`[G.R. NO.

172101 : November 23, 2007]

REPUBLIC OF THE PHILIPPINES, represented by the

SOCIAL SECURITY COMMISSION and SOCIAL SECURITY
SYSTEM , Petitioners, v. ASIAPRO
COOPERATIVE, Respondent.

COOPERATVE – must comply with the requirements for an

independent contractor otherwise, LOC (NORKIS Trading Corp v
Buenavista GR No. 182018, 10 October 2012) Dole Philippines, Inc.
v. Esteva, 538 SCRA 817 (2006)

Finally, contrary to the insinuations of Norkis Trading, the fact that

PASAKA was a duly-registered cooperative did not preclude the
possibility that it was engaged in labor-only contracting, as confirmed
by the findings of the Regional Director. An entity is characterized as a
labor-only contractor based on the elements and guidelines
established by law and jurisprudence, judging primarily on the
relationship that the said entity has with the company to which the
workers are deployed, and not on any special arrangement that the
entity has with said workers.

Dole Philippines, Inc. v. Esteva,57; 538 Phil. 817 (2006)

This Court cannot sustain petitioner’s argument.

It is true that CAMPCO is a cooperative composed of its members, including respondents.

Nonetheless, it cannot be denied that a cooperative, as soon as it is registered with the CDA,
attains a juridical personality of its own,32separate and distinct from its members; much in the
same way that a corporation has a juridical personality separate and distinct from its
stockholders, known as the doctrine of corporate fiction. The protection afforded by this
doctrine is not absolute, but the exception thereto which necessitates the piercing of the
corporate veil can only be made under specified circumstances. In Traders Royal Bank v.
Court of Appeals,33 this Court ruled that

Petitioner cannot put up the excuse of piercing the veil of corporate entity, as this is merely an
equitable remedy, and maybe awarded only in cases when the corporate fiction is used to
defeat public convenience, justify wrong, protect fraud or defend crime or where a corporation
is a mere alter ego or business conduit of a person.

Piercing the veil of corporate entity requires the court to see through the protective shroud
which exempts its stockholders from liabilities that ordinarily, they could be subject to, or
distinguishes one corporation from a seemingly separate one, were it not for the existing
corporate fiction. But to do this, the court must be sure that the corporate fiction was misused,
to such an extent that injustice, fraud, or crime was committed upon another, disregarding,
thus, his, her, or its rights. It is the corporate entity which the law aims to protect by this
1
Page

doctrine.
Using the above-mentioned guidelines, is petitioner entitled to a piercing of the "cooperative
identity" of CAMPCO? This Court thinks not.

It bears to emphasize that the piercing of the corporate veil is an equitable remedy, and among
the maxims of equity are: (1) he who seeks equity must do equity, and (2) he who comes into
equity must come with CLEAN hands. Hence, a litigant may be denied relief by a court of
equity on the ground that his conduct has been inequitable, unfair, dishonest, fraudulent, or
deceitful as to the controversy in issue.34

Petitioner does not come before this Court with CLEAN hands. It is not an innocent party in
this controversy.

Petitioner itself admitted that it encouraged and even helped the establishment of CAMPCO
and the other cooperatives in Polomolok, South Cotabato. These cooperatives were
established precisely to render services to petitioner. It is highly implausible that the petitioner
was lured into entering into the Service Contract with CAMPCO in 1993 on the latter’s
misrepresentation and false warranty that it was an independent JOB contractor. Even if it is
conceded that petitioner was indeed defrauded into believing that CAMPCO was an
independent contractor, then the DOLE proceedings should have placed it on guard.
Remember that petitioner participated in the proceedings before the DOLE Regional Office, it
cannot now claim ignorance thereof. Furthermore, even after the issuance
of the cease and desist order on CAMPCO, petitioner still
continued with its prohibited service arrangement with the
said cooperative. If petitioner was truly defrauded by CAMPCO and its members into
believing that the cooperative was an independent job contractor, the more logical recourse of
petitioner was to have the Service Contract voided in the light of the explicit findings of the
DOLE officials that CAMPCO was engaging in labor-only contracting. Instead, petitioner still
carried on its Service Contract with CAMPCO for several more years thereafter.

As previously discussed, the finding of the duly authorized representatives of the DOLE
Secretary that CAMPCO was a labor-only contractor is already conclusive. This Court cannot
deviate from said finding.

This Court, though, still notes that even an independent review of the evidence on record, in
consideration of the proper labor statutes and regulations, would result in the same conclusion:
that CAMPCO was engaged in prohibited activities of labor-only
contracting.
The existence of an independent and permissible contractor relationship is generally
established by the following criteria: whether or not the contractor is carrying on an
independent business; the nature and extent of the work; the skill required; the term and
duration of the relationship; the right to assign the performance of a specified piece of work;
the control and supervision of the work to another; the EMPLOYER'S power with respect to
the hiring, firing and payment of the contractor's workers; the control of the premises; the duty
to supply the premises tools, appliances, materials and labor; and the mode, manner and
terms of payment.35

While there is present in the relationship of petitioner and

CAMPCO some factors suggestive of an independent
contractor relationship (i.e., CAMPCO chose who among its members should be
sent to work for petitioner; petitioner paid CAMPCO the wages of the members, plus a
percentage thereof as administrative charge; CAMPCO paid the wages of the members who
many other factors are present which
rendered service to petitioner),
would indicate a labor-only contracting arrangement between
2

petitioner and CAMPCO.

Page

36
First, although petitioner touts the multi-million pesos assets of CAMPCO, it does well
to remember that such were amassed in the years following its establishment. In 1993,
when CAMPCO was established and the Service Contract between petitioner and
CAMPCO was entered into, CAMPCO only had P6,600.00 paid-
up capital, which could hardly be considered
substantial. It only managed
37 to increase its capitalization and assets in the
succeeding years by continually and defiantly engaging in what had been declared by
authorized DOLE officials as labor-only contracting.

CAMPCO did not carry out an independent

Second,
business from petitioner. It was precisely established to render services
to petitioner to augment its workforce during peak seasons. Petitioner was its only
client. Even as CAMPCO had its own office and office equipment, these were mainly
the tools, machineries, and
used for administrative purposes;
equipment actually used by CAMPCO members when
rendering services to the petitioner belonged to the latter.

Third, petitioner exercised control over the CAMPCO

members, including respondents. Petitioner attempts to refute control by alleging
the presence of a CAMPCO supervisor in the work premises. Yet, the mere presence
within the premises of a supervisor from the cooperative did not necessarily mean that
CAMPCO had control over its members. Section 8(1), Rule VIII, Book III of the
implementing rules of the Labor Code, as amended, required for permissible job
contracting that the contractor undertakes the contract work on his account, under his
own responsibility, according to his own manner and method, free from the control and
direction of his employer or principal in all matters connected with the performance of
the work except as to the results thereof. As alleged by the respondents, and
unrebutted by petitioner, CAMPCO members, before working for the petitioner, had to
undergo instructions and pass the training provided by petitioner’s personnel. It
was
petitioner who determined and prepared the work
assignments of the CAMPCO members. CAMPCO
members worked within petitioner’s plantation and
processing plants alongside regular EMPLOYEES
PERFORMING identical jobs, a circumstance
recognized as an indicium of a labor-only
contractorship.38

Fourth, CAMPCO was not engaged to perform a specific

and special job or service. In the Service Contract of 1993, CAMPCO
agreed to assist petitioner in its daily operations, and perform odd jobs as may be
assigned. CAMPCO complied with this venture by assigning members to petitioner.
Apart from that, no other particular job, work or service was required from CAMPCO,
and it is apparent, with such an arrangement, that CAMPCO
merely acted
as a RECRUITMENT AGENCY for petitioner. Since the
undertaking of CAMPCO did not involve the performance
of a specific job, but rather the supply of manpower only,
CAMPCO clearly conducted itself as a labor-only
contractor.39
3
Page
 CAMPCO members, including respondents,
Lastly,
performed activities directly related to the principal
business of petitioner. They worked as can processing attendant, feeder of
canned pineapple and pineapple processing, nata de coco processing attendant, fruit
cocktail processing attendant, and etc., functions
which were, not only
directly related, but were very vital to petitioner’s
business of production and processing of pineapple
products for export.
The findings enumerated in the preceding paragraphs only support what DOLE Regional
Director Parel and DOLE Undersecretary Trajano had long before conclusively established,
that CAMPCO was a mere labor-only contractor.

VI

The declaration that CAMPCO is indeed engaged in the

prohibited activities of labor-only contracting, then
consequently, an employer-employee relationship is deemed
to exist between petitioner and respondents, since CAMPCO
shall be considered as a mere agent or intermediary of
petitioner.
Since respondents are now recognized as employees of petitioner, this Court is tasked to
In consideration of all the
determine the nature of their EMPLOYMENT .
attendant circumstances in this case, this Court concludes
that respondents are regular employees of petitioner.

Article 280 of the Labor Code, as amended, reads –

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 and 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 engagement of
the employee or where the work or
4

services to be performed is seasonal in

Page
 nature and the employment is for the
duration of the season.

An employment shall be deemed to be

casual if its 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 activity exists.
This Court expounded on the afore-quoted provision, thus –

The primary standard, therefore, of determining a regular employment is the reasonable

connection between the particular activity performed by the employee in relation to the usual
business or trade of the employer. The test is whether the former is usually necessary or
desirable in the usual business or trade of the employer. The connection can be determined
by considering the nature of the work performed and its relation to the scheme of the particular
business or trade in its entirety. Also, if the employee has been performing the job for at least
one year, even if her performance is not continuous or merely intermittent, the law deems the
repeated and continuing need for its performance as sufficient evidence of the necessity if not
indispensability of the activity to the business. Hence, the employment is also considered
regular, but only with respect to such activity and while such activity exists.40

In the instant Petition, petitioner is engaged in the manufacture and production of pineapple
products for export. Respondents rendered services as processing attendant, feeder of
1âwphi 1

canned pineapple and pineapple processing, nata de coco processing attendant, fruit cocktail
functions they performed alongside
processing attendant, and etc.,
regular employees of the petitioner. There is no doubt that the
activities performed by respondents are necessary or
desirable to the usual business of petitioner.
Petitioner likewise want this Court to believe that respondents’ EMPLOYMENT was
dependent on the peaks in operation, work backlogs, absenteeism, and excessive leaves.
However, bearing in mind that respondents all claimed to have worked for petitioner for over
respondent’s continued
a year, a claim which petitioner failed to rebut, then
employment clearly demonstrates the continuing necessity
and indispensability of respondents’ employment to the
business of petitioner.
Neither can this Court apply herein the ruling of the NLRC in the previous case involving
petitioner and the individual workers they used to hire before the advent of the cooperatives,
to the effect that the employment of these individual workers were not regular, but rather, were
valid "term employments," wherein the EMPLOYER and employee knowingly and voluntarily
agreed to employment for only a limited or specified period of time. The difference between
that case and the one presently before this Court is that the members of CAMPCO, including
respondents, were not informed, at the time of their engagement, that their employment shall
only be for a limited or specified period of time. There is absence of proof that the respondents
were aware and had knowingly and voluntarily agreed to such term employment. Petitioner
5
Page

did not enter into individual contracts with the CAMPCO members, but executed a Service
Contract with CAMPCO alone. Although the Service Contract of 1993 stated that it shall be for
a specific period, from 1 July to 31 December 1993, petitioner and CAMPCO continued the
service arrangement beyond 1993. Since there was no written renewal of the Service
Contract,41 there was no further indication that the engagement by petitioner of the services of
CAMPCO members was for another definite or specified period only.

Respondents, as regular employees of petitioner, are entitled to security of tenure. They could
only be removed based on just and authorized causes as provided for in the Labor Code, as
amended, and after they are accorded procedural due process. Therefore, petitioner’s acts of
placing some of the respondents on "stay home status" and not giving them work assignments
for more than six months were already tantamount to constructive and illegal dismissal.42

In summary, this Court finds that CAMPCO was a labor-only

contractor and, thus, petitioner is the real EMPLOYER of the
respondents, with CAMPCO acting only as the agent or
intermediary of petitioner. Due to the nature of their work and
length of their service, respondents should be considered as
regular employees of petitioner. Petitioner constructively
dismissed a number of the respondents by placing them on
"stay home status" for over six months, and was therefore
guilty of illegal dismissal. Petitioner must accord respondents
the status of regular employees, and reinstate the
respondents who it constructively and illegally dismissed, to
their previous positions, without loss of seniority rights and
other benefits, and pay these respondents’ backwages from
the date of filing of the Complaint with the NLRC on 19
December 1996 up to actual reinstatement.
WHEREFORE, in view of the foregoing, the instant Petition is DENIED and the Amended
Decision, dated 27 November 2003, rendered by the Court of Appeals in CA-G.R. SP No.
63405 is AFFIRMED.

Costs against the petitioner.

SO ORDERED.

MINITA V. CHICO-NAZARIO

Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the
conclusions in the above Decision were reached in consultation before the case was
assigned to the writer of the opinion of the Court’s Division.

ARTEMIO V. PANGANIBAN
Chief Justice

Footnotes

1Penned by Associate Justice Perlita J. Tria-Tirona, with Associate Justices

Buenaventura J. Guerrero and Rodrigo V. Cosico, concurring; rollo, pp. 87-99.

2 Id. at 101-115.
6

3 NLRC Records, Vol. 1, p. 159.

Page
4 Id. at 64.

5 Rollo, p. 227.

6 Id. at 273-274.

7 NLRC Records, Vol. 1, pp. 352, 357-358.

8 Id. at 358-359.

9 Id. at 352-354, 358-361.

10 Id. at 352-355.

11 Id. at 356-367.

12 NLRC Records, Vol. 1, pp. 29-30.

Docketed as Case No. RAB-XI-12-50364-96, entitled Medel Esteva v. Dole

13

Philippines, Inc., Id. at 1-5.

14 Id. at 64-66.

15 Id. at 349-350.

16 Id. at 159-198.

17Docketed as Case No. RAB-11-04-50147-91, entitled Pawis ng Makabayang

Obrero-National Federation of Labor (PAMAO-NFL), for and in behalf of the
dismissed members/workers within the bargaining unit v. Dole Philippines, Inc., and
Thomas W. Oliver.

18 Penned by Labor Arbiter Amado M. Solamo, NLRC Records, Vol. 1, pp. 211-236.

Penned by Commissioner Leon G. Gonzaga, Jr., with Presiding Commissioner

19

Mulib M. Buat and Commissioner Oscar N. Abella, concurring; id. at 238-259.

20 Penned by Labor Arbiter Noel Augusto S. Magbanua; id. at 368-382.

Penned by Commissioner Leon G. Gonzaga, Jr., with Presiding Commissioner

21

Salic B. Dumarpa and Commissioner Oscar N. Abella, concurring, NLRC Records,

Vol. 2, pp. 226-230.

22 Supra note 1.

23 Rollo, pp. 110-114.

24 Id. at 33-35.

356 Phil. 811, 816 (1998); See also Philippine National Bank v. Cabansag, G.R.
25

No. 157010, 21 June 2005, 460 SCRA 514, 524.

Noted in Footnote 17 of the case St. Martin Funeral Home v. National Labor
26

Relations Commission, supra.

27 331 Phil. 278, 287-288 (1996).

28 G.R. No. 147427, 7 February 2005, 450 SCRA 535, 548-549.

7
Page
 29Dueñas v. Santos Subdivision Homeowners Association, G.R. No. 149417, 4 June
2004, 431 SCRA 76;Republic of the Philippines v. Sandiganbayan, 355 Phil. 181
(1998); Co v. Court of Appeals, G.R. No. 100776, 28 October 1993, 227 SCRA 444.

30Commissioner of Internal Revenue v. Court of Appeals, 329 Phil. 987, 1018-1019

(1996).

31Hon. Fortich v. Hon. Corona, 352 Phil. 460 (1998); Ipekdjian Merchandising Co.,
Inc. v. Court of Tax Appeals, 118 Phil. 915 (1963); Brillantes v. Castro, 99 Phil. 497
(1956).

32Section 4(7) of Republic Act No. 6938, otherwise known as the Cooperative Code
of the Philippines.

33 336 Phil. 15, 28 (1997).

34 Pilapil v. Hon. Garchitorena, 359 Phil. 674 (1998).

35"Brotherhood" Labor Unity Movement of the Philippines v. Zamora, G.R. No. L-

48645, 7 January 1987, 147 SCRA 49.

36Broadway Motors, Inc. v. National Labor Relations Commission, G.R. No. L-78382,
14 December 1987, 156 SCRA 522.

37This Court did not even consider as substantial P75,000.00 paid-in capital (Vinoya
v. National Labor Relations Commission, 381 Phil. 460, 475-476 [2000])
and P62,500.00 paid-in capital (Manila Water Company, Inc. v. Pena, G.R. No.
158255, 8 July 2004, 434 SCRA 53).

38San Miguel Corporation v. Aballa, G.R. No. 149011, 28 June 2005, 461 SCRA 392,
425.

1. 39 Vinoya v. National Labor Relations Commission, supra note 36.

40
De Leon v. National Labor Relations Commission, G.R. No. 70705, 21 August
1989, 176 SCRA 615, 621.

41In 1997, petitioner and CAMPCO renewed their Service Contract. It should be
noted, however, that by the time this second agreement was executed, DOLE
Department Order No. 10, series of 1997, was already in force.

42Pulp and Paper, Inc. v. National Labor Relations Commission, 344 Phil. 821, 833
(1997).

The Lawphil Project - Arellano Law Foundation

LABORLUR 2007
>GR162468 – Loss Of Confidence not found

What cannot escape the Court’s attention is the circumstance that Garay was
initially investigated as one of the primary suspects for the loss of the
P47,299.34. When it became clear that she was not liable for it, the petitioners
changed their charge and accused her of exhibiting a belligerent and hostile
attitude during the investigation. The records, however, reveal that Garay
8

cooperated in the investigation process. In fact, no less than the petitioners

Page

admitted that Garay voluntarily complied with the written notices requiring
her to file her written explanation and to appear at the hearings.1[13] She may
have shown her exasperation through her written explanation and her lawyer’s
demand letter but we do not find this sufficient for the petitioners to lose their
trust and confidence in her. The sudden shift made by the petitioners on the
ground for terminating Garay only reinforces the Court’s conviction that there
was no basis in the first place to hold Garay suspect of any infraction. She
could not in any credible way be connected with the loss of an envelope with
cash left in the comfort room by the cashier.

>GR146667 – PIERCING THE VEIL

McLeod could have presented evidence to support his allegation of

employer-employee relationship between him and any of Filsyn, SRTI, and
FETMI, but he did not. Appointment letters or employment contracts,
payrolls, organization charts, SSS registration, personnel list, as well as
testimony of co-employees, may serve as evidence of employee status.2[33]

It is a basic rule in evidence that parties must prove their

affirmative allegations. While technical rules are not strictly followed
in the NLRC, this does not mean that the rules on proving allegations are
entirely ignored. Bare allegations are not enough. They must be supported
by substantial evidence at the very least.3[34]

However, McLeod claims that “for purposes of determining employer

liability, all private respondents are one and the same employer” because: (1)
they have the same address; (2) they are all engaged in the same business; and
(3) they have interlocking directors and officers.4[35]

This assertion is untenable.

9
Page
 A corporation is an artificial being invested by law with a personality
separate and distinct from that of its stockholders and from that of other
corporations to which it may be connected.5[36]

While a corporation may exist for any lawful purpose, the law will
regard it as an association of persons or, in case of two corporations, merge
them into one, when its corporate legal entity is used as a cloak for fraud or
illegality. This is the doctrine of piercing the veil of corporate fiction. The
doctrine applies only when such corporate fiction is used to defeat public
convenience, justify wrong, protect fraud, or defend crime,6[37] or when it is
made as a shield to confuse the legitimate issues, or where a corporation is the
mere alter ego or business conduit of a person, or where the corporation is so
organized and controlled and its affairs are so conducted as to make it merely
an instrumentality, agency, conduit or adjunct of another corporation.7[38]

To disregard the separate juridical personality of a corporation, the

wrongdoing must be established clearly and convincingly. It cannot be
presumed.8[39]

Here, we do not find any of the evils sought to be prevented by the

doctrine of piercing the corporate veil.

Respondent corporations may be engaged in the same business as that

of PMI, but this fact alone is not enough reason to pierce the veil of corporate
fiction.9[40]

In Indophil Textile Mill Workers Union v. Calica,10[41] the Court

10
ruled, thus:

Page
 In the case at bar, petitioner seeks to pierce the veil of
corporate entity of Acrylic, alleging that the creation of the
corporation is a devise to evade the application of the CBA
between petitioner Union and private respondent Company.
While we do not discount the possibility of the similarities of the
businesses of private respondent and Acrylic, neither are we
inclined to apply the doctrine invoked by petitioner in granting
the relief sought. The fact that the businesses of private
respondent and Acrylic are related, that some of the
employees of the private respondent are the same persons
manning and providing for auxiliary services to the units of
Acrylic, and that the physical plants, offices and facilities are
situated in the same compound, it is our considered opinion
that these facts are not sufficient to justify the piercing of the
corporate veil of Acrylic.11[42] (Emphasis supplied)

>GR169016 – Capitol Wireless/a case of double employment

FEBRUARY 2007

>GR146881 – RETAINERSHIP AGREEMENT

Considering that there is no employer-employee relationship between the
parties, the termination of the Retainership Agreement, which is in
accordance with the provisions of the Agreement, does not constitute illegal
dismissal of respondent. Consequently, there is no basis for the moral and
exemplary damages granted by the Court of Appeals to respondent due to
his alleged illegal dismissal.
>GR166996 –PAL-Suspension of actions

>GR169812 -- LIABILITY OF CORPORATE OFFICERS

A word on respondent Rosario’s liability. This Court notes that the only
reason why she was impleaded as a respondent in this case was because she
runs the day to day affairs of respondent’s business. Well settled is the rule
that corporate officers and/or agents are not personally liable for money
claims of discharged employees absent any showing, as in Rosario’s case, that
they acted with evident malice and bad faith in terminating their
employment.12[28]
11

>GR152232 - - CASH SHORTAGE

Page
 It is therefore immaterial that petitioner, as he claims, did not
misappropriate the funds. The fact remains that there was an undisputed
shortage in the petty cash fund entrusted to him. At the very least, petitioner
was negligent. Whatever it was, he failed to meet the degree of fidelity
demanded of him. His failure to give a satisfactory explanation for the cash
shortage gave PAL sufficient reason to lose confidence in him. His
accountability for the missing funds was clear. Indeed,

MARCH 2007

It would be most unfair to require an employer to continue

employing as its cashier a person whom it reasonably believes is
no longer capable of giving full and wholehearted
trustworthiness in the stewardship of company funds.13[13]

>GR154591 – 2000 Manila Hotel Strike

>GR162053 -
Ultimately, the issue raised by the parties boils down to whether petitioner
Santos was illegally dismissed by private respondent SLMC on the basis of
her inability to secure a certificate of registration from the Board of
Radiologic Technology. - DISMISSAL VALID

>GR167714 – ROWELL INDUSTRIAL CORP. v. TARIPE/7 March 2007

********A CASE OF REGULAR EMPLOYMENT*******
The aforesaid Article 280 of the Labor Code, as amended, classifies
employees into three categories, namely: (1) regular employees or those
whose work is necessary or desirable to the usual business 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 or where the
work or services to be performed is seasonal in nature and the employment is
for the duration of the season; and (3) casual employees or those who are
neither regular nor project employees.14[13]
12

Regular employees are further classified into: (1) regular employees by

Page

nature of work; and (2) regular employees by years of service.15[14] The

former refers to those employees who perform a particular activity which is
necessary or desirable in the usual business or trade of the employer,
regardless of their length of service; while the latter refers to those employees
who have been performing the job, regardless of the nature thereof, for at least
a year.16[15] Pangilinan vs. General Milling Corporation, supra note 13 at 169-170.

The aforesaid Article 280 of the Labor Code, as amended, however,

does not proscribe or prohibit an employment contract with a fixed period. It
does not necessarily follow that where the duties of the employee consist of
activities usually necessary or desirable in the usual business of the employer,
the parties are forbidden from agreeing on a period of time for the
performance of such activities. There is nothing essentially contradictory
between a definite period of employment and the nature of the employee’s
duties.17[16] What Article 280 of the Labor Code, as amended, seeks to
prevent is the practice of some unscrupulous and covetous employers who
wish to circumvent the law that protects lowly workers from capricious
dismissal from their employment. The aforesaid provision, however, should
not be interpreted in such a way as to deprive employers of the right and
prerogative to choose their own workers if they have sufficient basis to refuse
an employee a regular status. Management has rights which should also be
protected.18[17] Pantranco North Express, Inc. vs. NLRC, G.R. No. 106654, 16 December 1994,
239 SCRA 272, 279.

In the case at bar, respondent Taripe signed a contract of employment

prior to his admission into the petitioner’s company. Said contract of
employment provides, among other things: 5 MONTH CONTRACT

“4. That my employment shall be contractual for the

period of five (5) months which means that the end of the said
period, I can (sic) discharged unless this contract is renewed by
mutual consent or terminated for cause.” 19[18]
13
Based on the said contract, respondent Taripe’s employment with the
petitioner is good only for a period of five months unless the said contract is
Page
renewed by mutual consent. And as claimed by petitioner RIC, respondent
Taripe, along with its other contractual employees, was hired only to meet the
increase in demand for packaging materials during the Christmas season and
also to build up stock levels during the early part of the year.

Although Article 280 of the Labor Code, as amended, does not forbid
fixed term employment, it must, nevertheless, meet any of the following
guidelines in order that it cannot be said to circumvent security of tenure: (1)
that the fixed period of employment was knowingly and voluntarily agreed
upon by the parties, without any force, duress or improper pressure being
brought to bear upon the employee and absent any other circumstances
vitiating his consent; or (2) it satisfactorily appears that the employer and
employee dealt with each other on more or less equal terms with no moral
dominance whatever being exercised by the former on the latter.20[19]

In the present case, it cannot be denied that the employment contract

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

Likewise, as the NLRC mentioned in its Resolution, to which the Court

of Appeals agreed, other than the bare allegations of petitioner RIC that
respondent Taripe was hired only because of the increase in the demand for
packaging materials during the Christmas season, petitioner RIC failed to
substantiate such claim with any other evidence. Petitioner RIC did not
present any evidence which might prove that respondent Taripe was employed
for a fixed or specific project or that his services were seasonal in nature.

Also, petitioner RIC failed to controvert the claim of respondent Taripe

that he was made to sign the contract of employment, prepared by petitioner
RIC, as a condition for his hiring. Such contract in which the terms are
prepared by only one party and the other party merely affixes his signature
signifying his adhesion thereto is called contract of adhesion.21[20] Qua
14

Chee Gan vs. Law Union and Rock Insurance Co., Ltd., 98 Phil. 85, 95 (1955).It is an agreement
in which the parties bargaining are not on equal footing, the weaker party’s
Page

participation being reduced to the alternative “to take it or leave it.”22[21] In

the present case, respondent Taripe, in need of a job, was compelled to agree
to the contract, including the five-month period of employment, just so he
could be hired. Hence, it cannot be argued that respondent Taripe signed the
employment contract with a fixed term of five months willingly and with full
knowledge of the impact thereof.

With regard to the second guideline, this Court agrees with the Court
of Appeals that petitioner RIC and respondent Taripe cannot be said to have
dealt with each other on more or less equal terms with no moral dominance
exercised by the former over the latter. As a power press operator, a rank and
file employee, he can hardly be on equal terms with petitioner RIC. As the
Court of Appeals said, “almost always, employees agree to any terms of an
employment contract just to get employed considering that it is difficult to
find work given their ordinary qualifications.”23[22]

Therefore, for failure of petitioner RIC to comply with the necessary

guidelines for a valid fixed term employment contract, it can be safely stated
that the aforesaid contract signed by respondent Taripe for a period of five
months was a mere subterfuge to deny to the latter a regular status of
employment.

Settled is the rule that the primary standard of determining regular

employment is the reasonable connection between the particular activity
performed by the employee in relation to the casual business or trade of the
employer. The connection can be determined by considering the nature of the
work performed and its relation to the scheme of the particular business or
trade in its entirety.24[23]

Given the foregoing, this Court agrees in the findings of the Court of
Appeals and the NLRC that, indeed, respondent Taripe, as a rectangular power
press machine operator, in charge of manufacturing covers for “four liters
rectangular tin cans,” was holding a position which is necessary and desirable
in the usual business or trade of petitioner RIC, which was the manufacture of
tin cans. Therefore, respondent Taripe was a regular employee of petitioner
RIC by the nature of work he performed in the company.

Respondent Taripe does not fall under the exceptions mentioned in

Article 280 of the Labor Code, as amended, because it was not proven by
15

petitioner RIC that he was employed only for a specific project or undertaking
or his employment was merely seasonal. Similarly, the position and function
Page

of power press operator cannot be said to be merely seasonal. Such position

cannot be considered as only needed for a specific project or undertaking
because of the very nature of the business of petitioner RIC. Indeed,
respondent Taripe is a regular employee of petitioner RIC and as such, he
cannot be dismissed from his employment unless there is just or authorized
cause for his dismissal.

Well-established is the rule that regular employees enjoy security of

tenure and they can only be dismissed for just cause and with due process,
notice and hearing.25[24] And in case of employees’ dismissal, the burden is
on the employer to prove that the dismissal was legal. Thus, respondent
Taripe’s summary dismissal, not being based on any of the just or authorized
causes enumerated under Articles 282,26[25] 283,27[26] and 28428[27] of
the Labor Code, as amended, is illegal.

Before concluding, we once more underscore the settled precept that

factual findings of the NLRC, having deemed to acquire expertise in matters
within its jurisdiction, are generally accorded not only respect but finality
especially when such factual findings are affirmed by the Court of
Appeals;29[28] hence, such factual findings are binding on this Court.

>GR169494 –CABALEN MGT CO. INC. vs. Quiambao, et al/

14 March 2007

APRIL 2007

>GR167953 – Hardly a case of abandonment

>GR158499 – Not a case of abandonment
>GR169353 – PNOC-ENERGY DEVELOPNENT CORP vs. NLRC; 16
Page
 13 April 2007 ******Regular not project employees*******
Thus, the applicable formula to ascertain whether an employment
should be considered regular or non-regular is the reasonable connection
between the particular activity performed by the employee in relation to the
usual business or trade of the employer.30[9] As we held in Grandspan
Development Corporation v. Bernardo:31[10] G.R. No. 141464, September 21, 2005,
470 SCRA 461.

“The principal test for determining whether particular

employees are properly characterized as “project employees,” as
distinguished from “regular employees,” is whether or not the
project employees were assigned to carry out a “specific project
or undertaking,” the duration and scope of which were specified
at the time the employees were engaged for that project.32[11]

Unmistakably, the alleged projects stated in the employment contracts

were either too vague or imprecise to be considered as the “specific
undertaking” contemplated by law. Petitioner’s act of repeatedly and
continuously hiring respondents to do the same kind of work belies its
contention that respondents were hired for a specific project or undertaking.
The absence of a definite duration for the project/s has led the Court to
conclude that respondents are, in fact, regular employees.

Another cogent factor which militates against petitioner’s insistence

that the services of respondents were terminated because the projects for
which they were hired had been completed is the fact that respondents’
contracts of employment were extended a number of times for different or
new projects. It must be stressed that a contract that misuses a purported
fixed-term employment to block the acquisition of tenure by employees
deserves to be struck down for being contrary to law, morals, good customs,
public order and public policy.33[34] 17

>GR165594 – A case of valid redundancy program.

Page
>GR170811 – Supreme Steel Pipe/CHALLENGING TO A FIGHT

In this jurisdiction, we have consistently defined misconduct as an

improper or wrong conduct, a transgression of some established and definite
rule of action, a forbidden act, a dereliction of duty, willful in character,
implies wrongful intent and not mere error of judgment.34[19] To be a just
cause for termination under Article 282 of the Labor Code of the
Philippines,35[20] the misconduct must be serious,36[21]
that is, it must be of such grave and aggravated character and
not merely trivial or unimportant.37[22] However serious,
such misconduct must nevertheless be in connection with the
employee’s work;38[23] the act complained of must be
related to the performance of the employee’s duties showing
him to be unfit to continue working for the employer.39[24]
Thus, for misconduct or improper behavior to be a just cause
for dismissal, (a) it must be serious; (b) it must relate to the
performance of the employee’s duties; and, (c) it must show
that the employee has become unfit to continue working for
the employer.40[25]

18
These guideposts were not complied with in the instant

Page
case. Although we have recognized that fighting within
company premises may constitute serious
misconduct,41[26] we have also held that not every fight
within company premises in which an employee is involved
would automatically warrant dismissal from service.42[27]
Thus, in Sanyo Travel Corporation v. National Labor
Relations Commission,43[28] Oania v. National Labor
Relations Commission,44[29] and Foodmine, Inc.
(KentuckFried Chicken) v. National Labor Relations
Commission,45[30] where the employees were dismissed for
their alleged involvement in a fight, it was ruled that the
employer must prove by substantial evidence the accusation
of serious misconduct, and that in failing to discharge the
burden, the employee is deemed to have been illegally
dismissed. TOYOTA CASE/AKINS
Respondent’s actuations during the August 19, 1999 incident were not
entirely baseless. To begin with, it is certain that the verbal tussle between
him and Barrios did not start due to the alleged “violent temper and tendency
to violate company rules and regulations” of respondent; the incident was
primarily due to Barrios’ provoking attitude. Other than the self-serving
allegation of petitioner SSPC that Barrios “politely advised” respondent to
remove his green long-sleeved shirt and to wear the company-issued uniform,
no competent and credible evidence was shown to support the claim. In fact,
even the handwritten statements of the three security guards, including that of

19
Barrios himself, did not dwell on the manner by which petitioner was
instructed. On the other hand, petitioner’s narrations, as corroborated by the
Page
duly notarized affidavit of fellow warehouseman Jury Lobitania,46[31]
revealed how insulting and arrogant Barrios was. This, aside from petitioner’s
feeling that he was being singled out from other warehousemen, who were
similarly-clothed while on duty, sufficiently explained why he challenged
Barrios to a fight.

MAY – none
JUNE 2007 –

>GR162833, LAKAS SA INDUSTRIYA NG KAPATIRANG HALIGI NG

ALYANSA-PINAGBUKLOD NG MANGGAGAWANG PROMO NG
BURLINGAME VS. BURLINGAME CORPORATION;15 JUNE 2007
The resolution of this issue boils down to a determination of the true status
of F. Garil, i.e., whether it is an independent contractor or a labor-only
contractor.

The contract states that Burlingame would pay the workers through F.
Garil, stipulating that Burlingame shall pay F. Garil a certain sum per worker
on the basis of eight-hour work every 15th and 30th of each calendar month.
This evinces the fact that F. Garil merely served as conduit in the payment of
wages to the deployed personnel. The interpretation would have been
different if the payment was for the job, project, or services rendered during
the month and not on a per worker basis. In Vinoya v. National Labor
Relations Commission,47[19] we held:

The Court takes judicial notice of the practice of employers who, in

order to evade the liabilities under the Labor Code, do not issue payslips
directly to their employees. Under the current practice, a third person,
usually the purported contractor (service or manpower placement agency),
assumes the act of paying the wage. For this reason, the lowly worker is
unable to show proof that it was directly paid by the true employer.
Nevertheless, for the workers, it is enough that they actually receive their
pay, oblivious of the need for payslips, unaware of its legal implications.
Applying this principle to the case at bar, even though the wages were
coursed through PMCI, we note that the funds actually came from the
pockets of RFC. Thus, in the end, RFC is still the one who paid the wages
of petitioner albeit indirectly.48[20]

The contract also provides that “any personnel found to be inefficient,

20

troublesome, uncooperative and not observing the rules and regulations set
Page

forth by Burlingame shall be reported to F. Garil and may be replaced upon

request.” Corollary to this circumstance would be the exercise of control and
supervision by Burlingame over workers supplied by F. Garil in order to
establish the inefficient, troublesome, and uncooperative nature of undesirable
personnel. Also implied in the provision on replacement of personnel carried
upon request by Burlingame is the power to fire personnel.

These are indications that F. Garil was not left alone in the supervision
and control of its alleged employees. Consequently, it can be concluded that F.
Garil was not an independent contractor since it did not carry a distinct business
free from the control and supervision of Burlingame.

It goes without saying that the contractual stipulation on the nonexistence

of an employer-employee relationship between Burlingame and the personnel
provided by F. Garil has no legal effect. While the parties may freely stipulate
terms and conditions of a contract, such contractual stipulations should not be
contrary to law, morals, good customs, public order or public policy. A
contractual stipulation to the contrary cannot override factual circumstances
firmly establishing the legal existence of an employer-employee relationship.

Under this circumstance, there is no doubt that F. Garil was engaged in

labor-only contracting, and as such, is considered merely an agent of
Burlingame. In labor-only contracting, the law creates an employer-employee
relationship to prevent a circumvention of labor laws. The contractor is
considered merely an agent of the principal employer and the latter is
responsible to the employees of the labor-only contractor as if such employees
had been directly employed by the principal employer.49[21] Since F. Garil
is a labor-only contractor, the workers it supplied should be considered as
employees of Burlingame in the eyes of the law.

LABORJUR 2008

January 2008
GR 150861 – VALIDITY OF QUITCLAIM

GR 157966 - Pacquing v Coca-Cola -Labor only contracting found

GR 159625 - The first notice must state that the employer seeks dismissal for
21

the act or omission charged against the employee; otherwise, the notice does not
Page

comply with the rules.50[18]

February 2008

GR 172409 -
In the absence of said project employment contracts and
the corresponding Termination Report to DOLE at every project
termination, the inevitable conclusion is that the complainant
was a regular employee of the respondents.

In the case of Maraguinot, Jr. v. NLRC, 284 SCRA 539,

556 [1998], citing capital Industrial Construction Group v.
NLRC, 221 SCRA 469, 473-474 [1993], it was ruled therein that
a project employee may acquire the status of a regular employee
when the following concurs:
(1) there is a continuous rehiring of project employees even after
the cessation of a project; and
(2) the tasks performed by the alleged “project employee” are
vital, necessary and indispensable to the usual business or trade
of the employer.
Both factors are present in the instant case. Thus, even granting
that complainant was hired as a project employee, he eventually
became a regular employee as there was a continuous rehiring of
this services.

xxx

GR 159302 - “Prayer for equitable reliefs”

While it is established that technical rules of procedure may be relaxed in

labor cases, Mañebo v. NLRC51[8] instructs

We wish, however, to stress some points. Firstly, while it is true

that the Rules of the NLRC must be liberally construed and that the NLRC
is not bound by the technicalities of law and procedure, the Labor Arbiters
“It has been ruled in this jurisdiction that the general prayer for
‘other reliefs’ is applicable to such other reliefs which are
warranted by the law and facts alleged by the respondent in her
basic pleadings and not on a newly created issue
x x x Case law has it that a prayer for equitable relief is of no avail,
unless the petition states facts which will authorize the court to grant
such relief. A court cannot set itself in motion, nor has it power to decide
questions except as presented by the parties in their pleadings. Anything
22

that is resolved or decided beyond them is coram non judice and void.
(Emphasis supplied)
Page
GR 159302 –
These performance appraisals, however, did not merely show that
respondent was not able to meet performance targets. More relevantly,
they also consistently noted significant behavioral and attitudinal problems

The CA however reasoned out that for respondent’s absences,

deductions from his salary were made and hence to allow petitioners to use
said absences as ground for dismissal would amount to “double jeopardy.

A scrutiny of the disciplinary process undertaken by petitioners leads

us to conclude that they only paid lip service to the due process requirements.

The undue haste in effecting respondent’s termination shows that

the termination process was a mere simulation—the required notices were
given, a hearing was even scheduled and held, but respondent was not really
given a real opportunity to defend himself; and it seems that petitioners had
already decided to dismiss respondent from service, even before the first
notice had been given.

Anent the written notice of charges and hearing, it is plain to see that
there was merely a general description of the claimed offenses of respondent.
The hearing was immediately set in the afternoon of February 23, 1999—the
day respondent received the first notice. Therefore, he was not given any
opportunity at all to consult a union official or lawyer, and, worse, to prepare
for his defense.

GR170287 Alabang Country Club UNION SECURITY

CLAUSE

In terminating the employment of an employee by enforcing the union

security clause, the employer needs only to determine and prove that: (1)
the union security clause is applicable; (2) the union is requesting for the
enforcement of the union security provision in the CBA; and (3) there is
sufficient evidence to support the union’s decision to expel the employee
23

from the union. These requisites constitute just cause for terminating an
Page

employee based on the CBA’s union security provision.

 GR 154503
Constructive dismissal /LOSS OF CONFIDENC found –
In Caoile v. National Labor Relations Commission,52[62] the Court distinguished
the treatment of managerial employees from that of rank-and-file personnel, insofar
as the application of the loss of trust and confidence is concerned. The Court held:

Thus, with respect to rank-and-file personnel, loss of trust and confidence as ground
for valid dismissal requires proof of involvement in the alleged events in question,
and that mere uncorroborated assertions and accusations by the employer will not be
sufficient.53[63] But, as regards a managerial employee, mere existence of a
basis for believing that such employee has breached the trust of his employer
would suffice for his dismissal. Hence, in the case of managerial employees,
proof beyond reasonable doubt is not required, it being sufficient that there is
some basis for such loss of confidence, such as when the employer has
reasonable ground to believe that the employee concerned is responsible for
the purported misconduct, and the nature of his participation therein renders
him unworthy of trust and confidence demanded by his position.54[64]
(Emphasis supplied).

MARCH 2008
GR161134 - Failure to file MR/Exceptions
GR164403 - Questions of law and facts distinguished /Review of facts by SC (5) when
the findings of fact are conflicting;The doctrine of conclusive finality is not applicable.

GR145492 - Law of the case principle/liability of indirect employer limited to unpaid wages

GR175283 – MORENO V San Sebastian

On the basis of the evidence on record, the Court finds that Moreno has indeed
committed misconduct against respondent SSC-R. Her admitted failure to
obtain the required permission from the school before she engaged in external
teaching engagements is a clear transgression of SSC-R’s policy. However,
24
Page

GR 146408 -
PAL vs Ligan, – LABOR ONLY CONTRACTING found here (
said misconduct falls below the required level of gravity that would warrant
dismissal as a penalty.

GR166703 – REDUNDANCY defined

GR169829 – illegal strike for recognition

GR146121 – ABSENCES/Leniency

Thus, even if he was not punished for his subsequent AWOPs, the same
remained on record. He was aware of the number of AWOPs he incurred and
should have known that these were punishable under company rules. The fact
that he was spared from suspension cannot be used as a reason to incur further
AWOPs and be absolved from the penalty therefor.

The Court of Appeals, NLRC, and the labor arbiter found that
respondent incurred unauthorized absences, but concluded that the penalty
of discharge or determination was disproportionate to respondent’s absences
in view of SMC’s inconsistent and lax implementation of its policy on
employees attendance. The Court disagrees. Respondent’s dismissal was
well within the purview of SMC’s management prerogative.

What the lower tribunals perceived as laxity, we consider as leniency.

SMC’s tendency to excuse justified absences actually redounded to the benefit
of respondent since the imposition of the corresponding penalty would have
been deleterious to him. In a world where “no work-no pay” is the rule of
thumb, several days of suspension would be difficult for an ordinary working
man like respondent. He should be thankful that SMC did not exact from
him almost 70 days suspension before he was finally dismissed from work.

In any case, when SMC imposed the penalty of dismissal for the 12 th
and 13th AWOPs, it was acting well within its rights as an employer. An
employer has the prerogative to prescribe reasonable rules and regulations
necessary for the proper conduct of its business, to provide certain disciplinary
measures in order to implement said rules and to assure that the same would
be complied with.55[35] An employer enjoys a wide latitude of discretion in
the promulgation of policies, rules and regulations on work-related activities
of the employees.56[36]

GR164081 SERIOUS MISCONDUCT/BREACH OF TRUST

25
Page
EXTORTION: Respondents’ acts constitute serious misconduct and willful
breach of trust reposed by the employer, which are just causes for
termination under the Labor Code.57[

G.R. No. 168116

BELLE CORP: Project Employee?/GROSS NEGLIGENCE

In this case, the Labor Arbiter, the NLRC and the Court of Appeals were
unanimous in their factual conclusions that respondent was a regular and not a
project employee. When petitioner employed respondent in September 1997,
there was no indication that he was merely a project employee. Petitioner never
presented respondent’s employment contract for the alleged specific project.
Meanwhile, respondent’s job assignment58[15] did not indicate that he was a
project employee nor that his employment was co-terminous with a specific
project. What petitioner should have done was to present respondent’s
successive employment contracts for the different projects or phases thereof for
which he was employed. Notably, petitioner presented only respondent’s latest
contract of employment for March to July 1999.59[16] Petitioner also failed to
show that it reported to the DOLE respondent’s dismissal after the completion
of each project or any phase thereof, in which he was employed. Since
respondent had provided petitioner with continuous and uninterrupted services
since September 1997, we see his latest contract of employment for March to
July 1999 as a mere subterfuge to prevent him from acquiring regular status
and deriving benefits therefrom.

On the other hand, the Labor Arbiter, the NLRC and the Court of
Appeals were unanimous in their findings that respondent was illegally
dismissed on the ground of gross negligence.

Under Article 282 (b) of the Labor Code, negligence must be both gross
and habitual to justify the dismissal of an employee. As borne out by the
records, there was lack of substantial evidence to prove that respondent was
grossly negligent. Petitioner failed to submit evidence to disprove
respondent’s allegation that the equipment was replaced in April 1999 since
it was already old and not functioning properly. Neither did it show that the
26

equipment was operated solely by respondent so as to attribute the

equipment’s failure to him. Thus, the mechanical failure could have been
Page
brought about by factors such as ordinary wear and tear and use by other
grader operators. Furthermore, there was no evidence that respondent
operated the equipment without even the slightest care. While respondent
heard a loud cracking sound, there was doubt when he heard the succeeding
cracking sounds. These may have come immediately after the first such that
there was not enough time to stop the equipment immediately. In any event,
respondent stopped the equipment after the succeeding sounds.

AL KHUSIN NOTE: Petition raised questions of fact

THE COURT OF APPEALS DECIDED THE CASE IN A WAY NOT IN
ACCORD WITH LAW AND APPLICABLE DECISIONS OF THE
SUPREME COURT BY NOT HOLDING THAT

A. RESPONDENT WAS A PROJECT EMPLOYEE,

CONSIDERING THAT

1. RESPONDENTS WRITTEN CONTRACT FOR

PROJECT EMPLOYMENT WAS NEVER
DISPUTED;
2. RESPONDENT PRAYED FOR UNPAID WAGES
FOR THE PERIOD BEGINNING 01 JULY 1999
(TIME OF HIS DISMISSAL) UNTIL 16 JULY 1999
(LAST DAY OF PROJECT EMPLOYMENT) ONLY;
3. NON-COMPLIANCE WITH DEPARTMENT ORDER
NO. 19 DOES NOT PROVIDE CONCLUSIVE
EVIDENCE OF REGULAR EMPLOYMENT; AND
4. EMPLOYMENT FOR SUCCESSIVE PERIODS
DOES NOT PROVIDE CONCLUSIVE EVIDENCE
OF REGULAR EMPLOYMENT.

B. RESPONDENT WAS LEGALLY DISMISSED,

CONSIDERING THAT
1. RESPONDENTS GROSS NEGLIGENCE WAS
SUFFICIENTLY ESTABLISHED BY
SUBSTANTIAL EVIDENCE;
2. RESPONDENTS ACTS CONSTITUTE GROSS
NEGLIGENCE UNDER PREVAILING LAW AND
JURISPRUDENCE; AND
3. THE BASIS FOR THE COURT OF APPEALS
FINDING WAS ARBITRARY AND BASED ON
MERE ASSUMPTION AND CONJECTURE,
WITHOUT ANY EVIDENCE TO SUPPORT THE
SAME.

C. RESPONDENT WAS ENTITLED TO SEPARATION PAY

AND FULL BACKWAGES, CONSIDERING THAT
1. RESPONDENT DID NOT PRAY FOR SEPARATION
PAY, REINSTATEMENT NOR FULL BACKWAGES;
AND
27

2. RESPONDENT WAS LEGALLY DISMISSED.

Page
GR164824 - LOSS OF TRUST AND CONFIDENCE found \

MAY 2008

JUNE 2008

GR141020 - NLRC has no jurisdiction over PAGCOR

GR167310 – Regular employment found (Manila Pen nurse)

Article 280 of the Labor Code provides

Thus, an employment is deemed regular when the activities performed

by the employee are usually necessary or desirable in the usual business of the
employer. However, any employee who has rendered at least one year of
service, even though intermittent, is deemed regular with respect to the
activity performed and while such activity actually exists.60[11]

Being a regular employee, Alipio enjoys security of tenure. Her

services may be terminated only upon compliance with the substantive and
procedural requisites for a valid dismissal: (1) the dismissal must be for any
of the causes provided in Article 28261[12] of the Labor Code; and (2) the
employee must be given an opportunity to be heard and to defend
himself.62[13]

Did Alipio commit serious misconduct when she obtained copies of her payslips?

We have defined misconduct as any forbidden act or

dereliction of duty. It is willful in character and implies a wrongful
28
intent, not a mere error in judgment. The misconduct, to be serious,
must be grave and not merely trivial.63[14] Al KHUSIN
Page
JULY 2008

GR165565 – Cases when gross negligence need not be habitual

Notably, respondent’s negligence, although gross, was not habitual. In view of

the considerable resultant damage, however, we are in agreement that the cause
is sufficient to dismiss respondent

As a result of gross negligence in the present case, petitioners lost its

trust and confidence in respondent. Loss of trust and confidence to be a valid
ground for dismissal must be based on a willful breach of trust and founded
on clearly established facts. A breach is willful if it is done intentionally,
knowingly and purposely, without justifiable excuse, as distinguished from an
act done carelessly, thoughtlessly, heedlessly or inadvertently. 64 [23]
Otherwise stated, it must rest on substantial grounds and not on the employer’s
arbitrariness, whims, caprices or suspicion; otherwise, the employee would
eternally remain at the mercy of the employer. It should be genuine and not
simulated; nor should it appear as a mere afterthought to justify earlier action
taken in bad faith or a subterfuge for causes which are improper, illegal or
unjustified. It has never been intended to afford an occasion for abuse because
of its subjective nature. There must, therefore, be an actual breach of duty
committed by the employee which must be established by substantial
evidence.65[24]

AUGUST

SEPTEMBER 2008

GR151854 – Failure to appeal due to negligence of counsel

GR166996 - Transfer, Mgt Prerogatve

GR177785 – LABOR ONLY CONTRACTING found

ALMEDA vs. ASAHI GLASS PHILIPPINES, INC, Sept. 3, 2008

Respondent’s bare allegations, without supporting proof that SSASI

had substantial capital or investment, do not sway this Court. The Court did
not find a single financial statement or record to attest to the economic status
and financial capacity of SSASI to venture into and sustain its own business
29

independent from petitioner.

Page
 The indispensability of petitioners’ services was
fortified by the length and continuity of their performance,
lasting for periods ranging from three to 11 years.
More importantly, the Court finds that the crucial element of control
over petitioners rested in respondent.

In the instant case, petitioners worked at the respondent’s premises, and

nowhere else. Petitioners followed the work schedule prepared by respondent.
They were required to observe all rules and regulations of the respondent
pertaining to, among other things, the quality of job performance, regularity
of job output, and the manner and method of accomplishing the jobs.
Obscurity hounds respondent’s argument that even if petitioners were
working under its roof, it was still SSASI which exercised control over the
manner in which they accomplished their work. There was no showing that
it was SSASI who established petitioners’ working procedure and methods,
or who supervised petitioners in their work, or who evaluated the same. Other
than being the one who hired petitioners, there was absolute lack of evidence
that SSASI exercised control over them or their work.

The fact that it was SSASI which dismissed petitioners from

employment is irrelevant. It is hardly proof of control, since it was
demonstrated only at the end of petitioners’ employment. What is more, the
dismissal of petitioners by SSASI was a mere result of the termination by
respondent of its contractual relations with SSASI.

Despite respondent’s disavowal of the existence of an employer-

employee relationship between it and petitioners and its unyielding insistence
that petitioners were employees of SSASI, the totality of the facts and the
surrounding circumstances of the case convey otherwise. SSASI is a labor-
only contractor; hence, it is considered as the agent of respondent.
Respondent is deemed by law as the employer of petitioners. Surely,
respondent cannot expect this Court to sustain its stance and accord full
evidentiary weight to the documentary evidence belatedly procured in its vain
attempt to evade liability as petitioners’ employer.

The Certificate of Registration presented by respondent to buttress its

position that SSASI is a duly registered job contractor is of little significance,
considering that it were issued only on 3 January 2003. There is no further
proof that prior to said date, SSASI had already registered with and had been
recognized by the DOLE as a job contractor.

Verily, the Certificate of Registration of SSASI, instead of supporting

respondent’s case, only served to raise more doubts. The timing of the
registration of SSASI is highly suspicious. It is important to note that SSASI
30

was already providing respondent with workers, including petitioners, long

Page

before SSASI was registered with the DOLE as a job contractor. Some of the
petitioners were hired by SSASI and made to work for respondent for 11
years. Petitioners were also dismissed from service only a month prior to the
issuance of the Certificate of Registration of SSASI. Neither respondent nor
SSASI exerted any effort to explain the reason for the belated registration with
the DOLE by SSASI as a purported job contractor. It may be safely discerned
from the surrounding circumstances that the Certificate of Registration of
SSASI was merely secured in order to blanket the previous relations between
SSASI and respondent with legality.

Equally unavailing is respondent’s stance that its relationship with

petitioners should be governed by the Accreditation Agreement stipulating
that petitioners were to remain employees of SSASI and shall not become
regular employees of the respondent. To permit respondent to disguise the
true nature of its transactions with SSASI by the terms of its contract, for the
purpose of evading its liabilities under the law, would seriously impair the
administration of justice. A party cannot dictate, by the mere expedient of a
unilateral declaration in a contract, the character of its business, i.e., whether
as labor-only contractor or as job contractor, it being crucial that its character
be measured in terms of and determined by the criteria set by statute.66[19]

Having established that respondent was petitioners’ employer, the

Court now proceeds to determining whether petitioners were dismissed in
accordance with law.

Article 280 of the Labor Code, as amended, reads –

ART. 280. Regular and Casual Employment. – The

provisions of written x x x

This Court expounded on the afore-quoted provision, thus –

“The primary standard, therefore, of determining a regular
employment is the reasonable connection between the particular
activity performed by the employee in relation to the usual
business or trade of the employer. x x x The connection can be
determined by considering the nature of the work performed and
its relation to the scheme of the particular business or trade in its
entirety. Also, if the employee has been performing the job for
at least one year, even if the performance is not continuous or
merely intermittent, the law deems the repeated and continuing
need for its performance as sufficient evidence of the necessity
if not indispensability of that activity to the business. Hence, the
31
Page
 employment is also considered regular, but only with respect to
such activity and while such activity exists.” 67[20]

In the instant Petition, the Court has already declared that petitioners’
employment as quality controllers and glass cutters are directly related to the
usual business or trade of respondent as a glass manufacturer. Respondent
would have wanted this Court to believe that petitioners’ employment was
dependent on the increased market demand. However, bearing in mind that
petitioners have worked for respondent for not less than three years and as
much as 11 years, which respondent did not refute, then petitioners’ continued
employment clearly demonstrates its continuing necessity and
indispensability to the business of respondent, raising their employment to
regular status. Thus, having gained regular status, petitioners were entitled
to security of tenure and could only be dismissed on just or authorized causes
and after they had been accorded due process.68[21]

As petitioners’ employer, respondent has the burden of proving that the

dismissal was for a cause allowed under the law, and that they were afforded
procedural due process.69[22] However, respondent failed to discharge this
burden with substantial evidence as it noticeably narrowed its defense to the
denial of any employer-employee relationship between it and petitioners.

The sole reason given for the dismissal of petitioners by SSASI was the
termination of its service contract with respondent. But since SSASI was a
labor-only contractor, and petitioners were to be deemed the employees of
respondent, then the said reason would not constitute a just or authorized
cause70[23] for petitioners’ dismissal. It would then appear that petitioners
were summarily dismissed based on the afore-cited reason, without
compliance with the procedural due process for notice and hearing.

Herein petitioners, having been unjustly dismissed from work, are

entitled to reinstatement without loss of seniority rights and other privileges
and to full back wages, inclusive of allowances, and to other benefits or their
32

monetary equivalents computed from the time compensation was withheld up

Page
 to the time of actual reinstatement.71[24] Their earnings elsewhere during
the periods of their illegal dismissal shall not be deducted therefrom.72[25]

GR179402 ULP: NUWHRAIN v ACESITE

NOVEMBER 2008

GR163942 –

GR176484 – RIGHT OF CONTROL TEST

Under the “control test,” an employment relationship exists between a

physician and a hospital if the hospital controls both the means and the details
of the process by which the physician is to accomplish his task.73[29] Condo
Suite Club Travel v. NLRC, G.R. No. 125671, January 28, 2000, 323 SCRA 679, 690 citing Vinta
Maritime v. NLRC, 284 SCRA 656, 671-672 (1998).

GR166554 – Julio Sagales v Rustan

Indeed, the immortal words of Mr. Justice (later Chief Justice) Enrique
Fernando ring true then as they do now: “where a penalty less punitive would
suffice, whatever missteps may be committed by labor ought not be visited
with a consequence so severe. It is not only because of the law’s concern for
the workingman. There is, in addition, his family to consider. Unemployment
brings untold hardships and sorrows on those dependent on the wage-
earner.”74[81] Almira v. B.F. Goodrich Philippines, Inc., G.R. No. L-34974, July 25, 1974, 58
SCRA 120, 131.

DECEMBER 2008

GR156382 – McDonald’s (Katipunan Branch) vs.Alba, Dec. 18, 2008

Eating Company Food (McDo) 33

Page
 Petitioners, on which the onus of proving lawful cause in sustaining the
dismissal of respondent lies,75[23] failed to prove that respondent’s
misconduct was induced by a perverse and wrongful intent, they having
merely anchored their claim that she was on her knowledge of the meal policy.

While petitioners wield a wide latitude of discretion in the

promulgation of policies, rules and regulations on work-related activities of
its employees, these must, however, be fair and reasonable at all times, and
the corresponding sanctions for violations thereof, when prescribed, must be
commensurate thereto as well as to the degree of the infraction.76[24]

Moreover, petitioners likewise failed to prove any resultant material damage or

prejudice on their part as a consequence of respondent's questioned act. Their
claim that the act would cause “irremediable harm to the company’s business”
is too vague to merit consideration.

With respect to serious misconduct, it is not sufficient that the act or the
conduct complained of must have violated some established rules or policies.
It must have been performed with wrongful intent.77[22]

Petitioners, on which the onus of proving lawful cause in sustaining the

dismissal of respondent lies,78[23] failed to prove that respondent’s
misconduct was induced by a perverse and wrongful intent, they having
merely anchored their claim that she was on her knowledge of the meal policy.

While petitioners wield a wide latitude of discretion in the

promulgation of policies, rules and regulations on work-related activities of
its employees, these must, however, be fair and reasonable at all times, and
the corresponding sanctions for violations thereof, when prescribed, must be
commensurate thereto as well as to the degree of the infraction.79[24]
34
Page
 Given respondent’s claim that she was having stomach pains due to
hunger, which is not implausible, the same should have been properly taken
into account in the imposition of the appropriate penalty for violation of the
meal policy. Respondent’s suspension for five days sufficed. With that
penalty, the necessity of cautioning other employees who may be wont to
violate the same policy was not compromised.

Moreover, petitioners likewise failed to prove any resultant material

damage or prejudice on their part as a consequence of respondent's questioned
act. Their claim that the act would cause “irremediable harm to the company’s
business” is too vague to merit consideration.

- 2009 –
- GR N0.167426/Jan 2009/Chris Garments vs DOLE
- EER may be determined in a PCE
- Res judicata has a dual aspect: first, “bar by prior judgment” which
35

is provided in Rule 39, Section 47(b)80[22] of the 1997 Rules of Civil

Procedure and second, “conclusiveness of judgment” which is provided
Page

in Section 47(c)81[23] of the same Rule.

-
- There is “bar by prior judgment” when, as between the first case where
the judgment was rendered, and the second case that is sought to be
barred, there is identity of parties, subject matter, and causes of
action.82[24] In this instance, the judgment in the first case constitutes an
absolute bar to the second action. Otherwise put, the judgment or decree
of the court of competent jurisdiction on the merits concludes the
litigation between the parties, as well as their privies, and constitutes a bar
to a new action or suit involving the same cause of action before the same
or any other tribunal.83[25]
-
- On the other hand, the doctrine of “conclusiveness of judgment”
provides that issues actually and directly resolved in a former suit cannot
again be raised in any future case between the same parties involving a
different cause of action. Under this doctrine, identity of causes of action
is not required but merely identity of issues. Otherwise stated,
conclusiveness of judgment bars the relitigation of particular facts or
issues in another litigation between the same parties on a different claim
or cause of action.84[26]
-
- In the instant case, there is no dispute as to the presence of the first three
elements of res judicata. The Resolution dated
-
-
- GR158539/Jan 15, 2009/
- Industrial & Transport Equipment Inc vs Tugade
-
- Since there was no dismissal to speak of, there is no basis to award
any backwages to respondents. Under Article 279 of the Labor Code, an
employee is entitled to reinstatement and backwages only if he was
illegally dismissed.
-
- GR164032 Jan 2009/QC Sports Club
- illegal strike = violation of “no-strike no lockout” provision in the CBA.
36

-
Page
- Maranaw Hotels and Resort Corp. vs CA, Sheryl
Oabel, MRDC / G.R. No. 149660, January 20, 2009
-
- GR 164856
- Garcia vs Phil Airlines REFUND ART 223 payroll reinstatement.
- no particulars of the fact of dismissal having been proffered.
-
- GR172670 CRAVINGS
- RBC Cable Master System vs Baluyot Jan 20, 2009
- SEPARATION PAY IN LIEU OF REINSTATEMENT
-
- Finally, an employee who is illegally dismissed
is entitled to the twin reliefs of full backwages
and reinstatement. If reinstatement is not viable,
separation pay is awarded to the
employee.85[17] In awarding separation pay to
an illegally dismissed employee, in lieu of
reinstatement, the amount to be awarded shall be
equivalent to one (1) month salary for every
year of service.86[18] Under Republic Act No.
6715, employees who are illegally dismissed are
entitled to full backwages, inclusive of
allowances and other benefits or their monetary
equivalent, computed from the time their actual
compensation was withheld from them up to the
time of their actual reinstatement but if
reinstatement is no longer possible, the
backwages shall be computed from the time
of their illegal termination up to the finality of
the decision.87[1
-

GR 182570: Ventura vs CA Jan 27, 2009

- Auditor not reporting criminal activities of nephew is guilty of breach of trust
37

-
Page
- GR161615/Jan 30, 2009/Endico vs Quantum Foods Distribution
Center/
- TRANSFER: a management prerogative
- Endico maintains that he was constructively dismissed because he did
not commit any offense that would justify his relief. Endico adds that his
transfer was intended to unreasonably inconvenience him and his family
because of its substantial effect on their finances and quality of family
life, which would ultimately force him to quit
-
- On the other hand, Quantum Foods insists that Endico was not
transferred but was only temporarily recalled to the head office pending
investigation. Quantum Foods argues that if it did transfer Endico, it was
merely exercising a management prerogative.
-
- Jurisprudence recognizes the exercise of management prerogatives.
Labor laws also discourage interference with an employer’s judgment in
the conduct of its business.88[27] For this reason, the Court often declines
to interfere in legitimate business decisions of employers.89[28] The law
must protect not only the welfare of employees, but also the right of
employers.90[29]
-
- In the pursuit of its legitimate business interests, especially during
adverse business conditions, management has the prerogative to transfer
or assign employees from one office or area of operation to another –
provided there is no demotion in rank or diminution of salary, benefits
and other privileges and the action is not motivated by discrimination, bad
faith, or effected as a form of punishment or demotion without sufficient
cause.91[30] This privilege is inherent in the right of employers to control
and manage their enterprises effectively.92[31] The right of employees to
security of tenure does not give them vested rights to their positions to the
38
Page
 extent of depriving management of its prerogative to change their
assignments or to transfer them.93[32]
- Managerial prerogatives, however, are subject to limitations provided
by law, collective bargaining agreements, and general principles of fair
play and justice.94[33] The test for determining the validity of the transfer
of employees was explained in Blue Dairy Corporation v. NLRC95[34] as
follows:
- Like other rights, there are limits thereto. The managerial prerogative to
transfer personnel must be exercised without grave abuse of discretion, bearing
in mind the basic elements of justice and fair play. Having the right should
not be confused with the manner in which that right is exercised. Thus, it
cannot be used as a subterfuge by the employer to rid himself of an undesirable
worker. In particular, the employer must be able to show that the transfer is
not unreasonable, inconvenient or prejudicial to the employee; nor does it
involve a demotion in rank or a diminution of his salaries, privileges and other
benefits. Should the employer fail to overcome this burden of proof, the
employee’s transfer shall be tantamount to constructive dismissal, which has
been defined as a quitting because continued employment is rendered
impossible, unreasonable or unlikely; as an offer involving a demotion in rank
and diminution in pay. Likewise, constructive dismissal exists when an act of
clear discrimination, insensibility or disdain by an employer has become so
unbearable to the employee leaving him with no option but to forego with his
continued employment.96[35]
-
- In this case, we find no reason to disturb the conclusion of the Court
of Appeals that there was no constructive dismissal.
Reassignments made by management pending investigation of
violations of company policies and procedures allegedly committed
by an employee fall within the ambit of management
prerogative.97[36] The decision of Quantum Foods to transfer
Endico pending investigation was a valid exercise of management
prerogative to discipline its employees. The transfer, while

39
incidental to the charges against Endico, was not meant as a
penalty, but rather as a preventive measure to avoid further loss of Page
 sales and the destruction of Quantum Foods’ image and goodwill.
It was not designed to be the culmination of the then on-going
administrative investigation against Endico.
- Neither was there any demotion in rank or any diminution of Endico’s
salary, privileges and other benefits. Endico was being transferred to the
head office as area sales manager, the same position Endico held in
Cebu.98[37] There was also no proof that the transfer involved a
diminution of Endico’s salary, privileges and other benefits.
- On the alleged inconvenience on Endico and his family because of the
transfer from Cebu to the head office in Parañaque, we rule that the
transfer is valid, there being no showing that there was bad faith on the
part of Quantum Foods.99[38] Moreover, we find that Quantum Foods,
considering the declining sales and the loss of a major account in Cebu,
was acting in the legitimate pursuit of what it considered its best interest
in deciding to transfer Endico to the head office.
-
- Since we have ruled that Quantum Foods did not constructively dismiss
Endico, there is no need to discuss the other issues raised by Endico.
- GR177026 jan 30, 2009
- Roquero, as well as Article 223100[18] of the Labor Code on which the

40
appellate court also relied, finds no application in the present case. Article

Page
223 concerns itself with an interim relief, granted to a dismissed or

By Decision99[5] dated August 10, 2006, the appellate court affirmed

the NLRC modified Decision, holding that there was no evidence to show that
petitioner’s employment was terminated, much less that the same was illegal.
Citing CALS Poultry Supply v. Roco,99[6] the appellate court held that
petitioner failed to prove the fact of dismissal. Petitioner’s motion for
reconsideration having been denied by Resolution dated March 16, 2007, the
present recourse was filed. Petitioner contends that it is respondent company,
as the employer, which has the burden of proving that he was not dismissed,
or if dismissed, that the dismissal was not illegal; and that he having proved
that he was dismissed and that it was illegal, he is entitled to backwages and
reinstatement, or separation pay of one month for every year of service, not
just one half month, there being no allegation nor proof of serious financial
reverses on the part of respondent company.

In their Comment,99[7] respondents aver that the petition raises

questions of fact and maintain that no employer-employee relationship existed
between respondent company and petitioner.
 separated employee while the case for illegal dismissal is pending appeal,
as what happened in Roquero. It does not apply where there is no finding
of illegal dismissal, as in the present case.
- GR164804 Triumph Jan 30, 2009 Not a case of constructive dismissal
- FEBRUARY 2009
- GR #170669, Mobilia Products vs. Demecillo RETRENCHMENT
- However, apart from petitioner’s bare assertion of reduced orders from
Japan, the only evidence it presented were the letters of voluntary
acceptance of retrenchment, and waivers and quitclaims signed by
respondents. To our mind, these were insufficient to show that petitioner
indeed suffered business losses so serious as to necessitate the reduction
of personnel.101[21] We have constantly ruled that financial statements
audited by independent external auditors constitute the normal method of
proof of the profit and loss performance of a company. 102[22] Any less
exacting standard of proof would render too easy the abuse of this ground
for termination of services of employees.103[23] Petitioner submitted
none. Further, let it be clarified that our ruling in International Hardware,
Inc. v. NLRC104[24] did not dispense with the responsibility of the
employer to substantiate losses. It merely exempts the latter from giving
notice of retrenchment to its employees and DOLE
-
- GR#180551 ERWIN REYES vs. NLRC, CCBPI
- Procedure: In this case, failure to explain why petition for certiorari was
not personally served was excused out of liberality.
-
- DISMISSAL: COMPUTATION OF BACKWAGES
- NLRC committed grave abuse of discretion.
- Explicit is Art. 279 of the Labor Code which states: x x x
- Applying the above-quoted statutory provision, this Court decreed in 41
Page
Pheschem Industrial Corporation v. Moldez105[16]:
- Article 279 of the Labor Code provides that an illegally dismissed employee
shall be entitled, inter alia, to the payment of his full backwages, inclusive of
allowances and to his other benefits or their monetary equivalent computed
from the time that his compensation was withheld from him, i.e., from the
time of his illegal dismissal, up to the time of his actual reinstatement.
Thus, where reinstatement is adjudged, the award of backwages and other
benefits continues beyond the date of the Labor Arbiter’s Decision ordering
reinstatement and extends up to the time said order of reinstatement is actually
carried out. (Emphasis supplied.)
-
- The Court was more emphatic in Philippine Industrial Security Agency
Corporation v. Dapiton,106[17] when it ruled that backwages had to be
paid by the employer as part of the price or penalty he had to pay for
illegally dismissing his employee. It was to be computed from the time
of the employee’s illegal dismissal (or from the time his compensation
was withheld from him) up to the time of his reinstatement.
- One of the natural consequences of a finding that an employee has been
illegally dismissed is the payment of backwages corresponding to the
period from his dismissal up to actual reinstatement. The statutory intent
of this matter is clearly discernible. The payment of backwages allows
the employee to recover from the employer that which he has lost by way
of wages as a result of his dismissal.107[18] Logically, it must be
computed from the date of petitioner’s illegal dismissal up to the time of
actual reinstatement. There can be no gap or interruption, lest we defeat
the very reason of the law in granting the same. That petitioner did not
immediately file his Complaint should not affect or diminish his right to
backwages, for it is a right clearly granted to him by law -- should he be
found to have been illegally dismissed -- and for as long as his cause of
action has not been barred by prescription.
- The law fixes the period of time within which petitioner could seek
remedy for his illegal dismissal and for as long as he filed his Complaint
within the prescriptive period, he shall be entitled to the full protection of
his right to backwages. In illegal dismissal cases, the employee concerned
is given a period of four years from the time of his illegal dismissal within
which to institute the complaint. This is based on Article 1146 of the New
Civil Code which states that actions based upon an injury to the rights of
the plaintiff must be brought within four years.108[19] The four-year
prescriptive period shall commence to run only upon the accrual of a
42
Page
 cause of action of the worker.109[20] Here, petitioner was dismissed from
service on 15 September 2001. He filed his complaint for illegal dismissal
on 14 June 2004. Clearly, then, the instant case was filed within the
prescriptive period.
- The Labor Arbiter, in his computation of the award for backwages to
petitioner, had followed the long-settled rule110[21] that full backwages
should be awarded, to be reckoned from the time of illegal dismissal up
to actual reinstatement. The NLRC, however, modified the Labor
Arbiter’s award for backwages by computing the same only from the time
petitioner filed his Complaint for illegal dismissal before the Labor
Arbiter, i.e., on 24 October 2004, up to the day when the Labor Arbiter
promulgated his judgment, i.e., 30 April 2005. The NLRC provided no
other explanation for its modification except that it was just and equitable
to reduce the amount of backwages given to petitioner since, having been
dismissed on 15 September 2001, it took him more than three years to file
his Complaint against respondents CCBP and Taguibao.
- We find no justice or rationality in the distinction created by the NLRC;
and when there is neither justice or rationality, the distinction transgresses
the elementary principle of equal protection and must be stricken out.
Equal protection requires that all persons or things similarly situated
should be treated alike, as to both rights conferred and responsibilities
imposed.111[22] There is no sufficient basis why petitioner should not be
placed in the same plane with other illegally dismissed employees who
were awarded backwages without qualification.
- Herein petitioner, having been unjustly dismissed from work, is entitled
to reinstatement without loss of seniority rights and other privileges and
to full backwages, inclusive of allowances, and to other benefits or their
monetary equivalents computed from the time compensation was
withheld up to the time of actual reinstatement.112[23] Accordingly,
backwages must be awarded to petitioner in the amount to be computed
from the time his employment was unlawfully terminated by respondents
CCBP and Taguibao on 15 September 2001 up to the time he was actually
reinstated on 1 March 2006.
43
-
Page

- STRAINED RELATIONS:
- We also do not agree with the NLRC in deleting the directive of the Labor
Arbiter for the reinstatement of petitioner to his former position, on the
flimsy excuse that the petitioner’s position as Route Salesman was
confidential in nature and that the relationship between petitioner and
respondents CCBP and Taguibao was already strained.
- To protect the employee’s security of tenure, the Court has emphasized
that the doctrine of “strained relations” should be strictly applied so as not
to deprive an illegally dismissed employee of his right to reinstatement.
Every labor dispute almost always results in “strained relations,” and the
phrase cannot be given an overarching interpretation; otherwise, an
unjustly dismissed employee can never be reinstated.113[24] The
assumption of strained relations was already debunked by the fact that as
early as March 2006 petitioner returned to work for respondent CCBP,
without any antagonism having been reported thus far by any of the
parties. Neither can we sustain the NLRC’s conclusion that petitioner’s
position is confidential in nature. Receipt of proceeds from sales of
respondent CCBP’s products does not make petitioner a confidential
employee. A confidential employee is one who (1) assists or acts in a
confidential capacity, in regard to (2) persons who formulate, determine,
and effectuate management policies specifically in the field of labor
relations.114[25] Verily, petitioner’s job as a salesman does not fall under
this qualification.
-
- ATTORNEY’S FEES: Finally, the Court overrules the deletion by the
NLRC of the Labor Arbiter’s award for attorney’s fees to petitioner.
Petitioner is evidently entitled to attorney’s fees, since he was compelled
to litigate115[26] to protect his interest by reason of unjustified and
unlawful termination of his employment by respondents CCBP and
Taguibao.
-
- GR#179546, CCBPI vs, Agito, et al 44
- LABOR ONLY CONTRACTING - found here
Page

GR#179546, CCBPI vs, Agito, et al

LABOR ONLY CONTRACTING - found here
- CITED IN DAISY’S PLEADINGS

LABORJUR 2010
JANUARY 2010
GR183810, January 21, 2010, Fulache vs ABS-CBN Broadcasting Corp.

A case of DISMISSAL IN BAD FAITH Citing Kay Products, Inc. v. CA, G.R.
No. 162472, July 28, 2005, 464 SCRA 544. Petitioner Kay Lee, as the
president, actively managed the business of KPI. In fact, she was the one who
decided the private respondents' transfer to the employment agencies, and
signed the memoranda ordering such transfer, in bad faith, as earlier
discussed. In labor cases, particularly, corporate directors and officers are
solidarily liable with the corporation for the termination of employment of
corporate employees done with malice or in bad faith. [30] In fact, in Naguiat
v. NLRC, [31] the Court held that the president of a corporation, who actively
manages the business, falls within the meaning of an 'employer as
contemplated by the Labor Code, and may be held jointly and severally liable
for the obligations of the corporation to its dismissed employees. Thus, in
the present case, petitioners Kay Lee and KPI are jointly and severally liable
for the latter's obligations to the private respondents.

GR177114, January 21, 2010, Peaflor vs Outdoor Clothing

 Constructive dismissal/appointment of someone else to occupy
Penaflor’s position
 Penaflor’s Resignation: not voluntary
The first is the settled rule that in employee termination
disputes, the employer bears the burden of proving that the
employee’s dismissal was for just and valid cause.116[25]
Thathet Peñaflor did indeed file a letter of resignation does
not help the company’s case as, other than the fact of
resignation, the company must still prove that the employee
voluntarily resigned.117[26] There can be no valid
resignation where the act was made under compulsion or
under circumstances approximating compulsion, such as
45

when an employee’s act of handing in his resignation was a

Page

reaction to circumstances leaving him no alternative but to

 resign.118[27] In sum, the evidence does not support the
existence of voluntariness in Peaflor’s resignation.

FEBRUARY 2010
GR188002, February 1, 2010, Goodrich Mfg Corp. vs Ativo, et al

 QUITCLAIMS: found valid here / WILLIE’S CASE

It is true that the law looks with disfavor on quitclaims
and releases by employees who have been inveigled or
pressured into signing them by unscrupulous employers
seeking to evade their legal responsibilities and frustrate
just claims of employees.119[14] In certain cases, however,
the Court has given effect to quitclaims executed by
employees if the employer is able to prove the following
requisites, to wit:
(1) the employee executes a deed of quitclaim voluntarily;
(2) there is no fraud or deceit on the part of any of the
parties;(3) the consideration of the
quitclaim is credible and reasonable; and
(4) the contract is not contrary to law, public order, public
policy, morals or good customs, or prejudicial to a third
person with a right recognized by law.120[15]

GR157661, February 2, 2010, Babiana Farms and Mills vs. Lado

 Warehouseman position = one of trust and confidence

GR180302,Feb 5, 2010; Areno vs. SkyCable
Petitioner was validly dismissed on the ground of
willful disobedience in refusing to comply with
46

the suspension order.

Page
MARCH 2010
GR180866, March 2, 2010, Lepanto Ceramics, Inc. vs LPEA

 CBA BENEFIT/BONUS
 Generally, a bonus is not a demandable and enforceable obligation.
For a bonus to be enforceable, it must have been promised by the
employer and expressly agreed upon by the parties.121[21] Given
that the bonus in this case is integrated in the CBA, the same
partakes the nature of a demandable obligation. Verily, by virtue of
its incorporation in the CBA, the Christmas bonus due to respondent
Association has become more than just an act of generosity on the
part of the petitioner but a contractual obligation it has
undertaken.122[22]

A CBA refers to a negotiated contract between a legitimate labor

organization and the employer, concerning wages, hours of work
and all other terms and conditions of employment in a bargaining
unit. As in all other contracts, the parties to a CBA may establish
such stipulations, clauses, terms and conditions as they may deem
convenient, provided these are not contrary to law, morals, good
customs, public order or public policy.123[23]

It is a familiar and fundamental doctrine in labor law that the CBA

is the law between the parties and they are obliged to comply
with its provisions.124[24] This principle stands strong and true in
the case at bar.

GR160506 March 9, 2010, Aliviado et al vs P&G Inc. and PROMM

 REGULARIZATION/OUTSOURCING
 Clearly, the law and its implementing rules allow contracting
47

arrangements for the performance of specific jobs, works or services.

Page
 Indeed, it is management prerogative to farm out any of its activities,
regardless of whether such activity is peripheral or core in nature.

However, in order for such outsourcing to be valid, it must be

made to an independent contractor because the current labor
rules expressly prohibit labor-only contracting.

 Promm-Gem: found to be an independent contractor

 SAPS: found to be a “labor only” contractor
 On the other hand, the Articles of Incorporation of SAPS shows that it
has a paid-in capital of only P31,250.00. There is no other evidence
presented to show how much its working capital and assets are.
Furthermore, there is no showing of substantial investment in tools,
equipment or other assets.

 Considering that SAPS has no substantial capital or investment and

the workers it recruited are performing activities which are directly
related to the principal business of P&G, we find that the former is
engaged in “labor-only contracting”.

GR183250, March 10, 2010, William Uy Construction vs Trinidad

 PROJECT OR REGULAR EMPLOYEE?

 The core issue presented in the case is whether or not the CA
correctly ruled that petitioner company’s repeated rehiring of
respondent Trinidad over several years as project employee for its
various projects automatically entitled him to the status of a regular
employee.

The Supreme Court’s Ruling

 But the test for distinguishing a “project employee” from a “regular

employee” is whether or not he has been assigned to carry out a
“specific project or undertaking,” with the duration and scope of his
engagement specified at the time his service is contracted.125[5]
48

Here, it is not disputed that petitioner company contracted

respondent Trinidad’s service by specific projects with the duration
Page

of his work clearly set out in his employment contracts.126[6] He

 remained a project employee regardless of the number of years and
the various projects he worked for the company.127[7]

GR 149552, March 10, 2010,DISMISSAL/UNION SECURITY CLAUSE

GR 164016, March 15, 2010,RENO Foods vs NLM, Capor
 Theft of 6 cans of food = serious misconduct
 Acquittal = no effect
 Award of Financial Assistance = not justified

GR 167563, Mar 22, 2010, College of Immac. Concepcion v NLRC

 Payroll Reinstatement/no need to reimburse.
 Does the subsequent reversal of the LA's
findings mean that respondent should
reimburse petitioner all the salaries and
benefits he received pursuant to the
immediate execution of the LA's erroneous
decision ordering his reinstatement as
Department Dean?
 We rule in the negative. In Air Philippines Corporation
v. Zamora,128[15] citing Roquero v. Philippine Airlines,
Inc.,129[16] we held that:

x x x Hence, even if the order of reinstatement of the Labor Arbiter

is reversed on appeal, it is obligatory on the part of the employer to
reinstate and pay the wages of the dismissed employee during the
period of appeal until reversal by the higher court. On the other
hand, if the employee has been reinstated during the appeal
49

period and such reinstatement order is reversed with finality, the

Page

employee is not required to reimburse whatever salary he

 received for he is entitled to such, more so if he actually rendered
services during the period.

GR 174420, Mar 22, 2010, Santuyo vs Remerco Garments

 RES JUDICATA

Settled is the rule that unions are the agent of its members
for the purpose of securing just and fair wages and good
working conditions.130[25] Since petitioners were part of
the bargaining unit represented by the union and members
thereof, the September 18, 1996 order of the Secretary of
Labor applies to them.

GR 169207. WPP Marketing Communications vs Galera/

March25, 2010,
ISSUE: Whether Galera is an Employee or a Corporate Officer

 An examination of WPP’s by-laws resulted in a finding

that Galera’s appointment as a corporate officer (Vice-
President with the operational title of Managing Director
of Mindshare) during a special meeting of WPP’s Board of
Directors is an appointment to a non-existent corporate
office. WPP’s by-laws provided for only one Vice-
President. /Galera –an employee

GR 186019. March25, 2010, White Diamond Trading vs.NLRC

 FRAUD: Found here [OR P200t, duplicate P190t)

GR 165951. March 30, 2010, Solidbank Corp. vs. NLRC, et al

In the case at bar, petitioner paid respondents the following: (a) separation
pay computed at 150% of their gross monthly pay per year of service; and (b)
cash equivalent of earned and accrued vacation and sick leaves. Clearly,
petitioner had gone over and above the requirements of the law. Despite
this, however, petitioner has been ordered to pay respondents an additional
amount, equivalent to one month’s salary, as a form of financial assistance.
50

APRIL 2010
Page
GR182114, April 5, 2010;Genesis Transport Service vs UNYON
ISSUES NOT RAISED BEFORE LABOR ARBITER
CANNOT BE RAISED ON APPEAL:

GR183383: King of Kings Transport v. Mama DUE PROCESS

King of Kings Transport v. Mamac131[37] explains the importance of

the first written notice:

(1) The first written notice to be served on the employees should

contain the specific causes or grounds for termination against them,
and a directive that the employees are given the opportunity to submit
their written explanation within a reasonable period. "Reasonable
opportunity" under the Omnibus Rules means every kind of assistance
that management must accord to the employees to enable them to prepare
adequately for their defense. This should be construed as a period of at
least five (5) calendar days from receipt of the notice to give the
employees an opportunity to study the accusation against them, consult
a union official or lawyer, gather data and evidence, and decide on the
defenses they will raise against the complaint. Moreover, in order to
enable the employees to intelligently prepare their explanation and
defenses, the notice should contain a detailed narration of the facts
and circumstances that will serve as basis for the charge against the
employees. A general description of the charge will not suffice.
Lastly, the notice should specifically mention which company rules,
if any, are violated and/or which among the grounds under Art. 282
is being charged against the employees.

GR177114: April 13, 2010, Peaflor VS Outdoor Clothing

 Constructive Dismissal: A CASE OF

GR183572: April 13, 2010, Yolanda vs AMA Computer Colle
 The CA’s Review of
Factual Findings
under Rule 65
 We agree with the petitioners that, as a rule in certiorari proceedings
under Rule 65 of the Rules of Court, the CA does not assess and
weigh each piece of evidence introduced in the case. The CA only
51

examines the factual findings of the NLRC to determine whether or

not the conclusions are supported by substantial evidence whose
Page

absence points to grave abuse of discretion amounting to lack or

 excess of jurisdiction.132[24] In the recent case of Protacio v. Laya
Mananghaya & Co.,133[25] we emphasized that:

 As a general rule, in certiorari proceedings

under Rule 65 of the Rules of Court, the
appellate court does not assess and weigh the
sufficiency of evidence upon which the Labor
Arbiter and the NLRC based their conclusion.
The query in this proceeding is limited to the
determination of whether or not the NLRC
acted without or in excess of its jurisdiction or
with grave abuse of discretion in rendering its
decision. However ….

 However, as an exception, the appellate court may

examine and measure the factual findings of the
NLRC if the same are not supported by substantial
evidence. The Court has not hesitated to affirm the
appellate court’s reversals of the decisions of labor
tribunals if they are not supported by substantial
evidence. [Emphasis supplied]

 As discussed below, our review of the records and of the CA

decision shows that the CA erred in recognizing that grave abuse of
discretion attended the NLRC’s conclusion that the petitioners were
illegally dismissed. Consistent with this conclusion, the evidence
on record show that AMACC failed to discharge its burden of
proving by substantial evidence the just cause for the non-renewal
of the petitioners’ contracts.

RULE 45


52

In Montoya v. Transmed Manila Corporation,134[26] we laid down

our basic approach in the review of Rule 65 decisions of the CA in
Page

labor cases, as follows:

  In a Rule 45 review, we consider the
correctness of the assailed CA decision, in
contrast with the review for jurisdictional error
that we undertake under Rule 65. Furthermore,
Rule 45 limits us to the review of questions of
law raised against the assailed CA decision. In
ruling for legal correctness, we have to view the
CA decision in the same context that the petition
for certiorari it ruled upon was presented to it;

 we have to examine the CA decision from the prism

of whether it correctly determined the presence or
absence of grave abuse of discretion in the NLRC
decision before it, not on the basis of whether the
NLRC decision on the merits of the case was correct.
 In other words, we have to be keenly aware that the CA undertook a
Rule 65 review, not a review on appeal, of the NLRC decision
challenged before it. This is the approach that should be basic in a Rule
45 review of a CA ruling in a labor case. In question form, the
question to ask is:

Did the CA correctly determine whether the NLRC

committed grave abuse of discretion in ruling on the
case?

 Following this approach, our task is to determine whether the CA

correctly found that the NLRC committed grave abuse of discretion
in ruling that the petitioners were illegally dismissed.


GR175532, April 19, 2010;Basay et al vs Hacienda Consolacion et al

Fair evidentiary rule dictates that before employers are burdened

to prove that they did not commit illegal dismissal, it is incumbent
upon the employee to first establish the fact of his or her
dismissal.
Ledesma, Jr. v. National Labor Relations Commission, G.R. No. 174585, October 19,
53

2007, 537 SCRA 358, 370. USE THIS

Page
135[18] Leopard Integrated Services, Inc. v. Macalinao, G.R. No. 159808,
September 30, 2008, 567 SCRA 192, 200.

LEDESMA RULING:

“While this Court is not unmindful of the rule that in

cases of illegal dismissal, the employer bears the burden of
proof to prove that the termination was for a valid or
authorized cause in the case at bar, however, the facts and
the evidence did not establish a prima facie case that the
petitioner was dismissed from employment.136[31] Before
the private respondent must bear the burden of proving that
the dismissal was legal, petitioner must first establish by
substantial evidence the fact of his dismissal from service.
Logically, if there is no dismissal, then there can be no
question as to the legality or illegality thereof.

In Machica v. Roosevelt Services Center,

Inc.,137[32] we had underscored that the burden of proving
the allegations rest upon the party alleging, to wit:

The rule is that one who alleges a fact has the burden of
proving it; thus, petitioners were burdened to prove their allegation
that respondents dismissed them from their employment. It must be
stressed that the evidence to prove this fact must be clear, positive
and convincing. The rule that the employer bears the burden of proof
in illegal dismissal cases finds no application here because the
respondents deny having dismissed the petitioners.138[33]

In Rufina Patis Factory v. Alusitain,139[34] this

Court took the occasion to emphasize:

It is a basic rule in evidence, however, that the burden of proof

is on the part of the party who makes the allegations – ei incumbit
54
Page
 probatio, qui dicit, non qui negat. If he claims a right granted by
law, he must prove his claim by competent evidence, relying on
the strength of his own evidence and not upon the weakness of
that of his opponent.140[35]

It is true that the Constitution affords full protection

to labor, and that in light of this Constitutional mandate, we
must be vigilant in striking down any attempt of the
management to exploit or oppress the working class.
However, it does not mean that we are bound to uphold the
working class in every labor dispute brought before this
Court for our resolution.

The law in protecting the rights of the employees,

authorizes neither oppression nor self-destruction of the
employer. It should be made clear that when the law tilts
the scales of justice in favor of labor, it is in recognition of
the inherent economic inequality between labor and
management. The intent is to balance the scales of justice;
to put the two parties on relatively equal positions. There
may be cases where the circumstances warrant favoring
labor over the interests of management but never should the
scale be so tilted if the result is an injustice to the employer.
Justitia nemini neganda est -- justice is to be denied to
none.141[36]

LEOPARD RULINGS

It is also noteworthy that respondent failed to rebut petitioners'

evidence establishing that he was not dismissed. The rule is that one who
alleges a fact has the burden of proving it. Aside from allegations, it also rests
upon respondent to show that petitioners dismissed him from employment.
It must be stressed that the evidence to prove this fact must be clear, positive
and convincing.142[18] The records are bereft of any indication that
respondent was given any “walking papers” or even the slightest
55

manifestation from petitioners that he was being terminated or prevented

from returning to work. There is no illegal dismissal to speak of where the
Page
 employee was not notified that he had been dismissed from his employment
nor was he prevented from returning to his work.143[19]

Given these circumstances, it is clear that there was no dismissal

to begin with; instead, it was respondent who, by his own acts,
displayed his lack of interest in resuming his employment with
petitioners.

The fact that respondent filed a complaint for illegal dismissal, as

noted by the CA,144[22] is not by itself sufficient indicator that
respondent had no intention of deserting his employment since the
totality of respondent's antecedent acts palpably display the contrary.
In Abad v. Roselle Cinema,145[23] the Court ruled that:

The filing of a complaint for illegal dismissal should be taken into

account together with the surrounding circumstances of a certain
case. In Arc-Men Food Industries Inc. v. NLRC, the Court ruled that
the substantial evidence proffered by the employer that it had not, in
the first place, terminated the employee, should not simply be ignored
on the pretext that the employee would not have filed the complaint
for illegal dismissal if he had not really been dismissed. “This is clearly
a non sequitur reasoning that can never validly take the place of the
evidence of both the employer and the employee.” (Emphasis
supplied)

GR169725 April 30, 2010 UNIWIDE CORP REHABILITATION

All these, taken into consideration, support the LA's dismissal of

respondent's complaint.

Petitioners seek to introduce into evidence subsequent acts committed

by respondent, which allegedly buttress their claim. Suffice it to say that
dictates of due process prohibit this. In any case, the evidence on hand, even
without said subsequent acts, are enough to justify the dismissal of
respondent's complaint.
56

GR 187605, April 2010 Technol Eight Phils. Corp vs NLRC

Page
 *Serious Misconduct: Mauling a co-employee
MAY 2010
JUNE 2010

GR169523,July 2010, LIMA LAND vs CUEVAS

 WILLFUL BREACH OF TRUST: Not found here

Stated differently, the loss of trust and confidence must

be based not on ordinary breach by the employee of the trust
reposed in him by the employer, but, in the language of
Article 282 (c) of the Labor Code, on willful breach.146[37]
A breach is willful if it is done intentionally, knowingly and
purposely, without justifiable excuse, as distinguished from
an act done carelessly, thoughtlessly, heedlessly or
inadvertently.147[38] It must rest on substantial grounds
and not on the employer’s arbitrariness, whims, caprices or
suspicion; otherwise, the employee would eternally remain
at the mercy of the employer.148[39] It should be genuine
and not simulated; nor should it appear as a mere
afterthought to justify earlier action taken in bad faith or a
subterfuge for causes which are improper, illegal or
unjustified.149[40] There must, therefore, be an actual
breach of duty committed by the employee which must be
established by substantial evidence.150[41] Moreover, the

57
Page
 burden of proof required in labor cases must be amply
discharged.151[42]

Petitioners contend that respondent's unexplained

omission and/or gross neglect to carry out her duties and to
exercise the extraordinary diligence required of her position
gave the other employees of petitioner company, whose
duties and activities should have been properly monitored
by her, the opportunity to commit fraud against the
company. However, this supposed function of respondent
– monitoring duties and activities of other employees – is
not subsumed in what petitioners claim as respondent's
duties which are (a) to ma ……..

GR179801, June 18, 2010, BPI vs NLRC WILLFUL BREACH

OF TRUST: NO SEPARATION Pay

GR171327, June 18, 2010; Velasco vs Transit Automotive

Supply

 CONSTRUCTIVE DISMISSAL: Not Found

Constructive dismissal is defined as a quitting because
continued employment is rendered impossible,
unreasonable or unlikely, or when there is a demotion in
rank or a diminution of pay.152[16] It exists when an act
of clear discrimination, insensibility or disdain by an
employer has become so unbearable to the employee
leaving him with no option but to forego with his continued
employment.153[17]

Here, there was no diminution of petitioner’s salary

and other benefits. There was no evidence that she was
harassed or discriminated upon, or that respondents made
it difficult for her to continue with her other duties. Absent
58

any evidence of bad faith, it is within the exercise of

respondents’ management prerogative to transfer some of
Page
 petitioner’s duties if in their judgment, it would be more
beneficial to the corporation. There was no basis for the
NLRC’s finding that from performing managerial functions,
petitioner was reduced to performing clerical tasks.

Respondents allowed petitioner to take a leave of

absence for the whole month of February 1993. It was only
on 5 March 1993 when respondents called her attention
that she had been absent without official leave since 1
March 1993. Respondents required petitioner to explain
her absence within three days from receipt of the letter.
However, it was only on 31 March 1993 when petitioner
answered that she had nothing to explain because in
February 1993, she was verbally informed by De Dios to
resign from her employment as Comptroller. Petitioner’s
belated reply showed her lack of intention to report back
to work and to perform her other responsibilities. Instead,
she filed a case for constructive dismissal against
respondents which we find to be without factual and legal
basis.

GR185269 June 29, 2010; Malig-on vs. Equitable General Services, Inc.

 FLOATING STATUS
The company evidently placed Malig-on on floating status
after being relieved as janitress in a client’s workplace.
But, as the Court has repeatedly ruled, such act of “off-
detailing” Malig-on was not the equivalent of dismissal so
long as her floating status did not continue beyond a
reasonable time. But, when it ran up to more than six
months, the company may be considered to have
constructively dismissed her from work, that is, as of
August 16, 2002.[6] Veterans Security Agency, Inc. v. Gonzalvo, Jr.,
G.R. No. 159293, December 16, 2005, 478 SCRA 298, 308.

JULY 2010
AC 8390: July 2, 2010, Issuing Bouncing Checks: 2 years suspension
GR167218, July 2, 1010:Erector Adv. vs. NLRC
…… an employee may be dismissed only if the grounds mentioned in the pre-
59

dismissal notice were the ones cited for the termination of

Page

employment.154[29] The same is true with the third ground of termination,

i.e., that Cloma has frequently been late in reporting for work. Observably,
aside from the fact that Cloma, with respect to this ground, has not been
furnished a pre-dismissal notice, the notice of termination does not state the
inclusive dates on which Cloma actually reported late for his work. 29 Glaxo
Wellcome Philippines, Inc. v. Nagkakaisang Empleyado ng Wellcome-DFA (NEW-DFA), G.R. No. 149349,
March 11, 2005, 453 SCRA 256, 274, citing Kwikway Engineering Works v. National Labor Relations
Commission, 195 SCRA 526 (1991), BPI Credit Corporation v. National Labor Relations Commission, 234 SCRA
441, (1994) and Gold City Integrated Port Services, Inc. v. National Labor Relations Commission, 189 SCRA
811, (1990).

GR1677401, July 5, 2010, Bagong Pagkakaisa vs Triumph

*Limits of CA’s certiorari jurisdiction
The CA was correct in declaring that the Labor Secretary had seriously erred
in not ruling on the dismissal issue, but was totally out of place in proceeding
to resolve the dismissal issue; its action required the prior and implied act of
suspending the Rules of Court – a prerogative that belongs to this Court alone.

In the recent case of Marcos-Araneta v. Court of Appeals,155[56] we

categorically ruled that the CA cannot resolve the merits of the case on
a petition for certiorari under Rule 65 and must confine itself to the
jurisdictional issues raised.
Let this case be another reminder to the CA of the limits of its certiorari
jurisdiction.

AC No. 8096, July 5, 2010

Before the Court is a petition for review of Resolution No. XVIII-2008-
335[1] passed on July 17, 2008 by the Board of Governors of the Integrated
Bar of the Philippines (IBP) in CBD Case No. 07-1953. The IBP Board of
Governors dismissed the disbarment case filed by the complainants against
the respondents.

GR181051,July 5, 2010, Certificate of non-forum shopping

60

In Altres v. Empleo,156[15] the Court en banc issued guidelines based

Page

on jurisprudential pronouncements respecting non-compliance with the

requirements on, or submission of defective, verification and certification
against forum shopping. The portions thereof which are pertinent to the instant
case are the following:

1) A distinction must be made between non-compliance with the

requirement on or submission of defective verification, and non-compliance
with the requirement on or submission of defective certification against
forum shopping.

2) As to verification, non-compliance therewith or a defect therein

does not necessarily render the pleading fatally defective. The court may
order its submission or correction or act on the pleading if the attending
circumstances are such that strict compliance with the Rule may be
dispensed with in order that the ends of justice may be served thereby.

3) Verification is deemed substantially complied with when one

who has ample knowledge to swear to the truth of the allegations in the
complaint or petition signs the verification, and when matters alleged in the
petition have been made in good faith or are true and correct.

4) As to certification against forum shopping, non-

compliance therewith or a defect therein, unlike in verification,
is generally not curable by its subsequent submission or
correction thereof, unless there is a need to relax the Rule on the
ground of "substantial compliance" or presence of "special
circumstances or compelling reasons.”

GR164257, July 5, 2010, San Miguel Corp vs Semillano

*Labor Only Contracting found here!!!

Petitioner cannot rely either on AMPCO’s Certificate of

Registration as an Independent Contractor issued by the
proper Regional Office of the DOLE to prove its claim. It
is not conclusive evidence of such status. The fact of
registration simply prevents the legal presumption of being
a mere labor-only contractor from arising.157[22] In
distinguishing between permissible job contracting and
prohibited labor-only contracting, the totality of the facts
and the surrounding circumstances of the case are to be
61

considered.158[23]
Page
 PREVENTIVE SUSPENSION
Preventive suspension may be legally imposed against an
employee whose alleged violation is the subject of an
investigation. The purpose of his suspension is to prevent
him from causing harm or injury to the company as well as
to his fellow employees.
The pertinent rules dealing with preventive
suspension are found in Section 8 and Section 9 of Rule
XXIII, Book V of the Omnibus Rules Implementing the
Labor Code, as amended by Department Order No. 9, Series
of 1997, which read as follows:

When preventive suspension exceeds the maximum

period allowed without reinstating the employee either by
actual or payroll reinstatement159[18] or when preventive
suspension is for indefinite period,160[19] only then will
constructive dismissal set in.

While no period was mentioned in the show-cause

memorandum, it was wrong for petitioner to infer that her
suspension was for an indefinite period. It must be pointed
out that the inclusion of the phrase “during the course of
investigation” would lead to a reasonable and logical
presumption that said suspension in fact has a duration
which could very well be not more than 30 days as
mandated by law. And, as the Court of Appeals correctly
observed, the suspension has been rendered moot by
petitioner’s resignation tendered a day after the suspension
was made effective.

Respondent is correct. Indeed, as sales manager,

petitioner had the power and authority to enter into
contracts that would bind respondent, regardless of
whether these contracts would prove to be beneficial or
prejudicial to the interest of respondent. Respondent has
every right to protect its assets and operations pending
investigation of petitioner.
GR 187693, July 13, 2010; Intertranz Container vs Bautista
62
Page
 Fraud & Willful Breach of Trust: Found Here
Overtime Pay Claim – must be supported

The Appeal Bond Issue

Jurisprudence tells us that in labor cases, an appeal from a decision

involving a monetary award may be perfected only upon the posting of a cash
or surety bond.161[30] The Court, however, has relaxed this requirement
under certain exceptional circumstances in order to resolve controversies on
their merits. These circumstances include: (1) fundamental consideration of
substantial justice; (2) prevention of miscarriage of justice or of unjust
enrichment; and (3) special circumstances of the case combined with its legal
merits, and the amount and the issue involved.162[31]

A claim for overtime pay, it must be stressed, cannot be granted in the absence of
supporting factual and legal basis.163[64]

GR180660, July 20, 2010, MARIBAGO vs DUAL

 Theft/alteration of OR = just cause

AUGUST 2010
AC No. 8481; Alonso vs Relamida; August 3, 2010
Forum Shopping: one month suspension
GR169170 Gobres, et al . August 2010

Are project employees entitled to nominal damages for lack of advance

notice of their dismissal? NO/
63
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GR171630;Century Canning Corp vs Ramil; August 8, 2010
EVIDENCE:

The case of Philippine Airlines, Inc. v. Tongson,164[23] cited by the petitioner, is not
applicable to the present case. In that case, PAL dismissed Tongson from service on the
ground of corruption, extortion and bribery in the processing of PAL's passengers' travel
documents. We upheld the validity of Tongson's dismissal because PAL's overwhelming
documentary evidence reflects an unbroken chain which naturally leads to one fair and
reasonable conclusion, that at the very least, respondent was involved in extorting money
from PAL's passengers. We further said that even if there is no direct evidence
to prove that the employees actually committed the offense,
substantial proof based on documentary evidence is sufficient to
warrant their dismissal from employment.

In the case at bar, there is neither direct evidence nor

substantial documentary evidence pointing to respondent as the one
liable for the forgery of the signature of Po.

GR172589; Nacague vs. Sulpicio Lines; August 8, 2010

DRUG TEST:
The law is clear that drug tests shall be performed only by authorized drug
testing centers. In this case, Sulpicio Lines failed to prove that S.M. Lazo
Clinic is an accredited drug testing center. Sulpicio Lines did not even deny
Nacague’s allegation that S.M. Lazo Clinic was not accredited. Also, only a
screening test was conducted to determine if Nacague was guilty of using
illegal drugs. Sulpicio Lines did not confirm the positive result of the
screening test with a confirmatory test. Sulpicio Lines failed to indubitably
prove that Nacague was guilty of using illegal drugs amounting to serious
misconduct and loss of trust and confidence. Sulpicio Lines failed to clearly
show that it had a valid and legal cause for terminating Nacague’s
employment. When the alleged valid cause for the termination of employment
is not clearly proven, as in this case, the law considers the matter a case of
illegal dismissal.

GR171115; NLMK-OLALIA vs Keihin; August 9, 2010

64

THEFT: Just Cause found here.

Page
In the case at bar, Helen took the packing tape with the thought that she could use it
for her own personal purposes. When Helen was asked to explain in writing why
she took the tape, she stated, “Kumuha po ako ng isang packing tape na gagamitin
ko sa paglilipat ng gamit ko sa bago kong lilipatang bahay.”165[35] In other
words, by her own admission, there was intent on her part to benefit herself when
she attempted to bring home the packing tape in question.

GR187698; Serrano vs Severino Transit; August 9, 2010

 Computation of Retirement Pay

GR160828; PICOP vs. TANECA et al. ; August 9, 2010

At the expiration of the freedom period, the employer

shall continue to recognize the majority status of the incumbent
bargaining agent where no petition for certification election is
filed.166[19]

Applying the same provision, it can be said that while it is incumbent

for the employer to continue to recognize the majority status of the incumbent
bargaining agent even after the expiration of the freedom period, they could
only do so when no petition for certification election was filed. The reason is,
with a pending petition for certification, any such agreement entered into by
management with a labor organization is fraught with the risk that such a labor
union may not be chosen thereafter as the collective bargaining
representative.167[20] The provision for status quo is conditioned on the fact
that no certification election was filed during the freedom period. Any other
view would render nugatory the clear statutory policy to favor certification
election as the means of ascertaining the true expression of the will of the
workers as to which labor organization would represent them.168[21]
65
Page

UNION SECURITY CLAUSE

GR170830; PHIMCO INDUSTRIES vs. PILA et al. Aug 11, 2010
 ILLEGAL STRIKE, a case of
 RULE 45: Review of CA Decisions in labor cases
In Montoya v. Transmed Manila Corporation,169[13] we laid down the
basic approach that should be followed in the review of CA decisions in labor
cases, thus:
In a Rule 45 review, x x x the question to ask is: Did the CA
correctly determine whether the NLRC committed grave abuse
of discretion in ruling on the case?

In this light, the core issue in the present case is whether the
CA correctly ruled that the NLRC did not act with grave abuse of
discretion in ruling that the union’s strike was legal.
Based on our examination of the evidence which the LA viewed differently from the
NLRC and the CA, we find the PILA strike illegal. We intervene and rule even on the
evidentiary and factual issues of this case as both the NLRC and the CA grossly misread
the evidence, leading them to inordinately incorrect conclusions, both factual and legal.
While the strike undisputably had not been marred by actual violence and patent
intimidation, the picketing that respondent PILA officers and members undertook as part
of their strike activities effectively blocked the free ingress to and egress from PHIMCO’s
premises, thus preventing non-striking employees and company vehicles from entering
the PHIMCO compound. In this manner, the picketers violated Article 264(e) of the Labor
Code.

GR190216, August 16, 2011, ANIB vs. CCBPI

 CA DISMISSAL OF PETITION ON TECHNICAL GROUNDS

The CA should not have dismissed the petition for certiorari upon a
mere technicality, that is, failure to attach a certified true copy of the assailed
NLRC Decision. Incidentally, petitioner insisted in his Compliance that the
copy of the assailed NLRC decision attached to the Petition was certified by
a duly authorized officer of the NLRC.

Such mere technicality should not be allowed to impede petitioner’s

call for a just review of the decision in the illegal dismissal case, ordering the
payment of separation pay in lieu of reinstatement.
66
Page
 It is well-settled that the application of technical rules of procedure may
be relaxed to serve the demands of substantial justice, particularly in labor
cases. Labor cases must be decided according to justice and equity and the
substantial merits of the controversy.170[9] Procedural niceties should be
avoided in labor cases in which the provisions of the Rules of Court are
applied only in suppletory manner. Indeed, rules of procedure may be relaxed
to relieve a part of an injustice not commensurate with the degree of non-
compliance with the process required.171[10]

We therefore remand the case to the CA for further proceeding.

However, it behooves the CA to resolve, initially, the issue of whether to allow
petitioner to litigate the case as an indigent, taking into consideration the
supporting documents that petitioner attached to his Compliance.

GR186557, August 25, 2010; Negros Metal Corp. vs. Lamayo

 LA HAS JURISDICTION OVER DISMISSALS

Under Art. 217, it is clear that a labor arbiter has original and exclusive
jurisdiction over termination disputes. On the other hand, under Article 261,
a voluntary arbitrator has original and exclusive jurisdiction

67
Page
over grievances arising from the interpretation or enforcement of company
policies.

GR 174593; Gurango vs. Best Chemicals; August 25, 2010

 FIST FIGHT

Also, the finding of the Court of Appeals that Gurango engaged in

a fistfight is a conclusion without citation of specific evidence on
which it is based.

September 2010
>GR176748 – Daquital et al vs L M Camus Eng’g,
Sept 1, 2010 not project but regular employees
>GR182622 PLDT vs Pingol, Sept 8, 2010
The Court agrees with petitioner PLDT. Judicial admissions made by
parties in the pleadings, or in the course of the trial or other
proceedings in the same case are conclusive and so does not require
further evidence to prove them. These admissions cannot be
contradicted unless previously shown to have been made through
palpable mistake or that no such admission was made.172[18] In Pepsi
Cola Bottling Company v. Guanzon,173[19] it was written:
xxx that the dismissal of the private respondent's complaint
was still proper since it is apparent from its face that the action has
prescribed. Private respondent himself alleged in the complaint that
he was unlawfully dismissed in 1979 while the complaint was filed
only on November 14, 1984. xxx (Emphasis supplied. Citations
omitted.)

>GR174040, Insular Hotel EU vs Waterfront IH DavaoSept22,2010

Petitioners have not, however, been duly authorized to represent the
union. Apropos is this Court’s pronouncement in Atlas Farms, Inc. v.
National Labor Relations Commission, viz:
68

x x x Pursuant to Article 260 of the Labor Code, the

Page

parties to a CBA shall name or designate their respective

 representatives to the grievance machinery and if the
grievance is unsettled in that level, it shall automatically be
referred to the voluntary arbitrators designated in advance by
parties to a CBA. Consequently, only disputes involving
the union and the company shall be referred to the
grievance machinery or voluntary arbitrators. (Emphasis
and underscoring supplied.)174[55]

If the individual members of the Union have no authority to file the case, does
the federation to which the local union is affiliated have the standing to do so?
On this note, Coastal Subic Bay Terminal, Inc. v. Department of Labor and
Employment175[56] G.R. No. 157117, November 20, 2006, 507 SCRA 300. is
enlightening, thus:

x x x A local union does not owe its existence to the

federation with which it is affiliated. It is a separate and
distinct voluntary association owing its creation to the
will of its members. Mere affiliation does not divest the
local union of its own personality, neither does it give
the mother federation the license to act independently
of the local union. It only gives rise to a contract of
agency, where the former acts in representation of the
latter. Hence, local unions are considered principals
while the federation is deemed to be merely their agent.
x x x176[57]

>GR160302, Escario et al vs NLRC Sept 27, 2010

Conformably with the long honored principle of a fair day’s wage for
a fair day’s labor, employees dismissed for joining an illegal strike are not
entitled to backwages for the period of the strike even if they are reinstated by
virtue of their being merely members of the striking union who did not commit
any illegal act during the strike.
69

>GR155109, C. Alcantara & Sons vs. CA et al Sept 29, 2010

Page
 ILLEGAL STRIKE: Violation of “No Strike Clause”
Company and the Union entered into a Collective Bargaining
Agreement (CBA) that bound them to hold no strike and no lockout in the
course of its life. At some point the parties began negotiating the economic
provisions of their CBA but this ended in a deadlock, prompting the Union to
file a notice of strike. After efforts at conciliation by the Department of Labor
and Employment (DOLE) failed, the Union conducted a strike vote that
resulted in an overwhelming majority of its members favoring it. The Union
reported the strike vote to the DOLE and, after the observance of the
mandatory cooling-off period, went on strike.

October 2010:

>GR # 163091 CCBPI vs. Del Villar, Oct. 6, 2010

TRANSFER = Constructive Dismissal

Moral & Exemplary Damages awarded here

Because of his unjustified dismissal, we likewise award in Del
Villar’s favor moral and exemplary damages. Award of moral and
exemplary damages for an illegally dismissed employee is proper
where the employee had been harrassed and arbitrarily terminated
by the employer. Moral damages may be awarded to compensate
one for diverse injuries such as mental anguish, besmirched
reputation, wounded feelings, and social humiliation occasioned by
the employer’s unreasonable dismissal of the employee. We have
consistently accorded the working class a right to recover damages
for unjust dismissals tainted with bad faith; where the motive of the
employer in dismissing the employee is far from noble. The award
of such damages is based not on the Labor Code but on Article 220
of the Civil Code.177[43] These damages, however, are not
intended to enrich the illegally dismissed employee, such that, after
deliberations, we find the amount of P100,000.00 for moral damages
and P50,000.00 for exemplary damages sufficient to assuage the
sufferings experienced by Del Villar and by way of example or
correction for the public good.
70

>GR# 188154, Cercado vs. UNIPROM, October 13, 2010

Page
 Acceptance by the employees of an early retirement age option must be
explicit, voluntary, free, and uncompelled. While an employer may
unilaterally retire an employee earlier than the legally permissible ages under
the Labor Code, this prerogative must be exercised pursuant to a mutually
instituted early retirement plan. In other words, only the implementation and
execution of the option may be unilateral, but not the adoption and institution
of the retirement plan containing such option. For the option to be valid, the
retirement plan containing it must be voluntarily assented to by the employees
or at least by a majority of them through a bargaining representative.

>GR#157802 MATLING vs. Coros, October 13, 2010

This case reprises the jurisdictional conundrum of whether a complaint

for illegal dismissal is cognizable by the Labor Arbiter (LA) or by the
Regional Trial Court (RTC). The determination of whether the dismissed
officer was a regular employee or a corporate officer unravels the conundrum.
In the case of the regular employee, the LA has jurisdiction; otherwise, the
RTC exercises the legal authority to adjudicate.

>GR#185814, SHS Perforated vs. Diaz, October 13, 2010

Management prerogative x x x it cannot be understood

to include the right to temporarily withhold salary/wages
without the consent of the employee. To sanction such an
interpretation would be contrary to Article 116 of the Labor
Code, which provides:
CRAVINGS x x x
Any withholding of an employee’s wages by an employer may only be
allowed in the form of wage deductions under the circumstances provided in
Article 113 of the Labor Code, as set forth below: x x x
`LA/CA/SC = AMOUNTED TO CONSTRUCTIVE DISCHARGE

GR#196400 Bolos vs. Bolos, October 20, 2010

WHEN THE LAW IS CLEAR: A cardinal rule in statutory

construction is that when the law is clear and free from any doubt or
71

ambiguity, there is no room for construction or interpretation. There is only

Page

room for application.178[9] As the statute is clear, plain, and free from
ambiguity, it must be given its literal meaning and applied without attempted
interpretation. This is what is known as the plain-meaning rule or verba legis.
It is expressed in the maxim, index animi sermo, or “speech is the index of
intention.” Furthermore, there is the maxim verba legis non est recedendum,
or “from the words of a statute there should be no departure.”179[10]

>GR#151349, Alcantara vs. PCIB, October 20, 2010

BREACH OF TRUST (Bank Branch Manager)

As a general rule, employers are allowed a wider latitude of discretion

in terminating the employment of managerial personnel or those who, while
not of similar rank, perform functions which by their nature require the
employer’s full trust and confidence. This must be distinguished from the
case of ordinary rank and file employees, whose termination on the basis of
these same grounds requires a higher proof of involvement in the events in
question; mere uncorroborated assertions and accusations by the employer
will not suffice.180[29

>GR#152166, St. Lukes vs. Notario, Oct. 20, 2010, GROSS NEGLIGENCE –

must be HABITUAL

>GR#185567, Locsin vs. Nissan Car Lease, Oct 20. 2010.

Labor Arbiter has no jurisdiction over intra-corporate disputes.

November:
>GR No. ?15946?: ILLEGAL STRIKE

3 day work boycott amounted to a strike:

“x x x. The term “strike” shall comprise not only concerted work stoppages, but
72

also slowdowns, mass leaves, sitdowns, attempts to damage, destroy or sabotage

Page

plant equipment and facilities and similar activities.181[42] Thus, the fact that the
conventional term “strike” was not used by the striking employees to describe their
common course of action is inconsequential, since the substance of the situation,
and not its appearance, will be deemed to be controlling.182[43]

>GR NO. 190515: Arbitral Award, an approximation of a CBA

It is well-settled that the Secretary of Labor, in the exercise of his power to

assume jurisdiction under Art. 263 (g)183[11] of the Labor Code, may resolve all
issues involved in the controversy including the award of wage increases and
benefits.184[12] While an arbitral award cannot per se be categorized as an
agreement voluntarily entered into by the parties because it requires the
intervention and imposing power of the State thru the Secretary of Labor when he
assumes jurisdiction, the arbitral award can be considered an approximation of
a collective bargaining agreement which would otherwise have been entered
into by the parties, hence, it has the force and effect of a valid contract
obligation.185[13]

That the arbitral award was higher than that which was purportedly agreed
upon in the MOA is of no moment. For the Secretary, in resolving the CBA
deadlock, is not limited to considering the MOA as basis in computing the wage
increases. He could, as he did, consider the financial documents186[14] submitted

73
by respondent as well as the parties’ bargaining history and respondent’s financial
outlook and improvements as stated in its website.187[15]

Page

>GR No. 188412 RULE 45

The general rule is that in petitions for review on certiorari, the Court will
not re-examine the findings of fact of the appellate court except
(a) when the latter’s findings are grounded entirely on speculations, surmises
or conjectures;
(b) when its inference is manifestly mistaken, absurd or impossible;
(c) when there is a grave abuse of discretion;
(d) when its findings of fact are conflicting; and
>GR No. 184362: a case of regular and not project employment

 NLRC may treat MR as appeal

The NLRC did not err in treating respondent’s motion for

reconsideration as an appeal, the presence of some procedural flaws including
the lack of verification and proof of service notwithstanding.

In labor cases, rules of procedure should not be applied in a very

rigid and technical sense. They are merely tools designed to facilitate the
attainment of justice, and where their strict application would result in the
frustration rather than promotion of substantial justice, technicalities must
be avoided. Technicalities should not be permitted to stand in the way
of equitably and completely resolving the rights and obligations of the
parties. Where the ends of substantial justice shall be better served, the
application of technical rules of procedure may be relaxed.188[11]
(emphasis supplied)

Respecting the lack of verification, Pacquing v. Coca-Cola Philippines,

Inc.189[12] instructs

As to the defective verification in the appeal memorandum

before the NLRC, the same liberality applies. After all, the
requirement regarding verification of a pleading is formal, not
jurisdictional. Such requirement is simply a condition affecting the form
of pleading, the non-compliance of which does not necessarily render the
pleading fatally defective. Verification is simply intended to secure an
assurance that the allegations in the pleading are true and correct and not
the product of the imagination or a matter of speculation, and that the
pleading is filed in good faith. The court or tribunal may order the correction
of the pleading if verification is lacking or act on the pleading although it is
not verified, if the attending circumstances are such that strict compliance
with the rules may be dispensed with in order that the ends of justice may
thereby be served. (emphasis supplied)
74

As for the requirement on proof of service, it may also be dispensed

with since in appeals in labor cases, non-service of copy of the appeal or
Page

(e) when it goes beyond the issues of the case.187[3] Citibank fails to
convince the Court that the case falls under any of the exceptions. Hence,
the findings of fact should no longer be reviewed. J. Hidalgo Uy v. Spouses Medina,
G.R. No. 172541, August 8, 2010.
appeal memorandum to the adverse party is not a jurisdictional defect which
calls for the dismissal of the appeal.190[13]

On the merits of the case, the Court finds that, indeed, respondent was a
regular, not a project employee.

December:

>GR No. 163293:

A bank manager’s abuse of authority in implementing bank policies is an abuse of the trust reposed
in him by his employer which constitutes as a just cause for his termination.

>GR No. 189366

 VALID DISMISSAL/DUE PROCESS

The law in protecting the rights of the laborer, authorizes neither oppression nor self-destruction of
the employer. While the Constitution is committed to the policy of social justice and the protection
of the working class, it should not be supposed that every labor dispute will be automatically

75
decided in favor of labor. Management also has its own rights, which, as such, are entitled to respect
and enforcement in the interest of simple fair play. x x x191[1]

Page
>GR No. 170542 (MetroBank) – a case of serious misconduct

x-----------------------------------------------------------------------------------
>GR186091/BABAS et al vs LORENZO SHIPPING CORP.’15 Dec 2010
“The requisites for a valid dismissal are: (a) the employee must be afforded due
process, i.e., he must be given an opportunity to be heard and defend himself; and
(b) the dismissal must be for a valid cause as provided in Article 282 of the Labor

On the issue of due process

It is hornbook in employee dismissal cases that “[t]he essence of due process is an

opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain one’s

76
side x x x.”192[15] “A formal or trial type hearing is not at all times and in all instances essential

Page
to due process, the requirements of which are satisfied where the parties are afforded fair and

Labor Only Contracting Found here:

In declaring BMSI as an independent contractor, the CA, in the challenged

Decision, heavily relied on the provisions of the Agreement, wherein BMSI declared that
it was an independent contractor, with substantial capital and investment.

De Los Santos v. NLRC191[18] instructed us that the character

of the business, i.e., whether as labor-only contractor or as job
contractor, should be measured in terms of, and determined by, the
criteria set by statute. The parties cannot dictate by the mere
expedience of a unilateral declaration in a contract the character of
their business.

In San Miguel Corporation v. Vicente B. Semillano, Nelson

Mondejas, Jovito Remada, Alilgilan Multi-Purpose Coop (AMPCO), and Merlyn N.
Policarpio,191[19] this Court explained:

Despite the fact that the service contracts contain

stipulations which are earmarks of independent contractorship,
they do not make it legally so. The language of a contract is
neither determinative nor conclusive of the relationship between
the parties. Petitioner SMC and AMPCO cannot dictate, by a
declaration in a contract, the character of AMPCO's business,
that is, whether as labor-only contractor, or job contractor.
AMPCO's character should be measured in terms of, and
determined by, the criteria set by statute.
reasonable opportunity to explain their side of the controversy.”193[16] Neither is it necessary that
the witnesses be cross-examined by counsel for the adverse party.194[17]

>GR No. 169965

 Documents to be attached to Petition for Certiorari

In Quintano v. National Labor Relations Commission,195[26] we held,

x x x The Rules do not specify the precise documents, pleadings or

parts of the records that should be appended to the petition other than the
judgment, final order, or resolution being assailed. The Rules only state
that such documents, pleadings or records should be relevant or pertinent to
the assailed resolution, judgment or orders; as such, the initial determination
of which pleading, document or parts of the records are relevant to the
assailed order, resolution, or judgment, falls upon the petitioner. The CA
will ultimately determine if the supporting documents are sufficient to even
make out a prima facie case. If the CA was of the view that the petitioner
should have submitted other pleadings, documents or portions of the records
to enable it to determine whether the petition was sufficient in substance, it
should have accorded the petitioner, in the interest of substantial justice, a
chance to submit the same instead of dismissing the petition outright.
Clearly, this is the better policy. x x x (Emphasis supplied.)

 GROSS and HABITUAL NEGLECT OF DUTY

 FRAUD

On the merits, we likewise find that the petition fails. There is no compelling reason
in this case for us to reverse the ruling of the CA sustaining the finding of the Labor Arbiter
that petitioner’s dismissal was effected with just cause. The findings of the Labor Arbiter
are supported by more than substantial evidence and even petitioner’s admissions during
the administrative hearings.196[27] As the CA correctly held,

Evidence overwhelmingly shows that petitioner Valenzuela was

indeed guilty of habitual and gross neglect of his duties. It was not the first
77
time that there occurred a shortage of the merchandise stocks but apparently
petitioner Valenzuela did nothing about it and, instead, manipulated
Page

documents and records, i.e., stock cards, to create the illusion that all
 merchandise stocks were accounted for, when in fact a lot of these
merchandise were already missing from petitioner Company’s Lapu-Lapu
terminal. x x x197[28]

xxxx

Furthermore, petitioner Valenzuela likewise committed fraud and

willful breach of the trust reposed in him by petitioner Caltex. He was in-
charge of the custody and monitoring of the merchandise stocks, and, as
found by the Labor Arbiter, was entrusted with confidence on delicate
matters, i.e., the handling and care and protection of the employer's
property. Considering that the merchandise stocks are the lifeblood of
petitioner Caltex, petitioner Valenzuela's act of allowing the loss of
merchandise stocks and concealing these from the employer is reason
enough for his termination from his employment.198[29]

Under Article 282 of the Labor Code, as amended, gross and habitual
neglect by the employee of his duties is a sufficient and legal ground to
terminate employment. Jurisprudence provides that serious misconduct and
habitual neglect of duties are among the just causes for terminating an
employee. Gross negligence connotes want of care in the performance of
one’s duties. Habitual neglect implies repeated failure to perform one’s duties
for a period of time, depending upon the circumstances.199[30]

Further, Article 282 of the Labor Code, as amended, also provides fraud
or willful breach by employee of the trust reposed in him by his employer as
a just cause for termination. It is always a serious issue for the employer when
an employee performs acts which diminish or break the trust and confidence
reposed in him. The Labor Code, as amended, although sympathetic to the
working class, is aware of this scenario and in pursuit of fairness, included
fraud or willful breach of trust as a just cause for termination of employment.

>GR No. 188637: Seafarer must prove his illness is wor 78

Page
 LABORJUR 2011
MARCH 2011
HARPOON MARINE SERVICES, G.R. No. 167751
INC. and JOSE LIDO T. ROSIT,

-VERSUS-

FERNAN H. FRANCISCO, Promulgated:

Respondent. March 2, 2011

x------------------ -------------------------------------------------x

>GR167751/ March 02, 2011/ HARPOON MARINE SERVICES,

INC. vs FRANCISO

EVIDENCE:
Satisfactory evidence of a valid or just cause of dismissal is indispensably required
in order to protect a laborer’s right to security of tenure. In the case before us, the
employer presented none despite the burden to prove clearly its cause.

LIABILITY OF CORPORATE OFFICERS:

As held in the case of MAM Realty Development Corporation v. National

Labor Relations Commission,200[33] “obligations incurred by [corporate officers],
79
acting as such corporate agents, are not theirs but the direct accountabilities of the
Page

corporation they represent.”201[34] As such, they should not be generally held

This petition generally involves factual issues, such as, whether or not
there is evidence on record to support the findings of the LA, the NLRC and
the CA that private respondents were project or regular employees and that
their salary differentials had been paid. This calls for a re-examination of the
evidence, which the Court cannot entertain. Settled is the rule that factual
findings of labor officials, who are deemed to have acquired expertise in
matters within their respective jurisdiction, are generally accorded not only
jointly and solidarily liable with the corporation. The Court, however, cited
circumstances when solidary liabilities may be imposed, as exceptions:

LIABILITY OF CORPORATE OFFICERS:

As held in the case of MAM Realty Development Corporation v. National

Labor Relations Commission,202[33] “obligations incurred by [corporate officers],
acting as such corporate agents, are not theirs but the direct accountabilities of the
corporation they represent.”203[34] As such, they should not be generally held
jointly and solidarily liable with the corporation. The Court, however, cited
circumstances when solidary liabilities may be imposed, as exceptions:

1. When directors and trustees or, in appropriate cases, the officers of a

corporation –

(a) vote for or assent to [patently] unlawful acts of the

corporation;
(b) act in bad faith or with gross negligence in directing the
corporate affairs;
(c) are guilty of conflict of interest to the prejudice of the
corporation, its stockholders or members, and other persons.

>G.R. No. 172161

RULE 45

80
This petition generally involves factual issues, such as, whether or not

Page
there is evidence on record to support the findings of the LA, the NLRC and

all over again, particularly where the findings of both the Labor tribunals and
the CA concur. 203[16]

This petition generally involves factual issues, such as, whether or not
there is evidence on record to support the findings of the LA, the NLRC and
the CA that private respondents were project or regular employees and that
their salary differentials had been paid. This calls for a re-examination of the
evidence, which the Court cannot entertain. Settled is the rule that factual
findings of labor officials, who are deemed to have acquired expertise in
matters within their respective jurisdiction, are generally accorded not only
the CA that private respondents were project or regular employees and that
their salary differentials had been paid. This calls for a re-examination of the
evidence, which the Court cannot entertain. Settled is the rule that factual
findings of labor officials, who are deemed to have acquired expertise in
matters within their respective jurisdiction, are generally accorded not only
respect but even finality, and bind the Court when supported by substantial
evidence. It is not the Court’s function to assess and evaluate the evidence
all over again, particularly where the findings of both the Labor tribunals and
the CA concur. 204[16]

all over again, particularly where the findings of both the Labor
tribunals and the CA concur. 205[16]

BURDEN OF PROOF OF PAYMENT:

As a general rule, on payment of wages, a party who alleges payment

as a defense has the burden of proving it.206[17] Specifically with respect to
labor cases, the burden of proving payment of monetary claims rests on the
employer, the rationale being that the pertinent personnel files, payrolls,
records, remittances and other similar documents — which will show that
overtime, differentials, service incentive leave and other claims of workers
have been paid — are not in the possession of the worker but in the custody
and absolute control of the employer.207[18]

>G.R. No. 177467 (PFIZER)

ORDER OF REINSTATEMENT PENDING APPEAL

PFIZER argues that, contrary to the Court of Appeals’ pronouncement

in its assailed Decision dated November 23, 2005, the ruling in Roquero v.
Philippine Airlines, Inc.208[14] is not applicable in the case at bar, 81
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particularly with regard to the nature and consequences of an order of
reinstatement, to wit:

The order of reinstatement is immediately executory. The

unjustified refusal of the employer to reinstate a dismissed employee
entitles him to payment of his salaries effective from the time the
employer failed to reinstate him despite the issuance of a writ of
execution. Unless there is a restraining order issued, it is ministerial upon
the Labor Arbiter to implement the order of reinstatement. In the case at
bar, no restraining order was granted. Thus, it was mandatory on PAL to
actually reinstate Roquero or reinstate him in the payroll. Having
failed to do so, PAL must pay Roquero the salary he is entitled to, as if
he was reinstated, from the time of the decision of the NLRC until the
finality of the decision of the Court.209[15] (Emphases supplied.)

As far back as 1997 in the seminal case of Pioneer Texturizing

Corporation v. National Labor Relations Commission,210[21] the Court held
that an award or order of reinstatement is immediately self-executory without
the need for the issuance of a writ of execution in accordance with the third
paragraph of Article 223211[22] of the Labor Code. In that case, we discussed
in length the rationale for that doctrine, to wit: x x x

In the case at bar, PFIZER did not immediately admit respondent back
to work which, according to the law, should have been done as soon as an
order or award of reinstatement is handed down by the Labor Arbiter without
need for the issuance of a writ of execution. Thus, respondent was entitled to
the wages paid to her under the aforementioned writ of execution. At most,
PFIZER’s payment of the same can only be deemed partial
compliance/execution of the Court of Appeals Resolution dated October 23,
2006 and would not bar respondent from being paid her wages from May 6,
2005 to November 23, 2005.

>G.R. No. 171189 (LORES REALTY)

WILLFUL DISOBEDIENCE:

The offense of willful disobedience requires the concurrence of two (2)

requisites: (1) the employee’s assailed conduct must have been willful, that is
82

characterized by a wrongful and perverse attitude; and (2) the order violated
Page
must have been reasonable, lawful, made known to the employee and must
pertain to the duties which he had been engaged to discharge.212[17]

Let it be noted at this point that the Court finds nothing unlawful in the
directive of Sumulong to prepare checks in payment of LREI’s obligations.
The availability or unavailability of sufficient funds to cover the check is
immaterial in the physical preparation of the checks.

Pacia’s initial reluctance to prepare the checks, however, which was

seemingly an act of disrespect and defiance, was for honest and well
intentioned reasons. Protecting LREI and Sumulong from liability under the
Bouncing Checks Law213[18] was foremost in her mind. It was not wrongful
or willful. Neither can it be considered an obstinate defiance of company
authority. The Court takes into consideration that Pacia, despite her initial
reluctance, eventually did prepare the checks on the same day she was tasked
to do it.

The Court also finds it difficult to subscribe to LREI and Sumulongs’s

contention that the reason for Pacia’s initial reluctance to prepare the checks
was a mere afterthought considering that “check no. 0000737527 under one
of the check vouchers she reluctantly prepared, bounced when it was
deposited.”214[19] Pacia’s apprehension was justified when the check was
dishonored. This clearly affirms her assertion that she was just being cautious
and circumspect for the company’s sake. Thus, her actuation should not be
construed as improper conduct.

[DOUBTS TO BE RESOLVED IN FAVOR OF LABOR]

In finding for Pacia, the Court is guided by the time-honored principle
that ifdoubt exists between the evidence presented by the
employer and the employee, the scales of justice must be
tilted in favor of the latter. The rule in controversies between
a laborer and his master distinctly states that doubts
reasonably arising from the evidence, or in the interpretation
83
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of agreements and writing, should be resolved in the former's
favor.215[20]
>G.R. No. 169717 (CHARTER CHEMICAL)

PETITION FOR CERTIFICATION ELECTION

The right to file a petition for certification election is accorded to a labor
organization provided that it complies with the requirements of law for proper
registration. The inclusion of supervisory employees in a labor organization
seeking to represent the bargaining unit of rank-and-file employees does not
divest it of its status as a legitimate labor organization. We apply these principles
to this case.

The charter certificate need not be certified under oath by the local union’s
secretary or treasurer and attested to by its president.

G.R. No. 169260 (SANDEN AIRCON)

WILLFUL BREACH OF TRUST

Article 282(c) of the Labor Code prescribes two separate and distinct
grounds for termination of employment, namely: (1) fraud or (2) willful breach by
the employee of the trust reposed in him by his employer or duly authorized
representative.

Settled is the rule that under Article 282(c), the breach of trust must be
willful. Ordinary breach will not suffice. “A breach is willful if it is done
intentionally and knowingly without any justifiable excuse, as distinguished from
an act done carelessly, thoughtlessly or inadvertently.”216[30]

“As firmly entrenched in our jurisprudence, loss of trust and confidence as a

just cause for termination of employment is premised on the fact that an employee
concerned holds a position where greater trust is placed by management and from
whom greater fidelity to duty is correspondingly expected.”217[31] “The betrayal
84
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 85
of this trust is the essence of the offense for which an employee is

Page
penalized.”218[32]

JUNE 2012

APO CEMENT vs BAPTISMA/GR176671/Factual Review by SC/Contradicting

factual findings/

The rule that only questions of law may be raised in a petition

brought under Rule 45 of the Rules of Court is not without
exception. Factual review may warrant when the factual
findings of the NLRC are contrary to those of the Labor Arbiter
and the CA;218[51] or when the CA’s findings of fact,
supposedly premised on the absence of evidence, are
contradicted by evidence on record.218[52] In this case, the
Labor Arbiter and the CA found no just cause to warrant the
dismissal of respondent. The NLRC, however, found otherwise.
A factual review is, therefore, in order.

SUBSTANTIAL EVIDENCE

All told, we find that the testimony of Lobitaña constitutes

substantial evidence to prove that respondent, as the then Power
Plant Manager, accepted commissions and/or “kickbacks” from
suppliers, which is a clear violation of Section 2.04 of
petitioner’s Company Rules and Regulations. Jurisprudence
consistently holds that for managerial employees “the mere
existence of a basis for believing that such employee has
breached the trust of his employer would suffice for his
dismissal.” 218[60] As we then see it, respondent’s termination
was for a just and valid cause.

WATERFRONT CEBU CITY HOTEL vs. JIMENEZ,

et al GR174214 Closure of a Division is retrenchment and
not closure
PAULINO vs PLDT GR176184/Willful Breach of Trust

The Labor Code recognizes that an employer, for just cause,

may validly terminate the services of an employee for
serious misconduct or willful disobedience of the lawful
orders of the employer or representative in connection with
the employee’s work.218[18] Fraud or willful breach by the
employee of the trust reposed by the employer in the
former, or simply loss of confidence, also justifies an
employee’s dismissal from employment.218[19]

To warrant dismissal based on loss of confidence, there

must be some basis for the loss of trust or the employer
 must have reasonable grounds to believe that the employee
is responsible for misconduct that renders the latter
unworthy of the trust and confidence demanded by his or
her position.218[24] Here, petitioner disputes the
sufficiency of PLDT’s basis for loss of trust and confidence.
He alleges that he did not steal the plant materials,
considering that he had lawful possession.218[25]

However, assuming that he lawfully possessed the

materials, PLDT still had ample reason or basis to already
distrust petitioner. For more than a month, he did not even
inform PLDT of the whereabouts of the plant materials.
Instead, he stocked these materials at his residence even if
they were needed in the daily operations of the company.
In keeping with the honesty and integrity demanded by his
position, he should have turned over these materials to the
plant’s warehouse.

JULY 2012

ELIGIR vs. PAL GR181995/Recovery of Training Costs

LEGEND HOTEL vs REALUYO GR153511/Hotel Pianist/EER found here/CA

may review facts/

AUGUST 2012

DLSU vs DLSUEA GR169254/ULP found here/Refusal to bargain

As to whether Kingspoint Express complied with the substantive requirements of due

process, this Court agrees with the CA that the concerned employees’ refusal to
submit themselves to drug test is a just cause for their dismissal.

KAKAMPI and ITS MEMBERS,

- versus -

KINGSPOINT EXPRESS and

LOGISTIC and/or MARY ANN CO,

Respondents.
86

G.R. No. 19481 April 25, 2012

Page
Sanden has the burden of proof to prove
its allegations.

“Unlike in other cases where the complainant has the burden of proof to
[prove] its allegations, the burden of establishing facts as bases for an employer’s
loss of confidence in an employee – facts which reasonably generate belief by the
employer that the employee was connected with some misconduct and the
nature of his participation therein is such as to render him unworthy of trust and
confidence demanded of his position – is on the employer.”219[33]

While it is true that loss of trust and confidence is one of the just causes for
termination, such loss of trust and confidence must, however, have some basis.
Proof beyond reasonable doubt is not required. It is sufficient that there must only
be some basis for such loss of confidence or that there is reasonable ground to
believe if not to entertain the moral conviction that the concerned employee is
responsible for the misconduct and that the nature of his participation therein
rendered him absolutely unworthy of trust and confidence demanded by his
position.220[34]

87
Page
As to whether Kingspoint Express complied with the substantive requirements of
due process, this Court agrees with the CA that the concerned employees’ refusal
to submit themselves to drug test is a just cause for their dismissal.
An employer may terminate an employment on the ground of serious misconduct
or willful disobedience by the employee of the lawful orders of his employer or
representative in connection with his work. Willful disobedience requires the concurrence
of two elements: (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. Both elements are present in this case.

As to the first element, that at no point did the dismissed employees deny
Kingspoint Express’ claim that they refused to comply with the directive for them to submit
to a drug test or, at the very least, explain their refusal gives rise to the impression that their
non-compliance is deliberate. The utter lack of reason or justification for their
insubordination indicates that it was prompted by mere obstinacy, hence, willful and
warranting of dismissal.
Sanden failed to discharge the burden of
proof that the dismissal of Loressa is for
a just cause.

The first requisite for dismissal on the ground of loss of trust and confidence
is that the employee concerned must be holding a position of trust and confidence.

In this case, we agree that Loressa, who had immediate access to Sanden’s
confidential files, papers and documents, held a position of trust and confidence
as Coordinator and Data Custodian of the MIS Department.

“The second requisite is that there must be an act that would justify the loss
of trust and confidence. Loss of trust and confidence, to be a valid cause for
dismissal, must be based on a willful breach of trust and founded on clearly

88
established facts. The basis for the dismissal must be clearly and convincingly
established but proof beyond reasonable doubt is not necessary.”221[35]

Page
LABORJUR 2012
JUNE 2012

>APO CEMENT vs BAPTISMA/GR176671/

Factual Review by SC/Contradicting factual findings/

The rule that only questions of law may be raised in a petition

brought under Rule 45 of the Rules of Court is not without
exception. Factual review may warrant:

* when the factual findings of the NLRC are contrary to those

of the Labor Arbiter and the CA;221[51] or

* when the CA’s findings of fact, supposedly premised on the

absence of evidence, are contradicted by evidence on
record.221[52]

In this case, the Labor Arbiter and the CA found no just cause
to warrant the dismissal of respondent. The NLRC, however,
found otherwise. A factual review is, therefore, in order.

SUBSTANTIAL EVIDENCE

All told, we find that the testimony of Lobitaña constitutes

substantial evidence to prove that respondent, as the then Power
Plant Manager, accepted commissions and/or “kickbacks” from
suppliers, which is a clear violation of Section 2.04 of
petitioner’s Company Rules and Regulations. Jurisprudence
consistently holds that for managerial employees “the mere
 existence of a basis for believing that such employee has
breached the trust of his employer would suffice for his
dismissal.” 221[60] As we then see it, respondent’s termination
was for a just and valid cause.

>WATERFRONT CEBU CITY HOTEL vs. JIMENEZ, et al

GR174214

*Closure of a Division is retrenchment and not closure

(CRAVINGS)
>PAULINO vs PLDT/ GR176184/Willful Breach of Trust
Here, petitioner disputes the sufficiency of PLDT’s basis
for loss of trust and confidence. He alleges that he did not
steal the plant materials, considering that he had lawful
possession.221[25]

However, assuming that he lawfully possessed the

materials, PLDT still had ample reason or basis to already
distrust petitioner. For more than a month, he did not even
inform PLDT of the whereabouts of the plant materials.
Instead, he stocked these materials at his residence even if
they were needed in the daily operations of the company.
In keeping with the honesty and integrity demanded by his
position, he should have turned over these materials to the
plant’s warehouse.

JULY 2012

>ELIGIR vs. PAL GR181995/Recovery of Training Costs

>LEGEND HOTEL vs REALUYO GR153511/Hotel Pianist/

EER found here/CA may review facts/

AUGUST 2012

>DLSU vs DLSUEA/GR169254/ULP found here/Refusal to bargain

89
Page
 Kakampi and its Members- versus Kingspoint Express
andLogistic and/or MARY Ann Co, G.R. No. 19481 April 25, 2012 As to
whether Kingspoint Express complied with the substantive requirements of due process,
this Court agrees with the CA that the concerned employees’ refusal to submit
themselves to drug test is a just cause for their dismissal.

LABORJUR 2013
GR No.170054, January 21, 2013

JOB-ONTRACTING: CBA serves as limitation on exercise of mgt prerogative to contract

out work performed by union members. CBA is the law between the
parties.GOYA:

>GENERAL MILLING: GR No. 181738, January 30, 2013

ILLEGAL TERMINATION DUE TO REDUNDANCY DONE IN BAD
FAITH.DAMAGES AWARDED

>CAVITE APPAREL,GR No.172022, February 6, 2013

*DISMISSAL on account of 4x ABSENCES in 6 years IS TOO

HARSH. “TOTALITY OF INFRACTIONS DOCTRINE” not
applicable/NOT HABITUAL/

>DISMISSAL FOR JUST CAUSE BUT W/O DUE PROCESS-

pay only indemnity DE JESUS/GR No.164662, February 18, 2012
>VOLUNTARY ARBITRATION: of complaint for payment of CBA wage
increases: Octavio vs PLDT: GR No. 175492, Feb 27, 2013

>FOOD SERVICE ATTENDANT (waitress)-occupies position of trust/

unauthorized application of discount privilege=breach of trust. Philippine
Plaza: GR No.192826, Feb 27, 2013
MARCH 2013
90
Page
>Constructive dismissal occurs not when the employee ceases to report for
work, but when the unwarranted acts of the employer are committed to the end
that the employee's continued employment shall become so intolerable. In these
difficult times, an employee may he left with no choice but to continue with his
employment despite abuses committed against him by the employer, and even
during the pendency of a labor dispute between them. This should not be taken
against the employee. Instead, we must share the burden of his plight, ever aware
of the precept that necessitous men are not free men.
(The Orchard Golf & Country Club, GR No. 178125, March 2013)
CD= transfer with demotion in rank
Attorney’s fees = properly awarded.

>CONSTRUCTIVE DISMISSAL: Veterans Security Agency vs Vargas

GR 159293m 16 December

DECEMBER 2013
 BAGUIO CENTRAL UNIVERSITY vs GALLENTE
December 02, 2013/G.R. No. 188267
RULING: WILLFUL BREACH OF TRUST found here
SC reversed CA
 RAMOS vs BPI FAMILY SAVINGS BANK
G.R. No. 203186/December 04,2013
RULING: CA’s finding of NEGLIGENCE – not supported by
substantial evidence

The Court’s Ruling

The petition is meritorious. To justify the grant of the

extraordinary remedy of certiorari, the petitioner must satisfactorily
show that the court or quasi-judicial authority
gravely abused the discretion conferred upon them. Grave abuse of
discretion connotes judgment exercised in a capricious and whimsical
manner that is tantamount to lack of jurisdiction. 40To be considered
“grave, ”the discretionary authority must be exercised in a despotic
manner by reason of passion or personal hostility, and must be so
patent and gross as to amount to an evasion of positive duty or to a
virtual refusal to perform the
duty enjoined by or to act all in contemplation of law.
41
In labor disputes, the NLRC’s findings are said to be tainted
with grave abuse of discretion when its conclusions are not
91

supported by substantial evidence.

Page
As held in the case of Mercado v. AMA Computer
College-Parañaque City, Inc.,4 citing Protacio v. Laya Mananghaya &
Co.:\43
The CA only examines the factual findings of the NLRC
to determine whether or not the conclusions are supported by
substantial evidence
whose absence points to grave abuse of discretion amounting to lack
or excess of jurisdiction. In the recent case of Protacio v. Laya
Mananghaya & Co., we emphasized that:
As a general rule, in certiorari proceedings under Rule 65 of the Rules of Court,
the appellate court does not assess and weigh th

> Phil. Carpet Manufacturing Corp vs Tagyamon et al

G.R. N0. 191475/December 11, 2013

 ILLEGAL RETRENCHMENT
 LACHES cannot be invoked to resist an existing legal right.
 The principle of STARE DECISIS applied here.
 WAIVER, RELEASE, QUITCLAIM – obtained through fraud

>GMA Network, Inc. vs Pabrica, et al /Nov 27, 2013

RULING: TV Technicians are regular employees, despite
fixed term employment contracts.
DISCUSSIONS re: regular, project and fixed term
contracts
>GEMINA vs BANKWISE/Oct 23, 2013
 Fund level commitment, condition for continued
employment
 No constructive dismissal found he

>ALVAREZ vs GOLDEN TRI BLOC/Sept 25, 2013

 Totality of Infractions Rule applied here
 Asking co-employee to punch-in his timecard =serious
misconduct
 NLRC may entertain Evidence on appeal
92

ASIA BREWERY
 CBA deadlock/AJ
Page
  FS to support losses must be audited

Colegio del Santisimo Rosario/GR170388/Sept 4, 2013

*Probationary period of Teachers
*When deemed regular

>NUBE vs PEMA GR174287 August 12, 2013

 Right of local union to disaffiliate is well settled
 Union dues

.MZR Industries/|GR179001/Aug 28, 2013

 Employee must prove the fact of dismissal

>INTEGRATED MICRO ELECTRONICS/GR 200222/Aug 28, 2013

 No backwages awarded although dismissal illegal (too harsh)

>CASTELLS vs SAUDIA ARABIAN AIRLINES

GR188514/Aug28, 2013
 General Rule: No extension of 60 day period under Rule 65

93
Page
>Manila Polo Club EU : Closure of F&B Department: LEGAL/July 24, 2013
94
Page

>BPI EMPLOYEES UNION ; JULY 24, 2013

 *OUTSOURCING OF CBU JOBS/CB CIRCULAR 1388/MGT
PREROGATIVE

>HOLY CHILD CATHOLIC SCHOOL July 23, 2013

 CE/MIXTURE OF R&F AND SUPERVISORS/ BYSTANDER RULE

>ABBOT LABORATORIES, PHILIPPINES vs ALCARAZ, GR192571, July 23, 2013

 COMPANY POLICY – an implied contract so long as it remains
effective
 PROBATIONARY EMPLOYMENT

>ZUELLIG FREIGHT July 22, 2013
CHANGE OF NAME does not result in creation of a new corporation

>SAMAR MED DISTRIBUTION vs NLRC/GUTANG GR 162385 July 15, 2013

Cause of action for illegal dismissal may still be entertained even if
not raised in the complaint which was merely a check list of possible
causes of action.

>MARTINEZ vs. ZENPELCO; GR192306 July 15, 2013

ISSUE: LOSS OF TRUST AND CONFIDENCE/found due to

unexplained cash shortage/cover-up by overage

>ZUELLIG PHARMA CORP vs SIBAL, et al GR 173587, July

15, 2013
ISSUE: Retirement Pay in addition to separation pay?

See: AQUINO vs NLRC, GR 87653 11 February 1992

In a Decision dated December 4, 2003, the CA granted respondents’ Petition and

nullified the Decisions of both the Labor Arbiter and the NLRC. Relying on the case of
Aquino v. National Labor Relations Commission,11 the CA ruled that since there is
nothing in the CBA which expressly prohibits the grant of both benefits, those who
received separation pay are, therefore, still entitled to retirement gratuity. The CA also
took note of Section 5, Article V of Zuellig’s January 1, 1968 Retirement Gratuity Plan,12
which provides that an employee who may be separated from the service for any cause
not attributable to his or her own fault or misconduct shall be entitled to full retirement
benefits. Since the cause of respondents’ separation from work was redundancy, the CA
ordered Zuellig to pay respondents retirement gratuity and the monetary equivalent of
their unused sick leave on top of the redundancy pay previously granted to them. The
dispositive portion of the CA Decision reads:

WHEREFORE, the petition is GIVEN DUE COURSE and GRANTED, and the assailed
Decision of the Labor Arbiter dated August 6, 1996 and the affirming Decision of the
NLRC dated January 21, 1998 are SET ASIDE and VACATED. In its stead, judgment is
rendered ORDERING respondent Zuellig Pharma Corporation to pay the retirement
95

gratuity and unused sick leave pay prayed for, and to this end the respondent NLRC is
directed to compute and specify the respective amounts due them.
Page
SO ORDERED.13

96
Page
First Philippine Industrial Corp. vs. Calimbas. !0 July 2013

97
Page
 98

Universal Robina Corp vs. Castillo GR189685 10 July 2013

Page
  An employee dismissed for a just cause is not entitled to separation pay.

FERNANDEZ vs NEW FIELD SOLUTIONSm INC. ; 10 July 2013

 ABANDONMENT NOT PROVEN

99
Page
PNOC-Energy Development Corp. vs. Estrella, 08 July 2013
100
Page
Page
101
ROY PASOS vs PNCC, July 3. 2013 GR 192394 “ A regular
employee didmissed for a cause other thab the just or authorized
cause causes prescribed by law is illegally dismissed.” Petitioner’s
regular employment was terminated by PNCC due to contract
expiration or project completion, which are both not among the
just or authorized causes provided in the Labor Code, as amended
for dismissing a regular employee. Petitioner was illegally
dismissed.

102
Page
Page
103
SEXUAL HARASSMENT - GR 166039 DIGITEL vs Mariquit
As New Jersey Vice Chancellor Van Fleet stated in the often-cited case
of Daggers v. Van Dyck:222[67] “Evidence to be believed, must not only
proceed from the mouth of a credible witness, but it must be credible in itself
– such as the common experience and observation of mankind can approve as
probable under the circumstances. We have no test of the truth of human
testimony, except its conformity to our knowledge, observation, and
experience. Whatever is repugnant to these belongs to the miraculous and is
outside of judicial cognizance.”223[68]

As petitioners put it: “It is always easy to say that no one is willing to testify
to corroborate the accuser’s allegations against an employer for fear of
retaliation on one’s livelihood. But courts should also not close their eyes to
the possibility that the failure to present a witness could only mean that the
act complained of did not actually happen.”224[74]

Any employee, male or female, may charge an employer or superior with

sexual harassment, but the claim must be well substantiated.225[87] As
reflected above, however, Mariquit’s claim does not pass the test of
credibility.]]

G.R. No. 140128 June 6, 2001

ARNOLD P. MOLLANEDA, petitioner,

vs.
LEONIDA C. UMACOB, respondent.

SANDOVAL-GUTIERREZ, J.:

104
Page
GROSS INEFFICIENCY G.R. No. 118434 July 26, 1996

SIXTA C. LIM, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and PEPSI-COLA FAR EAST
TRADE DEVELOPMENT CO., INC., respondents.

We cannot but agree with PEPSI that "gross

inefficiency" falls within the purview of "other
causes analogous to the foregoing," this
constitutes, therefore, just cause to terminate an
employee under Article 282 of the Labor Code. One
is analogous to another if it is susceptible of
comparison with the latter either in general or in
some specific detail; or has a close relationship with
the latter. 32 "Gross inefficiency" is closely related to
"gross neglect," for both involve specific acts of
omission on the part of the employee resulting in
damage to the employer or to his business. In Buiser
vs. Leogardo, 33 this Court ruled that failure to
observe prescribed standards to inefficiency may
constitute just cause for dismissal.

In the case at bench, however, prior to the issuance

of the Termination Letter on 15 May 1991, PEPSI
never called the petitioner's attention to any
alleged "gross inefficiency" on her part. Likewise,
she was never warned of possible disciplinary action
due to any alleged "gross inefficiency." The
evaluation report merely indicated her areas for
improvement. Moreover, in PEPSI's brochure
entitled "Managing Performance For the 90's," 34 a
BT rating does not merit dismissal from the service;
as a matter of fact, the lower rating — Significantly
Below Target (SB) — is not even a ground for
termination of employment, but may only justify
putting the employee "on probation and [telling
him] that improvement is necessity."
105

Undoubtedly, the petitioner obtained an unfavorable

rating, but not to the extent, under the company's
Page

standards, to warrant even a probationary measure

 which is given to the lowest rating of Significantly Below
Target (SB). If the company truly found the petitioner's
"inefficiency" to be of such a gross character, then it
should have rated her even lower than SB, since the
latter only requires that the employee be put on
probation.

It is then quite clear that by its own acts, PEPSI had not
characterized as "gross inefficiency" whatever failures,
shortcomings, or deficiencies may have been
attributable to the petitioner. The rule is of course
doctrinally entrenched that in termination cases, the
burden of proving that the employee's dismissal from
employment was for just cause rests upon the
employer. 35

LABORJUR 2013

EVIDENCE MAY BE SUBMITTED ON APPEAL

 Precision Electronics Corp. vs. NLRC/GR# 86657, 25 Oct
1989

“The submission of additional evidence in support

of Cabrera's appeal did not prejudice his employer
for the latter could have submitted counter-
evidence. After all, the rules of evidence prevailing
in courts of law or equity are not controlling in
proceedings before the Commission (Article 221,
Labor Code).”

 PT&T vs. NLRC/GR# 80600, 21 March 1990

“A contrario sensu, regarding respondent
commissions pronouncement on the award of
holiday pay, rest day pay and incentive leave pay
for three (3) years from August 23, 1982 to August
23, 1983 (sic), 12 we are inclined to subscribe to the
position taken by the Solicitor General. On appeal
to respondent commission, petitioner submitted
uncontracted evidence 13 showing payment to
private respondent of his holiday pay and rest day
pay, and private respondent's non-entitlement to
106

incentive leave pay due to his enjoyment of

vacation leave privileges, consistent with Article
Page
 95, Chapter III, Title I, Book III of the Labor Code.
Such evidence was, however, rejected by
respondent commission on the erroneous
justification that it was not presented at the first
opportunity, presumably when the case was
pending with the labor arbiter. 14

The belated presentation of the evidence

notwithstanding, respondent commission should
have considered them just the same. As correctly
pointed out by the Solicitor General, who has
impartially taken a contrary view vis-a-vis that
portion of said decision of respondent commission
which he is supposed to defend, technical rules of
evidence are not binding in labor cases. Labor
officials should use every and reasonable means to
ascertain the facts in each case speedily and
objectively, without regard to technicalities of law
or procedure, all in the interest of due process. 15
l15 Article 221, Labor Code; Magna Rubber
Manufacturing Corporation vs. Drilon, et al., G.R.
No. 81771, December 29, 1988.]

Thus, even if the evidence was not submitted to

the labor arbiter, the fact that it was duly
introduced on appeal to respondent commission is
enough basis for the latter to have been more
judicious in admitting the same, instead of falling
back on the mere technicality that said evidence
can no longer be considered on appeal. Certainly,
the first course of action would be more consistent
with equity and the basic notions of fairness.”

Magna Rubber Manufacturing Corporation vs. Drilon, et al.,

G.R. No. 81771, December 29, 1988.]

“This Court holds that even assuming that no

financial statement was submitted at the regional
level, the fact that it was submitted on appeal to
the public respondent Secretary is a cogent basis
for the latter to consider said evidence to have
been submitted, instead of falling back on the
technicality that said evidence can no longer be
107

admitted on appeal. Respondent Secretary

exercises quasi- judicial functions wherein the rules
Page
 of technicality should give way to equity and
fairness.

In Columbia Development Corporation vs. Hon.

Minister of Labor and Employment. 11 We held that
evidence submitted on appeal should be admitted
and considered in keeping with the directive of
Article 221 of the Labor Code of the liberal
application of the rules.”

JULY
GR192394: ROY D. PASOS vs. PNCC (July 3, 2013)
“Petitioner’s regular employment was
terminated by PNCC due to contract expiration or
project completion, which are both not among the
just or authorized causes provided in the Labor
Code, as amended, for dismissing a regular
employee. Thus, petitioner was illegally dismissed.”

JUNE
GR184116 Century Iron Works. June 19, 2013
LOSS OF TRUST AND CONFIDENCE:
Since Banas was an ordinary rank and file
employee, his termination on the ground of loss of
trust and confidence is illegal.
GR 201701 Unilever: June 7
VALIDLY DISMISSED EMPLOYEE IS NOT ENTITED TO
SEPARATION PAY

MARCH 2013

Constructive dismissal occurs not when the employee ceases to report

for work, but when the unwarranted acts of the employer are committed to
the end that the employee's continued employment shall become so intolerable.
108

In these difficult times, an employee may he left with no choice but to continue
with his employment despite abuses committed against him by the employer,
Page
and even during the pendency of a labor dispute between them. This should not
be taken against the employee. Instead, we must share the burden of his plight,
ever aware of the precept that necessitous men are not free men.
(The Orchard Golf & Country Club, GR No. 178125, March 2013)
CD= transfer with demotion in rank
Attorney’s fees = properly awarded.

MARANAW HOTELS AND G.R. No. 149660

RESORT CORP.,

Petitioner,

Present:

PUNO, C.J., Chairperson,

- versus - CARPIO,

CORONA,
AZCUNA, and

LEONARDO-DE CASTRO, JJ.

COURT OF APPEALS, SHERYL

OABEL AND MANILA Promulgated:

109

RESOURCE DEVELOPMENT

CORP.,
Page
 Respondents. January 20, 2009

x------------------------------------------------- x

This being so, the Court finds no difficulty in sustaining the finding of the

NLRC that MANRED is a labor-only contractor.226[20] Concordantly, the

real employer of private respondent Oabel is the petitioner.

LABORJUR 2014
>GR 186439 – Jan – A case of regular seasonal employment
>GR 196047 – Jan – Substantial compliance re appeal bond requirement
>GR180972 – Jan – Garza vs CCBPI – EVIDENCE
“Unsubstantiated accusations or
baseless conclusions of the employer are
insufficient legal justifications to dismiss an
employee. “The unflinching rule in illegal
dismissal cases is that the employer bears
the burden of proof.”

 GR 191714 - FEB - ULP found here

 GR 204406 – FEB – EXPIRATION OF CONTRACT – not just cause
“The respondents cannot use the alleged expiration of the
employment contracts of the petitioners as a shield of their illegal acts.
The project employment contracts that the petitioners were made to
sign every year since the start of their employment were only a
stratagem to violate their security of tenure in the company. As
restated in Poseidon Fishing v. NLRC,21 "if from the circumstances
it is apparent that periods have been imposed to preclude acquisition
of tenurial security by the employee, they should be disregarded for
being contrary to public policy.
110

G.R. No. 167286 - Feb 5, 2014 – gross inefficiency FOUND HERE

Page
In all cases involving termination of employment, the burden of proving the
existence of the above just causes rests upon the employer.66 The quantum of
proof required in these cases is substantial evidence, that is, such relevant
evidence that a reasonable mind might accept as adequate to support a
conclusion, even if other equally reasonable minds might conceivably opine
otherwise.67

The Court had occasion to explain in Century Iron Works, Inc. v. Bañas68 the
concept of gross and habitual neglect of duties. Thus:

Gross negligence connotes want or absence of or failure to exercise slight care

or diligence, or the entire absence of care. It evinces a thoughtless disregard
of consequences without exerting any effort to avoid them. Fraud and willful
neglect of duties imply bad faith of the employee in failing to perform his job,
to the detriment of the employer and the latter’s business. Habitual neglect,
on the other hand, implies repeated failure to perform one’s duties for a period
of time, depending upon the circumstances. (Citations omitted, emphasis
supplied.)

We also reiterated in Union Motor Corporation v. National Labor Relations

Commission69 that in dismissing an employee for gross and habitual neglect
of duties, the negligence should not merely be gross, it should also be habitual.

On gross inefficiency, we ruled in Lim v. National Labor Relations

Commission70 that:

[G]ross inefficiency falls within the purview of "other causes analogous to the
foregoing," and constitutes, therefore, just cause to terminate an employee
under Article 282 of the Labor Code. One is analogous to another if it is
susceptible of comparison with the latter either in general or in some specific
detail; or has a close relationship with the latter. "Gross inefficiency" is
closely related to "gross neglect," for both involve specific acts of omission
on the part of the employee resulting in damage to the employer or to his
business. In Buiser vs. Leogardo, this Court ruled that failure to observe
prescribed standards of work, or to fulfill reasonable work assignments due to
inefficiency may constitute just cause for dismissal. (Emphases ours; citations
omitted.)

Lim vs NLRC :

In the case at bench, however, prior to the issuance of the Termination Letter
on 15 May 1991, PEPSI never called the petitioner’s attention to any alleged
“gross inefficiency” on her part. Likewise, she was never warned of possible
disciplinary action due to any alleged “gross inefficiency.” The evaluation
report merely indicated her areas for improvement. Moreover, in PEPSI’s
brochure entitled “Managing Performance For the 90’s,”i[34] a BT rating
does not merit dismissal from the service; as a matter of fact, the lower rating
111

—- Significantly Below Target (SB) —- is not even a ground for termination

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of employment, but may only justify putting the employee “on probation and
[telling him] that improvement is a necessity.”

>GR 190724 – MARCH – Diamond Taxi

* When CA may review facts
* NLRC committed grave abuse of discretion in dismissing appeal
based on technicality (no certificate of non-forum shopping}
* a case of constructive discharge’ not abandonment

>GR 201663
*Posting of bond indispensable requisite to perfect an
appeal
*Instances when filing of MR of NLRC Decision may be
excused

GR 189456 - APRIL - CONSTRUCTIVE DISMISSAL not found

 A case of voluntary resignation
 Resignation defined
 http://lexoterica.wordpress.com/2010/07/16/june-
2010-philippine-supreme-court-decisions-on-labor-
law/ 112
Page
 LABORJUR 2014
>GR 186439 – Jan – A case of regular seasonal employment
>GR 196047 – Jan – Substantial compliance re appeal bond requireme
>GR180972 – Jan – Garza vs CCBPI – EVIDENCE
“Unsubstantiated accusations or baseless
conclusions of the employer are insufficient legal
justifications to dismiss an employee. “The
unflinching rule in illegal dismissal cases is that the
employer bears the burden of proof.”

 GR 191714 - FEB - ULP found here

 GR 204406 – FEB – EXPIRATION OF CONTRACT – not just cause
“The respondents cannot use the alleged expiration of
the employment contracts of the petitioners as a shield
of their illegal acts. The project employment contracts
that the petitioners were made to sign every year since
the start of their employment were only a stratagem to
violate their security of tenure in the company. As
restated in Poseidon Fishing v. NLRC,21 "if from the
circumstances it is apparent that periods have been
imposed to preclude acquisition of tenurial security by
the employee, they should be disregarded for being
contrary to public policy.

G.R. No. 167286 - Feb 5, 2014 – gross inefficiency FOUND HERE

In all cases involving termination of employment, the burden of proving

existence of the above just causes rests upon the employer.66 The quantum of pr
required in these cases is substantial evidence, that is, such relevant evidence tha
reasonable mind might accept as adequate to support a conclusion, even if ot
equally reasonable minds might conceivably opine otherwise.67
113
Page
>GR 190724 – MARCH – Diamond Taxi
114

* When CA may review facts

Page
* NLRC committed grave abuse of discretion in dismissing appeal
based on technicality (no certificate of non-forum shopping}

* a case of constructive discharge’ not abandonment

>GR 201663

*Posting of bond indispensable requisite to perfect an

appeal

*Instances when filing of MR of NLRC Decision may be G.R. No.

169494 March 14, 2007

CABALEN MANAGEMENT CO., INC., MA.ESTELA O. NIEVERA, IAN TIONGSON, ADJI

TIONGSON, ESTER O. NIEVERA and ANASTACIA NAVAL, ADRIANO JR.
CORPORATION, LEDA A. PANGILINAN, EVA S. CANDELARIA, ROSE MARIE
MORALES, DANILO SUNUBA, LETECIA DAVID, MARLON BULANADI, MA. THERESA
L. GADDI and CONSUELO HALILI REYES, Petitioners,
vs.
JESUS P. QUIAMBAO, GERALDINE M. PALERMO, RODEL B. PANGILINAN, WILLIAM
F. LACSON, ROCHELLE B. DE LEON, JOCELYN B. DEANG, EDGAR E. DE GUZMAN,
VIZIER INOCENCIO, VINCENT EDWARD C. MAPUA and JESSEBEL G.
OBIEN, Respondents.

DECISION

CARPIO MORALES, J.:

Excused

The dismissal of respondents was based on the statements of two witnesses, Henry dela
Vega Balen (Balen) and Roderick Malana (Malana), their co-employees, that they had
connived with one another in pocketing tips which were intended for the group, serving food
or drinks without receipts or with tampered ones, and committing like forms of stealing,
resulting in losses or damages to the company.

An audit report dated September 19, 2001 on the company’s accountable forms and on
incidents of missing bar order slips (OS), swapping of dining and bar OS, unrecorded bar OS
issuance, and excessive cancellation of OS and official receipts, was also considered as
evidence against respondents.

As for Quiambao and Palermo, while they were directed to immediately report to the Human
Resources Department (HRD), they were allegedly not given any assignments.

Respondents thus filed three separate cases3 against herein petitioners, the company and
Adriano Jr. Corporation, together with the Cabalen restaurant at the Glorietta, for illegal
dismissal and illegal suspension, with claims for 13th month pay, sick and vacation leaves,
monthly allowances, weekly tip, monthly signed chit, unpaid salaries, moral and exemplary
115

damages, attorney’s fees, and regularization for respondents Palermo, Pangilinan, Lacson,
Deang and De Guzman. The complaints were later amended to implead herein individual
petitioners as respondents.
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Labor Arbiter Virginia T. Luyas-Azarraga, finding that the evidence presented by petitioners
had sufficiently proved the charges against respondents Lacson, De Leon, Deang,
Pangilinan, De Guzman and Obien, held, by Decision of November 27, 2002,4 that they were
validly dismissed from the service.

With respect to respondents Quiambao and Palermo, however, the Labor Arbiter ordered
petitioners to reinstate them to their previous positions "under the same terms and conditions
prevailing as of September 4, 2001, but without backwages."5 The two were accordingly
directed to return to work within 48 hours from receipt of the decision. All other claims,
except for the proportionate 13th month pay for 2001, were dismissed for lack of merit.

The complaints of Inocencio and Mapua, who failed to sign the position paper for the
complainants, were dismissed for lack of interest.

By Resolution of September 30, 2003,6 the NLRC affirmed the Labor Arbiter’s decision. In
upholding the Labor Arbiter’s findings and conclusions, the Commission found well-taken the
observation that, stripped of herein respondents’ attacks on the persons of herein individual
petitioners, respondents had presented no material allegation or evidence to controvert the
charges against them.

Respondents filed a motion for reconsideration of the NLRC resolution, with a supplemental
manifestation7 from respondent Quiambao that he was not reinstated to his previous
position, as ordered by the Labor Arbiter, but was instead assigned to the company’s head
office in a "floating status," and that on April 21, 2003, he was served a Notice of Termination
of Service because the company was said to be losing heavily and had to retrench to avoid
closure.

Respondents’ motion for reconsideration was denied by the NLRC by Resolution of April 28,
2004 for lack of merit.8

On respondents’ petition for certiorari,9 the Court of Appeals, by Decision of April 29, 2005,
reversed and set aside the NLRC decision and resolution.

The appellate court found the statements of petitioners’ witnesses bereft of probative value,
there being no clear showing when, where, to and before whom those statements were
made, aside from the fact that they were not sworn to before a notary public.

As for the audit report of September 19, 2001, the appellate court noted that it failed to state
that respondents were responsible for the reported irregularities; and that the procedures on
valid dismissals laid down by the Labor Code and the company’s Code of Conduct were not
religiously followed.

Passing on the status of employment of respondents Palermo, Pangilinan, Lacson, Deang

and De Guzman who were hired from August 1997 to January 1999, the appellate court held
that having served the company for more than a year, they should be considered regular
employees, their positions as cashier, receptionist, and waiters being reasonably necessary
to the company’s usual business.

The appellate court held, however, that the award of moral and exemplary damages,
attorney’s fees and costs of suit was not in accord with law and jurisprudence in the absence
of proof that the dismissal was attended by fraud or bad faith.

Petitioners were thus ordered to reinstate respondents to their former positions without loss
of seniority rights and other privileges and to pay them their full back wages, allowances, and
other benefits computed from the time their compensation was withheld up to the time of
their actual reinstatement.

WHEREFORE, the petition is granted, and the resolutions of the public respondent NLRC
116

dated September 30, 2003 and April 28, 2004 are hereby reversed and set aside.
Accordingly, petitioners are ordered reinstated to their respective former positions without
loss of seniority rights and other privileges, and to their full backwages, inclusive of
Page

allowances, and to their other benefits or monetary equivalent computed from the time their
compensation was withheld from them up to the time of their actual reinstatement.
No pronouncement as to the costs.10

Their Motion for Reconsideration having been denied by the appellate court, petitioners
lodged the present petition which hinges on the sufficiency of evidence of a valid dismissal.

Amid these conflicting findings, which circumstance is a recognized exception11 to the

general rule that only questions of law may be entertained in a petition for review on
certiorari,12 this Court is constrained to re-examine the sufficiency of the evidence proffered
by petitioners in dismissing respondents.

It is a well-established rule that the employer has the burden of proving a valid dismissal of
an employee,13 for which two requisites must concur: (a) the dismissal must be for any of the
causes expressed in the Labor Code;14and (b) the employee must be accorded due process,
basic of which is the opportunity to be heard and to defend himself.15

To establish a just or authorized cause for dismissal, substantial evidence16 or "such amount
of relevant evidence which a reasonable mind might accept as adequate to justify a
conclusion" is required.17 Further required is that an employee sought to be dismissed must
be served two written notices before the termination of his employment. The first notice must
apprise him of the particular acts or omissions upon which his dismissal is grounded; the
second, to inform him of the employer’s decision to terminate his employment.18 While the
failure of the employer to comply with these notice requirements does not make the
dismissal illegal as long as a just or authorized cause has been proved, it renders the
employer liable for payment of damages because of the violation of the worker’s right to
statutory due process.19

Section 3 of Rule V of the New Rules of Procedure of the NLRC,20 which governs the
proceedings before the Labor Arbiter, provides:

Section 3. Submission of Position Papers/Memorandum. – Should the parties fail to agree

upon an amicable settlement, either in whole or in part, during the conferences, the Labor
Arbiter shall issue an order stating therein the matters taken up and agreed upon during the
conferences and directing the parties to simultaneously file their respective verified position
papers.

These verified position papers shall cover only those claims and causes of action raised in
the complaint excluding those that may have been amicably settled, and shall be
accompanied by all supporting documents including the affidavits of their respective
witnesses which shall take the place of the latter’s direct testimony. The parties shall
thereafter not be allowed to allege facts, or present evidence to prove facts, not referred to
and any cause or causes of action not included in the complaint or position papers, affidavits
and other documents . . . (Emphasis and underscoring supplied)

Section 9 of the same Rule states that "proceedings before a Labor Arbiter shall be non-
litigious in nature" and that "subject to the requirements of due process, the technicalities of
law and procedure and the rules obtaining in the courts of law shall not strictly apply thereto."
It is sufficient that the documents submitted by the parties have a bearing on the issue at
hand and support the positions taken by them.21

In light of the afore-quoted provisions, there was no necessity for the statements of Balen
and Malana to be sworn to before a notary public or that the said witnesses be presented in
person before the Labor Arbiter. For the statements to be of probative value, however, they
must measure up to basic evidentiary requirements.22

In IBM Philippines, Inc. v. NLRC,23 this Court clarified that the liberality in administrative
procedure "does not go so far as to justify orders without a basis in evidence having rational
probative value." And in Uichico v. National Labor Relations Commission,24 it held:
117

x x x It is true that administrative and quasi-judicial bodies like the NLRC are not bound by
technical rules of procedure in the adjudication of cases. However, this procedural rule
should not be construed as a license to disregard certain fundamental evidentiary rules.
Page

While the rules of evidence prevailing in courts of law or equity are not controlling in the
proceedings before the NLRC, the evidence presented before it must at least have a
modicum of admissibility for it to be given some probative value. x x x. (Emphasis and
underscoring supplied)

In the instant case, only photocopies25 of the statements of Balen and Malana form part of
the records despite petitioners’ reliance thereon to prove respondents’ purported
transgressions. Jarcia Machine Shop and Auto Supply, Inc. v. NLRC26 held that the unsigned
photocopies of daily time records (DTRs), which were presented by the therein employer to
show that its employee was neglectful of his duties, were of "doubtful or dubious probative
value."27

Indeed, the DTRs annexed to the present petition would tend to establish private
respondent’s neglectful attitude towards his work duties as shown by repeated and habitual
absences and tardiness and propensity for working undertime for the year 1992. But the
problem with these DTRs is that they are neither originals nor certified true copies. They are
plain photocopies of the originals, if the latter do exist. More importantly, they are not even
signed by private respondent nor by any of the employer’s representatives x x x.

Likewise, although Balen and Malana’s statements bore their signatures, they are wanting in
material particulars, the most glaring of which are the dates of execution.28 Understandably,
respondents objected to their admission, they claiming that the statements were presented
only after their cases for illegal dismissal were filed before the Labor Arbiter.29

In Balen’s statement, his name was hand printed on the first page thereof on the space
provided therefor, but the spaces intended for the date and the witnesses were left blank.

The purported transcript of Malana’s 15-page question-and-answer testimony, on the other

hand, while bearing his hand printed name and signature at the top rightmost margin of the
first page and on every page thereafter, merely indicated the person making the inquiry with
the initials "TLG." While the initials may have referred to Theresa L. Gaddi, manager of the
HRD,30 this point was never clarified by petitioners, hence, it remains in the realm of
speculation and surmises. Neither were the omissions as to date and other particulars
rectified. The appellate court’s discrediting of the statements as bereft of rational probative
value upon which a decision or order may properly be based is thus well-taken.

Respecting the audit report, petitioners posit that the therein mentioned documented
incidents-bases of faulting respondents were so numerous to have been incurred in the
normal course of business. It added that the statements of Balen and Malana regarding the
alleged wrongdoings of respondents who had possession of the accountable forms were
corroborated by the audit report.

It bears noting that while the audit report covered a 20-month period (January 2000 to
August 31, 2001), respondents had served only partly in the restaurant’s Glorietta branch
due to the company’s practice of rotating employees every so often. For that matter,
respondents Quiambao and Obien were assigned to the same branch in March and August
of 2000, respectively; Deang and Lacson, in October 2000; De Leon in April 2001; and De
Guzman in June 2001 only.31 Respondents’ alleged involvement in the reported irregularities
moreover appeared to be incongruent with the company’s awarding them of certificates32 of
commendation, recognition or appreciation for their invaluable service during the same
period.

Petitioners’ contention that the number of cancelled OS and receipts and the incidents of
swapping dining OS with bar OS were beyond the normal course of business deserves scant
attention, petitioners not having established the average figures in the ordinary course of its
business.

All told, neither the statements of Balen and Malana nor the audit report could support a valid
ground for dismissal.

It also does not help petitioners’ cause that they failed to follow rudiments of due process
118

and even the rules laid down in their own Code of Conduct. Section 2 of Rule XIV of the
Omnibus Rules Implementing the Labor Code33specifically provides, as follows:
Page
Section 2. Standards of due process; requirements of notice. – In all cases of termination of
employment, the following standards of due process shall be substantially observed:

1. For termination of employment based on just causes as defined in Article 282 of the Code:

(a) A written notice served on the employee specifying the ground or grounds for
termination, and giving to said employee reasonable opportunity within which to
explain his side;

(b) A hearing or conference during which the employee concerned, with the
assistance of counsel, if the employee so desires, is given 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 circumstances, grounds have been established to justify his
termination.

x x x x (Underscoring supplied)

The foregoing provision has been interpreted to mean that the written notice to the
employees who stand to lose their employment must specify the particular acts or omissions
constituting the grounds for their dismissal.34 The rule ensures that the employees are able to
answer the charges and to defend themselves from imputed wrongdoings before their
dismissals are ordered.

A review of the charges in the Notice to Explain and Suspension of September 4, 2001
shows that most, if not all, were couched in general terms. Thus, respondents Quiambao and
Obien were charged with "negligence in the performance of duties resulting to losses or
damages amounting to more than P5,000.00" and "involvement in stealing in any form." On
the other hand, Palermo, Lacson and De Leon were charged with "issuing /serving food or
drinks without corresponding receipts or [with] tampered receipts" and "stealing in any form,"
while Pangilinan and De Guzman were charged with "pocketing tips intended for the group"
and "stealing in any form." The charges against Deang, meanwhile, consisted of "withholding
information on administrative or legal cases" and "stealing in any form."

Precisely because of petitioners’ failure to sufficiently state the acts or omissions constituting
the alleged transgressions that respondent Obien asked to be clarified of the charges against
her.35 Because of the vagueness of the charges, it followed that respondents could only
issue a general denial.

The Corrective Action Report (CARE) furnished each of the respondents in accordance with
the company’s Code of Conduct was not any better. It did not contain the date/s when the
alleged infractions were committed,36 the person/s who reported the same for investigation,
or the signatures of the employees’ immediate supervisors.

Petitioners did not even heed their own procedures on disciplinary actions. The only facts
extant in the records are that respondents were issued above-said CARE Forms asking them
to explain their alleged infractions within 48 hours; and they subsequently received notices of
dismissal after they submitted their written explanations. There is, however, nothing to show
that before their dismissal, respondents were informed of their immediate supervisors’
decision to terminate their services, or that they were thereafter invited to an administrative
investigation before the HRD manager or officer who is tasked to conduct the investigation in
the presence of the employees’ immediate supervisor/s and the witnesses, if necessary, as
provided under Section IV of the company’s Code of Conduct.37

No record of any administrative investigation proceeding, which under the company’s rules,
was to be "minuted," had also been presented. Hence, only petitioners’ allegation that the
statements of the witnesses were taken as part of the administrative investigation is before
119

this Court. Allegations without proof do not deserve consideration.

Finally, on the dismissal of Quiambao allegedly on the ground of business losses, it was
Page

incumbent upon petitioners to prove it by substantial evidence. It did not, however. In fact,
Quiambao presented documents to disprove the validity of his retrenchment on that ground.
For petitioners’ failure to discharge its burden then, this Court is constrained to hold that
respondent Quiambao’s dismissal was not valid.

WHEREFORE, the Petition is DENIED. The challenged Decision of the Court of Appeals is
AFFIRM

120
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