306
. WENPHIL CORPORATION,
vs.
NATIONAL LABOR RELATIONS COMMISSION AND
ROBERTO MALLARE
(G.R. No. 80587, February 8, 1989)
FACTS: Respondent was hired by Petitioner first,
as a crew member, then as Assistant Head of the
Backroom in its Cubao branch. On May 29, 1985,
the Respondent got into an altercation with his
coworker, Job Barrameda which resulted in
Barrameda’s suspension while respondent was
dismissed from work.
His dismissal prompted the Respondent to file a
complaint for illegal suspension, illegal dismissal
and unfair labor practices before the Labor
Arbiter. The Labor Arbiter, however, dismissed
the complaint. But upon appeal to the NLRC, the
said tribunal reversed the decision of the Labor
Arbiter.
Petitioner cried foul imputing to the NLRC
committed grave abuse of discretion,
contending that the decision of Petitioner to
dismiss Respondent was justified. In support of
his contention, Petitioner cited a provision in the
“Personnel Manual” which states that if an
employee commits an offense punishable with
suspension of more than 15 days, an
investigation may be conducted at the request
of the concerned employee. In this case, said
Petitioner, Respondent did not request for an
investigation, therefore, Respondent’s right to
invoke said provision should be deemed waived.
ISSUE: Whether or not Respondent’s right to due
process was violated.
HELD: “The incident happened on May 20, 1985
and right then and there as afore repeated on
the following day private respondent was
suspended in the morning and was dismissed
from the service in the afternoon. He received
an official notice of his termination four (4) days
later.
“Although in the Personnel Manual of the
petitioner, it states that an erring employee
must request for an investigation it does not
thereby mean that petitioner is thereby relieved
of the duty to conduct an investigation before
dismissing private respondent. Indeed said
provision of the Personnel Manual of petitioner
which may effectively deprive its employees of
the right to due process is clearly against the law
and hence null and void. The security of tenure
of a laborer or employee is enshrined in the
Constitution, the Labor Code and other related
laws.
“Under Section 1, Rule XIV of the Implementing
Regulations of the Labor Code, it is provided that
"No worker shall be dismissed except for just or
authorized cause provided by law and after due
process." Sections 2, 5, 6, and 7 of the same
rules require that before an employer may
dismiss an employee the latter must be given a
written notice stating the particular act or
omission constituting the grounds thereof; that
the employee may answer the allegations within
a reasonable period; that the employer shall
afford him ample opportunity to be heard and
to defend himself with the assistance of his
representative, if he so desires; and that it is
only then that the employer may dismiss the
employee by notifying him of the decision in
writing stating clearly the reasons therefor.
“The failure of petitioner to give private
respondent the benefit of a hearing before he
was dismissed constitutes an infringement of his
constitutional right to due process of law and
equal protection of the laws.
“The rule is explicit as above discussed. The
dismissal of an employee must be for just or
authorized cause and after due
process. Petitioner committed an infraction of
the second requirement. Thus, it must be
imposed a sanction for its failure to give a formal
notice and conduct an investigation as required
by law before dismissing petitioner from
employment. Considering the circumstances of
this case petitioner must indemnify the private
respondent the amount of P1,000.00. The
measure of this award depends on the facts of
each case and the gravity of the omission
committed by the employer.
G.R. No. 117040 January 27,
2000
RUBEN SERRANO, petitioner
vs
NATIONAL LABOR RELATIONS COMMISSION and
ISETANN DEPARTMENT STORE, respondents
Facts:
Sometime in1991, Isetann Department
Store (Isetann) instituted a retrenchment
program which abolished its Security Checkers
Section. Isetann engaged the services of an
independent security agency. On October 11,
1991, Ruben Serrano, the head of Isetann’s
Security Checkers Section received a letter from
the Human Resources Department of Isetann
terminating his services effective the same day.
Because of loss of employment, Ruben
Serrano filed a complaint for illegal dismissal and
monetary claims.
Labor Arbiter rendered judgement
finding the dismissal of Ruben Serrano illegal
and that Isetann failed to accord due process to
the petitioner. Isetann was ordered to pay
Ruben Serrano full backwages from the time of
his dismissal until reinstatement.
Isetann appealed to National Labor
Relations Commission (NLRC) which, reversed
the decisionof the Labor Arbiter and ordered
Ruben Serrano to be given separation pay
equivalent to one month pay for every year of
service. NLRC held that the abolition of the
Security Checkers and hiring of an independent
security agency constituted an exercise by
Isetann of its legitimate business decision.
Petitioner appealed to the Supreme
Court.
Issue:
Whether or not the hiring of
independent security agency by Isetann to
replace the Security Checkers Section a valid
ground for the termination of Ruben Serrano
Whether or not the non-compliance of
Isetann of the 30-day written notice
requirement in Art 283 (old) of the Labor Code
constituted a denial of due process
Ruling:
Article 283 of the Labor Code provides
that the employer may also terminate the
employment of any employee due to the
installation of labor-saving devices, redundancy,
retrenchment to prevent losses or the closing or
cessation of operations of the establishment or
undertaking unless the closing is for the purpose
of circumventing the provisions of this Title, by
serving a written notice on the workers and the
Department of Labor and Employment at least
one month before the intended date thereof. In
case of termination due to the installation of
labor-saving devices or redundancy, the worker
affected thereby shall be entitled to a separation
pay equivalent to at least one month pay or to at
least one month pay for every year of service,
whichever is higher. In case of retrenchment to
prevent losses and in cases of closure or
cessation of operations of establishment or
undertaking not due to serious business losses
or financial reverses, the separation pay shall be
equivalent to at least one month pay or at least
one-half month pay for every year of service,
whichever is higher. A fraction of at least six
months shall be considered as one whole year.
Supreme Court held that Management
cannot be denied the faculty of promoting
efficiency and attaining economy by a study of
what units are essential for its preparation. To it
belongs the ultimate determination of whether
services should be performed by its personnel or
contracted to outside agencies. While there
should be mutual consultation, eventually
deference is to be paid to what management
decides. Consequently, absent proof that
management acted in a malicious or arbitrary
manner, the Court will not interfere with the
exercise of judgement by an employer. The
termination of petitioner’s services was for an
authorized cause.
Supreme Court also held that not all
notice requirements are requirements of due
process. Some are simply part of a procedure to
be followed before a right granted to a party can
be exercised. With respect to Art 283 of the
Labor Code, the employer’s failure to comply
with the notice of requirement does not
constitute a denial of due process but a mere
failure to observe a procedure for the
termination of employment which makes the
termination merely ineffectual.
In sum, if in proceedings for
reinstatement under Art. 283, it is shown that
the termination of employment was due to an
authorized cause, then the employee should not
be ordered reinstated even though there is
failure to comply with the 30-day notice
requirement. Instead, he must be granted
separation pay in accordance with Art. 283.
If employee’s separation is without
cause, instead of being given separation pay, he
should be reinstated. In either case, whether he
is reinstated or only granted separation pay, he
should be paid full backwages if he has been laid
off without written notice at least 30 days in
advance.
Petition granted and the resolution the
NLRC is modifies by ordering Isetann to pay
petitioner separation pay equivalent to one
month pay for every year of service and full
backwages from the time his employment was
terminated up to the time decision becomes
final.
TONGKO vs. MANULIFE
FACTS:
Tongko started working at Manulife by virtue of
a Career Agent’s Agreement. He was first named
as Unit Manager in Manulife’s Sales Agency
Organization and later on as Branch Manager.
When Manulife instituted manpower
development programs in the regional sales
management level, he received a letter
informing him that his region is the lowest
performer in terms of recruiting. As a result,
meetings were held to tackle on issues and
Tongko was provided with directives as part of
the changes needed to meet the goal.
Subsequently, Tongko received a notice of
termination with 15-day effectivity from receipt
of such letter.
ISSUES:
1. Was there an employer-employee
relationship between Manulife and Tongko?
2. If yes, was Manulife guilty of illegal
dismissal?
RULING:
1. “Thus, with the company regulations
and requirements alone, the fact that Tongko
was an employee of Manulife may already be
established. Certainly, these requirements
controlled the means and methods by which
Tongko was to achieve the company's goals.”
“Additionally, it must be pointed out that the
fact that Tongko was tasked with recruiting a
certain number of agents, in addition to his
other administrative functions, leads to no other
conclusion that he was an employee of
Manulife.”
2. “Manulife did not even point out which
order or rule that Tongko disobeyed. More
importantly, Manulife did not point out the
specific acts that Tongko was guilty of that
would constitute gross and habitual neglect of
duty or disobedience. Manulife merely cited
Tongko's alleged ‘laggard performance,’ without
substantiating such claim, and equated the same
to disobedience and neglect of duty.”
“Here, Manulife failed to overcome such burden
of proof. It must be reiterated that Manulife
even failed to identify the specific acts by which
Tongko's employment was terminated much less
support the same with substantial evidence. To
repeat, mere conjectures cannot work to
deprive employees of their means of livelihood.
Thus, it must be concluded that Tongko was
illegally dismissed.”
“Moreover, as to Manulife's failure to comply
with the twin notice rule, it reasons that
Tongko not being its employee is not entitled to
such notices. Since we have ruled that
Tongko is its employee, however, Manulife
clearly failed to afford Tongko said notices.
Thus, on this ground too, Manulife is guilty of
illegal dismissal.”
ARMANDO ALILING, petitioner, vs. JOSE B.
FELICIANO, MANUEL F. SAN MATEO III, JOSEPH R.
LARIOSA AND WIDE WIDE WORLD EXPRESS
CORPORATION, respondents.
Facts: Aliling was an employee of Wide Wide
World Express Corporation (WWWEC) who was
tasked to handle the company’s Ground Express
(GX) involving domestic cargo forwarding
services. Barely a month after, the company sent
an email to the petitioner to express
dissatisfaction with the latter’s performance. On
September 20, 2004 respondent through its
memo asked Aliling to explain why he should not
be terminated for failure to meet expected job
performance (This letter was later denied to
have been received by the petitioner, thus he
was not able to explain). Thereafter, on a letter
dated October 1, 2004, respondent informed
petitioner that his case was still in the process of
being evaluated. On October 6, 2004,
respondent again wrote, this time to advise
Aliling of the termination of his services effective
as of that date owing to his “non-satisfactory
performance”.
Issue/s: Whether or not Aliling was illegally
terminated by reason of violation of due process
requirement.
Held: YES, Aliling was illegally terminated. As a
rule to effect a legal dismissal the employer
must show not only a valid ground therefor but
also procedural due process should properly be
observed. When the Labor Code speaks of
procedural due process, the reference is usually
to the two (2) notice rule, envisaged in Section 2
(III), Rule XXIII, Book V of the Omnibus Rules of
Implementing the Labor Code which provides:
“Section 2. Standard of due process:
requirements of notice
I. For termination of Employment base on just
causes as defined in Article 282 of the Coode:
(a) A written notice served on the
employee specifying the ground or grounds of
termination, and giving the said employee
reasonable opportunity to explain his side;
(b) A hearing or conference during
which the employee concerned, with the
assistance of counsel if the employee so desires,
is given the opportunity to respond to the
charge, present his evidence or rebut the
evidence presented against him; and
(c) A written notice [of] termination
served on the employee indicating that upon due
consideration of all the circumstance, grounds
have been established to justify his termination.
As to the first written notice, WWWEC did not
adduce proof to show that a copy of the letter
was duly served upon Aliling. Clearly enough,
WWWEC did not comply with the first notice
requirement. Lastly, the termination letter did
not specifically state Aliling’s “non-satisfactory
performance,” or that Aliling’s termination was
by reason of his failure to achieve his set quota.
In other words, the written notice of
termination itself did not indicate all the
circumstances involving the charge to justify
severance of employment.
Here, the first and second notice requirements
have not been properly observed, thus tainting
petitioner’s dismissal with illegality.
EQUITABLE PCI BANK, INC. vs. OJ-MARK
TRADING, INC. and SPOUSES OSCAR AND
EVANGELINE MARTINEZ
G.R. No. 165950 (August 11, 2010)
FACTS:
Respondent-spouses Oscar and Evangeline
Martinez obtained loans from petitioner
Equitable PCI Bank, Inc. in the aggregate amount
of P 4,048,800.00. As security for the said
amount, a Real Estate Mortgage (REM) was
executed over a condominium unit in San
Miguel Court, Valle Verde 5, Pasig City, Metro
Manila where the spouses are residing.
Respondent-spouses defaulted in the payment
of their outstanding loan obligation, they offered
to settle their indebtedness with the assignment
to the Bank of a commercial lot of
corresponding value and also requested for
recomputation at a lower interest rate and
condonation of penalties. The respondents
failed to submit the required documents such as
certificates of title and tax declarations so that
the bank can evaluate his proposal to pay the
mortgage debt via dacion en pago. The
petitioner initiated the extrajudicial foreclosure
of the real estate mortgage.
Respondents then filed Civil Case No. 69294 for
Temporary Restraining Order (TRO), Injunction
and Annulment of Extrajudicial Foreclosure Sale.
They imputed bad faith on the part of petitioner
who did not officially inform them of the denial
or disapproval of their proposal to settle the
loan obligation by dacion via assignment of a
commercial property. The trial court granted a
TRO effective for twenty (20) days.
Petitioner questioned the issuance of
preliminary injunction before the CA arguing
that the respondents are not entitled to
injunctive relief after having admitted that they
were unable to settle their loan obligations. By
Decision dated October 29, 2004, the appellate
court sustained the assailed orders.
ISSUE:
Whether or not the respondents have shown a
clear legal right to enjoin the foreclosure and
public auction of the third-party mortgagors
property while the case for annulment of REM
on said property is being tried.
HELD:
NO. The Supreme Court held that the
respondent spouses have not shown a clear
legal right to enjoin the foreclosure. According
to the SC:
1. It is not sufficient for the respondents to
simply harp on the serious damage they
stand to suffer if the foreclosure sale is
not stayed. They must establish such
clear and unmistakable right to the
injunction. Injunction is not a remedy to
protect or enforce contingent, abstract,
or future rights; it will not issue to
protect a right not in esse and which
may never arise, or to restrain an action
which did not give rise to a cause of
 action. There must be an existence of
an actual right.
2. Respondents failed to show that they
have a right to be protected and that
the acts against which the writ is to be
directed are violative of the said right.
On the face of their clear admission that
they were unable to settle their
obligations which were secured by the
mortgage, petitioner has a clear right to
foreclose the mortgage. Foreclosure is
but a necessary consequence of non-
payment of a mortgage indebtedness.
WHEREFORE, the petition is GRANTED.
The Decision dated October 29, 2004 of
the Court of Appeals in CA-G.R. SP No.
77703 is hereby REVERSED and SET
ASIDE. Respondents application for a writ
of preliminary injunction is DENIED.
EMER MILAN, RANDY MASANGKAY, WILFREDO
JAVIER, RONALDO DAVID, BONIFACIO
MATUNDAN, NORA MENDOZA, ET AL.,
Petitioners, v. NATIONAL LABOR RELATIONS
COMMISSION, SOLID MILLS, INC., AND/OR PHILIP
ANG, Respondents.
FACTS:
Petitioners are employees of Solid Mills,
Inc. Petitioners were allowed by Solid Mills, Inc.
to occupy a property owned by the latter known
as the SMI Village. This was granted by the
respondents to the petitioners out of liberality
and for convenience of the latter. Solid Mills
experience a serious financial losses to which
had force its operation to ceased. The
petitioners then were required to sign a
memorandum of agreement with release and
quitclaim before their vacation and sick leave
benefits, 13th month pay, and separation pay
would be released. Employees who signed the
memorandum of agreement were considered to
have agreed to vacate SMI Village, and to the
demolition of the constructed houses inside as
condition for the release of their termination
benefits and separation pay. Petitioners refused
to sign the documents and demanded to be paid
their benefits and separation pay. Labor Arbiter
ruled in favour of Petitioner. NLRC affirmed. CA
ruled in favour of Solid Mills.
ISSUE:
WON Solid Mills Inc, can withhold the
payment of vacation and sick leave benefits, 13
month pay and separation pay.
HELD:
Our law supports the employers’
institution of clearance procedures before the
release of wages. As an exception to the general
rule that wages may not be withheld and
benefits may not be diminished, the Labor Code
provides:
Art. 113. Wage deduction. No employer, in his
own behalf or in behalf of any person, shall
make any deduction from the wages of his
employees, except.
1. In cases where the worker is insured with his
consent by the employer, and the deduction is
to recompense the employer for the amount
paid by him as premium on the insurance
2. For union dues, in cases where the right of
the worker or his union to check-off has been
recognized by the employer or authorized in
writing by the individual worker concerned; and
3. In cases where the employer is authorized by
law or regulations issued by the Secretary of
Labor and Employment. (Emphasis supplied)
The Civil Code provides that the employer is
authorized to withhold wages for debts due:
Article 1706. Withholding of the wages, except
for a debt due, shall not be made by the
employer.d
“Debt” in this case refers to any obligation due
from the employee to the employer. It includes
any accountability that the employee may have
to the employer. There is no reason to limit its
scope to uniforms and equipment, as petitioners
would argue. Petitioners do not categorically
deny respondent Solid Mills’ ownership of the
property, and they do not claim superior right to
it. What can be gathered from the findings of
the Labor Arbiter, National Labor Relations
Commission, and the Court of Appeals is that
respondent Solid Mills allowed the use of its
property for the benefit of petitioners as its
employees. Petitioners were merely allowed to
possess and use it out of respondent Solid Mills’
liberality. The employer may, therefore,
demand the property at will.
G.R. No. 205300, March 18, 2015
FONTERRA BRANDS PHILS.,
1
INC., Petitioner, v. LEONARDO LARGADO AND
TEOTIMO ESTRELLADO, Respondents.
Facts:
Petitioner Fonterra Brands Phils., Inc. (Fonterra)
contracted the services of Zytron Marketing and
Promotions Corp. (Zytron) for the marketing and
promotion of its milk and dairy products.
Pursuant to the contract, Zytron provided
Fonterra with trade merchandising
representatives (TMRs), including respondents
Leonardo Largado (Largado) and
TeotimoEstrellado (Estrellado).
Fonterra sent Zytron a letter terminating its
promotions contract. Fonterra then entered into
an agreement for manpower supply with A.C.
Sicat Marketing and Promotional Services (A.C.
Sicat). Desirous of continuing their work as
TMRs, respondents submitted their job
applications with A.C. Sicat, which hired them
for a term of five (5) months.
When respondents’ 5-month contracts with A.C.
Sicat were about to expire, they allegedly sought
renewal thereof, but were allegedly refused.
This prompted respondents to file complaints
for illegal dismissal against petitioner, Zytron,
and A.C. Sicat.
The Labor Arbiter dismissed the complaint and
ruled that respondents were not illegally
dismissed.
The NLRC affirmed the Labor Arbiter, finding
that respondents’ separation from Zytron was
brought about by the execution of the contract
between Fonterra and A.C. Sicat where the
parties agreed to absorb Zytron’s personnel,
including respondents.
The NLRC decision was assailed in a petition
under Rule 65 before the CA.
CA held that respondents were illegally
dismissed since Fonterra itself failed to prove
that their dismissal is lawful. However, the illegal
dismissal should be reckoned from the
termination of their supposed employment with
Zytron on June 6, 2006. Furthermore,
respondents’ transfer to A.C. Sicat is tantamount
to a completely new engagement by another
employer. Lastly, the termination of their
contract with A.C. Sicat arose from the
expiration of their respective contracts with the
latter. The CA, thus, ruled that Fonterra is liable
to respondents and ordered the reinstatement
of respondents without loss of seniority rights,
with full backwages, and other benefits from the
time of their illegal dismissal up to the time of
their actual reinstatement.
Zytron and Fonterra moved for reconsideration,
but to no avail. Hence, this petition.
Issue:whether or not respondents were illegally
dismissed. (By zytron and A.C. Sicat)
Held: No.
We do not agree with the CA that respondents’
employment with Zytron was illegally
terminated.
As correctly held by the Labor Arbiter and the
NLRC, the termination of respondents’
employment with Zytron was brought about by
the cessation of their contracts with the latter.
We give credence to the Labor Arbiter’s
conclusion that respondents were the ones who
refused to renew their contracts with Zytron,
and the NLRC’s finding that they themselves
acquiesced to their transfer to A.C. Sicat.
By refusing to renew their contracts with Zytron,
respondents effectively resigned from the latter.
Resignation is the voluntary act of employees
who are compelled by personal reasons to
dissociate themselves from their employment,
done with the intention of relinquishing an
office, accompanied by the act of abandonment.
Here, it is obvious that respondents were no
longer interested in continuing their
employment with Zytron. Their voluntary refusal
to renew their contracts was brought about by
their desire to continue their assignment in
Fonterra which could not happen in view of the
conclusion of Zytron’s contract with Fonterra.
Hence, to be able to continue with their
assignment, they applied for work with A.C. Sicat
with the hope that they will be able to continue
rendering services as TMRs at Fonterra since
A.C. Sicat is Fonterra’s new manpower supplier.
This fact is even acknowledged by the CA in the
assailed Decision where it recognized the reason
why respondents applied for work at A.C. Sicat.
The CA stated that “[t]o continuously work as
merchandisers of Fonterra products,
[respondents] submitted their job applications
to A.C. Sicat xxx.” This is further bolstered by the
fact that respondents voluntarily complied with
the requirements for them to claim their
corresponding monetary benefits in relation to
the cessation of their employment contract with
Zytron.
In short, respondents voluntarily terminated
their employment with Zytron by refusing to
renew their employment contracts with the
latter, applying with A.C. Sicat, and working as
the latter’s employees, thereby abandoning
their previous employment with Zytron. Too, it is
well to mention that for obvious reasons,
resignation is inconsistent with illegal dismissal.
This being the case, Zytron cannot be said to
have illegally dismissed respondents, contrary to
the findings of the CA.
whether the termination of respondents’
employment with A.C. Sicat is valid?
We agree with the findings of the CA that the
termination of respondents’ employment with
the latter was simply brought about by the
expiration of their employment contracts.
Foremost, respondents were fixed-term
employees. As previously held by this Court,
fixed-term employment contracts are not
limited, as they are under the present Labor
Code, to those by nature seasonal or for specific
projects with predetermined dates of
completion; they also include those to which the
parties by free choice have assigned a specific
date of termination.11 The determining factor of
such contracts is not the duty of the employee
but the day certain agreed upon by the parties
for the commencement and termination of the
employment relationship.
In the case at bar, it is clear that respondents
were employed by A.C. Sicat as project
employees. In their employment contract with
the latter, it is clearly stated that “[A.C. Sicat is]
temporarily employing [respondents] as TMR[s]
effective June 6[, 2006] under the following
terms and conditions: The need for your service
being only for a specific project, your temporary
employment will be for the duration only of said
project of our client, namely to promote
FONTERRA BRANDS products xxx which is
expected to be finished on or before Nov. 06,
2006.”
Respondents, by accepting the conditions of the
contract with A.C. Sicat, were well aware of and
even acceded to the condition that their
employment thereat will end on said pre-
determined date of termination. They cannot
now argue that they were illegally dismissed by
the latter when it refused to renew their
contracts after its expiration. This is so since the
non-renewal of their contracts by A.C. Sicat is a
management prerogative, and failure of
respondents to prove that such was done in bad
faith militates against their contention that they
were illegally dismissed. The expiration of their
contract with A.C. Sicat simply caused the
natural cessation of their fixed-term
employment there at.
PHIL. JAPAN ACTIVE CARBON CORP. and
SATOFUKA v. NLRC and QUIÑANOLA
G.R. No. 83239, 08 March 1989, FIRST DIVISION
(Griño-Aquino, J.)
FACTS
Olga S. Quiñanola employed as Assistant
Secretary/Export Coordinator, was promoted to
the position of Executive Secretary to the
Executive Vice President and General Manager.
For no apparent reason at all and without prior
notice to her, she was transferred to the
Production Department as Production Secretary.
Although the transfer did not amount to a
demotion because her salary and workload
remained the same, she believed otherwise so
she rejected the assignment and filed a
complaint for illegal dismissal.
The Labor Arbiter found that the
transfer would amount to constructive dismissal
("she was dismissed for unjustified causes")
hence, her refusal to obey the transfer order
was justified. The LA finds Quiñanola was
illegally dismissed and orders Philippine Japan
Active Carbon Corporation and/or Tokuichi
Satofuka to reinstate her with backwages and
damages.
Upon appeal to the NLRC, the
Commission approved the Labor Arbiter's
decision.
ISSUE
Was there a constructive dismissal?
HELD
The Supreme Court rules that there was
NO constructive dismissal.
A constructive discharge is defined as: "A
quitting because continued employment is
rendered impossible, unreasonable or unlikely;
as, an offer involving a demotion in rank and a
diminution in pay." (Alia vs. Salani Una
Transportation Co., January 29, 1971)
In this case, Quiñanola's assignment as
Production Secretary of the Production
Department was not unreasonable as it did not
involve a demotion in rank (her rank was still
that of a department secretary) nor a change in
her place of work (the office is in the same
building), nor a diminution in pay, benefits, and
privileges. It did not constitute a constructive
dismissal.
It is the employer's prerogative, based
on its assessment and perception of its
employees' qualifications, aptitudes, and
competence, to move them around in the
various areas of its business operations in order
to "ascertain where they will function with
maximum benefit to the company." When an
employee's transfer is not unreasonable, nor
inconvenient, nor prejudicial to him, and it does
not involve a demotion in rank or a diminution
of his salaries, benefits, and other privileges, the
employee may not complain that it amounts to a
constructive dismissal.
 NLRC's decision is affirmed insofar as it
orders herein petitioners to reinstate Quiñanola,
but she shall be reinstated to her position as
Production Secretary of the Production
Department without loss of seniority rights and
other privileges.
MINTERBRO, INC. and/or DE CASTRO v.
NAGKAHIUSANG MAMUMUO SA MINTERBRO–
SOUTHERN PHILIPPINES FEDERATION OF LABOR
and/or ABELLANA, et al.
G.R. No. 174300, 05 December 2012, FIRST
DIVISION (Leonardo-De Castro, J.)
FACTS
Mindanao Terminal and Brokerage
Service, Inc. (Minterbro) is a domestic
corporation managed by De Castro and engaged
in the business of providing arrastre and
stevedoring services to its clientele at Port Area,
Sasa, Davao City. Del Monte is their exclusive
client.
Davao Pilots' Association, Inc. (DPAI)
informed Minterbro of its intention to refrain
from docking vessels at Minterbro’s pier for
security and safety reasons until its docks are
repaired or rehabilitated. Minterbro decided to
rehabilitate the pier and on the same day, sent a
letter to the Department of Labor and
Employment (DOLE) to inform DOLE of
Minterbro’s intention to temporarily suspend
arrastre and stevedoring operations.
The Union composed of respondents
Manuel Abellana, et al., employees of
Minterbro, filed a complaint for payment of
separation pay against Minterbro and De Castro.
ISSUE
Whether or not the union members/employees
were deprived of gainful employment making
Minterbro liable for separation pay
HELD
The Supreme Court finds Minterbro
liable to its employees.
Minterbro's inaction on what they allege
to be the unexplained abandonment by Del
Monte of its obligations under the Contract for
the Use of Pier coupled with petitioners’ belated
action on the damaged condition of the pier
caused the absence of available work for the
union members. As Minterbro was responsible
for the lack of work at the pier and,
consequently, the layoff of the union members,
it is liable for the separation from employment
of the union members on a ground similar to
retrenchment. This Court has ruled:
"A lay-off, used interchangeably with
"retrenchment," is a recognized
prerogative of management. It is an act
of the employer of dismissing
employees because of losses in
operation of a business, lack of work,
and considerable reduction on the
volume of his business, a right
consistently recognized and affirmed by
this Court. The requisites of a valid
retrenchment are covered by Article 283
of the Labor Code."
When a lay-off is temporary, the
employment status of the employee is not
deemed terminated, but merely suspended.
Article 286 of the Labor Code provides, in part,
that the bona fide suspension of the operation
of the business or undertaking for a period not
exceeding six months does not terminate
employment.
When Minterbro failed to make work
available to the union members for a period of
more than six months by failing to call the
attention of Del Monte on the latter’s
obligations under the Contract of Use of Pier
and to undertake a timely rehabilitation of the
pier, they are deemed to have constructively
dismissed the union members.
Begino et. al. Vs ABS-CBN Corporation and Amala
Villafuerte
FACTS:
 Respondent ABS-CBN Corporation (ABS-
CBN) employed respondent Villafuerte as
Manager. Thru Villafuerte, ABS-CBN engaged the
services of petitioners Begino and Del Valle as
Cameramen/Editors for TV Broadcasting,
Petitioners Sumayao and Llorin were likewise
similarly engaged as reporters. Petitioners were
tasked with coverage of news items for
subsequent daily airings in respondents’ TV
Patrol Bicol Program.
Claiming that they were regular
employees of ABS-CBN, petitioners filed a
complaint against before the NLRC. In support of
their claims for regularization, underpayment of
overtime pay, holiday pay, 13th month pay,
service incentive leave pay, damages and
attorney's fees, petitioners alleged that they
performed functions necessary and desirable in
ABS-CBN's business. They averred that they
were repeatedly hired by respondents for
ostensible fixed periods and this situation had
hone on for years since TV Patrol Bicol has
continuously aired from 1996 onwards.
Respondents argued that, although it
occasionally engages in production and
generates programs thru various means, the
company had allegedly resorted to engaging
independent contractors who offered their
services in relation to a particular program, such
independent contractors were required to
accomplish Talent Information Forms to
facilitate their engagement for and appearance
on designated project days. Respondents argued
that the company cannot afford to provide
regular work for talents given the
unpredictability of viewer.
Respondents insisted that, petitioners
were hired as talents, to act as reporters and/or
cameramen for designated periods and rates.
Although petitioners were inevitably subjected
to some degree of control, the same was
allegedly limited to the imposition of general
guidelines on conduct and performance, simply
for the purpose of upholding the standards of
the company and the strictures of the industry.
ISSUE: Whether or not there exist an employer-
employee relationship.
RULING:
Yes, there exist an employer-employee
relationship.
“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 project 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 service to
be performed is seasonal in nature and the
employment is for the duration of the season.”
An employment shall be deemed to be
casual if it is not covered by the preceding
paragraph: Provided, That, any employee who
has rendered at least one year of service,
whether such service is continuous or broken,
shall be considered a regular employee with
respect to the activity in which he is employed
and his employment shall continue while such
actually exists.
The Court finds that, notwithstanding
the nomenclature of their Talent Contracts,
petitioners are regular employees of ABS-CBN.
Time and again, it has been ruled that the test to
determine whether employment is regular or
not is the reasonable connection between the
activity performed by the employee in relation
to the business or trade of the employer. As
cameramen/editors and reporters, petitioners
were undoubtedly performing functions
necessary and essential to ABS-CBN’s business
of broadcasting television and radio content.
Aside from the fact that said program is a
regular weekday fare of the ABS-CBN the record
shows that, petitioners were continuously re-
hired by respondents over the years.
It is evident from the foregoing
disquisition that petitioners are regular
employees of ABS-CBN. This conclusion is borne
out by the ineluctable showing that petitioners
perform functions necessary and essential to the
business of ABS-CBN which repeatedly
employed them for a long-running news
program.
NOTES:
• 4 kinds of employees contemplated in
Art. 280 of the Labor Code:
1. Regular employees or those who have
been engaged to perform activities which are
usually necessary or desirable in the usual
business or trade of the employer;
2. Project employees or those whose
employment has been fixed for a specific project
or undertaking, the completion or termination
of which has been determined at the time of the
engagement of the employee;
3. Seasonal employees or those who work
or perform services which are seasonal in
nature, and the employment is for the duration
of the season; and
4. Casual employees or those who are not
regular, project, or seasonal employees.
• To determine the existence of said
relation, case law has consistently applied the
four-fold test, to wit:
(a) the selection and engagement of the
employee;
(b) the payment of wages;
(c) the power of dismissal; and
(d) the employer's power to control the
employee on the means and methods by which
the work is accomplished.
Of these criteria, the so-called "control test" is
generally regarded as the most crucial and
determinative indicator of the presence or
absence of an employer-employee relationship.
Star Paper Corporation, Josephine Ongsitco &
Sebastian Chua, Petitioners vs. Ronaldo D.
Simbol, Wilfreda N. Comia & Lorna A. Estrella,
Respondents
Facts: Petitioner Corporation has a company
policy promulgated in 1995, viz.
1. New applicants will not be allowed to be hired
if in case he/she has [a] relative, up to [the] 3rd
degree of relationship, already employed by the
company.
2. In case of two of our employees (both singles
[sic], one male and another female) developed a
friendly relationship during the course of their
employment and then decided to get married,
one of them should resign to preserve the policy
stated above.
Respondents herein were all regular employees
of the company. Simbol was employed by the
company. He met Alma Dayrit, also an employee
of the company, whom he married. On the other
hand, Comia also married a co-employee, while
Estrella had an affair with her co- employee.
Respondents were all dismissed.
Issue: Whether the policy of the employer
banning spouses from working in the same
company violates the rights of the employee
under the Constitution and the Labor Code or is
a valid exercise of management prerogative.
Ruling: The policy violates the rights of the
employee. To justify a bona fide occupational
qualification, the employer must prove two
factors: (1) that the employment qualification is
reasonably related to the essential operation of
the job involved; and, (2) that there is a factual
basis for believing that all or substantially all
persons meeting the qualification would be
unable to properly perform the duties of the job.
The concept of a bona fide occupational
qualification is not foreign in our jurisdiction. We
employ the standard of reasonableness of the
company policy which is parallel to the bona fide
occupational qualification requirement. The
cases of Duncan and PT&T instruct us that the
requirement of reasonableness must be clearly
established to uphold the questioned
employment policy. The employer has the
burden to prove the existence of a reasonable
business necessity.
We do not find a reasonable business necessity
in the case at bar.
Petitioners’ sole contention that "the company
did not just want to have two (2) or more of its
employees related between the third degree by
affinity and/or consanguinity" is lame. That the
second paragraph was meant to give teeth to
the first paragraph of the questioned rule is
evidently not the valid reasonable business
necessity required by the law. It is significant to
note that in the case at bar, respondents were
hired after they were found fit for the job, but
were asked to resign when they married a co-
employee. The questioned policy may not
facially violate Article 136 of the Labor Code but
it creates a disproportionate effect and under
the disparate impact theory, the only way it
could pass judicial scrutiny is a showing that it is
reasonable despite the discriminatory, albeit
disproportionate, effect.
Thus, for failure of petitioners to present
undisputed proof of a reasonable business
necessity, we rule that the questioned policy is
an invalid exercise of management prerogative.
G.R. No. 124208 January 28,
2008
 GOVERNMENT SERVICE INSURANCE
SYSTEM (GSIS), petitioner,
 vs.
 COURT OF
APPEALS and HEIRS OF ABRAHAM CATE,
represented by DOROTHY CATE,
respondents.
 X-------------------------------------------
---- X
 G.R. No. 124275 January 28,
2008
 EMPLOYEES COMPENSATION
COMMISSION and PHILIPPINE NATIONAL POLICE,
petitioner,
 vs.
 THE HONORABLE COURT OF
APPEALS and HEIRS OF ABRAHAM CATE,
represented by DOROTHY CATE, respondents.
Facts:
Abraham Cate(Abraham) was a Rifleman of
Philippine Navy before joining the Philippine
National Police(PNP). During his service with the
PNP, he noticed a mass on his left cheek which
after a series of tests turned out to be an
Osteoblastic Osteosarcoma, which is one of the
most aggressive primary bone cancer. He
underwent a series of surgeries and
radiotherapy, however, he died and was
survived by his wife and children.
His wife filed a claim for income benefits with
the Government Service Insurance System (GSIS)
under PD No. 626, as amended. The GSIS denied
the claim on the ground that osteosarcoma is
not considered an occupational disease under
PD No. 626 therefore there must be sufficient
proof that Abraham had an increased risk of
contracting said ailment.
The decision of GSIS was affirmed by the
Employees Compensation Commission(ECC),
however, the Court of Appeals reversed the
decision and declared that Abraham’s disease is
compensable on the ground that the Employees
Compensation Act is basically a social legislation
designed to afford relief to our working men,
and should, therefore, be liberally construed in
favor of the applicant. Hence, this petition for
review.
Issue:
Whether or not the CA erred in ruling that the
ailment of the late Abraham is compensable
under the present law on employees’
compensation?
Held:
In this case, Osteosarcoma is not listed as an
occupational disease in the Amended Rules on
Employees’ Compensation. Hence, it is supposed
to be upon the claimant or private respondents
to prove by substantial evidence that the risk of
contracting Osteosarcoma was increased by the
working conditions of the late Abraham.
Substantial evidence means such relevant
evidence as a reasonable mind might accept as
adequate to support a conclusion.
The rule is that awards of compensation cannot
rest on speculations and presumptions as the
claimant must prove a positive thing. The
application of the rules would mean that absent
any proof that the risk of contracting the ailment
was increased by the working conditions of the
late Abraham, private respondents would not be
entitled to compensation.
It is practically undisputed that under the
present state of science, the proof referred by
the law to be presented by the deceased private
respondent claimant was unavailable and
impossible to comply with, the condition must
be deemed as not imposed.
In the specific case of respondent, the
requirement is impossible to comply with, given
the present state of scientific knowledge. The
obligation to present such as an impossible
evidence must, therefore, be deemed void.
Respondent, therefore, is entitled to
compensation, consistent with the social
legislation’s intended beneficial purpose.
“WHEREFORE, the petitions are DENIED.”
ONE SHIPPING CORP., AND OR ONE SHIPPING
KABUSHIKI KAISHA/JAPAN, Petitioner, vs. IMELDA
C. PAÑAFIEL Respondent, GR No. 192406,
January 21, 20015
FACTS:
Ildefonso Pañafiel, the husband of the
respondent Imelda Pañafiel, was hired by One
Shipping Corp. for and in behalf of the principal
One Shipping Kabushiki Kaisha/Japan as second
engineer on board vessel MV/ACX Magnolia.
Respondent alleged that while on board the
vessel, her husband experienced chest pain and
difficulty in breathing which he reported to his
superior, but was ignored. He returned to the
Philippines on May 21, 2005 and sought for post
medical examination from the petitioners but
was not heeded. Ildefonso suddenly collapsed
and died on July 2, 2005. Due to this incident,
respondent filed for monetary claims against the
petitioners.
Petitioners, on the other hand, denied
the monetary claims arguing that Ildefonso was
no longer their employee when the incident
occurred.
Labor Arbiter dismissed the complaint
for lack of merit which the NLRC affirmed on
appeal. The issue was raised to CA through
petition for certiorari under Rule 65 of Revised
Rules of Court. CA granted the petition and
reversed the resolution of NLRC.
ISSUES:
1. W/N CA has jurisdiction over present
case after the Resolutions of Labor Arbiter and
NLRC became final and executory
2. W/N Respondent is entitled to avail
death benefits
HELD:
1. CA has no jurisdiction on the case
after the resolutions of NLRC became final and
executory. It is a hornbook rule that once a
judgment has become final and executory, it
may no longer be modified in any respect, even
if the modification is meant to correct an
erroneous conclusion of fact or law, and
regardless of whether the modification is
attempted to be made by the court rendering it
or by the highest court of the land, as what
remains to be done is the purely ministerial
enforcement or execution of the judgment.
The only exceptions to the rule on the
immutability of final judgments are (1) the
correction of clerical errors, (2) the so-called
nunc pro tunc entries which cause no prejudice
to any party, and (3) void judgments. Nunc pro
tunc judgment does not pertain to rendering
new judgment; rather, it is one that places the
previous judgment in proper form on the record
to make it speak of the truth as to make it show
what the judicial action really was.
2. Respondent is not entitled to avail death
benefits. In order to avail of death benefits, the
death of the employee should occur during the
affectivity of the employment contract. The
death of a seaman during the term of
employment makes the employer liable to his
heirs for death compensation benefits. Once it is
established that the seaman died during the
effectivity of his employment contract, the
employer is liable. In the present case, Ildefonso
died after he pre-terminated the contract of
employment. That alone would have sufficed for
his heirs not to be entitled for death
compensation benefits. Furthermore, there is no
evidence to show that Ildefonso's illness was
acquired during the term of his employment
with petitioners. Petition is GRANTED.
Maersk-Filipinas Crewing, Inc. v. Avestruz GR
207010 Feb. 18, 2015
Facts: Toribio Avestruz was hired by Maersk-
Filipinas as Chief Cook on board the vessel M/V
Nedlloyd Drake for a period of six months. In the
course of Avestruz’s work, he had an argument
with the ship’s captain, Charles C. Woodward.
This argument resulted in Captain Woodward
summoning and requiring Avestruz to write a
statement regarding the incident. Captain
Woodward likewise asked Messman Jomilyn P.
Kong to submit his own written statement
regarding the incident. On the very same day of
the incident, Captain Woodward informed
Avestruz that he would be dismissed from
service. After Avestruz’ return to the Philippines,
he filed a complaint for illegal dismissal,
payment for the unexpired portion of his
contract, damages, and attorney’s fees against
Maersk. Maersk alleged that Avestruz has been
lawfully dismissed due to insubordination.
Issue: Whether or not Avestruz is illegally
dismissed by his employee Maersk due to
insubordination.
Ruling: Yes.
Insubordination, as a just cause for the
dismissal of an employee, necessitates the
concurrence of at least two requisites: (1) the
employee’s assailed conduct must have been
willful, that is, characterized by a wrongful and
perverse attitude; and (2) the order violated
must have been reasonable, lawful, made
known to the employee, and must pertain to the
duties which he had been engaged to discharge.
In this case, the contents of Captain
Woodward’s e-mails do not establish that
Avestruz’s conduct had been willful, or
characterized by a wrongful and perverse
attitude. The Court concurs with the CA’s
observation that Avestruz’s statement regarding
the incident in the galley deserves more
credence, being corroborated by Kong, a
messman who witnessed the same. Apart from
Captain Woodward’s e-mails, no other evidence
was presented by the petitioners to support
their claims. While rules of evidence are not
strictly observed in proceedings before
administrative bodies, petitioners should have
offered additional proof to corroborate the
statements described therein.
It was incumbent upon the petitioners
to present other substantial evidence to bolster
their claim that Avestruz committed acts that
constitute insubordination as would warrant his
dismissal. At the least, they could have offered
in evidence entries in the ship’s official logbook
showing the infractions or acts of
insubordination purportedly committed by
Avestruz, the ship’s logbook being the official
repository of the day-to-day transactions and
occurrences on board the vessel. Having failed
to do so, their position that Avestruz was
lawfully dismissed cannot be sustained.
The Supreme Court also affirmed the
finding of the CA that Avestruz was not accorded
procedural due process, there being no
compliance with the provisions of Section 17 of
the POEA-SEC which requires the “two-notice
rule.”
G.R. No. 196357 April 20, 2015
The Heirs of the late Delfin Dela Cruz vs.
Philippine Transmarine Carriers
FACTS:
The late Delfin Dela Cruz was contracted by
Philippine Transmarine carriers for the position
of Oiler. He left the Philippines and embarked on
August 17, 2000. While performing regular
duties,, he was hit by a metal on his back. He
requested medical attention and was advised to
be given light duties. Upon the vessel’s arrival at
a convenient port on August 16, 2001, his
contract expired and was signed off from the
vessel. He also sought medical assistance but
was not extended such. Afterwards, he was not
employed because he was already incapacitated
to engage in his customary work. On November
13, 2003, he went to De Los Santos Medical
Center and underwent X-Ray and MRI of the
Spine. He filed his claim for sickness allowance
but was not granted. His condition deteriorated
and thereafter, he was admitted at St. Luke’s
Medical Center where he was diagnosed of
MPNST, a malignant peripheral nerve sheath
tumor.
On December 4, 2003, he filed a complaint
before the NLRC, claiming a payment for
sickness allowance and disability compensation
in which it was moved to dismiss by the
Philippine Transmarine carriers on the ground of
prescription, the claim having filed beyond one
year from the date of the termination of the
contract. On May 6, 2005 Delfin passed away.
ISSUES:
Whether the heirs of the late Delfin Dela Cruz
are entitled to permanent disability benefits and
sickness allowance.
HELD:
The 1996 POEA SEC concerning disability claims
and sickness allowance applies to the case
where it states on Section 20 (3) that upon sign
off for the purpose for medical treatment, the
seafarer shall submit himself to a post-
employment medical examination within three
working days upon his return except when he is
physically incapacitated to do so, in which case,
a written notice to the agency within the same
period is deemed as compliance. Furthermore,
failure to do such mandatory reporting
requirements shall result in his forfeiture of the
right to claim the benefits. Unfortunately, the
petitioners failed to show the steps supposedly
undertaken by Delfin to comply with the
mandatory reporting requirement. To the
Court’s mind, this lapse on petitioners’ part only
demonstrates that Delfin did not comply with
what was incumbent upon him. The reasonable
conclusion is that at the time of his repatriation,
Delfin was not suffering from any physical
disability requiring immediate medical
attendance.
Wherefore, the Petition is hereby
DENIED.
Marcopper Mining Corporation vs National Labor
Relations commission and National Mines and
Allied Workers’ Union G.R. No. 103525 March
29, 1996
Facts: Marcopper mining corporation entered
into a Collective Bargaining Agreement with the
National Mines and Allied Workers Union
effective from May 1, 1984 until April 1987.
Before the expiration of the CBA, they executed
a memorandum of agreement modifying the
CBA by adding wage increase 5% of the basic
rate, to be effective May 1, 1987. On June 1,
1987 Executive Order no. 178 was promulgated
and it mandated the integration of the cost of
living allowance into the basic wage of the
workers, its effectivity retroacts to May 1, 1987.
Petitioner implemented it by increasing first by
5% the basic rate base on the CBA and then
integrating the cost of living allowance to the
basic wage, the respondents assailed such
manner of increase and argued that cost of
living allowance should first be integrated before
the 5% increase of the CBA is computed.
Issue: Whether or not E.O. No. 178 should take
effect before computing the CBA increase?
Ruling: The Supreme Court ruled, “We rule for
the respondents..
The principle that the CBA is the law between
the contracting parties stands strong and true.
However, the present controversy involves not
merely an interpretation of CBA provisions.
More importantly, it requires a determination of
the effect of an executive order on the terms
and the conditions of the CBA. This is, and
should be, the focus of the instant case. It is
unnecessary to delve too much on the intention
of the parties as to what they allegedly meant by
the term "basic wage" at the time the CBA and
MOA were executed because there is no
question that as of 1 May 1987, as mandated by
E.O. No. 178, the basic wage of workers, or the
statutory minimum wage, was increased with
the integration of the COLA. As of said date,
then, the term "basic wage" includes the COLA.
This is what the law ordains and to which the
collective bargaining agreement of the parties
must conform.
Petitioner's arguments eventually lose steam in
the light of the fact that compliance with the law
is mandatory and beyond contractual stipulation
by and between the parties; consequently,
whether or not petitioner intended the basic
wage to include the COLA becomes immaterial.
There is evidently nothing to construe and
interpret because the law is clear and
unambiguous. Unfortunately for petitioner, said
law, by some uncanny coincidence, retroactively
took effect on the same date the CBA increase
became effective. Therefore, there cannot be
any doubt that the computation of the CBA
increase on the basis of the "integrated" wage
does not constitute a violation of the CBA.
Finally, petitioner misinterprets the declaration
of the Labor Arbiter in the assailed decision that
"when the pendulum of judgment swings to and
fro and the forces are equal on both sides, the
same must be stilled in favor of labor." While
petitioner acknowledges that all doubts in the
interpretation of the Labor Code shall be
resolved in favor of labor, it insists that what is
involved here is the amended CBA which is
essentially a contract between private persons.
What petitioner has lost sight of is the avowed
policy of the State, enshrined in our
Constitution, to accord utmost protection and
justice to labor, a policy, we are, likewise, sworn
to uphold.”
Philippine Airlines, Inc. (PAL) vs. National Labor
Relations Commision, Labor Arbiter Isabel P.
Ortiguerra, and Philippine Airlines Employees
Association (PALEA), G.R. No. 85985 (August 13,
1993)
Facts: In 1985, Philippine Airlines, Inc. (PAL)
completely revised its 1966 Code of Discipline
which was circulated among the employees and
was immediately implemented. In effect, some
employees were subjected to the disciplinary
measures embodied therein. On August, the
same year, the Philippine Airlines Employees
Association (PALEA) filed a complaint before the
National Labor Relations Commission (NLRC) for
unfair labor practice, alleging that PAL violated
paragraphs E and G of Article 249 and Article
253 of the Labor Code, because the
implementation of the Code of Discipline was
unilaterally implemented without notice and
prior discussion with the Union. Also, some
provisions of the Code run counter to the
construction of penal laws and making
punishable any offense within PAL’s
contemplation. Lastly, PALEA alleged that copies
of the Code had been circulated in limited
numbers.
PAL, on the other had asserts its prerogative as
an employer to prescribe rules and regulations
regarding employees’ conduct in carrying out
their duties and functions, and alleging that by
implementing the Code, it had not violated the
collective bargaining agreement or any provision
of the Labor Code. PAL maintained that Article
253 cited by PALEA referred to the requirement
for negotiating a CBA which was inapplicable in
this case.
The Labor Arbiter Isabel Ortiguerra found that
there was no bad faith on the part of PAL in
adopting the Code and ruled that there was no
unfair labor practice. However, PAL was not
totally fault free. Management prerogative must
meet reasonableness, propriety and fairness.
Also, PAL failed to prove that the new Code was
amply circulated. Thus, PAL was ordered to
furnish all employees with the new Code, to
reconsider the cases of employees meted with
penalties under the new Code and discuss with
PALEA the objected provisions. NLRC affirms.

Issue/s: Whether the formulation of a Code of

Discipline among employees is a shared
responsibility of the employer and the
employees.

Ruling:The petition is DISMISSED and the

questioned decision AFFIRMED.

The exercise by management of its prerogative

shall be done in a just, reasonable, humane
and/or lawful manner.

Petitioner's assertion that it needed the

implementation of a new Code of Discipline
considering the nature of its business cannot be
overemphasized. Nonetheless, whatever
disciplinary measures are adopted cannot be
properly implemented in the absence of full
cooperation of the employees. Such cooperation
cannot be attained if the employees are restive
on account of their being left out in the
determination of cardinal and fundamental
matters affecting their employment.