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Supreme Court 2009 Labor Case Digest

Appeal
As a rule, a party who does not appeal from the decision may not obtain any affirmative relief from the
appellate court other than what he has obtained from the lower tribunal, if any, whose decision is brought up
on appeal. Due process prevents the grant of additional awards to parties who did not appeal. As an
exception, he may assign an error where the purpose is to maintain the judgment on other grounds, but he
cannot seek modification or reversal of the judgment or affirmative relief unless he has also appealed or filed
a separate petition. (AKLAN COLLEGE, INC. vs. PERPETUO ENERO, ARLYN CASTIGADOR,
NUENA SERMON and JOCELYN ZOLINA, G.R. No. 178309, January 27, 2009)
Likewise, by availing of a wrong or inappropriate mode of appeal, the petition merits an outright dismissal
pursuant to Circular No. 2-90 which provides that, an appeal taken to either Supreme Court or the Court of
Appeals by the wrong or inappropriate mode shall be dismissed.( HANJIN HEAVY INDUSTRIES AND
CONSTRUCTION COMPANY LTD. (FORMERLY HANJIN ENGINEERING AND CONSTRUCTION
CO. LTD.) v. HONORABLE COURT OF APPEALS, G.R. No. 167938, February 19, 2009)
At the outset, it must be stated that petitioners adopted the wrong mode of remedy in bringing the case
before this Court. It is well-settled that the proper recourse of an aggrieved party to assail the decision of the
Court of Appeals is to file a petition for review on certiorari under Rule 45 of the Rules of Court. The Rules
precludes recourse to the special civil action of certiorari if appeal, by way of a petition for review is
available, as the remedies of appeal and certiorari are mutually exclusive and not alternative or successive.
(TACLOBAN FAR EAST MARKETING CORPORATION and FRANCISCO Y. ROMUALDEZ v. THE
COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 182320, September
11, 2009)
Time and again, it has been held that the right to appeal is not a constitutional right, but a mere statutory
privilege. Hence, parties who seek to avail themselves of it must comply with the statutes or rules allowing
it. To reiterate, perfection of an appeal in the manner and within the period permitted by law is mandatory
and jurisdictional. The requirements for perfecting an appeal must, as a rule, be strictly followed. Such
requirements are considered indispensable interdictions against needless delays and are necessary for the
orderly discharge of the judicial business. Failure to perfect the appeal renders the judgment of the court
final and executory. Just as a losing party has the privilege to file an appeal within the prescribed period, so
does the winner also have the correlative right to enjoy the finality of the decision. Thus, the propriety of the
monetary awards of the Labor Arbiter is already binding upon this Court, much more with the Court of
Appeals. (ANDREW JAMES MCBURNIE v. EULALIO GANZON, EGI-MANAGERS,INC. and E.
GANZON, INC. G.R. Nos. 178034 & 178117, G.R. Nos. 186984-85, September 18, 2009)
From the immediately quoted pronouncement of the Court in Sy, petitioners mere filing of the Motion for
Reduction of Bond did not suffice to perfect his appeal. As correctly found by the appellate court, petitioner
filed a Motion for Reduction of Bond dated June 24, 1999 (which was received by the appellate court on
June 28, 1999) alleging financial constraints without showing substantial compliance with the Rules or
demonstrating a willingness to abide by the [R]ules by posting a partial bond. That petitioner questioned
the computation of the monetary award basis of the computation of the amount of appeal bond did not
excuse it from posting a bond in a reasonable amount or what it believed to be the correct amount. (THE
HERITAGE HOTEL MANILA v. NATIONAL LABOR RELATIONS COMMISSION, RUFINO C.
RAON II, AND ISMAEL C. VILLA, G.R. Nos. 180478-79, September 3, 2009)

Certiorari
Respondent may have a point in asserting that in this case a Rule 65 petition is a wrong mode of appeal, as
indeed the writ of certiorari is an extraordinary remedy, and certiorari jurisdiction is not to be equated with
appellate jurisdiction. Nevertheless, it is settled, as a general proposition, that the availability of an appeal
does not foreclose recourse to the extraordinary remedies, such as certiorari and prohibition, where appeal is
not adequate or equally beneficial, speedy and sufficient, as where the orders of the trial court were issued in
excess of or without jurisdiction, or there is need to promptly relieve the aggrieved party from the injurious
effects of the acts of an inferior court or tribunal, e.g., the court has authorized execution of the judgment.
This Court has even recognized that a recourse to certiorari is proper not only where there is a clear
deprivation of petitioners fundamental right to due process, but so also where other special circumstances
warrant immediate and more direct action. (PEOPLES BROADCASTING(BOMBO RADYO PHILS.,
INC.) vs. THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, THE
REGIONAL DIRECTOR, DOLE REGION VII, and JANDELEON JUEZAN, G.R. No. 179652, May 8,
2009)
Strict Application of the Rules
As to the other ground cited by private respondents counsel, suffice it to say that it was a bare allegation
unsubstantiated by any proof or affidavit of merit. Besides, they could have filed the petition on time with a
motion to be allowed to litigate in forma pauperis. While social justice requires that the law look tenderly on
the disadvantaged sectors of society, neither the rich nor the poor has a license to disregard rules of
procedure. The fundamental rule of human relations enjoins everyone, regardless of standing in life, to duly
observe procedural rules as an aspect of acting with justice, giving everyone his due and observing honesty
and good faith. For indeed, while technicalities should not unduly hamper our quest for justice, orderly
procedure is essential to the success of that quest to which all courts are devoted. (LAGUNA METTS
CORPORATION v. ARIES C. CAALAM and GERALDINE ESGUERRA, G.R. No. 185220, July 27, 2009)
Date of Filing
In this case, petitioner availed of the services of LBC, a private carrier, to deliver its notice of appeal to the
NLRC. Had petitioner sent its notice of appeal by registered mail, the date of mailing would have been
deemed the date of filing with the NLRC. But petitioner, for reasons of its own, chose to send its notice of
appeal through a private letter-forwarding agency. Therefore, the date of actual receipt by the NLRC of the
notice of appeal, and not the date of delivery to LBC, is deemed to be the date of the filing of the notice of
appeal. Since the NLRC received petitioners notice of appeal on 26 February 2001, the appeal was clearly
filed out of time. Petitioner had thus lost its right to appeal from the decision of the Labor Arbiter and the
NLRC should have dismissed its notice of appeal. (CHARTER CHEMICAL AND COATING
CORPORATION vs. HERBERT TAN and AMALIA SONSING, G.R. No. 163891, May 21, 2009)
Delayed Filing
We agree with the Court of Appeals that since no intent to delay the administration of justice could be
attributed to Guinmapang, a one day delay does not justify the appeals denial. More importantly, the Court
of Appeals declared that Guinmapangs appeal, on its face, appears to be impressed with merit. The
constitutional mandate to accord full protection to labor and to safeguard the employees means of
livelihood should be given proper attention and sanction. A greater injustice may occur if said appeal is not
given due course than if the reglementary period to appeal were strictly followed. In this case, we are
inclined to excuse the one day delay in order to fully settle the merits of the case. This is in line with our
policy to encourage full adjudication of the merits of an appeal. (REPUBLIC CEMENT CORPORATION v.
PETER I. GUINMAPANG, G.R. No. 168910, August 24, 2009)

Appeal Bond
At the time of the filing of the surety bond by PJI on January 2, 2003, PPAC was still an accredited bonding
company. Thus, it was but proper to honor the appeal bond issued by a bonding company duly accredited by
this Court at the time of its issuance. The subsequent revocation of the authority of a bonding company
should not prejudice parties who relied on its authority. The revocation of authority of a bonding company is
prospective in application. (CESARIO L. DEL ROSARIO v. PHILIPPINE JOURNALISTS, INC., G.R. No.
181516, August 19, 2009)
While the bond may be reduced upon motion by the employer, this is subject to the conditions
that:
(1) the motion to reduce the bond shall be based on meritorious grounds; and
(2) a reasonable amount in relation to the monetary award is posted by the appellant,
otherwise the filing of the motion to reduce bond shall not stop the running of the period to
perfect an appeal.

The qualification effectively requires that unless the NLRC grants the reduction of the cash bond within the
10 day reglementary period, the employer is still expected to post the cash or surety bond securing the full
amount within the said 10-day period. If the NLRC does eventually grant the motion for reduction after the
reglementary period has elapsed, the correct relief would be to reduce the cash or surety bond already posted
by the employer within the 10-day period. (ANDREW JAMES MCBURNIE v. EULALIO GANZON, EGIMANAGERS,INC. and E. GANZON, INC. G.R. Nos. 178034 & 178117, G.R. Nos. 186984-85, September
18, 2009)
In addition, while the bond requirement on appeals involving a monetary award has been relaxed in certain
cases, this can only be done where there was substantial compliance with the Rules; or where the appellants,
at the very least, exhibited willingness to pay by posting a partial bond. ( LOLITA A. LOPEZ, ET. al., vs.
QUEZON CITY SPORTS CLUB, INC.,G.R. No. 164032, January 19, 2009)
The decisions, awards or orders of the Labor Arbiter are final and executory unless appealed to the NLRC
by any parties within ten (10) calendar days from receipt thereof, with proof of payment of the required
appeal fee accompanied by a memorandum of appeal. And where, as here, the judgment involves monetary
award, an appeal therefrom by the employer may be perfected only upon the posting of a cash or surety
bond. A mere notice of appeal without complying with the other requisites mentioned does not stop the
running of the period for perfecting an appeal as in fact no motion for extension of said period is allowed.
(WALLEM MARITIME SERVICES, INC. and SCANDIC SHIPMANAGEMENT LIMITED v. ERIBERTO
S. BULTRON, G.R. No. 185261, October 2, 2009)
The purpose of an appeal bond is to ensure, during the period of appeal, against any occurrence that would
defeat or diminish recovery by the aggrieved employees under the judgment if subsequently affirmed. The
Deed of Assignment in the instant case, like a cash or surety bond, serves the same purpose. First, the Deed
of Assignment constitutes not just a partial amount, but rather the entire award in the appealed Order.
Second, it is clear from the Deed of Assignment that the entire amount is under the full control of the bank,
and not of petitioner, and is in fact payable to the DOLE Regional Office, to be withdrawn by the same
office after it had issued a writ of execution. For all intents and purposes, the Deed of Assignment in tandem
with the Letter Agreement and Cash Voucher is as good as cash. Third, the Court finds that the execution of
the Deed of Assignment, the Letter Agreement and the Cash Voucher were made in good faith, and
constituted clear manifestation of petitioners willingness to pay the judgment amount. (PEOPLES
BROADCASTING(BOMBO RADYO PHILS., INC.) vs. THE SECRETARY OF THE DEPARTMENT OF
LABOR AND EMPLOYMENT, THE REGIONAL DIRECTOR, DOLE REGION VII, and JANDELEON
JUEZAN, G.R. No. 179652, May 8, 2009)
Attorneys Fees

Finally, the Court overrules the deletion by the NLRC of the Labor Arbiters award for attorneys fees to
petitioner. Petitioner is evidently entitled to attorneys fees, since h3e was compelled to litigate to protect his
interest by reason of unjustified and unlawful termination of his employment by respondents CCBP and
Taguibao. (ERWIN H. REYES v. NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 180551,
February 10, 2009)
Considering that Atty. Go successfully represented his client, it is only proper that he should receive
adequate compensation for his efforts. Even as we agree with the reduction of the award of attorneys fees
by the CA, the fact that a lawyer plays a vital role in the administration of justice emphasizes the need to
secure to him his honorarium lawfully earned as a means to preserve the decorum and respectability of the
legal profession. A lawyer is as much entitled to judicial protection against injustice or imposition of fraud
on the part of his client as the client is against abuse on the part of his counsel. The duty of the court is not
alone to ensure that a lawyer acts in a proper and lawful manner, but also to see that a lawyer is paid his just
fees. With his capital consisting of his brains and with his skill acquired at tremendous cost not only in
money but in expenditure of time and energy, he is entitled to the protection of any judicial tribunal against
any attempt on the part of his client to escape payment of his just compensation. It would be ironic if after
putting forth the best in him to secure justice for his client, he himself would not get his due.
(EVANGELINA MASMUD (as substitute complainant for ALEXANDER J. MASMUD) v. NATIONAL
LABOR RELATIONS COMMISSION, G.R. No. 183385, February 13, 2009)
Moreover, in cases for recovery of wages, the award of attorneys fees is proper and there need not be any
showing that the employer acted maliciously or in bad faith when it withheld the wages. There need only be
a showing that the lawful wages were not paid accordingly. (BARON REPUBLIC THEATRICAL V.
NORMITA P. PERALTA et al, G.R. No. 170525, October 2, 2009)
In the case at bar, we find that the flight attendants were represented by respondent union which, in turn,
engaged the services of its own counsel. The flight attendants had a common cause of action. While the
work performed by respondents counsel was by no means simple, seeing as it spanned the whole litigation
from the Labor Arbiter stage all the way to this Court, nevertheless, the issues involved in this case are
simple, and the legal strategies, theories and arguments advanced were common for all the affected crew
members. Hence, it may not be reasonable to award said counsel an amount equivalent to 10% of all
monetary awards to be received by each individual flight attendant. Based on the length of time that this
case has been litigated, however, we find that the amount of P2,000,000.00 is reasonable as attorneys fees.
This amount should include all expenses of litigation that were incurred by respondent union. (FLIGHT
ATTENDANTS AND STEWARDS ASSOCIATION OF THE PHILIPPINES (FASAP), v. PHILIPPINE
AIRLINES, INC.,PATRIA CHIONG and COURT OF APPEALS,G.R. No. 178083, October 2, 2009)
The claim for attorneys fees is granted following Article 2208 of the New Civil Code which allows its
recovery in actions for recovery of wages of laborers and actions for indemnity under the employers
liability laws. The same fees are also recoverable when the defendants act or omission has compelled the
plaintiff to incur expenses to protect his interest as in the present case following the refusal by respondent to
settle his claims. Pursuant to prevailing jurisprudence, petitioner is entitled to attorneys fees of ten percent
(10%) of the monetary award. (LEOPOLDO ABANTE v. KJGS FLEET MANAGEMENT MANILA G.R.
No. 182430, December 4, 2009)
Backwages
One of the natural consequences of a finding that an employee has been illegally dismissed is the payment of
backwages corresponding to the period from his dismissal up to actual reinstatement. The statutory intent of
this matter is clearly discernible. The payment of backwages allows the employee to recover from the
employer that which he has lost by way of wages as a result of his dismissal. Logically, it must be computed
from the date of petitioners illegal dismissal up to the time of actual reinstatement. There can be no gap or
interruption, lest we defeat the very reason of the law in granting the same. That petitioner did not

immediately file his Complaint should not affect or diminish his right to backwages, for it is a right clearly
granted to him by law should he be found to have been illegally dismissed and for as long as his cause
of action has not been barred by prescription. (ERWIN H. REYES v. NATIONAL LABOR RELATIONS
COMMISSION, G.R. No. 180551, February 10, 2009)
He never bothered to redeem his license at the soonest possible time when there was no showing that he was
unlawfully prevented by respondent from doing so. Thus, petitioner should not be paid for the time he was
not working. The Court has held that where the failure of employees to work was not due to the employers
fault, the burden of economic loss suffered by the employees should not be shifted to the employer. Each
party must bear his own loss. It would be unfair to allow petitioner to recover something he has not earned
and could not have earned, since he could not discharge his work as a driver without his drivers license.
Respondent should be exempted from the burden of paying backwages. (BERNARDINO V. NAVARRO v.
P.V. PAJARILLO LINER, INC., G.R. No. 164681, April 24, 2009)
Burden of Proof
In termination cases, the employer bears the burden of proving that the dismissal of the employee is for a
just or an authorized cause. Failure to dispose of the burden would imply that the dismissal is not lawful, and
that the employee is entitled to reinstatement, back wages and accruing benefits. Moreover, dismissed
employees are not required to prove their innocence of the employers accusations against them. (SAN
MIGUEL CORPORATION vs. NATIONAL LABOR RELATIONS COMMISSION AND WILLIAM L.
FRIEND, JR., G.R. No. 153983, May 26, 2009)
As a general rule, one who pleads payment has the burden of proving it. Even where the employee must
allege nonpayment, the general rule is that the burden rests on the employer to prove payment, rather than on
the employee to prove nonpayment. The reason for the rule is that the pertinent personnel files, payrolls,
records, remittances and other similar documents which will show that overtime, differentials, service
incentive leave and other claims of workers have been paid are not in the possession of the employee but
in the custody and absolute control of the employer. Since in the case at bar petitioner company has not
shown any proof of payment of the correct amount of salary, holiday pay and 13th month pay, we affirm the
award of Madriagas monetary claims. (MANTLE TRADING SERVICES, INCORPORATED AND/OR
BOBBY DEL ROSARIO v. NATIONAL LABOR RELATIONS COMMISSION and PABLO S.
MADRIAGA,G.R. No. 166705,July 28,2009)
Respecting the issue of illegal dismissal, the Court appreciates no evidence that petitioner was dismissed.
What it finds is that petitioner unilaterally stopped reporting for work before filing a complaint for illegal
dismissal, based on his belief that Guillermo and Bergonia had spread rumors that his transactions on behalf
of BAYER would no longer be honored as of April 30, 2002. This belief remains just that it is
unsubstantiated. While in cases of illegal dismissal, the employer bears the burden of proving that the
dismissal is for a valid or authorized cause, the employee must first establish by substantial evidence the fact
of dismissal. (RAMY GALLEGO v. BAYER PHILIPPINES, INC., DANPIN GUILLERMO, PRODUCT
IMAGE MARKETING, INC., and EDGARDO BERGONIA, G.R. No. 179807, July 31, 2009)
The burden of proving the validity of retrenchment is on the petitioner. Evidence does not sufficiently
establish that petitioner had incurred losses that would justify retrenchment to prevent further losses. The
Comparative Income Statement for the year 1996 and for the months of February to June 1997 which
petitioner submitted did not conclusively show that petitioner had suffered financial losses. In fact, records
show that from January to July 1997, petitioner hired a total of 114 new employees assigned in the
petitioners stores located in the different places of the country. (EMCOR INCORPORATED v. MA.
LOURDES D. SIENES, G.R. No. 152101, September 8, 2009)
It is well-settled that in termination cases, the burden of proof rests upon the employer to show that the
dismissal was for a just and valid cause and failure to discharge the same would mean that the dismissal is
not justified and therefore illegal. Hence, in arguing that Sabulao abandoned his work, it is incumbent upon
the petitioners to prove: (1) that the employee failed to report for work or had been absent without valid or
justifiable reason; and (2) that there must have been a clear intention to sever the employer-employee
relationship as manifested by some overt acts. Clearly, jurisprudence dictates that the burden of proof to
show that there was unjustified refusal to go back to work rests on the employer. (TACLOBAN FAR EAST
MARKETING CORPORATION and FRANCISCO Y. ROMUALDEZ v. THE COURT OF APPEALS,
NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 182320, September 11, 2009)

Cause of Action
The Secretary of Labor and Employment dismissed the first petition as it was filed outside the 60-day
freedom period. At that time therefore, the union has no cause of action since they are not yet legally
allowed to challenge openly and formally the status of SMCGC-SUPER as the exclusive bargaining
representative of the bargaining unit. Such dismissal, however, has no bearing in the instant case since the
third petition for certification election was filed well within the 60-day freedom period. Otherwise stated,
there is no identity of causes of action to speak of since in the first petition, the union has no cause of action
while in the third, a cause of action already exists for the union as they are now legally allowed to challenge
the status of SMCGC-SUPER as exclusive bargaining representative. (CHRIS GARMENTS
CORPORATION vs HON. PATRICIA A. STO. TOMAS and CHRIS GARMENTS WORKERS UNIONPTGWO LOCAL CHAPTER No. 832, G.R. No. 167426, January 12, 2009)
Circumvention of the Law
Notably, private respondents purported employment with MANRED commenced only in 1996, way after
she was hired by the petitioner as extra beverage attendant on April 24, 1995. There is thus much credence in
the private respondents claim that the service agreement executed between the petitioner and MANRED is a
mere ploy to circumvent the law on employment, in particular that which pertains on regularization.
(MARANAW HOTELS AND RESORT CORP vs COURT OF APPEALS, SHERYL OABEL AND
MANILA RESOURCE DEVELOPMENT CORP., G.R. No. 149660, January 20, 2009)
Collective Bargaining Agreement (CBA)
If the terms of a CBA are clear and have no doubt upon the intention of the contracting parties, as in the
herein questioned provision, the literal meaning thereof shall prevail. That is settled. As such, the daily-paid
employees must be paid their regular salaries on the holidays which are so declared by the national
government, regardless of whether they fall on rest days.
Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the State shall afford
protection to labor. 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. (Emphasis and underscoring supplied) (RFM CORPORATIONFLOUR DIVISION and SFI FEEDS DIVISION v. KASAPIAN NG MANGGA-GAWANG PINAGKAISARFM (KAMPI-NAFLU-KMU) and SANDIGAN AT UGNAYAN NG MANGGAGAWANG
PINAGKAISA-SFI (SUMAPI-NAFLU-KMU), G.R. No. 162324, February 4, 2009)
Company Policy
As respondents creditably explained, and as admitted by petitioner herself, respondents have standing
policies that an employee must be single at the time of employment and must be willing to be assigned to
any of its branches in the country. Petitioners contention that upon getting married, she no longer bound
herself to be assigned to any of respondents branches in the country is preposterous. Just because an
employee gets married does not mean she can already renege on a commitment she willingly made at the
time of her employment particularly if such commitment does not appear to be unreasonable, inconvenient,
or prejudicial to her. Respondents claimed that travel time from the Bacolod City Branch to the Iloilo City
Branch will only take about an hour by boat and that they were even willing to defray petitioners
transportation and lodging expenses. Petitioner never disputed these matters. There is no showing either that
petitioners transfer was only being used by respondents to camouflage a sinister scheme of management to
rid itself of an undesirable worker in the person of petitioner. (AILEEN G. HERIDA v. F & C PAWNSHOP
and JEWELRY STORE/MARCELINO FLORETE, JR., G.R. No. 172601, April 16, 2009)
Computation of Award
Finally, on the increase in the computation of the monetary award to respondents, the decision of the Labor

Arbiter specified that for purposes of putting up a bond should petitioner appeal, the backwages were
computed only for a certain period. Otherwise, the actual backwages to be paid to respondents are computed
from the date of dismissal until the finality of the decision. In addition, because petitioner continues to
refuse and accord regular status to respondents and to pay them their corresponding wages even after the
lapse of two (2) years from the finality of the Labor Arbiters decision, the Labor Arbiter correctly included
that in its order of execution. Thus, the Labor Arbiters order of execution simply covered the correct
computation of wages and other payments enjoyed by petitioners regular employees. (PHILIPPINE LONG
DISTANCE TELEPHONE COMPANY v. RIZALINA RAUT, LEILA EMNACE and GINA
CAPISTRANO, G.R. No. 174209, August 25, 2009)
This Court notes that the NLRC awarded backwages, 13th month pay, and service incentive leave pay from
July 10, 2005 to January 23, 2007 only. It is evident that these should not be limited to said period. These
should be computed from the date of her illegal dismissal until this decision attains finality. Though Bolanos
did not appeal the computation of the NLRCs award as affirmed by the Court of Appeals, we are not barred
from ordering its modification. This Court is imbued with sufficient authority and discretion to review
matters, not otherwise assigned as errors on appeal, if it finds that their consideration is necessary in arriving
at a complete and just resolution of the case or to serve the interests of justice or to avoid dispensing
piecemeal justice. Besides, substantive rights like the award of backwages, 13th month pay and service
incentive leave pay resulting from illegal dismissal must not be prejudiced by a rigid and technical
application of the rules. The computation of the award for backwages and other benefits from the time the
compensation was withheld up to the time of actual reinstatement is a mere legal consequence of the finding
that respondent was illegally dismissed by petitioners. (HENLIN PANAY COMPANY v. NATIONAL
LABOR RELATIONS COMMISSION , G.R. No. 180718, October 23, 2009)
Conclusiveness of Judgment
Third. The matter of employer-employee relationship has been resolved with finality by the Secretary of
Labor and Employment in the Resolution dated December 27, 2002. Since petitioner did not appeal this
factual finding, then, it may be considered as the final resolution of such issue. To reiterate, conclusiveness
of judgment has the effect of preclusion of issues. (CHRIS GARMENTS CORPORATION vs HON.
PATRICIA A. STO. TOMAS and CHRIS GARMENTS WORKERS UNION-PTGWO LOCAL CHAPTER
No. 832, G.R. No. 167426, January 12, 2009)
Contingent Fee
Contingent fee contracts are subject to the supervision and close scrutiny of the court in order that clients
may be protected from unjust charges. The amount of contingent fees agreed upon by the parties is subject to
the stipulation that counsel will be paid for his legal services only if the suit or litigation prospers. A much
higher compensation is allowed as contingent fees because of the risk that the lawyer may get nothing if the
suit fails. The Court finds nothing illegal in the contingent fee contract between Atty. Go and Evangelinas
husband. The CA committed no error of law when it awarded the attorneys fees of Atty. Go and allowed
him to receive an equivalent of 39% of the monetary award. (EVANGELINA MASMUD (as substitute
complainant for ALEXANDER J. MASMUD) v. NATIONAL LABOR RELATIONS COMMISSION, G.R.
No. 183385, February 13, 2009)
Contract of Adhesion
In addition, the employment agreement may be likened into a contract of adhesion considering that it is
petitioner who insists that there existed an express period of one year from April 1, 2002 to March 31, 2003,
using as proof its own copy of the agreement. While contracts of adhesion are valid and binding, in cases of
doubt which will cause a great imbalance of rights against one of the parties, the contract shall be construed
against the party who drafted the same. Hence, in this case, where the very employment of respondent is at
stake, the doubt as to the period of employment must be construed in her favor. (MAGIS YOUNG

ACHIEVERS LEARNING CENTER and MRS. VIOLETA T. CARIO v. ADELAIDA . MANALO, G.R.
No. 178835, February 13, 2009)
Contract of Employment
Since respondent was already a regular employee months before the execution of the Employment with a
Fixed Period contract, its execution was merely a ploy on SMCs part to deprive respondent of his tenurial
security. Hence, no valid fixed-term contract was executed. The employment status of a person is defined
and prescribed by law and not by what the parties say it should be. Equally important to consider is that a
contract of employment is impressed with public interest such that labor contracts must yield to the common
good. Provisions of applicable statutes are deemed written into the contract, and the parties are not at liberty
to insulate themselves and their relationships from the impact of labor laws and regulations by simply
contracting with each other. (SAN MIGUEL CORPORATION v. EDUARDO L. TEODOSIO, G.R. No.
163033, October 2, 2009)
Corporate Rehabilitation
Given these premises, it is not difficult to understand why actions for claims against the ailing enterprise
have to be suspended. It then becomes easy to accept the hypothesis that the date when the claim arose, or
when the action is filed, is of no moment. As long as the corporation is under a management committee or a
rehabilitation receiver, all actions for claims against it for money or otherwise must yield to the greater
imperative of corporate rehabilitation, excepting only, as already mentioned, claims for payment of
obligations incurred by the corporation in the ordinary course of business. Enforcement of writs of execution
issued by judicial or quasi-judicial tribunals, since such writs emanate from actions for claims, must,
likewise, be suspended. (MALAYAN INSURANCE COMPANY, INC. v. VICTORIAS MILLING
COMPANY, INC., G.R. No. 167768, April 17, 2009)
Damages
Petitioners reliance on Viernes v. National Labor Relations Commission to support its claim for the
reduction of the award of nominal damages is misplaced. The factual circumstances are different. Viernes is
an illegal dismissal case, since there was no authorized cause for the dismissal of the employees; and the
employer was ordered to pay backwages inclusive of allowances and other benefits, computed from the time
the compensation was withheld up to the actual reinstatement. In addition, since the dismissal was done
without due process, the nominal damages awarded was only P2,590.00 equivalent to one-month salary of
the employee. In this case, the dismissal was valid, as it was due to an authorized cause, but without the
observance of procedural due process, and the only award given was nominal damages. (CELEBES JAPAN
FOODS CORPORATION V. SUSAN YERMO G.R. No. 175855 October 2, 2009)
In previous cases where moral damages and attorneys fees were awarded, the manner of termination was
done in a humiliating and insulting manner, such as in the case of Balayan Colleges v. National Labor
Relations Commission where the employer posted copies of its letters of termination to the teachers inside
the school campus and it also furnished copies to the town mayor and Parish Priest of their community for
the purpose of maligning the teachers reputation. So also in the case of Chiang Kai Shek School v. Court of
Appeals, this Court awarded moral damages to a teacher who was flatly, and without warning or a formal
notice, told that she was dismissed. (M+W ZANDER PHILIPPINES, INC. and ROLF WILTSCHEK v.
TRINIDAD M. ENRIQUEZ, G.R. No. 169173, June 5, 2009)
Disability Benefits
Under paragraph 20.1.5 of the parties CBA, it is stipulated that [a] seafarer whose disability is assessed at
50% or more under the POEA Employment Contract shall x x x be regarded as permanently unfit for further
sea service in any capacity and entitled to 100% compensation, i.e., x x x US$60,000.00 for ratings.

Petitioners disability rating being 68.66%, he is entitled to a 100% disability compensation of US$60,000,
as correctly found by the Labor Arbiter and the NLRC. So Philimare, Inc./Marlow Navigation Co., Ltd. v.
Suganob, enlightens, thus:
Apropos the appropriate disability benefits that respondent is entitled to, we find that Suganob is entitled to
Grade 1 disability benefits which corresponds to total and permanent disability. . .
x x x To be entitled to Grade 1 disability benefits, the employees disability must not only be total but also
permanent.
Permanent disability is the inability of a worker to perform his job for more than 120 days, regardless of
whether or not he loses the use of any of his body. Clearly, Suganobs disability is permanent since he was
unable to work from the time he was medically repatriated on September 17, 2001 up to the time the
complaint was filed on April 25, 2002, or more than 7 months. Moreover, if in fact Suganob is clear and fit
to work on October 29, 2001, he would have been taken back by petitioners to continue his work as a Chief
Cook, but he was not. His disability is undoubtedly permanent.
Total disability, on the other hand, does not mean absolute helplessness. In disability compensation, it is not
the injury which is compensated, but rather the incapacity to work resulting in the impairment of ones
earning capacity. Total disability does not require that the employee be absolutely disabled, or totally
paralyzed. What is necessary is that the injury must be such that the employee cannot pursue his usual work
and earn therefrom. Both the company-designated physician and Suganobs physician found that Suganob is
unfit to continue his duties as a Chief Cook since his illness prevented him from continuing his duties as
such. Due to his illness, he can no longer perform work which is part of his daily routine as Chief Cook like
lifting heavy loads of frozen meat, fish, water, etc. when preparing meals for the crew members. Hence,
Suganobs disability is also total. (Emphasis supplied) (JOELSON O. ILORETA v. PHILIPPINE
TRANSMARINE CARRIERS, INC., G.R. NO. 183908, December 4, 2009)
As with all other kinds of worker, the terms and conditions of a seafarers employment is governed by the
provisions of the contract he signs at the time he is hired. But unlike that of others, deemed written in the
seafarers contract is a set of standard provisions set and implemented by the POEA, called the Standard
Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels,
which are considered to be the minimum requirements acceptable to the government for the employment of
Filipino seafarers on board foreign ocean-going vessels. Thus, the issue of whether petitioner Nisda can
legally demand and claim disability benefits from respondents Sea Serve and ADAMS for an illness suffered
is best addressed by the provisions of his POEA-SEC, which incorporated the Standard Terms and
Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels. When
petitioner Nisda was employed on 7 August 2001, it was the 2000 Amended Standard Terms and Conditions
Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels (hereinafter referred to
simply as Amended Standard Terms and Conditions for brevity) that applied and were deemed written in or
appended to his POEA-SEC. (CARLOS N. NISDA v. SEA SERVE MARITIME AGENCY and KHALIFA
A. ALGOSAIBI DIVING AND MARINE SERVICES, G. R. No. 179177, July 23, 2009)
Given a seafarers entitlement to permanent disability benefits when he is unable to work for more than 120
days, the failure of the company-designated physician to pronounce petitioner fit to work within the 120-day
period entitles him to permanent total disability benefit in the amount of US$60,000.00. (LEOPOLDO
ABANTE v. KJGS FLEET MANAGEMENT MANILA G.R. No. 182430, December 4, 2009)
Dismissal
In the present case, we significantly note that petitioner, after filing her explanation in response to the
employers July 1, 1997 memo, never asked for any clarificatory hearing during the plant-level proceedings.
She also had ample opportunity to explain her side vis--vis the principal charge against her her
involvement in the incident of June 30, 1997 . It is a matter of record that the petitioner lost no time in

10

submitting the required explanation, as she submitted it on the very same day that the memo was served on
her. The explanation, in Filipino, narrated among others the indifferent and discriminatory treatment she had
been receiving from the group of Nilo Echavez, which she also told her husband who got mad. Taken
together with the testimonies of other witnesses who gave their statements on how the petitioner encouraged
her husband to attack Echavez (all of which were duly and seasonably disclosed), the petitioner cannot claim
that the respondent company did not give her ample opportunity to be heard. All told, we are convinced that
the respondent company acted based on a valid cause for dismissal and observed the required procedures in
so acting. (ROSARIO A. GATUS v. QUALITY HOUSE, INC. and CHRISTOPHER CHUA, G.R. No.
156766, April 16, 2009)
Constructive Dismissal
Case law holds that constructive dismissal occurs when there is cessation of work because continued
employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or
diminution in pay or both; or when a clear discrimination, insensibility, or disdain by an employer becomes
unbearable to the employee. Respondents sudden, arbitrary and unfounded adoption of the two-day work
scheme which greatly reduced petitioners salaries renders it liable for constructive dismissal. (FE LA ROSA
et. al., v. AMBASSADOR HOTEL,G.R. No. 177059, March 13, 2009)
What thus surfaces is that petitioner was constructively dismissed. No actual dismissal might have occurred
in the sense that petitioner was not served with a notice of termination, but there was constructive dismissal,
petitioner having been placed in a position where continued employment was rendered impossible and
unreasonable by the circumstances indicated above. (ODILON L. MARTINEZ v. B&B FISH
BROKER/NORBERTO M. LUCINARIO, G.R. No. 179985, September 18, 2009)
Time and again we have ruled that in constructive dismissal cases, the employer has the burden of proving
that the transfer of an employee is for just and valid grounds, such as genuine business necessity. The
employer must demonstrate that the transfer is not unreasonable, inconvenient, or prejudicial to the
employee and that the transfer does not involve a demotion in rank or a diminution of salary and other
benefits. If the employer fails to overcome this burden of proof, the employees transfer is tantamount to
unlawful constructive dismissal. (MERCK SHARP AND DOHME (PHILIPPINES) v. JONAR P. ROBLES,
et al., G.R. No. 176506, November 25, 2009)
These discriminatory acts were calculated to make petitioner feel that he is no longer welcome nor needed in
respondent company short of sending him an actual notice of termination. We, therefore, hold that
respondent constructively dismissed petitioner from the service. (RAMON B. FORMANTES v. DUNCAN
PHARMACEUTICALS, PHILS., INC., G.R. No. 170661, December 4, 2009)
In the present case, the petitioners ceased verbally communicating with the respondent and giving him work
assignment after suspecting that he had forged purchase receipts. Under this situation, the respondent was
forced to leave the petitioners compound with his family and to transfer to a nearby place. Thus, the
respondents act of leaving the petitioners premises was in reality not his choice but a situation the
petitioners created. (CRC AGRICULTURAL TRADING and ROLANDO B. CATINDIG v. NATIONAL
LABOR RELATIONS COMMISSION, G.R. No. 177664, December 23, 2009)
Dismissal of Managerial Employees
In view of the lack of proper investigation into the charges against respondent, petitioners failed to show that
they have a just cause for terminating his employment. Respondents alleged infractions amount to nothing
more than bare accusations and unilateral conclusions that do not provide legal justification for his
termination from employment. Although petitioners have wider latitude of discretion in terminating
respondent, who was a managerial employee, it is nonetheless settled that confidential and managerial
employees cannot be arbitrarily dismissed at any time, and without cause as reasonably established in an

11

appropriate investigation. Such employees, too, are entitled to security of tenure, fair standards of
employment and the protection of labor laws. Managerial employees, no less than rank-and-file laborers are
entitled to due process. (CASA CEBUANA INCORPORADA and ANGELA FIGUEROA PAULIN v.
IRENEO P. LEUTERIO, G.R. No. 176040, September 4, 2009)
Dismissal due to Union Security Clauses
Nonetheless, while We uphold dismissal pursuant to a union security clause, the same is not without a
condition or restriction. For to allow its untrammeled enforcement would encourage arbitrary dismissal and
abuse by the employer, to the detriment of the employees. Thus, to safeguard the rights of the employees,
We have said time and again that dismissals pursuant to union security clauses are valid and legal, subject
only to the requirement of due process, that is, notice and hearing prior to dismissal. In like manner, We
emphasized that the enforcement of union security clauses is authorized by law, provided such enforcement
is not characterized by arbitrariness, and always with due process. (Herminigildo Inguillo and Zenaida
Bergante v. First Philippine Scales, Inc. and/or Amparo Policarpio, Manager, G.R. No. 165407, June 5,
2009)
Dismissal of Union Officer
Note that the verb participates is preceded by the adverb knowingly. This reflects the intent of the
legislature to require knowledge as a condition sine qua non before a union officer can be dismissed from
employment for participating in an illegal strike. The provision is worded in such a way as to make it very
difficult for employers to circumvent the law by arbitrarily dismissing employees in the guise of exercising
management prerogative. This is but one aspect of the States constitutional and statutory mandate to protect
the rights of employees to self-organization. (CLUB FILIPINO, INC. and ATTY. ROBERTO F. DE LEON v.
benjamin bautista, et. al., G.R. No. 168406, July 13, 2009)
Illegal Dismissal
With the finding that Interserve was engaged in prohibited labor-only contracting, petitioner shall be deemed
the true employer of respondents. As regular employees of petitioner, respondents cannot be dismissed
except for just or authorized causes, none of which were alleged or proven to exist in this case, the only
defense of petitioner against the charge of illegal dismissal being that respondents were not its employees.
Records also failed to show that petitioner afforded respondents the twin requirements of procedural due
process, i.e., notice and hearing, prior to their dismissal. Respondents were not served notices informing
them of the particular acts for which their dismissal was sought. Nor were they required to give their side
regarding the charges made against them. Certainly, the respondents dismissal was not carried out in
accordance with law and, therefore, illegal. (COCA-COLA BOTTLERS PHILS., INC v. ALAN M. AGITO,
et al., G.R. No. 179546, February 13, 2009)
As the employer, petitioner has the burden of proving that the dismissal of petitioner was for a cause allowed
under the law and that petitioner was afforded procedural due process. Petitioner failed to discharge this
burden. Indeed, it failed to show any valid or authorized cause under the Labor Code which allowed it to
terminate the services of individual respondents. Neither did petitioner show that individual respondents
were given ample opportunity to contest the legality of their dismissal. No notice of such impending
termination was ever given to them. Individual respondents were definitely denied due process. Having
failed to establish compliance with the requirements on termination of employment under the Labor Code,
the dismissal of individual respondents was tainted with illegality. (ILIGAN CEMENT CORPORATION v.
ILIASCOR EMPLOYEES AND WORKERS UNION SOUTHERN PHILIPPINES FEDERATION OF
LABOR (IEWU-SPFL), AND ITS OFFICERS AND MEMBERS, et. al, G.R. No. 158956, April 24, 2009)
In this case, we find no overt act on the part of petitioner that he was ready to sever his employment ties.
The alleged resignation was actually premised by respondents only on the filing of the complaint for

12

separation pay, but this alone is not sufficient proof that petitioner intended to resign from the company.
What strongly negates the claim of resignation is the fact that petitioner filed the amended complaint for
illegal dismissal immediately after he was not allowed to report for work on June 3, 2000. Resignation is
inconsistent with the filing of the complaint for illegal dismissal. It would have been illogical for petitioner
to resign and then file a complaint for illegal dismissal later on. If petitioner was determined to resign, as
respondents posited, he would not have commenced the action for illegal dismissal. Undeniably, petitioner
was unceremoniously dismissed in this case. (BALTAZAR L. PAYNO v. ORIZON TRADING CORP. /
ORATA TRADING and FLORDELIZA LEGASPI, G.R. No. 175345, August 19, 2009)
Therefore, this Court finds no reason to disturb its finding that the retrenchment of the flight attendants was
illegally executed. As held in the Decision sought to be reconsidered, PAL failed to observe the procedure
and requirements for a valid retrenchment. Assuming that PAL was indeed suffering financial losses, the
requisite proof therefor was not presented before the NLRC which was the proper forum. More importantly,
the manner of the retrenchment was not in accordance with the procedure required by law. Hence, the
retrenchment of the flight attendants amounted to illegal dismissal. Consequently, the flight attendants
affected are entitled to the reliefs provided by law, which include backwages and reinstatement or separation
pay, as the case may be. (FLIGHT ATTENDANTS AND STEWARDS ASSOCIATION OF THE
PHILIPPINES (FASAP), v. PHILIPPINE AIRLINES, INC.,PATRIA CHIONG and COURT OF
APPEALS,G.R. No. 178083, October 2, 2009)
Clearly, Bolanoss case is one of illegal dismissal. First, there is no just or authorized cause for petitioners to
terminate her employment. Her alleged act of dishonesty of passing out food for free was not proven.
Neither was there incompetence on her part when some food items were not punched in the cash register as
she was not the cashier manning it when the food items were ordered. In fact, the other cashier even owned
up to said mistake. Second, Bolanos was not afforded due process by petitioners before she was dismissed.
A day after the incident, she was verbally dismissed from her employment without being given the chance to
be heard and defend herself. (HENLIN PANAY COMPANY v. NATIONAL LABOR RELATIONS
COMMISSION , G.R. No. 180718, October 23, 2009)
In fine, as petitioners failed to indubitably prove that respondents were guilty of drug use in contravention of
its drug-free workplace policy amounting to serious misconduct, respondents are deemed to have been
illegally dismissed. (PLANTATION BAY RESORT and SPA v. ROMEL S. DUBRICO, et al., G.R. No.
182216, December 4, 2009)
Docket Fees
Anent petitioners claim regarding respondents failure to pay the full amount of docket fees at the time of
the filing of the petition with the CA, we find that it is estopped from questioning the jurisdiction of the CA
on this ground, because such issue had never been raised in any of the pleadings filed before the CA.
Notably, the CA issued a minute resolution dated June 7, 1999 requiring respondent to remit the amount of
P510.00 to complete the docket and other fees. Respondent complied, but due to inadvertence, the amount
remitted lacked the amount of P10.00, thus, the CA in a Resolution dated November 22, 1999, considered
the appeal abandoned pursuant to Section 1(c), Rule 50 of the 1997 Rules of Court. Upon respondents
motion for reconsideration, the appeal was reinstated on February 22, 2000. Petitioner was copy-furnished
all the resolutions issued by the CA, but petitioner never raised the issue of incomplete payment of docket
fees. In fact, such issue was only raised for the first time in its Reply filed with us. (EMCOR
INCORPORATED v. MA. LOURDES D. SIENES, G.R. No. 152101, September 8, 2009)
Doctrine of Strained Relationship
To protect the employees security of tenure, the Court has emphasized that the doctrine of strained
relations should be strictly applied so as not to deprive an illegally dismissed employee of his right to
reinstatement. Every labor dispute almost always results in strained relations, and the phrase cannot be

13

given an overarching interpretation; otherwise, an unjustly dismissed employee can never be reinstated. The
assumption of strained relations was already debunked by the fact that as early as March 2006 petitioner
returned to work for respondent CCBP, without any antagonism having been reported thus far by any of the
parties. Neither can we sustain the NLRCs conclusion that petitioners position is confidential in nature.
Receipt of proceeds from sales of respondent CCBPs products does not make petitioner a confidential
employee. A confidential employee is one who (1) assists or acts in a confidential capacity, in regard to (2)
persons who formulate, determine, and effectuate management policies specifically in the field of labor
relations. Verily, petitioners job as a salesman does not fall under this qualification. (ERWIN H. REYES v.
NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 180551, February 10, 2009)
In the present case, reinstatement is no longer feasible because of the strained relations between the
petitioners and the respondent. Time and again, this Court has recognized that strained relations between the
employer and employee is an exception to the rule requiring actual reinstatement for illegally dismissed
employees for the practical reason that the already existing antagonism will only fester and deteriorate, and
will only worsen with possible adverse effects on the parties, if we shall compel reinstatement; thus, the use
of a viable substitute that protects the interests of both parties while ensuring that the law is respected. (CRC
AGRICULTURAL TRADING and ROLANDO B. CATINDIG v. NATIONAL LABOR RELATIONS
COMMISSION, G.R. No. 177664, December 23, 2009)
In conclusion, it bears to stress that it is human nature that some hostility will inevitably arise between
parties as a result of litigation, but the same does not always constitute strained relations in the absence of
proof or explanation that such indeed exists. (REYNALDO G. CABIGTING v. SAN MIGUEL FOODS,
INC, G.R. No. 167706, November 5, 2009)
Downsizing Scheme
This, in turn, gives rise to another question: Does the implementation of the downsizing scheme preclude
petitioner from availing the services of contractual and agency-hired employees?
In Asian Alcohol Corporation v. National Labor Relations Commission, we answered in the negative. We
said:
In any event, we have held that an employers good faith in implementing a redundancy program is not
necessarily destroyed by availment of the services of an independent contractor to replace the services of the
terminated employees. We have previously ruled that the reduction of the number of workers in a company
made necessary by the introduction of the services of an independent contractor is justified when the latter is
undertaken in order to effectuate more economic and efficient methods of production. In the case at bar,
private respondent failed to proffer any proof that the management acted in a malicious or arbitrary manner
in engaging the services of an independent contractor to operate the Laura wells. Absent such proof, the
Court has no basis to interfere with the bona fide decision of management to effect more economic and
efficient methods of production.
With petitioners downsizing scheme being valid, and the availment of contractual and agency-hired
employees legal, the strike staged by officers and members of respondent Union is, perforce, illegal.
(HOTEL ENTERPRISES OF THE PHILIPPINES, INC. (HEPI), owner of Hyatt Regency Manila, v.
SAMAHAN NG MGA MANGGAGAWA SA HYATT-NATIONAL UNION OF WORKERS IN THE
HOTEL AND RESTAURANT AND ALLIED INDUSTRIES (SAMASAH-NUWHRAIN), G.R. No.
165756, June 5, 2009)
Due Process
It is well settled that the basic requirement of notice and hearing in termination cases is for the employer to
inform the employee of the specific charges against him and to hear his side and defenses. This does not,

14

however, mean a full adversarial proceeding. The parties may be heard through pleadings, written
explanations, position papers, memorandum or oral argument. In all of these instances, the employer plays
an active role by providing the employee with the opportunity to present his side and answer the charges in
substantial compliance with due process.( ROMEO N. VENTURA, vs. COURT OF APPEALS, NATIONAL
LABOR RELATIONS COMMISSION, GENUINO ICE CO., INC., and HECTOR GENUINO, G.R. No.
182570, January 27, 2009)
In the dismissal of employees, it has been consistently held that the twin requirements of notice and hearing
are essential elements of due process. Article 277 (b) of the Labor Code and Section 2, Rule XXIII, Book V
of the Rules Implementing the Labor Code require the employer to furnish the employee with two written
notices, to wit: (1) a written notice served on the employee specifying the ground or grounds for termination,
and giving to said employee reasonable opportunity within which to explain his side; and (2) a written notice
of termination served on the employee indicating that upon due consideration of all the circumstances,
grounds have been established to justify his termination. The first notice which may be considered as the
proper charge, serves to apprise the employee of the particular acts or omissions for which his dismissal is
sought. The second notice on the other hand seeks to inform the employee of the employers decision to
dismiss him. With regard to the requirement of a hearing, it should be stressed that the essence of due
process lies simply in an opportunity to be heard, and not that an actual hearing should always and
indispensably be held. (PHILIPPINE PASAY CHUNG HUA ACADEMY and EMILIO CHING v.
SERVANDO L. EDPAN, G.R. No. 168876, SERVANDO L. EDPAN v. PHILIPPINE PASAY CHUNG HUA
ACADEMY and EMILIO CHING)
Nonetheless, Section 2(d), Rule I of the Implementing Rules of Book VI of the Labor Code should not be
taken to mean that holding an actual hearing or conference is a condition sine qua non for compliance with
the due process requirement in termination of employment. The test for the fair procedure guaranteed under
Article 277(b) cannot be whether there has been a formal pretermination confrontation between the
employer and the employee. The ample opportunity to be heard standard is neither synonymous nor
similar to a formal hearing. To confine the employees right to be heard to a solitary form narrows down that
right. It deprives him of other equally effective forms of adducing evidence in his defense. Certainly, such an
exclusivist and absolutist interpretation is overly restrictive. The very nature of due process negates any
concept of inflexible procedures universally applicable to every imaginable situation. (FELIX B. PEREZ
and AMANTE G. DORIA vs. PHILIPPINE TELEGRAPH AND TELEPHONE COMPANY and JOSE
LUIS SANTIAGO, G.R. No. 152048, April 7, 2009)
Also, to effectively dismiss an employee for abandonment, the employer must comply with the due process
requirement of sending notices to the employee. In Brahm Industries, Inc. v. NLRC, we ruled that this
requirement is not a mere formality that may be dispensed with at will. Its disregard is a matter of serious
concern since it constitutes a safeguard of the highest order in response to mans innate sense of justice.
Petitioner was not able to send the necessary notice requirement to Eleonor. Petitioners belated claim that it
was not able to send the notice of infraction prior to the filing of the illegal dismissal case cannot simply
unacceptable. Based on the foregoing, Eleonor did not abandon her work. (SOUTH DAVAO
DEVELOPMENT COMPANY, INC. (NOW SODACO AGRICULTURAL CORPORATION) AND/OR
MALONE PACQUIAO AND VICTOR A. CONSUNJI, v. SERGIO L. GAMO, et. al., G.R. No. 171814,
May 8, 2009)
The case of Agabon v. NLRC, et al. applies to the case at bar. In Agabon, the dismissal was found by the
Court to be based on a just cause because the employee abandoned his work. But it also found that the
employer did not follow the notice requirement demanded by due process. It ruled that this violation of due
process on the part of the employer did not nullify the dismissal, or render it illegal, or ineffectual.
Nonetheless, the employer was ordered to indemnify the employee for the violation of his right to due
process. It further held that the penalty should be in the nature of indemnification, in the form of nominal
damages and should depend on the facts of each case, taking into special consideration the gravity of the due
process violation of the employer. The amount of such damages is addressed to the sound discretion of the

15

court, considering the relevant circumstances. Thus, in Agabon, the Court ordered the employer to pay the
employee nominal damages in the amount of P30,000.00. (MANTLE TRADING SERVICES,
INCORPORATED AND/OR BOBBY DEL ROSARIO v. NATIONAL LABOR RELATIONS
COMMISSION and PABLO S. MADRIAGA,G.R. No. 166705,July 28,2009)
Had Metros cause for terminating Aman rested on a just or authorized cause yet failed to observe
procedural requirements, then Metro will only be liable for nominal damages worth P30,000. However, such
is not the case here. We hold that Amans dismissal not only failed to observe procedural requirements, it
also lacked an authorized cause. Article 279 of the Labor Code mandates that the employee who is illegally
dismissed and not given due process is entitled to reinstatement without loss of seniority rights and other
privileges and full backwages, inclusive of allowances, and other benefits or their monetary equivalent
computed from the time the compensation was not paid up to the time of actual reinstatement. (METRO
CONSTRUCTION, INC. V. ROGELIO AMAN, G.R. No. 168324, October 12, 2009)
In the present case, Jose, Jr. was not given any written notice about his dismissal. However, the propriety of
Jose, Jr.s dismissal is not affected by the lack of written notices. When the dismissal is for just cause, the
lack of due process does not render the dismissal ineffectual but merely gives rise to the payment of P30,000
in nominal damages. (BERNARDO B. JOSE, JR. v. MICHAELMAR PHILS., INC., G.R. No. 169606,
November 27, 2009)
In cases of abandonment of work, the ground alleged by respondents, notice shall be served at the workers
last known address. Here, no such notice was served to petitioner. Hence, for breach of the due process
requirements, respondents shall also be liable in the amount of P30,000 as indemnity in the form of nominal
damages. (CONCEPCION FAELDONIA v. TONG YAK GROCERIES,JAYME GO and MERLITA
GO,G.R. No. 182499, October 2, 2009)
The petitioners clearly failed to comply with the two-notice requirement. Nothing in the records shows that
the petitioners ever sent the respondent a written notice informing him of the ground for which his dismissal
was sought. It does not also appear that the petitioners held a hearing where the respondent was given the
opportunity to answer the charges of abandonment. Neither did the petitioners send a written notice to the
respondent informing the latter that his service had been terminated and the reasons for the termination of
employment. Under these facts, the respondents dismissal was illegal. (CRC AGRICULTURAL TRADING
and ROLANDO B. CATINDIG v. NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 177664,
December 23, 2009)
Employer-Employee Relationship
In order to determine the existence of an employer-employee relationship, the Court has frequently applied
the four-fold test: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the
power of dismissal; and (4) the power to control the employees conduct, or the so called control test,
which is considered the most important element. From the time they were hired by petitioner corporation up
to the time that they were reassigned to work under Gamos supervision, their status as petitioner
corporations employees did not cease. Likewise, payment of their wages was merely coursed through
Gamo. As to the most determinative testthe power of control, it is sufficient that the power to control the
manner of doing the work exists, it does not require the actual exercise of such power. In this case, it was in
the exercise of its power of control when petitioner corporation transferred the copra workers from their
previous assignments to work as copraceros. It was also in the exercise of the same power that petitioner
corporation put Gamo in charge of the copra workers although under a different payment scheme. Thus, it is
clear that an employer-employee relationship has existed between petitioner corporation and respondents
since the beginning and such relationship did not cease despite their reassignments and the change of
payment scheme. (SOUTH DAVAO DEVELOPMENT COMPANY, INC. (NOW SODACO
AGRICULTURAL CORPORATION) AND/OR MALONE PACQUIAO AND VICTOR A. CONSUNJI, v.
SERGIO L. GAMO, et. al., G.R. No. 171814, May 8, 2009)

16

What is more, respondent PDMC enrolled petitioner Gomez with the Social Security System, the Medicare,
and the Pag-Ibig Fund. It even issued certifications dated October 10, 2008, stating that Gomez was a
permanent employee and that the company had remitted combined contributions during her tenure. The
company also made her a member of the PDMCs savings and provident plan and its retirement plan. It
grouped her with the managers covered by the companys group hospitalization insurance. Likewise, she
underwent regular employee performance appraisals, purchased stocks through the employee stock option
plan, and was entitled to vacation and emergency leaves. PDMC even withheld taxes on her salary and
declared her as an employee in the official Bureau of Internal Revenue forms. These are all indicia of an
employer-employee relationship which respondent PDMC failed to refute. (GLORIA V. GOMEZ v. PNOC
DEVELOPMENT AND MANAGEMENT CORPORATION, G.R. No. 174044, November 27, 2009)
Control Test
In the case at bench, both the Labor Arbiter and the NLRC were one in their conclusion that respondents
were not independent contractors, but employees of petitioner. In determining the existence of an employeremployee relationship between the parties, both the Labor Arbiter and the NLRC examined and weighed the
circumstances against the four-fold test which has the following elements: (1) the power to hire, (2) the
payment of wages, (3) the power to dismiss, and (4) the power to control the employees conduct, or the socalled control test. Of the four, the power of control is the most important element. More importantly, the
control test merely calls for the existence of the right to control, and not necessarily the exercise thereof.
(DEALCO FARMS, INC., vs. NATIONAL LABOR RELATIONS COMMISSION (5th DIVISION), G.R.
No. 153192 January 30, 2009)
In this regard, it has not escaped the notice of the Court that the operations of the hotel itself do not cease
with the end of each event or function and that there is an ever present need for individuals to perform
certain tasks necessary in the petitioners business. Thus, although the tasks themselves may vary, the need
for sufficient manpower to carry them out does not. In any event, as borne out by the findings of the NLRC,
the petitioner determines the nature of the tasks to be performed by the private respondent, in the process
exercising control. (MARANAW HOTELS AND RESORT CORP vs COURT OF APPEALS, SHERYL
OABEL AND MANILA RESOURCE DEVELOPMENT CORP., G.R. No. 149660, January 20, 2009)
Contrary to petitioners contention, the various office directives issued by Shangri-las officers do not imply
that it is Shangri-las management and not respondent doctor who exercises control over them or that
Shangri-la has control over how the doctor and the nurses perform their work. The letter addressed to
respondent doctor dated February 7, 2003 from a certain Tata L. Reyes giving instructions regarding the
replenishment of emergency kits is, at most, administrative in nature, related as it is to safety matters; while
the letter dated May 17, 2004 from Shangri-las Assistant Financial Controller, Lotlot Dagat, forbidding the
clinic from receiving cash payments from the resorts guests is a matter of financial policy in order to ensure
proper sharing of the proceeds, considering that Shangri-la and respondent doctor share in the guests
payments for medical services rendered. In fine, as Shangri-la does not control how the work should be
performed by petitioners, it is not petitioners employer. (JEROMIE D. ESCASINAS and EVAN RIGOR
SINGCO v. SHANGRI-LAS MACTAN ISLAND RESORT and DR. JESSICA J.R. PEPITO, G.R. No.
178827, March 4, 2009)
To reiterate, while respondent and SSCP no longer had any legal relationship with the termination of the
Agreement, petitioners remained at their post securing the premises of respondent while receiving their
salaries, allegedly from SSCP. Clearly, such a situation makes no sense, and the denials proffered by
respondent do not shed any light to the situation. It is but reasonable to conclude that, with the behest and,
presumably, directive of respondent, petitioners continued with their services. Evidently, such are indicia of
control that respondent exercised over petitioners. (RAUL G. LOCSIN and EDDIE B. TOMAQUIN v.
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, G.R. No. 185251, October 2, 2009)
Equity

17

While the Court commiserates with the plight of Tirazona, who has recently manifested that she has since
been suffering from her poor health condition, the Court cannot grant her plea for the award of financial
benefits based solely on this unfortunate circumstance. For all its conceded merit, equity is available only in
the absence of law and not as its replacement. Equity as an exceptional extenuating circumstance does not
favor, nor may it be used to reward, the indolent or the wrongdoer, for that matter. This Court will not allow
a party, in the guise of equity, to benefit from its own fault. (MA. WENELITA S. TIRAZONA, vs.
PHILIPPINE EDS TECHNO- SERVICE INC. (PET INC.) AND/OR KEN KUBOTA, MAMORU ONO and
JUNICHI HIROSE, G.R. No. 169712, January 20, 2009)
Estoppel
Estoppel, an equitable principle rooted on natural justice, prevents a person from rejecting his previous acts
and representations to the prejudice of others who have relied on them. This principle of law applies to
corporations as well. The PDMC in this case is estopped from claiming that despite all the appearances of
regular employment that it weaved around petitioner Gomezs position it must have technically hired her
only as a corporate officer. The board and its officers made her stay on and work with the company for years
under the belief that she held a regular managerial position. (GLORIA V. GOMEZ v. PNOC
DEVELOPMENT AND MANAGEMENT CORPORATION, G.R. No. 174044, November 27, 2009)
Evidence
It may be true that the NBI agents affidavit did not directly implicate petitioners in the scheme. However,
their co-employees Gimena, Welsh and Derupe, who had personal knowledge of petitioners activities,
narrated in their affidavits the nature, dates and time of their (petitioners) participation. Petitioners did not
refute these sworn statements. Neither did they explain why their former colleagues would unjustly and
falsely testify against them even if they had the opportunity to defend themselves during the administrative
investigations conducted by respondent. These pieces of evidence, when taken together, constituted
substantial evidence to prove petitioners culpability. It is of no moment that they were acquitted in the
criminal case. Petitioners infractions were willful and serious, thus their dismissal was proper under the
circumstances. (RENITA DEL ROSARIO, et al., v. MAKATI CINEMA SQUARE CORPORATION, G.R.
No. 170014, July 3, 2009)
It is common practice for companies to provide identification cards to individuals not only as a security
measure, but more importantly to identify the bearers thereof as bona fide employees of the firm or
institution that issued them. The provision of company-issued identification cards and uniforms to
respondents, aside from their inclusion in MCIs summary payroll, indubitably constitutes substantial
evidence sufficient to support only one conclusion: that respondents were indeed employees of MCI.
(MASONIC CONTRACTOR, INC. v. MAGDALENA MADJOS , et al., G.R. No. 185094, November 25,
2009)
Proof of Mailing
In this case and in like manner, while a postmasters certification is usually sufficient proof of mailing, its
evidentiary value must be differentiated from the situation presently before us where the postmasters
certification is intended to prove that the post office had committed a mistake in placing the date of receipt
on the registry return card. In other words, the Postmasters certification is offered to overcome the
presumption that the Malate Post Office regularly performed its official duties when the registry return card
was filled up by the recipient of the labor arbiters decision with November 21, 1999 as the date of receipt.
We find it significant that both the petitioner and the postmasters certification failed to show that the Malate
Post Office committed an inadvertence in handling the registry return card so that a corrective certification
from the Postmaster was necessary. In the absence of such justification for the certification, we are
compelled to deny it of any evidentiary value for the purpose it was submitted. (EUREKA PERSONNEL &
MANAGEMENT SERVICES, INC. v. EDUARDO VALENCIA, G.R. No. 159358, July 15, 2009)

18

Execution
We would like to stress the settled rule that the power of the court in executing judgments extends only to
properties unquestionably belonging to the judgment debtor alone. To be sure, one mans goods shall not be
sold for another mans debts. A sheriff is not authorized to attach or levy on property not belonging to the
judgment debtor, and even incurs liability if he wrongfully levies upon the property of a third person.
(PANTRANCO EMPLOYEES ASSOCIATION (PEA-PTGWO) and PANTRANCO RETRENCHED
EMPLOYEES ASSOCIATION (PANREA) v. NATIONAL LABOR RELATIONS COMMISSION (NLRC),
G.R. No. 170689, G.R. No. 170705)
Finality of Factual Findings
The well-entrenched rule is that factual findings of administrative or quasi-judicial bodies, which are
deemed to have acquired expertise in matters within their respective jurisdictions, are generally accorded not
only respect but even finality, and bind the Court when supported by substantial evidence. Section 5, Rule
133 defines substantial evidence as that amount of relevant evidence which a reasonable mind might accept
as adequate to justify a conclusion. (DEALCO FARMS, INC., vs. NATIONAL LABOR RELATIONS
COMMISSION (5th DIVISION), G.R. No. 153192 January 30, 2009)
Lastly, in its assailed decision, the CA affirmed the ruling of the NLRC and adopted as its own the latters
factual findings. Long-established is the doctrine that findings of fact of quasi-judicial bodies like the NLRC
are accorded respect, even finality, if supported by substantial evidence. When passed upon and upheld by
the CA, they are binding and conclusive upon the Supreme Court and will not normally be disturbed.
Though this doctrine is not without exceptions, the Court finds that none are applicable to the present case.
ROMEO N. VENTURA, vs. COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION,
GENUINO ICE CO., INC., and HECTOR GENUINO, G.R. No. 182570, January 27, 2009)
Exception
The appellate court predicated its reversal of the NLRC decision that petitioners were illegally dismissed on
petitioners supposed abandonment of their jobs, and justified the work rotation/reduction scheme adopted
by respondent as a valid exercise of management prerogative in light of respondents business losses. (FE
LA ROSA et. al., v. AMBASSADOR HOTEL,G.R. No. 177059, March 13, 2009)
The issue of the reasonableness of attorneys fees is a question of fact. Well-settled is the rule that
conclusions and findings of fact of the CA are entitled to great weight on appeal and will not be disturbed
except for strong and cogent reasons which are absent in the case at bench. The findings of the CA, which
are supported by substantial evidence, are almost beyond the power of review by the Supreme Court.
(EVANGELINA MASMUD (as substitute complainant for ALEXANDER J. MASMUD) v. NATIONAL
LABOR RELATIONS COMMISSION, G.R. No. 183385, February 13, 2009)
Petitioners argument that the CA erred and abused its discretion in reversing the findings of the Labor
Arbiter and the NLRC, as it is the courts policy of non-interference in the exercise of the adjudicatory
functions of the administrative bodies, is devoid of merit. We agree with petitioner that factual findings of
quasi-judicial and administrative bodies are accorded great respect and even finality by the courts. However,
this rule is not absolute. When there is a showing that the factual findings of administrative bodies were
arrived at arbitrarily or in disregard of the evidence on record, they may be examined by the courts. The CA
can grant the petition for certiorari if it finds that the NLRC, in its assailed decision or resolution, made a
factual finding not supported by substantial evidence. It is within the jurisdiction of the CA, whose
jurisdiction over labor cases has been expanded to review the findings of the NLRC. In R & E Transport,
Inc. v. Latag, we held:

19

The power of the CA to review NLRC decisions via a Rule 65 petition is now a settled issue. As early as St.
Martin Funeral Homes v. NLRC, we have definitively ruled that the proper remedy to ask for the review of a
decision of the NLRC is a special civil action for certiorari under Rule 65 of the Rules of Court, and that
such petition should be filed with the CA in strict observance of the doctrine on the hierarchy of courts.
Moreover, it has already been explained that under Section 9 of Batas Pambansa (BP) 129, as amended by
Republic Act 7902, the CA pursuant to the exercise of its original jurisdiction over petitions for certiorari
was specifically given the power to pass upon the evidence, if and when necessary, to resolve factual issues.
(EMCOR INCORPORATED v. MA. LOURDES D. SIENES, G.R. No. 152101, September 8, 2009)
Forum Shopping
On the part of Mr. Gumarang, knowing fully well that he was no longer the representative of the NCTEA,
why did he not inform both the Court of Appeals and the Supreme Court of such fact when he filed the
petitions? Instead, he claimed to be the duly authorized representative of the NCTEA which he was not. His
omission and misrepresentation are clear indications of bad faith of which this Court does not approve. He
should have known that by including NCTEA as petitioner and signing as its representative, he should have
had the authority to do so. This, he did not possess. When he alone signed on his behalf and that of the
NCTEA, not once but twice, he flagrantly violated the rule on the filing of a certificate of non-forum
shopping. (NORTHEASTERN COLLEGE TEACHERS AND EMPLOYEES ASSOCIATION vs.
NORTHEASTERN COLLEGE, INC., G.R. No. 152923, January 19, 2009)
Without the required authority from the NCTEA, Mr. Gumarang cannot represent the NCTEA. As explained
above, if there are several petitioners, the failure of one to sign the certificate of non-forum shopping is a
deficiency which is a ground for the dismissal of the petition. In the case before us, there being two
petitioners NCTEA and Mr. Gumarang both of them should sign the certificate against forum shopping.
Since there was only one signatory, the requirement on the filing of the certificate against forum shopping
has not been complied with. As in the Court of Appeals, Mr. Gumarang failed to show why the duly
authorized representative of the NCTEA was unable to sign the certification, and to convince this Court that
the outright dismissal of the petition would defeat the administration of justice. (NORTHEASTERN
COLLEGE TEACHERS AND EMPLOYEES ASSOCIATION vs. NORTHEASTERN COLLEGE, INC.,
G.R. No. 152923, January 19, 2009)
Fuentebella and Rolling Hills Memorial Park v. Castro, on the requirement of a certification against forum
shopping, explains:
The reason for this is that the principal party has actual knowledge whether a petition has previously been
filed involving the same case or substantially the same issues. If, for any reason, the principal party cannot
sign the petition, the one signing on his behalf must have been duly authorized.
. . . Where the petitioner is a corporation, the certification against forum shopping should be signed by its
duly authorized director or representative [I]f the real party-in-interest is a corporate body, an officer of
the corporation can sign the certification against forum shopping as long as he is authorized by a resolution
of its board of directors.
xxxx
A certification without the proper authorization is defective and constitutes a valid cause for the dismissal of
the petition. (Citations omitted; emphasis, italics and underscoring supplied)
Petitioners discourse on relaxation of technical rules of procedure in the interest of substantial justice does
not impress. While there have been instances when the Court dispensed with technicalities on the basis of
special circumstances or compelling reasons, there is no such circumstance or reason in the present case
which warrants the liberal application of technical rules. (EAGLE STAR SECURITY SERVICES, INC. v.
BONIFACIO L. MIRANDO, G.R. No. 179512, July 30, 2009)

20

Grave Abuse of Discretion

The Regional Director fully relied on the self-serving allegations of respondent and misinterpreted the
documents presented as evidence by respondent. To make matters worse, DOLE denied petitioners appeal
based solely on petitioners alleged failure to file a cash or surety bond, without any discussion on the merits
of the case. Since the petition for certiorari before the Court of Appeals sought the reversal of the two
aforesaid orders, the appellate court necessarily had to examine the evidence anew to determine whether the
conclusions of the DOLE were supported by the evidence presented. It appears, however, that the Court of
Appeals did not even review the assailed orders and focused instead on a general discussion of due process
and the jurisdiction of the Regional Director. Had the appellate court truly reviewed the records of the case,
it would have seen that there existed valid and sufficient grounds for finding grave abuse of discretion on the
part of the DOLE Secretary as well the Regional Director. In ruling and acting as it did, the Court finds that
the Court of Appeals may be properly subjected to its certiorari jurisdiction. After all, this Court has
previously ruled that the extraordinary writ of certiorari will lie if it is satisfactorily established that the
tribunal had acted capriciously and whimsically in total disregard of evidence material to or even decisive of
the controversy. (PEOPLES BROADCASTING(BOMBO RADYO PHILS., INC.) vs. THE SECRETARY
OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, THE REGIONAL DIRECTOR, DOLE
REGION VII, and JANDELEON JUEZAN, G.R. No. 179652, May 8, 2009)
Hearing
A hearing means that a party should be given a chance to adduce his evidence to support his side of the case
and that the evidence should be taken into account in the adjudication of the controversy. To be heard does
not mean verbal argumentation alone inasmuch as one may be heard just as effectively through written
explanations, submissions or pleadings. Therefore, while the phrase ample opportunity to be heard may in
fact include an actual hearing, it is not limited to a formal hearing only. In other words, the existence of an
actual, formal trial-type hearing, although preferred, is not absolutely necessary to satisfy the employees
right to be heard. (FELIX B. PEREZ and AMANTE G. DORIA vs. PHILIPPINE TELEGRAPH AND
TELEPHONE COMPANY and JOSE LUIS SANTIAGO, G.R. No. 152048, April 7, 2009)
Dialogue not Tantamount to Hearing
Policarpios allegations are self-serving. Except for her claim as stated in the respondents Position Paper,
nowhere from the records can We find that Bergante and Inguillo were accorded the opportunity to present
evidence in support of their defenses. Policarpio relied heavily on the Petisyon of FPSILU. She failed to
convince Us that during the dialogue, she was able to ascertain the validity of the charges mentioned in the
Petisyon. In her futile attempt to prove compliance with the procedural requirement, she reiterated that the
objective of the dialogue was to provide the employees the opportunity to receive the act of grace of FPSI
by giving them an amount equivalent to one-half () month of their salary for every year of service. We are
not convinced. We cannot even consider the demand and counter-offer for the payment of the employees as
an amicable settlement between the parties because what took place was merely a discussion only of the
amount which the employees are willing to accept and the amount which the respondents are willing to give.
Such non-compliance is also corroborated by Bergante and Inguillo in their pleadings denouncing their
unjustified dismissal. In fine, We hold that the dialogue is not tantamount to the hearing or conference
prescribed by law. (Herminigildo Inguillo and Zenaida Bergante v. First Philippine Scales, Inc. and/or
Amparo Policarpio, Manager, G.R. No. 165407, June 5, 2009
Inchoate Right
Again, the contention is bereft of merit. While PNB has an apparent interest in Mega Primes assets being
the creditor of the latter for a substantial amount, its interest remains inchoate and has not yet ripened into a
present substantial interest, which would give it the standing to maintain an action involving the subject
properties. As aptly observed by the Labor Arbiter, PNB only has an inchoate right to the properties of Mega

21

Prime in case the latter would not be able to pay its indebtedness. This is especially true in the instant case,
as the debt being claimed by PNB is secured by the accessory contract of pledge of the entire stockholdings
of Mega Prime to PNB-Madecor. (PANTRANCO EMPLOYEES ASSOCIATION (PEA-PTGWO) and
PANTRANCO RETRENCHED EMPLOYEES ASSOCIATION (PANREA) v. NATIONAL LABOR
RELATIONS COMMISSION (NLRC), G.R. No. 170689, G.R. No. 170705)
Independent Contractor
The existence of an independent and permissible contractor relationship is generally established by
considering the following determinants: whether 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
employers power with respect to the hiring, firing and payment of the contractors 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. (JEROMIE D. ESCASINAS and EVAN RIGOR SINGCO v. SHANGRI-LAS
In sum, there existed no employer-employee relationship between the parties. De Raedt is an independent
contractor, who was engaged by SGV to render services to SGVs client TMI, and ultimately to DA on the
CECAP project, regarding matters in the field of her special knowledge and training for a specific period of
time. Unlike an ordinary employee, De Raedt received retainer fees and benefits such as housing and
subsistence allowances and medical insurance. De Raedts services could be terminated on the ground of end
of contract between the DA and TMI, and not on grounds under labor laws. Though the end of the contract
between the DA and TMI was not the ground for the withdrawal of De Raedt from the CECAP, De Raedt
was disengaged from the project upon the instruction of SGVs client, TMI. Most important of all, SGV did
not exercise control over the means and methods by which De Raedt performed her duties as Sociologist.
SGV did impose rules on De Raedt, but these were necessary to ensure SGVs faithful compliance with the
terms and conditions of the Sub-Consultancy Agreement it entered into with TMI. (SYCIP, GORRES,
VELAYO & COMPANY, v. CAROL DE RAEDT, G.R. No. 161366, June 16, 2009)
Insubordination
Aside from the findings of sexual abuse, petitioner is also guilty of insubordination. Records show that after
filing a case for constructive dismissal on April 13, 1994 against the respondent, petitioner continued
working and performing his functions with the respondent company until his termination on May 19, 1994.
However, despite receipt of the various notices sent by respondent to him to report to the office and to
submit written explanations relative to his failure to follow instructions, the records of the case are bereft of
showing that he filed any written explanation to any of these notices. His continued failure to carry out the
reasonable oral or written instructions of his supervisor is punishable by insubordination, which is provided
under Rule IV.5.a of the Operational Instruction OI-A-AP25, Work Rules. While petitioner cannot be faulted
in believing that respondent constructively dismissed him from work, he was still, strictly speaking,
respondents employee when he received the written notices. As an employee, he should have at least
responded thereto, as instructed. (RAMON B. FORMANTES v. DUNCAN PHARMACEUTICALS,
PHILS., INC., G.R. No. 170661, December 4, 2009)
Interpretation of Doubt
We reject petitioners self-serving contention. Having failed to substantiate its allegation on the relationship
between the parties, we stick to the settled rule in controversies between a laborer and his master that doubts
reasonably arising from the evidence should be resolved in the formers favor. The policy is reflected in no
less than the Constitution, Labor Code and Civil Code. (DEALCO FARMS, INC., vs. NATIONAL LABOR
RELATIONS COMMISSION (5th DIVISION), G.R. No. 153192 January 30, 2009)

22

The relations between capital and labor are so impressed with public interest, and neither shall act
oppressively against the other, or impair the interest or convenience of the public. In case of doubt, all labor
legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer.
(BECMEN SERVICE EXPORTER v. SPOUSES SIMPLICIO and MILA CUARESMA (for and in behalf
oftheir daughter, Jasmin G. Cuaresma), WHITE FALCON SERVICES, INC. and JAIME ORTIZ
(President,White Falcon Services, Inc.) AND PROMOTION, INC.,G.R. Nos. 182978-79, G.R. Nos.
184298-99, April 7, 2009)
Job contracting or Subcontracting
Permissible job contracting or subcontracting refers to an arrangement whereby a principal agrees to farm
out with a contractor or subcontractor the performance of a specific job, work, or service within a definite or
predetermined period, regardless of whether such job, work or, service is to be performed or completed
within or outside the premises of the principal. Under this arrangement, the following conditions must be
met: (a) the contractor carries on a distinct and independent business and undertakes the contract work on
his account under his own responsibility according to his own manner and method, free from the control and
direction of his employer or principal in all matters connected with the performance of his work except as to
the results thereof; (b) the contractor has substantial capital or investment; and (c) the agreement between
the principal and contractor or subcontractor assures the contractual employees entitlement to all labor and
occupational safety and health standards, free exercise of the right to self-organization, security of tenure,
and social welfare benefits. (RAMY GALLEGO v. BAYER PHILIPPINES, INC., DANPIN GUILLERMO,
PRODUCT IMAGE MARKETING, INC., and EDGARDO BERGONIA, G.R. No. 179807, July 31, 2009)
Joint Venture
To the Court, the Contract between the Cooperative and DFI, far from being a job contracting arrangement,
is in essence a business partnership that partakes of the nature of a joint venture. The rules on job contracting
are, therefore, inapposite. The Court may not alter the intention of the contracting parties as gleaned from
their stipulations without violating the autonomy of contracts principle under Article 1306 of the Civil Code
which gives the contracting parties the utmost liberality and freedom to establish such stipulations, clauses,
terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good
custom, public order or public policy. (OLDARICO S. TRAVEO, et al v. BOBONGON BANANA
GROWERS MULTI-PURPOSE COOPERATIVE, TIMOG AGRICULTURAL CORPORATION,
DIAMOND FARMS, INC., and DOLE ASIA PHILIPPINES, G.R. No. 164205, September 3, 2009)
Judgment
We disfavor delay in the enforcement of the labor arbiters decision. Once a judgment becomes final and
executory, the prevailing party should not be denied the fruits of his victory by some subterfuge devised by
the losing party. Final and executory judgments can neither be amended nor altered except for correction of
clerical errors, even if the purpose is to correct erroneous conclusions of fact or of law. Trial and execution
proceedings constitute one whole action or suit such that a case in which execution has been issued is
regarded as still pending so that all proceedings in the execution are proceedings in the suit. (C-E
CONSTRUCTION CORPORATION v. NATIONAL LABOR RELATIONS, G.R. No. 180188, March 25,
2009)
Jurisdiction
It is a settled rule that jurisdiction over the subject matter is conferred by law. The determination of the
rights of a director and corporate officer dismissed from his employment as well as the corresponding
liability of a corporation, if any, is an intra-corporate dispute subject to the jurisdiction of the regular courts.
Thus, the appellate court correctly ruled that it is not the NLRC but the regular courts which have
jurisdiction over the present case. (LESLIE OKOL v. SLIMMERS WORLD INTERNATIONAL,
BEHAVIOR MODIFICATIONS, INC., G.R. No. 160146, December 11, 2009)

23

In sum, when the labor arbiter proceeded with the consolidated cases despite the SEC suspension order, he
exceeded his jurisdiction to hear and decide illegal dismissal cases and the CA correctly reversed his June
16, 2004 order. (GINA M. TIANGCO, et al, v. UNIWIDE SALES WAREHOUSE CLUB, INC., G.R. No.
168697, December 14, 2009)
Intra-Corporate Dispute
Atty. Garcia tries to deny he is an officer of ETPI. Not being a corporate officer, he argues that the Labor
Arbiter has jurisdiction over the case. One of the corporate officers provided for in the by-laws of ETPI is
the Vice-President. It can be gathered from Atty. Garcias complaint-affidavit that he was Vice President for
Business Support Services and Human Resource Departments of ETPI when his employment was
terminated effective 16 April 2000 . It is therefore clear from the by-laws and from Atty. Garcia himself that
he is a corporate officer. One who is included in the by-laws of a corporation in its roster of corporate
officers is an officer of said corporation and not a mere employee. Being a corporate officer, his removal is
deemed to be an intra-corporate dispute cognizable by the SEC and not by the Labor Arbiter. (ATTY.
VIRGILIO R. GARCIA v. EASTERN TELECOMMUNICATIONS PHILIPPINES, INC. and ATTY.
SALVADOR C. HIZON, G.R. No. 173115, EASTERN TELECOMMUNICATIONS PHILIPPINES, INC.
and ATTY. SALVADOR C. HIZON v. ATTY. VIRGILIO R. GARCIA, G.R. Nos. 173163-64, April 16,
2009)
Demarcation line Between DOLEs Prerogative
and NLRCs Jurisdiction
It can be assumed that the DOLE in the exercise of its visitorial and enforcement power somehow has to
make a determination of the existence of an employer-employee relationship. Such prerogatival
determination, however, cannot be coextensive with the visitorial and enforcement power itself. Indeed, such
determination is merely preliminary, incidental and collateral to the DOLEs primary function of enforcing
labor standards provisions. The determination of the existence of employer-employee relationship is still
primarily lodged with the NLRC. This is the meaning of the clause in cases where the relationship of
employer-employee still exists in Art. 128(b). (PEOPLES BROADCASTING(BOMBO RADYO PHILS.,
INC.) vs. THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, THE
REGIONAL DIRECTOR, DOLE REGION VII, and JANDELEON JUEZAN, G.R. No. 179652, May 8,
2009)
In sum, respondent contested the findings of the labor inspector during and after the inspection and raised
issues the resolution of which necessitated the examination of evidentiary matters not verifiable in the
normal course of inspection. Hence, the Regional Director was divested of jurisdiction and should have
endorsed the case to the appropriate Arbitration Branch of the NLRC. Considering, however, that an illegal
dismissal case had been filed by petitioners wherein the existence or absence of an employer-employee
relationship was also raised, the CA correctly ruled that such endorsement was no longer necessary.
(VICTOR METEORO, et al v. CREATIVE CREATURES, INC., G.R. No. 171275, July 13, 2009)
Labor-only Contractor
In sum, Interserve did not have substantial capital or investment in the form of tools, equipment,
machineries, and work premises; and respondents, its supposed employees, performed work which was
directly related to the principal business of petitioner. It is, thus, evident that Interserve falls under the
definition of a labor-only contractor, under Article 106 of the Labor Code; as well as Section 5(i) of the
Rules Implementing Articles 106-109 of the Labor Code, as amended. (COCA-COLA BOTTLERS PHILS.,
INC v. ALAN M. AGITO, et al., G.R. No. 179546, February 13, 2009)
In a labor-only contract, there are three parties involved: (1) the labor-only contractor; (2) the employee
who is ostensibly under the employ of the labor-only contractor; and (3) the principal who is deemed the
real employer. Under this scheme, the labor-only contractor is the agent of the principal. Here, Vedali is

24

the labor-only contractor; individual respondents are the employees and petitioner is the principal. The law
makes the principal responsible to the employees of the labor-only contractor as if the principal itself
directly hired or employed the employees. (ILIGAN CEMENT CORPORATION v. ILIASCOR
EMPLOYEES AND WORKERS UNION SOUTHERN PHILIPPINES FEDERATION OF LABOR
(IEWU-SPFL), AND ITS OFFICERS AND MEMBERS, et. al, G.R. No. 158956, April 24, 2009)
Length of Service
Although his nearly two decades of service might generally be considered for some form of financial
assistance to shield him from the effects of his termination, Tomadas acts reflect a regrettable lack of
concern for his employer. If length of service justifies the mitigation of the penalty of dismissal, then this
Court would be awarding disloyalty, distorting in the process the meaning of social justice and undermining
the efforts of labor to cleanse its ranks of undesirables. (EDUARDO M. TOMADA, SR. v. RFM
CORPORATION-BAKERY FLOUR DIVISION and JOSE MARIA CONCEPCION III, G.R. No. 163270,
September 11, 2009)
Liability of Corporate Officers
However, Article 212(e) of the Labor Code, by itself, does not make a corporate officer personally liable for
the debts of the corporation because Section 31 of the Corporation Code is still the governing law on
personal liability of officers for the debts of the corporation. Section 31 of the Corporation Code provides:
Liability of directors, trustees or officers. Directors or trustees who willfully and knowingly vote for or
assent to patently unlawful acts of the corporation or who are guilty of gross negligence or bad faith in
directing the affairs of the corporation or acquire any personal or pecuniary interest in conflict with their
duty as such directors, or trustees shall be liable jointly and severally for all damages resulting therefrom
suffered by the corporation, its stockholders or members and other persons. x x x
There was no showing of David willingly and knowingly voting for or assenting to patently unlawful acts of
the corporation, or that David was guilty of gross negligence or bad faith. (ARMANDO DAVID v.
NATIONAL FEDERATION OF LABOR UNION and MARIVELES APPAREL CORPORATION, G.R.
Nos. 148263 and 148271-72, April 21, 2009)
Liability of General Manager
Lastly, we come to the issue of whether Wiltschek, as the General Manager, should be personally liable
together with M+W Zander. We agree with petitioners that he should not be made personally liable. The
general manager of a corporation should not be made personally answerable for the payment of an illegally
dismissed employees monetary claims arising from the dismissal unless he had acted maliciously or in bad
faith in terminating the services of the employee. The employer corporation has a separate and distinct
personality from its officers who merely act as its agents. (M+W ZANDER PHILIPPINES, INC. and ROLF
WILTSCHEK v. TRINIDAD M. ENRIQUEZ, G.R. No. 169173, June 5, 2009)
Liability of Recruitment Agencies and Foreign-Based Employer
Private employment agencies are held jointly and severally liable with the foreign-based employer for any
violation of the recruitment agreement or contract of employment. This joint and solidary liability imposed
by law against recruitment agencies and foreign employers is meant to assure the aggrieved worker of
immediate and sufficient payment of what is due him. If the recruitment/placement agency is a juridical
being, the corporate officers and directors and partners as the case may be, shall themselves be jointly and
solidarily liable with the corporation or partnership for the aforesaid claims and damages. (BECMEN
SERVICE EXPORTER v. SPOUSES SIMPLICIO and MILA CUARESMA (for and in behalf oftheir
daughter, Jasmin G. Cuaresma), WHITE FALCON SERVICES, INC. and JAIME ORTIZ (President,White

25

Falcon Services, Inc.) AND PROMOTION, INC.,G.R. Nos. 182978-79, G.R. Nos. 184298-99, April 7,
2009)
Management Prerogative
As aptly cited by the CA:
The general rule is that the characterization by an employer of an employees services as no longer
necessary or sustainable is an exercise of business judgment on the part of the employer. The wisdom or
soundness of such a characterization or decision is not, as a general rule, subject to discretionary review on
the part of the Labor Arbiter, the NLRC and the CA. Such characterization may, however, be rejected if the
same is found to be in violation of the law or is arbitrary or malicious.
We find no violations of law in the respondents actions against the petitioner, nor was the respondent
arbitrary or influenced by malice in terminating the petitioners employment for redundancy. This ground for
termination is a legitimate exercise of management prerogative unless attended to by arbitrariness or by the
failure to follow statutory requirements. No arbitrariness or any violations took place in the present case.
(MIRIAM B. ELLECCION VDA. DE LECCIONES v. NATIONAL LABOR RELATIONS COMMISSION,
NNA PHILIPPINES CO., INC. and MS. KIMI KIMUR A, G.R. No. 184735, September 17, 2009)
Transfer
In this case, we find no reason to disturb the conclusion of the Court of Appeals that there was no
constructive dismissal. Reassignments made by management pending investigation of violations of company
policies and procedures allegedly committed by an employee fall within the ambit of management
prerogative. The decision of Quantum Foods to transfer Endico pending investigation was a valid exercise of
management prerogative to discipline its employees. The transfer, while incidental to the charges against
Endico, was not meant as a penalty, but rather as a preventive measure to avoid further loss of sales and the
destruction of Quantum Foods image and goodwill. It was not designed to be the culmination of the then
on-going administrative investigation against Endico. (ARNULFO O. ENDICO vs. QUANTUM FOODS
DISTRIBUTION CENTER, G.R. No. 161615, January 30, 2009)
ATIs transfer of Bismark IVs base from Manila to Bataan was, contrary to Aguanzas assertions, a valid
exercise of management prerogative. The transfer of employees has been traditionally among the acts
identified as a management prerogative subject only to limitations found in law, collective bargaining
agreement, and general principles of fair play and justice. Even as the law is solicitous of the welfare of
employees, it must also protect the right of an employer to exercise what are clearly management
prerogatives. The free will of management to conduct its own business affairs to achieve its purpose cannot
be denied. (GUALBERTO AGUANZA v. ASIAN TERMINAL, INC., KEITH JAMES, RICHARD
BARCLAY, and ATTY. RODOLFO CORVITE, G.R. No. 163505, August 14, 2009)
Money Claims
An employee should be compensated for the work he has rendered in accordance with the minimum wage,
and must be appropriately remunerated when he was suffered to work on a regular holiday during the time
he was employed by the petitioner company. As regards the 13th month pay, an employee who was
terminated at any time before the time for payment of the 13th month pay is entitled to this monetary benefit
in proportion to the length of time he worked during the year, reckoned from the time he started working
during the calendar year up to the time of his termination from the service. (MANTLE TRADING
SERVICES, INCORPORATED AND/OR BOBBY DEL ROSARIO v. NATIONAL LABOR RELATIONS
COMMISSION and PABLO S. MADRIAGA,G.R. No. 166705,July 28,2009)
Motion for Reconsideration

26

In this case, the Decision dated January 18, 2005 of the Secretary of Labor and Employment was received
by petitioner on January 25, 2005. It would have become final and executory on February 4, 2005, the tenth
day from petitioners receipt of the decision. However, petitioner filed a petition for certiorari with the Court
of Appeals on even date. Clearly, petitioner availed of the proper remedy since Department Order No. 40-03
explicitly prohibits the filing of a motion for reconsideration. Such motion becomes dispensable and not at
all necessary. (CHRIS GARMENTS CORPORATION vs HON. PATRICIA A. STO. TOMAS and CHRIS
GARMENTS WORKERS UNION-PTGWO LOCAL CHAPTER No. 832, G.R. No. 167426, January 12,
2009)
NLRC Rules of Procedure
Reinstatement Compliance Report
The new NLRC Rules of Procedure, which took effect on January 7, 2006, now require the employer to
submit a report of compliance within 10 calendar days from receipt of the Labor Arbiters decision,
disobedience to which clearly denotes a refusal to reinstate. The employee need not file a motion for the
issuance of the writ of execution since the Labor Arbiter shall thereafter motu proprio issue the writ. With
the new rules in place, there is hardly any difficulty in determining the employers intransigence in
immediately complying with the order. (JUANITO A. GARCIA and ALBERTO J. DUMAGO vs.
PHILIPPINE AIRLINES, INC., G.R. No. 164856, January 20, 2009)
Liberal Application of the Rules of Procedure
The Court is unimpressed. The gravity of Maralits infraction demands the relaxation of strict rules of
procedure. Strict rules of procedure may be set aside to serve the demands of substantial justice. Labor cases
must be decided according to justice, equity, and the substantial merits of the controversy. In Azul v. Banco
Filipino Savings and Mortgage Bank, the Court held:
The seriousness of petitioners infraction demanded the setting aside of strict rules of procedure as to allow
the determination on the merits of whether he was lawfully dismissed. As held by the Court, the application
of technical rules of procedure may be relaxed to serve the demands of substantial justice, particularly in
labor cases, because they must be decided according to justice and equity and the substantial merits of the
controversy.
There is substantial evidence showing that there was valid cause for the bank to dismiss petitioners
employment for loss of trust and confidence. Petitioner was a bank accountant, which is a position of trust
and confidence. The amount involved is significant, almost P4.5 million. (ESTER B. MARALIT v.
PHILIPPINE NATIONAL BANK, G.R. No. 163788, August 24, 2009)
Notice of Change of Address
PALs argument that its chaotic situation due to its rehabilitation rendered the filing of a notice of change of
address impractical does not merit consideration. Since moving out from its office at Allied Bank Center,
where the NLRC decision was sent, PAL occupied four different office addresses. Yet these office addresses
could be found in the same building, the PAL Center Building in Makati City. PAL merely moved from one
floor to another. To our mind, it would have been more prudent had PAL informed the NLRC that it has
moved from one floor to another rather than allowed its old address at Allied Bank Center to remain as its
official address. To rule in favor of PAL considering the circumstances in the instant case would negate the
purpose of the rules on completeness of service and the notice of change of address, which is to place the
date of receipt of pleadings, judgments and processes beyond the power of the party being served to
determine at his pleasure. (PHILIPPINE AIRLINES, INC. v. HEIRS OF BERNARDIN J. ZAMORA, G.R.
No. 164267, G.R. No. 166996)

27

Overseas Employment Contracts

Respondents service award for the sixth contract is equivalent only to half-months pay plus the
proportionate amount for the additional nine days of service he rendered after one year. Respondents
employment contracts expressly stated that his employment ended upon his departure from work. Each year
he departed from work and successively new contracts were executed before he reported for work anew. His
service was not cumulative. Pertinently, in Brent School, Inc. v. Zamora, we said that a fixed term is an
essential and natural appurtenance of overseas employment contracts, as in this case. We also said in that
case that under American law, [w]here a contract specifies the period of its duration, it terminates on the
expiration of such period. A contract of employment for a definite period terminates by its own terms at the
end of such period. As it is, Article 72 of the Saudi Labor Law is also of similar import. It reads:
A labor contract concluded for a specified period shall terminate upon the expiry of its term. If both parties
continue to enforce the contract, thereafter, it shall be considered renewed for an unspecified period. (LWV
CONSTRUCTION CORPORATION v. MARCELO B. DUPO, G.R. No. 172342, July 13, 2009
In Placewell International Services Corporation v. Camote, we held that the subsequently executed side
agreement of an overseas contract worker with the foreign employer is void, simply because it is against our
existing laws, morals and public policy. The subsequent agreement cannot supersede the terms of the
standard employment contract approved by the POEA. Republic Act No. 8042, commonly known as the
Migrant Workers Act of 1995, expressly prohibits the substitution or alteration, to the prejudice of the
worker, of employment contracts already approved and verified by the Department of Labor and
Employment (DOLE) from the time of the actual signing thereof by the parties up to and including the
period of the expiration of the same, without the approval of DOLE. Since the second employment contract
petitioner Nisda signed with respondent ADAMS was void for not having been sanctioned by the POEA,
then petitioner Nisdas employment with respondent ADAMS was still governed by his POEA-SEC until his
repatriation to the Philippines on 17 July 2002. (CARLOS N. NISDA v. SEA SERVE MARITIME
AGENCY and KHALIFA A. ALGOSAIBI DIVING AND MARINE SERVICES, G. R. No. 179177, July
23, 2009)
Payment of Wages Pending Appeal
In other words, a dismissed employee whose case was favorably decided by the Labor Arbiter is entitled to
receive wages pending appeal upon reinstatement, which is immediately executory. Unless there is a
restraining order, it is ministerial upon the Labor Arbiter to implement the order of reinstatement and it is
mandatory on the employer to comply therewith. (JUANITO A. GARCIA and ALBERTO J. DUMAGO vs.
PHILIPPINE AIRLINES, INC., G.R. No. 164856, January 20, 2009)
Prescriptive Period for Illegal Dismissal
The law fixes the period of time within which petitioner could seek remedy for his illegal dismissal and for
as long as he filed his Complaint within the prescriptive period, he shall be entitled to the full protection of
his right to backwages. In illegal dismissal cases, the employee concerned is given a period of four years
from the time of his illegal dismissal within which to institute the complaint. This is based on Article 1146 of
the New Civil Code which states that actions based upon an injury to the rights of the plaintiff must be
brought within four years. The four-year prescriptive period shall commence to run only upon the accrual of
a cause of action of the worker. Here, petitioner was dismissed from service on 15 September 2001. He filed
his complaint for illegal dismissal on 14 June 2004. Clearly, then, the instant case was filed within the
prescriptive period. (ERWIN H. REYES v. NATIONAL LABOR RELATIONS COMMISSION, G.R. No.
180551, February 10, 2009)
Prescriptive Period for Money Claims

28

In the present case, the earliest incident covered by Article 1155 is the extrajudicial demand which came on
January 7, 1995 . As the CA correctly computed, the period for prescription started to run on January 15,
1993 , and was interrupted on January 7, 1995 . UNILAB only answered the petitioners January 7, 1995
letter on February 26, 1996 , with a categorical denial of the petitioners demand; the running of the
prescription period re-started on the date of this denial, but again stopped again on August 9, 1996 , when
the complaint before the NLRC was filed. Adding all the running periods yields a total of less than three (3)
years; hence, the petitioner seasonably filed her monetary claim when she filed her complaint before the
NLRC. (JANUARIA A. RIVERA v. UNITED LABORATORIES, INC.,G.R. No. 155639 April 22, 2009)
Money Claims OFWs
In Cadalin v. POEAs Administrator, we held that Article 291 covers all money claims from employeremployee relationship and is broader in scope than claims arising from a specific law. It is not limited to
money claims recoverable under the Labor Code, but applies also to claims of overseas contract workers.
The following ruling in Cadalin v. POEAs Administrator is instructive:
First to be determined is whether it is the Bahrain law on prescription of action based on the Amiri Decree
No. 23 of 1976 or a Philippine law on prescription that shall be the governing law.
Article 156 of the Amiri Decree No. 23 of 1976 provides:
A claim arising out of a contract of employment shall not be actionable after the lapse of one year from the
date of the expiry of the contract x x x.
As a general rule, a foreign procedural law will not be applied in the forum. Procedural matters, such as
service of process, joinder of actions, period and requisites for appeal, and so forth, are governed by the laws
of the forum. This is true even if the action is based upon a foreign substantive law (Restatement of the
Conflict of Laws, Sec. 685; Salonga, Private International Law, 131 [1979]).
A law on prescription of actions is sui generis in Conflict of Laws in the sense that it may be viewed either
as procedural or substantive, depending on the characterization given such a law.
xxxx
However, the characterization of a statute into a procedural or substantive law becomes irrelevant when the
country of the forum has a borrowing statute. Said statute has the practical effect of treating the foreign
statute of limitation as one of substance (Goodrich, Conflict of Laws, 152-153 [1938]). A borrowing
statute directs the state of the forum to apply the foreign statute of limitations to the pending claims based
on a foreign law (Siegel, Conflicts, 183 [1975]). While there are several kinds of borrowing statutes, one
form provides that an action barred by the laws of the place where it accrued, will not be enforced in the
forum even though the local statute has not run against it (Goodrich and Scoles, Conflict of Laws, 152-153
[1938]). Section 48 of our Code of Civil Procedure is of this kind. Said Section provides:
If by the laws of the state or country where the cause of action arose, the action is barred, it is also barred in
the Philippine Islands.
Section 48 has not been repealed or amended by the Civil Code of the Philippines. Article 2270 of said Code
repealed only those provisions of the Code of Civil Procedure as to which were inconsistent with it. There is
no provision in the Civil Code of the Philippines, which is inconsistent with or contradictory to Section 48
of the Code of Civil Procedure (Paras, Philippine Conflict of Laws, 104 [7th ed.]).
In the light of the 1987 Constitution, however, Section 48 [of the Code of Civil Procedure] cannot be
enforced ex proprio vigore insofar as it ordains the application in this jurisdiction of [Article] 156 of the
Amiri Decree No. 23 of 1976.
The courts of the forum will not enforce any foreign claim obnoxious to the forums public policy x x x. To
enforce the one-year prescriptive period of the Amiri Decree No. 23 of 1976 as regards the claims in
question would contravene the public policy on the protection to labor.
xxxx
Thus, in our considered view, respondents complaint was filed well within the three-year prescriptive period
under Article 291 of our Labor Code. This point, however, has already been mooted by our finding that
respondents service award had been paid, albeit the payroll termed such payment as severance pay. (LWV
CONSTRUCTION CORPORATION v. MARCELO B. DUPO, G.R. No. 172342, July 13, 2009)
Probationary Employee

29

A probationary employee or probationer is one who is on trial for an employer, during which the latter
determines whether or not he is qualified for permanent employment. The probationary employment is
intended to afford the employer an opportunity to observe the fitness of a probationary employee while at
work, and to ascertain whether he will become an efficient and productive employee. While the employer
observes the fitness, propriety and efficiency of a probationer to ascertain whether he is qualified for
permanent employment, the probationer, on the other hand, seeks to prove to the employer that he has the
qualifications to meet the reasonable standards for permanent employment. Thus, the word probationary, as
used to describe the period of employment, implies the purpose of the term or period, not its length.
(MAGIS YOUNG ACHIEVERS LEARNING CENTER and MRS. VIOLETA T. CARIO v. ADELAIDA .
MANALO, G.R. No. 178835, February 13, 2009 )
Probationary Employment for Academic Personnel
For academic personnel in private schools, colleges and universities, probationary employment is
governed by Section 92 of the 1992 Manual of Regulations for Private Schools (Manual), which reads:
Section 92. Probationary Period. Subject in all instances to compliance with the Department and school
requirements, the probationary period for academic personnel shall not be more than three (3) consecutive
years of satisfactory service for those in the elementary and secondary levels, six (6) consecutive regular
semesters of satisfactory service for those in the tertiary level, and nine (9) consecutive trimesters of
satisfactory service for those in the tertiary level where collegiate courses are offered on a trimester basis.
(MAGIS YOUNG ACHIEVERS LEARNING CENTER and MRS. VIOLETA T. CARIO v. ADELAIDA .
MANALO, G.R. No. 178835, February 13, 2009 )
Security of Tenure of Probationary Employees
As above discussed, probationary employees enjoy security of tenure during the term of their probationary
employment such that they may only be terminated for cause as provided for by law, or if at the end of the
probationary period, the employee failed to meet the reasonable standards set by the employer at the time of
the employees engagement. Undeniably, respondent was hired as a probationary teacher and, as such, it was
incumbent upon petitioner to show by competent evidence that she did not meet the standards set by the
school. This requirement, petitioner failed to discharge. To note, the termination of respondent was effected
by that letter stating that she was being relieved from employment because the school authorities allegedly
decided, as a cost-cutting measure, that the position of Principal was to be abolished. Nowhere in that
letter was respondent informed that her performance as a school teacher was less than satisfactory. (MAGIS
YOUNG ACHIEVERS LEARNING CENTER and MRS. VIOLETA T. CARIO v. ADELAIDA .
MANALO, G.R. No. 178835, February 13, 2009 )
Termination of Probationary Employee
Under Article 281 of the Labor Code, a probationary employee can be legally dismissed either: (1) for a just
cause; or (2) when he fails to qualify as a regular employee in accordance with the reasonable standards
made known to him by the employer at the start of the employment. Nonetheless, the power of the employer
to terminate the services of an employee on probation is not without limitations. First, this power must be
exercised in accordance with the specific requirements of the contract. Second, the dissatisfaction on the part
of the employer must be real and in good faith, not feigned so as to circumvent the contract or the law.
Third, there must be no unlawful discrimination in the dismissal. In termination cases, the burden of proving
just or valid cause for dismissing an employee rests on the employer. (DAVAO CONTRACTORS
DEVELOPMENT COOPERATIVE (DACODECO) v. MARILYN A. PASAWA,G.R. No. 172174,July 9,
2009)
Project Employee

30

While respondent performed tasks that were clearly vital, necessary and indispensable to the usual business
or trade of Alcatel, respondent was not continuously rehired by Alcatel after the cessation of every project.
Records show that respondent was hired by Alcatel from 1988 to 1995 for three projects, namely the PLDT
X-5 project, the PLDT X-4 IOT project and the PLDT 1342 project. On 30 April 1988, upon the expiration
of respondents contract for the PLDT X-4 IOT project, Alcatel did not rehire respondent until 1 February
1991, or after a lapse of 33 months, for the PLDT 1342 project. Alcatels continuous rehiring of respondent
in various capacities from February 1991 to December 1995 was done entirely within the framework of one
and the same project the PLDT 1342 project. This did not make respondent a regular employee of Alcatel
as respondent was not continuously rehired after the cessation of a project. Respondent remained a project
employee of Alcatel working on the PLDT 1342 project. (ALCATEL PHILIPPINES, INC., v. RENE R.
RELOS, G.R. No. 164315, July 3, 2009)
Protection to Labor
Whether employed locally or overseas, all Filipino workers enjoy the protective mantle of Philippine labor
and social legislation, contract stipulations to the contrary notwithstanding. This pronouncement is in
keeping with the basic public policy of the State to afford protection to labor, promote full employment,
ensure equal work opportunities regardless of sex, race or creed, and regulate the relations between workers
and employers. This ruling is likewise rendered imperative by Article 17 of the Civil Code which states that
laws which have for their object public order, public policy and good customs shall not be rendered
ineffective by laws or judgments promulgated, or by determinations or conventions agreed upon in a foreign
country. (BECMEN SERVICE EXPORTER v. SPOUSES SIMPLICIO and MILA CUARESMA (for and in
behalf oftheir daughter, Jasmin G. Cuaresma), WHITE FALCON SERVICES, INC. and JAIME ORTIZ
(President,White Falcon Services, Inc.) AND PROMOTION, INC.,G.R. Nos. 182978-79, G.R. Nos.
184298-99, April 7, 2009)
Thus, as held in that case, the right of an employee to be informed of the charges against him and to
reasonable opportunity to present his side in a controversy with either the company or his own Union is not
wiped away by a Union Security Clause or a Union Shop Clause in a collective bargaining agreement. An
employee is entitled to be protected not only from a company which disregards his rights but also from his
own Union, the leadership of which could yield to the temptation of swift and arbitrary expulsion from
membership and mere dismissal from his job. (HERMINIGILDO INGUILLO AND ZENAIDA
BERGANTE V. FIRST PHILIPPINE SCALES, INC. and/or AMPARO POLICARPIO, MANAGER, G.R.
No. 165407, June 5, 2009)
Question of Law / Fact
There is a question of law if the issue raised is capable of being resolved without need of reviewing the
probative value of the evidence. The resolution of the issue must rest solely on what the law provides on a
given set of circumstances. Once it is clear that the issue invites a review of the evidence presented, the
question posed is one of fact. If the query requires a re-evaluation of the credibility of witnesses, or the
existence or relevance of surrounding circumstances and their relation to one another, the issue in that query
is factual. (GENERAL SANTOS COCA-COLA PLANT FREE WORKERS UNION-TUPAS vs. COCACOLA BOTTLERS PHILS., INC. (GENERAL SANTOS CITY), THE COURT OF APPEALS and THE
NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 178647)
Quitclaim
However, with respect to the second batch of quitclaims signed by 85 of the remaining 160 employees who
were terminated following Hyatts permanent closure, we hold that these are valid and binding undertakings.
The said documents indicate that the amount received by each of the employees represents a reasonable
settlement of their monetary claims against petitioner and were even signed in the presence of a DOLE
representative. A quitclaim, with clear and unambiguous contents and executed for a valid consideration

31

received in full by the employee who signed the same, cannot be later invalidated because its signatory
claims that he was pressured into signing it on account of his dire financial need. When it is shown that the
person executing the waiver did so voluntarily, with full understanding of what he was doing, and the
consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and
binding undertaking. (HOTEL ENTERPRISES OF THE PHILIPPINES, INC. (HEPI), owner of Hyatt
Regency Manila, v. SAMAHAN NG MGA MANGGAGAWA SA HYATT-NATIONAL UNION OF
WORKERS IN THE HOTEL AND RESTAURANT AND ALLIED INDUSTRIES (SAMASAHNUWHRAIN), G.R. No. 165756, June 5, 2009)
To excuse petitioners from complying with the terms of their waivers, they must locate their case within any
of three narrow grounds: (1) the employer used fraud or deceit in obtaining the waivers; (2) the
consideration the employer paid is incredible and unreasonable; or (3) the terms of the waiver are contrary to
law, public order, public policy, morals or good customs or prejudicial to a third person with a right
recognized by law. The preceding discussion on the voluntariness of petitioners retirement from service
effectively removes these grounds beyond petitioners argumentative reach. Accordingly, petitioners, by the
terms of their waivers, are barred from filing this suit. (ARSENIO F. QUEVEDO, et al., v. BENGUET
ELECTRIC COOPERATIVE,INCORPORATED (BENECO) and GERARDO P. VERZOSA, G.R. No.
168927, September 11, 2009)
Invalid Quitclaims
Significantly, the Manifestations filed by petitioner with respect to the quitclaims executed by members of
respondent Union state that 34 of the 48 employees terminated on account of the downsizing program have
already executed quitclaims on various dates. We, however, take judicial notice that 33 of these quitclaims
failed to indicate the amounts received by the terminated employees. Because of this, petitioner leaves us no
choice but to invalidate and set aside these quitclaims. However, the actual amount received by the
employees upon signing the said documents shall be deducted from whatever remaining amount is due them
to avoid double recovery of separation pay and other monetary benefits. We hereby order the Labor Arbiter
to effect the necessary computation on this matter. (HOTEL ENTERPRISES OF THE PHILIPPINES, INC.
(HEPI), owner of Hyatt Regency Manila, v. SAMAHAN NG MGA MANGGAGAWA SA HYATTNATIONAL UNION OF WORKERS IN THE HOTEL AND RESTAURANT AND ALLIED INDUSTRIES
(SAMASAH-NUWHRAIN), G.R. No. 165756, June 5, 2009)
Also, SMC cannot take refuge in the Receipt and Release document signed by the respondent. Generally,
deeds of release, waivers, or quitclaims cannot bar employees from demanding benefits to which they are
legally entitled or from contesting the legality of their dismissal, since quitclaims are looked upon with
disfavor and are frowned upon as contrary to public policy. Where, however, the person making the waiver
has done so voluntarily, with a full understanding thereof, and the consideration for the quitclaim is credible
and reasonable, the transaction must be recognized as a valid and binding undertaking. The burden of
proving that the quitclaim or waiver was voluntarily entered into rests on the employer. (SAN MIGUEL
CORPORATION v. EDUARDO L. TEODOSIO, G.R. No. 163033, October 2, 2009)
Real Party in Interest
To qualify a person to be a real party in interest in whose name an action must be prosecuted, he must appear
to be the present real holder of the right sought to be enforced. Interest within the meaning of the rule
means material interest, an interest in essence to be affected by the judgment as distinguished from mere
interest in the question involved, or a mere incidental interest. By real interest is meant a present substantial
interest, as distinguished from a mere expentancy or a future, contingent, subordinate or consequential
interest. (NORTHEASTERN COLLEGE TEACHERS AND EMPLOYEES ASSOCIATION vs.
NORTHEASTERN COLLEGE, INC., G.R. No. 152923, January 19, 2009)

32

It has been repeatedly stated that the Pantranco properties which were the subject of execution sale were
owned by Macris and later, the PNB-Madecor. They were never owned by PNEI or PNB. Following our
earlier discussion on the separate personalities of the different corporations involved in the instant case, the
only entity which has the right and interest to question the execution sale and the eventual right to annul the
same, if any, is PNB-Madecor or its successor-in-interest. Settled is the rule that proceedings in court must
be instituted by the real party in interest. (PANTRANCO EMPLOYEES ASSOCIATION (PEA-PTGWO)
and PANTRANCO RETRENCHED EMPLOYEES ASSOCIATION (PANREA) v. NATIONAL LABOR
RELATIONS COMMISSION (NLRC), G.R. No. 170689, G.R. No. 170705)
Re-computation of Awards
Furthermore, the CA sufficiently explained the need to increase the award of 13th month pay and SIL pay. It
modified the award after finding that the computation of the amount given by the NLRC in its Decision
dated March 25, 2002 does not conform to the dismissed employees employment history. The CA aptly
explained, viz.:
A cursory reading of the assailed Decision of the NLRC dated March 25, 2002 readily reveals that the labor
tribunal awarded private respondents their unpaid 13th Month Pay and Service Incentive Leave (SIL) Pay
without regard to their employment history with the petitioner. There was even no explanation or adequate
showing on the face of the questioned judgment why the award of the unpaid 13th Month and SIL Pay
differs from one private respondent to another. This Court, therefore, after determining that indeed the
petitioner had not paid the private respondents these special benefits for the whole period of their
employment therewith, modified the award by painstakingly basing it to each of the dismissed employees
employment history with petitioner.
xxxx
The procedural lapse on the part of the NLRC in this case in failing to take into account the number of years
when the private respondents did not receive their 13th Month and SIL Pay cannot defeat their right to
receive these benefits as granted under substantive law. This Court simply could not uphold an erroneous
computation of the said unpaid benefits. Hence, it had to re-compute, and as a consequence, increased it.
(AKLAN COLLEGE, INC. vs. PERPETUO ENERO, ARLYN CASTIGADOR, NUENA SERMON and
JOCELYN ZOLINA, G.R. No. 178309, January 27, 2009)
Recruitment Agency
As the Court previously observed, the Contract of Services between Interserve and petitioner did not identify
the work needed to be performed and the final result required to be accomplished. Instead, the Contract
specified the type of workers Interserve must provide petitioner (Route Helpers, Salesmen, Drivers,
Clericals, Encoders & PD) and their qualifications (technical/vocational course graduates, physically fit, of
good moral character, and have not been convicted of any crime). The Contract also states that, to carry out
the undertakings specified in the immediately preceding paragraph, the CONTRACTOR shall employ the
necessary personnel, thus, acknowledging that Interserve did not yet have in its employ the personnel
needed by petitioner and would still pick out such personnel based on the criteria provided by petitioner. In
other words, Interserve did not obligate itself to perform an identifiable job, work, or service for petitioner,
but merely bound itself to provide the latter with specific types of employees. These contractual provisions
strongly indicated that Interserve was merely a recruiting and manpower agency providing petitioner with
workers performing tasks directly related to the latters principal business. (COCA-COLA BOTTLERS
PHILS., INC v. ALAN M. AGITO, et al., G.R. No. 179546, February 13, 2009)
Refusal to Return to Work

33

Therefore, the complaint for illegal dismissal filed by respondents was premature, since even after the
expiration of their suspension period, they refused, despite due notice, to report to work. In fact, in their
Memorandum of Appeal, respondents admitted having received petitioners return-to-work memorandum
which, however, became futile because they hastily filed the complaint for illegal dismissal. (INDUSTRIAL
& TRANSPORT EQUIPMENT, INC. RAYMOND JARINA, vs. TOMAS TUGADE and CRESENCIO
TUGADE, G.R. No. 158539, January 15, 2009)
Regular Employment
Undoubtedly, respondents were regular employees of petitioner with respect to the escort or comboy
activity for which they had been engaged since 1993 and 1994, respectively, without regard to continuity or
brokenness of the service. (DEALCO FARMS, INC., vs. NATIONAL LABOR RELATIONS
COMMISSION (5th DIVISION), G.R. No. 153192 January 30, 2009)
Thus, there are two kinds of regular employees, namely: (1) those who are engaged to perform activities
which are usually necessary or desirable in the usual business or trade of the employer; and (2) those who
have rendered at least one year of service, whether continuous or broken, with respect to the activity in
which they are employed. Simply stated, regular employees are classified into (1) regular employees by
nature of work and (2) regular employees by years of service. The former refers to those employees who
perform a particular activity which is necessary or desirable in the usual business or trade of the employer,
regardless of their length of service; while the latter refers to those employees who have been performing the
job, regardless of the nature thereof, for at least a year. If the employee has been performing the job for at
least one 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. (SAN MIGUEL CORPORATION v. EDUARDO L. TEODOSIO, G.R. No. 163033,
October 2, 2009)
Reinstatement
The spirit of the rule on reinstatement pending appeal animates the proceedings once the Labor Arbiter
issues the decision containing an order of reinstatement. The immediacy of its execution needs no further
elaboration. Reinstatement pending appeal necessitates its immediate execution during the pendency of the
appeal, if the law is to serve its noble purpose. At the same time, any attempt on the part of the employer to
evade or delay its execution, as observed in Panuncillo and as what actually transpired in Kimberly,
Composite, Air Philippines, and Roquero, should not be countenanced.
After the labor arbiters decision is reversed by a higher tribunal, the employee may be barred from
collecting the accrued wages, if it is shown that the delay in enforcing the reinstatement pending appeal was
without fault on the part of the employer. (JUANITO A. GARCIA and ALBERTO J. DUMAGO vs.
PHILIPPINE AIRLINES, INC., G.R. No. 164856, January 20, 2009)
Reinstatement during Corporate Rehabilitation
Case law recognizes that unless there is a restraining order, the implementation of the order of reinstatement
is ministerial and mandatory. This injunction or suspension of claims by legislative fiat partakes of the
nature of a restraining order that constitutes a legal justification for respondents non-compliance with the
reinstatement order. Respondents failure to exercise the alternative options of actual reinstatement and
payroll reinstatement was thus justified. Such being the case, respondents obligation to pay the salaries
pending appeal, as the normal effect of the non-exercise of the options, did not attach. (JUANITO A.
GARCIA and ALBERTO J. DUMAGO vs. PHILIPPINE AIRLINES, INC., G.R. No. 164856, January 20,
2009)
Republic Act No. 8042

34

Fifth Paragraph of Section 10; Unconstitutional

The argument of the Solicitor General, that the actual purpose of the subject clause of limiting the
entitlement of OFWs to their three-month salary in case of illegal dismissal, is to give them a better chance
of getting hired by foreign employers. This is plain speculation. As earlier discussed, there is nothing in the
text of the law or the records of the deliberations leading to its enactment or the pleadings of respondent that
would indicate that there is an existing governmental purpose for the subject clause, or even just a pretext of
one.
The subject clause does not state or imply any definitive governmental purpose; and it is for that precise
reason that the clause violates not just petitioners right to equal protection, but also her right to
substantivedue process under Section 1, Article III of the Constitution. (ANTONIO M. SERRANO v.
GALLANT MARITIME SERVICES,INC. and MARLOW NAVIGATION CO., INC., G.R. No. 167614,
March 24, 2009)
Retirement Coverage
A twist in Riveras case is that she continued working beyond the compulsory separation from service that
resulted from her retirement. Whether she could or could not resume working with the company is, as a rule,
a consensual matter for the parties to agree upon, limited only by company policies and the applicable terms
of the retirement plan. To be sure, there is no limitation by law that barred her from continuing her work
with UNILAB; even the above-quoted Implementing Rules, in setting the retirement age at 60, deferred to
the parties agreement. Her employment terms under this renewed employment are based on what she and
the company agreed upon. Whether these terms included renewed coverage in the retirement plan is an
evidentiary gap that could have been conclusively shown by evidence of deductions of contributions to the
plan after 1988. Two indicators, however, tell us that no such coverage took place. The first is that the terms
of the retirement plan, before and after its 1992 amendment, continued to exclude those who have rendered
30 years of service or have reached 60 years of age. Therefore, the plan could not have covered her. The
second is the absence of evidence of, or of any demand for, any reimbursement of what Rivera would have
paid as contributions to the plan had her coverage and deductions continued after 1988. Thus, we conclude
that her renewed service did not have the benefit of any retirement plan coverage. (JANUARIA A. RIVERA
v. UNITED LABORATORIES, INC.,G.R. No. 155639 April 22, 2009)
Seafarer
Death Benefits
The general rule is that the employer is liable to pay the heirs of the deceased seafarer for death benefits
once it is established that he died during the effectivity of his employment contract. However, the employer
may be exempted from liability if he can successfully prove that the seafarers death was caused by an injury
directly attributable to his deliberate or willful act. In sum, respondents entitlement to any death benefits
depends on whether the evidence of the petitioners suffices to prove that the deceased committed suicide;
the burden of proof rests on his employer. (GREAT SOUTHERN MARITIME SERVICES CORP. and IMC
SHIPPING CO., PTE. LTD. v. LEONILA SURIGAO for Herself and In Behalf of Her Minor
Children,Namely KAYE ANGELI and MIRIAM,Both Surnamed SURIGAO G.R. No. 183646)
Post-Employment Medical Examination
But even assuming that petitioner was repatriated for medical reasons, he failed to submit himself to the
company-designated doctor in accordance with the post-employment medical examination requirement
under the above-quoted paragraph 3 of Section 20(B) of the POEA Standard Employment Contract. Failure
to comply with this requirement which is a sine qua non bars the filing of claim for disability benefits.
(DIONISIO M. MUSNIT v. SEA STAR SHIPPING CORPORATION , G.R. No. 182623, December 4,
2009)

35

Security Guard
Temporary offdetail
Petitioners citation of Article 286 of the Labor Code reading:
ART. 286. When employment not deemed terminated. The bona fide suspension of the operation of a
business or undertaking for a period not exceeding six (6) months, or the fulfillment by the employee of a
military or civic duty shall not terminate employment. In all such cases, the employer shall reinstate the
employee to his former position without loss of seniority rights if he indicates his desire to resume his work
not later than one (1) month from the resumption of operations of his employer or from his relief from the
military or civic duty. (Emphasis in the original; underscoring supplied) is misplaced. Philippine Industrial
Security Agency v. Dapiton teaches:
We stress that Article 286 applies only when there is a bonafide suspension of the employers operation of a
business or undertaking for a period not exceeding six (6) months. In such a case, there is no termination of
employment but only a temporary displacement of employees, albeit the displacement should not exceed six
(6) months. The paramount consideration should be the dire exigency of the business of the employer that
compels it to put some of its employees temporarily out of work. In security services, the temporary offdetail of guards takes place when the security agencys clients decide not to renew their contracts with the
security agency, resulting in a situation where the available posts under its existing contracts are less than the
number of guards in its roster. (Underscoring supplied)
In the present case, there is no showing that there was lack of available posts at petitioners clients or that
there was a request from the client-bank, where respondent was last posted and which continued to hire
petitioners services, to replace respondent with another. Petitioner suddenly prevented him from reporting
on his tour of duty at the bank on December 15, 2001 and had not thereafter asked him to report for duty.
(EAGLE STAR SECURITY SERVICES, INC. v. BONIFACIO L. MIRANDO, G.R. No. 179512, July 30,
2009)
Separate Corporate Personality
Assuming, for the sake of argument, that PNB may be held liable for the debts of PNEI, petitioners still
cannot proceed against the Pantranco properties, the same being owned by PNB-Madecor, notwithstanding
the fact that PNB-Madecor was a subsidiary of PNB. The general rule remains that PNB-Madecor has a
personality separate and distinct from PNB. The mere fact that a corporation owns all of the stocks of
another corporation, taken alone, is not sufficient to justify their being treated as one entity. If used to
perform legitimate functions, a subsidiarys separate existence shall be respected, and the liability of the
parent corporation as well as the subsidiary will be confined to those arising in their respective businesses.
(PANTRANCO EMPLOYEES ASSOCIATION (PEA-PTGWO) and PANTRANCO RETRENCHED
EMPLOYEES ASSOCIATION (PANREA) v. NATIONAL LABOR RELATIONS COMMISSION (NLRC),
G.R. No. 170689, G.R. No. 170705)
Separation Pay
Since petitioner was not faultless in regard to the offenses imputed against her, we hold that the award of
separation pay only, without backwages, is proper. (ELIZABETH D. PALTENG v. UNITED COCONUT
PLANTERS BANK, G.R. No. 172199, February 27, 2009)
We thus find the dismissal to be illegal. Consequently, respondent is entitled to reinstatement without loss of
seniority rights and other privileges, and to full backwages, inclusive of allowances, and other benefits or
their monetary equivalent, computed from the time of the withholding of the employees compensation up to
the time of actual reinstatement. If reinstatement is not possible due to the strained relations between the
employer and the employee, separation pay should instead be paid the employee equivalent to one month

36

salary for every year of service, computed from the time of engagement up to the finality of this decision.
(M+W ZANDER PHILIPPINES, INC. and ROLF WILTSCHEK v. TRINIDAD M. ENRIQUEZ, G.R. No.
169173, June 5, 2009)
Article 279 of the Labor Code provides that [a]n 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. Since, in the present case,
reinstatement is no longer practicable or feasible, separation pay may be awarded in lieu of reinstatement.
Moreover, the awards of separation pay and backwages are not mutually exclusive and both may be given to
Tagulao and Serrano.
The normal consequences of a finding that an employee has been illegally dismissed are, firstly, that the
employee becomes entitled to reinstatement to his former position without loss of seniority rights and,
secondly, the payment of backwages corresponding to the period from his illegal dismissal up to actual
reinstatement. The statutory intent on this matter is clearly discernible. Reinstatement restores the employee
who was unjustly dismissed to the position from which he was removed, that is, to his status quo ante
dismissal, while the grant of backwages allows the same employee to recover from the employer that which
he had lost by way of wages as a result of his dismissal. These twin remedies reinstatement and payment
of backwages make the dismissed employee whole who can then look forward to continued employment.
Thus do these two remedies give meaning and substance to the constitutional right of labor to security of
tenure. The two forms of relief are distinct and separate, one from the other. Though the grant of
reinstatement commonly carries with it an award of backwages, the inappropriateness or non-availability of
one does not carry with it the inappropriateness or non-availability of the other. x x x As the term suggests,
separation pay is the amount that an employee receives at the time of his severance from the service and x x
x is designed to provide the employee with the wherewithal during the period that he is looking for another
employment. In the instant case, the grant of separation pay was a substitute for immediate and continued
re-employment with the private respondent Bank. The grant of separation pay did not redress the injury that
is intended to be relieved by the second remedy of backwages, that is, the loss of earnings that would have
accrued to the dismissed employee during the period between dismissal and reinstatement. Put a little
differently, payment of backwages is a form of relief that restores the income that was lost by reason of
unlawful dismissal; separation pay, in contrast, is oriented towards the immediate future, the transitional
period the dismissed employee must undergo before locating a replacement job. x x x The grant of
separation pay was a proper substitute only for reinstatement; it could not be an adequate substitute both for
reinstatement and for backwages. (Emphasis added) (NISSAN NORTH EDSA BALINTAWAK, QUEZON
CITY v. ANGELITO SERRANO, JR. and EDWIN TAGULAO, G.R. No. 162538, June 4, 2009)
Above all, the intention to sever the employer-employee relationship was not duly established by
respondents. The prior submission of a medical certificate that petitioner is fit to resume work negates the
claim of respondents that the former demanded for separation pay on account of her failing health. Certainly,
petitioner cannot demand for separation benefits on the ground of illness while at the same time presenting a
certification that she is fit to work. Respondents could have denied petitioners demand at that instance and
ordered her to return to work had it not been their intention to sever petitioner from their employ. Hence, we
find the allegation that petitioner presented herself for work but was refused by respondents more credible.
(CONCEPCION FAELDONIA v. TONG YAK GROCERIES,JAYME GO and MERLITA GO,G.R. No.
182499, October 2, 2009)
Since Dusit Hotel is explicitly mandated by the afore-quoted statutory provision to pay its employees and
management their respective shares in the service charges collected, the hotel cannot claim that payment
thereof to its 82 employees constitute substantial compliance with the payment of ECOLA under WO No. 9.
Undoubtedly, the hotel employees right to their shares in the service charges collected by Dusit Hotel is
distinct and separate from their right to ECOLA; gratification by the hotel of one does not result in the
satisfaction of the other. (PHILIPPINE HOTELIERS, INC., DUSIT HOTEL NIKKO-MANILA v.

37

NATIONAL UNION OF WORKERS IN HOTEL, RESTAURANT, AND ALLIED INDUSTRIES

(NUWHRAIN-APL-IUF)- DUSIT HOTEL NIKKO CHAPTER, G.R. No. 181972, August 25, 2009)
Social Justice
The Court is not unmindful of the equally important right of respondent as employer under the Constitution
to be protected in its property and interest. The particular circumstances attendant in this case, however,
convince the Court that the supreme penalty of dismissal upon petitioner is not justified. The law regards the
workers with compassion. Even where a worker has committed an infraction of company rules and
regulations, a penalty less punitive than dismissal may suffice. This is not only because of the laws concern
for the workingman. There is, in addition, his family to consider. Unemployment brings untold hardships
and sorrows on those dependent upon the wage-earner. (ABELARDO P. ABEL v. PHILEX MINING
CORPORATION, G.R. No. 178976, July 31, 2009)
While the Court commiserates with petitioners on their loss of employment, especially now that the
Cooperative is no longer a going concern, it cannot simply, by default, hold the Cooperatives corespondents liable for their claims without any factual and legal justification therefor. The social justice
policy of labor laws and the Constitution is not meant to be oppressive of capital. (OLDARICO S.
TRAVEO, et al v. BOBONGON BANANA GROWERS MULTI-PURPOSE COOPERATIVE, TIMOG
AGRICULTURAL CORPORATION, DIAMOND FARMS, INC., and DOLE ASIA PHILIPPINES, G.R.
No. 164205, September 3, 2009)
In the present case, respondent had been employed with the petitioner for almost twelve (12) years. On
February 13, 1996, he suffered from a fractured left transverse process of fourth lumbar vertebra, while
their vessel was at the port of Yokohama, Japan. After consulting a doctor, he was required to rest for a
month. When he was repatriated to Manila and examined by a company doctor, he was declared fit to
continue his work. When he reported for work, petitioner refused to employ him despite the assurance of its
personnel manager. Respondent patiently waited for more than one year to embark on the vessel as 2rd
Engineer, but the position was not given to him, as it was occupied by another person known to one of the
stockholders. Consequently, for having been deprived of continued employment with petitioners vessel,
respondent opted to apply for optional retirement. In addition, records show that respondents seamans
book, as duly noted and signed by the captain of the vessel was marked Very Good, and recommended
for hire. Moreover, respondent had no derogatory record on file over his long years of service with the
petitioner.
Considering all of the foregoing and in line with Eastern, the ends of social and compassionate justice would
be served best if respondent will be given some equitable relief. Thus, the award of P100,000.00 to
respondent as financial assistance is deemed equitable under the circumstances.( EASTERN SHIPPING
LINES, INC V. FERRER D. ANTONIO G.R. No. 171587, October 13, 2009)
Petitioners bare invocation of the interest of substantial justice does not lie. Only under exceptionally
meritorious cases may a relaxation from an otherwise stringent rule be allowed to relieve a litigant of an
injustice not commensurate with the degree of thoughtlessness in not complying with the procedure
prescribed the existence of which petitioners failed to demonstrate. (WALLEM MARITIME SERVICES,
INC. and SCANDIC SHIPMANAGEMENT LIMITED v. ERIBERTO S. BULTRON, G.R. No. 185261,
October 2, 2009)
Strike
Illegal Strike
The use of unlawful means in the course of a strike renders such strike illegal. Therefore, pursuant to the
principle of conclusiveness of judgment, the March 9, 1998 strike was ipso facto illegal. The filing of a

38

petition to declare the strike illegal was thus unnecessary. (JACKBILT INDUSTRIES, INC.v. JACKBILT
EMPLOYEESWORKERS UNION-NAFLU-KMU,G.R. Nos. 171618-19, March 20, 2009)
Dinopol and Lustria Decision
There is no conflict between the Dinopol and the Lustria decisions. While both rulings involve the same
parties and same issues, there is a distinction between the remedies sought by the parties in these two cases.
In the Dinopol decision, it was QCSC which filed a petition to declare the illegality of the 12 August 1997
strike by the union. The consequence of the declaration of an illegal strike is termination from employment,
which the Labor Arbiter did so rule in said case. However, not all union members were terminated. In fact,
only a few union officers were validly dismissed in accordance with Article 264 of the Labor Code.
Corollarily, the other union members who had merely participated in the strike but had not committed any
illegal acts were not dismissed from employment. Hence, the NLRC erred in declaring the employment
status of all employees as having been lost or forfeited by virtue of the Dinopol decision.
On the other hand, the Lustria decision involved the unfair labor practices alleged by the union with
particularity. In said case, Labor Arbiter Lustria sided with the Union and found QCSC guilty of such
practices. As a consequence, the affected employees were granted backwages and separation pay. The grant
of backwages and separation pay however was not premised on the declaration of the illegality of the strike
but on the finding that these affected employees were constructively dismissed from work, as evidenced by
the layoffs effected by the company. As explained in the Lustria decision:
Considering that the temporary lay-off of listed employees effected by the respondents on 16 August 1997
was without documentary evidence to determine its validity, it is our considered view and we so hold that
said employees were constructively dismissed without just or authorized cause and observance of due
process. This opinion finds support from the hard and cold fact of absence of prior notice, report with the
regional office of the Department of Labor and Employment having jurisdiction over the area and they
remain under lay-off status of employment. In conclusion, they are entitled to backwages and separation pay
in lieu of reinstatement as prayed.
Clearly, there are two separate decisions issued by two different labor arbiters involving the same parties and
interests. Considering that the remedies sought by the parties in each case differ, these two rulings may coexist. (LOLITA A. LOPEZ, ET. al., vs. QUEZON CITY SPORTS CLUB, INC.,G.R. No. 164032, January
19, 2009)
Substitution of Parties
Finally, as to the prayer of the counsel of Mr. Gumarang to allow the latter to be substituted by his wife, and
by his former co-employees whom he had allegedly represented before the Regional Arbitration Branch of
the NLRC, we grant the same insofar as the wife is concerned, she being his heir, but not as to the other coemployees. We cannot allow petitioner Gumarangs co-employees to take his place because, if we do, we
would be allowing them to become parties to the instant petition when they are not. It would have been
different if they presented evidence showing that they had authorized Mr. Gumarang to file the petition on
their behalf before this Court and even before the Court of Appeals. This, they had not done.
(NORTHEASTERN COLLEGE TEACHERS AND EMPLOYEES ASSOCIATION vs. NORTHEASTERN
COLLEGE, INC., G.R. No. 152923, January 19, 2009)
Suspension
Thus, the CA and the NLRC correctly observed that the worst that respondent committed was an inadvertent
infraction. For that, the extreme penalty of dismissal imposed on him by petitioners was grossly
disproportionate. Taking into account the managerial position he held and the prior warning issued to him
for failing to communicate with his superiors, the penalty commensurate to the violation he committed

39

should be suspension for three months. The period of his suspension is to be deducted from the period for
which he is entitled to backwages as awarded by the NLRC and affirmed by the CA. (GULF AIR, JASSIM
HINDRI ABDULLAH and RESTY AREVALO v. NATIONAL LABOR RELATIONS COMMISSION and
ROBERTO J.C. REYES, G.R. No. 159687, April 24, 2009)
Teachers
Employment Status
The common practice is for the employer and the teacher to enter into a contract, effective for one school
year. At the end of the school year, the employer has the option not to renew the contract, particularly
considering the teachers performance. If the contract is not renewed, the employment relationship
terminates. If the contract is renewed, usually for another school year, the probationary employment
continues. Again, at the end of that period, the parties may opt to renew or not to renew the contract. If
renewed, this second renewal of the contract for another school year would then be the last year since it
would be the third school year of probationary employment. At the end of this third year, the employer
may now decide whether to extend a permanent appointment to the employee, primarily on the basis of the
employee having met the reasonable standards of competence and efficiency set by the employer. For the
entire duration of this three-year period, the teacher remains under probation. Upon the expiration of his
contract of employment, being simply on probation, he cannot automatically claim security of tenure and
compel the employer to renew his employment contract. It is when the yearly contract is renewed for the
third time that Section 93 of the Manual becomes operative, and the teacher then is entitled to regular or
permanent employment status. (MAGIS YOUNG ACHIEVERS LEARNING CENTER and MRS.
VIOLETA T. CARIO v. ADELAIDA MANALO, G.R. No. 178835, February 13, 2009 )
Probationary Period for Teachers
Thus, in light of our ruling of Espiritu Santo Parochial School v. NLRC that, in the absence of an express
period of probation for private school teachers, the three-year probationary period provided by the Manual
of Regulations for Private Schools must apply likewise to the case of respondent. In other words, absent any
concrete and competent proof that her performance as a teacher was unsatisfactory from her hiring on April
18, 2002 up to March 31, 2003, respondent is entitled to continue her three-year period of probationary
period, such that from March 31, 2003, her probationary employment is deemed renewed for the following
two school years. (MAGIS YOUNG ACHIEVERS LEARNING CENTER and MRS. VIOLETA T.
CARIO v. ADELAIDA . MANALO, G.R. No. 178835, February 13, 2009 )
Termination of Employment
Just Causes
Neglect of Duty/Abandonment
Hence, we find it hard to believe that he will just abandon his job after petitioners gave him a chance to
continue working for them. We uphold the following findings of the Court of Appeals that respondent did
not abandon his job:
In the case at bar, the charge of abandonment is belied by the following circumstances: First, the high
improbability of private respondent to intentionally abandon his work considering that he had already served
a penalty of suspension for his infractions and violations as well as the petitioners tacit condonation of the
infractions he committed, by permitting him to go back to work and by asking him to execute a promissory
note. It is incongruent to human nature, that after having ironed things out with his employer, an employee
would just not report for work for no apparent reason. Secondly, there was no proof that petitioner sent
private respondent a notice of termination on the ground of abandonment, if indeed it is true that he really

40

failed to go back to work. Section 2, Rule XVI, Book V, Rules and regulations implementing the Labor
Code provides that any employer who seeks to dismiss a worker shall furnish him a written notice stating the
particular act or omission constituting the ground for his dismissal. In cases of abandonment of work, the
notice shall be served at the workers last known address (Icawat vs. National Labor Relations Commission,
334 SCRA 75, 81 [2000]). For this reason, We are constrained to give credence to private respondents
assertion that he attempted to report back to work but he was just asked to leave as he was considered
terminated. And lastly, private respondents filing of a case for illegal dismissal with the labor arbiter negates
abandonment. As held by the Supreme Court, a charge of abandonment is totally inconsistent with the
immediate filing of a complaint for illegal dismissal, more so when it includes a prayer for reinstatement
(Globe Telecom, Inc. vs Florendo-Flores, 390 SCRA 201, 2002[sic]-203 [2002]). (BC CABLE MASTER
SYSTEM AND/OR EVELYN CINENSE vs. MARCIAL BALUYOT, G.R. No. 172670,January 20, 2009)
In the instant case, respondent was informed by no less than his immediate superior, the chief cook and by
his brother that he was being terminated. Like the Court of Appeals, the Court finds no reason why these two
would give respondent the false impression that he was being dismissed, and in turn, the Court, like the
appellate court again, is inclined to believe that they were given prior instruction, or they at least had prior
knowledge of the termination. Moreover, as previously discussed, the charge of abandonment does not
square with the fact that a week after respondents alleged dismissal, he filed a complaint with the NLRC.
(HARBORVIEW RESTAURANT v. REYNALDO LABRO, G.R. No. 168273, April 30, 2009)
To constitute abandonment, there must be clear proof of deliberate and unjustified intent to sever the
employer-employee relationship. Clearly, the operative act is still the employees ultimate act of putting an
end to his employment. However, an employee who takes steps to protest her layoff cannot be said to have
abandoned her work because a charge of abandonment is totally inconsistent with the immediate filing of a
complaint for illegal dismissal, more so when it includes a prayer for reinstatement. When Eleonor filed the
illegal dismissal complaint, it totally negated petitioners theory of abandonment. (SOUTH DAVAO
DEVELOPMENT COMPANY, INC. (NOW SODACO AGRICULTURAL CORPORATION) AND/OR
MALONE PACQUIAO AND VICTOR A. CONSUNJI, v. SERGIO L. GAMO, et. al., G.R. No. 171814,
May 8, 2009)
In petitioners case, despite the directive cum caveat of CASI for them to report back for work within two
days from receipt thereof, they failed to comply therewith. After three years, as reflected above, they offered
to return to work. Their intention to sever the employer-employee relationship with CASI is manifested,
however, by the length of time they refused to return to work, for they had, in the interim, been looking for
other jobs. (MIGUEL A. PILAPIL, et al. v. NATIONAL LABOR RELATIONS COMMISSION G.R. No.
178229 October 23, 2009)
Respondents failed to discharge this burden. Mere absence of petitioner is not sufficient to establish the
allegation of abandonment. The prolonged absence of petitioner was not without justifiable reason because it
was established that her failure to report for work was due to the injury she suffered in the course of her
employment and with sufficient notice to respondents. Petitioner also presented herself for work on the date
stated in the medical certificate which stated that she is fit to resume work. (CONCEPCION FAELDONIA
v. TONG YAK GROCERIES,JAYME GO and MERLITA GO,G.R. No. 182499, October 2, 2009)
Furthermore, the Court agrees with respondents when they argued in their petition filed with the CA that if
an employees aim is to secure the benefits due him from his employer, abandonment would surely be an
illogical and impractical recourse, especially for simple laborers such as respondent Aguilar. Considering the
difficult times in which our country is in it is illogical and even suicidal for an employee like Aguilar to
abandon his work, knowing fully well of the widespread unemployment and underemployment problems as
well as the difficulty of looking for a means of livelihood, simply because his employer rejected his demand
for salary increase. Under the given facts, no basis in reason exists for the petitioners theory that Aguilar
abandoned his job. (BARON REPUBLIC THEATRICAL V. NORMITA P. PERALTA et al, G.R. No.
170525, October 2, 2009)

41

Gross Negligence
An employer cannot legally be compelled to continue with the employment of a person admittedly guilty of
gross negligence in the performance of his duties. This holds true specially if the employees continued
tenure is patently inimical to the employers interest. What happened was not a simple case of oversight and
could not be attributed to a simple lapse of judgment. No amount of good intent, or previous conscientious
performance of duty, can assuage the damage Mateo caused LBC when he failed to exercise the requisite
degree of diligence required of him under the circumstances.( LBC EXPRESS METRO MANILA, INC.
and LORENZO A. NIO v. JAMES MATEO, G.R. No. 168215, June 9, 2009)
To warrant removal from service, the negligence should not merely be gross but also habitual. Gross
negligence implies a want or absence of or failure to exercise even slight care or diligence, or the entire
absence of care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid
them. Habitual neglect implies repeated failure to perform ones duties for a period of time, depending upon
the circumstances. The single or isolated act of negligence does not constitute a just cause for the dismissal
of the employee. (ABELARDO P. ABEL v. PHILEX MINING CORPORATION, G.R. No. 178976, July 31,
2009)
Serious Misconduct
PNB may rightfully terminate Maralits services for a just cause, including serious misconduct. Serious
misconduct is improper conduct, a transgression of some established and definite rule of action, a forbidden
act, or a dereliction of duty. Having been dismissed for a just cause, Maralit is not entitled to her retirement
benefits. (ESTER B. MARALIT v. PHILIPPINE NATIONAL BANK, G.R. No. 163788, August 24, 2009)
By sleeping on the job and leaving his work area without prior authorization, Tomada did not merely
disregard company rules. Tomada, in effect, issued an open invitation for others to violate those same
company rules. Indeed, considering the presence of trainees in the building and Tomadas acts, Tomada
failed to live up to his companys reasonable expectations. Tomadas offenses cannot be excused upon a plea
of being a first offense, or have not resulted in prejudice to the company in any way. No employer may
rationally be expected to continue in employment a person whose lack of morals, respect and loyalty to his
employer, regard for his employers rules, and appreciation of the dignity and responsibility of his office, has
so plainly and completely been bared. (EDUARDO M. TOMADA, SR. v. RFM CORPORATION-BAKERY
FLOUR DIVISION and JOSE MARIA CONCEPCION III, G.R. No. 163270, September 11, 2009)
Moreover, the peculiar nature of Espaderos position aggravates her misconduct. Misconduct has been
defined as improper or wrong conduct; the transgression of some established or definite rule of action, a
forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in
judgment. The misconduct, to be serious, must be of such a grave character and not merely trivial or
unimportant. To constitute just cause for termination, it must be in connection with the employees work.
With the degree of trust expected of Espadero, such infraction can hardly be classified as one that is trivial or
unimportant. Her failure to promptly report the incident reflects a cavalier regard for the responsibility
required of her in the discharge of the duties of her position. (EATS-CETERA FOOD SERVICES OUTLET
and/or SERAFIN RAMIREZ v. MYRNA B. LETRAN and MARY GRACE ESPADERO, G.R. No. 179507,
October 2, 2009)
An employee who fails to account for and deliver the funds entrusted to him is liable for misappropriating
the same and is consequently guilty of serious misconduct. Petitioner therefore validly dismissed
respondent.( SUPERLINES TRANSPORTATION COMPANY, INC. v. EDUARDO PINERA G.R. No.
188742, October 13, 2009)
o Simple Misconduct

42

Based on the foregoing, we consider respondents offense to be a simple misconduct which does not merit
termination of his employment. The penalty of dismissal from service is not commensurate to respondents
offense. Although petitioner, as an employer, has the right to discipline its erring employees, exercise of
such right should be tempered with compassion and understanding. The magnitude of the infraction
committed by an employee must be weighed and equated with the penalty prescribed and must be
commensurate thereto, in view of the gravity of the penalty of dismissal or termination from the service. The
employer should bear in mind that in termination cases, what is at stake is not simply the employees job or
position but his very livelihood. (PHILIPPINE LONG DISTANCE TELEPHONE COMPANY v.
INOCENCIO B. BERBANO, JR., G.R. No. 165199, November 27, 2009)
Loss of Trust and Confidence
Petitioner, in his Position Paper filed before the LA and in his Sagot na Sinumpaang Salaysay, averred that
sometime in August 2004, Alido informed him of the illegal activities in the company premises. But this fact
was not reflected in his Partial Audit Report; instead, petitioner made it appear therein that it was upon the
initiative of Lejos that he discovered the illegal activities only on October 28, 2004, after Lejos already
resigned from the company. The basis for terminating the employment of petitioner actually came from
petitioner himself due to the substantial and irreconcilable inconsistencies in the narration of facts in his
Audit Report and his Sagot na Sinumpaang Salaysay filed before the company, and his pleadings before the
lower tribunals and before this Court. In sum, it cannot be denied that he withheld this information from his
immediate supervisor and from the company a clear breach of the trust and confidence the company had
reposed in him as one of its Auditors.( ROMEO N. VENTURA, vs. COURT OF APPEALS, NATIONAL
LABOR RELATIONS COMMISSION, GENUINO ICE CO., INC., and HECTOR GENUINO, G.R. No.
182570, January 27, 2009
Indeed, by obtaining an altered police report and medical certificate, petitioners deliberately attempted to
cover up the fact that Sales was under the influence of liquor at the time the accident took place. In so doing,
they committed acts inimical to respondents interests. They thus committed a work-related willfull breach
of the trust and confidence reposed in them. (ERIC DELA CRUZ and RAUL M. LACUATA v. COCACOLA BOTTLERS PHILS. INC., G.R. No. 180465, July 31, 2009)
The amount misappropriated by petitioner Manliclic is irrelevant. More than the resulting material damage
or prejudice, it is petitioner Manliclics very act of misappropriation that is offensive to respondent PELCO
I. If taxes are the lifeblood of the state, then, by analogy, the payment collection is the lifeblood of the
cooperative. The collection provides respondent PELCO I with the financial resources to continue its
operations. Respondent PELCO I cannot afford to continue in its employ dishonest bill collectors.
By his own admission, petitioner Manliclic committed a breach of the trust reposed in him by his employer,
respondent PELCO I. This constitutes valid cause for his dismissal from service. (CHONA ESTACIO and
LEOPOLDO MANLICLIC v. PAMPANGA I ELECTRIC COOPERATIVE, INC., and LOLIANO E.
ALLAS, G.R. No. 183196, August 19, 2009)
We are not unmindful of the employers right to dismiss an employee based on fraud or willful breach of
trust. However, the loss of confidence must be based not on an ordinary breach by the employee of the trust
reposed in him by the employer, but, in the language of Article 282(c) of the Labor Code, on a willful
breach. A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as
distinguished from an act done carelessly, thoughtlessly, heedlessly, or inadvertently. It must rest on
substantial grounds and not on the employers arbitrariness, whims, caprices or suspicion; otherwise, the
employee would eternally remain at the mercy of the employer. It should be genuine and not simulated; nor
should it appear as a mere afterthought to justify an earlier action taken in bad faith or as a subterfuge for
causes that are improper, illegal or unjustified. It has never been intended to afford an occasion for abuse
because of its subjective nature. There must, therefore, be an actual breach of duty committed by the
employee, which must be established by substantial evidence. In this case, SLMC utterly failed to establish

43

the requirements prescribed by law and jurisprudence for a valid dismissal on the ground of breach of trust
and confidence. (ST. LUKES MEDICAL CENTER, INCORPORATED v. JENNIFER LYNNE C.
FADRIGO, G.R. No. 185933, November 25, 2009)
Verily, the actions of Tirazona reflected an obdurate character that is arrogant, uncompromising, and hostile.
By immediately and unreasonably adopting an adverse stance against PET, she sought to impose her will on
the company and placed her own interests above those of her employer. Her motive for her actions was
rendered even more questionable by her exorbitant and arbitrary demand for P2,000,000.00 payable within
five days from demand. Her attitude towards her employer was clearly inconsistent with her position of trust
and confidence. Her poor character became even more evident when she read what was supposed to be a
confidential letter of the legal counsel of PET to PET officers/directors expressing his legal opinion on
Tirazonas administrative case. PET was, therefore, fully justified in terminating Tirazonas employment for
loss of trust and confidence. (MA. WENELITA S. TIRAZONA, vs. PHILIPPINE EDS TECHNOSERVICE INC. (PET INC.) AND/OR KEN KUBOTA, MAMORU ONO and JUNICHI HIROSE, G.R. No.
169712, January 20, 2009)
To recapitulate, the right of an employer to dismiss an employee on account of loss of trust and confidence
must not be exercised whimsically. To countenance an arbitrary exercise of that prerogative is to negate the
employees constitutional right to security of tenure. In other words, the employer must clearly and
convincingly prove by substantial evidence the facts and incidents upon which loss of confidence in the
employee may be fairly made to rest; otherwise, the latters dismissal will be rendered illegal. (SAN
MIGUEL CORPORATION vs. NATIONAL LABOR RELATIONS COMMISSION AND WILLIAM L.
FRIEND, JR., G.R. No. 153983, May 26, 2009)
Loss of confidence must not be indiscriminately used as a shield by the employer against a claim that the
dismissal of an employee was arbitrary. Loss of confidence as a just cause for termination of employment is
premised on the fact that the employee concerned holds a position of responsibility or trust and confidence.
He must be invested with confidence on delicate matters, such as custody handling or care and protection of
the property and assets of the employer. And, in order to constitute a just cause for dismissal, the act
complained of must be work-related and shows that the employee concerned is unfit to continue to work for
the employer. (ADAM B. GARCIA v. NATIONAL LABOR RELATIONS COMMISSION (SECOND
DIVISION), LEGAZPI OIL COMPANY, INC., ROMEO F. MERCADO and GUS ZULUAGA G.R. No.
172854, April 16, 2009)
Considering the foregoing, we find that respondents Apostol and Opulencia were dismissed by TIPI for a
valid and just cause. The relationship of employer and employee, specially where the employee has access to
the employers property, necessarily involves trust and confidence. Where the rules laid down by the
employer to protect its property are violated by the very employee who is entrusted and expected to follow
and implement the rules, the employee may be validly dismissed from service. (TRIUMPH
INTERNATIONAL(PHILS.), INC.FIRST DIVISION v. RAMON L. APOSTOL and BEN M.
OPULENCIA, G.R. No. 164423, June 16, 2009)
As Airport Manager, respondent occupies a position of such extreme sensitivity that the existence of some
basis or reasonable ground for his involvement in any irregularity is enough to destroy the trust and
confidence which petitioner Gulf Air had reposed in him. However, it is settled that for breach of trust to
constitute a valid cause for dismissal, the same must be willful. Ordinary breach of trust will not suffice.
(GULF AIR, JASSIM HINDRI ABDULLAH and RESTY AREVALO v. NATIONAL LABOR
RELATIONS COMMISSION and ROBERTO J.C. REYES, G.R. No. 159687, April 24, 2009)
The second requisite is that there must be an act that would justify the loss of trust and confidence. Loss of
trust and confidence, to be a valid cause for dismissal, must be based on a willful breach of trust and
founded on clearly established facts. The basis for the dismissal must be clearly and convincingly
established but proof beyond reasonable doubt is not necessary. Respondents evidence against petitioner

44

fails to meet this standard. Its lone witness, Lupega, did not support his affidavit and testimony during the
company investigation with any piece of evidence at all. No other employee working at respondents mine
site attested to the truth of any of his statements. Standing alone, Lupegas account of the subsidence area
anomaly could hardly be considered substantial evidence. And while there is no concrete showing of any ill
motive on the part of Lupega to falsely accuse petitioner, that Lupega himself was under investigation when
he implicated petitioner in the subsidence area anomaly makes his uncorroborated version suspect.
(ABELARDO P. ABEL v. PHILEX MINING CORPORATION, G.R. No. 178976, July 31, 2009)
o Application of the Doctrine of Loss of Trust and Confidence
Recent decisions of this Court have distinguished the treatment of managerial employees from that of the
rank-and-file personnel, insofar as the application of the doctrine of loss of trust and confidence is
concerned. Thus, with respect to rank-and-file personnel, loss of trust and confidence, as ground for valid
dismissal, requires proof of involvement in the alleged events in question, and that mere uncorroborated
assertions and accusations by the employer will not be sufficient. But as regards a managerial employee, the
mere existence of a basis for believing that such employee has breached the trust of his employer would
suffice for his dismissal. Hence, in the case of managerial employees, proof beyond reasonable doubt is not
required. It is sufficient that there is some basis for the employers loss of trust and confidence, such as when
the employer has reasonable ground to believe that the employee concerned is responsible for the purported
misconduct, and the nature of his participation therein renders him unworthy of the trust and confidence
demanded of his position. Nonetheless, the evidence must be substantial and must establish clearly and
convincingly the facts on which the loss of confidence rests and not on the employers arbitrariness, whims,
and caprices or suspicion. (TRIUMPH INTERNATIONAL(PHILS.), INC.FIRST DIVISION v. RAMON L.
APOSTOL and BEN M. OPULENCIA, G.R. No. 164423, June 16, 2009)
o Positions of Trust
There are two classes of positions of trust. The first class consists of managerial employees. They are
defined as those vested with the powers or prerogatives to lay down management policies and to hire,
transfer, suspend, lay-off, recall, discharge, assign or discipline employees or effectively recommend such
managerial actions. The second class consists of cashiers, auditors, property custodians, etc. They are
defined as those who, in the normal and routine exercise of their functions, regularly handle significant
amounts of money or property. (ABELARDO P. ABEL v. PHILEX MINING CORPORATION, G.R. No.
178976, July 31, 2009)
Authorized Causes
Retrenchment
The proper view, therefore, is that the Sec. 1 criteria qualify the factors of seniority and needs of the
company in Sec. 5(c). Stated a bit differently, Sec. 5(c) should be understood in the light of Sec. 1 which, to
stress, provides seniority, efficiency and attitude, job knowledge and potential, and attendance as among the
factors that should guide the company in choosing the employees to be laid-off or kept. All other things
being equal, a company would necessarily need to retain those who had rendered dedicated and highly
efficient service and whose knowledge, attendance, and potential hew with company standards. Any other
measure would be senseless in the business viewpoint. Accordingly, the merit rating used by MMPC based
on Sec. 5 in conjunction with and as qualified by the factors provided under Sec. 1 is fair and reasonable,
and, to be sure, well within the contemplation of the parties CBA. In fact, Alfredo, shorn of the contention
that the merit rating is against the CBA, has not shown any arbitrariness on the part of MMPC in the
evaluation, selection, and retrenchment of employees. (ALFREDO A. MENDROS, JR v. MITSUBISHI
MOTORS PHILS. CORPORATION (MMPC), G.R. No. 169780, February 16, 2009)
Records do not show any criterion adopted or used by petitioner in dismissing respondent. Respondent was
terminated without considering her seniority. Retrenchment scheme without taking seniority into account

45

rendered the retrenchment invalid. While respondent was the third most senior employee among the 7
employees in petitioners personnel department, she was retrenched while her other co-employees junior
than her were either retained in the Personnel Department or were transferred to other positions in the
company. There was no showing that respondent was offered to be transferred to other positions.(EMCOR
INCORPORATED v. MA. LOURDES D. SIENES, G.R. No. 152101, September 8, 2009)
At all events, even if the comparative report were to be considered, the Court is not persuaded on the
necessity of resorting to retrenchment to prevent or minimize actual or imminent business losses on the part
of petitioner. For retrenchment should only be resorted to when other less drastic means have been tried and
found to be inadequate. So Polymart Paper Industries, Inc. v. NLRC instructs:
. . . [E]ven if business losses were indeed sufficiently proven, the employer must still prove that
retrenchment was resorted to only after less drastic measures such as the reduction of both management and
rank-and-file bonuses and salaries, going on reduced time, improving manufacturing efficiency, reduction of
marketing and advertising costs, faster collection of customer accounts, reduction of raw materials
investment and others, have been tried and found wanting. (Emphasis supplied)
In the case at bar, petitioner did not adduce evidence to prove that retrenchment was resorted to because
other measures were undertaken to abate actual or future business losses but thus failed. (BIO QUEST
MARKETING INC. and/or JOSE L. CO v. EDMUND REY, G.R. No. 181503,September 18, 2009)
Requirement for Retrenchment
For a valid termination due to retrenchment, the law also requires that written notices of the intended
retrenchment be served by the employer on the worker and on the DOLE at least one month before the
actual date of the retrenchment. The purpose of this requirement is to give employees time to prepare for the
eventual loss of their jobs, as well as to give DOLE the opportunity to ascertain the veracity of the alleged
cause of termination. In this case, petitioner insists that the payment of 30 days salary to respondents in
place of notice was sufficient compliance with the 30-day notice rule. We cannot agree. Nothing in the law
gives petitioner the option to substitute the required prior written notice with payment of 30 days salary.
Indeed, a job is more than the salary it carries. Payment of 30 days salary cannot compensate for the
psychological effect or the stigma of immediately finding ones self laid off from work. It cannot be a fully
effective substitute for the 30 days written notice requirement by law, especially when, as in this case, no
notice was given to the DOLE. Even as the letters of voluntary acceptance were dated July 25, 1998, the
notices of termination given on July 23, 1998 were effective the following day. In essence, respondents had
already been dismissed before they signed the letters of voluntary acceptance. Clearly, petitioner deprived
respondents of their right to statutory due process. For this, we affirm the appellate courts award of nominal
damages to respondents. But, consistent with our ruling in Agabon v. National Labor Relations Commission,
the amount of nominal damages should be P30,000. We also sustain the award of attorneys fees as it is
sanctioned by law. (MOBILIA PRODUCTS, INC. v. ALAN G. DEMECILLO, et al., G.R. No. 170669,
February 4, 2009)
Losses
Third, it bears to state that the aforequoted Art. 283 of the Code uses the phrase retrenchment to prevent
losses. The phrase necessarily implies that retrenchment may be effected even in the event only of
imminent, impending, or expected losses. The employer need not wait for substantial losses to materialize
before exercising ultimate and drastic option to prevent such losses. In the case at bench, MMPC was
already financially hemorrhaging before finally resorting to retrenchment. (ALFREDO A. MENDROS, JR v.
MITSUBISHI MOTORS PHILS. CORPORATION (MMPC), G.R. No. 169780, February 16, 2009)
However, apart from petitioners bare assertion of reduced orders from Japan, the only evidence it presented
were the letters of voluntary acceptance of retrenchment, and waivers and quitclaims signed by respondents.

46

To our mind, these were insufficient to show that petitioner indeed suffered business losses so serious as to
necessitate the reduction of personnel. We have constantly ruled that financial statements audited by
independent external auditors constitute the normal method of proof of the profit and loss performance of a
company. Any less exacting standard of proof would render too easy the abuse of this ground for termination
of services of employees. Petitioner submitted none. Further, let it be clarified that our ruling in International
Hardware, Inc. v. NLRC did not dispense with the responsibility of the employer to substantiate losses. It
merely exempts the latter from giving notice of retrenchment to its employees and DOLE. (MOBILIA
PRODUCTS, INC. v. ALAN G. DEMECILLO, et al., G.R. No. 170669, February 4, 2009)
Unfair Labor Practice
Totality of the Conduct Doctrine
Then came the Lustria decision, issued two (2) months later, finding that QCSC had committed unfair labor
practices against the union and accordingly granting backwages and separation pay in favor of 112
employees. The Lustria decision emanated from a complaint for unfair labor practice against QCSC. Culled
from the unions pleadings were the specific acts committed by QCSC, such as:
1. Insulting of the Union President as evidenced by the Salaysay of Ma. Cecilia Pangan;
2. Cuddling and treating the minority union with favor, such as paying their salaries/wages fully and ahead
of the incumbent union and as if it were the incumbent bargaining agents;
3. Discouraging the members of the incumbent union from continuing their membership with the incumbent
union as evidenced by the Pinagsamang Salaysay of Ramiro Espinosa and Ronaldo Q. Lim;
4. Bribing union member and promising promotion if he will not join the strike as evidenced by the Salaysay
of Bernard Delta;
5. Transferring union members to another job description;
6. Replacing them with members of minority union evidenced by Leslie Tamayos Salaysay;
7. Subjecting one union member to a very tense confrontation in the General Managers Office after she
commented during the NCMB conference that the 201 file of the employees are intact, resulting to her being
taken to the hospital for nervous breakdown; and
8. Requiring the union members to submit another information sheet, and failure to do so would mean no
payment of their June 16-30, 1997 salary.
Applying the totality of the conduct doctrine, Labor Arbiter Lustria held that QCSC had committed unfair
labor practices. (LOLITA A. LOPEZ, ET. al., vs. QUEZON CITY SPORTS CLUB, INC.,G.R. No. 164032,
January 19, 2009)
Unfair labor practice refers to acts that violate the workers right to organize. The prohibited acts are
related to the workers right to self-organization and to the observance of a CBA. Without that element, the
acts, even if unfair, are not unfair labor practices. (GENERAL SANTOS COCA-COLA PLANT FREE
WORKERS UNION-TUPAS vs. COCA-COLA BOTTLERS PHILS., INC. (GENERAL SANTOS CITY),
THE COURT OF APPEALS and THE NATIONAL LABOR RELATIONS COMMISSION, G.R. No.
178647)
Here, respondent Union went on strike in the honest belief that petitioner was committing ULP after the
latter decided to downsize its workforce contrary to the staffing/manning standards adopted by both parties
under a CBA forged only four (4) short months earlier. The belief was bolstered when the management hired
100 contractual workers to replace the 48 terminated regular rank-and-file employees who were all Union
members. Indeed, those circumstances showed prima facie that the hotel committed ULP. Thus, even if
technically there was no legal ground to stage a strike based on ULP, since the attendant circumstances
support the belief in good faith that petitioners retrenchment scheme was structured to weaken the
bargaining power of the Union, the strike, by exception, may be considered legal. (HOTEL ENTERPRISES
OF THE PHILIPPINES, INC. (HEPI), owner of Hyatt Regency Manila, v. SAMAHAN NG MGA

47

MANGGAGAWA SA HYATT-NATIONAL UNION OF WORKERS IN THE HOTEL AND

RESTAURANT AND ALLIED INDUSTRIES (SAMASAH-NUWHRAIN), G.R. No. 165756, June 5,
2009)
Petitioners never substantiated their allegations. In a similar case, Schering Employees Labor Union (SELU)
et al. v. Schering Plough Corporation, petitioner Sereneo, the president of SELU, charged respondent with
ULP and illegal dismissal because she was in the process of renegotiating the CBA with respondent when
she was dismissed on the ground of loss of trust and confidence. We said:
Petitioners accusation of union busting is bereft of any proof. We scanned the records very carefully and
failed to discern any evidence to sustain such charge.
In Tiu vs. NLRC, we held:
. . . . It is the union, therefore, who had the burden of proof to present substantial evidence to support its
allegations (of unfair labor practices committed by management).
xxx xxx xxx.
. . ., but in the case at bar the facts and the evidence did not establish even at least a rational basis why the
union would wield a strike based on alleged unfair labor practices it did not even bother to substantiate
during the conciliation proceedings. It is not enough that the union believed that the employer committed
acts of unfair labor practice when the circumstances clearly negate even a prima facie showing to warrant
such a belief. (RENITA DEL ROSARIO, et al., v. MAKATI CINEMA SQUARE CORPORATION, G.R.
No. 170014, July 3, 2009)
Voluntary Resignation
Finally, respondent claims that in light of the opinion of the physician in Korea that he had suspected
ischemic heart, petitioners affirmed his medical repatriation. As reflected in the immediately preceding
paragraph, however, ischemic heart disease cannot develop in a short span of time that respondent served as
chief cook for petitioners. In fact, as indicated above, the Gleneagles Maritime Medical Centre doctor who
treated respondent in May 2000 for abscess in his left hand had noted respondents [h]istory of
hypertension for 3 years. Moreover, the Korean physician did not make any recommendation as to
respondents bill of health for petitioners to assume that he was fit for repatriation.
IN FINE, respondents actions show that he voluntarily resigned. (VIRGEN SHIPPING CORPORATION,
CAPT. RENATO MORENTE & ODYSSEY MARITIME PTE. LTD., NATIONAL LABOR RELATIONS
COMMISSION v. JESUS B. BARRAQUIO, G.R. No. 178127, April 16, 2009)
Work-related Disease
If we found in Seagull Shipmanagement that the different climates and unpredictable weather, as well as the
stress of the job, had a correlation with the heart disease of a seafarer working as a radioman on a vessel,
then what more in the heart disease of a seafarer serving as a ship master, a position involving more strain
and pressure? A Tug (boat) Master is primarily tasked to operate tug boats, a powerful marine vessel that
meets large ships out at sea and attach a line to guide/steer the same into and out of berths. In operating such
a powerful vessel, a Tug Master requires not just a thorough knowledge of the port environment in which he
is operating, but a high level of skill as well. In fact, in the case at bar, respondent ADAMS recognized how
grueling petitioner Nisdas job was, according the latter a month of paid vacation every three months of
straight service. Thus, more than a reasonable connection between the nature of petitioner Nisdas job and
his Coronary Artery Disease has been established. Petitioner Nisda was able to sufficiently prove, by
substantial evidence, that his Coronary Artery Disease was work-related, given the arduous nature of his job

48

that caused his disease or, at least, aggravated any pre-existing condition he might have had. Respondents
Sea Serve and ADAMS, on the other hand, utterly failed to refute the said connection. (CARLOS N. NISDA
v. SEA SERVE MARITIME AGENCY and KHALIFA A. ALGOSAIBI DIVING AND MARINE
SERVICES, G. R. No. 179177, July 23, 2009)