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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
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.
VI
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
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
2 Id. at 101-115.
6
5 Rollo, p. 227.
6 Id. at 273-274.
8 Id. at 358-359.
10 Id. at 352-355.
11 Id. at 356-367.
14 Id. at 64-66.
15 Id. at 349-350.
16 Id. at 159-198.
18 Penned by Labor Arbiter Amado M. Solamo, NLRC Records, Vol. 1, pp. 211-236.
22 Supra note 1.
24 Id. at 33-35.
356 Phil. 811, 816 (1998); See also Philippine National Bank v. Cabansag, G.R.
25
Noted in Footnote 17 of the case St. Martin Funeral Home v. National Labor
26
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.
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.
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).
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
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.
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]
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)
FEBRUARY 2007
MARCH 2007
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]
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
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]
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.
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
APRIL 2007
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 –
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:
troublesome, uncooperative and not observing the rules and regulations set
Page
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.
LABORJUR 2008
January 2008
GR 150861 – VALIDITY OF QUITCLAIM
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
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.
xxx
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
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.
from the union. These requisites constitute just cause for terminating an
Page
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
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.
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.
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]
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
MAY 2008
JUNE 2008
Did Alipio commit serious misconduct when she obtained copies of her payslips?
AUGUST
SEPTEMBER 2008
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.
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]
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.
NOVEMBER 2008
GR163942 –
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
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]
- 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
-
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
-
-
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
- 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
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.
FEBRUARY 2010
GR188002, February 1, 2010, Goodrich Mfg Corp. vs Ativo, et al
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]
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.
APRIL 2010
Page
GR182114, April 5, 2010;Genesis Transport Service vs UNYON
ISSUES NOT RAISED BEFORE LABOR ARBITER
CANNOT BE RAISED ON APPEAL:
RULE 45
52
LEDESMA RULING:
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]
LEOPARD RULINGS
57
Page
burden of proof required in labor cases must be amply
discharged.151[42]
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
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:
A claim for overtime pay, it must be stressed, cannot be granted in the absence of
supporting factual and legal basis.163[64]
AUGUST 2010
AC No. 8481; Alonso vs Relamida; August 3, 2010
Forum Shopping: one month suspension
GR169170 Gobres, et al . August 2010
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.
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.
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.
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.
67
Page
over grievances arising from the interpretation or enforcement of company
policies.
FIST FIGHT
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.)
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:
October 2010:
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#152166, St. Lukes vs. Notario, Oct. 20, 2010, GROSS NEGLIGENCE –
must be HABITUAL
November:
>GR No. ?15946?: ILLEGAL STRIKE
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]
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
(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:
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.
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
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
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,
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
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.
-VERSUS-
x------------------ -------------------------------------------------x
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.
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:
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]
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.
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.
The charter certificate need not be certified under oath by the local union’s
secretary or treasurer and attested to by its president.
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]
Page
penalized.”218[32]
JUNE 2012
SUBSTANTIAL EVIDENCE
JULY 2012
AUGUST 2012
- versus -
Respondents.
86
“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
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
JULY 2012
AUGUST 2012
LABORJUR 2013
GR No.170054, January 21, 2013
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
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
ASIA BREWERY
CBA deadlock/AJ
Page
FS to support losses must be audited
93
Page
>Manila Polo Club EU : Closure of F&B Department: LEGAL/July 24, 2013
94
Page
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
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]
SANDOVAL-GUTIERREZ, J.:
104
Page
GROSS INEFFICIENCY G.R. No. 118434 July 26, 1996
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
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
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.
RESORT CORP.,
Petitioner,
Present:
- versus - CARPIO,
CORONA,
AZCUNA, and
RESOURCE DEVELOPMENT
CORP.,
Page
Respondents. January 20, 2009
x------------------------------------------------- x
This being so, the Court finds no difficulty in sustaining the finding of the
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.”
The Court had occasion to explain in Century Iron Works, Inc. v. Bañas68 the
concept of gross and habitual neglect of duties. Thus:
[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
>GR 201663
*Posting of bond indispensable requisite to perfect an
appeal
*Instances when filing of MR of NLRC Decision may be
excused
>GR 201663
DECISION
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.
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
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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
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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.
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:
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:
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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.
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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.
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
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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:
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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
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Finally, on the dismissal of Quiambao allegedly on the ground of business losses, it was
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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
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