at the time it was owned by Mr. Bower and leased by Manuel
Gonzales, a jai-alai pelotari known as “Ybarra.” Respondent added that it was not
obliged to absorb the employees of the former owner.

ISSUE:

1)WON petitioner is a regular employee. 2) If so, was he illegally dismissed from

employment? and 3) Is he entitled to his monetary claims?

RATIO DECIDENDI:

(1) The petitioner is a regular employee. Article 280 of the Labor Code provides that
there are two kinds of REGULAR EMPLOYEES, namely:

Regular employees by nature of work – Those who are engaged to perform

activities which are usually necessary or desirable in the usual business or trade of the
employer (regardless of length of service); and

 Regular employees by years of service – Those who have rendered at least

one year of service, whether continuous or broken, with respect to the activity in
which they are employed (regardless of nature of work).

213
 If the law has been performing the job for at least a year, even if the
performance is not continuous or merely intermittent, the law deems the repeated and
continuing need for its performance as sufficient evidence of the necessity, if not
indispensability, of that activity to the business.Petitioner was engaged to perform
carpentry work. His services were needed for a period of 2 years until such time that
respondent decided not to give him work assignment anymore. Owing to his length of
service, petitioner became a regular employee, by operation of law.

The principal test used to determine whether employees are 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 or
scope of which was specified at the time the employees were engaged for that project.
In this case, apart from the respondent’s bare allegation that petitioner was a project
employee, it had not shown that petitioner was informed that he would be assigned to
a specific project or undertaking. Neither was it established that he was informed of the
duration and scope of such project or undertaking at the time of his engagement.

(2) As to the question of whether petitioner was illegally dismissed, we

answer in the affirmative. Well-established is the rule that regular employees enjoy
security of tenure and they can only be dismissed for just cause and with due process,
i.e., after notice and hearing. In cases involving an employee's dismissal, the burden is
on the employer to prove that the dismissal was legal. This burden was not amply
discharged by the respondent in this case. Obviously, petitioner's dismissal was not
based on any of the just or authorized causes enumerated under Articles 282, 283 and
284 of the Labor Code, as amended. After working for the respondent for a period of
two years, petitioner was shocked to find out that he was not given any work
assignment anymore. Hence, the requirement of substantive due process was not
complied with.

Apart from the requirement that the dismissal of an employee be based on any
of the just or authorized causes, the procedure laid down in Book VI, Rule I, Section 2
(d) of the Omnibus Rules Implementing the Labor Code, must be followed. Failure to
observe the rules is a violation of the employee's right to procedural due process.

(3) In the instant case, petitioner may be awarded separation pay in lieu of
reinstatement. Petitioner's separation pay is pegged at the amount equivalent to
petitioner's one (1) month pay, or one-half (1/2) month pay for every year of service,
whichever is higher, reckoned from his first day of employment up to finality of this
decision. Full backwages, on the other hand, should be computed from the date of his
illegal dismissal until the finality of this decision. On petitioner's entitlement to
attorney's fees, we must take into account the fact that petitioner was illegally
dismissed from his employment and that his wages and other benefits were withheld
from him without any valid and legal basis. As a consequence, he was compelled to file
an action for the recovery of his lawful wages and other benefits and, in the process,

214
incurred expenses. On these bases, the Court finds that he is entitled to attorney's fees
equivalent to ten percent (10%) of the monetary award. Lastly, we affirm the NLRC's
award of salary differential. In light of our foregoing disquisition on the illegality of
petitioner's dismissal, and our adoption of the NLRC's findings, suffice it to state that
such issue is a question of fact, and we find no cogent reason to disturb the findings of
the labor tribunal.

FALLO:

For the foregoing premises considered, the petition is GRANTED. The Decision
of the Court of Appeals dated August 27, 2003 and its Resolution dated November 11,
2003 in CA-G.R. SP No. 74892 are REVERSED and SET ASIDE. Petitioner is found to
have been illegally dismissed from employment and thus, is ENTITLED to: 1) Salary
Differential embodied in the NLRC decision dated October 24, 2000 in NLRC Case No. V-
000882-99; 2) Separation Pay; 3) Backwages; and 4) Attorney's fees equivalent to ten
percent (10%) of the monetary awards. Upon finality of this judgment, let the records
of the case be remanded to the NLRC for the computation of the exact amounts due
the petitioner. Petition granted.

215
 DR. CARLOS L. SEVILLA AND LINA O. SEVILLA, PETITIONERS-APPELLANTS,
VS.
THE COURT OF APPEALS, TOURIST WORLD SERVICE, INC., ELISEO
S.CANILAO, AND SEGUNDINA NOGUERA, RESPONDENTS-APPELLEES.
G.R. NO. L-41182-3, APRIL 16, 1988
SARMIENTO, J.:

FACTS:

On the strength of a contract, Tourist World Service Inc. (TWS) leased the
premises belonging to Mrs. Segundina Noguera for the former’s use as a branch office.
Lina Sevilla bound herself solidarily liable with TWS for the prompt payment of the
monthly rentals thereon. When the branch office was opened, it was run by appellant
Sevilla payable to TWS by any airline for any fare brought in on the efforts of Sevilla,
4% was to go to Sevilla, and 3% was to be withheld by TWS.

TWS appears to have been informed that Sevilla was connected with a rival firm,
the Philippine Travel Bureau, and, since the branch office was anyhow losing, the TWS
considered closing down its office. Two resolutions of the TWS board of directors were
passed to abolish the office of the manager and vice president of the branch office and
authorizing the corporate secretary to receive the properties in the said branch office.

Subsequently, the corporate secretary went to the branch office, and finding the
premises locked and being unable to contact Sevilla, padlocked the premises to protect
the interests of TWS. When neither Sevilla nor her employees could enter the locked
premises, she filed a complaint against TWS with a prayer for the issuance of a
mandatory preliminary injunction.

The trial court dismissed the case holding that TWS, being the true lessee, was
within its prerogative to terminate the lease and padlock the premises. It likewise found
that Sevilla was a mere employee of TWS and as such, was bound by the acts of her
employee.

The CA affirmed. Hence, this petition.

ISSUE:

Whether or not there was an employer-employee relationship between TWS and

Sevilla.

216
RATIO DECIDENDI:

No. It was a principal-agent relationship. The records show that petitioner,

Sevilla, was not subject to control by the private respondent TWS.

In the first place, under the contract of lease, she had bound herself in solidum
for rental payments, an arrangement that would belie claims of a master-servant
relationship. That does not make her an employee of TWS, since a true employee
cannot be made part with his own money in pursuance of his employer’s business, ot
otherwise, assume any liability thereof.

In the second place, when the branch office was opened, the same was run by
the appellant Sevilla payable to TWS by any airline for any fare brought in on the effort
of Sevilla. Thus, it cannot be said that Sevilla was under the control of TWS. Sevilla in
pursuing the business, relied on her own capabilities. It is further admitted that Sevilla
was not in the company’s payroll. For her efforts, she retained 4% in commissions from
airline bookings, the remaining 3% going to TWS. Unlike an employee, who earns a
fixed salary, she earned compensation in fluctuating amount depending on her booking
success. The fact that Sevilla had not been designated “branch manager” does not
make her a TWS employee. It appears that Sevilla is a bona fide travel agent herself,
and she acquired an interest in the business entrusted to her. She also had assumed
personal obligation for the operation thereof, holding herself solidary liable for the
payment of rentals.

FALLO:

Wherefore, TWS and Canilao are jointly and severally liable to indemnify the
petitioner, Sevilla.

217
 GRAND ASIAN SHIPPING LINES, INC. VS WILFREDO GALVEZ
G.R. NO. 178184, JANUARY 29, 2014
DEL CASTILLO, J.:

FACTS:

Respondents are crewmembers of one of GASLI’s vessels, M/T Dorothy Uno, with
the following designations: Wilfredo Galvez (Galvez) as Captain; Joel Sales (Sales) as
Chief Mate; Cristito Gruta (Gruta) as Chief Engineer; Danilo Arguelles (Arguelles) as
Radio Operator; Renato Batayola (Batayola), Patricio Fresmillo (Fresmillo) and Jovy
Noble (Noble) as Able Seamen; Emilio Dominico (Dominico) and Benny Nilmao (Nilmao)
as Oilers; and Jose Austral (Austral) as 2nd Engineer.

Sometime in January 2000, one of the vessel’s Oilers, reported to GASLI’s Office
and Crewing Manager an alleged illegal activity being committed by respondents aboard
the vessel. He revealed that after about four to five voyages a week, a substantial
volume of fuel oil is unconsumed and stored in the vessel’s fuel tanks. However, Gruta
would misdeclare it as consumed fuel in the Engineer’s Voyage Reports. Then, the
saved fuel oil is siphoned and sold to other vessels out at sea usually at nighttime.
Respondents would then divide among themselves the proceeds of the sale.

An investigation on the alleged pilferage was conducted. After audit and

examination of the Engineer’s Voyage Reports, GASLI’s Internal Auditor issued a
Certification of Overstatement of Fuel Oil Consumptionfor M/T Dorothy Uno stating that
for the period June 30, 1999 to February 15, 2000 fuel oil consumption was overstated
by 6,954.3 liters amounting to P74,737.86.

A formal complaint for qualified theft was filed with the Criminal Investigation
and Detection Group (CIDG) at Camp Crame against respondents. In their Joint
Counter–Affidavitand Joint Rejoinder–Affidavit, respondents denied the charge. The
CIDG referred the case to the Office of the City Prosecutor of Manila, which, after
finding a prima facie case, filed the corresponding Information for Qualified Theftwith
the Regional Trial Court (RTC) of Manila.

Meanwhile, GASLI placed respondents under preventive suspension. After

conducting administrative hearings, petitioners decided to terminate respondents from
employment. Respondents (except Sales) were thus served with noticesinforming them
of their termination for serious misconduct, willful breach of trust, and commission of a
crime or offense against their employer. It appears that several other employees and
crewmembers of GASLI’s two other vessels were likewise suspended and terminated
from employment. Nine seafarers of M/T Deborah Uno were charged and terminated
for insubordination, defying orders and refusal to take responsibility of cargo
products/fuel. For vessel M/T Coral Song, two crewmembers were dismissed for
serious act of sabotage and grave insubordination.

Respondents and the other dismissed crewmembers of M/T Deborah Uno and
M/T Coral Song (complainants) filed with the NLRC separate complaints for illegal
suspension and dismissal, underpayment/non–payment of salaries/ wages, overtime
pay, premium pay for holiday and rest day, holiday pay, service incentive leave pay,
hazard pay, tax refunds and indemnities for damages and attorney’s fees against
petitioners. The Labor Arbiter rendered a Decision finding the dismissal of all 21
complainants illegal. The Labor Arbiter ordered petitioners to reinstate complainants
with full backwages and to pay their money claims for unpaid salary, overtime pay,

218
premium pay for holidays and rest days, holiday and service incentive leave pay, as
indicated in the Computation of Money Claims.

Petitioners filed a Notice of Appeal WithA Very Urgent Motion to Reduce

Bond before the NLRC and posted a cash bond in the amount of P500,000.00. The
NLRC issued an Orderdenying petitioners’ motion to reduce bond and directing them to
post an additional bond in the amount of P4,084,736.70 in cash or surety within an
unextendible period of 10 days; otherwise, their appeal would be dismissed. Petitioners
failed to comply with the Order. Thus complainants moved for the dismissal of the
appeal since petitioners had thus far posted only P1.5 million supersedes bond and
P500,000.00 cash bond, short of the amount required by the NLRC. In a Decision, the
NLRC, despite its earlier Order denying petitioners’ motion for the reduction of bond,
reduced the amount of appeal bond to P1.5 million and gave due course to petitioners’
appeal. It also found the appeal meritorious and ruled that petitioners presented
sufficient evidence to show just causes for terminating complainants’ employment and
compliance with due process. Accordingly, complainants’ dismissal was valid, with the
exception of Sales. Complainants filed Motions for Reconsideration while petitioners
filed a Motion for Partial Reconsideration. In a Resolution, the NLRC reconsidered its
ruling with respect to Sales, absolving petitioners from the charge of illegally dismissing
him as Sales was neither placed under preventive suspension nor terminated from the
service.

Respondents, excluding the other complainants, filed a Petition for Certiorari with
the CA, attributing grave abuse of discretion on the part of the NLRC in entertaining the
appeal despite the insufficiency of petitioners’ appeal bond. Respondents also assailed
the NLRC’s ruling upholding the validity of their dismissal. In a Decision, the CA set
aside the NLRC’s Decision and Resolution. It held that the NLRC’s act of entertaining
the appeal is a jurisdictional error since petitioners’ failure to post additional bond
rendered the Labor Arbiter’s Decision final, executory and immutable. The CA
conformed with the Labor Arbiter’s ruling that petitioners’ evidence was inadequate to
support the charge of pilferage and justify respondents’ termination. The CA ruled that
Sales was also illegally dismissed, stating that Sales’ active participation in the labor
case against petitioners belies the theory that he was not terminated from
employment. Petitioners filed a Motion for Reconsideration, questioning the CA in
finding that respondents were illegally dismissed, in reinstating the monetary awards
granted by the Labor Arbiter without passing upon the merits of these money claims
and in ascribing grave abuse of discretion on the part of the NLRC in taking cognizance
of the appeal before it. The CA issued a Resolution denying petitioners’ Motion for
Reconsideration. Hence, the instant Petition.

ISSUE:

Whether or not the respondents were illegally dismissed.

RATIO DECIDENDI:

Galvez and Gruta were validly dismissed on the ground of loss of trust and
confidence; there were no valid grounds for the dismissal of Arguelles, Batayola,
Fresnillo, Noble, Dominico, Nilmao and Austral. Respondents were dismissed on the
grounds of (i) serious misconduct, particularly in engaging in pilferage while navigating
at sea, (ii) willful breach of the trust reposed by the company, and (iii) commission of a
crime or offense against their employer.

After examination of the evidence presented, the Court finds that petitioners
failed to substantiate adequately the charges of pilferage against respondents. “[T]he

219
quantum of proof which the employer must discharge is substantial evidence. x x x
Substantial evidence is that amount of relevant evidence as a reasonable mind might
accept as adequate to support a conclusion, even if other minds, equally reasonable,
might conceivably opine otherwise.” Here, the mere filing of a formal charge, does not
automatically make the dismissal valid. Evidence submitted to support the charge
should be evaluated to see if the degree of proof is met to justify respondents’
termination. “Unsubstantiated suspicions, accusations, and conclusions of employers do
not provide for legal justification for dismissing employees.”

As for the second ground for respondents’ termination, which is loss of trust and
confidence, distinction should be made between managerial and rank and file
employees. “[W]ith respect to rank–and–file personnel, loss of trust and confidence, as
ground for valid dismissal, requires proof of involvement in the alleged events x x x
[while for] managerial employees, the mere existence of a basis for believing that such
employee has breached the trust of his employer would suffice for his dismissal.”

In this case, Galvez, as the ship captain, is considered a managerial employee

since his duties involve the governance, care and management of the vessel. Gruta, as
chief engineer, is also a managerial employee for he is tasked to take complete charge
of the technical operations of the vessel. As captain and as chief engineer, Galvez and
Gruta perform functions vested with authority to execute management policies and
thereby hold positions of responsibility over the activities in the vessel. Indeed, their
position requires the full trust and confidence of their employer for they are entrusted
with the custody, handling and care of company property and exercise authority over it.
The fact that there was an overstatement of fuel consumption and that there was loss
of a considerable amount of diesel fuel oil remained unrefuted. Their failure to account
for this loss of company property betrays the trust reposed and expected of them.
They had violated petitioners’ trust and for which their dismissal is justified on the
ground of breach of confidence.

As for Arguelles, Batayola, Fresnillo, Noble, Dominico, Nilmao and Austral, proof
of involvement in the loss of the vessel’s fuel as well as their participation in the alleged
theft is required for they are ordinary rank and file employees. And as discussed above,
no substantial evidence exists in the records that would establish their participation in
the offense charged. This renders their dismissal illegal, thus, entitling them to
reinstatement plus full backwages, inclusive of allowances and other benefits, computed
from the time of their dismissal up to the time of actual reinstatement.

The rule that the employer bears the burden of proof in illegal dismissal cases
finds no application when the employer denies having dismissed the employee. The
employee must first establish by substantial evidence the fact of dismissal before
shifting to the employer the burden of proving the validity of such dismissal. The Court
give credence to petitioners’ claim that Sales was not dismissed from employment.
Unlike the other respondents, there is no evidence in the records to show that Sales
was preventively suspended, that he was summoned and subjected to any
administrative hearing and that he was given termination notice. From the records, it
appears Sales was not among those preventively suspended. To bolster this fact,
petitioners presented the Payroll Journal Register showing that Sales was still included
in the payroll and was not among those who were charged with an offense to warrant
suspension. In fact, Sales’ signature in the Semi–Monthly Attendance Report proves
that he continued to work as Chief Mate for the vessel M/T Dorothy Uno along with a
new set of crewmembers. This only shows that he was never subjected to any
accusation or investigation as a prelude to termination. Hence, it would be pointless to

220
determine the legality or illegality of his dismissal because, in the first place, he was not
dismissed from employment.

FALLO:

WHEREFORE, the Court of Appeals’ Decision dated September 12, 2006 and
the Resolution dated May 23, 2007 in CA–G.R. SP No. 82379 are ANNULLED and SET
ASIDE. Respondents Wilfredo Galvez and Cristito Gruta
arehereby DECLARED dismissed from employment for just cause while respondent
Joel Sales was not dismissed from employment. Respondents Danilo Arguelles, Renato
Batayola, Patricio Fresmillo, Jovy Noble, Emilio Dominico, Benny Nilmao, and Jose
Austral are DECLARED to have been illegally dismissed; hence, petitioners are ordered
to reinstate them to their former position or its equivalent without loss of seniority
rights and to pay them full backwages, inclusive of allowances and other benefits,
computed from the time of dismissal up to the time of actual reinstatement, as well as
13th month pay for the period of their illegal dismissal.

Petitioner Grand Asian Shipping Lines, Inc. is also ordered to pay respondents
Wilfredo Galvez, Danilo Arguelles, Renato Batayola, Patricio Fresnillo, Jovy Noble, Emilio
Dominico, Benny Nilmao and Jose Austral unpaid salaries from February 16 to 29, 2000,
as computed by the Labor Arbiter; and to pay respondents Danilo Arguelles, Renato
Batayola, Patricio Fresmillo, Jovy Noble, Emilio Dominico and Benny Nilmao salary
differentials plus double indemnity, as computed by the Labor Arbiter. Ten percent
(10%) of the monetary award should be added as and by way of attorney’s fees.
Interest at the rate of six percent (6%) per annum shall be imposed on all monetary
awards from date of finality of this Decision until full payment pursuant to Nacar v.
Gallery Frames.78

Petitioners Eduardo P. Francisco and William How are absolved from the liability
adjudged against petitioner Grand Asian Shipping Lines, Inc.ChanRoblesVirtualawlibrary

SO ORDERED.

221
"BROTHERHOOD" LABOR UNITY MOVEMENT OF THE PHILIPPINES ET AL. VS
ZAMORA,
G.R. NO. L-48645 JANUARY 7, 1987
GUTIERREZ, JR., J.:

FACTS:

The petitioners worked exclusively at the San Miguel Corporation (SMC) as

pahinantes or kargadors for almost 7 years. Their work was neither regular nor
continuous, depending on the volume of bottles to be loaded and unloaded, as well as
the business activity of the company. However, work exceeded the eight-hour day and
sometimes, necessitated work on Sundays and holidays and for this, they were neither
paid overtime nor compensation.

Sometime in January, 1969, the petitioner workers numbering one hundred and
forty (140) organized and affiliated themselves with the petitioner union and engaged in
union activities. The petitioner union filed a notice of strike with the Bureau of Labor
Relations in connection with the dismissal of some of its members who were allegedly
castigated for their union membership and warned that should they persist in
continuing with their union activities they would be dismissed from their jobs. Even so,
all the petitioners were dismissed from their jobs and, thereafter, denied entrance to
respondent company's glass factory despite their regularly reporting for work. A
complaint for illegal dismissal and unfair labor practice was filed by the petitioners.

The Labor Arbiter found for complainants which was concurred in by the NLRC.
On appeal, the Secretary set aside the NLRC ruling, stressing the absence of an
employer-employee relationship as borne out by the records of the case.

The petitioners strongly argue that there exists an employer-employee

relationship between them and the respondent company and that they were dismissed
for unionism, an act constituting unfair labor practice "for which respondents must be
made to answer."

ISSUE:

Whether an employer-employee relationship exists between the workers and San

Miguel Corporation

222
RATIO DECIDENDI:

The Supreme Court ruled that there exists an employer-employee relationship in

this case. In determining the existence of an employer-employee relationship, the
elements that are generally considered are the following: (a) the selection and
engagement of the employee; (b) the payment of wages; (c) the power of dismissal;
and (d) the employer's power to control the employee with respect to the means and
methods by which the work is to be accomplished. It is the called "control test" that is
the most important element.

Applying the above, the evidence strongly indicates the existence of an

employer-employee relationship between petitioner workers and respondent San Miguel
Corporation.Considering the length of... time that the petitioners have worked with the
respondent company, there is justification to conclude that they were engaged to
perform activities necessary or desirable in the usual business or trade of the
respondent, and the petitioners are, therefore regularemployees.

Even under the assumption that a contract of employment had indeed been
executed between respondent SMC and the alleged labor contractor, respondent's case
will, nevertheless, fail as none from the criteria provided by Section 8, Rule VIII, Book
III of the Implementing Rules of the Labor Code regarding labor contractor exists
herein case.

FALLO:

WHEREFORE, IN VIEW OF THE FOREGOING, the petition is GRANTED. The San

Miguel Corporation is hereby ordered to REINSTATE petitioners, with three (3) years
back wages. However, where reinstatement is no longer possible, the respondent SMC
is ordered to pay the petitioners separation pay equivalent to one (1) month pay for
every year of service.

SO ORDERED.

223
 NATIONAL WATERWORKS AND SEWERAGE AUTHORITY VS
NWSA CONSOLIDATED UNIONS, ET AL.
G.R. NO. L-18939, AUGUST 31, 1964
BAUTISTA ANGELO, J.:

FACTS:

Petitioner National Waterworks & Sewerage Authority is a government-owned

and controlled corporation created under Republic Act No. 1383, while respondent
NWSA Consolidated Unions are various labor organizations composed of laborers and
employees of the NAWASA. The other respondents are intervenors Jesus Centeno, et
al., hereinafter referred to as intervenors.

The Court of Industrial Relations (now NLRC) conducted a hearing on the

controversy then existing between petitioner and respondent unions specifically the
implementation of the 40-Hour Week Law (Republic Act No. 1880)
Respondent intervenors filed a petition in intervention on the issue of additional
compensation for night work.

The court ruled that “The NAWASA is an agency not performing governmental
functions and, therefore, is liable to pay additional compensation for work on Sundays
and legal holidays conformably to Commonwealth Act No. 444, known as the Eight-
Hour Labor Law, even if said days should be within the staggered five-work days
authorized by the President; the intervenors do not fall within the category of
“managerial employees” as contemplated in Republic Act 2377 and so are not exempt
from the coverage of the Eight-Hour Labor Law.”

ISSUE:

Whether or not the intervenors are “managerial employees” within the meaning
of Republic Act 2377 and, therefore, not entitled to the benefits of Commonwealth Act
No. 444, as amended

RATIO DECIDENDI:

The Supreme Court ruled that the intervenors are not within the meaning of
Republic Act 3277 as defined as managerial employees and therefor are not entitled to
the benefits of Eight-Hour Labor Law.

Section 2 of Republic Act 2377 provides that: “This Act shall apply to all persons
employed in any industry or occupation, whether public or private, with the exception of
farm laborers, laborers who prefer to be paid on piece work basis, managerial
employees outside sales personnel, domestic servants — persons in the personal

224
service of another and members of the family of the employer working for him. The
term ‘managerial employee’ in this Act shall mean either (a) any person whose primary
duty consists of the management of the establishment in which he is employed or of a
customarily recognized department or subdivision thereof, or (b) any officer or member
of the managerial staff.”

One of the distinguishing characteristics by which a managerial employee may be

known as expressed in the explanatory note of Republic Act No. 2377 is that he is not
subject to the rigid observance of regular office hours. The true worth of his service
does not depend so much on the time he spends in office but more on the results he
accomplishes. In fact, he is free to go out of office anytime.

Non-Managerial Employees covered by Commonwealth Act No. 444 states that

employees who have little freedom of action and whose main function is merely to carry
out the company’s orders, plans and policies, are not managerial employees and hence
are covered by Commonwealth Act No. 444.

The philosophy behind the exemption of managerial employees from the 8-Hour
Labor Law is that such workers are not usually employed for every hour of work but
their compensation is determined considering their special training, experience or
knowledge which requires the exercise of discretion and independent judgment, or
perform work related to management policies or general business operations along
specialized or technical lines. For these workers it is not feasible to provide a fixed
hourly rate of pay or maximum hours of labor. The intervenors herein are holding
position of responsibility. One of them is the Secretary of the Board of Directors.
Another is the private secretary of the general manager. Another is a public relations
officer, and many chiefs of divisions or sections and others are supervisors and
overseers. Respondent court, however, after examining carefully their respective
functions, duties and responsibilities found that their primary duties do not bear any
direct relation with the management of the NAWASA, nor do they participate in the
formulation of its policies nor in the hiring and firing of its employees. The chiefs of
divisions and sections are given ready policies to execute and standard practices to
observe for their execution. Hence, it concludes, they have little freedom of action, as
their main function is merely to carry out the company’s orders, plans and policies.

FALLO:

“With the modification indicated in the above resume as elaborated in this

decision, we hereby affirm the decision of respondent court in all other respects,
without pronouncement as to costs.”

225
 SAN MIGUEL BREWERY, INC., PETITIONER,
VS.
DEMOCRATIC LABOR ORGANIZATION, ET AL., RESPONDENTS.
G.R. NO. L-18353 JULY 31, 1963
BAUTISTA ANGELO, J.

FACTS:
On January 27, 1955, the Democratic Labor Association filed complaint against
the San Miguel Brewery, Inc. embodying 12 demands for the betterment of the
conditions of employment of its members. The company filed its answer to the
complaint specifically denying its material averments and answering the demands point
by point. The company asked for the dismissal of the complaint.
At the hearing held sometime in September 1955, the union manifested its desire
to confine its claim to its demands for overtime, night-shift differential pay, and
attorney's fees, although it was allowed to present evidence on service rendered during
Sundays and holidays, or on its claim for additional separation pay and sick and
vacation leave compensation.
After the case had been submitted for decision, Presiding Judge Jose S. Bautista,
who was commissioned to receive the evidence, rendered decision expressing his
disposition with regard to the points embodied in the complaint on which evidence was
presented and specifically, the disposition insofar as those points covered by this
petition for review are concerned, is as follows:
1. With regard to overtime compensation, Judge Bautista held that the provisions
of the Eight-Hour Labor Law apply to the employees concerned for those working in the
field or engaged in the sale of the company's products outside its premises and
consequently they should be paid the extra compensation accorded them by said law in
addition to the monthly salary and commission earned by them, regardless of the meal
allowance given to employees who work up to late at night.
2. As to employees who work at night, Judge Bautista decreed that they be paid
their corresponding salary differentials for work done at night prior to January 1, 1949
with the present qualification: 25% on the basis of their salary to those who work from
6:00 to 12:00 p.m., and 75% to those who work from 12:01 to 6:00 in the morning.
3. With regard to work done during Sundays and holidays, Judge Bautista also
decreed that the employees concerned be paid an additional compensation of 25% as
provided for in Commonwealth Act No. 444 even if they had been paid a compensation
on monthly salary basis.
ISSUE:
Whether or not employee of the petitioner is entitled of Eight Hour Labor Law?
RATIO DECIDENDI:
We are in accord with this view, for in our opinion the Eight-Hour Labor Law only
has application where an employee or laborer is paid on a monthly or daily basis, or is
paid a monthly or daily compensation, in which case, if he is made to work beyond the
requisite period of 8 hours, he should be paid the additional compensation prescribed
by law. This law has no application when the employee or laborer is paid on a piece-
work, "pakiao", or commission basis, regardless of the time employed. The philosophy
behind this exemption is that his earnings in the form of commission based on the gross
receipts of the day. His participation depends upon his industry so that the more hours
he employs in the work the greater are his gross returns and the higher his

226
commission. This philosophy is better explained in Jewel Tea Co. v. Williams, C.C.A.
Okla., 118 F. 2d 202, as follows:
The reasons for excluding an outside salesman are fairly apparent. Such
salesman, to a greater extent, works individually. There are no restrictions respecting
the time he shall work and he can earn as much or as little, within the range of his
ability, as his ambition dictates. In lieu of overtime he ordinarily receives commissions
as extra compensation. He works away from his employer's place of business, is not
subject to the personal supervision of his employer, and his employer has no way of
knowing the number of hours he works per day.
True it is that the employees concerned are paid a fixed salary for their month of
service, such as Benjamin Sevilla, a salesman, P215; Mariano Ruedas, a truck driver,
P155; Alberto Alpaza and Alejandro Empleo, truck helpers, P125 each, and sometimes
they work in excess of the required 8-hour period of work, but for their extra work they
are paid a commission which is in lieu of the extra compensation to which they are
entitled. The record shows that these employees during the period of their employment
were paid sales commission ranging from P30, P40, sometimes P60, P70, to sometimes
P90, P100 and P109 a month depending on the volume of their sales and their rate of
commission per case. And so, insofar is the extra work they perform, they can be
considered as employees paid on piece work, "pakiao", or commission basis. The
Department of Labor, called upon to implement, the Eight-Hour Labor Law, is of this
opinion when on December 9, 1957 it made the ruling on a query submitted to it, thru
the Director of the Bureau of Labor Standards, to the effect that field sales personnel
receiving regular monthly salaries, plus commission, are not subject to the Eight-Hour
Labor Law. Thus, on this point, said official stated:
. . . Moreover, when a fieldman receives a regular monthly salary plus commission on
percentage basis of his sales, it is also the established policy of the Office to consider
his commission as payment for the extra time he renders in excess of eight hours,
thereby classifying him as if he were on piecework basis, and therefore, technically
speaking, he is not subject to the Eight-Hour Labor Law.
We are, therefore, of the opinion that the industrial court erred in holding that the
Eight-Hour Labor Law applies to the employees composing the outside service force and
in ordering that they be paid the corresponding additional compensation
FALLO:
WHEREFORE, the decision of the industrial court is hereby modified as follows:
the award with regard to extra work performed by those employed in the outside or
field sales force is set aside. The rest of the decision insofar as work performed on
Sundays and holidays covering watchmen and security guards, as well as the award for
night salary differentials, is affirmed. No costs.

227
 TEOFILO ARICA, DANILOBERNABE, MELQUIADES DOHINO, ABONDIO
OMERTA, GIL TANGIHAN, SAMUEL LABAJO, NESTOR NORBE, RODOLFO
CONCEPCION, RICARDO RICHA, RODOLFO NENO, ALBERTO BALATRO,
BENJAMIN JUMAMOY, FERMIN DAAROL, JOVENAL ENRIQUEZ, OSCAR
BASAL, RAMON ACENA, JAIME BUGTAY, and 561 OTHERS, HEREIN
REPRESENTEDBY
KORONADO B. APUZEN, petitioners vs.
NATIONAL LABOR RELATIONS COMMISSION, HONORABLE FRANKLIN
DRILON,HONORABLE CONRADO B. MAGLAYA, HONORABLE ROSARIO B.
ENCARNACION, and STANDARD (PHILIPPINES)FRUIT
CORPORATION, respondents.
G.R. No. 78210 February 28, 1989 PARAS, J.:
FACTS:

Teofilo Arica et al and 561 others sued Standard Fruits Corporation

(STANFILCO) Philippines for allegedly not paying the workers for their assembly
time which takes place every work day from 5:30am to 6am. The assembly time
consists of the roll call of the workers; their getting of assignments from the
foreman; their filling out of the Laborer’s Daily Accomplishment Report; their getting
of tools and equipment from the stockroom; and their going to the field to work.
The workers alleged that this is necessarily and primarily for STANFILCO’s benefit.

ISSUE:

Whether or not the worker’s assembly time is compensable.

RULING:

No. The thirty-minute assembly time long practiced and institutionalized by

mutual consent of the parties under Article IV, Section 3, of the Collective Bargaining
Agreement cannot be considered as ‘waiting time’ within the purview of Section 5, Rule
I, Book III of the Rules and Regulations Implementing the Labor Code. Furthermore,
the thirty (30)-minute assembly is a deeply- rooted, routinary practice of the
employees, and the proceedings attendant thereto are not infected with complexities as
to deprive the workers the time to attend to other personal pursuits. In short, they are
not subject to the absolute control of the company during this period, otherwise, their
failure to report in the assembly time would justify the company to impose
disciplinarymeasures. The CBA does not contain any provision to this effect; the record
is also bare of any proof on this point. This, therefore, demonstrates the indubitable
fact that the thirty (30)-minute assembly time was not primarily intended for the
interests of the employer, but ultimately for the employees to indicate their availability
or non-availability for work during every working day.

228
RATIODECIDENDI:

In this connection account should be taken of the cognate principle that res
judicata operates to bar not only the relitigation in a subsequent action of the issues
squarely raised, passed upon and adjudicated in the first suit, but also the ventilation
in said subsequent suit of any other issue which could have been raised in the first but
was not. The law provides that 'the judgment or order is, with respect to the matter
directly adjudged or as to any other matter that could have been raised in relation
thereto, conclusive between the parties and their successors in interest by title
subsequent to the commencement of the action, litigating for the same thing and in
the same capacity.' So, even if new causes of action are asserted in the second action
(e.g. fraud, deceit, undue machinations in connection with their execution of the
convenio de transaccion), this would not preclude the operation of the doctrine of res
judicata. Those issues are also barred, even if not passed upon in the first. They could
have been, but were not, there raised.

Moreover, as a rule, the findings of facts of quasi-judicial agencies which have

acquired expertise because their jurisdiction is confined to specific matters are
accorded not only respect but at times even finality if such findings are supported by
substantial evidence.

FALLO:

PREMISES CONSIDERED, the petition is DISMISSED for lack of merit and the
decision of the National Labor Relations Commission is AFFIRMED

229
 UNIVERSITY OF PANGASINAN FACULTY UNION, PETITIONER, VS.
UNIVERSITY OF PANGASINAN
AND NATIONAL LABOR RELATIONS COMMISSION, RESPONDENTS.
NO. L-63122. FEBRUARY 20, 1984
GUTIERREZ, JR., J.:

FACTS:

Petitioner University of Pangasinan Faculty Union is a labor union composed of

faculty members of the respondent University of Pangasinan, an educational institution
duly organized and existing by virtue of the laws of the Philippines. Said labor union
through its President filed a complaint against the school before NLRC Dagupan,
seeking the payment of Emergency Cost of Living Allowances (ECOLA) for the semestral
break (November 7 to December 5, 1981).

The University defended that the teachers are not entitled for the ECOLA during
semestral break since such is not an integral part of the school year and there being no
actual services rendered by the teachers during said period. Thus, “No work, no pay”
applies.

ISSUE:

Whether or not semestral breaks may be considered as “hours worked” on the

part of petitioners-teachers

RATIO DECIDENDE:

YES.
Semestral breaks may be considered as “hours worked” under the Rules
implementing the Labor Code. The semestral break is a work interruption beyond
petitioner’s control and it cannot be used “effectively nor gainfully in the employee’s
interest.” Thus, the semesteral break may also be considered as “hours worked.” For
this, the teachers are paid regular salaries and be entitled to ECOLA.

Not only do the teachers continue to work during this short recess but much less
do they cease to live for which the cost of living allowance is intended. The legal
principles of “No work, no pay; No pay, no ECOLA” must necessarily give way to the
purpose of the law to augment the income of employees to enable them to cope with
the harsh living conditions brought about by inflation; and to protect employees and
their wages against the ravages brought by these conditions. Significantly, it is the
commitment of the State to protect labor and to provide means by which the difficulties
faced by the working force may best be alleviated. To submit to the respondents’
interpretation of the no work, no pay policy is to defeat this noble purpose. The
Constitution and the law mandate otherwise.

Petitioners, in the case at bar, certainly do not, ad voluntatem, absent

themselves during semestral breaks. Rather, they are constrained to take mandatory
leave from work. For this they cannot be faulted nor can they be begrudged that which
is due them under the law.

FALLO:

Wherefore, private respondent is ordered to pay its regular fulltime

teachers/employees emergency cost of living allowances for the semestral break.

230
SIME DARBY PILIPINAS, INC. PETITIONER, V. NATIONAL LABOR RELATIONS
COMMISSION (2ND DIVISION) AND SIME DARBY SALARIED EMPLOYEES
ASSOCIATION (ALU-TUCP), RESPONDENTS.
G.R. NO. 119205 APRIL 15, 1998
BELLOSILLO, J.:

FACTS:

Sime Darby Pilipinas, Inc., petitioner, is engaged in the manufacture of

automotive tires, tubes and other rubber products. Sime Darby Salaried Employees
Association (ALU-TUCP), private respondent, is an association of monthly salaried
employees of petitioner at its Marikina factory. Prior to the present controversy, all
company factory workers in Marikina including members of private respondent union
worked from 7:45 a.m. to 3:45 p.m. with a 30-minute paid "on call" lunch break.

On 14 August 1992 petitioner issued a memorandum to all factory-based

employees advising all its monthly salaried employees in its Marikina Tire Plant, except
those in the Warehouse and Quality Assurance Department working on shifts, a change
in work schedule effective 14 September 1992.

Since private respondent felt affected adversely by the change in the work
schedule and discontinuance of the 30-minute paid "on call" lunch break, it filed on
behalf of its members a complaint with the Labor Arbiter for unfair labor practice,
discrimination and evasion of liability pursuant to the resolution of this Court in Sime
Darby International Tire Co., Inc. v. NLRC. 2However, the Labor Arbiter dismissed the
complaint on the ground that the change in the work schedule and the elimination of
the 30-minute paid lunch break of the factory workers constituted a valid exercise of
management prerogative and that the new work schedule, break time and one-hour
lunch break did not have the effect of diminishing the benefits granted to factory
workers as the working time did not exceed eight (8) hours.

Private respondent appealed to respondent National Labor Relations Commission

(NLRC) which sustained the Labor Arbiter and dismissed the appeal. 4 However, upon
motion for reconsideration by private respondent, the NLRC, this time with two (2) new
commissioners replacing those who earlier retired, reversed its earlier decision of 20
April 1994 as well as the decision of the Labor Arbiter.

The Office of the Solicitor General filed in a lieu of comment a manifestation and
motion recommending that the petitioner be granted, alleging that the 14 August 1992
memorandum which contained the new work schedule was not discriminatory of the
union members nor did it constitute unfair labor practice on the part of petitioner.

231
ISSUE:

Is the act of management in revising the work schedule of its employees and
discarding their paid lunch break constitutive of unfair labor practice?

RATIO DECIDENDI:

The right to fix the work schedules of the employees rests principally on their
employer. In the instant case petitioner, as the employer, cites as reason for the
adjustment the efficient conduct of its business operations and its improved production.

Even as the law is solicitous of the welfare of the employees, it must also protect
the right of an employer to exercise what are clearly management
prerogatives. 10
Thus, management is free to regulate, according to its own discretion
and judgment, all aspects of employment, including hiring, work assignments, working
methods, time, place and manner of work, processes to be followed, supervision of
workers, working regulations, transfer of employees, work supervision, lay off of
workers and discipline, dismissal and recall of workers. Further, management retains the
prerogative, whenever exigencies of the service so require, to change the working
hours of its employees. So 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
agreements, this Court will uphold such exercise.

While the Constitution is committed to the policy of social justice and the
protection of the working class, it should not be supposed that every dispute will be
automatically decided in favor of labor. Management also has rights which, as such, are
entitled to respect and enforcement in the interest of simple fair play. Although this
Court has inclined more often than not toward the worker and has upheld his cause in
his conflicts with the employer, such favoritism has not blinded the Court to the rule
that justice is in every case for the deserving, to be dispensed in the light of the
established facts and the applicable law and doctrine.

FALLO:

WHEREFORE, the Petition is GRANTED. The Resolution of the National Labor

Relations Commission dated 29 November 1994 is SET ASIDE and the decision of the
Labor Arbiter dated 26 November 1993 dismissing the complaint against petitioner for
unfair labor practice is AFFIRMED.

232
PAN-AMERICAN WORLD AIRWAYS SYSTEM (PHILIPPINES), PETITIONER, VS.
PAN AMERICAN EMPLOYEES ASSOCIATION, RESPONDENT
G.R. NO. L-16572; FEBRUARY 23, 1961
REYES, J.B.L.,S.:

FACTS:

Petitioner herein claims that the one-hour meal period should not be considered
as overtime work (after deducting 15 minutes). Because the evidence showed that the
complainants could rest completely, and were not in any manner under the control of
the company during that period.

That court below found, on the contrary, that during the so-called meal period,
the mechanics were required to stand by for emergency work; that if they happened
not to be available when they called, they were reprimanded by the leadman; that as in
fact it happened on many occasions, the mechanics had been called for their meals or
told to hurry up eating to perform work during this period.

ISSUE:

Whether the one-hour meal period should be considered overtime work.

RATIO DECIDENDI:

Far from being unsupported by substantial evidence, the record clearly confirms
the above factual findings of the Industrial court.

RULING:

The judgment appealed from is affirmed. Costs against the appellant.

233
 NATIONAL DEVELOPMENT CORPORATION VS.
COURT OF INDUSTRIAL RELATIONS AND NATIONAL
TEXTILE WORKERS UNION
G.R. NO. L15422, NOV 30, 1962

FACTS:

At the National Development Co., a government-owned and controlled

corporation, there were four shifts of work. One shift was from 8 a.m. to 4 p.m., while
the three other shifts were from 6 a.m. to 2 p.m; then from 2 p.m. to 10 p.m. and,
finally, from 10 p.m. to 6 a.m. In each shift, there was a one-hour mealtime period, to
wit: From (1) 11 a.m. to 12 noon for those working between 6 a.m. and 2 p.m. and
from (2) 7 p.m. to 8 p.m. for those working between 2 p.m. and 10 p.m.

The records disclose that although there was a one-hour mealtime, petitioner
nevertheless credited the workers with eight hours of work for each shift and paid them
for the same number of hours. However, since 1953, whenever workers in one shift
were required to continue working until the next shift, petitioner instead of crediting
them with eight hours of overtime work, has been paying them for six hours only,
petitioner that the two hours corresponding to the mealtime periods should not be
included in computing compensation. On the other hand, respondent National Textile
Workers Union whose members are employed at the NDC, maintained the opposite
view and asked the Court of Industrial Relations to order the payment of additional
overtime pay corresponding to the mealtime periods.

After hearing, Judge Arsenio I. Martinez of the CIR issued an order dated March
19, 1959, holding that mealtime should be counted in the determination of overtime
work and accordingly ordered petitioner to pay P101,407.96 by way of overtime
compensation. Petitioner filed a motion for reconsideration but the same was dismissed
by the CIR en banc on the ground that petitioner failed to furnish the union a copy of
its motion.

ISSUE:

WON the CIR has jurisdiction over claims for overtime compensation?

RULING:

Held. Citing the ruling in Campos et al vs Manila Road Co. et al, G.R. No. L-
17905, May 25, 1962, the court held that for such jurisdiction to come into play, the
following requisites must be complied with: (a) there must exist between the parties an
employer-employee relationship or the claimant must seek his reinstatement; and (b)
the controversy must relate to a case certified by the President to the CIR as one
involving national interest, or must arise either under the Eight-Hour Labor Law, or
under the Minimum Wage Law. In default of any of these circumstances, the claim
becomes a mere money claim that comes under the jurisdiction of the regular courts.
Here, petitioner does not deny the existence of an employer-employee relationship
between it and the members of the union. Neither is there any question that the claim
234
is based on the Eight-Hour Labor Law (Com. Act No. 444, as amended). The court ruled
in favor of the jurisdiction of the CIR over the present claim and dismissed the
petitioner’s appeal.

235
 MERCURY DRUG CO., INC., PETITIONER, VS NARDO DAYAO, ET AL.,
RESPONDENTS
G.R. NO. L-30452, SEPTEMBER 30, 1982
GUTIERREZ, JR., J.:

FACTS:

The respondent, Nardo Dayao, filed a petition praying for: 1) payment of their
unpaid back wages for work done on Sundays and legal holidays plus 25% additional
compensation from date of their employment up to June 30, 1962; 2) payment of extra
compensation on work done at night; 3) reinstatement of Januario Referente and Oscar
Echalar to their former positions with back salaries; and against the respondent union
for its disestablishment and the refund of all monies it had collected from petitioners.

The court rendered its decision affirming the petition of the respondent. Mercury
Drug Company, not satisfied with the decision, filed motion for reconsideration. Hence,
this petition.

ISSUE/S:

WON respondent court erred in declaring the contracts of employment null and
void and contrary to law.

RATIO DECIDENDI:

While an employer may compel his employees to perform service on such days,
the law nevertheless imposes upon him the obligation to pay his employees at least
25% additional of their basic or regular salaries.

No person, firm or corporation, business establishment or place of center of labor

shall compel an employee or laborer to work during Sundays and legal holidays unless
he is paid an additional sum of at least 25% of his regular remuneration: Provided
however, that this prohibition shall not apply to public utilities performing some public
service such as supplying gas, electricity, power, water or providing means of
transportation or communication. (Section 4, C.A. No. 444)

Even assuming that the petitioners had agreed to work on Sundays and legal
holidays without any further consideration than their monthly salaries, they are not
barred nevertheless from claiming what is due them, because such agreement is
contrary to public policy and is declared nun and void by law.

236
FALLO:

WHEREFORE, the petition is hereby dismissed. The decision and resolution

appealed from are affirmed with costs against petitioner. SO ORDERED.

237
 EMIRATE SECURITY AND MAINTENANCE SYSTEMS, INC AND ROBERTO A.
YAN, VS GLENDA M. MENESE
G.R. NO. 182848, OCTOBER 5, 2011
ARTURO BRION

FACTS:

Respondent Glenda M. Menese filed a complaint for constructive dismissal; illegal

reduction of salaries and allowances; separation pay; refund of contribution to cash
bond; overtime, holiday, rest day and premium pay; damages; and attorneys fees
against the petitioners, Emirate Security and Maintenance Systems, Inc. and its General
Manager, Robert A. Yan.

Menese alleged in the compulsory arbitration proceedings that on April 1, 1999,

the agency engaged her services as payroll and billing clerk. She was assigned to the
agency’s security detachment at the Philippine General Hospital. She was given a
monthly salary of P9,200.00 and an allowance of P2,500.00, for a total of P11,700.00 in
compensation. Effective May 2001, her allowance was allegedly reduced to P1,500.00
without notice, and P100.00 was deducted from her salary every month as her
contribution to a cash bond which lasted throughout her employment. She was required
to work seven days a week, from 8:00 a.m. to 5:00 p.m. She was also required to
report for work on holidays, except on New Years Day and Christmas. She claimed that
she was never given overtime, holiday, rest day and premium pay.

Still not satisfied with what they did, the petitioners allegedly withheld her salary
for May 16-31, 2001. She claimed that the petitioners dismissed her from the service
without just cause and due process.

ISSUE:

Did the petitioner violates Article 282 (a) of the Labor Code in illegally dismissing
the Respondent Glenda Menese

RATIONALE DECIDENDI:

In Blue Dairy Corporation v NLRC, the court stressed as a matter of principle that
the managerial prerogative to transfer personnel must be exercised without abuse of
discretion, in which the basic elements of justice and fair play. Having the right should
not be confused with the manner in which the right is exercised. Thus, it should not be
used as a subterfuge by the employer to get rid of an undesirable worker. Measured
against this basic precept, the petitioners undoubtedly abused their authority in
transferring the Respondent Menese to the agency head office. She had become
undesirable because she stood in the way of Claros entry into PGH detachment.
Respondent Menese had to go, thus the need for pretext to get rid of her. The request
of a client for the transfer became the overring command that prevailed over the lack of
basis for the transfer.

238
 In these lights, Menese’s transfer constituted a constructive dismissal as it had
no justifiable basis and entailed a demotion in rank and a diminution in pay for her. For
a transfer not to be considered a constructive dismissal, the employer must be able to
show that the transfer is for a valid reason, entails no diminution in the terms and
conditions of employment, and must be unreasonably inconvenient or prejudicial to the
employee. If the employer fails to meet these standards, the employee’s transfer shall
amount, at the very least, to constructive dismissal. The petitioners, unfortunately for
them, failed to come up to these standards.

FALLO:

WHEREFORE, premises considered, except for the overtime pay award and the
refund of deposit for the cash bond, the petition is DENIED for lack of merit. The
assailed decision and resolution of the Court of Appeals are AFFIRMED, with the
following modifications:

1) The deletion of the overtime pay award; and

2) Adjustment of the refund of the cash or surety bond deposit award from
₱2,500.00 to ₱600.00.

239
NATIONAL SUGAR REFINERIES CORPORATION, PETITIONER, VS. NATIONAL
LABOR RELATIONS COMMISSION AND NBSR SUPERVISORY UNION
(PACIWU) TUCP, RESPONDENTS
G. R. NO. 101761, MARCH 24, 1993
REGALADO, J.:

FACTS:

This is a Petition for Certiorari by the Batangas Sugar Refinery of National Sugar
Refineries Corporation (NASUREFCO), a corporation which is fully owned and controlled
by the Government.

On June 1, 1988, petitioner implemented a Job Evaluation (JE) Program affecting

all employees, from rank-and-file to department heads. These positions were re-
evaluated, and all employees including the members of respondent union were granted
salary adjustments and increases in benefits commensurate to their actual duties and
functions.

Prior to the implementation of the aforesaid program, the members of

respondent union were treated in the same manner as rank-and-file employees. They
were paid overtime, rest day and holiday pay. With the implementation of the JE
Program, they were considered managerial staff. Hence, the compensation and benefits
adjustments.

On June 20, 1990, two years after the implementation of the JE Program, the
members of respondent union filed a complaint with the executive labor arbiter for non-
payment of overtime, rest day and holiday pay, allegedly in violation of Article 100 of
the Labor Code.

The Labor Arbiter directed NASUREFCO to pay the wages complained of.

On appeal, respondent National Labor Relations Commission (NLRC) affirmed the

decision of the Labor Arbiter on the ground that the members of respondent union are
not managerial employees and therefore, they are entitled to overtime, rest day and
holiday pay. Respondent NLRC declared that these supervisory employees are merely
exercising recommendatory powers and their main function is to carry out the ready
policies and plans of the corporation.

Reconsideration of said decision was denied in a resolution of public respondent.

Hence, this petition.

ISSUE:

Whether or not the union members, as supervisory employees are considered as

officers or members of the managerial staff, and therefore, are not entitled to overtime
rest day and holiday pay.

240
RATIO DECIDENDI:

Yes. It is the submission of petitioner that while the members of respondent

union, as supervisors, may not be occupying managerial positions, they are clearly
officers or members of the managerial staff because they meet all the conditions
prescribed by law and hence, they are not entitled to overtime, rest day and
supervisory employees under Article 212 (m) should be made to apply only to the
provisions on Labor Relations, while the right of said employees to the questioned
benefits should be considered in the light of the meaning of a managerial employee and
of the officers or members of the managerial staff, as contemplated under Article 82 of
the Code and Section 2, Rule I Book III of the implementing rules. In other words, for
purposes of forming and joining unions, certification elections, collective bargaining,
and so forth, the union members are supervisory employees. In terms of working
conditions and rest periods and entitlement to the questioned benefits, however, they
are officers or members of the managerial staff, hence, they are not entitled thereto.

Prior to the implementation of the JE Program, the union members, while being
supervisors, received benefits similar to the rank-and-file employees such as overtime,
rest day and holiday pay. With their promotion, they are no longer entitled to the
benefits which attach and pertain exclusively to their positions. Their assumption of
these positions removed them from the coverage of such benefits they used to receive.

FALLO:

The impugned decision and respondent National Labor Relations Commission

promulgated on July 19, 1991 and August 30, 1991 are ANNULLED and SET ASIDE for
having been rendered and adopted with grave abuse of discretion, and the basic
complaint of private respondent union is dismissed.

241
 WILGEN LOON, JERRY ARCILLA, ALBERT PEREYE, ARNOLD PEREYE,
EDGARDO OBOSE, ARNEL MALARAS, PATROCINO TOETIN, EVELYN
LEONARDO, ELMER GLOCENDA, RUFO CUNAMAY, ROLANDO SAJOL,
ROLANDO ABUCAYON, JENNIFER NATIVIDAD, MARITESS TORION,
ARMANDO LONZAGA, RIZAL GELLIDO, EVIRDE HAQUE,1 MYRNA VINAS,
RODELITO AYALA, WINELITO OJEL, RENATO RODREGO, NENA ABINA,
EMALYN OLIVEROS, LOUIE ILAGAN, JOEL ENTIG, ARNEL ARANETA,
BENJAMIN COSE, WELITO LOON AND WILLIAM ALIPAO, PETITIONERS,
VS.
POWER MASTER, INC., TRI-C GENERAL SERVICES, AND SPOUSES HOMER
AND CARINA ALUMISIN, RESPONDENTS.
G.R. NO. 189404, DECEMBER 11, 2013
BRION, J.:

FACTS:
Respondents, Powermaster, Inc. and Tri-C General Services are employers of
petitioners. Petitioners were assigned at various Philippine Long Distance Telephone
(PLDT) Company in Metro Manila. The petitioners filed a complaint for money claims
against respondents alleging that they were not paid minimum wages, overtime,
holiday, premium, service incentive leave and thirteenth (13th) month pays. They also
claim that the respondents made them sign blank payroll sheets.
On 11 June 2001, the petitioners amended their complaint and included illegal
dismissal as their cause of action, they stated that the respondents removed them from
service in retaliation for the filing of their complaint.
The respondents did not participate in the proceedings before the Labor Arbiter
except on April 19, 2001 and May 21, 2001 represented by Mr. Romulo Pacia, Jr. on
their behalf. He also appeared in a preliminary mandatory conference on July 5, 2001.
The Labor Arbiter ruled that salary differential, service incentive leave, thirteenth
(13th)month pays and attorneys fees shall be awarded to the petitioners. The burden in
providing the payment of these money claims rests with the employer. However, they
were not awarded overtime, backwages and premium pays as they failed to show that
they rendered services after the required working hours (8-hour) and that they worked
during holidays. The decision for the illegal dismissal complaint of petitioners is still
pending as they failed to show notice of termination of their employment.
Both parties appealed before the National Labor Relations Commission (NLRC).
The NLRC affirmed the decision of the Labor Arbiter to award holiday pay and
attorney’s fees and vacated the award of the payment of salary differential, thirteenth
(13th) month pay and service incentive leaves. Also, the NLRC allowed the respondents
to present evidence for the first time on appeal on the ground that they have been
deprived due process. Further, the NLRC ruled that petitioner were legally dismissed for
gross misconduct as the respondent’s claimed that petitioners resisted to be assigned in
different branches of PLDT in Metro Manila.
The Court of Appeals affirmed the decision of the NLRC. Hence, the petitioner for
review on certiorari was filed before this court.
ISSUE:
Whether or not the petitioners were illegally dismissed and thus are entitled to
payment of backwages, salary differential, overtime, holiday, premium, service
incentive leave, thirteenth (13th) month pays and attorney’s fees.

242
RATIO DECIDENDI:

Based on the above considerations, we reverse the NLRC and the CA’s finding
that the petitioners were terminated for just cause and were afforded procedural due
process. In termination cases, the burden of proving just and valid cause for dismissing
an employee from his employment rests upon the employer. The employer’s failure to
discharge this burden results in the finding that the dismissal is unjustified. 40 This is
exactly what happened in the present case.

We also reverse the NLRC and the CA’s finding that the petitioners are not
entitled to salary differential, service incentive, holiday, and thirteenth month pays. As
in illegal dismissal cases, the general rule is that the burden rests on the defendant to
prove payment rather than on the plaintiff to prove non-payment of these money
claims.41 The rationale for this rule is that the pertinent personnel files, payrolls,
records, remittances and other similar documents – which will show that differentials,
service incentive leave and other claims of workers have been paid – are not in the
possession of the worker but are in the custody and control of the employer.42

However, the CA was correct in its finding that the petitioners failed to provide
sufficient factual basis for the award of overtime, and premium pays for holidays and
rest days. The burden of proving entitlement to overtime pay and premium pay for
holidays and rest days rests on the employee because these are not incurred in the
normal course of business.43 In the present case, the petitioners failed to adduce any
evidence that would show that they actually rendered service in excess of the regular
eight working hours a day, and that they in fact worked on holidays and rest days.

The award of attorney’s fees is also warranted under the circumstances of this
case. An employee is entitled to an award of attorney’s fees equivalent to ten percent
(10%) of the amount of the wages in actions for unlawful withholding of wages.44

As a final note, we observe that Rodelito Ayala, Winelito Ojel, Renato Rodrego
and Welito Loon are also named as petitioners in this case. However, we deny their
petition for the reason that they were not part of the proceedings before the CA. Their
failure to timely seek redress before the CA precludes this Court from awarding them
monetary claims.

FALLO:

WHEREFORE, based on these premises, we REVERSE and SET ASIDE the

decision dated June 5, 2009, and the resolution dated August 28, 2009 of the Court of
Appeals. This case is REMANDED to the Labor Arbiter for the sole purpose of computing
petitioners' (Wilgen Loon, Jerry Arcilla, Albert Pereye, Arnold Pereye, Edgardo Obose,
Arnel Malaras, Patrocino Toetin, Evelyn Leonardo, Elmer Glocenda, Rufo Cunamay,
Rolando Sajol, Rolando Abucayon, Jennifer Natividad, Maritess Torion, Ammndo
Lonzaga, Rizal Gellido, Evirdly Haque, Myrna Vinas, Nena Abina, Emalyn Oliveros, Louie
Ilagan, Joel Entig, Amel Araneta, Benjamin Cose and William Alipao) full backwages
(computed from the date of their respective dismissals up to the finality of this decision)
and their salary differential, service incentive leave, holiday, thirteenth month pays, and
attorney's fees equivalent to ten percent (10%) of the withheld wages. The
respondents are further directed to immediately post a satisfactory bond conditioned on
the satisfaction of the awards affirmed in this Decision.

243
JULIO N. CAGAMPAN, SILVINO C. VICERA, JORGE C. DE CASTRO, JUANITO R.
DE JESUS, ARNOLD J. MIRANDA, MAXIMO O. ROSELLO & ANICETO L.
BETANA, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, & ACE MARITIME AGENCIES,
INC., respondents.
G.R. Nos. 85122-24,March 22, 1991
PARAS, J.:

FACTS:

On April 17 and 18,1985, petitioners, all seamen, entered into separate contracts
of employment with the Golden Light Ocean Transport, Ltd., through its local agency,
private respondent ACE MARITIME AGENCIES, INC. Petitioners. Petitioners were
deployed on May 7, 1985, and discharged on July 12, 1986. Thereafter, petitioners
collectively and/or individually filed complaints for non-payment of overtime pay,
vacation pay and terminal pay against private respondent. In addition, they claimed
that they were made to sign their contracts in blank. Likewise, petitioners averred that
although they agreed to render services on board the vessel Rio Colorado managed by
Golden Light Ocean Transport, Ltd., the vessel they actually boarded was MV "SOIC I"
managed by Columbus Navigation. Two (2) petitioners, Jorge de Castro and Juanito de
Jesus, charged that although they were employed as ordinary seamen (OS), they
actually performed the work and duties of Able Seamen (AB).

Private respondent was furnished with copies of petitioners' complaints and

summons, but it failed to file its answer within the reglementary period. Thus, on
January 12, 1987, an Order was issued declaring that private respondent has waived its
right to present evidence in its behalf and that the cases are submitted for decision.

On August 5, 1987, the Philippine Overseas Employment Administration (POEA)

rendered a Decision dismissing petitioners' claim for terminal pay but granted their
prayer for leave pay and overtime pay. The payments represent their leave pay
equivalent to their respective salary of 35 days and should be paid in Philippine
currency at the current rate of exchange at the time of actual payment. On appeal, the
NLRC is hereby REVERSED and SET ASIDE and another one entered dismissing these
cases for lack of merit. The Urgent Motion for Reconsideration of the NLRC's Decision
was denied for lack of merit. Hence, this appeal.

ISSUE:

Whether the NLRC erred on the disallowance of overtime pay?

HELD:

No, the NLRC ruling on the disallowance of overtime pay is ably supported by the
fact that petitioners never produced any proof of actual performance of overtime work.

Petitioners have conveniently adopted the view that the "guaranteed or fixed overtime
pay of 30% of the basic salary per month" embodied in their employment contract

244
should be awarded to them as part of a "package benefit." They have theorized that
even without sufficient evidence of actual rendition of overtime work, they would
automatically be entitled to overtime pay. Their theory is erroneous for being illogical
and unrealistic. Their thinking even runs counter to the intention behind the provision.
The contract provision means that the fixed overtime pay of 30% would be the basis for
computing the overtime pay if and when overtime work would be rendered. Simply,
stated, the rendition of overtime work and the submission of sufficient proof that said
work was actually performed are conditions to be satisfied before a seaman could be
entitled to overtime pay which should be computed on the basis of 30% of the basic
monthly salary. In short, the contract provision guarantees the right to overtime pay
but the entitlement to such benefit must first be established. Realistically speaking, a
seaman, by the very nature of his job, stays on board a ship or vessel beyond the
regular eight-hour work schedule. For the employer to give him overtime pay for the
extra hours when he might be sleeping or attending to his personal chores or even just
lulling away his time would be extremely unfair and unreasonable.

The Court resolved the question of overtime pay of a worker aboard a vessel in
the case of National Shipyards and Steel Corporation v. CIR (3 SCRA 890), “The correct
criterion in determining whether or not sailors are entitled to overtime pay is not,
therefore, whether they were on board and can not leave ship beyond the regular eight
working hours a day, but whether they actually rendered service in excess of said
number of hours.”The aforequoted ruling is a reiteration of Our resolution in Luzon
Stevedoring Co., Inc. vs. Luzon Marine Department Union, et al. (G.R. No. 9265, April
29, 1957).

FALLO:

WHEREFORE, the decision of the NLRC is hereby AFFIRMED with the

modification that petitioners Cagampan and Vicera are awarded their leave pay
according to the terms of the contract.

245
 LAGATIC VS. NATIONAL LABOR RELATIONS COMMISSION
G.R. NO. 121004 JANUARY 28, 1998
ROMERO, J.:

FACTS:

Petitioner Romeo Lagatic was employed in May 1986 by Cityland, first as a

probationary sales agent, and later on as a marketing specialist. He was tasked with
soliciting sales for the company, with the corresponding duties of accepting call-ins,
referrals, and making client calls and cold calls. Cold calls refer to the practice of
prospecting for clients through the telephone directory. Cityland, believing that the
same is an effective and cost-efficient method of finding clients, requires all its
marketing specialists to make cold calls. The number of cold calls depends on the sales
generated by each: more sales mean less cold calls. Likewise, in order to assess cold
calls made by the sales staff, as well as to determine the results thereof, Cityland
requires the submission of daily progress reports on the same.

On October 22, 1991, Cityland issued a written reprimand to petitioner for his
failure to submit cold call reports for 28 instances and was suspended for three (3) days
for similar warning. To worsen matters, he wrote a note, "TO HELL WITH COLD CALLS!
WHO CARES?" he left the same lying on his desk where everyone could see it.

Also, Petitioner anchors his claim for illegal deductions of commissions on

Cityland's formula for determining commissions and even goes as far as to claim that
with the use of Cityland's formula, he is indebted to the company in the amount of
P1,410.00

On February 23, 1993, petitioner received a memorandum requiring him to

explain why Cityland should not make good its previous warning for his failure to submit
cold call reports, as well as for issuing the written statement aforementioned but the
petitioner denied the allegation and stated that his accounts must not be treated as
insubordination.

Finding petitioner guilty of gross insubordination, Cityland served a notice of

dismissal upon him on February 26, 1993. Aggrieved by such dismissal, petitioner filed
a complaint against Cityland for illegal dismissal, illegal deduction, underpayment,
overtime and rest day pay, damages and attorney's fees. The labor arbiter dismissed
the petition for lack of merit. On appeal, the same was affirmed by the NLRC; hence the
present recourse.

ISSUES:

1. Whether or not respondent NLRC gravely abused its discretion 1n not finding
that petitioner was illegally dismissed;

2. Whether or not respondent NLRC gravely abused its discretion in ruling that
petitioner is not entitled to salary differentials, backwages, separation pay,
overtime pay, rest day pay, unpaid commissions, moral and exemplary damages
and attorney's fees.

RATIO DECIDENDI:

I. The petition lacks merit. To constitute a valid dismissal from employment, two
requisites must be met, namely: (1) the employee must be afforded due process, and

246
(2) the dismissal must be for a valid cause. In the case at bar, petitioner contends that
his termination was illegal on both substantive and procedural aspects.
An employee may be validly dismissed for violation of a reasonable company rule
or regulation adopted for the conduct of the company business. Petitioner's continued
infraction of company policy requiring cold call reports, as evidenced by the 28
instances of non-submission of aforesaid reports, justifies his dismissal. Petitioner's only
defense is denial. The rule, however, is that denial, if unsubstantiated by clear and
convincing evidence, is negative and self-serving evidence which has no weight in law.

Based on the foregoing, we find petitioner guilty of willful disobedience. There is,
thus, just cause for his dismissal.

On the procedural aspect, petitioner claims that he was denied due process. Well
settled is the dictum that the twin requirements of notice and hearing constitute the
elements of due process in the dismissal of employees. Thus, the employer must
furnish the employee with two written notices before the termination of employment
can be effected. The first apprises the employee of the particular acts or omissions for
which his dismissal is sought; the second informs him of the employer's decision to
dismiss him. In the case at bar, petitioner was notified of the charges against him in a
memorandum dated February 19, 1993, which he received on February 23, 1993. He
submitted a letter-reply thereto on February 24, 1993, wherein he asked that his failure
to submit cold call reports be not interpreted as gross insubordination. He was given
notice of his termination on February 26, 1993. This chronology of events clearly show
that petitioner was served with the required written notices.

II. Petitioner's argument that he is indebted to respondent by P1,410.00 is fallacious as

his basic salary remains the same and he continues to receive the same, regardless of
his collections. Additionally, there is no law which requires employers to pay
commissions, and when they do so, as stated in the letter-opinion of the Department of
Labor and Employment dated February 19, 1993, "there is no law which prescribes a
method for computing commissions. The determination of the amount of commissions
is the result of collective bargaining negotiations, individual employment contracts or
established employer practice." Since the formula for the computation of commissions
was presented to and accepted by petitioner, such prescribed formula is in order. It
must be noted that his commissions are not meant to be in a fixed amount. The
company may not remove theprivilege of sales personnel to earn a commission.

With respect to petitioner's claims for overtime pay, rest day pay and holiday
premiums,
the labor arbiter and the NLRC sanctioned respondent's practice of offsetting rest day or
holiday work with equivalent time on regular workdays on the ground that the same is
authorized by Department Order 21, Series of 1990.

Petitioner failed to show his entitlement to overtime and rest day pay due, to the
lack of sufficient evidence as to the number of days and hours when he rendered
overtime and rest day work. Petitioner submitted in evidence minutes of meetings
wherein he was assigned to work on weekends and holidays at Cityland's housing
projects but said minutes do not prove that petitioner actually worked on said dates. It
is a basic rule in evidence that each party must prove his affirmative allegations.

Lastly, with the finding that petitioner's dismissal was for a just and valid cause,
his claims for moral and exemplary damages, as well as attorney's fees, must fail.

247
FALLO:

WHEREFORE, premises considered, the assailed Resolution is AFFIRMED and this

petition is hereby DISMISSED for lack of merit. Costs against petitioner.

SO ORDERED.

248
PHILIPPINE NATIONAL BANK VS. PHILIPPINE NATIONAL BANK EMPLOYEES
ASSOCIATION (PEMA) AND COURT OF INDUSTRIAL RELATIONS
G.R L-30279, JULY 30, 1982
BARREDO J.

FACTS:
By Resolution No. 1162, PNB approved a revision of the computation of overtime
pay and authorized a recomputation of the regular one hour and extra overtime already
rendered by all officers and employees of PNB. PEMA alleged that the computation of
overtime pay should include the cost of living allowance and longevity pay in
accordance with CA 44 and the NAWASA case. Petitioner contends that the parties have
not stipulated in the collective bargaining agreement the inclusion of cost of living
allowance and longevity pay as part of the computation.

ISSUE:

Whether or not the computation of overtime pay should include the cost of living
allowance and longevity pay.

RATIO DECIDENDI:

No, the cost of living allowance and longevity pay should not be included in the
computation of overtime pay.

Commonwealth Act 44 prescribes only a minimum of at least 25% in addition to

the regular wage or salary of an employee to constitute his overtime rate of pay. The
basis of computation of overtime pay beyond that required by CA 44 must be the
collective bargaining agreement. And that the NAWASA case does not apply where the
collective bargaining agreement does not provide for the method of computation of
overtime pay. Since the parties did not stipulate in the collective bargaining agreement
that the cost of living allowance and longevity pay is included in the computation of
overtime pay, such should not be included in accordance with CA 44 and the NAWASA
case.

FALLO:

Wherefore, the cost of living allowance and longevity pay should not be included
in the computation of overtime pay.

249
 PAMPANGA SUGAR DEVELOPMENT CO INC V. CIR AND SUGAR WORKERS
ASSOCIATION (SWA)
G.R. NO. L-39387, JUNE 29, 1982
MAKASIAR, J.

FACTS:

Sometime in February 1956, respondent Sugar Workers Association organized a

strike against petitioner Pampanga Sugar Development Co Inc. The labor dispute was
then endorsed by the company President to the Court of Industrial Relations (CIR). On
November 8, 1962, the said court issued an order directing petitioner company to
reinstate the members of the respondent union. However, the reinstated union
members were discriminated by the petitioner with respect to wage rates, off-season
pay, cost of living allowance, milling bonus and Christmas bonus. For this reason, the
respondent filed a complaint for unfair labor practices against the petitioner with the
CIR.

On December 4, 1972, the CIR found the petitioner guilty of unfair labor practice
acts as charged & thereby directed petitioner to cease and desist from further
committing the said practices. It also directed the petitioner to pay wage differentials to
certain workers & fringe benefits as would be due and payable to them.

Petitioner filed a motion for reconsideration but was denied by CIR. Petitioner
then appealed the above decision & resolution to the Higher Court, but it was also
denied due to lack of merit.

In addition, respondent Union filed with the CIR a motion for computation of
final judgement and a petition for attorney’s lien both dated October 17, 1973 which
the petitioner company answered. On June 6, 1964, the CIR issued its order approving
& granting respondent’s counsel Atty. Ignacio Lacsina, attorney’s fees equivalent to
20% of the total amount of final judgement and also directed its Examining Division to
compute the wage ang fringe differentials due the individual workers.

Petitioner moved for reconsideration but was denied thus the appeal seeking
reversal of the subject order and resolution of the CIR.

ISSUES:

1. Whether or not the question regarding alleged unreasonableness of award of

attorney's fees, not raised before Court a quo, is barred on appeal
2. Whether or not the rights of labor are waivable
3. Whether or not quitclaims null and void

RATIO DECIDENDI:

On the first assignment of error, the Court stated that because the petitioner
failed to raise this issue before the trial court, then this may not be raised on appeal.
Nevertheless, the Court finds the petitioner’s allegations to be lacking merit. The Court

250
further held that the petitioner’s contention that there is no basis for respondent’s
petition for attorney’s lien is senseless. The written conformity of the SWA President on
behalf thereof confirms the existence of such an agreement on attorney’s fees and
constitutes an irrefutable evidence. More so, the petitioners not contesting the
allegations contacted on the respondent’s petition constitutes an implied decision
thereof.

Secondly, the Court ruled that while rights may be waived, the same must not be
contrary to law, public order, public policy, morals or good customs or prejudicial to a
third person with a right recognized by law (Art. 6, New Civil Code). The foregoing
provisions of the quitclaim are contrary to law because it exempted the petitioner from
any legal liability that it may choose to reject. Thus, rendering the quitclaim agreements
void ab initio.

Thirdly, the Court also held that the alleged quitclaim agreement is contrary to
public policy. It is stated that once a civil action is filed in court, the cause of action may
not be the subject of compromise unless the same is by leave of the court concerned.
Otherwise, this will render the entire judicial system irrelevant to the prejudice of the
national interest.

FALLO:

Wherefore, the petition is hereby dismissed and respondent CIR (now NLRC) is
hereby directed to implement its order dated June 6, 1974. Cost against petitioner.

251
 JPL MARKETING PROMOTIONS, PETITIONER VS., COURT OF APPEALS,
NATIONAL LABOR RELATIONS COMMISSION, NOEL GONZALES, RAMON
ABESA III AND FAUSTINO ANINIPOT, RESPONDENTS.
G.R. NO. 151966, JULY 8, 2005
TINGA, J.:

FACTS:
JPL Marketing and Promotions (hereinafter referred to as “JPL”) is a domestic
corporation engaged in the business of recruitment and placement of workers. On the
other hand, private respondents Noel Gonzales, Ramon Abesa III and Faustino Aninipot
were employed by JPL as merchandisers on separate dates and assigned at different
establishments in Naga City and Daet, Camarines Norte as attendants to the display of
California Marketing Corporation (CMC), one of petitioner’s clients.
On 13 August 1996, JPL notified private respondents that CMC would stop its
direct merchandising activity in the Bicol Region, Isabela, and Cagayan Valley effective
15 August 1996. They were advised to wait for further notice as they would be
transferred to other clients. However, on 17 October 1996, private respondents Abesa
and Gonzales filed before the NLRC complaints for illegal dismissal, praying for
separation pay, 13th month pay, service incentive leave pay and payment for moral
damages. Aninipot filed a similar case thereafter.
It must be noted that private respondents were not given their 13th month pay and
service incentive leave pay while they were under the employ of JPL. Instead, JPL
provided salaries which were over and above the minimum wage.
ISSUE:
Whether or not the 13th month pay and service incentive leave pay should be
computed from the start of employment up to the finality of the NLRC resolution.
RULING:
Service incentive leave, as provided in Art. 95 of the Labor Code, is a yearly
leave benefit of five (5) days with pay, enjoyed by an employee who has rendered at
least one year of service. Unless specifically excepted, all establishments are required
to grant service incentive leave to their employees. The term “at least one year of
service” shall mean service within twelve (12) months, whether continuous or broken
reckoned from the date the employee started working. The Court has held in several
instances that “service incentive leave is clearly demandable after one year of service.”
While computation for the 13th month pay should properly begin from the first
day of employment, the service incentive leave pay should start a year after
commencement of service, for it is only then that the employee is entitled to
said benefit. On the other hand, the computation for both benefits should only be up
to 15 August 1996, or the last day that private respondents worked for JPL. To extend
the period to the date of finality of the NLRC resolution would negate the absence of
illegal dismissal, or to be more precise, the want of dismissal in this case. Besides, it
would be unfair to require JPL to pay private respondents the said benefits beyond 15
August 1996 when they did not render any service to JPL beyond that date. These
benefits are given by law on the basis of the service actually rendered by the employee,
and in the particular case of the service incentive leave, is granted as a motivation for
the employee to stay longer with the employer. There is no cause for granting said
incentive to one who has already terminated his relationship with the employer.

252
FALLO:

WHEREFORE, the petition is GRANTED IN PART. The Decision and Resolution of

the Court of Appeals in CA-G.R. SP No. 62631 are hereby MODIFIED. The award of
separation pay is deleted. Petitioner is ordered to pay private respondents their 13th
month pay commencing from the date of employment up to 15 August 1996, as well as
service incentive leave pay from the second year of employment up to 15 August 1996.
No pronouncement as to costs.

SO ORDERED.

253
 INSULAR BANK OF ASIA AND AMERICA EMPLOYEES' UNION
(IBAAEU), PETITIONER,
VS.
HON. AMADO G. INCIONG, DEPUTY MINISTER, MINISTRY OF LABOR AND
INSULAR BANK OF ASIA AND AMERICA, RESPONDENTS.
G.R. NO. L-52415 OCTOBER 23, 1984
MAKASIAR, J.

FACTS:

On June 20, 1975, petitioner filed a complaint against the respondent bank for
the payment of holiday pay before the then Department of Labor, National Labor
Relations Commission, Regional Office No. IV in Manila.

On August 25, 1975, Labor Arbiter Ricarte T. Soriano rendered a decision in the
above-entitled case, granting petitioner's complaint for payment of holiday pay.
Respondent bank did not appeal from the said decision. Instead, it complied with the
order of Arbiter Ricarte T. Soriano by paying their holiday pay up to and including
January, 1976.

On December 16, 1975, Presidential Decree No. 850 was promulgated amending,
among others, the provisions of the Labor Code on the right to holiday pay.
Accordingly, on February 16, 1976, by authority of Article 5 of the same Code, the
Department of Labor (now Ministry of Labor) promulgated the rules and regulations for
the implementation of holidays with pay. The controversial section thereof reads:

Sec. 2. Status of employees paid by the month. — Employees who are

uniformly paid by the month, irrespective of the number of working days
therein, with a salary of not less than the statutory or established
minimum wage shall be presumed to be paid for all days in the month
whether worked or not.

Policy Instruction No. 9 was issued by the then Secretary of Labor (now Minister)
interpreting the above-quoted rule, pertinent portion of which read:

The ten (10) paid legal holidays law, to start with, is intended to benefit
principally daily employees. In the case of monthly, only those whose monthly
salary did not yet include payment for the ten (10) paid legal holidays are
entitled to the benefit.
If the monthly paid employee is receiving not less than P240, the maximum
monthly minimum wage, and his monthly pay is uniform from January to
December, he is presumed to be already paid the ten (10) paid legal holidays.
However, if deductions are made from his monthly salary on account of holidays
in months where they occur, then he is still entitled to the ten (10) paid legal
holidays.

Respondent bank, by reason of the ruling laid down by the afore cited rule
implementing Article 94 of the Labor Code and by Policy Instruction No. 9, stopped the
payment of holiday pay to all its employees.
Petitioner filed a motion for a writ of execution to enforce the arbiter's decision whereby
the respondent bank was ordered to pay its employees their daily wage for the
unworked regular holidays.

254
 Respondent bank filed an opposition to the motion for a writ of execution
alleging that its refusal to pay the corresponding unworked holiday pay is based on and
justified by Policy Instruction No. 9Labor Arbiter Ricarte T. Soriano, instead of issuing a
writ of execution, issued an order enjoining the respondent bank to continue paying its
employees their regular holiday pay on the following grounds that the judgment is
already final and the findings which is found in the body of the decision as well as the
dispositive portion thereof is res judicata or is the law of the case between the parties;
and that since the decision had been partially implemented by the respondent bank,
appeal from the said decision is no longer available. The National Labor Relations
Commission promulgated its resolution en banc dismissing respondent bank's appeal.

ISSUE

Whether or not holiday pay does not apply to monthly paid employees.

RATIO DECIDENDI

NO. Section 2, Rule IV, Book III of the implementing rules and Policy Instruction No. 9
issued by the then Secretary of Labor are null and void since in the guise of clarifying
the Labor Code's provisions on holiday pay, they in effect amended them by enlarging
the scope of their exclusion.

Article 94 of the Labor Code provides that every worker shall be paid his regular
daily wage during regular holidays, except in retail and service establishments regularly
employing less than ten (10) workers.

From the above-cited provisions, it is clear that monthly paid employees are not
excluded from the benefits of holiday pay.

In the case at bar, the provisions of the Labor Code on the entitlement to the
benefits of holiday pay are clear and explicit that it provides for both the coverage of
and exclusion from the benefits. In Policy Instruction No. 9, the then Secretary of Labor
went as far as to categorically state that the benefit is principally intended for daily paid
employees, when the law clearly states that every worker shall be paid their regular
holiday pay. This is a flagrant violation of the mandatory directive of Article 4 of the
Labor Code, which states that "All doubts in the implementation and interpretation of
the provisions of this Code, including its implementing rules and regulations, shall be
resolved in favor of labor."

Obviously, the Secretary (Minister) of Labor had exceeded his statutory authority
granted by Article 5 of the Labor Code authorizing him to promulgate the necessary
implementing rules and regulations.

FALLO:

WHEREFORE, THE PETITION IS HEREBY GRANTED, THE ORDER OF PUBLIC

RESPONDENT IS SET ASIDE, AND THE DECISION OF LABOR ARBITER RICARTE T.
SORIANO DATED AUGUST 25, 1975, IS HEREBY REINSTATED.
COSTS AGAINST PRIVATE RESPONDENT INSULAR BANK OF ASIA AND AMERICA.

SO ORDERED.

255
 CHARTERED BANK EMPLOYEES ASSOCIATION
VS OPLE ET AL
G.R. NO. L-44717, AUGUST 28, 1985
GUTIERREZ, JR.:

FACTS:

On May 20, 1975, the Chartered Bank Employees Association instituted a

complaint with the Department of Labor against private respondent Chartered Bank, for
the payment of ten (10) unworked legal holidays, as well as for premium and overtime
differentials for worked legal holidays from November 1, 1974. Both the arbitrator and
the National Labor Relations Commission (NLRC) ruled in favor of the petitioners
ordering the respondent bank to pay its monthly paid employees, holiday pay for the
ten (10) legal holidays and to pay premium or overtime pay differentials to all
employees who rendered work during said legal holidays.

On appeal, the Minister of Labor set aside the decision of the NLRC and
dismissed the petitioner's claim for lack of merit basing its decision on the provisions of
Book III of the Integrated Rules and Policy Instruction No. 9, which provide:

Sec. 2. Status of employees paid by the month. Employees who are uniformly
paid by the month, irrespective of the number of working days therein, with a salary of
not less than the statutory or established minimum wage shall be presumed to be paid
for all days in the month whether worked or not.

POLICY INSTRUCTION NO. 9

TO: All Regional Directors

SUBJECT: PAID LEGAL HOLIDAYS

The rules implementing PD 850 have clarified the policy in the implementation of
the ten (10) paid legal holidays. Before PD 850, the number of working days a year in a
firm was considered important in determining entitlement to the benefit. Thus, where
an employee was working for at least 313 days, he was considered definitely already
paid. If he was working for less than 313, there was no certainty whether the ten (10)
paid legal holidays were already paid to him or not.

The ten (10) paid legal holidays law, to start with, is intended to benefit
principally daily employees. In the case of monthly, only those whose monthly salary
did not yet include payment for the ten (10) paid legal holidays are entitled to the
benefit.

Under the rules implementing PD 850, this policy has been fully clarified to
eliminate controversies on the entitlement of monthly paid employees. The new
determining rule is this: 'If the monthly paid employee is receiving not less than P240,
the maximum monthly minimum wage, and his monthly pay is uniform from January to
December, he is presumed to be already paid the ten (10) paid legal holidays. However,

256
if deductions are made from his monthly salary on account of holidays in months where
they occur, then he is still entitled to the ten (10) paid legal holidays.

These new interpretations must be uniformly and consistently upheld.

This issuance shall take effect immediately.

Hence, this petition for certiorari seeking to annul the decision of the respondent
Secretary.

ISSUE:

Whether or not the Secretary of Labor erred and acted contrary to law in
promulgating Sec. 2, Rule IV, Book III of the Integrated Rules and Policy Instruction
No. 9.

RATIO DECIDENDI:

Yes. Section 2, Rule IV, Book III of the Rules to implement the Labor Code and
Policy Instruction No. 9 issued by the then Secretary of Labor must be declared null and
void. Accordingly, public respondent Deputy Minister of Labor Amado G. Inciong had no
basis at all to deny the members of petitioner union their regular holiday pay as
directed by the Labor Code.

Since the private respondent premises its action on the invalidated rule and
policy instruction, it is clear that the employees belonging to the petitioner association
are entitled to the payment of ten (10) legal holidays under Articles 82 and 94 of the
Labor Code, aside from their monthly salary. They are not among those excluded by
law from the benefits of such holiday pay.

The questioned Section 2, Rule IV, Book III of the Integrated Rules and the
Secretary's Policy Instruction No. 9 add another excluded group, namely, "employees
who are uniformly paid by the month." While the additional exclusion is only in the form
of a presumption that all monthly paid employees have already been paid holiday pay,
it constitutes a taking away or a deprivation which must be in the law if it is to be valid.
An administrative interpretation which diminishes the benefits of labor more than what
the statute delimits or withholds is obviously ultra vires.

It is argued that even without the presumption found in the rules and in the
policy instruction, the company practice indicates that the monthly salaries of the
employees are so computed as to include the holiday pay provided by law. The
petitioner contends otherwise.

One strong argument in favor of the petitioner's stand is the fact that the
Chartered Bank, in computing overtime compensation for its employees, employs a
"divisor" of 251 days. The 251 working days divisor is the result of subtracting all
Saturdays, Sundays and the ten (10) legal holidays from the total number of calendar
days in a year. If the employees are already paid for all non-working days, the divisor
should be 365 and not 251.

257
 The situation is muddled somewhat by the fact that, in computing the
employees' absences from work, the respondent bank uses 365 as divisor. Any slight
doubts, however, must be resolved in favor of the workers. This is in keeping with the
constitutional mandate of promoting social justice and affording protection to labor
(Sections 6 and 9, Article II, Constitution). The Labor Code, as amended, itself
provides:

ART. 4. Construction in favor of labor. All doubts in the implementation and

interpretation of the provisions of this Code, including its implementing rules and
regulations, shall be resolved in favor of labor.

Any remaining doubts which may arise from the conflicting or different divisors
used in the computation of overtime pay and employees' absences are resolved by the
manner in which work actually rendered on holidays is paid. Thus, whenever monthly
paid employees work on a holiday, they are given an additional 100% base pay on top
of a premium pay of 50%. If the employees' monthly pay already includes their salaries
for holidays, they should be paid only premium pay but not both base pay and premium
pay.

FALLO:

WHEREFORE, the September 7, 1976 order of the public respondent is hereby

REVERSED and SET ASIDE. The March 24, 1976 decision of the National Labor
Relations Commission which affirmed the October 30, 1975 resolution of the Labor
Arbiter but deleted interest payments is REINSTATED.

SO ORDERED.

258
 UNION OF FILIPRO EMPLOYEES (UFE) VS. BENIGNO VIBAR, JR., NLRC AND
NESTLE PHILIPPINES, INC. (FORMERLY FILIPRO, INC.)
G.R. NO. 79255, JANUARY 20, 1992

FACTS:

On November 8, 1985, respondent Filipro, Inc. (now Nestle Philippines, Inc.)

filed with the National Labor Relations Commission (NLRC) a petition for claims of its
monthly paid employees for holiday pay.Both Filipro and the Union of Filipino
Employees agreed to submit the case for voluntary arbitration and appointed
respondent Benigno Vivar Jr., as voluntary arbitrator.

Abitrator Vivar rendered a decision directing Filipro to pay its monthly paid
employees holiday pay pursuant to Art 94 of Labor Code, subject to exclusions and
limitations in Art 82 and such other legal restrictions as are provided for in the Code.

Filipro filed a motion for clarification seeking (1) the limitation of the award to
three years, (2) the exclusion of salesmen, sales representatives, truck drivers,
merchandisers and medical representatives (hereinafter referred to as sales personnel)
from the award of the holiday pay, and (3) deduction from the holiday pay award of
overpayment for overtime, night differential, vacation and sick leave benefits due to the
use of 251 divisors.

Petitioner UFE answered that the award should be made effective from the date
of effectivity of the Labor Code, that their sales personnel are not field personnel and
are therefore entitled to holiday pay, and that the use of 251 as divisor is an established
employee benefit which cannot be diminished.

On January 14, 1986, the respondent arbitrator issued an order declaring that
the effectivity of the holiday pay award shall retroact to November 1, 1974, the date of
effectivity of the Labor Code. He adjudged, however, that the company’s sales
personnel are field personnel and, as such, are not entitled to holiday pay. He likewise
ruled that with the grant of 10 days’ holiday pay, the divisor should be changed from
251 to 261 and ordered the reimbursement of overpayment for overtime, night
differential, vacation and sick leave pay due to the use of 251 days as divisor.

ISSUES:

1) Whether or not Nestle’s sales personnel are entitled to holiday pay; and

2) Whether or not, concomitant with the award of holiday pay, the divisor should
be changed from 251 to 261 days and whether or not the previous use of 251 as divisor
resulted in overpayment for overtime, night differential, vacation and sick leave pay.

RATIO DECIDENDI:

1. Sales personnel are not entitled to holiday pay.

Under Article 82, field personnel are not entitled to holiday pay. Said article defines field
personnel as “non-agritultural employees who regularly perform their duties away from

259
the principal place of business or branch office of the employer and whose actual hours
of work in the field cannot be determined with reasonable certainty.”

The law requires that the actual hours of work in the field be reasonably
ascertained. The company has no way of determining whether or not these sales
personnel, even if they report to the office before 8:00 a.m. prior to field work and
come back at 4:30 p.m, really spend the hours in between in actual field work.

Moreover, the requirement that “actual hours of work in the field cannot be
determined with reasonable certainty” must be read in conjunction with Rule IV, Book
III of the Implementing Rules which provides:

Rule IV Holidays with Pay

Sec. 1. Coverage — This rule shall apply to all employees except:

(e) Field personnel and other employees whose time and performance is unsupervised
by the employer.

Hence, in deciding whether or not an employee’s actual working hours in the

field can be determined with reasonable certainty, query must be made as to whether
or not such employee’s time and performance is constantly supervised by the employer.

2. The divisor in computing the award of holiday pay should still be 251 days.

While in that case the issue was whether or not salesmen were entitled to overtime
pay, the same rationale for their exclusion as field personnel from holiday pay benefits
also applies.

The petitioner union also assails the respondent arbitrator’s ruling that,
concomitant with the award of holiday pay, the divisor should be changed from 251 to
261 days to include the additional 10 holidays and the employees should reimburse the
amounts overpaid by Filipro due to the use of 251 days’ divisor.

The 251 working days’ divisor is the result of subtracting all Saturdays, Sundays
and the ten (10) legal holidays from the total number of calendar days in a year. If the
employees are already paid for all non-working days, the divisor should be 365 and not
251.

In the petitioner’s case, its computation of daily ratio since September 1, 1980, is
as follows:

monthly rate x 12 months / 251 days

The use of 251 days’ divisor by respondent Filipro indicates that holiday pay is
not yet included in the employee’s salary, otherwise the divisor should have been 261.

It must be stressed that the daily rate, assuming there are no intervening salary
increases, is a constant figure for the purpose of computing overtime and night
differential pay and commutation of sick and vacation leave credits. Necessarily, the
daily rate should also be the same basis for computing the 10 unpaid holidays.

260
 The respondent arbitrator’s order to change the divisor from 251 to 261 days
would result in a lower daily rate which is violative of the prohibition on non-diminution
of benefits found in Article 100 of the Labor Code. To maintain the same daily rate if
the divisor is adjusted to 261 days, then the dividend, which represents the employee’s
annual salary, should correspondingly be increased to incorporate the holiday pay.

To illustrate, if prior to the grant of holiday pay, the employee’s annual salary is
P25,100, then dividing such figure by 251 days, his daily rate is P100.00 After the
payment of 10 days’ holiday pay, his annual salary already includes holiday pay and
totals P26,100 (P25,100 + 1,000). Dividing this by 261 days, the daily rate is still
P100.00. There is thus no merit in respondent Nestle’s claim of overpayment of
overtime and night differential pay and sick and vacation leave benefits, the
computation of which are all based on the daily rate, since the daily rate is still the
same before and after the grant of holiday pay.

The decision of SC is that, the Court thereby resolves that the grant of holiday
pay be effective, not from the date of promulgation of the Chartered Bank case nor
from the date of effectivity of the Labor Code, but from October 23, 1984, the date of
promulgation of the IBAA case (Insular Bank of Asia and America Employees’ Union
(IBAAEU) v. Inciong, where the court declared that Sec 2, Rule IV, Book III of IRR
which excluded monthly paid employees from holiday pay benefits, are null and void).

FALLO:

WHEREFORE, the order of the voluntary arbitrator in hereby MODIFIED. The

divisor to be used in computing holiday pay shall be 251 days. The holiday pay as
above directed shall be computed from October 23, 1984. In all other respects, the
order of the respondent arbitrator is hereby AFFIRMED.

261
 PRODUCERS BANK OF THE PHILIPPINES,
vs.
NATIONAL LABOR RELATIONS COMMISSION and PRODUCERS BANK
EMPLOYEES ASSOCIATION,
G.R. No. 100701, March 28, 2001
GONZAGA-REYES, J.:

FACTS:

A complaint was filed by private respondent on 11 February 1988 with the

Arbitration Branch, National Capital Region, National Labor Relations Commission
(NLRC), charging petitioner with diminution of benefits, non-compliance with Wage
Order No. 6 and non-payment of holiday pay. In addition, private respondent prayed for
damages.

On 31 March 1989, Labor Arbiter Nieves V. de Castro found private respondent's

claims to be unmeritorious and dismissed its complaint. In a complete reversal,
however, the NLRC granted all of private respondent's claims, except for damages.

Petitioner filed a Motion for Partial Reconsideration, which was denied by the
NLRC in a Resolution issued on 18 June 1991. Hence, recourse to this Court.

ISSUE:

Whether or not the claims of the public respondent, especially the non-payment
of holiday pay has merit.

RATIO DECIDENDI:

No. Article 94 of the Labor Code provides that every worker shall be paid his
regular daily wage during regular holidays and that the employer may require an
employee to work on any holiday but such employee shall be paid a compensation
equivalent to twice his regular rate. In this case, the Labor Arbiter found that the divisor
used by petitioner in arriving at the employees' daily rate for the purpose of computing
salary-related benefits is 314. This finding was not disputed by the NLRC. However, the
divisor was reduced to 303 by virtue of an inter-office memorandum issued on 13
August 1986, Proceeding from the unambiguous terms of the above quoted
memorandum, the Labor Arbiter observed that the reduction of the divisor to 303 was
for the sole purpose of increasing the employees' overtime pay and was not meant to
replace the use of 314 as the divisor in the computation of the daily rate for salary-
related benefits.

Private respondent admits that, prior to 18 August 1986, petitioner used a divisor
of 314 in arriving at the daily wage rate of monthly-salaried employees. Private
respondent also concedes that the divisor was changed to 303 for purposes of
computing overtime pay only.

262
 Apparently, the divisor of 314 is arrived at by subtracting all Sundays from the
total number of calendar days in a year, since Saturdays are considered paid rest days,
as stated in the inter-office memorandum. Thus, the use of 314 as a divisor leads to the
inevitable conclusion that the ten legal holidays are already included therein.

We agree with the labor arbiter that the reduction of the divisor to 303 was done
for the sole purpose of increasing the employees' overtime pay, and was not meant to
exclude holiday pay from the monthly salary of petitioner's employees. In fact, it was
expressly stated in the inter-office memorandum - also referred to by private
respondent in its pleadings - that the divisor of 314 will still be used in the computation
for cash conversion and in the determination of the daily rate. Thus, based on the
records of this case and the parties' own admissions, the Court holds that petitioner has
complied with the requirements of Article 94 of the Labor Code.

FALLO:

WHEREFORE, for the reasons above stated, the 30 April 1991 Decision of public
respondent in NLRC-NCR Case No. 02-00753-88, entitled "Producers Bank Employees
Association v. Producers Bank of the Philippines," and its 18 June 1991 - Resolution
issued in the same case are hereby SET ASIDE, with the exception of public
respondent's ruling on damages.

SO ORDERED.

263
 ASIAN TRANSMISSION CORPORATION VS. COURT OF APPEALS
G. R. NO. 144664 MARCH 15, 2004
CARPIO- MORALES, J.

FACTS:
The Department of Labor and Employment (DOLE), through Undersecretary
Cresenciano B. Trajano, issued an Explanatory Bulletin dated March 11, 1993 wherein it
clarified, inter alia, that employees are entitled to 200% of their basic wage on April 9,
1993, whether unworked, which apart from being Good Friday and, therefore, a legal
holiday], is also Araw ng Kagitingan [which is also a legal holiday].
Said bulletin was reproduced on January 23, 1998, when April 9, 1998 was both
Maundy Thursday and Araw ng Kagitingan. Despite the explanatory bulletin, petitioner
[Asian Transmission Corporation] opted to pay its daily paid employees only 100% of
their basic pay on April 9, 1998. Respondent Bisig ng Asian Transmission Labor Union
(BATLU) protested.
In accordance with Step 6 of the grievance procedure of the Collective
Bargaining Agreement (CBA) existing between petitioner and BATLU, the controversy
was submitted for voluntary arbitration. On July 31, 1998, the Office of the Voluntary
Arbitrator rendered a decision directing petitioner to pay its covered employees "200%
and not just 100% of their regular daily wages for the unworked April 9, 1998 which
covers two regular holidays, namely, Araw ng Kagitignan and Maundy Thursday."
In deciding in favor of the Bisig ng Asian Transmission Labor Union (BATLU), the
Voluntary Arbitrator held that Article 94 of the Labor Code provides for holiday pay for
every regular holiday, the computation of which is determined by a legal formula which
is not changed by the fact that there are two holidays falling on one day, like on April 9,
1998 when it was Araw ng Kagitingan and at the same time was Maundy Thursday; and
that that the law, as amended, enumerates ten regular holidays for every year should
not be interpreted as authorizing a reduction to nine the number of paid regular
holidays "just because April 9 (Araw ng Kagitingan) in certain years, like 1993 and
1998, is also Holy Friday or Maundy Thursday.
On appeal, Court of Appeals upheld the findings of the Voluntary Arbitrator,
holding that the Collective Bargaining Agreement (CBA) between petitioner and BATLU,
the law governing the relations between them, clearly recognizes their intent to
consider Araw ng Kagitingan and Maundy Thursday, on whatever date they may fall in
any calendar year, as paid legal holidays during the effectivity of the CBA and that
"[t]here is no condition, qualification or exception for any variance from the clear intent
that all holidays shall be compensated. And further held that, "in the absence of an
explicit provision in law which provides for [a] reduction of holiday pay if two holidays
happen to fall on the same day, any doubt in the interpretation and implementation of
the Labor Code provisions on holiday pay must be resolved in favor of labor." Hence,
this case.

ISSUE:

Whether or not Asian Transmission Corporation should pay its employees 200%
of their basic wage on April 9 which is a part from being Good Friday is also Araw ng
Kagitangan which are two different legal holidays under the explanatory bulletin issued
by DOLE.
RATIO DECIDENDI:
Yes.

264
 Holiday pay is a legislated benefit enacted as part of the Constitutional
imperative that the State shall afford protection to labor.7 Its purpose is not merely "to
prevent diminution of the monthly income of the workers on account of work
interruptions. In other words, although the worker is forced to take a rest, he earns
what he should earn, that is, his holiday pay." It is also intended to enable the worker
to participate in the national celebrations held during the days identified as with great
historical and cultural significance.
Independence Day (June 12), Araw ng Kagitingan (April 9), National Heroes Day
(last Sunday of August), Bonifacio Day (November 30) and Rizal Day (December 30)
were declared national holidays to afford Filipinos with a recurring opportunity to
commemorate the heroism of the Filipino people, promote national identity, and deepen
the spirit of patriotism. Labor Day (May 1) is a day traditionally reserved to celebrate
the contributions of the working class to the development of the nation, while the
religious holidays designated in Executive Order No. 203 allow the worker to celebrate
his faith with his family.
Art. 94 of the Labor Code, as amended, affords a worker the enjoyment of ten
paid regular holidays. The provision is mandatory, regardless of whether an employee is
paid on a monthly or daily basis. Unlike a bonus, which is a management
prerogative, holiday pay is a statutory benefit demandable under the law. Since a
worker is entitled to the enjoyment of ten paid regular holidays, the fact that two
holidays fall on the same date should not operate to reduce to nine the ten holiday pay
benefits a worker is entitled to receive.

It is elementary, under the rules of statutory construction, that when the

language of the law is clear and unequivocal, the law must be taken to mean exactly
what it says. In the case at bar, there is nothing in the law which provides or indicates
that the entitlement to ten days of holiday pay shall be reduced to nine when two
holidays fall on the same day.

In any event, Art. 4 of the Labor Code provides that all doubts in the
implementation and interpretation of its provisions, including its implementing rules and
regulations, shall be resolved in favor of labor. For the working man’s welfare should be
the primordial and paramount consideration.16

Moreover, Sec. 11, Rule IV, Book III of the Omnibus Rules to Implement the
Labor Code provides that "Nothing in the law or the rules shall justify an employer in
withdrawing or reducing any benefits, supplements or payments for unworked regular
holidays as provided in existing individual or collective agreement or employer practice
or policy."

FALLO:

WHEREFORE, the petition is hereby DISMISSED.

SO ORDERED.

265
 SAN MIGUEL CORPORATION, PETITIONER, VS. THE HONORABLE COURT OF
APPEALS-FORMER THIRTEENTH DIVISION, HON. UNDERSECRETARY JOSE M.
ESPAÑOL, JR., HON. CRESENCIANO B. TRAJANO, AND HON. REGIONAL
DIRECTOR ALLAN M. MACARAYA, RESPONDENTS.
G.R. NO. 146775, JANUARY 30, 2002
KAPUNAN, J.:

FACTS:
In the course of the Department of Labor and Employment (DOLE) routine
inspection, it was discovered that there was underpayment by San Miguel
Corporation (SMC) of regular Muslim holiday pay to its employees.
The inspection result was received by and explained to SMC personnel
officer.
SMC contested the findings and DOLE conducted summary hearings, but the
former still failed to submit proof that it was paying regular Muslim holiday pay to its
employees.
Hence, Alam Macaraya, Director IV of DOLE Iligan District Office issued a
compliance order directing SMC to pay both its Muslim and non-Muslim employees
holiday pay within thirty (30) days.
ISSUE:
Whether or not the non-Muslim employees of SM-ILICOCO are entitled
to Muslim Holiday pay.
RATIO DECIDENDI:
Petitioner asserts that Article 3(3) of Presidential Decree No. 1083 provides that
“(t)he provisions of this Code shall be applicable only to Muslims x x x.”
However, there should be no distinction between Muslims and non-Muslims as
regards payment of benefits for Muslim holidays. The Court of Appeals did not err in
sustaining Undersecretary Español who stated:
Assuming arguendo that the respondent’s position is correct, then by the
same token, Muslims throughout the Philippines are also not entitled to
holiday pays on Christian holidays declared by law as regular holidays. We
must remind the respondent-appellant that wages and other emoluments
granted by law to the working man are determined on the basis of the
criteria laid down by laws and certainly not on the basis of the worker’s
faith or religion.
Article 3(3) of Presidential Decree No. 1083 also declares that “x x x nothing
herein shall be construed to operate to the prejudice of a non-Muslim.”
In addition, the 1999 Handbook on Workers’ Statutory Benefits, approved by
then DOLE Secretary Bienvenido E. Laguesma on 14 December 1999 categorically
stated:
Considering that all private corporations, offices, agencies, and entities or
establishments operating within the designated Muslim provinces and cities
are required to observe Muslim holidays, both Muslim and Christians
working within the Muslim areas may not report for work on the
days designated by law as Muslim holidays.

266
FALLO:
WHEREFORE, in view of the foregoing, the petition is DISMISSED.

267
 VIVIAN Y. IMBUIDO, PETITIONER,
VS.
NATIONAL LABOR RELATIONS COMMISSION, INTERNATIONAL
INFORMATION SERVICES, INC. AND GABRIEL LIBRANDO, RESPONDENTS.
G.R. NO. 114734
MARCH 31, 2000
BUENA, J.:

FACTS:

Petitioner was employed as a data encoder by private respondent, a domestic

corporation engaged in the business of data encoding and keypunching, from August
26, 1988 until October 18, 1991. From the said period, petitioner entered into several
employment contracts with private respondent, each contract lasting only for a period
of three months. It was stipulated in the employment contract that it was effective for
the period agreed upon unless the employee will be dismissed for valid and lawful
cause.

Petitioner and twelve other employees of private respondent allegedly agreed to

the filing of a petition for certification election involving the rank-and-file employees of
private respondent. Lakas Manggagawa sa Pilipinas (LAKAS) filed a petition for
certification election with the Bureau of Labor Relations (BLR).

Petitioner then received a termination letter from the private respondent,

allegedly "due to low volume of work." Thus petitioner filed a complaint for illegal
dismissal with prayer for service incentive leave pay with the NLRC.

Private respondent explained that "The happening of completion of the project

has materialized, thus, her contract of employment is deemed terminated. Thus,
petitioners "claims for non-payment of overtime and service incentive leave pay are
without factual and legal basis.

The Labor Arbiter ruled that the petitioner was illegally dismissed and was
considered a regular employee.He ordered private respondent to reinstate petitioner
and to pay her monetary claims except the 13th month pay.

NLRC reversed the decision of Labor Arbiter. The NLRC held that the complainant
is statutorily guaranteed of her tenurial security, only up to the time the specific project
for which she was hired is completed.

ISSUE:

1. Whether or not petitioner was a project employee

2. Whether or not petitioner wasillegally dismissed
3. Whether or not petitioner entitledto incentive leave pay

RATIO DECIDENDI:

1. Yes. As per contract, the petitioner was a projectemployee. However once a

project employee has been continuously re-hired by the same employer for the
same tasks or nature of tasks that are vital, necessary and indispensable to the
usual business or trade of the employer, then the employee is deemed to be a
regular employee pursuant to Article 280 of the Labor Code.

268
 2. Yes the petitioner was illegallydismissed. Since she attained the status as a
regular employee she can only be removed for valid cause. Low volume of work
is not one of the lawful and authorized causes to dismiss an employee. The
Labor Code provides that in cases of regular employment, the employer shall not
terminate the services of an employee except for a just or authorized cause.

3. Yes the petitioner is entitled to service incentive leave pay, as provided in Article
95 of the Labor Code which provides “Every employee who has rendered at least
one year of service shall be entitled to a yearly service incentive leave of five
days with pay.” It also provides that an employee who is unjustly dismissed
from work shall be entitled to his other benefits or their monetary equivalent
computed from the time his compensation is withheld up to the time of his
actual reinstatement."

FALLO:
WHEREFORE, the instant petition is GRANTED. The assailed decision of the
National Labor Relations Commission in NLRC NCR CA No. 003845-92 dated September
27, 1993, as well as its Order dated January 11, 1994, are hereby ANNULLED and SET
ASIDE for having been rendered with grave abuse of discretion, and the decision of the
Labor Arbiter in NLRC NCR Case No. 05-02912-92 is REINSTATED with MODIFICATION
as above-stated, with regard to the computation of back wages and service incentive
leave pay.

269
NICANOR BALTAZAR,PLAINTIFF /APPELLEE VS SAN MIGUEL BREWERY INC.,
DEFENDANT /APPELLANT
G.R. NO. L- 23076., FEBRUARY 27,1969
PONENTE JUSTICE DIZON

FACTS:

This is an appeal by SMB Inc. to reverse the decision of CFI Manila ordering
plaintiff to be paid 1,680 pesos 1mos separation pay and 240 pesos per most total of
6mos accumulated sick leave. The plaintiff a salesman of the defendant company based
on dagupan warehouse and re assigned to manila office due to allegation of being a
Mastermind on dagupan employees strike.

The appellant contends that CFi judgement is incorrect. Because the dismissal of
plaintiff due to unauthorized absences is based on company policy and. Ground for
immediate dismissal from employment. And the awarding of sick leave for 6mos
converted into cash value is incorrect and unjust to the defendant company so they
sought the assistance of Supreme Court.

RATIO DECIDENDE:

1. R.A.No.1052 states that termination of employment attributable to the fault of

employee is not entitled to one month salary and his dismissal was for a cause. 2. Cash
value of 6 mos unused and accumulated sick leave is not convertible and not payabale
to cash.and based upon the employers option. (Article 5 of appellants rules and
regulations of health,welfare and retirement plan.

FALLO:

Appellee is not entitled to one month separation pay. Wherefore the appealed
decision is hereby reversed without special pronouncement as to cost. So ordered.

270
 LEIDEN FERNANDEZ, ET. AL., PETITIONERS, VS. NATIONAL LABOR
RELATIONS COMMISSION, ET. AL., RESPONDENTS.
G.R. NO. 105892 JANUARY 28, 1998
PANGANIBAN, J.:

FACTS:
The case stems from a consolidated complaint against private respondents
Agencia Cebuana-H. Lhuillier and/or Margueritte Lhuillier (Lhuillier) for illegal dismissal.
The petitioners, Fernandez, et.al alleged that prior to and during early July 1990, they
demanded‟ from the private respondent an increase in their salaries since her business
was making good and that she was evading the payment of taxes by declaring false
items in her account. For Lim andCanonigo however, they alleged that they also
“demanded” for an increase in their salaries due to the progress of the business, the
false statement of the private respondent in her account and they informed the latter
that they were going to join the Associated Labor Union.
The private respondent contends that the petitioners were not illegally dismissed
but they abandoned their employment and some of the petitioners were alleged by the
private respondent to have committed anomalies against the company. It was
eventually proven that some of the petitioners were in fact illegally dismissed by the
private respondent to which they are entitled to their backwages inclusive of allowances
and other benefits or their monetary equivalent. However, uponrecommending that the
labor arbiter’s decision be reinstated substantially, the solicitor generalrecommended
that the award of service incentive leave be limited to three years. Labor Arbiter
favored petitioners but NLRC vacated the labor arbiter’s order. MR denied.

ISSUE:

Whether or not the claim for service incentive leaves may be limited to a certain
number of years.

RATIO DECIDENDI:

No. Section 2, Rule V, Book III of the Implementing Rules and Regulations
provides that “every employee who has rendered at least one year of service shall be
entitled to a yearly service incentive leave of five days with pay.”

To limit the award to three years is to unduly restrict such right. The law does
not prohibit its commutation.

SG’s recommendation is contrary to the ruling of the Court in Bustamante et al.

vs. NLRC et al. lifting the three-year restriction on the amount of backwages and other
allowances that may be awarded an illegally dismissed employee, thus: “Therefore, in
accordance with R.A. No. 6715, petitioners are entitled to their full backwages, inclusive
of allowances and other benefits or their monetary equivalent, from the time their
actual compensation was withheld from them up to the time of their actual
reinstatement.”

271
FALLO:

WHEREFORE, the petition is hereby GRANTED and the assailed Decision and
Resolution are REVERSED and SET ASIDE. The labor arbiter's decision is REINSTATED
with MODIFICATIONS, such that the award of separation pay is deleted and the service
incentive leave pay is computed from December 16, 1975 up to petitioners' actual
reinstatement. Full backwages, including the accrued thirteenth month pay, are also
awarded to the nine petitioners — Leiden Fernandez, Brenda Gadiano, Gloria Adriano,
Emelia Negapatan, Jesus Tomongha, Eleonor Quiñanola, Asteria Campo, Florida
Villaceran and Florida Talledo — from the date of their illegal dismissal to the time of
their actual reinstatement. Petitioners Lim and Canonigo, whom we find to have
voluntarily resigned, are not entitled to any benefit.

SO ORDERED.

272
 AUTO BUS TRANSPORT SYSTEMS, INC., PETITIONER, VS. ANTONIO
BAUTISTA, RESPONDENT.
G.R. NO. 156367, MAY 16, 2005
CHICO-NAZARIO, J.:

FACTS:

Since 24 May 1995, respondent Antonio Bautista has been employed by

petitioner Auto Bus Transport Systems, Inc. (Autobus), as driver-conductor with travel
routes Manila-Tuguegarao via Baguio, Baguio- Tuguegarao via Manila and Manila-Tabuk
via Baguio. Respondent was paid on commission basis, seven percent (7%) of the total
gross income per travel, on a twice a month basis.

On 03 January 2000, while respondent was driving Autobus No. 114 along Sta.
Fe, Nueva Vizcaya, the bus he was driving accidentally bumped the rear portion of
Autobus No. 124, as the latter vehicle suddenly stopped at a sharp curve without giving
any warning. Respondent averred that the accident happened because he was
compelled by the management to go back to Roxas, Isabela, although he had not slept
for almost twenty-four (24) hours, as he had just arrived in Manila from Roxas, Isabela.
Respondent alleged that he was not allowed to work until he fully paid the amount of
P75,551.50, representing 30% of the cost of repair of the damaged buses and that
despite respondent’s pleas for reconsideration, the same was ignored by management.
After a month, management sent him a letter of termination.

The Respondent instituted a Complaint for Illegal Dismissal with Money Claims
for nonpayment of 13th month pay and service incentive leave pay against Autobus.

Petitioner, on the other hand, maintained that respondent’s employment was

replete with offenses involving reckless imprudence, gross negligence, and dishonesty.
To support its claim, petitioner presented copies of letters, memos, irregularity reports,
and warrants of arrest pertaining to several incidents wherein respondent was involved.
Furthermore, petitioner avers that in the exercise of its management prerogative,
respondent’s employment was terminated only after the latter was provided with an
opportunity to explain his side regarding the accident on 03 January 2000.

On 29 September 2000, Labor Arbiter Monroe C. Tabingan promulgated a

Decision dismissing the complaint for illegal dismissal however directing the respondent
to pay the complainant his 13th month pay from the date of his hiring to the date of his
dismissal, presently computed at P78,117.87, and his service incentive leave pay for all
the years he had been in service with the respondent, presently computed at
P13,788.05.

Not satisfied with the decision of the Labor Arbiter, petitioner appealed the
decision to the NLRC which modified the decision of the Labor Arbiter by deleting the

273
award of 13th month pay. Petitioner thus sought a reconsideration of this aspect, which
was subsequently denied in a Resolution by the NLRC dated 31 October 2001.

Displeased with only the partial grant of its appeal to the NLRC, petitioner sought
the review of said decision with the Court of Appeals which was subsequently denied by
the appellate court. Hence, the instant petition.

ISSUES:

1. Whether or not respondent is entitled to service incentive leave;

2. Whether or not the three (3)-year prescriptive period provided under Article 291 of
the Labor Code, as amended, is applicable to respondent’s claim of service incentive
leave pay.

RATIO DECIDENDI:

Art. 95 of the Labor Code states that every employee who has rendered at least
one year of service shall be entitled a yearly service incentive leave of five days with
pay. In Section 1, Rule V, Book III of the Implementing Rules and Regulations of the
Labor Code, the rule shall apply to all, except… (d) Field personnel and other
employees whose performance is unsupervised by the employer including those who
are engaged on task or contract basis, purely commission basis, or those who are paid
in a fixed amount for performing work irrespective of the time consumed in the
performance thereof.

According to the Implementing Rules, Service Incentive Leave shall not apply to
employees classified as "field personnel." The phrase "other employees whose
performance is unsupervised by the employer" must not be understood as a separate
classification of employees to which service incentive leave shall not be granted. Rather,
it serves as an amplification of the interpretation of the definition of field personnel
under the Labor Code as those "whose actual hours of work in the field cannot be
determined with reasonable certainty."

The same is true with respect to the phrase "those who are engaged on task or
contract basis, purely commission basis." Said phrase should be related with "field
personnel," applying the rule on ejusdem generis that general and unlimited terms are
restrained and limited by the particular terms that they follow. Hence, employees
engaged on task or contract basis or paid on purely commission basis are not
automatically exempted from the grant of service incentive leave, unless, they fall
under the classification of field personnel.

Petitioner’s contention that respondent is not entitled to the grant of service

incentive leave just because he was paid on purely commission basis is misplaced. What

274
must be ascertained in order to resolve the issue of propriety of the grant of service
incentive leave to respondent is whether or not he is a field personnel.

As observed by the Labor Arbiter and concurred in by the Court of Appeals:

It is of judicial notice that along the routes that are plied by these bus
companies, there are its inspectors assigned at strategic places who board the
bus and inspect the passengers, the punched tickets, and the conductor’s
reports. There is also the mandatory once-a-week car barn or shop day, where
the bus is regularly checked as to its mechanical, electrical, and hydraulic
aspects, whether or not there are problems thereon as reported by the driver
and/or conductor. They too, must be at specific place as [sic] specified time, as
they generally observe prompt departure and arrival from their point of origin to
their point of destination. In each and every depot, there is always the
Dispatcher whose function is precisely to see to it that the bus and its crew leave
the premises at specific times and arrive at the estimated proper time. These,
are present in the case at bar. The driver, the complainant herein, was therefore
under constant supervision while in the performance of this work. He cannot be
considered a field personnel.

We agree in the above disquisition. Therefore, as correctly concluded by the

appellate court, respondent is not a field personnel but a regular employee who
performs tasks usually necessary and desirable to the usual trade of petitioner’s
business. Accordingly, respondent is entitled to the grant of service incentive leave.

2. Article 291 of the Labor Code states that all money claims arising from
employer-employee relationship shall be filed within three (3) years from the time the
cause of action accrued; otherwise, they shall be forever barred.

It is settled jurisprudence that a cause of action has three elements, to wit, (1) a
right in favor of the plaintiff by whatever means and under whatever law it arises or is
created; (2) an obligation on the part of the named defendant to respect or not to
violate such right; and (3) an act or omission on the part of such defendant violative of
the right of the plaintiff or constituting a breach of the obligation of the defendant to
the plaintiff.

To properly construe Article 291 of the Labor Code, it is essential to ascertain the
time when the third element of a cause of action transpired. Stated differently, in the
computation of the three-year prescriptive period, a determination must be made as to
the period when the act constituting a violation of the workers’ right to the benefits
being claimed was committed. For if the cause of action accrued more than three (3)
years before the filing of the money claim, said cause of action has already prescribed
in accordance with Article 291.

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 Applying Article 291 of the Labor Code in light of this peculiarity of the service
incentive leave, we can conclude that the three (3)-year prescriptive period
commences, not at the end of the year when the employee becomes entitled to the
commutation of his service incentive leave, but from the time when the employer
refuses to pay its monetary equivalent after demand of commutation or upon
termination of the employee’s services, as the case may be.

In the case at bar, respondent had not made use of his service incentive leave
nor demanded for its commutation until his employment was terminated by petitioner.
Neither did petitioner compensate his accumulated service incentive leave pay at the
time of his dismissal. It was only upon his filing of a complaint for illegal dismissal, one
month from the time of his dismissal, that respondent demanded from his former
employer commutation of his accumulated leave credits. His cause of action to claim
the payment of his accumulated service incentive leave thus accrued from the time
when his employer dismissed him and failed to pay his accumulated leave
credits.Therefore, the prescriptive period with respect to his claim for service incentive
leave pay only commenced from the time the employer failed to compensate his
accumulated service incentive leave pay at the time of his dismissal. Since respondent
had filed his money claim after only one month from the time of his dismissal,
necessarily, his money claim was filed within the prescriptive period provided for by
Article 291 of the Labor Code.

FALLO:

WHEREFORE, premises considered, the instant petition is hereby DENIED. The

assailed Decision of the Court of Appeals in CA-G.R. SP. No. 68395 is hereby
AFFIRMED. No Costs.

SO ORDERED.

276
 MANSION PRINTING CENTER AND CLEMENT CHENG, PETITIONERS, VS.
DIOSDADO BITARA, JR. RESPONDENT.
[G.R. NO. 168120: JANUARY 25, 2012]

FACTS:

Petitioners engaged the services of respondent as a helper (kargador).

Respondent was later promoted as the company’s sole driver tasked to pick-up raw
materials for the printing business, collect account receivables and deliver the products
to the clients within the delivery schedules.Petitioners aver that the timely delivery of
the products to the clients is one of the foremost considerations material to the
operation of the business. It being so, they closely monitored the attendance of
respondent. They noted his habitual tardiness and absenteeism.

Thus, petitioners issued a Memorandum requiring respondent to submit a written

explanation why no administrative sanction should be imposed on him for his habitual
tardiness.Despite respondents undertaking to report on time, however, he continued to
disregard attendance policies.

Consequently, Davis Cheng, General Manager of the company and son of

petitioner Cheng, issued another Memorandum (Notice to Explain) requiring respondent
to explain why his services should not be terminated. He personally handed the Notice
to Explain to respondent but the latter, after reading the directive, refused to
acknowledge receipt thereof. He did not submit any explanation and, thereafter, never
reported for work.

Davis Cheng personally served another Memorandum(Notice of Termination)

upon him informing him that the company found him grossly negligent of his duties, for
which reason, his services were terminated.

On even date, respondent met with the management requesting for

reconsideration of his termination from the service. However, after hearing his position,
the management decided to implement the Memorandum. Nevertheless, the
management, out of generosity, offered respondent financial assistance in the amount
of P6,110.00 equivalent to his one month salary. Respondent demanded that he be
given the amount equivalent to two (2) months salary but the management declined as
it believed it would, in effect, reward respondent for being negligent of his duties.

Respondent filed a complaint for illegal dismissal against the petitioners before
the Labor Arbiter.Labor Arbiter dismissed the complaint for lack of merit.
On appeal to the National Labor Relations Commission, the findings of the Labor Arbiter
were AFFIRMED en toto.Before the Court of Appeals, respondent sought the annulment
of the Commissions Resolution on the ground that they were rendered with grave
abuse of discretion and/or without or in excess of jurisdiction.

277
 The Court of Appeals found for the respondent and reversed the findings of the
Commission.

ISSUE:

Whether or not respondent is illegally dismissed?

RATIO DECIDENDI:

NLRC's decision is reinstated.In order to validly dismiss an employee, the

employer is required to observe both substantive and procedural aspects the
termination of employment must be based on a just or authorized cause of dismissal
and the dismissal must be effected after due notice and hearing.
We, therefore, agree with the Labor Arbiters findings, to wit:

The imputed absence and tardiness of the complainant are documented. He

faltered on his attendance 38 times of the 66 working days. His last absences on 11,
13, 14, 15 and 16 March 2000 were undertaken without even notice/permission from
management. These attendance delinquencies may be characterized as habitual and
are sufficient justifications to terminate the complainant’s employment.

On this score, Valiao v. Court of Appeals is instructive:

xxx It bears stressing that petitioners absences and tardiness were not isolated
incidents but manifested a pattern of habituality. xxx The totality of infractions or the
number of violations committed during the period of employment shall be considered in
determining the penalty to be imposed upon an erring employee. The offenses
committed by him should not be taken singly and separately but in their totality. Fitness
for continued employment cannot be compartmentalized into tight little cubicles of
aspects of character, conduct, and ability separate and independent of each other.

In Valiao, we defined gross negligence as want of care in the performance of

ones duties and habitual neglect as repeated failure to perform ones duties for a period
of time, depending upon the circumstances. These are not overly technical terms,
which, in the first place, are expressly sanctioned by the Labor Code of the Philippines,
to wit:

278
 ART. 282. Termination by employer.- An employer may terminate an
employment for any of the following causes:
(a) xxx
(b)Gross and habitual neglect by the employee of his duties;
Xxx
Clearly, even in the absence of a written company rule defining gross and
habitual neglect of duties, respondents omissions qualify as such warranting his
dismissal from the service.
Procedural due process entails compliance with the two-notice rule in dismissing
an employee, to wit: (1) the employer must inform the employee of the specific acts or
omissions for which his dismissal is sought; and (2) after the employee has been given
the opportunity to be heard, the employer must inform him of the decision to terminate
his employment.

FALLO:

For the foregoing premises considered,the Resolution dated 29 June 2001 and
the Order dated 21 February 2002 of the National Labor Relations Commission in NLRC
NCR CASE No. 027871-01 are hereby REINSTATED with the MODIFICATION that
petitioners are ORDERED to pay respondent the money equivalent of the five-day
service incentive leave for every year of service covering his employment period from
August 1988 to 1 April 2000. This case is hereby REMANDED to the Labor Arbiter for
the computation of respondent’s service incentive leave pay.

279
 MAYN HOTEL AND RESTAURANT VS ADANA
G.R NO. 157634, MAY 16, 2005
PUNO, J.:

FACTS:

Petitioner Mayon Hotel & Restaurant is a single proprietor business registered in

the name of petitioner Pacita O. Po,6 whose mother, petitioner Josefa Po Lam,
manages the establishment.7 The hotel and restaurant employed about sixteen (16)
employees.

Due to the expiration and non-renewal of the lease contract for the rented space
occupied by the said hotel and restaurant at Rizal Street, the hotel operations of the
business were suspended on March 31, 1997.9 The operation of the restaurant was
continued in its new location at Elizondo Street, Legazpi City, while waiting for the
construction of a new Mayon Hotel & Restaurant at Peñaranda Street, Legazpi City.10
Only nine (9) of the sixteen (16) employees continued working in the Mayon Restaurant
at its new site.11 the 16 employees filed complaints for underpayment of wages and
other money claims against petitioners

Executive Labor Arbiter Gelacio L. Rivera, Jr. rendered a Joint Decision in favor of
the employees. The Labor Arbiter awarded substantially all of respondents’ money
claims, and held that respondents Loveres, Macandog and Llarena were entitled to
separation pay, while respondents Guades, Nicerio and Alamares were entitled to their
retirement pay. The Labor Arbiter also held that based on the evidence presented,
Josefa Po Lam is the owner/proprietor of Mayon Hotel & Restaurant and the proper
respondent in these cases.

On appeal to the NLRC, the decision of the Labor Arbiter was reversed, and all
the complaints were dismissed.

Respondents filed a motion for reconsideration with the NLRC and when this was
denied, they filed a petition for certiorari with the CA. CA reversed the NLRC decision
and the employers filed Motion for Reconsideration which was denied, hence the case
before the SC.

ISSUE:

Whether or not the respondents are entitled to their money claims.

RATIO DECIDENDI:

280
 Yes, the respondents are entitled. The Supreme Court reinstated the award of
monetary claims granted by the Labor Arbiter. Petitioner assail this ruling that since
there was no illegal dismissal, the respondents was not entitled to their money claims.
The Supreme Court did not agree and explained that entitlement to labor standards
benefits is a separate and distinct concept from payment of separation pay from illegal
dismissal, and govern by different provisions in Labor Code. Supreme Court did not
agree with petitioners that the five (5) percent of the gross income of the establishment
can be considered as part of the respondents' wages. We quote with approval the Labor
Arbiter on this matter, to wit:

While complainants, who were employed in the hotel, receive[d] various

amounts as profit share, the same cannot be considered as part of their wages in
determining their claims for violation of labor standard benefits. Although called profit
share[,] such is in the nature of share from service charges charged by the hotel. This
is more explained by [respondents] when they testified that what they received are not
fixed amounts and the same are paid not on a monthly basis (pp. 55, 93, 94, 103, 104;
vol. II, rollo). Also, [petitioners] failed to submit evidence that the amounts received by
[respondents] as profit share are to be considered part of their wages and had been
agreed by them prior to their employment. Further, how can the amounts receive[d] by
[respondents] be considered as profit share when the same [are] based on the gross
receipt of the hotel[?] No profit can as yet be determined out of the gross receipt of an
enterprise. Profits are realized after expenses are deducted from the gross income.

FALLO:

IN VIEW WHEREOF, the petition is hereby DENIED.

281
 MAYON HOTEL AND RESTAURANT VS ADINA
G.R.NO. 157634, DATE: MARCH 16,2005
PONENTE JUSTICE PUNO

FACTS:

The petitioner is a single proprietor business employing 16 employees. But

unfortunately the business stop operation due to issue on lease with the owner of the
building on March 31,1997. Prompting them to relocate their business and operation on
different location.Upon their renewed operation 9 employees return to work and on
various dates of April and May the 16 employees filed complaints at the labor arbiter.

The petitioner Mayon hotel and restaurant filed a motion for certiorari to reverse
and set aside the decision of CA affirming the decision of labor arbiter granting money
claims and finding the petitioner guilty of illegal dismissal upon her employees. The said
petitioner contends that the CA and the NLRC erred in it’s judgement prompting them
to seek the supreme court.

ISSUE:

Whether or not the employees were entitled for money claims.

RATIO DECIDENDE:

Article 221 of the labor code clearly states that the application of technical rules
of procedure are not binding and maybe relaxed in labor cases to serve the demand of
substantial Justice.

The rule of evidence regarding the ownership of the business of petitioner is not
controlling in labor cases. And the labor arbiter is mandated to ascertain the facts of the
case speedily and objectively without regard to technicalities of the procedural law for
the interest of justice.

FALLO:

The petition of the petitioner is hereby denied. The decision of the CA upholding
the joint decision of the labor arbiter is affirmed but with modification. The case is
remanded to labor arbiter for recomputation of the total monetary benefits awarded to
the employees stated on the decision.

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