Henlin Panay Corporation vs. NLRC, G.R. no. 167426, Jan.

12, 2009

FACTS:

Private respondent Nory A. Bolanos started working on September 26, 2004 as

service crew for petitioner Henlin Panay Company where she worked for eight
hours a day from Sunday to Friday and was paid P325 per day. Henlin Panay is
owned by VMD Food House Company whose president is petitioner Angel
Lazaro III.

On July 8, 2005, around 7:00 p.m., while Bolanos was manning Henlin Panays
Counter B, her brother-in-law, Febe Javier (Javier), arrived and ordered wanton
mami from her. Javier gave her a 500-peso bill for his order and was given his
corresponding change. Petitioner Edwin Francisco (Francisco), the store
supervisor, who was just near the counter and was about to take his break,
asked Bolanos who her customer was to which she replied that he is her brother-
in-law. Afterwards, Francisco took his break.

Bolanos served one more customer before she closed Counter B. Later, Javier
ordered an additional siopao and softdrink from Counter A manned by Fe Niyam
Combo (Combo).

After taking his break, Francisco returned to the dine-in area and noticed that
Javier was already having siopao and softdrink. He then checked the journal tape
of Counter B but did not find said food items punched in the cash register. At that
time, Javier already left Henlin Panay.

Francisco then asked Bolanos about the additional items ordered by Javier, but
she told him that they were ordered at Counter A.

When Francisco scrutinized the journal tape of Counter A, it did not also reflect
the siopao and softdrink ordered by Javier.Francisco asked Combo about the
matter and the latter told him that she remembered giving Javier siopao and
softdrink.

Combo said that she might have made an erroneous entry in the cash register by
punching in siomai and lemonade instead. When Bolanos and Combo checked
the order slips, where the order of each customer was first written before being
punched in the cash register, they found one indicating siopao and
softdrink.Despite Combos admission of her mistake, Francisco did not believe
her.

Bolanos offered to bring along her brother-in-law the next day to prove that the
additional food items were ordered from and paid for at Counter A, but Francisco
dismissed the idea and remarked that Javier would naturally side with her. He
just instructed her to call him the following day.

As instructed, Bolanos called Francisco the next day, and was ordered not to
report the following day.She inquired why she was being penalized as she did
nothing wrong, to which Francisco replied that she was not only being suspended
but was already dismissed from service. Bolanos protested as she was not
served a notice of termination.

However, Francisco simply replied that he has the authority to terminate the
employment of employees; hence, a notice of termination was not
necessary. Bolanos wanted to go to VMDs office to explain her side further, but
Francisco remained adamant. He told her that even if she brought her lawyer
along with her, his decision would not change.

Bolanos went to the NLRC and was advised that she might have been illegally
dismissed. The NLRC scheduled a mediation between Bolanos and petitioners
on July 26, 2005, but the same failed. Hence, Bolanos filed an illegal dismissal
complaint.

Petitioners, for their part, presented a different version of the events. [6] They
alleged that when Francisco did not see in the journal tapes of both Counters A
and B the additional food items ordered by Javier, he asked Bolanos why said
items were not punched in or unpaid. Bolanos allegedly did not give an
explanation and merely said, Babayaran ko na lang yan. Francisco replied, Di
iyon ang point ko doon. Ang point ko ay naglabas ka ng pagkain na hindi
nabayaran at dishonesty yun. Bolanos became speechless. After her duty that
night, Francisco instructed her to call him the next day.

During their phone conversation on July 9, 2005, Francisco told Bolanos that he
had already informed Susan Lim of VMD and Cecille Navarro of M & H Food
Corporation, owner of the Henlin franchise, about the incident and both said that
the matter should be investigated. Before the call ended, Bolanos
remarked, Siguro ginagawa mo iyon dahil alam mo. Francisco replied that it was
just part of his job to watch out for fraudulent schemes like passing out of food.

On July 11, 2005, Lim informed Bolanos to report to her and explain her
side. When she came later that day, Lim told her that there was no decision yet
since the investigation was still ongoing and requested that Bolanos obtain the
receipt from Javier if he still has it. Lim likewise required Bolanos to report for
work that day, but the latter said that she will just go to work on July 12, 2005.

On July 12, 2005, Bolanos called Lim and said that she cannot go to work as she
accidentally slipped.Lim then just told her to take a rest.
The following day, Lim was surprised to receive a Notice/Invitation from the
NLRC Conciliation and Mediation Center with an Information Sheet executed by
Bolanos charging Henlin Panay of illegal dismissal.
Labor arbiter ruled in favor of Lim. Bolanos appealed the case on NLRC. NLRC
ruled in favor of Bolanos. Petitioners then elevated the case to CA which affirmed
the findings of NLRC. Hence, This petition.

ISSUE:

Whether petitioners are liable for illegal dismissal.

RULING:

To constitute abandonment, there must be a clear and deliberate intent to

discontinue ones employment without any intention of returning. Two elements
must concur: (1) failure to report for work or absence without valid or justifiable
reason, and (2) a clear intention to sever the employer-employee relationship,
with the second element as the more determinative factor and being manifested
by some overt acts.

It is the employer who has the burden of proof to show a deliberate and
unjustified refusal of the employee to resume his employment without any
intention of returning.

In the instant case, petitioners failed to prove that it was Bolanos who refused to
report for work despite being asked to return to work. Petitioners merely
presented the affidavits of the officers of Henlin Panay narrating their version of
the facts. These affidavits, however, are not only insufficient but also undeserving
of credit as they are self-serving. Petitioners failed to present memoranda or
show-cause letters served on Bolanos at her last known address requiring her to
report for work or to explain her absence, with a warning that her failure to report
would be construed as abandonment of work.

Also, if indeed Bolanos abandoned her work, petitioners should have served her
a notice of termination as required by law. Petitioners failure to comply with said
requirement bolsters Bolanoss claim that she did not abandon her work but was
dismissed.

Article 279 of the Labor Code, as amended, provides that an illegally dismissed
employee shall be entitled to reinstatement without loss of seniority rights, full
backwages and other benefits or their monetary equivalent computed from the
time her compensation was withheld from her up to her actual reinstatement.

In the instant case, however, we will not order Bolanoss reinstatement as she did
not pray for it and considering that antagonism caused a severe strain in the
parties employer-employee relationship. Instead, she is awarded separation pay
pegged at one month pay for every year of service reckoned from her first day of
employment up to the finality of this decision.
Chris Garments Corporation v. Hon. Patricia A. Sto. Tomas and
Chris Garments Workers Union-PTGWO G.R. No. 167426,January 12, 2009

FACTS:

Chris Garments Workers Union-PTGWO Local Chapter No. 832 (Union) filed a
Petition for CertificationElection with the Med-Arbiter seeking to represent the
rank and file employees of Chris Garments Corporation(Company) not covered
by its Collective Bargaining Agreement (CBA) with the Samahan Ng Mga
Manggagawasa Chris Garments Corporation

Solidarity of Union in the Philippines for Empowerment and Reforms (SMCGC-

SUPER), the certified bargaining agent of the rank-and-file employees.

Med-Arbiter dismissed. There was no ER-EE relationship between the parties

since the union itself admitted thatits members are agency employees. And
assuming they are EE, the petition for certification election will still faildue to the
contract bar rule (no petition for certification election shall be filed prior to the 60-
day freedom period)under Article 232 of the Labor Code.

Secretary of Labor and Employment (SOLE) affirmed.

Med-Arbiter dismissed the petition on the ground that it was barred by a prior
judgment.

SOLE affirmed.

Med-Arbiter dismissed the petition on the grounds that no ER-EE relationship

exists between theparties and that the case was barred by a prior judgment.

BUT on appeal, SOLE granted and ordered the immediate conduct of

a certification election among theregular rank-and-file employees of Chris
Garments Corporation with the ff. choices: (a) Chris GarmentsWorkers Union

PTGWO Local Chapter No. 832, (b) SMCGC-SUPER, and (c) No Union.

A certification election was then conducted where SMCGC-SUPER emerged as

the winning union.

ISSUES:
WON a Motion for Reconsideration (MR) is necessary before filing a petition for
certiorari from the decisionof the SOLE.

WON the case is barred by res judicata.

WON there is an ER-EE relationship between the company and the union
members.

Issue no.1 :

NO.

The general rule is that a MR is a prerequisite to the filing of a special civil

action for certiorari. However, thiscase falls under one of the exceptions, that is,
when a MR would be useless under the circumstances. Thecompany availed of
the proper remedy since Department Order No. 40-03 explicitly prohibits the filing
of a MRwith the SOLE.

ISSUE 2:

NO.

Elements of Res Judicata:1) the judgment sought to bar the new action must be
final2) the decision must have been rendered by a court having jurisdiction over
the subject matter and the parties3) the disposition of the case must be
a judgment on the merits4) there must be as between the first and second action,
identity of parties, subject matter, and causes ofaction
In the instant case, there is no dispute as to the presence of the first 3
elements of res judicata. The Resolutionof SOLE on the 1st PCE became final
and executory.

BUT the 4th element is not present.

The SOLE dismissed the 1st PCE as it was filed outside the 60-day freedom
period. At that time, the union has no cause of action since they are not yet
legally allowed to challenge openly and formally the status ofSMCGC-SUPER as
the exclusive bargaining representative of the bargaining unit.

Such dismissal however, has no bearing in the instant case since the 3rd PCE
was filed well within the 60-day freedom period. In other words, a cause of action
already exists for the union as they are now legallyallowed to challenge the
status of SMCGC-SUPER as exclusive bargaining representative.

ISSUE 3:

YES.
The company failed to appeal this factual finding with the SOLE. Thus, the matter
of ER-EE relationship hasbeen resolved with finality by the SOLE.

Standard Chartered Bank Employees Union vs. Standard Chartered Bank,

et. Al., G.R. no. 161399, April 22, 2008

FACTS:

The 1998-2000 Collective Bargaining Agreement between the Standard

Chartered Bank employees Union and the Standard Chartered Bank expired so
the parties tried to renew it but then a deadlock ensued. Under the old CBA, the
following are excluded as appropriate bargaining unit:

A. All covenanted and assistant officers (now called National Officers)

B. One confidential secretary of each of the:

1. Chief Executive, Philippine Branches

2. Deputy Chief Executive/Head, Corporate Banking Group
3. Head, Finance
4. Head, Human Resources
5. Manager, Cebu
6. Manager, Iloilo
7. Covenanted Officers provided said positions shall be filled by new recruits.
C. The Chief Cashiers and Assistant Cashiers in Manila, Cebu and Iloilo, and in
any other branch that the BANK may establish in the country.
D. Personnel of the Telex Department
E. All Security Guards
F. Probationary employees, without prejudice to Article 277 (c) of the Labor Code,
as amended by R.A. 6715, casuals or emergency employees; and
G. One (1) HR Staff

But then in the renewal sought by SCBEU-NUBE, they only wanted the exclusion
to apply only to the following employees from the appropriate bargaining unit all
managers who are vested with the right to hire and fire employees, confidential
employees, those with access to labor relations materials, Chief Cashiers,
Assistant Cashiers, personnel of the Telex Department and one Human
Resources (HR) staff.

SCBEU-NUBE also averred that employees assigned in an acting capacity for at

least a week should be given salary raise.

A notice of strike was given to the Department of Labor due to this deadlock.
Then DOLE Secretary Patricia Sto. Tomas issued an order dismissing the
Unions plea.
ISSUE:

Whether or not the confidential employees sought to be removed from the

exclusion as appropriate bargaining unit by SCBEU-NUBE holds ground.
RULING:

No. Whether or not the employees sought to be excluded from the appropriate
bargaining unit are confidential employees is a question of fact, which is not a
proper issue in a petition for review under Rule 45 of the Rules of Court. SCBEU-
NUBE insists that the foregoing employees are not confidential employees;
however, it failed to buttress its claim. Aside from its generalized arguments, and
despite the Secretarys finding that there was no evidence to support it, SCBEU-
NUBE still failed to substantiate its claim. SCBEU-NUBE did not even bother to
state the nature of the duties and functions of these employees, depriving the
Court of any basis on which it may be concluded that they are indeed confidential
employees.

With regards to the salary increase of employees in acting capacities, the

Supreme Court agreed with the Court of Appeals that a restrictive provision
would curtail managements prerogative, and at the same time, recognized that
employees should not be made to work in an acting capacity for long periods of
time without adequate compensation. The usual rule that employees in acting
capacities for at least a month should be given salary raise is upheld.
Lepanto Consolidated Mining v. Dumapis, G.R. 163210, August 13, 2008

FACTS:

Lepanto Consolidated Mining employed Moreno Dumapis and Elmo Tundagui as

lead miners; and Francis Liagao, as load, haul and dump (LHD) machine
operator (respondents).All three were assigned at the 850 level, underground,
Victoria Area in Benguet. This is a known high grade area where most of the
ores mined are considered of high grade content.

Dwayne Chambers, one of its foreign consultants who was then acting as
assistant resident manager of the mine, conducted a routine inspection at the
site. During such inspection, he discovered that some miners are committing high
grading.

He made a report accordingly,and after investigating, the security investigators

executed a Joint Affidavit stating that anincident report was made by Mr.
Chambers saying that he saw and surprised several unidentified miners at 8K
Stope, 850 level committing high grading activities therein; that a security guard
honestly confessed his direct participation then claimed that he was allegedly
convinced by one of the miners to commit high grading.

He revealed his companions to be all the miners assigned at 8K stope, among

them Tundagui and Dumapis; that from another confession, it was learned
that Liagao was also involved.

Lepanto Consolidated then issued a resolution finding all those involved,

including the respondents, guilty of the offense of high grading and dismissed
them from employment.

The respondents subsequently filed a complaint for illegal dismissal with the
Labor Arbiter,who dismissed it for lack of merit. The NLRC declared the dismissal
of the respondents illegal and this resolution was affirmed by the CA.

In finding the dismissal of respondents illegal, the CA upheld the NLRC in

considering the Joint Affidavit of the Security Investigators as hearsay and
therefore inadmissible.

ISSUE:

WON breach of trust and confidence, proof beyond doubt is not required, it being
sufficient that the employer has reasonable ground to believe that the employees
are responsible for the misconduct which renders them unworthy of the trust and
confidence demanded by their position.

RULING:

While the Court agrees that the job of the respondents, as miners, although
generally described as menial, is nevertheless of such nature as to require a
substantial amount of trust and confidence on the part of petitioner, the rule that
proof beyond reasonable doubt is not required to terminate an employee on the
charge of loss of confidence, and that it is sufficient that there be some basis for
such loss of confidence, is not absolute.

The right of an employer to dismiss an employee on the ground that it has lost its
trust and confidence in him must not be exercised arbitrarily and without just
cause. In order that loss of trust and confidence may be considered as a valid
ground for an employees dismissal, it must be substantial and not arbitrary, and
must be founded on clearly established facts sufficient to warrant the employees
separation from work.
Javellana, Jr. vs. Belen, G.R. Nos. 181913 & 182158, March 5, 2010

Facts:

Belen was hired by Javellana as company driver and assigned him the tasks of
picking up and delivering live hogs, feeds, and lime stones used for cleaning the
pigpens. On August 19, 1999 Javellana gave him instructions to (a) pick up lime
stones in Tayabas, Quezon; (b) deliver live hogs at Barrio Quiling, Talisay,
Batangas; (c) have the delivery truck repaired; and (d) pick up a boar at Joliza
Farms in Norzagaray, Bulacan. Petitioner Belen further alleged that his long and
arduous day finally ended at 4:30 a.m. of the following day, August 20, 1999. But
after just three hours of sleep, respondent Javellana summoned him to the office.
When he arrived at 8:20 a.m., Javellana had left. After being told that the latter
would not be back until 4:00 p.m., Belen decided to go home and get some more
sleep. Petitioner Belen was promptly at the office at 4:00 p.m. but respondent
Javellana suddenly blurted out that he was firing Belen from work. Deeply
worried that he might not soon get another job, Belen asked for a separation pay.
When Javellana offered him only P5,000.00, he did not accept it. Javellana
claimed, on the other hand, that he hired petitioner Belen in 1995, not as a
company driver, but as family driver. Belen did not do work for his farm on a
regular basis, but picked up feeds or delivered livestock only on rare occasions
when the farm driver and vehicle were unavailable.

Regarding petitioner Belen's dismissal from work, respondent Javellana insisted

that he did it for a reason. Belen intentionally failed to report for work on August
20, 1999 and this warranted his dismissal.

Issue:

Does the amount that the Labor Arbiter awarded petitioner Belen represent all
that he will get when the decision in his case becomes final or does it represent
only the amount that he was entitled to at the time the Labor Arbiter rendered his
decision, leaving room for increase up to the date the decision in the case
becomes final?

Ruling:

Article 279 of the Labor Code, as amended by Section 34 of Republic Act 6715
instructs:

Art. 279. Security of Tenure. - In cases of regular employment, the employer shall
not terminate the services of an employee except for a just cause or when
authorized by this Title. An employee who is unjustly dismissed from work shall
be entitled to reinstatement without loss of seniority rights and other privileges
and to his full backwages, inclusive of allowances, and to his other benefits or
their monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.

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

As it happens, the parties filed separate petitions before this Court. The petition
in G.R. 181913, filed by respondent Javellana, questioned the CA's finding of
illegality of dismissal while the petition in G.R. 182158, filed by petitioner Belen,
challenged the amounts of money claims awarded to him. The Court denied the
first with finality in its resolution of September 22, 2008; the second is the subject
of the present case. Consequently, Belen should be entitled to backwages from
August 20, 1999, when he was dismissed, to September 22, 2008, when the
judgment for unjust dismissal in G.R. 181913 became final. Separation pay, on
the other hand, is equivalent to one month pay for every year of service, a
fraction of six months to be considered as one whole year. Here that would begin
from January 31, 1994 when petitioner Belen began his service. Technically the
computation of his separation pay would end on the day he was dismissed on
August 20, 1999 when he supposedly ceased to render service and his wages
ended. But, since Belen was entitled to collect backwages until the judgment for
illegal dismissal in his favor became final, here on September 22, 2008, the
computation of his separation pay should also end on that date. Further, since
the monetary awards remained unpaid even after it became final on September
22, 2008 because of issues raised respecting the correct computation of such
awards, it is but fair that respondent Javellana be required to pay 12% interest
per annum on those awards from September 22, 2008 until they are paid. The
12% interest is proper because the Court treats monetary claims in labor cases
the equivalent of a forbearance of credit. It matters not that the amounts of the
claims were still in question on September 22, 2008. What is decisive is that the
issue of illegal dismissal from which the order to pay monetary awards to
petitioner Belen stemmed had been long terminated.
MASMUD vs. NLRC, G.R. No. 183385, Feb. 13, 2009

FACTS:

The late Alexander J. Masmud (Alexander), the husband of

Evangelina Masmudn (Evangelina) filed a complaint against First Victory
Shipping Services and Angelakos (Hellas) S.A. on July 9, 2003 for non-payment
of permanent disability benefits, medical expenses, sickness allowance, moral
and exemplary damages, and attorney's fees.

Alexander engaged the services of Atty. Rolando B. Go, Jr. (Atty. Go) as his
counsel. In consideration of Atty. Go's legal services, Alexander agreed to pay
attorney's fees on a contingent basis, as follows: twenty percent (20%) of total
monetary claims as settled or paid and an additional ten percent (10%) in case of
appeal. On November 21, 2003, the Labor Arbiter (LA) rendered a Decision
granting the monetary claims of Alexander.

Alexander's employer filed an appeal before the National Labor Relations

Commission (NLRC). During the pendency of the proceedings before the NLRC,
Alexander died. After explaining the terms of the lawyer's fees to Evangelina,
Atty. Go caused her substitution as complainant. On April 30, 2004, the NLRC
rendered a Decision dismissing the appeal of Alexander's employer.

On appeal before the CA, the decision of the LA was affirmed with modification.
Thereafter, Alexanders employer appealed to the Supreme Court. On February 6,
2006, the Court issued a Resolution dismissing the case for lack of merit. On
January 10, 2005, the LA directed the NLRC Cashier to release the amount of
P3,454,079.20 to Evangelina.

Out of the said amount, Evangelina paid Atty. Go the sum of P680,000.00.
Dissatisfied, Atty. Go filed a motion to record and enforce the attorney's lien
alleging that Evangelina reneged on their contingent fee agreement. Evangelina
paid only the amount of P680,000.00, equivalent to 20% of the award as
attorney's fees, thus, leaving a balance of 10%, plus the award pertaining to the
counsel as attorney's fees.

In her comment, Evangelina manifested that Atty. Go's claim for attorney's fees of
40% of the total monetary award was null and void based on Article 111 of the
Labor Code. The Labor Arbiter issued an Order granting Atty. Go's motion. Then,
Evangelina questioned the decision of the Labor Arbiter before the
NLRC.However, the NLRC dismissed her appeal.

Then, she elevated the case to the Court of Appeals. The CA partially granted the
petition with some modification declaring that Atty. Go is fully compensated by
the amount of P1,347,950.11 that he has already received. Dissatisfied, Angelina
filed this petition.

ISSUE:

Whether or not the legal compensation of a lawyer in a labor proceeding should

be based on Article 111 of the Labor Code.

RULING:
There are two concepts of attorney's fees. In the ordinary sense, attorney's fees
represent the reasonable compensation paid to a lawyer by his client for the legal
services rendered to the latter.

On the other hand, in its extraordinary concept, attorney's fees may be awarded
by the court as indemnity for damages to be paid by the losing party to the
prevailing party, such that, in any of the cases provided by law where such award
can be made, e.g., those authorized in Article 2208 of the Civil Code, the amount
is payable not to the lawyer but to the client, unless they have agreed that the
award shall pertain to the lawyer as additional compensation or as part thereof.

Here, we apply the ordinary concept of attorney's fees, or the compensation that
Atty. Go is entitled to receive for representing Evangelina, in substitution of her
husband, before the labor tribunals and before the court. The retainer contract
between Atty. Go and Evangelina provides for a contingent fee. The contract
shall control in the determination of the amount to be paid, unless found by the
court to be unconscionable or unreasonable.

Attorney's fees are unconscionable if they affront one's sense of justice, decency
or reasonableness. The decree of unconscionability or unreasonableness of a
stipulated amount in a contingent fee contract will not preclude recovery.

It merely justifies the fixing by the court of a reasonable compensation for the
lawyer's services.

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 mayget nothing if the suit fails.

The Court finds nothing illegal in the contingent fee contract between Atty. Go
and Evangelina's husband. The CA committed no error of law when it awarded
the attorney's fees of Atty. Go and allowed him to receive an equivalent of 39% of
the monetary award. Considering that Atty. Go successfully represented his
client, it is only proper that he should receive adequate compensation for his
efforts.

With his capital consisting of his brains and with his skill acquired at tremendous
cost not only in money but in expenditure of time andenergy, 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.In
view of the foregoing, the Decision and Resolution of the Court of Appeals are
hereby AFFIRMED.
MAGIS YOUNG ACHIEVERS' LEARNING CENTER and MRS. VIOLETA T.
CARIO v.ADELAIDA P. MANALOG.R. No. 178835, February 13, 2009

FACTS:

Respondent Adelaida P. Manalo was hired as a teacher and acting principal

of petitioner Magis Young Achievers Learning Center on March 29,
2003, respondent wrote a letter of resignation addressed to Violeta T. Cario,
directress of petitioner

March 31, 2003, respondent received a letter of termination from petitioner

The letter stated that the position of PRINCIPAL will be abolished next
school year, therefore respondent cannot renew her contract anymore

On April 4, 2003, respondent instituted against petitioner a Complaint for illegal

dismissal and non-payment of 13th month pay, with a prayer for reinstatement,
award of full backwages and moral and exemplary damages.

respondent claimed that her termination violated the provisions of her

employment contract, and that the alleged abolition of the position of Principal
was not among the grounds for termination by an employer under Article282

She also claimed that she was terminated from service for the alleged expiration
of her employment, butthat her contract did not provide for a fixed term or period
Petitioner, in its position paper, countered that respondent was legally terminated
because the one-year probationary period, from April 1, 2002 to March 3, 2003,
had already lapsed

ISSUE:

1.W/N RESIGNATION OF RESPONDENT MANALO DID NOT BECOME

EFFECTIVE DUE TO ALLEGED LACK OF ACCEPTANCE (YES)

2.W/N RESPONDENT MANALO IS A PERMANENT EMPLOYEE (NO)

3.W/N CONTRACT OF EMPLOYMENT BETWEEN PETITIONER AND

RESPONDENT DID NOTSTIPULATE A PERIOD.(YES)

4. W/N RESPONDENT WAS ILLEGALLY DISMISSED (YES)

RULING:

1.
RESIGNATION OF RESPONDENT

The SC agreed with the CA that the resignation of the respondent is not valid, not
only because there was no express acceptance thereof by the employer, but
because there is a cloud of doubt as to the voluntariness of respondents
resignation.

Voluntary resignation is made with the intention of relinquishing an

office, accompanied by the act of abandonment. It is the acceptance of an
employees resignation that renders it operative

In this case, respondent actively pursued her illegal dismissal case against
petitioner, such that she cannot be said to have voluntarily resigned from her job.

EMPLOYMENT STATUS

A probationary employee or probationer is one who is on trial for an employer,

during which the latterdetermines whether or not he is qualified for permanent
employment the employer may set or fix a probationary period within which the
latter may test and observe theconduct of the former before hiring him
permanently, however, the law sets a maximum "trial period" during which the
employer may test the fitness and efficiency of the employee.

Article 281 of the Labor Code: shall not exceed six (6) months

Section 92 of the 1992 Manual of Regulations for Private Schools: shall not be
more than three (3)consecutive school years no vested right to a permanent
appointment shall accrue until the employee has completed the prerequisite
three-year period necessary for the acquisition of a permanent status

There should be no question that the employment of the respondent, as teacher,

in petitioner school on April 18, 2002 is probationary in character

She had rendered service as such only from April 18, 2002 until March 31, 2003.
She has not completed the requisite three-year period of probationary
employment, as provided in the Manual. She cannot, by right, claim permanent
status

An "acting" appointment is essentially a temporary appointment, revocable at will.

STIPULATION OF PERIOD

It is important that the contract of probationary employment specify the period or

term of its effectivity. The failure to stipulate its precise duration could lead to
the inference that the contract is binding for the full three-year probationary
period.

We can only apply Article 1702 of the Civil Code which provides that, in case of
doubt, all labor contracts shall be construed in favor of the laborer. Then, too,
settled is the rule that any ambiguity in a contract whose terms are susceptible of
different interpretations must be read against the party who drafted it. In the case
at bar, the drafter of the contract is herein petitioners and must, therefore, be
read against their contention

In respondents copy, the period of effectivity of the agreement remained blank

Thus, following Article 1702 of the Civil Code that all doubts regarding
labor contracts should be construed in favor of labor, then it should be
respondents copy which did not provide for an express period which should be
upheld4.

ILLEGAL DISMISSAL

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.
Rowell Industrial Corporation vs. CA, G.R. No. 167714, Mar. 7, 2007

Facts:

Rowell Industrial is engaged in manufacturing tin cans for use in packaging of

consumer products, e.g., foods, paints, among other things.

Taripe was employed by petitioner on November 8, 1999 as a rectangular power

press machine operator Taripe alleged that upon employment, he was made to
sign a document, which was not explained to him but which was made a
condition for him to be taken in and for which he was not furnished a copy.

ISSUE:

Whether respondent was a regular employee

RULING:

Under Art 280 regular employees are classified into:

(1) regular employees by nature of work - 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;
(2) regular employees by years of service - those employees who have been
performing the job, regardless of the nature thereof, for at least a year.

Article 280 of the Labor Code, as amended, however, does not proscribe or
prohibit an employment contract with a fixed period. It does not necessarily follow
that where the duties of the employee consist of activities usually necessary or
desirable in the usual business of the employer, the parties are forbidden from
agreeing on a period of time for the performance of such activities. There is
nothing essentially contradictory between a definite period of employment and
the nature of the employees duties.

In the case at bar, Taripe signed a contract of employment good only for a period
of five months unless the said contract is renewed by mutual consent. Along with
other contractual employees, he was hired only to meet the increase in demand
for packaging materials for the Christmas season and to build up stock levels for
the early part of the year.

Standards for valid fixed term employment:

(1) the fixed period of employment was knowingly and voluntarily agreed upon by
the parties, without any force, duress or improper pressure being brought to bear
upon the employee and absent any other circumstances vitiating his consent; or

(2) it satisfactorily appears that the employer and employee dealt with each other
on more or less equal terms with no moral dominance whatever being exercised
by the former on the latter.

Application of these standards to this case:

1) The employment contract signed by respondent Taripe did not mention that he
was hired only for a specific undertaking, the completion of which had been
determined at the time of his engagement. The said employment contract neither
mentioned that respondent Taripes services were seasonal in nature and that his
employment was only for the duration of the Christmas season as purposely
claimed by petitioner RIC. What was stipulated in the said contract was that
Taripes employment was contractual for the period of five months.

2) Also RIC failed to controvert the claim that Taripe was made to sign the
contract of employment, prepared by RIC, as a condition for his hiring. Such
contract in which the terms are prepared by only one party and the other party
merely affixes his signature signifying his adhesion thereto is called contract of
adhesion.It is an agreement in which the parties bargaining are not on equal
footing, the weaker partys participation being reduced to the alternative to take
it or leave it. In the present case, respondent Taripe, in need of a job, was
compelled to agree to the contract, including the five-month period of
employment, just so he could be hired.

3) 2) As a power press operator, a rank and file employee, he can hardly be on

equal terms with petitioner RIC. As the Court of Appeals said, almost always,
employees agree to any terms of an employment contract just to get employed
considering that it is difficult to find work given their ordinary qualifications. He
was a regular employee As a rectangular power press machine operator, in
charge of manufacturing covers for four liters rectangular tin cans, was holding
a position which is necessary and desirable in the usual business or trade of
petitioner RIC, which was the manufacture of tin cans.Thus, he was a regular
employee.
PETROLEUM SHIPPING LTD. and TRANS-GLOBAL MARITIME vs. NLRC
AND TANCHICO, G.R. No. 148130, June 16, 2006

FACTS:

On 6 March 1978, Esso International Shipping (Bahamas) Co., Ltd., (Esso)

through Trans-Global Maritime Agency, Inc. (Trans-Global) hired Florello W.
Tanchico (Tanchico) as First Assistant Engineer. In 1981, Tanchico became
Chief Engineer. On 13 October 1992, Tanchico returned to the Philippines for a
two-month vacation after completing his eight-month deployment.

Tanchico underwent the required standard medical examination prior to boarding

the vessel. The medical examination revealed that Tanchico was suffering from
Ischemic Heart Disease, Hypertensive Cardio-Muscular Disease and Diabetes
Mellitus. Tanchico took medications for two months and a subsequent stress test
showed a negative result. However, Esso no longer deployed Tanchico. Instead,
Esso offered to pay him benefits under the Career Employment Incentive Plan.
Tanchico accepted the offer.

On 26 April 1993, Tanchico filed a complaint against Esso, Trans-Global and

Malayan Insurance Co., Inc. (Malayan) before the Philippine Overseas
Employment Administration (POEA) for illegal dismissal with claims for
backwages, separation pay, disability and medical benefits and 13th month
pay. In view of the enactment of Republic Act No. 8042 (RA 8042) transferring
to the National Labor Relations Commission (NLRC) the jurisdiction over money
claims of overseas workers, the case was indorsed to the Arbitration Branch of
the National Capital Region.

DEVELOPMENT OF THE CASE: Labor arbiter dismissed the complaint for lack
of merit; NLRC affirmed, on the ground that complainant had been declared as
one with partial permanent disability. Thus, he should be entitled to disability
benefit xxx

On the claim of 13th month pay, the respondent Agency not falling under the
enumerated exempted employers under P.D. 851 and in the absence of any
proof that respondent is already paying its employees a 13th month pay or more
in a calendar year, perforce, respondent agency should pay complainant his
monthly pay computed at [sic] the actual month [sic] worked, which is 8 months.

Esso, now using the name Petroleum Shipping Limited (Petroleum Shipping),
and Trans-Global (collectively referred to as petitioners) filed a petition for
certiorari before the Court of Appeals. The Court of Appeals ruled that Tanchico
was a regular employee of Petroleum Shipping. The Court of Appeals held that
petitioners are not exempt from the coverage of Presidential Decree No. 851, as
amended (PD 851) which mandates the payment of 13th month pay to all
employees. MR Denied. Hence, this petition for certiorari.

ISSUES:

(1) Whether Tanchico is a regular employee of petitioners; and

(2) Whether Tanchico is entitled to 13th month pay, disability benefits and
attorneys fees.

RULING:

The petition is partly meritorious.

Seafarers are Contractual Employees [sinama ko na to, looks important eh]

The issue on whether seafarers are regular employees is already a settled
matter.

In Ravago v. Esso Eastern Marine, Ltd., the Court traced its ruling in a number of
cases that seafarers are contractual, not regular, employees. Thus, in Brent
School, Inc. v. Zamora, the Court cited overseas employment contract as an
example of contracts where the concept of regular employment does not apply,
whatever the nature of the engagement and despite the provisions of Article 280
of the Labor Code.

In Coyoca v. NLRC, the Court held that the agency is liable for payment of a
seamans medical and disability benefits in the event that the principal fails or
refuses to pay the benefits or wages due the seaman although the seaman may
not be a regular employee of the agency.

The Court squarely passed upon the issue in Millares v. NLRC where one of the
issues raised was whether seafarers are regular or contractual employees whose
employment are terminated everytime their contracts of employment expire. The
Court explained:

xxx Their employment is governed by the contracts they sign everytime they are
rehired and their employment is terminated when the contract expires. Their
employment is contractually fixed for a certain period of time. They fall under the
exception of Article 280 whose employment has been fixed for a specific project
or undertaking the completion or termination of which has been determined at the
time of engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the duration of the
season xxx
There are certain forms of employment which also require the performance of
usual and desirable functions and which exceed one year but do not necessarily
attain regular employment status under Article 280. Overseas workers including
seafarers fall under this type of employment which are governed by the mutual
agreements of the parties.

Thus, in the present case, the Court of Appeals erred in ruling that Tanchico was
a regular employee of Petroleum Shipping.

In this jurisdiction and as clearly stated in the Coyoca case, Filipino seamen are
governed by the Rules and Regulations of the POEA. The Standard Employment
Contract governing the employment of All Filipino Seamen on Board Ocean-
Going Vessels of the POEA, particularly in Part I, Sec. C specifically provides
that the contract of seamen shall be for a fixed period. And in no case should the
contract of seamen be longer than 12 months.

The period of employment shall be for a fixed period but in no case to exceed 12
months and shall be stated in the Crew Contract. Any extension of the Contract
period shall be subject to the mutual consent of the parties.

Undeniably, this circumstance of continuous re-hiring was dictated by practical

considerations that experienced crew members are more preferred. Petitioners
were only given priority or preference because of their experience and
qualifications but this does not detract the fact that herein petitioners are
contractual employees. They can not be considered regular employees. x x x
Respondent not entitled to 13th month pay.

The Court of Appeals also ruled that petitioners are not exempt from the
coverage of PD 851 which requires all employers to pay their employees a 13th
month pay.

We do not agree with the Court of Appeals. Again, Tanchico was a contractual,
not a regular, employee. Further, PD 851 does not apply to seafarers. The
WHEREAS clauses of PD 851 provides:

WHEREAS, it is necessary to further protect the level of real wages from ravages
of world-wide inflation;

WHEREAS, there has been no increase in the legal minimum wage rates since
1970;

WHEREAS, the Christmas season is an opportune time for society to show its
concern for the plight of the working masses so they may properly celebrate
Christmas and New Year.
PD 851 contemplates the situation of land-based workers, and not of seafarers
who generally earn more than domestic land-based workers.

Tanchicos employment is governed by his Contract of Enlistment (Contract),

approved by the POEA. The Contract of Employment, which is the standard
employment contract of the POEA, likewise does not provide for the payment of
13th month pay.

Furthermore, petitioners contract did not provide for separation benefits. In this
connection, it is important to note that neither does POEA standard employment
contract for Filipino seamen provide for such benefits.
As a Filipino seaman, petitioner is governed by the Rules and Regulations
Governing Overseas Employment and the said Rules do not provide for
separation or termination pay. x x x

Hence, in the absence of any provision in his Contract governing the payment of
13th month pay, Tanchico is not entitled to the benefit.

PETITION GRANTED. We REMAND the case to the Labor Arbiter to determine if

Florello Tanchico has been paid his disability benefits for 18 days in accordance
with his Contract of Enlistment. If no payment has been made, the Labor Arbiter
is DIRECTED to determine the amount Tanchico is entitled.
Bernardino Labayog et. Al. vs. M.Y. San Biscuits, Inc. and Mew Wah Lim,
G.R. No. 148102, July 11, 2006

FACTS:

On various dates in 1992, petitioners entered into contracts of employment with

respondent company as mixers, packers and machine operators for a fixed term.
On the expiration of their contracts, their services were terminated. Forthwith,
they each executed a quitclaim.

Petitioners filed complaints for illegal dismissal, among others. The labor arbiter
ruled their dismissal to be illegal on the ground that they had become regular
employees who performed duties necessary and desirable in respondent
company's business and ordered for their reinstatement.

The NLRC reversed the ruling, which the CA eventually affirmed.

ISSUE:

W/N the fixed term contract of petitioners were valid.

RULING:

YES.

Where the duties of the employee consist of activities which are necessary or
desirable in the usual business of the employer, the parties are not prohibited
from agreeing on the duration of employment. Article 280 of the Labor Code does
not proscribe or prohibit an employment contract with a fixed period provided it is
not intended to circumvent the security of tenure.

Two criteria validate a contract of employment with a fixed period: (1) the fixed
period of employment was knowingly and voluntarily agreed upon by the parties
without any force, duress or improper pressure being brought to bear on the
employee and without any circumstances vitiating consent or, (2) it satisfactorily
appears that the employer and employee dealt with each other on more or less
equal terms with no moral dominance whatever being exercised by the former on
the latter. Against these criteria, petitioners' contracts of employment with a fixed
period were valid.

In this case, there was no allegation of vitiated consent. Respondents did not
exercise moral dominance over petitioners. The contracts were mutually
advantageous to the parties.

While their employment as mixers, packers and machine operators was

necessary and desirable in the usual business of respondents, they were
employed temporarily only, during periods when there was heightened demand
for production. Consequently, there could have been no illegal dismissal when
their services were terminated on expiration of their contracts. There was even
no need for notice of termination because they knew exactly when their contracts
would end. Contracts of employment for a fixed period terminate on their own at
the end of such period.
PLACEWELL INTERNATIONAL SERVICES CORPORATION vs. IRENEO B.
CAMOTE, G.R. No. 169973, June 26, 2006

FACTS:

The records show that on August 15, 1999, petitioner Placewell International
Services Corporation (PISC) deployed respondent Ireneo B. Camote to work as
building carpenter for SAAD Trading and Contracting Co. (SAAD) at the Kingdom
of Saudi Arabia (KSA) for a contract duration of two years, with a corresponding
salary of US$370.00 per month.

At the job site, respondent was allegedly found incompetent by his foreign
employer; thus the latter decided to terminate his services. However, respondent
pleaded for his retention and consented to accept a lower salary of SR 800.00
per month. Thus, SAAD retained respondent until his return to the Philippines
two years after.

On November 27, 2001, respondent filed a sworn Complaint for monetary claims
against petitioner alleging that when he arrived at the job site, he and his fellow
Filipino workers were required to sign another employment contract written in
Arabic under the constraints of losing their jobs if they refused; that for the entire
duration of the new contract, he received only SR 590.00 per month; that he was
not given his overtime pay despite rendering nine hours of work everyday; that
he and his co-workers sought assistance from the Philippine Embassy but they
did not succeed in pursuing their cause of action because of difficulties in
communication.

On May 31, 2002, the labor arbiter rendered a decision holding that the
modification of respondents employment contract is not allowed under Section
10 of Republic Act No. 8042 (R.A. No. 8042); thus, he should have received the
original contracted salary of US$370.00 per month instead of the new rate
given by SAAD.

On appeal by the petitioner, the NLRC set aside the Decision of the Labor Arbiter.
Respondent filed a Petition for Certiorari under Rule 65 in the Court of Appeals
which set aside the Resolution of the NLRC, and reinstated with modifications
the Decision of the labor arbiter.

Petitioner avers that respondent failed to substantiate the allegation that he was
forced to enter into the new employment contract with SAAD which proves that
the new contract was actually voluntarily entered and agreed upon between said
parties; that if respondent was indeed forced to sign the new contract, his claims
are now barred by laches because respondent never informed petitioner of
any problem at the job site until two years after his deployment; that the appellate
courts award for unauthorized deductions in the amount of P171,780.00 should
be deleted for lack of legal or factual basis; that respondent is not entitled to
attorneys fees.

ISSUES:

1. Whether respondent has a right to the money claims

2. Whether the claim of the respondent is barred by laches

RULING:

1. YES. R.A. No. 8042 explicitly 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
actual signing thereof by the parties up to and including the period of the
expiration of the same without the approval of the DOLE. The unauthorized
alteration in the employment contract of respondent, particularly the diminution in
his salary from US$370.00 to SR 800.00 per month, is void for violating the
POEA-approved contract which set the minimum standards, terms, and
conditions of his employment.

Moreover, we find that there was no proper dismissal of respondent by SAAD;

the "termination" of respondent was clearly a ploy to pressure him toagree to
a lower wage rate for continued employment. Thus, the original POEA-approved
employment contract of respondent subsists despite the so-called new
agreement with SAAD. Consequently, the solidary liability of petitioner with
SAAD for respondents money claims continues in accordance with Section 10 of
R.A. 8042

2. NO. Laches has been defined as the failure of or neglect for an unreasonable
and unexplained length of time to dothat which by exercising due diligence, could
or should have been done earlier, or to assert a right within reasonable time,
warranting a presumption that the party entitled thereto has either abandoned it
or declined to assert it. Thus, the doctrine of laches presumes that the party
guilty of negligence had the opportunity to do what should have been done, but
failed to do so. Conversely, if the said party did not have the occasion to assert
the right, then, he cannot be adjudged guilty of laches.

Laches is not concerned with the mere lapse of time, rather, the party must have
been afforded an opportunity to pursue his claim in order that the delay may
sufficiently constitute laches. The doctrine of laches is based upon grounds of
public policy which requires, for the peace of society, the discouragement of stale
claims, and is principally a question of the inequity or unfairness of permitting a
right or claim to be enforced or asserted. There is no absolute rule as to what
constitutes laches; each case is to be determined according to its particular
circumstances. The question of laches is addressed to the sound discretion
of the court, and since it is an equitable doctrine, its application is controlled by
equitable considerations. It cannot beworked to defeat justice or to perpetrate
fraud and injustice. In the instant case, respondent filed his claim within the
three-year prescriptive period for the filing of money claims set forth in Article 291
of the Labor Code from the time the cause of action accrued. Thus, we find that
the doctrine of laches finds no application in this case.
INTERCONTINENTAL BROADCASTING CORPORATION (IBC), represented
by ATTY. RENATO Q. BELLO, in his capacity as CEO and President, vs.
NOEMI B. AMARILLA, CORSINI R. LAGAHIT, ANATOLIO G. OTADOY, and
CANDIDO C. QUIONES, JR., (G.R. No. 162775, October 27, 2006)

FACTS:

Petitioner employed the following persons at its Cebu station: Candido C.

Quiones, Jr.; on February 1, 1975;[3] Corsini R. Lagahit, as Studio Technician,
also on February 1, 1975; Anatolio G. Otadoy, as Collector, on April 1, 1975; and
Noemi Amarilla, as Traffic Clerk, on July 1, 1975. On March 1, 1986, the
government sequestered the station, including its properties, funds and other
assets, and took over its management and operations from its owner, Roberto
Benedicto. However, in December 1986, the government and Benedicto entered
into a temporary agreement under which the latter would retain its management
and operation. On November 3, 1990, the Presidential Commission on Good
Government (PCGG) and Benedicto executed a Compromise Agreement, where
Benedicto transferred and assigned all his rights, shares and interests in
petitioner station to the government.

In the meantime, the four (4) employees retired from the company and received,
on staggered basis, their retirement benefits under the 1993 Collective
Bargaining Agreement (CBA) between petitioner and the bargaining unit of its
employees. When a salary increase took effect P1,500.00 salary increase was
given to all employees of the company, current and retired, effective July
1994. However, when the four retirees demanded theirs, petitioner refused and
instead informed them via a letter that their differentials would be used to offset
the tax due on their retirement benefits in accordance with the National Internal
Revenue Code (NIRC).

The four (4) retirees filed separate complaints[13] against IBC TV-13 Cebu and
Station Manager Louella F. Cabaero for unfair labor practice and non-payment
of backwages before the NLRC, Regional Arbitration Branch VII. The Labor
Arbiter rendered judgment in favor of the retirees,

ISSUE:

(1) whether the retirement benefits of respondents are part of their gross income;
and
(2) whether petitioner is estopped from reneging on its agreement with
respondent to pay for the taxes on said retirement benefits.
HELD:

We agree with petitioners contention that, under the CBA, it is not obliged to pay
for the taxes on the respondents retirement benefits. We have carefully reviewed
the CBA and find no provision where petitioner obliged itself to pay the taxes on
the retirement benefits of its employees.

We also agree with petitioners contention that, under the NIRC, the retirement
benefits of respondents are part of their gross income subject to taxes.

For the retirement benefits to be exempt from the withholding tax, the taxpayer is
burdened to prove the concurrence of the following elements: (1) a reasonable
private benefit plan is maintained by the employer; (2) the retiring official or
employee has been in the service of the same employer for at least 10 years; (3)
the retiring official or employee is not less than 50 years of age at the time of his
retirement; and (4) the benefit had been availed of only once.

While it may indeed be conceded that the previous dispensation of petitioner

IBC-13 footed the bill for the withholding taxes, upon discovery by the new
management, this was stopped altogether as this was grossly prejudicial to the
interest of the petitioner IBC-13. The policy of withholding the taxes due on the
differentials as a remedial measure was a matter of sound business judgment
and dictates of good governance aimed at protecting the interests of the
government.

Necessarily, the newly-appointed board and officers of the petitioner, who learned
about this grossly disadvantageous mistake committed by the former
management of petitioner IBC-13 cannot be expected to just follow suit blindly.
An illegal act simply cannot give rise to an obligation. Accordingly, the new
officers were correct in not honoring this highly suspect practice and it is now
their duty to rectify this anomalous occurrence, otherwise, they become remiss in
the performance of their sworn responsibilities.
San Miguel Corporation vs. Teodosio, G.R. No. 163033, Oct. 2, 2009

FACTS:

On September 5, 1991, Eduardo Teodosio was hired by San Miguel Corporation

(SMC) as a casual forklift operator in its Bacolod City Brewery. Respondent
continuously worked from September 5, 1991 until March 1992, after which he
was asked to rest. A month after, respondent was rehired for the same position,
and after serving for about five to six months, he was again asked to rest. After
three weeks, he was again rehired as a forklift operator. He continued to work as
such until August 1993.Sometime in August 1993, respondent was made to sign
an Employment with a Fixed Period contract by SMC, wherein it was stipulated,
among other things, that respondents employment would be from August 7, 1993
to August 30, 1995, or upon cessation of the instability/fluctuation of the market
demand, whichever comes first. Thereafter, respondent worked at the plant
without interruption as a forklift operator.

On March 20, 1995, respondent was transferred to the plants bottling section as
a case piler. In a letter, respondent formally informed SMC of his opposition to his
transfer to the bottling section. He asserted that he would be more effective as a
forklift operator because he had been employed as such for more than three
years already. Respondent also requested that he be transferred to his former
position as a forklift operator. However, SMC did not answer his letter. In an
undated letter, respondent informed SMC that he was applying for the vacant
position of bottling crew as he was interested in becoming a regular employee of
SMC.

On June 1, 1995, SMC notified the respondent that his employment shall be
terminated on July 1, 1995 in compliance with the Employment with a Fixed
Period contract. SMC explained that this was due to the reorganization and
streamlining of its operations.

In a letter dated July 3, 1995, respondent expressed his dismay for his
dismissal. He informed SMC that despite the fact that he would be compelled to
receive his separation pay and would be forced to sign a waiver to that effect,
this does not mean that he would be waiving his right to question his dismissal
and to claim employment benefits as provided in the Collective Bargaining
Agreement (CBA) and company policies. Respondent signed a Receipt and
Release document in favor of SMC and accepted his separation pay, thereby
releasing all his claims against SMC.

Respondent filed a Complaint against SMC before the NLRC Bacolod City, for
illegal dismissal and underpayment of wages and other benefits. Labor Arbiter
rendered a Decision dismissing the complaint for lack of merit. Aggrieved,
respondent sought recourse before the NLRC Cebu City. NLRC dismissed the
appeal and affirmed the Labor Arbiters decision. The respondent filed a motion
for reconsideration, but it was denied in a Resolution. CA grants the respondents
petition, SMCs motion for reconsideration is denied. Hence this petition.

ISSUES:

1) whether the respondent was a regular employee of SMC;

2) whether the respondent was illegally dismissed; and
3) whether the respondent is entitled to his monetary claims and damages.

RULING:

1.) Respondent is a regular employee under the Art. 280 of the Labor Code;
Respondent Eduardo L. Teodosio became a regular employee in September
1992.

2.) Having gained the status of a regular employee, respondent is entitled to

security of tenure and could only be dismissed on just or authorized causes and
after he has been accorded due process; Respondent is awarded separation pay
in lieu of reinstatement.

3.) Respondent is not entitled to moral and exemplary damages. Moral damages
are recoverable where the dismissal of the employee was attended by bad faith
or fraud or constituted an act oppressive to labor, or was done in a manner
contrary to morals, good customs or public policy. On the other hand, exemplary
damages are proper when the dismissal was effected in a wanton,
oppressive or malevolent manner, and public policy requires that these acts must
be suppressed and discouraged in the present case, respondent failed to
sufficiently establish that his dismissal was done in bad faith; was contrary to
morals, good customs or public policy; and was arbitrary and oppressive to labor,
thus entitling him to the award of moral and exemplary damages, thus entitling
him to the award of moral and exemplary damages; The awards of moral and
exemplary damages granted by CA are DELETED.
Manila Water Company Inc. vs Dalumpines, G.R. No. 175501, Oct. 4, 2010

Facts:

By virtue of Republic Act No. 8041, otherwise known as the "National Water
Crisis Act of 1995," the Metropolitan Waterworks and Sewerage System (MWSS)
was given the authority to enter into concession agreements allowing the private
sector in its operations. Petitioner Manila Water Company, Inc. (Manila Water)
was one of two private concessionaires contracted by the MWSS to manage the
water distribution system in the east zone of Metro Manila. The east service area
included the following towns and cities: Mandaluyong, Marikina, Pasig, Pateros,
San Juan, Taguig, Makati, parts of Quezon City and Manila, Angono, Antipolo,
Baras, Binangonan, Cainta, Cardona, Jala-Jala, Morong, Pililla, Rodriguez,
Tanay, Taytay, Teresa, and San Mateo.

On November 21, 1997, before the expiration of the contract of services, the 121
bill collectors formed a corporation duly registered with the Securities and
Exchange Commission (SEC) as the "Association Collectors Group, Inc."
(ACGI). ACGI was one of the entities engaged by Manila Water for its courier
service. However, Manila Water contracted ACGI for collection services only in its
Balara Branch.

In December 1997, Manila Water entered into a service agreement with

respondent First Classic Courier Services, Inc. (FCCSI) also for its courier needs.
The service agreements between Manila Water and FCCSI covered the periods
1997 to 1999 and 2000 to 2002. Earlier, in a memorandum dated November 28,
1997, FCCSI gave a deadline for the bill collectors who were members of ACGI
to submit applications and letters of intent to transfer to FCCSI. The individual
respondents in this case were among the bill collectors who joined FCCSI and
were hired effective December 1, 1997.

On various dates between May and October 2002, individual respondents were
terminated from employment. Manila Water no longer renewed its contract with
FCCSI because it decided to implement a "collectorless" scheme whereby
Manila Water customers would instead remit payments through "Bayad Centers."
The aggrieved bill collectors individually filed complaints for illegal dismissal,
unfair labor practice, damages, and attorneys fees, with prayer for reinstatement
and backwages against petitioner Manila Water and respondent FCCSI. The
complaints were consolidated and jointly heard.

Petitioner Manila Water, for its part, denied that there was an employer-employee
relationship between its company and respondent bill collectors. Based on the
agreement between FCCSI and Manila Water, respondent bill collectors are the
employees of the former, as it is the former that has the right to select/hire,
discipline, supervise, and control. FCCSI has a separate and distinct legal
personality from Manila Water, and it was duly registered as an independent
contractor before the DOLE.

Issues:

WON FCCSI was a labor-only contractor and that respondent bill collectors are
employees of petitioner Manila Water

Ruling:

Yes. FCCSI was a labor-only contractor and that respondent bill collectors are
employees of petitioner Manila Water.

"Contracting" or "subcontracting" refers to an arrangement whereby a principal

agrees to put out or farm out with a contractor or subcontractor the performance
or completion 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.

Department Order No. 18-02, Series of 2002, enunciates that labor-only

contracting refers to an arrangement where the contractor or subcontractor
merely recruits, supplies, or places workers to perform a job, work, or service for
a principal, and any of the following elements are present: (i) the contractor or
subcontractor does not have substantial capital or investment which relates to
the job, work, or service to be performed and the employees recruited, supplied,
or placed by such contractor or subcontractor are performing activities which are
directly related to the main business of the principal; or (ii) the contractor does
not exercise the right to control the performance of the work of the contractual
employee.

FCCSI has no sufficient investment in the form of tools, equipment and

machinery to undertake contract services for Manila Water involving a fleet of
around 100 collectors assigned to several branches and covering the service
area of Manila Water customers spread out in several cities/towns of the East
Zone. The only rational conclusion is that it is Manila Water that provides most if
not all the logistics and equipment including service vehicles in the performance
of the contracted service, notwithstanding that the contract between FCCSI and
Manila Water states that it is the Contractor which shall furnish at its own
expense all materials, tools and equipment needed to perform the tasks of
collectors.
Fulache vs. ABS-CBN Broadcasting Corp (AJG) GR No.183810, January 21,
2010

FACTS:

Regularization Case

Petitioners Fulache and Castillo (drivers and cameramen), Atinen, Lagunzad,

Jabonero (drivers), Ponce and Almendras (cameramen/editors), Bigno
(PA/Teleprompter) and Cabas (VTR man/editor) filed complaints for
regularization, unfair labor practice, and several money claims against ABS.

They alleged that ABSCBN and their union entered into a CBA, and they learned
that they had been excluded from its coverage as ABS-CBN considered them
temporary employees. They claimed they had already rendered more than a year
of service in the company and, therefore, should have been recognized as
regular employees entitled to security of tenure and to the privileges and benefits
enjoyed by regular employees.

To properly establish their side, ABS-CBN first explained the nature of the
employment of the complainants:

A local station, like the Cebu station, can resort to cost-effective and cost-saving
measures to remain viable; local stations produced shows and programs that
were constantly changing because of the competitive nature of the industry, the
changing public demand or preference, and the seasonal nature of media
broadcasting programs.

To cope with fluctuating business conditions, it contracts on a case-to-case basis

the services of persons, also called talents (considered independent
contractors) who possess the necessary qualifications to meet the requirements
of its programs. These talents are paid a pre-arranged talent fee. They do not
undergo probation and their services are terminated at the completion of the
program.

ABSCBN alleged that the complainants in this case are off-camera talents, hence
not entitled to regularization.

LA ruling ONE petitioners are regular employees.

Illegal Dismissal Case
During its appeal to NLRC, ABSCBN terminated the services of the drivers (Note
only five of the above: Fulache, Jabonero, Castillo, Lagunzad and Atinen
[Atinen will execute a quitclaim later]).

Hence, they filed a complaint for illegal dismissal case (Note: The same Labor
Arbiter above [LA Rendoque] handled this case)

ABSCBNs Defense:

Petitioners refused to sign with service contractor Able Services.

Before all these cases started, it had already undertaken a comprehensive

review of its existing organizational structure to address its operational
requirements. Some services, such driving services, belongs to a job category
that had already been contracted out.

Even if the petitioners had been found to have been illegally dismissed, their
reinstatement had become a physical impossibility because their employer-
employee relationships had been strained and that Atinen had executed a
quitclaim and release.

LA Ruling TWO contracting out of ABS CBN is valid. No illegal dismissal of

petitioners due to redundancy, an authorized cause.

Merger of cases

NLRCs Joint Decision

Regularization Case

EER exists between ABS CBN and petitioners.

They cannot be considered contractual employees since they were not paid for
the result of their work, but on a monthly basis and were required to do their work
in accordance with the companys schedule.

Granted CBA benefits.

Illegal Dismissal Case

Drivers are illegally dismissed.

Awarded backwages, separation pay, CBA benefits (BUT NOTE: No award for
13th month pay, sick leaves cash conversion, medical allowances, etc. So
petitioners still appealed this)

Both appealed. Here are their allegations:

Employees No award for 13th month pay blah blah see above.

ABS CBN

No backwages should be awarded because they are independent contractors.

Petitioners should notbe entitled to the CBA benefits because they never claimed
these benefits in their position paper before the labor arbiter while the NLRC
failed to make a clear and positive finding that that they were part of the
bargaining unit; neither was there evidence to support this finding.

NLRCs Reconsideration EER exists, BUT there is redundancy so no illegal

dismissal! They are also denied CBA benefits and that they are not deemed part
of the collective bargaining unit!

CAs Ruling

Petitioners failed to prove their claim to CBA benefits since they never raised the
issue in the compulsory arbitration proceedings, and did not appeal the labor
arbiters decision which was silent on their entitlement to CBA benefits.

No illegal dismissal redundancy! No showing of abuse of prerogative on the

part of ABS CBN!

Except for separation pay, the CA denied the petitioners claim for backwages,
moral and exemplary damages, and attorneys fees.

Hence, this petition.

ISSUE:
Whether or not the petitioners are regular employees YES
Whether or not they are entitled to CBA benefits (issue of whether or not they are
covered by the CBA) YES
Whether or not the drivers are illegally dismissed - YES

HELD:

Petition GRANTED.

Decision of CA REVERSED and SET ASIDE.

Confirming that petitioners FARLEY FULACHE, MANOLO JABONERO, DAVID

CASTILLO, JEFFREY LAGUNZAD, MAGDALENA MALIG-ON BIGNO,
FRANCISCO CABAS, JR., HARVEY PONCE and ALAN C. ALMENDRAS are
regular employees of ABS-CBN BROADCASTING CORPORATION, and
declaring them entitled to all the rights, benefits and privileges, including CBA
benefits, from the time they became regular employees in accordance with
existing company practice and the Labor Code;

Declaring illegal the dismissal of Fulache, Jabonero, Castillo and Lagunzad, and
ordering ABS-CBN to immediately reinstate them to their former positions without
loss of seniority rights with full backwages and all other monetary benefits, from
the time they were dismissed up to the date of their actual reinstatement;

Awarding moral damages of P100,000.00 each to Fulache, Jabonero, Castillo

and Lagunzad; and, Awarding attorneys fees of 10% of the total monetary award
decreed in this Decision.

Petitioners Arguments

The CA gravely erred in:

Not considering the evidence submitted to the NLRC on appeal to bolster their
claim that they were members of the bargaining unit and therefore entitled to the
CBA benefits.

Not ordering ABS-CBN to pay the petitioners salaries, allowances and CBA
benefits after the NLRC has declared that they were regular employees of ABS-
CBN;
Not ruling that under existing jurisprudence, the position of driver cannot be
declared redundant, and that the petitioners-drivers were illegally dismissed; and

Not ruling that the petitioners were entitled to damages and attorneys fees.

The petitioners then proceeded to describe the work they render for the
company. Collectively, they claim that they work as assistants in the production of
the Cebuano news program broadcast daily over ABS-CBN Channel 3, as
follows:

Fulache, Jabonero, Castillo and Lagunzad as production assistants to drive the

news team;
Ponce and Almendras, to shoot scenes and events with the use of cameras
owned by ABS-CBN;
Malig-on Bigno, as studio production assistant and assistant editor/teleprompter
operator; and
Cabas, Jr., as production assistant for video editing and operating the VTR
machine recorder.

As production assistants, the petitioners submit that they are rank-and-file

employeeswho are entitled to salary increases and other benefits under the CBA.

Relying on the Courts ruling in New Pacific Timber and Supply Company, Inc. v.
NLRC, they posit that to exclude them from the CBA "would constitute undue
discrimination and would deprive them of monetary benefits they would otherwise
be entitled to. (CBA issue. Bago to. Aralinnyo. Bakabiglangtanungin)
Petitioners impute bad faith on ABS-CBN when it abolished the positions of
drivers claiming that the company failed to comply with the requisites of a valid
redundancy action.

ABS CBNs Arguments

Technicalities nalang arguments nila, such as the petition raises question of facts
and not of law kahitna certiorari ito, lapsed with finality without appeal, etc.

SCs Ruling
Claim for CBA Benefits
As regular employees, the petitioners fall within the coverage of the bargaining
unit and are therefore entitled to CBA benefits as a matter of law and contract.
The ruling of the Labor Arbiter unequivocally settled the petitioners employment
status: they are ABS-CBNs regular employees entitled to the benefits and
privileges of regular employees. These benefits and privileges arise from
entitlements under the law and from their employment contract as regular ABS-
CBN employees, part of which is the CBA if they fall within the coverage of this
agreement.

Thus, what only needs to be resolved as an issue for purposes of implementation

of the decision is whether the petitioners fall within CBA coverage. Their CBA
provides:

Section 1. APPROPRIATE BARGAINING UNIT. The parties agree that the

appropriate bargaining unit shall be regular rank-and-file employees of ABS-CBN
BROADCASTING CORPORATION but shall not include:

a) Personnel classified as Supervisor and Confidential employees;

b) Personnel who are on "casual" or "probationary" status as defined in Section 2

hereof;

c) Personnel who are on "contract" status or who are paid for specified units of
work such as writer-producers, talent-artists, and singers.

The inclusion or exclusion of new job classifications into the bargaining unit shall
be subject of discussion between the COMPANY and the UNION.

Under these terms, the petitioners are members of the appropriate bargaining
unit because they are regular rank-and-file employees and do not belong to any
of the excluded categories. Specifically, nothing in the records shows that they
are supervisory or confidential employees; neither are they casual nor
probationary employees.

CBA coverage is not only a question of fact, but of law and contract. The factual
issue is whether the petitioners are regular rank-and-file employees of ABS-CBN.
The tribunals below uniformly answered this question in the affirmative.

Illegal Dismissal Case

The termination of employment of the four drivers occurred under highly

questionable circumstances and with plain and unadulterated bad faith.
The regularization case was in fact the root of the resulting bad faith as this case
gave rise and led to the dismissal case.In the course of this appeal, ABS-CBN
took matters into its own hands and terminated the petitioners services, clearly
disregarding its own appeal then pending with the NLRC.To justify the
termination of service, the company cited redundancy as its authorized cause but
offered no justificatory supporting evidence. It merely claimed that it was
contracting out the petitioners activities in the exercise of its management
prerogative. This move (dismissed while there is a pending case) is a direct
affront to the authority of the NLRC and an abuse of the appeal process)

It also forgot that by claiming redundancy, they admitted that petitioners are
regular employees.

ABS-CBN forgot that it had an existing CBA with a union, which agreement must
be respected in any move affecting the security of tenure of affected employees;
otherwise, it ran the risk of committing unfair labor practice both a criminal and
an administrative offense.

Awards

By law, illegally dismissed employees are entitled to reinstatement without loss of

seniority rights and other privileges and to full backwages, inclusive of
allowances, and to other benefits or their monetary equivalent from the time their
compensation was withheld from them up to the time of their actual
reinstatement. The four dismissed drivers deserve no less.
Moreover, they are also entitled to moral damages since their dismissal was
attended by bad faith.40 For having been compelled to litigate and to incur
expenses to protect their rights and interest, the petitioners are likewise entitled
to attorneys fees.

The errors and omissions do not belong to ABS-CBN alone. The labor arbiter
himself who handled both cases did not see the totality of the companys actions
for what they were. He appeared to have blindly allowed what he granted the
petitioners with his left hand, to be taken away with his right hand, unmindful that
the company already exhibited a badge of bad faith in seeking to terminate the
services of the petitioners whose regular status had just been recognized. He
should have recognized the bad faith from the timing alone of ABS-CBNs
conscious and purposeful moves to secure the ultimate aim of avoiding the
regularization of its so-called "talents."

The NLRC, for its part, initially recognized the presence of bad faith. However, in
an inexplicable turnaround, it reconsidered its joint decision and reinstated not
only the labor arbiters decision of January 17, 2002 in the regularization case,
but also his illegal dismissal decision of April 21, 2003.38 Thus, the NLRC joined
the labor arbiter in his error that we cannot but characterize as grave abuse of
discretion.
The Court cannot leave unchecked the labor tribunals patent grave abuse of
discretion that resulted, without doubt, in a grave injustice to the petitioners who
were claiming regular employment status and were unceremoniously deprived of
their employment soon after their regular status was recognized. Unfortunately,
the CA failed to detect the labor tribunals gross errors in the disposition of the
dismissal issue. Thus, the CA itself joined the same errors the labor tribunals
committed.
BALAGTAS MULTI-PURPOSE COOPERATIVE, INC. vs CA, G.R. No. 159268,
October 27, 2006

FACTS:

Balagtas Multi-Purpose Cooperative, Inc. is a duly organized and existing

cooperative under the laws of the Philippines. Sometime in April 1991, Balagtas
hired Josefina G. Hipolito-Herrero, as part time manager in its office in Sulok,
Panginay, Balagtas, Bulacan, where she was required to report.

In September 1992, Balagtas created a branch office at Wawa, Balagtas,

Bulacan. Josefina was required to report at the said Wawa branch from 8:00 to
12:00 noon before reporting to her office at Sulok from 2:00 to 6:00 p.m. For the
additional work, Josefina received a proportionate increase in salary.

In the early part of 1994, the board members contemplated closing its Wawa
Branch Office inasmuch as the desired number of the members and volume of
transactions were not met with, rendering it more costly to maintain.

On May 1, 1994, in their monthly meeting, Josefina informed them that she
intends to take a leave of absence from May 9 to May 30, 1994. Her proposal
was immediately approved by the board.

Subsequently, the board members resolved to close its Wawa branch. Meantime,
after the lapse of her leave of absence on May 30, 1994, Josefina did not report
for work anymore. Later on, she filed her resignation.

Almost nine (9) months thereafter Josefina filed a complaint with the Provincial
Office of the Department of Labor in Malolos, Bulacan for illegal dismissal, and
non-payment of 13th month pay or Christmas Bonus. She prayed that she be
reinstated and paid backwages as well as moral damages.

The Labor Arbiter rendered a decision in favor of Josefina ordering the petitioners
to pay separation pay, backwages and 13th month pay.

Aggrieved, Balagtas appealed the decision to the National Labor Relations

Commission (NLRC) but failed to post either a cash or surety bond as required
by Article 223 of the Labor Code. Instead, petitioners filed a manifestation and
motion, stating, among others, that under Republic Act No. 6938, Article 62(7) of
the Cooperative Code of the Philippines, petitioners are exempt from putting up a
bond in an appeal from the decision of the inferior court. In a Resolution, the
NLRC ordered the Petitioner to post a bond within 10 days.

Petitioners then filed a petition for certiorari with the CA, alleging that the NLRC
acted with grave abuse of discretion amounting to excess or lack of jurisdiction in
directing them to post an appeal bond despite the clear mandate of Article 62,
paragraph (7) of Republic Act No. 6938 (Cooperative Code) which dispensed
with such requirement.

After the parties submitted their respective pleadings, the CA resolved to dismiss
the petition in the assailed decision dated September 27, 2002 holding that the
exemption from putting up a bond by a cooperative applies to cases decided by
inferior courts only.

ISSUE:

Whether cooperatives are exempted from filing a cash or surety bond required to
perfect an employers appeal under Section 223 of Presidential Decree No. 442
,the Labor Code.

HELD:

The provision cited by petitioners cannot be taken in isolation and must be

interpreted in relation to the Cooperative Code in its entirety. It must be kept in
mind that the enactment of the Cooperative Code is pursuant to the States
declared policy of fostering the creation and growth of cooperatives as a
practical vehicle for prompting self-reliance and harnessing people power
towards the attainment of economic development and social justice. In line with
this, certain benefits and privileges were expressly granted to cooperative entities
under the statute. The provision invoked by petitioners regarding the exemption
from payment of an appeal bond is only one among a number of such privileges
which appear under the article entitled Tax and Other Exemptions of the code.

Considering that the provision relates to tax and other exemptions, the same
must be strictly construed. This follows the well-settled principle that exceptions
are to be strictly. An express exception, exemption, or saving clause excludes
other exceptions. Express exceptions constitute the only limitations on the
operation of a statute and no other exception will be implied. The rule proceeds
from the premise that the legislative body would not have made specific
enumerations in a statute, if it had the intention not to restrict its meaning and
confine its terms to those expressly mentioned.

The term court has a settled meaning in this jurisdiction which cannot be
reasonably interpreted as extending to quasi-judicial bodies like the NLRC unless
otherwise clearly and expressly indicated in the wording of the statute. Simply
because these tribunals or agencies exercise quasi-judicial functions does not
convert them into courts of law.

For this reason, petitioners must comply with the requirement set forth in Article
223 of the Labor Code in order to perfect their appeal to the NLRC. It must be
pointed out that the right to appeal is not a constitutional, natural or inherent right.
It is a privilege of statutory origin and, therefore, available only if granted or
provided by statute. The law may validly provide limitations or qualifications
thereto or relief to the prevailing party in the event an appeal is interposed by the
losing party.

In this case, the obvious and logical purpose of an appeal bond is to insure,
during the period of appeal, against any occurrence that would defeat or diminish
recovery by the employee under the judgment if the latter is subsequently
affirmed. This is consistent with the States constitutional mandate to afford full
protection to labor in order to forcefully and meaningfully underscore labor as a
primary social and economic force.
FLIGHT ATTENDANTS AND STEWARDS ASSOCIATION OF THE
PHILIPPINES (FASAP) v. PHILIPPINE AIRLINES, INC., PATRIA CHIONG and
COURT OF APPEALS October 2, 2009/ G.R. No. 178083

FACTS:

Cabin crew personnel were covered by the retrenchment and demotion scheme
of PAL due to financial distress which is evidenced by proof of its claimed losses
in a petition for suspension of payments, as well as the Order of the Securities
and Exchange Commission (SEC) approving the said petition for suspension of
payments, together with proof of summary of its debts and other liabilities.

Exercising its management prerogative and sound business judgment, it decided

to cut its fleet of aircraft in order to minimize its operating losses and rescue itself
from total downfall; which meant that a corresponding company-wide reduction
in manpower necessarily had to be made. As a result, 5,000 PAL employees
(including the herein 1,400 cabin attendants) were retrenched.

PAL, however, gave a whole different reason for retrenchment when the pilots
went on strike. Accordingly, what really brought about the really perilous
situation of closure was that on June 5, 1998, the pilots went on strike, ninety
(90%) per cent of the pilots went on strike, approximately six hundred (600).
These pilots strike was so devastating x x x. Without any pilots no plane can fly,
your Honor, that is the stark reality of the situation, and without airplanes flying,
there would be no place for employment of cabin attendants.

ISSUE:

Whether or not the strike, which PAL used as basis to undertake the massive
retrenchment under scrutiny, is an authorized cause.

RULING:

The strike was a temporary occurrence that did not necessitate the immediate
and sweeping retrenchment of 1,400 cabin or flight attendants.

There was no reason to drastically implement a permanent retrenchment scheme

in response to a temporary strike, which could have ended at any time, or
remedied promptly, if management acted with alacrity.

Juxtaposed with its failure to implement the required cost-cutting measures, the
retrenchment scheme was a knee-jerk solution to a temporary problem that beset
PAL at the time.
PAL must still prove that it implemented cost-cutting measures to obviate
retrenchment, which under the law should be the last resort. By PALs own
admission, however, the cabin personnel retrenchment scheme was one of the
first remedies it resorted to, even before it could complete the proposed
downsizing of its aircraft fleet.

The following elements under Article 283 of the Labor Code must concur or be
present, to wit:

(1) That retrenchment is reasonably necessary and likely to prevent

business losses which, if already incurred, are not merely de minimis, but
substantial, serious, actual and real, or if only expected, are reasonably imminent
as perceived objectively and in good faith by the employer;

(2) That the employer served written notice both to the employees and to the
Department of Labor and Employment at least one month prior to the intended
date of retrenchment;

(3) That the employer pays the retrenched employees separation pay
equivalent to one (1) month pay or at least one-half () month pay for every year
of service, whichever is higher;

(4) That the employer exercises its prerogative to retrench employees in

good faith for the advancement of its interest and not to defeat or circumvent the
employees right to security of tenure; and,

(5) That the employer uses fair and reasonable criteria in ascertaining who
would be dismissed and who would be retained among the employees, such as
status, efficiency, seniority, physical fitness, age, and financial hardship for
certain workers.

In the absence of one element, the retrenchment scheme becomes an irregular

exercise of management prerogative.

The retrenchment scheme under scrutiny was not triggered directly by any
financial difficulty PAL was experiencing at the time, nor borne of an actual
implementation of its proposed downsizing of aircraft.
MALAYAN INSURANCE COMPANY, INC., vs. VICTORIAS MILLING COMPANY,
INC., G.R. No. 167768, April 17, 2009

FACTS:

Petitioner maintains that the Stay Order applies only to claims existing prior to or
at the time of the issuance of the said order. It avers that Sec. 6 (c) of P.D. No.
902-A is clear and categorical that the suspension covers actions for claims
which are pending before any court at the time of the appointment of the
management committee or rehabilitation receiver. And, not being a pre-existing
claim, payment of petitioners claim will not result in undue preference which is
the mischief sought to be prevented by a stay order.

Respondent posits that it is immaterial when the actions were commenced as the
cited provision is clear that all actions standing before a court against a
corporation under a management committee must be stayed; hence, even
actions for claims instituted after the appointment of the management committee
are covered by the stay

ISSUE:

Does the stay order only suspend those claims existing before or at the time of
its issuance?

HELD:

Suspension of actions/claims against a corporation cover all claims against the

distressed corporation whether for damages, labor cases, collection cases or
claims of pecuniary nature, at any stage, in order to expedite the rehabilitation.
However, this does not include criminal cases against corporation officer.
AMADEO FISHING CORPORATION v. NIERRA, G.R. No. 163099, October 4,
2005

FACTS:

Petitioner Amadeo Fishing Corporation is a domestic corporation engaged

principally in deep sea fishing in the high seas. Private respondents
Romeo Nierra, Raul Naces and Alberto Ojayas were reserved crew members of
the petitioners fishing boat, theF/B Eduardo 08 which was conducting fishing
operations in Indonesia.

The issuance of the gate pass for all fish taken out of the company premises, as
allowances, purchases or donations, is made at the weighing shed near the
wharf, about 500 meters away from the main gate. Only fish brokers weighed the
fish. Security guards are also posted within the vicinity to look after the fish, and
the movements of the buyers and labourers

On March 9, 1998, the private respondents were about to exit the company
premises at the main gate. The guard on duty would not let them pass; the
private respondents had fish in their possession about seven kilos of Skipjack
Tuna and Yellow Fin which required a gate pass.

The private respondents insisted that a gate pass was no longer necessary, as
they personally caught the fish. The guard confiscated the fish and stored it in the
company canteen.

General Manager of the fishing corporation remarked that their actuations

constituted theft and ordered the personnel department to institute criminal
charges against the private respondents, and, if the circumstances warranted,
terminate their employment for gross insubordination, disrespect and arrogance
towards their employer and immediate superior. Thereafter, the private
respondents were terminated.

The petitioners filed criminal charges of qualified theft against the private
respondents. However, the trial court dismissed the criminal case in an
Order11 dated September 23, 1998 due to insufficiency of evidence.
On August 18, 1998, the private respondents filed a Complaint for Illegal
Dismissal against Amadeo Fishing Corporation.

On June 30, 1999, the Labor Arbiter dismissed the complaint for illegal dismissal
for lack of merit. the Labor Arbiter held that the City Prosecutors finding of
a prima facie case for qualified theft and the recommendation of the filing of an
Information before a court of competent jurisdiction constituted "substantial
evidence that warranted a finding of the existence of a just cause for the
termination of the complainants on the ground of loss of trust and confidence.

On appeal, the NLRC affirmed with modification the Labor Arbiters ruling.
However, the NLRC also ruled that the petitioners failed to comply with the
procedural requirements of dismissal, namely, notice and hearing. The NLRC
further concluded that any excuse, defense, or justification by the private
respondents would not matter, as their dismissal from employment was already a
foregone conclusion.

The private respondents elevated the case before the CA. The CA agreed with
the NLRC, holding that in dismissing the private respondents employment, the
petitioners failed to observe the two-notice rule.
The petitioners filed a motion for reconsideration of the said ruling, which the
appellate court denied, hence, this petition.

ISSUE:

Whether the private respondents were illegally dismissed from employment.

HELD:

In general, management has the prerogative to discipline its employees and to

impose appropriate penalties on erring workers pursuant to company rules and
regulations. In this case, there is no dispute that the private respondents were
aware of the company policy requiring a gate pass for all fish that would be taken
out of the premises. If, indeed, it were true that respondent Nierra previously had
a gate pass, which he claimed was destroyed, he could have just as easily gotten
a new one.

As borne out by the records, respondent Naces had already twice been
reprimanded: once for taking 15 kilos of fish without permission and selling the
same to an outsider; and again for being under the influence of liquor and leaving
the vessel without proper permission from the supervisor. Considering these
previous infractions and the fact that one of the private respondents was on
liquor, petitioner Odango had the right to be concerned about the actuations of
the private respondents. Loss of confidence can be a ground for dismissing an
employee when there is basis for the same or when the employer has
reasonable ground to believe, if not entertain, the moral conviction that the
employee is responsible for the misconduct and that the nature of his
participation therein renders him unworthy of the trust and confidence demanded
by his position.

Article 282 of the Labor Code of the Philippines provides that an employer may
terminate an employee based on fraud or willful breach of the trust reposed in
him by his employer or duly-authorized representative. This is premised on the
fact that an employee concerned holds a position of trust and confidence. This
situation holds where an employee or official of the company is entrusted
with responsibility involving delicate matters, such as the custody,
handling or care of the employers property. In the case of company
personnel occupying such positions of responsibility, the Court has repeatedly
held that loss of trust and confidence justifies termination. Indeed, an
employees acquittal in a criminal case does not automatically preclude a
determination that he has been guilty of acts inimical to the employers interest
resulting in loss of trust and confidence.

While the private respondents were dismissed for cause, the CA correctly
held that the petitioners failed to observe the two-notice rule under Article
277(b) of the Labor Code in dismissing them from employment.

Thus, the petitioners claim that the private respondents were properly notified of
their termination is unavailing. The employers compliance with the second
requirement (the notice of termination) does not cure the initial defect of the
absence of the proper written charge required by law.
San Miguel Corporation v. Caroline del Rosario G.R. Nos. 168194 & 168603
December 13, 2005

Facts:

Caroline del Rosario is a KEY ACCOUNTANT SPECIALIST of SMC on April 17,

2000.-She was a temporary reliever of another employee who met an accident-
after the restructuring of the accounts in SMC, the previously hired 49 employees
were considered to be in excess of what was needed by the newly organized
accounts.

She was informed that her PROBATIONARY EMPLOYMENT will be severed at

the close of the business hours of March 12, 2001.- March 13, 2001: she wasnt
allowed to go inside SMC.

She filed a case for illegal dismissal

SMC: She was a probationary employee whose services were terminated as a

result of the excess manpower that couldno longer be accommodated by the
company (redundancy)

CAROLINE: excess in manpower is not true, in fact, they employed several other
recruits & her other batch mates

LA: in favor of Caroline; SMC didnt rebut the Carolines claim that SMC hired
several other employees although she was dismissed due to redundancy; she
was already a regular employee bec. the time exceeded 6 months already; no
validcause of dismissal-awarded holiday pay, backwages, service incentive leave
& 13th month pay NLRC: modified; she was a regular employee terminated for
valid cause but ineffectual bec. SMC failed to comply with the 30-day notice to
the employee-separation pay, full backwages, reduced 13 th month pay & service
incentive leave

CA First Division: illegally dismissed employee; deleted holiday pay for lack
of basis

Third Division: affirmed the NLRC Hence, 2 separate appeals.

ISSUES:

1: Was Caroline a regular employee??

2: Was she illegally dismissed??
3: What monetary benefits should she get?SC?
RULING:

1: no proof of probationary employment status was given by SMC, hence, she

was hired as a regular employee for 11 months. The best proof could have
beenthe employment contract but none was presented. Payroll is insufficient to
prove the Reliever Status of Caroline?

2: Yes.-SMC claims that Caroline was dismissed due to redundancy.-

Redundancy exists where the services of an employee are in excess of what
is reasonably demanded by the actual requirements of the enterprise; a position
isredundant where it is superfluous, and superfluity of a position or
positions may be the outcome of a number of factors, such as
overhiring of workers,decreased volume of business, or dropping of a
particular product line or service activity previously manufactured or undertaken
by the enterprise-WHAT CONSTITUTES SUFFICIENT PROOF:
Panlilio v. NLRC

the new staffing pattern, feasibility studies/proposal, on the viability of the newly
created positions, job description and the approval by the management of the
restructuring-What was presented an affidavit of its Sales Manager and a
memorandum of the company = insufficient ALSO, no notice to DOLE?

3: ARTICLE 279-reinstatement without loss of seniority rights & other privileges

and she is entitled to full backwages to his full backwages, inclusive of
allowances, and tohis other benefits or their monetary equivalent
computed from the time his compensation was withheld from him up to the time
of his actual reinstatement-she is entitled to service incentive leave and 13 th
Month Pay-BUT NOT entitled to holiday pay: because the records reveal that she
is a monthly paid regular employee. Under Section 2, Rule IV, Book III of the
OmnibusRules Implementing the Labor Code, employees who are uniformly paid
by the month, irrespective of the number of working days therein, shall be
presumedto be paid for all the days in the month whether worked or not.