LABOR LAW Compilation of Case Digest

LABOR LAW
MSCI-NACUSIP vs. NWPC and MONOMER SUGAR DIGEST

DECEMBER 21, 2 016 ~ LEA VE A COMMENT
MSCI-NACUSIP Local Chapter, petitioner, vs. NATIONAL WAGES AND PRODUCTIVITY COMMISSION and MONOMER
SUGAR CENTRAL, INC., respondents. G.R. No. 125198. March 3, 1997
FACTS:
On January 11, 1990, Asturias Sugar Central, Inc. (ASCI), executed a Memorandum of Agreement with Monomer Trading
Industries, Inc. (MTII), whereby MTII shall acquire the assets of ASCI by way of a Deed of Assignment provided that an entirely new
organization in place of MTII shall be organized, which new corporation shall be the assignee of the assets of ASCI. Thus, a new
corporation was organized and incorporated on February 15, 1990 under the corporate name Monomer Sugar Central, Inc. (MSCI),
the private respondent herein.
MSCI applied for exemption from the coverage of Wage Order No. RO VI-01 issued by the Regional Tripartite Wages and
Productivity Board VI (Board) on the ground that it is a distressed employer. MSCI submitted its audited financial statements and
income tax returns duly stamped “received” by the BIR and the SEC.
The petitioner MSCI-NACUSIP Local Chapter (Union), in opposition, maintained that MSCI is not distressed; that respondent
applicant has not complied with the requirements for exemption; and that the financial statements submitted by MSCI do not reflect
the true and valid financial status of the company, etc.
The Board denied MSCI’s application for exemption based on the finding that the applicant’s losses of P3,400,738.00 for the period
February 15, 1990 to August 31, 1990 constitute an impairment of only 5.25% of its paid-up capital of P64,688,528.00, cannot be
said to be sufficient to meet the required 25% loss in order to qualify for the exemption, as provided in NWPC Guidelines No. 01,
Series of 1992. An appeal was brought before the public respondent NATIONAL WAGES AND PRODUCTIVITY COMMISSION
(Commission). The Commission reversed and set aside the orders of the Board, and granted MSCI’s application for exemption from
Wage Order No. RO VI-01, for a period of 1 yr from its effectivity. Hence this Petition for Certiorari under Rule 65 by the Petitioner.
ISSUE:
What is the correct paid-up capital of MSCI for the period covered by the application for exemption — P5 million or P64,688,528.00?
(Would it qualify MSCI as a distressed employer and thus be entitled to exemption from compliance with Wage Order No. RO VI-01)
RULING:
NWPC Guidelines No. 01, Series of 1992 as well as the new NWPC Guidelines No. 01, Series of 1996, define Capital as referring to
paid-up capital at the end of the last full accounting period, in the case of corporations; or total invested capital at the beginning of
the period under review, in the case of partnerships and single proprietorships. To have a clear understanding of what paid-up
capital is, a referral to Sections 12 and 13 of the Corporation Code would be helpful:
“Sec. 12. Minimum capital stock required of stock corporations. — Stock corporations incorporated under this Code shall not be
required to have any minimum authorized capital stock except as otherwise specifically provided for by special law, and subject to
the provisions of the following section.”
“Sec. 13. Amount of capital stock to be subscribed and paid for purposes of incorporation. — At least 25% of the authorized
capital stock as stated in the articles of incorporation must be subscribed at the time of incorporation, and at least 25% percent of
the total subscription must be paid upon subscription, the balance to be payable on a date or dates fixed in the contract of
subscription without need of call, or in the absence of a fixed date or dates, upon call for payment by the board of
directors: Provided, however, That in no case shall the paid-up capital be less thanP5,000.00”
Paid-up capital is that portion of the authorized capital stock which has been both subscribed and paid. In the case at bar, MSCI was
organized and incorporated on February 15, 1990 with an authorized capital stock of P60 million, P20 million of which was
subscribed. Of theP20 million subscribed capital stock, P5 million was paid-up.
The argument of the Board that the value of the assets of ASCI transferred to MSCI as well as the loans or advances made by MTII
to MSCI should have been taken into consideration in computing the paid-up capital of MSCI is unmeritorious. Not all funds or
assets received by the corporation can be considered paid-up capital, for this term has a technical signification in Corporation Law.
Such must form part of the authorized capital stock of the corporation, subscribed and then actually paid up.
The loans and advances of MTII to respondent MSCI cannot be treated as investments, unless the corresponding shares of stocks
are issued. But as it turned out, such loans and advances were in fact treated as liabilities of MSCI to MTII as shown in its 1990
audited financial statements. The treatment by the Board of these loans as part of MSCI’s capital stock without satisfying certain
mandatory requirements is prohibited under Sec 38 of the Corporation Code which provides:
“Power to increase or decrease capital stock; incur, create or increase bonded indebtedness. No corporation shall increase or
decrease its capital stock or incur, create or increase any bonded indebtedness unless approved by a majority vote of the board of
directors and, at a stockholders’ meeting duly called for the purpose, two-thirds (2/3) of the outstanding capital stock shall favor the
increase or diminution of the capital stock, or the incurring, creating or increasing of any bonded indebtedness. Written notice of the
proposed increase or diminution of the capital stock or of the incurring, creating, or increasing of any bonded indebtedness and of
the time and place of the stockholders’ meeting at which the proposed increase or diminution of the capital stock or the incurring or
increasing of any bonded indebtedness is to be considered, must be addressed to each stockholders at his place of residence as
shown on the books of the corporation and deposited to the addressee in the post office with postage prepaid, or served personally.”
The above requirements, which are condition precedents before the capital stock of a corporation may be increased, were not
observed in this case. Henceforth, the paid-up capital stock of MSCI for the period covered by the application for exemption still
stood at P5 million. The losses, therefore, amounting to P3,400,738.00 for the period Feb 15, 1990 to Aug 31, 1990 impaired
MSCI’s paid-up capital of P5M by as much as 68%. MSCI is qualified as a distressed employer. Respondent Commission thus
acted well within its jurisdiction in granting MSCI full exemption from Wage Order No. RO VI-01 as a distressed employer.
WHEREFORE, the petition is DISMISSED.
LOPEZ vs. BODEGA CITY DIGEST
G.R. No. 155731 September 3, 2007
LOLITA LOPEZ, petitioner,
vs.
BODEGA CITY (Video-Disco Kitchen of the Philippines) and/or ANDRES C. TORRES-YAP, respondents.
Respondent Bodega City (Bodega City) is a corporation duly registered and existing under and by virtue of the laws of the Republic
of the Philippines, while respondent Andres C. Torres-Yap (Yap) is its owner/ manager. Petitioner was the “lady keeper” of Bodega
City tasked with manning its ladies’ comfort room.
In a letter signed by Yap dated February 10, 1995, petitioner was made to explain why the concessionaire agreement between her
and respondents should not be terminated or suspended in view of an incident that happened on February 3, 1995, wherein
petitioner was seen to have acted in a hostile manner against a lady customer of Bodega City who informed the management that
she saw petitioner sleeping while on duty.
Yap informed petitioner that because of the incident that happened respondents had decided to terminate the concessionaire
agreement between them.
Petitioner filed a complaint for illegal dismissal against respondents contending that she was dismissed from her employment
without cause and due process.
In their answer, respondents contended that no employer-employee relationship ever existed between them and petitioner; that the
latter’s services rendered within the premises of Bodega City was by virtue of a concessionaire agreement she entered into with
respondents.
Labor Arbiter rendered judgment finding that petitioner was an employee of respondents and that the latter illegally dismissed her.3
NLRC SET ASIDE AND VACATED LA Decision.
ISSUE:
Whether or not petitioner is an employee of respondents.
RULING:
In an illegal dismissal case, the onus probandi rests on the employer to prove that its dismissal of an employee was for a valid
cause.13 However, before a case for illegal dismissal can prosper, an employer-employee relationship must first be established.14
In filing a complaint before the Labor Arbiter for illegal dismissal based on the premise that she was an employee of respondent, it is
incumbent upon petitioner to prove the employee-employer relationship by substantial evidence.15
The NLRC and the CA found that petitioner failed to discharge this burden, and the Court finds no cogent reason to depart from their
findings.
The Court applies the four-fold test expounded in Abante v. Lamadrid Bearing and Parts Corp.,16 to wit:
To ascertain the existence of an employer-employee relationship, jurisprudence has invariably applied the four-fold test, namely: (1)
the manner of selection and engagement; (2) the payment of wages; (3) the presence or absence of the power of dismissal; and (4)
the presence or absence of the power of control. Of these four, the last one is the most important. The so-called “control test” is
commonly regarded as the most crucial and determinative indicator of the presence or absence of an employer-employee
relationship. Under the control test, an employer-employee relationship exists where the person for whom the services areperformed
reserves the right to control not only the end achieved, but also the manner and means to be used in reaching that end.17
To prove the element of payment of wages, petitioner presented a petty cash voucher showing that she received an allowance for
five (5) days.18 The CA did not err when it held that a solitary petty cash voucher did not prove that petitioner had been receiving
salary from respondents or that she had been respondents’ employee for 10 years.
Indeed, if petitioner was really an employee of respondents for that length of time, she should have been able to present salary
vouchers or pay slips and not just a single petty cash voucher. The Court agrees with respondents that petitioner could have easily
shown other pieces of evidence such as a contract of employment, SSS or Medicare forms, or certificates of withholding tax on
compensation income; or she could have presented witnesses to prove her contention that she was an employee of respondents.
Petitioner failed to do so.
Anent the element of control, petitioner’s contention that she was an employee of respondents because she was subject to their
control does not hold water.
Petitioner failed to cite a single instance to prove that she was subject to the control of respondents insofar as the manner in which
she should perform her job as a “lady keeper” was concerned.
It is true that petitioner was required to follow rules and regulations prescribing appropriate conduct while within the premises of
Bodega City. However, this was imposed upon petitioner as part of the terms and conditions in the concessionaire agreement
embodied in a 1992 letter of Yap addressed to petitioner.
Petitioner does not dispute the existence of the letter; neither does she deny that respondents offered her the subject
concessionaire agreement. However, she contends that she could not have entered into the said agreement with respondents
because she did not sign the document evidencing the same.
Petitioner is likewise estopped from denying the existence of the subject concessionaire agreement. She should not, after enjoying
the benefits of the concessionaire agreement with respondents, be allowed to later disown the same through her allegation that she
was an employee of the respondents when the said agreement was terminated by reason of her violation of the terms and
conditions thereof.
The principle of estoppel in pais applies wherein — by one’s acts, representations or admissions, or silence when one ought to
speak out — intentionally or through culpable negligence, induces another to believe certain facts to exist and to rightfully rely and
act on such belief, so as to be prejudiced if the former is permitted to deny the existence of those facts.24
Hence, going back to the element of control, the concessionaire agreement merely stated that petitioner shall maintain the
cleanliness of the ladies’ comfort room and observe courtesy guidelines that would help her obtain the results they wanted to
achieve. There is nothing in the agreement which specifies the methods by which petitioner should achieve these results.
Lastly, the Court finds that the elements of selection and engagement as well as the power of dismissal are not present in the
instant case.
It has been established that there has been no employer-employee relationship between respondents and petitioner. Their
contractual relationship was governed by the concessionaire agreement embodied in the 1992 letter. Thus, petitioner was not
dismissed by respondents. Instead, as shown by the letter of Yap to her dated February 15, 1995,37 their contractual relationship
was terminated by reason of respondents’ termination of the subject concessionaire agreement, which was in accordance with the
provisions of the agreement in case of violation of its terms and conditions.
In fine, the CA did not err in dismissing the petition for certiorari filed before it by petitioner.
WHEREFORE, the instant petition is DENIED. The assailed Decision and Resolution of the Court of Appeals are AFFIRMED. Costs
against petitioner.
SO ORDERED.
FROM ATTY. GUIFAYA^^
RE: REQUEST OF (RET.) CHIEF JUSTICE ARTEMIO V. PANGANIBAN FOR RECOMPUTATION OF HIS CREDITABLE
SERVICE FOR THE PURPOSE OF RECOMPUTING HIS RETIREMENT BENEFITS DIGEST
A.M. No. 10-9-15-SC February 12, 2013
RE: REQUEST OF (RET.) CHIEF JUSTICE ARTEMIO V. PANGANIBAN FOR RECOMPUTATION OF HIS CREDITABLE
SERVICE FOR THE PURPOSE OF RECOMPUTING HIS RETIREMENT BENEFITS.
The Court is asked to pass upon the request of former Chief Justice Artemio V. Panganiban (CJ Panganiban) to include as
creditable government service the period from January 1962 to December 1965 when he served the Department of Education
(DepEd), its Secretary, and the Board of National Education (BNE) to enable him to meet the present service requirement of fifteen
(15) years for entitlement to retirement benefits.
When CJ Panganiban reached the compulsory age of retirement on
December 7, 2006, he was credited with eleven (11) years, one (1) month and twenty-seven (27) days or 11.15844 years of
government service. The Office of Administrative Services (OAS) did not include in the computation his 4-year service as Legal
Counsel to the DepEd and its then Secretary, Alejandro R. Roces (Former Education Secretary Roces), and as Consultant to the
BNE in a concurrent capacity, from January 1962 to December 1965, on the ground that consultancy “is not considered government
service pursuant to Rule XI (Contract of Services/Job Orders) of the Omnibus Rules Implementing Book V of Executive Order No.
292.”1 Having failed to meet the twenty (20) years length of service then required under Republic Act (R.A.) No. 910,2 the OAS
considered him eligible to receive only the 5-year lump sum payment under said law.
On January 10, 2010, then President Gloria Macapagal-Arroyo approved R.A. 9946,3 which not only reduced the requisite length of
service under R.A. 910 from twenty (20) years to fifteen (15) years to be entitled to the retirement benefits with lifetime annuity, but
provided also for a survivorship clause, among others.
The Court finds merit in CJ Panganiban’s request.
A careful perusal of the actual functions and responsibilities of CJ Panganiban as outlined in his compliance with attached Sworn
Statements of Former Education Secretary Roces and Retired Justice Pardo reveal that he performed actual works and was
assigned multifarious tasks necessary and desirable to the main purpose of the DepEd and the BNE.
Former Education Secretary Roces certified that:
Under the old Administrative Code (Act No. 2657),10 a government “employee” includes any person in the service of the
Government or any branch thereof of whatever grade or class. A government “officer,” on the other hand, refers to officials whose
duties involve the exercise of discretion in the performance of the functions of government, whether such duties are precisely
defined or not. Clearly, the law, then and now, did not require a specific job description and job specification. Thus, the absence of
a specific position in a governmental structure is not a hindrance for the Court to give weight to CJ Panganiban’s government
service as legal counsel and consultant.
Justice Brion views the Court’s favorable disposition of CJ Panganiban’s request for lifetime annuity as another case of flip-flopping,
believing that the Court already denied former Chief Justice Panganiban’s request for full retirement benefits under R.A. No.
910 and would, thus, be making a complete turnabout even as CJ Panganiban makes a request for the second time and for the
same previously-denied services.16
Justice Brion, however, is mistaken in his belief that the Court is reversing itself in this case. There is no flip-flopping situation to
speak of since this is the first instance that the Court En Banc is being asked to pass upon a request concerning the computation of
CJ Panganiban’s creditable service for purposes of adjusting his retirement benefits. It may be recalled that Deputy Clerk of Court
and OAS Chief Atty. Eden T. Candelaria had simply responded to a query made by CJ
The Supreme Court has unquestionably followed the practice of liberal treatment in passing upon retirement claims of judges and
justices, thus: (1) waiving the lack of required length of service in cases of disability or death while in actual service19 or distinctive
service; (2) adding accumulated leave credits to the actual length of government service in order to qualify one for retirement; (3)
tacking post-retirement service in order to complete the years of government service required; (4) extending the full benefits of
retirement upon compassionate and humanitarian considerations;20 and (5) considering legal counselling work for a government
body or institution as creditable government service.
The generous extent of the Court’s liberality in granting retirement benefits is obvious in Re: Justice Efren I. Plana:21
It may also be stressed that under the beneficient provisions of Rep. Act 910, as amended, a Justice who reaches age 70 is entitled
to full retirement benefits with no length of service required. Thus, a 69 year old lawyer appointed to the bench will get full retirement
benefits for the rest of his life upon reaching age 70, even if he served in the government for only one year. Justice Plana served the
government with distinction for 33 years, 5 months, and 11 days, more than 5 years of which were served as a Justice of the Court
of Appeals of this Court.
In the instant case, no liberal construction is even necessary to resolve the merits of CJ Panganiban’s request. The Court need only
observe consistency in its rulings.
WHEREFORE, the Court resolves to GRANT former Chief Justice Artemio V. Panganiban’s request for a re-computation of his
creditable government service to include the 4-year period from January 1962 to December 1965 that he served as Legal Counsel
to the Department of Education and its then Secretary and Consultant to the Board of National Education, as duly attested to by
retired Justice Bernardo P. Pardo and then Secretary of Education himself, Alejandro R. Roces.
ACCORDINGLY, the Office of Administrative Services is hereby DIRECTED to re-compute former Chief Justice Artemio V.
Panganiban’s creditable government service and his corresponding retirement benefits.
SO ORDERED.
FROM ATTY. GUIFAYA^^
PP VS. GALLO DIGEST
G.R. No. 187730 June 29, 2010
PEOPLE OF THE PHILIPPINES, Petitioner,
vs.
RODOLFO GALLO y GADOT, Accused-Appellant,
FIDES PACARDO y JUNGCO and PILAR MANTA y DUNGO, Accused.
FACTS: Originally, accused-appellant Gallo and accused Fides Pacardo (“Pacardo”) and Pilar Manta (“Manta”), together with
Mardeolyn Martir (“Mardeolyn”) and nine (9) others [including herein accused-appellant, were charged with syndicated illegal
recruitment and eighteen (18) counts of estafa committed against eighteen complainants.
NOTE: Basta ang nanyari, the trial proceeded while some of the accused were at large. Some cases were provisionally dismissed
due to non-appearance. Pacardo and Manta were acquitted. While herein accused-appellant (GALLO) was convicted for syndicated
illegal recruitment. Hence, this appeal by Gallo alone.
In Criminal Case No. 02-206293, the information charges the accused-appellant, together with the others, as follows:
The undersigned accuses xxx of a violation of Section 6(a), (l) and (m) of Republic Act 8042, otherwise known as the Migrant
Workers and Overseas Filipino Workers Act of 1995, committed by a syndicate and in large scale,
When arraigned GALLO pleaded not guilty; pre-trial was terminated and trial ensued, thereafter.
VERSION OF THE PROSECUTION: Dela Caza was introduced by Eleanor Panuncio to accused-appellant Gallo, Pacardo, Manta,
Mardeolyn, Lulu Mendanes, Yeo Sin Ung and another Korean national at the office of MPM International Recruitment and
Promotion Agency (“MPM Agency”) located in Malate, Manila; Other accused were introduced as board members, officers and
employees of MPM.
Accused-appellant Gallo then introduced himself as a relative of Mardeolyn and informed Dela Caza that the agency was able to
send many workers abroad. Together with Pacardo and Manta, he also told Dela Caza about the placement fee of One Hundred
Fifty Thousand Pesos (PhP 150,000) with a down payment of Forty-Five Thousand Pesos (PhP 45,000) and the balance to be paid
through salary deduction; Dela Caza, together with the other applicants, were briefed.
With accused-appellant’s assurance that many workers have been sent abroad, as well as the presence of the two (2) Korean
nationals and upon being shown the visas procured for the deployed workers, Dela Caza was convinced to part with his money.
Thus, on May 29, 2001, he paid Forty-Five Thousand Pesos (PhP 45,000) to MPM Agency through accused-appellant Gallo.
Two (2) weeks after paying MPM Agency, Dela Caza went back to the agency’s office in Malate, Manila only to discover that the
office had moved to a new location at Batangas Street, Brgy. San Isidro, Makati. He proceeded to the new address and found out
that the agency was renamed to New Filipino Manpower Development & Services, Inc. (“New Filipino”).
Dela Caza decided to withdraw his application and recover the amount he paid; Gallo even denied any knowledge about the money.
After two (2) more months of waiting in vain to be deployed, Dela Caza and the other applicants decided to take action.
VERSION OF THE DEFENSE: For his defense, accused-appellant denied having any part in the recruitment of Dela Caza. In fact,
he testified that he also applied with MPM Agency for deployment to Korea as a factory worker; in order to facilitate the processing
of his papers, he agreed to perform some tasks for the agency, such as taking photographs of the visa and passport of applicants,
running errands and performing such other tasks assigned to him, without salary except for some allowance. He said that he only
saw Dela Caza one or twice at the agency’s office when he applied for work abroad. Lastly, that he was also promised deployment
abroad but it never materialized.
DEVELOPMENT OF THE CASE: RTC rendered its Decision convicting the accused of syndicated illegal recruitment and estafa; CA
affirmed; accused-appellant filed a timely appeal before this Court.
ISSUE: WON accused-appellant is guilty of illegal recruitment committed by a syndicate and estafa.
HELD: YES
The appeal has no merit.
Accused-appellant avers that he cannot be held criminally liable for illegal recruitment because he was neither an officer nor an
employee of the recruitment agency. He alleges that the trial court erred in adopting the asseveration of the private complainant that
he was indeed an employee because such was not duly supported by competent evidence.
We disagree.
To commit syndicated illegal recruitment, three elements must be established: (1) the offender undertakes either any activity within
the meaning of “recruitment and placement” defined under Article 13(b), or any of the prohibited practices enumerated under Art. 34
of the Labor Code; (2) he has no valid license or authority required by law to enable one to lawfully engage in recruitment and
placement of workers;8 and (3) the illegal recruitment is committed by a group of three (3) or more persons conspiring or
confederating with one another.9 When illegal recruitment is committed by a syndicate or in large scale, i.e., if it is committed
against three (3) or more persons individually or as a group, it is considered an offense involving economic sabotage.
After a thorough review of the records, we believe that the prosecution was able to establish the elements of the offense
sufficiently. The evidence readily reveals that MPM Agency was never licensed by the POEA to recruit workers for overseas
employment.
Even with a license, however, illegal recruitment could still be committed under Section 6 of Republic Act No. 8042 (“R.A.
8042”), otherwise known as the Migrants and Overseas Filipinos Act of 1995 (See Notes).
In the instant case, accused-appellant committed the acts enumerated in Sec. 6 of R.A. 8042. Testimonial evidence presented
by the prosecution clearly shows that, in consideration of a promise of foreign employment, accused-appellant received the amount
of Php 45,000.00 from Dela Caza. When accused-appellant made misrepresentations concerning the agency’s purported power and
authority to recruit for overseas employment, and in the process, collected money in the guise of placement fees, the former clearly
committed acts constitutive of illegal recruitment.
Essentially, Dela Caza appeared very firm and consistent in positively identifying accused-appellant as one of those who induced
him and the other applicants to part with their money. His testimony showed that accused-appellant made false misrepresentations
and promises in assuring them that after they paid the placement fee, jobs in Korea as factory workers were waiting for them and
that they would be deployed soon.
On the contrary, his active participation in the illegal recruitment is unmistakable. The fact that he was the one who issued
and signed the official receipt belies his profession of innocence.
This Court likewise finds the existence of a conspiracy between the accused-appellant and the other persons in the
agency who are currently at large, resulting in the commission of the crime of syndicated illegal recruitment. Verily, the active
involvement of each in the recruitment scam was directed at one single purpose – to divest complainants with their money on the
pretext of guaranteed employment abroad.
Estafa
The prosecution likewise established that accused-appellant is guilty of the crime of estafa as defined under Article 315 paragraph
2(a) of the Revised Penal Code (See notes)
The elements of estafa in general are: (1) that the accused defrauded another (a) by abuse of confidence, or (b) by means of deceit;
and (2) that damage or prejudice capable of pecuniary estimation is caused to the offended party or third person.
All these elements are present in the instant case: the accused-appellant, together with the other accused at large, deceived the
complainants into believing that the agency had the power and capability to send them abroad for employment; that there were
available jobs for them in Korea as factory workers; that by reason or on the strength of such assurance, the complainants parted
with their money in payment of the placement fees; that after receiving the money, accused-appellant and his co-accused went into
hiding by changing their office locations without informing complainants; and that complainants were never deployed abroad. As all
these representations of the accused-appellant proved false, paragraph 2(a), Article 315 of the Revised Penal Code is thus
applicable.1avvphi1
Defense of Denial Cannot Prevail over Positive Identification
APPEAL Denied.
________________
NOTES:
 Contents of the Information
That in or about and during the period comprised between November 2000 and December, 2001, inclusive, in the City of Manila,
Philippines, the said accused conspiring and confederating together and helping with one another, representing themselves to have
the capacity to contract, enlist and transport Filipino workers for employment abroad, did then and there willfully and unlawfully, for a
fee, recruit and promise employment/job placement abroad to xxxx in Korea as factory workers and charge or accept directly or
indirectly from said xxxx as placement fees in connection with their overseas employment, which amounts are in excess of or
greater than those specified in the schedule of allowable fees prescribed by the POEA Board Resolution No. 02, Series 1998, and
without valid reasons and without the fault of the said complainants failed to actually deploy them and failed to reimburse the
expenses incurred by the said complainants in connection with their documentation and processing for purposes of their
deployment.
 Sec. 6 of RA 8042
Sec. 6. Definition. – For purposes of this Act, illegal recruitment shall mean any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring, or procuring workers and includes referring, contract services, promising or advertising for employment
abroad, whether for profit or not, when undertaken by a non-licensee or non-holder of authority contemplated under Article 13(f) of
Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines: Provided, That any such non-
licensee or non-holder who, in any manner, offers or promises for a fee employment abroad to two or more persons shall be
deemed so engaged. It shall, likewise, include the following act, whether committed by any person, whether a non-licensee,
non-holder, licensee or holder of authority:
(a) To charge or accept directly or indirectly any amount greater than that specified in the schedule of allowable fees prescribed by
the Secretary of Labor and Employment, or to make a worker pay any amount greater than that actually received by him as a loan
or advance;
xxxx
(l) Failure to actually deploy without valid reason as determined by the Department of Labor and Employment; and
(m) Failure to reimburse expenses incurred by the worker in connection with his documentation and processing for purposes of
deployment and processing for purposes of deployment, in cases where the deployment does not actually take place without the
worker’s fault. Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving economic
sabotage.
 nature of conspiracy in the context of illegal recruitment:
Conspiracy to defraud aspiring overseas contract workers was evident from the acts of the malefactors whose conduct before,
during and after the commission of the crime clearly indicated that they were one in purpose and united in its execution. Direct proof
of previous agreement to commit a crime is not necessary as it may be deduced from the mode and manner in which the offense
was perpetrated or inferred from the acts of the accused pointing to a joint purpose and design, concerted action and community of
interest. As such, all the accused, including accused-appellant, are equally guilty of the crime of illegal recruitment since in a
conspiracy the act of one is the act of all.
 ART. 315, RPC
Art. 315. Swindling (estafa). – Any person who shall defraud another by any means mentioned hereinbelow…
xxxx
2. By means of any of the following false pretenses or fraudulent acts executed prior to or simultaneously with the commission of
the fraud:
(a) By using fictitious name, or falsely pretending to possess power, influence, qualifications, property, credit, agency, business or
imaginary transactions; or by means of other similar deceits.
PP. VS. PANIS DIGEST

G.R. Nos. L-58674-77 July 11, 1990
PEOPLE OF THE PHILIPPINES, petitioner,
vs.
HON. DOMINGO PANIS, Presiding Judge of the Court of First Instance of Zambales & Olongapo City, Branch III and
SERAPIO ABUG, respondents.
FACTS: Four informations were filed on January 9, 1981, in the Court of First Instance of Zambales and Olongapo City alleging that
Serapio Abug, private respondent herein, “without first securing a license from the Ministry of Labor as a holder of authority to
operate a fee-charging employment agency, did then and there wilfully, unlawfully and criminally operate a private fee charging
employment agency by charging fees and expenses (from) and promising employment in Saudi Arabia” to four separate individuals
named therein, in violation of Article 16 in relation to Article 39 of the Labor Code.
Motion to quash filed by respondent: on the ground that the informations did not charge an offense because he was accused of
illegally recruiting only one person in each of the four informations. Under the proviso in Article 13(b), he claimed, there would be
illegal recruitment only “whenever two or more persons are in any manner promised or offered any employment for a fee. ”
Motion at first was denied but was subsequently granted. The prosecution is now before us on certiorari.
ISSUE: The basic issue in this case is the correct interpretation of Article 13(b) of P.D. 442, otherwise known as the Labor Code,
reading as follows:
(b) Recruitment and placement’ refers to any act of canvassing, enlisting, contracting, transporting, hiring, or procuring workers, and
includes referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not: Provided,
That any person or entity which, in any manner, offers or promises for a fee employment to two or more persons shall be deemed
engaged in recruitment and placement.
HELD:
Petitioner’s contention: private respondent is being prosecuted under Article 39 in relation to Article 16 of the Labor Code;
hence, Article 13(b) is not applicable. However, as the first two cited articles penalize acts of recruitment and placement without
proper authority, which is the charge embodied in the informations, application of the definition of recruitment and placement in
Article 13(b) is unavoidable; that the requirement of two or more persons is imposed only where the recruitment and
placement consists of an offer or promise of employment to such persons and always in consideration of a fee. The other
acts mentioned in the body of the article may involve even only one person and are not necessarily for profit.
Respondent argues: that to constitute recruitment and placement, all the acts mentioned in this article should involve dealings with
two or m•re persons as an indispensable requirement.
Neither interpretation is acceptable.
As we see it, the proviso was intended neither to impose a condition on the basic rule nor to provide an exception thereto
but merely to create a presumption. The presumption is that the individual or entity is engaged in recruitment and placement
whenever he or it is dealing with two or more persons to whom, in consideration of a fee, an offer or promise of employment is made
in the course of the “canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring (of) workers. “
The number of persons dealt with is not an essential ingredient of the act of recruitment and placement of workers. Any of
the acts mentioned in the basic rule in Article 13(b) win constitute recruitment and placement even if only one prospective worker is
involved.
The proviso merely lays down a rule of evidence that where a fee is collected in consideration of a promise or offer of
employment to two or more prospective workers, the individual or entity dealing with them shall be deemed to be engaged in the act
of recruitment and placement. The words “shall be deemed” create that presumption.
In the instant case, the word “shall be deemed” should by the same token be given the force of a disputable presumption or of prima
facie evidence of engaging in recruitment and placement.
It is unfortunate that we can only speculate on the meaning of the questioned provision for lack of records of debates and
deliberations that would otherwise have been available if the Labor Code had been enacted as a statute rather than a presidential
decree.
At any rate, the interpretation here adopted should give more force to the campaign against illegal recruitment and placement, which
has victimized many Filipino workers seeking a better life in a foreign land, and investing hard- earned savings or even borrowed
funds in pursuit of their dream, only to be awakened to the reality of a cynical deception at the hands of their own countrymen.
WHEREFORE, informations against the private respondent reinstated.
PALOMA VS. PAL AND NLRC DIGEST

RICARDO G. PALOMA, PETITIONER, VS. PHILIPPINE AIRLINES, INC. AND THE NATIONAL LABOR RELATIONS
COMMISSION, RESPONDENTS. G.R. No. 148415, July 14, 2008]
PHILIPPINE AIRLINES, INC., PETITIONER, VS. RICARDO G. PALOMA, RESPONDENT.
G.R. NO. 156764
FACTS:
Paloma worked with PAL from September 1957, rising from the ranks to retire, after 35 years of continuous service, as senior vice
president for finance. In March 1992, or 9 months before Paloma retired on November 30, 1992, PAL was privatized.
By way of post-employment benefits, PAL paid Paloma the total amount of PhP 5,163,325.64 which represented his
separation/retirement gratuity and accrued vacation leave pay. The leave benefits Paloma claimed being he is entitled to refer to his
450-day accrued sick leave credits which PAL allegedly only paid the equivalent of 18 days. He anchored his entitlement on EO
1077 dated January 9, 1986, and his having accumulated a certain number of days of sick leave credits, as acknowledged in a letter
of Alvia R. Leaño, then an administrative assistant in PAL. Leaño’s letter substantially states that Paloma only acquired 230 days
sick leave credit because it is the maximum days laid down in PAL’s policy. Had there been no ceiling as mandated by Company
policy, Paloma’s sick leave credits would have totaled 450 days to date.
Paloma filed before the Arbitration Branch of NLRC a Complaint for Commutation of Accrued Sick Leaves Totaling 392 days.
Paloma alleged having accrued sick leave credits of 450 days commutable upon his retirement pursuant to EO 1077 which allows
retiring government employees to commute, without limit, all his accrued vacation and sick leave credits. And of the 450-day credit,
Paloma added, he had commuted only 58 days, leaving him a balance of 392 days of accrued sick leave credits for commutation.
Labor Arbiter (LA) ordered PAL to pay Paloma, the sum of P675,000.00 representing 162 accumulated sick leave credits, plus
attorney’s fees . LA held that PAL is not covered by the civil service system and, accordingly, its employees, like Paloma, cannot
avail themselves of the beneficent provision of EO 1077. This executive issuance applies only to government officers and
employees covered by the civil service, exclusive of the members of the judiciary whose leave and retirement system is covered by
a special law. However, the labor arbiter ruled that Paloma is entitled to a commutation of his alternative claim for 202 accrued sick
leave credits less 40 days for 1990 and 1991. Thus, the grant of commutation for 162 accrued leave credits.
Both parties appealed to NLRC.NLRC dismissed the appeal and affirmed the decision of the LA. Both parties filed MR. NLRC, found
Paloma to have accumulated sick leave credits of 230 days, modified its earlier decision. PAL went to the CA on a petition for
certiorari under Rule 65. CA favored PAL. Paloma filed for MR, CA vacated and set aside its former decision. And reinstated NLRC
decision with modification that the sum granted to Paloma shall earn legal interest. But CA allowed a 230-day sick leave
commutation, up from the 162 days only.
Paloma and PAL appealed the CA’s Amended Decision to SC.
ISSUE:
WON EO 1077, before PAL’s privatization, applies to its employees, and corollarily, whether or not Paloma is entitled to a
commutation of his accrued sick leave credits.
RULING:
No. EO 1077 (Revising the Computation of Creditable Vacation and Sick Leaves of Government Officers and Employees), provides:
“Section 1. Any officer [or] employee of the government who retires or voluntary resigns or is separated from the service through no
fault of his own and whose leave benefits are not covered by special law, shall be entitled to the commutation of all the accumulated
vacation and/or sick leaves to his credit, exclusive of Saturdays, Sundays, and holidays, without limitation as to the number of
days of vacation and sick leaves that he may accumulate.”
Contention of Paloma is without merit. PAL never ceased to be operated as a private corporation, and was not subjected to the Civil
Service Law
Through the years, PAL functioned as a private corporation and managed as such for profit. Their personnel were never considered
government employees. Civil service law and rules and regulations have not been made to apply to PAL and its employees. Of
governing application to them was the Labor Code.
Paloma cannot be accorded the benefits of EO 1077 which was issued to narrow the gap between the leave privileges between the
members of the judiciary, on one hand, and other government officers and employees in the civil service, on the other. It is the 1987
Constitution, which delimits the coverage of the civil service, that should govern this case because it is the Constitution in place at
the time the case was decided, even if, incidentally, the cause of action accrued during the effectivity of the 1973 Constitution.
Paloma, while with PAL, was never a government employee covered by the civil service law. As such, he did not acquire any vested
rights on the retirement benefits accorded by EO 1077. What governs Paloma’s entitlement to sick leave benefits and the
computation and commutation of creditable benefits is not EO 1077 but PAL’s company policy on the matter.
To elaborate the decision of the lower tribunals, the labor arbiter granted 162 days commutation, while the NLRC allowed the
commutation of the maximum 230 days. The CA, while seemingly affirming the NLRC’s grant of 230 days commutation, actually
decreed a 162-day commutation. These are all lacking legal basis, for PAL’s company policy upon which either disposition was
predicated did not provide for a commutation of the first 230 days accrued sick leave credits employees may have upon their
retirement. NLRC and the CA, by their act of allowing commutation to cash, erred because they read in the policy something not
written or intended therein. Indeed, no law provides for commutation of unused or accrued sick leave credits in the private sector.
Commutation is allowed by way of voluntary endowment by an employer through a company policy or by a CBA. None of such
medium is present in the case at bar and it would be inappropriate if the Court fills up the vacuum.
In the absence of any provision in the applicable company policy authorizing the commutation of the 230 days accrued sick leave
credits existing upon retirement, Paloma may not, as a matter of enforceable right, insist on the commutation of his sick leave
credits to cash.
WHEREFORE, the petition under G.R. No. 148415 is hereby DISMISSED for lack of merit, while the petition under G.R. No. 156764
is hereby GIVEN DUE COURSE.
PP vs. OCDEN DIGEST
PP vs. OCDEN
G.R. No. 173198
June 1, 2011
FACTS: The RTC rendered a Decision finding Ocden guilty beyond reasonable doubt of the crimes of illegal recruitment in large
scale and three counts of estafa.
(This is based from complaints of several persons accusing her of promising to the applicants employment to a stuffed toy factory in
Italy, wherein she asks for 70k from each as placement fee. After the applicants pay, they will be sent to Zamboanga on the
assurance that they will be first sent to Malaysia for easier processing of their visas, and then to Italy, which never materialized.
Ocden asserts that she was also just an applicant for overseas employment; and that she was receiving her co-applicants’ job
applications and other requirements, and accepting her co-applicants’ payments of placement fees, because she was designated as
the applicants’ leader by Ramos, the real recruiter. )
Aggrieved by the above decision, Ocden filed with the RTC a Notice of Appeal. Ocden’s appeal was sent to the Court of
Appeals. The appellate court promulgated its Decision, dismissing the appeal and affirming Ocden’s conviction.
Hence, this appeal
ISSUE: WON THE TRIAL COURT ERRED IN CONVICTING ACCUSED-APPELLANT OF ILLEGAL RECRUITMENT COMMITTED
IN LARGE SCALE ALTHOUGH THE CRIME WAS NOT PROVEN BEYOND REASONABLE DOUBT.
HELD: WHEREFORE, the instant appeal of accused-appellant Dolores Ocden is DENIED.
NO
After a thorough review of the records of the case, we find nothing on record that would justify a reversal of Ocden’s conviction.
Illegal recruitment in large scale
Ocden contends that the prosecution failed to prove beyond reasonable doubt that she is guilty of the crime of illegal recruitment in
large scale. Other than the bare allegations of the prosecution witnesses, no evidence was adduced to prove that she was a
non-licensee or non-holder of authority to lawfully engage in the recruitment and placement of workers. No certification
attesting to this fact was formally offered in evidence by the prosecution.
Ocden’s aforementioned contentions are without merit.
Article 13, paragraph (b) of the Labor Code defines and enumerates the acts which constitute recruitment and placement:
(b) “Recruitment and placement” refers to any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring
workers, and includes referrals, contract services, promising for advertising for employment locally or abroad, whether for profit or
not: Provided, That any person or entity which, in any manner, offers or promises for a fee employment to two or more persons shall
be deemed engaged in recruitment and placement.
The amendments to the Labor Code introduced by RA 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of
1995, broadened the concept of illegal recruitment and provided stiffer penalties, especially for those that constitute economic
sabotage, i.e., illegal recruitment in large scale and illegal recruitment committed by a syndicate. Pertinent provisions of Republic
Act No. 8042 are reproduced below:
SEC. 6. Definition. – For purposes of this Act, illegal recruitment shall mean any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring, or procuring workers and includes referring, contract services, promising or advertising for employment
abroad, whether for profit or not, when undertaken by a non-licensee or non-holder of authority contemplated under Article 13(f) of
Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines: Provided, That any such non-
licensee or non-holder who, in any manner, offers or promises for a fee employment abroad to two or more persons shall be
deemed so engaged. It shall likewise include the following acts, whether committed by any person, whether a non-licensee, non-
holder, licensee or holder of authority:
xx
(m) Failure to reimburse expenses incurred by the worker in connection with his documentation and processing for purposes
of deployment, in cases where the deployment does not actually take place without the worker’s fault. Illegal recruitment when
committed by a syndicate or in large scale shall be considered an offense involving economic sabotage.
xxxx
**
It is well-settled that to prove illegal recruitment, it must be shown that appellant gave complainants the distinct
impression that he had the power or ability to send complainants abroad for work such that the latter were convinced to
part with their money in order to be employed. As testified to by Mana-a, Ferrer, and Golidan, Ocden gave such an impression
through the following acts:
(1) Ocden informed Mana-a, Ferrer, and Golidan about the job opportunity in Italy and the list of necessary requirements for
application;
(2) Ocden required Mana-a, Ferrer, and Golidan’s sons, Jeffries and Howard, to attend the seminar conducted by Ramos at
Ocden’s house in Baguio City;
(3) Ocden received the job applications, pictures, bio-data, passports, and the certificates of previous employment (which was also
issued by Ocden upon payment of P500.00), of Mana-a, Ferrer, and Golidan’s sons, Jeffries and Howard;
(4) Ocden personally accompanied Mana-a, Ferrer, and Golidan’s sons, Jeffries and Howard, for their medical examinations in
Manila;
(5) Ocden received money paid as placement fees by Mana-a, Ferrer, and Golidan’s sons, Jeffries and Howard, and even issued
receipts for the same; and (6) Ocden assured Mana-a, Ferrer, and Golidan’s sons, Jeffries and Howard, that they would be
deployed to Italy.
It is not necessary for the prosecution to present a certification that Ocden is a non-licensee or non-holder of authority to lawfully
engage in the recruitment and placement of workers. Section 6 of Republic Act No. 8042 enumerates particular acts which would
constitute illegal recruitment “whether committed by any person, whether a non-licensee, non-holder, licensee or holder of
authority.” Among such acts, under Section 6(m) of Republic Act No. 8042, is the “[f]ailure to reimburse expenses incurred
by the worker in connection with his documentation and processing for purposes of deployment, in cases where the
deployment does not actually take place without the worker’s fault.”
Since illegal recruitment under Section 6(m) can be committed by anyperson, even by a licensed recruiter, a certification on
whether Ocden had a license to recruit or not, is inconsequential. Ocden committed illegal recruitment as described in said
provision by receiving placement fees from Mana-a, Ferrer, and Golidan’s two sons, Jeffries and Howard, evidenced by receipts
Ocden herself issued; and failing to reimburse/refund to Mana-a, Ferrer, and Golidan’s two sons the amounts they had paid when
they were not able to leave for Italy, through no fault of their own.
NOTES:
1. Under the last paragraph of Section 6, Republic Act No. 8042, illegal recruitment shall be considered an offense involving
economic sabotage if committed in a large scale, that is, committed against three or more persons individually or as a
group.
In People v. Hu, we held that a conviction for large scale illegal recruitment must be based on a finding in each case of illegal
recruitment of three or more persons, whether individually or as a group. While it is true that the law does not require that at
least three victims testify at the trial, nevertheless, it is necessary that there is sufficient evidence proving that the offense
was committed against three or more persons.
2. Section 7(b) of RA 8042 prescribes a penalty of life imprisonment and a fine of not less than P500,000.00 nor more than
P1,000,000.00 if the illegal recruitment constitutes economic sabotage.
3. The very same evidence proving Ocden’s liability for illegal recruitment also established her liability for estafa.
It is settled that a person may be charged and convicted separately of illegal recruitment under RA 8042 in relation to the Labor
Code, and estafa under Article 315, paragraph 2(a) of the RPC. It follows that one’s acquittal of the crime of estafa will not
necessarily result in his acquittal of the crime of illegal recruitment in large scale, and vice versa.
The penalty for estafa depends on the amount of defraudation.
SEAFDEC-AQD ET AL vs. NLRC and LAZAGA DIGEST

G.R. No. 86773 February 14, 1992
SOUTHEAST ASIAN FISHERIES DEVELOPMENT CENTER-AQUACULTURE DEPARTMENT (SEAFDEC-AQD), DR. FLOR
LACANILAO (CHIEF), RUFIL CUEVAS (HEAD, ADMINISTRATIVE DIV.), BEN DELOS REYES (FINANCE
OFFICER), petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and JUVENAL LAZAGA, respondents.
FACTS: This is a petition for certiorari to annul and set aside the decision of the NLRC sustaining the labor arbiter, in holding herein
petitioners liable to pay private respondent the amount of P126,458.89 plus interest thereon computed from May 16, 1986 until full
payment thereof is made, as separation pay and other post-employment benefits.
On April 20, 1975, private respondent Juvenal Lazaga was employed as a Research Associate an a probationary basis by the
SEAFDEC-AQD and was appointed Senior External Affairs Officer on January 5, 1983 with a monthly basic salary of P8,000.00 and
a monthly allowance of P4,000.00. Thereafter, he was appointed to the position of Professional III and designated as Head of
External Affairs Office with the same pay and benefits.
SEAFDEC-AQD is a department of an international organization, the Southeast Asian Fisheries Development Center,
organized through an agreement entered into in Bangkok, Thailand on December 28, 1967 by the governments of Malaysia,
Singapore, Thailand, Vietnam, Indonesia and the Philippines with Japan as the sponsoring country
On May 8, 1986, petitioner Lacanilao in his capacity as Chief of SEAFDEC-AQD sent a notice of termination to private respondent
informing him that due to the financial constraints being experienced by the department, his services shall be terminated at the
close of office hours on May 15, 1986 and that he is entitled to separation benefits equivalent to one (1) month of his basic salary for
every year of service plus other benefits.
Upon petitioner SEAFDEC-AQD’s failure to pay private respondent his separation pay, the latter filed on March 18, 1987 a
complaint against petitioners for non-payment of separation benefits plus moral damages and attorney’s fees with the Arbitration
Branch of the NLRC
Petitioners in their answer with counterclaim alleged that the NLRC has no jurisdiction over the case inasmuch as the SEAFDEC-
AQD is an international organization and that private respondent must first secure clearances from the proper departments for
property or money accountability before any claim for separation pay will be paid, and which clearances had not yet been obtained
by the private respondent.
LABOR ARBITER: ordered petitioner to pay the benefits claimed
NLRC: affirmed the LA.
PETITIONER CONTENDS that: SEAFDEC-AQD is immune from suit owing to its international character and the complaint is in
effect a suit against the State which cannot be maintained without its consent.
ISSUE: WON the petitioner is within the scope of application of Philippine labor laws (WON SEAFDEC is immuned from suit)
HELD: Petitioner Southeast Asian Fisheries Development Center-Aquaculture Department (SEAFDEC-AQD) is an international
agency beyond the jurisdiction of public respondent NLRC.
Being an intergovernmental organization, SEAFDEC including its Departments (AQD), enjoys functional independence and freedom
from control of the state in whose territory its office is located.
In so far as they are autonomous and beyond the control of any one State, they have a distinct juridical personality independent of
the municipal law of the State where they are situated. As such, according to one leading authority “they must be deemed to
possess a species of international personality of their own.” (Salonga and Yap, Public International Law, 83 [1956 ed.])
One of the basic immunities of an international organization is immunity from local jurisdiction, i.e.,that it is immune from the legal
writs and processes issued by the tribunals of the country where it is found. The obvious reason for this is that the subjection of such
an organization to the authority of the local courts would afford a convenient medium thru which the host government may interfere
in there operations or even influence or control its policies and decisions of the organization; besides, such subjection to local
jurisdiction would impair the capacity of such body to discharge its responsibilities impartially on behalf of its member-states.
WHEREFORE, finding SEAFDEC-AQD to be an international agency beyond the jurisdiction of the courts or local agency of the
Philippine government, the questioned decision and resolution of the NLRC dated July 26, 1988 and January 9, 1989, respectively,
are hereby REVERSED and SET ASIDE for having been rendered without jurisdiction.
OBRA VS. SSS DIGEST

G.R. No. 147745 April 9, 2003
MARIA BUENA OBRA, petitioner,
vs.
SOCIAL SECURITY SYSTEM (Jollar Industrial Sales and Services Inc.), respondents.
FACTS: Juanito Buena Obra, husband of petitioner, worked as a driver for twenty-four (24) years and five (5) months. His first and
second employers were logging companies. Thereafter, he was employed at Jollar Industrial Sales and Services Inc. as a dump
truck driver from January 1980 to June 1988. He was assigned to about 4 project within that time frame.
On 27 June 1988, Juanito suffered a heart attack while driving a dump truck inside the work compound, and died shortly
thereafter. In the Report of Death submitted by his employer to the Social Security System (SSS), Juanito expired at the Worker’s
Quarters at 10:30 a.m., of Myocardial Infarction.
Petitioner Maria M. Buenaobra immediately filed her claim for death benefits under the SSS law. She started receiving her
pension in November 1988. Petitioner was, however, unaware of the other compensation benefits due her under Presidential
Decree No. 626, as amended, or the Law on Employees’ Compensation. In September 1998, or more than ten (10) years after
the death of her husband, that she learned of the benefits under P.D. No. 626 through the television program of then
broadcaster Ted Failon who informed that one may claim for Employees Compensation Commission (ECC) benefits if the spouse
died while working for the company. Petitioner prepared the documents to support her claim for ECC benefits. On 23 April 1999,
she filed with the SSS her claim for funeral benefits under PD 626.
SSS denied the claim of petitioner for funeral benefits ruling that the cause of death of Juanito was not work-connected, absent a
causal relationship between the illness and the job. Re-evaluation was also denied. Records were then elevated to the ECC.
ECC dismissed the appeal. It ruled that petitioner failed to show by substantial evidence that her husband’s cause of death was
due to, or the risk of contracting his ailment was increased by his occupation and working conditions. Commission also declared
that petitioner’s claim has prescribed.
CA dismissed the petition. It ruled that petitioner’s filing of her claim for SSS benefits shortly after Juanito’s death did not suspend
the running of the prescriptive period for filing EC claims. It interpreted the aforementioned ECC Resolutions to mean that a claimant
must indicate the kind of claim filed before the running of the prescriptive period for filing EC claims may be interrupted. In the case
at bar, petitioner indeed filed a claim with SSS. In fact, she has been receiving her pension since November 1988. However, she
failed to specify whether the basis of her claim was any contingency which may be held compensable under the EC Program. CA
further states that it must be proven by substantial evidence that the risk of contracting the disease which caused the death of the
member was increased by the member’s working conditions.
The appellate court then held that the petitioner’s cause of action has prescribed. Petitioner’s husband died on 27 June 1988.
She filed her claim for funeral benefits under P.D. No. 626 or the Law on Employees’ Compensation only on 23 April 1999, or more
than ten (10) years from his death. The CA applied Art. 1142(2) of the Civil Code (brought within ten (10) years from the time the
right of action accrues: (2) Upon an obligation created by law

ISSUE:
1. WON the claim has prescribed
2. WON the illness of the deceased is work-related
HELD:
1. The claim of petitioner for funeral benefits under P.D. No. 626, as amended, has not yet prescribed.
The issue of prescription in the case at bar is governed by P.D. No. 626, or the Law on Employees’ Compensation. Art. 201 of P.D.
No. 626 and Sec. 6, Rule VII of the 1987 Amended Rules on Employees’ Compensation both read as follows:
“No claim for compensation shall be given due course unless said claim is filed with the System within three years from
the time the cause of action accrued.”
We agree with the petitioner that her claim for death benefits under the SSS law should be considered as the Employees’
Compensation claim itself. This is but logical and reasonable because the claim for death benefits which petitioner filed with the
SSS is of the same nature as her claim before the ECC. Furthermore, the SSS is the same agency with which Employees’
Compensation claims are filed. As correctly contended by the petitioner, when she filed her claim for death benefits with the
SSS under the SSS law, she had already notified the SSS of her employees’ compensation claim, because the SSS is the
very same agency where claims for payment of sickness/disability/death benefits under P.D. No. 626 are filed.
It is true that under the proviso, the employees’ compensation claim shall be filed with the GSIS/SSS within a reasonable time as
provided by law. It should be noted that neither statute nor jurisprudence has defined the limits of “reasonable time.” Thus, what is
reasonable time depends upon the peculiar facts and circumstances of each case.
Rule 3 of the ECC Rules of Procedure provide Section 4(b)3 – In any of the foregoing cases, the employees’ compensation claim
shall be filed with the GSIS or the SSS within a reasonable time as provided by law.
In the case at bar, we also find petitioner’s claim to have been filed within a reasonable time considering the situation and
condition of the petitioner. We have ruled that when the petitioner filed her claim for death benefits under the SSS law, her claim
for the same benefits under the Employees’ Compensation Law should be considered as filed. The evidence shows that the System
failed to process her compensation claim. Under the circumstances, the petitioner cannot be made to suffer for the lapse committed
by the System. It is the avowed policy of the State to construe social legislations liberally in favor of the beneficiaries. This
court has time and again upheld the policy of liberality of the law in favor of labor.
ART. 4. Construction in favor of labor. – All doubts in the implementation and interpretation of the provisions of this Code, including
its implementing rules and regulations, shall be resolved in favor of labor.
Claims falling under the Employees’ Compensation Act should be liberally resolved to fulfill its essence as a social legislation
designed to afford relief to the working man and woman in our society.
1. The second issue of whether or not the illness of petitioner’s husband, myocardial infarction which was the cause of
his death is work-related, must likewise be resolved in favor of the petitioner.
While it is true that myocardial infarction is not among the occupational diseases listed under Annex “A” of the Amended Rules on
Employees’ Compensation, the Commission, under ECC Resolution No. 432 dated July 20, 1977, laid down the conditions under
which cardio-vascular or heart diseases can be considered as work-related and thus compensable
In the case at bar, the petitioner’s husband’s heart disease falls under the second condition of ECC Resolution No. 432 dated July
20, 1977 which states that the strain of work that brought about the acute attack must be of sufficient severity and must be followed
within 24 hours by the clinical signs of a cardiac insult to constitute causal relationship. Petitioner’s husband was driving a dump
truck within the company premises where they were stacking gravel and sand when he suffered the heart attack. He had to be taken
down from the truck and brought to the workers’ quarters where he expired at 10:30 a.m., just a few minutes after the heart attack,
which is much less than the 24 hours required by ECC Resolution No. 432. This is a clear indication that severe strain of work
brought about the acute attack that caused his death.
ECC and the SSS should adopt a liberal attitude in favor of the employee in deciding claims for compensability especially where
there is some basis in the facts for inferring a work connection with the illness or injury, as the case may be. It is only this kind of
interpretation that can give meaning and substance to the compassionate spirit of the law as embodied in Article 4 of the New Labor
Code which states that all doubts in the implementation and interpretation of the provisions of the Labor Code including its
implementing rules and regulations should be resolved in favor of labor
ARELLANO et al, vs. POWERTECH DIGEST
ARELLANO et al, vs. POWERTECH
G.R. No. 150861
January 22, 2008
FACTS: The case stems from a complaint for illegal dismissal and other money claims filed by the Nagkakaisang Manggagawa
Ng Powertech Corporation in behalf of its individual members and non-union members against their employer, Powertech.
The Labor Arbiter rendered a Decision declaring illegal the termination of 20 of petitioners and granting their monetary
claims of 2.5M. Powertech appealed to the NLRC.
During its pendency, Gestiada, for himself and on behalf of other petitioners, executed a quitclaim, release and waiver in favor of
Powertech in consideration of 150k. (Earlier, Gestiada was appointed by his co-petitioners as their attorney-in-fact. The
appointment was evidenced by an SPA.) The compromise amount was paid to Gestiada by check.
Relying on the quitclaim and release, Powertech filed a motion for the withdrawal of the appeal and cash bond. The NLRC granted
the motion, dismissed the appeal and ordered the release of the cash bond.
The check of Gestiada, however, bounced due to a stop payment order of Powertech.
Aggrieved, petitioners moved to nullify the release and quitclaim for lack of consideration. In a Resolution, the NLRC declared the
quitclaim, release and waiver void for lack of consideration, reinstated the appeal and ordered Powertech to post a cash or surety
bond for the monetary judgment less the amount it had previously posted.
Then, Gestiada terminated the services of their counsel, Atty. Evangelista and, instead, retained Atty. Felipe of the Public
Attorney’s Office.
A day later, Powertech paid 150k to Gestiada purportedly as compromise amount for all of petitioners. That same day, Gestiada,
through Atty. Felipe, and Powertech filed a joint MTD with the NLRC based on the compromise agreement. Atty. Evangelista
opposed the motion, alleging that the compromise agreement is unconscionable, that he was illegally terminated as counsel for the
other petitioners without their consent, and that the 150k was received by Gestiada as payment solely for his backwages and other
monetary claims.
The NLRC issued a resolution denying the joint MTD. In denying the joint motion to dismiss, the NLRC held that the amount
received by Gestiada did not cover the monetary claim of petitioners against Powertech. For failure of Powertech to post the
required cash or surety bond, the NLRC ruled that the Labor Arbiter decision had attained finality.
Undaunted, Powertech elevated the matter to the CA via petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure.
The CA rendered a decision in favor of Powertech, ordering that the Resolution of the NLRC declaring the Quitclaim and Release
void ab initio and denying the Joint MTD and dismissing the appeal of the petitioners is ANNULLED and SET ASIDE.
The CA upheld the validity of the compromise agreement between petitioners and Powertech
Petitioners moved to reconsider the CA decision but their motion was denied. Hence, the present recourse.
ISSUE: WON THE COMPROMISE AGREEMENT IS VOID
HELD: WHEREFORE, the petition is GRANTED. The Decision of the CA is REVERSED and SET ASIDE. The Resolution of the
NLRC is REINSTATED.
YES
We give credence to the admission of Gestiada that he received the 150k as payment for his own backwages. In his letter to
Atty. Evangelista, Gestiada said that he was pressured by Powertech to sign the waiver and quitclaim for petitioners in order to
receive his share in the P2.5 million judgment. Having no stable job after his dismissal, Gestiada had no other choice but to breach
his fiduciary obligation to petitioners. He succumbed to the pressure of Powertech in signing the waiver, release and quitclaim in
exchange for the 150k. In short, he colluded with Powertech to the detriment of petitioners.
Powertech knew that Gestiada had plenary authority to act for petitioners in the labor case. It had prior dealings with him. It also
knew that Gestiada was authorized to negotiate for any amount “he may deem just and reasonable” and to sign waivers and
quitclaims on behalf of petitioners. Powertech obviously used that knowledge, capitalized on the vulnerable position of Gestiada in
entering into the agreement and took advantage of the situation to the disadvantage of petitioners.
To give effect to the collusion, Gestiada had to get rid of Atty. Evangelista, who had previously succeeded in nullifying the
compromise agreement. He fired Atty. Evangelista without cause basing his dismissal on his plenary authority as agent of
petitioners. He then procured the services of another lawyer, Atty. Felipe.
In line with Our conclusion that Powertech colluded with Gestiada, the CA gravely erred in upholding the compromise
agreement. The appellate court decision was premised on the compromise agreement being entered into by Powertech and
Gestiada in good faith. It is now clear that there is ample evidence indicating that Powertech was negotiating in bad faith and,
worse, it colluded with Gestiada in shortchanging, nay, fraudulently depriving petitioners of their just share in the award.
Collusion is a species of fraud. Article 227 of the Labor Code empowers the NLRC to void a compromise agreement for fraud, thus:
Any compromise settlement, including those involving labor standard laws, voluntarily agreed upon by the parties with the
assistance of the Bureau or the regional office of the Department of Labor, shall be final and binding upon the parties. The National
Labor Relations Commission or any court shall not assume jurisdiction over issues involved therein except in case of non-
compliance thereof or if there is prima facie evidence that the settlement was obtained through fraud, misrepresentation, or
coercion.[28] (Underscoring supplied)
In fine, We find that the CA erred in upholding the compromise agreement between Powertech and Gestiada. The
NLRC justifiably declared the compromise agreement as void.
NOTES:
Addressing petitioners’ contention on the failure of Powertech to post a surety bond, We agree with the NLRC resolution dismissing
its appeal. Said the NLRC on this point:
An appeal is neither a natural right nor is it part of due process but purely a statutory privilege and may be exercised only in the
manner and in accordance with the provisions of law x x x Considering that the Joint MTD remains unacted upon at the time
respondents received a copy of Our Resolution… respondents, in accordance with said Resolution and with Article 223 Labor Code
and with Section 6, Rule VI, NLRC New Rules of Procedure should have posted a cash and surety bond. Hence failing to do
so the appealed Decision is deemed final and executory…
The posting of a surety bond is mandatory and jurisdictional.
NUWHRAIN vs CA
OCTOBER 23, 201 2 ~ LEAVE A COMMENT
NUWHRAIN vs CA
GR 163942 and 166295
Facts:
Because of the collective bargaining deadlock, petitioner Union staged a strike against the Hotel, herein private respondent. This
strike was declared illegal by the SC.
Issue: The effects of an illegal strike on employees.
Held:
Regarding the Union officers and members’ liabilities for their participation in the illegal picket and strike, Article 264(a), paragraph 3
of the Labor Code provides that “any union officer who knowingly participates in an illegal strike and any worker or union officer who
knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status x x x.”
The law makes a distinction between union officers and mere union members. Union officers may be validly terminated from
employment for their participation in an illegal strike, while union members have to participate in and commit illegal acts for them to
lose their employment status. Thus, it is necessary for the company to adduce proof of the participation of the striking employees in
the commission of illegal acts during the strikes.
Clearly, the 29 Union officers may be dismissed pursuant to Art. 264(a), par. 3 of the Labor Code which imposes the penalty of
dismissal on “any union officer who knowingly participates in an illegal strike.” We, however, are of the opinion that there is room for
leniency with respect
to the Union members. It is pertinent to note that the Hotel was able to prove before the NLRC that the strikers blocked the ingress
to and egress from the Hotel. But it is quite apparent that the Hotel failed to specifically point out the participation of each of the
Union members in the commission of illegal acts during the picket and the strike. For this lapse in judgment or diligence, we are
constrained to reinstate the 61 Union members.
Further, we held in one case that union members who participated in an illegal strike but were not identified to have committed
illegal acts are entitled to be reinstated to their former positions but without backwages.
MSF Tire and Rubber vs CA

MSF Tire and Rubber vs CA
GR 128632
Facts:
Respondent Union filed a notice of strike in the NCMB charging (Phildtread) with unfair labor practice. Thereafter, they picketed and
assembled outside the gate of Philtread’s plant. Philtread, on the other hand, filed a notice of lockout. Subsequently, the Secretary
of Labor assumed jurisdiction over the labor dispute and certified it for compulsory arbitration.
During the pendency of the labor dispute, Philtread entered into a Memorandum of Agreement with Siam Tyre whereby its plant and
equipment would be sold to a new company, herein petitioner, 80% of which would be owned by Siam Tyre and 20% by Philtread,
while the land on which the plant was located would be sold to another company, 60% of which would be owned by Philtread and
40% by Siam Tyre.
Petitioner then asked respondent Union to desist from picketing outside its plant. As the respondent Union refused petitioner’s
request, petitioner filed a complaint for injunction with damages before the RTC. Respondent Union moved to dismiss the complaint
alleging lack of jurisdiction on the part of the trial court.
Petitioner asserts that its status as an “innocent bystander” with respect to the labor dispute between Philtread and the Union
entitles it to a writ of injunction from the civil courts.
Issue: WON petitioner has shown a clear legal right to the issuance of a writ of injunction under the “innocent bystander” rule.
Held:
In Philippine Association of Free Labor Unions (PAFLU) v. Cloribel, this Court, through Justice J.B.L. Reyes, stated the “innocent
bystander” rule as follows:
The right to picket as a means of communicating the facts of a labor dispute is a phase of the freedom of speech guaranteed by the
constitution. If peacefully carried out, it cannot be curtailed even in the absence of employer-employee relationship.
The right is, however, not an absolute one. While peaceful picketing is entitled to protection as an exercise of free speech, we
believe the courts are not without power to confine or localize the sphere of communication or the demonstration to the parties to the
labor dispute, including those
with related interest, and to insulate establishments or persons with no industrial connection or having interest totally foreign to the
context of the dispute. Thus the right may be regulated at the instance of third parties or “innocent bystanders” if it appears that the
inevitable result of its
exercise is to create an impression that a labor dispute with which they have no connection or interest exists between them and the
picketing union or constitute an invasion of their rights.
Thus, an “innocent bystander,” who seeks to enjoin a labor strike, must satisfy the court it is entirely different from, without any
connection whatsoever to, either party to the dispute and, therefore, its interests are totally foreign to the context thereof.
In the case at bar, petitioner cannot be said not to have such connection to the dispute. We find that the “negotiation, contract of
sale, and the post transaction” between Philtread, as vendor, and Siam Tyre, as vendee, reveals a legal relation between them
which, in the interest of petitioner, we cannot ignore. To be sure, the transaction between Philtread and Siam Tyre, was not a simple
sale whereby Philtread ceased to have any proprietary rights over its sold assets. On the contrary, Philtread remains as 20% owner
of private respondent and 60% owner of Sucat Land Corporation which was likewise incorporated in accordance with the terms of
the Memorandum of Agreement with Siam Tyre, and which now owns the land were subject plant is located. This, together with the
fact that private respondent uses the same plant or factory; similar or substantially the same working conditions; same machinery,
tools, and equipment; and
manufacture the same products as Philtread, lead us to safely conclude that private respondent’s personality is so closely linked to
Philtread as to bar its entitlement to an injunctive writ.
Petition denied.
Manila Diamond Hotel Employee Union vs CA

Manila Diamond Hotel Ee Union vs CA
GR 140518
Facts:
The Union filed a petition for a certification election, which was dismissed by the DOLE. Despite the dismissal of their petition, the
Union sent a letter to the Hotel informing the latter of its desire to negotiate for a collective bargaining agreement. The Hotel,
however, refused to
negotiate with the Union, citing the earlier dismissal of the Union’s petition for certification by DOLE.
Failing to settle the issue, the Union staged a strike against the Hotel. Numerous confrontations followed, further straining the
relationship between the Union and the Hotel. The Hotel claims that the strike was illegal and dismissed some employees for their
participation in the allegedly illegal concerted activity. The Union, on the other hand, accused the Hotel of illegally dismissing the
workers.
A Petition for Assumption of Jurisdiction under Article 263(g) of the Labor Code was later filed by the Union before the Secretary of
Labor. Thereafter, Secretary of Labor Trajano issued an Order directing the striking officers and members of the Union to return to
work within twenty-four (24) hours and the Hotel to accept them back under the same terms and conditions prevailing prior to the
strike.
After receiving the above order the members of the Union reported for work, but the Hotel refused to accept them and instead filed a
Motion for Reconsideration of the Secretary’s Order.
Acting on the motion for reconsideration, then Acting Secretary of Labor Español modified the one earlier issued by Secretary
Trajano and instead directed that the strikers be reinstated only in the payroll.
Issue: WON payroll reinstatement is proper in lieu of actual reinstatement under Article 263(g)
of the Labor Code.
Held:
Payroll reinstatement in lieu of actual reinstatement is not sanctioned under the provision of the said article.
The Court noted the difference between UST vs. NLRC and the instant case. In UST case the teachers could not be given back
their academic assignments since the order of the Secretary for them to return to work was given in the middle of the first semester
of the academic year.
The NLRC was, therefore, faced with a situation where the striking teachers were entitled to a return to work order, but the university
could not immediately reinstate them since it would be impracticable and detrimental to the students to change teachers at that point
in time.
In the present case, there is no similar compelling reason that called for payroll reinstatement as an alternative remedy. A strained
relationship between the striking employees and management is no reason for payroll reinstatement in lieu of actual reinstatement.
Under Article 263(g), all workers must immediately return to work and all employers must readmit all of them under the same terms
and conditions prevailing before the strike or lockout.
The Court pointed out that the law uses the precise phrase of “under the same terms and conditions,” revealing that it contemplates
only actual reinstatement. This is in keeping with the rationale that any work stoppage or slowdown in that particular industry can be
inimical to the
national economy.
The Court reiterates that Article 263(g) was not written to protect labor from the excesses of management, nor was it written to ease
management from expenses, which it normally incurs during a work stoppage or slowdown. This law was written as a means to be
used by the State to
protect itself from an emergency or crisis. It is not for labor, nor is it for management.
Petition granted.
Interphil Laboratories Employee Union vs Interphil Laboratories

Interphil Laboratories Ee Union vs Interphil Laboratories
GR 142824
Facts:
Petitioner is the sole and exclusive bargaining agent of the rank-and-file employees of Respondent. They had a CBA.
Prior to the expiration of the CBA, respondent company was approached by the petitioner, through its officers. The Union inquired
about the stand of the company regarding the duration of the CBA which was set to expire in a few months. Salazar told the union
officers that the matter could be best discussed during the formal negotiations which would start soon.
All the rank-and-file employees of the company refused to follow their regular two-shift work schedule. The employees stopped
working and left their workplace without sealing the containers and securing the raw materials they were working on.
To minimize the damage the overtime boycott was causing the company, Salazar immediately asked for a meeting with the union
officers. In the meeting, Enrico Gonzales, a union director, told Salazar that the employees would only return to their normal work
schedule if the company would agree to their demands as to the effectivity and duration of the new CBA. Salazar again told the
union officers that the matter could be better discussed during the formal renegotiations of the CBA. Since the union was apparently
unsatisfied with the answer of the company, the
overtime boycott continued. In addition, the employees started to engage in a work slowdown campaign during the time they were
working, thus substantially delaying the production of the company.
Respondent company filed with the National NLRC a petition to declare illegal petitioner union’s “overtime boycott” and “work
slowdown” which, according to respondent company, amounted to illegal strike. It also filed with Office Secretary of Labor a petition
for assumption
of jurisdiction. Secretary of Labor Nieves Confesor issued an assumption order over the labor dispute.
Labor Arbiter Caday submitted his recommendation to the then Secretary of Labor Leonardo A. Quisumbing. Then Secretary
Quisumbing approved and adopted the report in his Order, finding illegal strike on the part of petitioner Union.
Issue: WON the Labor Secretary has jurisdiction to rule over an illegal strike.
Held:
On the matter of the authority and jurisdiction of the Secretary of Labor and Employment to rule on the illegal strike committed by
petitioner union, it cannot be denied that the issues of “overtime boycott” and “work slowdown” amounting to illegal strike before
Labor Arbiter
Caday are intertwined with the labor dispute before the Labor Secretary.
The appellate court also correctly held that the question of the Secretary of Labor and Employment’s jurisdiction over labor-related
disputes was already settled in International Pharmaceutical, Inc. vs. Hon. Secretary of Labor and Associated Labor Union (ALU)
where the Court declared:
In the present case, the Secretary was explicitly granted by Article 263(g) of the Labor Code the authority to assume jurisdiction
over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, and decide the
same accordingly. Necessarily, this authority to assume jurisdiction over the said labor dispute must include and extend to all
questions and controversies arising therefrom, including cases over which the labor arbiter has exclusive jurisdiction.
Moreover, Article 217 of the Labor Code is not without, but contemplates, exceptions thereto. This is evident from the opening
proviso therein reading ‘(e)xcept as otherwise provided under this Code x x x.’ Plainly, Article 263(g) of the Labor Code was meant
to make both the Secretary (or the various regional directors) and the labor arbiters share jurisdiction,
subject to certain conditions. Otherwise, the Secretary would not be able to effectively and efficiently dispose of the primary dispute.
To hold the contrary may even lead to the absurd and undesirable result wherein the Secretary and the labor arbiter concerned may
have diametrically
opposed rulings. As we have said, ‘it is fundamental that a statute is to be read in a manner that would breathe life into it, rather than
defeat it.
In fine, the issuance of the assailed orders is within the province of the Secretary as authorized by Article 263(g) of the Labor Code
and Article 217(a) and (5) of the same Code, taken conjointly and rationally construed to subserve the objective of the jurisdiction
vested in the
Secretary.
Petition denied.
GLOBAL INC. vs. ATIENZA ET AL

MARCH 25, 20 11 ~ LEAVE A COMMENT
GLOBAL INC. vs. ATIENZA ET AL
G.R. No.L-51612-13
JULY 22, 1986
FACTS: Rosal, herein private respondent, commenced her employment with petitioner Global Incorporated in February, 1970, as a
“Sales Clerk.” In November 1976 Global Inc. filed with the Department of Labor Regional Office, an application for clearance to
terminate the services of Clarita Rosal, for having violated company rules and regulations by incurring repeated absences and
tardiness. The subject employee was placed under preventive suspension on November 16, 1976 pending resolution of the
application for clearance.c
Clarita Rosal filed her opposition to the clearance application as well as a counter-complaint against Global Inc., for illegal dismissal,
overtime pay and premium pay.
The officer-in-charge of Regional Office, Ministry of labor Leogardo, Jr. lifted the preventive suspension of Clarita Rosal, finding her
suspension not warranted, and reinstated her to her former position without loss of rights and with full backwages from the time of
preventive suspension up to the date of her actual reinstatement.
The Labor Arbiter rendered his decision dismissing the complaint for illegal dismissal, overtime compensation and premium pay,
and the clearance for the complainant’s termination is granted.
Rosal appealed the aforesaid decision to the NLRC.Respondents Commissioners Atienza and Quadra modified the appealed
decision, whereby:
(a) respondent is ordered to pay complainant overtime pay for the period Nov. 1, 1974 to Nov. 16, 1976 when she was suspended;
(b) respondent is likewise ordered to pay complainant backwages from Dec. 2, 1976 to May 31, 1978;
(c) the decision of the Labor Arbiter granting clearance to terminate the services of the complainant is affirmed.
Respondent Commissioner Villatuya voted to affirm the Labor Arbiter’s decision. Hence, the instant petition.
ISSUE: WON
1. Rosal is entitled to overtime pay

2. Rosal is entitled to backwages
HELD: The assailed decision of the NLRC is modified, where the order to pay overtime pay to Rosal is set aside, the order to pay
Rosal backwages affirmed, and the decision granting clearance to terminate the services of Rosal likewise affirmed
1. NO. We agree with the conclusion of the Labor Arbiter that the same should be denied for want of sufficient factual and legal
basis. No employee is authorized to work after office hours, during Sundays and Holidays unless required by a written memorandum
from the General Manager. During the period from Nov. 1, 1974 to Nov. 16, 1976, no employee of the company was never required
to work after 5:00 in the afternoon. There is nothing in the record except her bare allegations which would show that she truly and
actually rendered said overtime work
2. YES. the NLRC ordered petitioner to pay Rosal “backwages from Dec. 2, 1976 to May 31, 1978”, the date when Asst. Secretary
Leogardo, Jr., rendered his decision lifting the preventive suspension of Rosal and ordering petitioner to reinstate her to her former
position without loss of rights and with full backwages from the time of preventive suspension up to the date of her actual
reinstatement.c
We agree. We note that this decision of the Labor Arbiter ordering reinstatement had not been complied with. Neither was it
appealed by petitioner, therefore, the decision had become final and executory. To exempt petitioner from the payment of
backwages would be to give premium to the blant disregard of orders of the Ministry of Labor. Moreover, it would be in consonance
with compassionate justice that Rosal be paid backwages during the period that she was supposed to be reinstated
Note that the only ground for the imposition of preventive suspension is provided for under Sec. 4, Rule XIV of the Implementing
Regulations of the Ministry of Labor which reads-
SEC. 4. Preventive suspension. The employer may place the employee concerned under preventive suspension only if the
continued employment of the employee poses a serious and imminent threat to the life or property of the employer or of the co-
employees. Any preventive suspension before the filing of the application shall be considered worked days, and shall be duly paid
as such if the continued presence of the employee concerned does not pose a serious threat to the life and property of the employer
or of the co-employees.
As aptly held by Asst. Secretary Leogardo Jr., the continued presence of Clarita Rosal never posed a serious and imminent threat to
the life or property of the employer or co-employees as would warrant her preventive suspension
SALAZAR VS. NLRC
SALAZAR VS. NLRC
G.R. No 109210
APRIL 17, 1996
FACTS: On 17 April 1990, private respondent Carlos Construction, at a monthly salary of P4,500.00, employed Salazar as
construction/project engineer for the construction of a building in Cubao. Allegedly, by virtue of an oral contract, petitioner would also
receive a share in the profits after completion of the project and that petitioner’s services in excess of 8 ours on regular days and
services rendered on weekends and legal holidays shall be compensable overtime.
On 16 April 1991, petitioner received a memorandum issued by private respondent’s project manager informing him of the
termination of his services effective on 30 April 1991.
On 13 September 1991, Salazar filed a complaint against private respondent for illegal dismissal, unfair labor practice, illegal
deduction, non-payment of wages, overtime rendered, service incentive leave pay, commission, allowances, profit-sharing and
separation pay with the NLRC-NCR Arbitration Branch, Manila.
The Labor Arbiter rendered a decision dismissing the instant case for lack of merit. Petitioner appealed to the NLRC, where it
affirmed in toto the decision of the Labor Arbiter. His MR was likewise dismissed. Hence the instant petition.
ISSUE:
1) WON petitioner is entitled to overtime pay, premium pay for services rendered on rest days and holidays and service incentive
leave pay
2) WON petitioner is entitled to a share in the profits of the construction project;.
3) WON petitioner rendered services from 1 May to 15 May 1991 and is, therefore, entitled to unpaid wages;
4) WON private respondent is liable to reimburse petitioner’s legal expenses and;
5) WON petitioner is entitled to separation pay.
HELD: The assailed decision is modified.
1. NO. Although petitioner cannot strictly be classified as a managerial employee, nonetheless he is still not entitled to payment of
the aforestated benefits because he falls squarely under another exempt category — “officers or members of a managerial staff” as
defined under sec. 2(c) of the abovementioned implementing rules:
Sec. 2. Exemption. — The provisions of this Rule shall not apply to the following persons if they qualify for exemption under the
condition set forth herein:xxx
(c) Officers or members of a managerial staff xxx
That petitioner was paid overtime benefits does not automatically and necessarily denote that petitioner is entitled to such benefits
1. NO. petitioner insists that private respondent promised him a share in the profits after completion of the construction project. It is
because of this oral agreement, petitioner elucidates, that he agreed to a monthly salary of P4,500.00, an amount which he claims is
too low for a professional civil engineer like him with the rank of project engineer.
We cannot accede to petitioner’s demand. Nowhere in the disbursement vouchers can we find even the remotest hint of a profit-
sharing agreement between petitioner and private respondent. Petitioner’s rationalization stretches the imagination way too far.
Also, as said by the Labor Arbiter:
As to the issue of profit sharing, we simply cannot grant the same on the mere basis of complainant’s allegation that respondent
verbally promised him that he is entitled to a share in the profits derive(d) from the projects. Benefits or privileges of this nature (are)
usually in writing, besides complainant failed to (establish) that said benefits or privileges (have) been given to any of respondent(‘s)
employees as a matter of practice or policy.
3. YES. On April 30, he was advised by the Manager to continue supervising the finishing touches to the building until May 15, the
date appearing in the Certificate of Service as the date of the termination of the contract between Salazar and the Company. But the
Manager insists that Salazar’s services terminated at April 30 according to the Memorandum given the petitioner.
The purpose for which the said certificate was issued becomes irrelevant. The fact remains that private respondent knowingly and
voluntarily issued the certificate. Mere denials and self-serving statements to the effect that petitioner allegedly promised not to use
the certificate against private respondent are not sufficient to overturn the same. Hence, private respondent is estopped from
assailing the contents of its own certificate of service.
4. YES. During the construction of the building, a criminal complaint for unjust vexation was filed against the officers of the owner of
the building. Petitioner avers that he was implicated in the complaint for the sole reason that he was the construction engineer of the
project.
Although not directly implicated in the criminal complaint, Carlos Construction is nonetheless obligated to defray petitioner’s legal
expenses. Petitioner was included in the complaint not in his personal capacity but in his capacity as project engineer of private
respondent and the case arose in connection with his work as such. At the construction site, petitioner is the representative of
private respondent being its employee and he acts for and in behalf of private respondent. Hence, the inclusion of petitioner in the
complaint for unjust vexation, which was work-related, is equivalent to inclusion of private respondent itself.
5. NO. On the last issue, we rule that petitioner is a project employee and, therefore, not entitled to separation pay.
The applicable provision is Article 280 of the Labor Code which defines the term “project employee,” thus:
Art. 280. Regular and Casual Employment. — The provisions of written agreement to the contrary notwithstanding and regardless of
the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has
been fixed for a specific period or undertaking the completion or termination of which has been determined at the time of the
engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the
duration of the season. (Emphasis ours.)
In the case at bench, it was duly established that private respondent hired petitioner as project or construction engineer specifically
for its Monte de Piedad building project. Accordingly, as project employee, petitioner’s services are deemed coterminous with the
project, that is, petitioner’s services may be terminated as soon as the project for which he was hired is completed. There can be no
dispute that petitioner’s dismissal was due to the completion of the construction of the building.
NOTES:
1. Although we agree with private respondent that appeals to the SC from decisions of the NLRC should be in the form of a special
civil action for certiorari under Rule 65 of the Revised Rules of Court, this rule is not inflexible. In a number of cases this Court has
resolved to treat as special civil actions for certiorari petitions erroneously captioned as petitions for review on certiorari “in the
interest of justice.”
2. Policy Instruction No. 20 entitled “Stabilizing Employer-Employee Relations in the Construction Industry” explicitly mandates that:
xxx xxx xxx
Project employees are not entitled to termination pay if they are terminated as a result of the completion of the project or any phase
thereof in which they are employed, regardless of the number of projects in which they have been employed by a particular
construction company. Moreover, the company is not required to obtain a clearance from the Secretary of Labor in connection with
such termination. What is required of the company is a report to the nearest Public Employment Office for statistical purposes.
PNB V PNB EMPLOYEES ASSOCIATION
PNB V PNB EMPLOYEES ASSOCIATION
115 SCRA 507
July 30, 1982
NATURE
Appeal from decision of the Court of Industrial Relations (CIR)
FACTS
– PNB and PNB Employees Association (PEMA) had a dispute regarding the proper computation of overtime pay. PEMA wanted
the cost of living allowance (granted in 1958) and longevity pay (granted in 1961) to be included in the computation. PNB disagreed
and the 2 parties later went before the CIR to resolve the dispute.
– CIR decided in favor of PEMA and held that PNB should compute the overtime pay of its employees on the basis of the sum total
of the employee’s basic salary or wage plus cost of living allowance and longevity pay. The CIR relied on the ruling in NAWASA v
NAWASA Consolidated Unions, which held that “for purposes of computing overtime compensation, regular wage includes all
payments which the parties have agreed shall be received during the work week, including differentiated payments for working at
undesirable times, such as at night and the board and lodging customarily furnished the employee.” This prompted PNB to appeal,
hence this case.
ISSUE
WON the cost of living allowance and longevity pay should be

included in the computation of overtime pay as held by the CIR
HELD
NO
Ratio Overtime pay is for extra effort beyond that
contemplated in the employment contract; additional pay given for any other purpose cannot be included in the basis for the
computation of overtime pay.
– Absent a specific provision in the CBA, the bases for the
computation of overtime pay are 2 computations, namely:
1. WON the additional pay is for extra work done or service

rendered
2. WON the same is intended to be permanent and regular, not contingent nor temporary as a given only to remedy a situation
which can change any time.
Reasoning
– Longevity pay cannot be included in the computation of
overtime pay for the very simple reason that the contrary is expressly stipulated in the CBA, which constitutes the law between the
parties.
– As regards cost of living allowance, there is nothing in Commonwealth Act 444 [or “the 8-hour Labor Law,” now Art. 87 Labor
Code] that could justify PEMA’s posture that it should be added to the regular wage in computing overtime pay. C.A. 444 prescribes
that overtime work shall be paid “at the same rate as their regular wages or salary, plus at least 25% additional.” The law did not
define what is a regular wage or salary. What the law emphasized is that in addition to “regular wage,” there must be paid an
additional 25% of that “regular wage” to constitute overtime rate of pay. Parties were thus allowed to agree on what shall be
mutually considered regular pay from or upon which a 25% premium shall be based and added to makeup overtime compensation.
– No rule of universal application to other cases may be justifiably extracted from the NAWASA case. CIR relies on the part of the
NAWASA decision where the SC cited American decisions whose legislation on overtime is at variance with the law in this
jurisdiction. The US legislation considers work in excess of forty hours a week as overtime; whereas, what is
generally considered overtime in the Philippines is work in
excess of the regular 8 hours a day. It is understandably
material to refer to precedents in the US for purposes of computing weekly wages under a 40-hour week rule, since the particular
issue involved in NAWASA is the conversion of prior weekly regular earnings into daily rates without allowing diminution or addition.
– To apply the NAWASA computation would require a different formula for each and every employee. It would require reference to
and continued use of individual earnings in the past, thus multiplying the administrative difficulties of the Company. It would be
cumbersome and tedious a process to compute overtime pay and this may again cause delays in payments, which in turn could
lead to serious disputes. To apply this mode of computation would retard and stifle the growth of unions themselves as Companies
would be irresistibly drawn into denying, new and additional fringe benefits, if not those already existing, for fear of bloating their
overhead expenses through overtime which, by reason of being unfixed, becomes instead a veritable source of irritant in labor
relations.
**Overtime Pay Rationale Why is a laborer or employee who works beyond the regular hours of work entitled to extra compensation
called, in this enlightened time, overtime pay?
Verily, there can be no other reason than that he is made to work longer than what is commensurate with his agreed compensation
for the statutorily fixed or voluntarily agreed hours of labor he is supposed to do. When he thus spends additional time to his work,
the effect upon him is multi- faceted; he puts in more effort, physical and/or mental; he is delayed in going home to his family to
enjoy the comforts thereof; he might have no time for relaxation, amusement or sports; he might miss important pre-arranged
engagements; etc. It is thus the additional work, labor or service employed and the adverse effects just mentioned of his longer stay
in his place of work that justify and are the real reasons for the extra compensation that is called overtime pay.
**Overtime Pay Definition The additional pay for service or
work rendered or performed in excess of 8 hours a day by employees or laborers in employment covered by the 8 hour Labor Law
[C.A. 444, now Art. 87 Labor Code] and not exempt from its requirements. It is computed by multiplying the overtime hourly rate by
the number of hours worked in excess of eight.
Disposition decision appealed from is REVERSED
PHILIPPINE AIRLINES vs. NLRC et al

JULY 11, 2010 ~ LEAVE A COMMENT
PHILIPPINE AIRLINES vs. NLRC et al
G.R. No. 132805
Feb. 2, 1999
FACTS: Private respondent Dr. Fabros was employed as flight surgeon at petitioner company. He was assigned at the PAL Medical
Clinic and was on duty from 4:00 in the afternoon until 12:00 midnight.
On Feb.17, 1994, at around 7:00 in the evening, Dr. FAbros left the clinic to have his dinner at his residence, which was abou t5-
minute drive away. A few minutes later, the clinic received an emergency call from the PAL Cargo Services. One of its
employeeshad suffered a heart attack. The nurse on duty, Mr. Eusebio, called private respondent at home to inform him of the
emergency. The patient arrived at the clinic at 7:50 in the evening and Mr. Eusebio immediately rushed him to the hospital. When
Dr. Fabros reached the clinic at around 7:51 in the evening, Mr. Eusebio had already left with the patient to the hospital. The patient
died the following day.
Upon learning about the incident, PAL Medical Director ordered the Chief Flight Surgeon to conduct an investigation. In his
explanation, Dr. Fabros asserted that he was entitled to a thirty-minute meal break; that he immediately left his residence upon
being informed by Mr. Eusebio about the emergency and he arrived at the clinic a few minutes later; that Mr. Eusebio panicked and
brought the patient to the hospital without waiting for him.
Finding private respondent’s explanation unacceptable, the management charged private respondent with abandonment of post
while on duty. He denied that he abandoned his post on February 17, 1994. He said that he only left the clinic to have his dinner at
home. In fact, he returned to the clinic at 7:51 in the evening upon being informed of the emergency.
After evaluating the charge as well as the answer of private respondent, he was given a suspension for three months effective
December 16, 1994.
Private respondent filed a complaint for illegal suspension against petitioner.
On July 16, 1996, the Labor Arbiter rendered a decision declaring the suspension of private respondent illegal. It also ordered
petitioner to pay private respondent the amount equivalent to all the benefits he should have received during his period of
suspension plus P500,000.00 moral damages.
Petitioner appealed to the NLRC.
The NLRC, however, dismissed the appeal after finding that the decision of the Labor Arbiter is supported by the facts on record and
the law on the matter. The NLRC likewise denied petitioner’s motion for reconsideration.
Hence, this petition.
ISSUE:
1. WON the nullifying of the 3-month suspension by the NLRC erroneous.
2. WON the awarding of moral damages is proper.
HELD: The petition is PARTIALLY GRANTED. The portion of the assailed decision awarding moral damages to private respondent
is DELETED. All other aspects of the decision are AFFIRMED
1. The legality of private respondent’s suspension: Dr. Fabros left the clinic that night only to have his dinner at his house, which
was only a few minutes’ drive away from the clinic. His whereabouts were known to the nurse on duty so that he could be easily
reached in case of emergency. Upon being informed of Mr. Acosta’s condition, private respondent immediately left his home and
returned to the clinic. These facts belie petitioner’s claim of abandonment. Petitioner argues that being a full-time employee, private
respondent is obliged to stay in the company premises for not less than eight (8) hours. Hence, he may not leave the company
premises during such time, even to take his meals. We are not impressed. Art. 83 and 85 of the Labor Code read: Art. 83. Normal
hours of work. — The normal hours of work of any employee shall not exceed eight (8) hours a day. Health personnel in cities and
municipalities with a population of at least one million (1,000,000) or in hospitals and clinics with a bed capacity of at least one
hundred (100) shall hold regular office hours for eight (8) hours a day, for five (5) days a week, exclusive of time for meals, except
where the exigencies of the service require that such personnel work for six (6) days or forty-eight (48) hours, in which case they
shall be entitled to an additional compensation of at least thirty per cent (30%) of their regular wage for work on the sixth day. For
purposes of this Article, “health personnel” shall include: resident physicians, nurses, nutritionists, dieticians, pharmacists, social
workers, laboratory technicians, paramedical technicians, psychologists, midwives, attendants and all other hospital or clinic
personnel. (emphasis supplied) Art. 85. Meal periods. — Subject to such regulations as the Secretary of Labor may prescribe, it
shall be the duty of every employer to give his employees not less than sixty (60) minutes time-off for their regular meals. Sec. 7,
Rule I, Book III of the Omnibus Rules Implementing the Labor Code further states: Sec. 7. Meal and Rest Periods. — Every
employer shall give his employees, regardless of sex, not less than one (1) hour time-off for regular meals, except in the following
cases when a meal period of not less than twenty (20) minutes may be given by the employer provided that such shorter meal
period is credited as compensable hours worked of the employee; (a) Where the work is non-manual work in nature or does not
involve strenuous physical exertion; (b) Where the establishment regularly operates not less than sixteen hours a day; (c) In cases
of actual or impending emergencies or there is urgent work to be performed on machineries, equipment or installations to avoid
serious loss which the employer would otherwise suffer; and (d) Where the work is necessary to prevent serious loss of perishable
goods. Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered as compensable working time.
Thus, the eight-hour work period does not include the meal break. Nowhere in the law may it be inferred that employees must take
their meals within the company premises. Employees are not prohibited from going out of the premises as long as they return to
their posts on time. Private respondent’s act, therefore, of going home to take his dinner does not constitute abandonment. 2. The
award of moral damages: Not every employee who is illegally dismissed or suspended is entitled to damages. As a rule, moral
damages are recoverable only where the dismissal or suspension 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 In the case at bar, there is no
showing that the management of petitioner company was moved by some evil motive in suspending private respondent. It
suspended private respondent on an honest, albeit erroneous, belief that private respondent’s act of leaving the company premises
to take his meal at home constituted abandonment of post which warrants the penalty of suspension. Under the circumstances, we
hold that private respondent is not entitled to moral damages.

LABOR LAW Compilation of Case Digest

Încărcat de

Informații document

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

LABOR LAW Compilation of Case Digest

Încărcat de

Drepturi de autor:

Formate disponibile

LABOR LAW

MSCI-NACUSIP vs. NWPC and MONOMER SUGAR DIGEST

PP. VS. PANIS DIGEST

PALOMA VS. PAL AND NLRC DIGEST

SEAFDEC-AQD ET AL vs. NLRC and LAZAGA DIGEST

OBRA VS. SSS DIGEST

right of action accrues: (2) Upon an obligation created by law

MSF Tire and Rubber vs CA

Manila Diamond Hotel Employee Union vs CA

Interphil Laboratories Employee Union vs Interphil Laboratories

GLOBAL INC. vs. ATIENZA ET AL

1. Rosal is entitled to overtime pay

WON the cost of living allowance and longevity pay should be

1. WON the additional pay is for extra work done or service

PHILIPPINE AIRLINES vs. NLRC et al

S-ar putea să vă placă și