CASE DIGESTS IN LABOR RELATIONS – PART 1

Manggagawa ng Komunikasyon sa Pilipinas vs. PLDT (April 19, 2017)

Facts:

 MKG represented the employees of the PLDT. The MKG filed a notice to strike before the NCMB
for PDLT’s alleged act of ULP because of the termination by reason of redundancy of the PDLT.
 Out of the 503 who were terminated by reason of redundancy, 108 were redeployed to other
positions.
 MKG went on a strike but the Secretary of Labor and Employment ordered the strike to be
enjoined and ordered the striking workers to return to work except those who were removed
from service by reason of redundancy.
 MKG assailed the SOLE’s order for creating a distinction among the striking workers. The CA
granted the petition for certiorari and nullified the SOLE’s order. The CA then issued an order to
readmit all striking workers under the same terms and conditions.
 On October 28, 2005 the NLRC dismissed the charges of ULP and upheld the validity of the
redundancy program. The case was elevated to the CA.
 The CA confirmed that the order of reinstatement assailed indicated all employees even those
declared separated and should be reinstated pendente lite however, the said order became
moot and academic due to the NLRC’s decision which upheld the validity of the dismissal of the
employees affected by the redundancy program.
 The CA also denied the prayer of MKG for payment of salaries from the date of their separation
until the date that the dismissal was held to be valid.
 The case was elevated to the CA through a petition for certiorari under rule 45.

Issues:
1. WON the CA committed grave abuse of discretion in upholding the validity of the redundancy
program of the PLDT.
2. WON the return-to-order was rendered moot when the NLRC upheld the validity of the
redundancy program.
3. WON the dismissed workers are entitled to separation pay.

Held:
(The court first discussed the Rule 45 aspect of the case)
A petition for review on certiorari under Rule 45 is a mode of appeal where the issue is limited only to
questions of law. In labor cases, a Rule 45 petition "can prosper only if the Court of Appeals ... fails to
correctly determine whether the National Labor Relations Commission committed grave abuse of
discretion."

A court or tribunal is said to have acted with grave abuse of discretion when it capriciously acts or
whimsically exercises judgment to be "equivalent to lack of jurisdiction."69 Furthermore, the abuse of
discretion must be so flagrant to amount to a refusal to perform a duty or to act as provided by law.

Issue no. 1:
redundancy exists when "the services of an employee are in excess of what is reasonably demanded by
the actual requirements of the enterprise."
While a declaration of redundancy is ultimately a management decision in exercising its business
judgment, and the employer is not obligated to keep in its payroll more employees than are needed for
 CASE DIGESTS IN LABOR RELATIONS – PART 1

its day to-day operations, management must not violate the law nor declare redundancy without
sufficient basis.

Asian Alcohol Corporation v. National Labor Relations Commission listed down the elements for the valid
implementation of a redundancy program:

(1) written notice served on both the employees and the Department of Labor and Employment at least
one month prior to the intended date of retrenchment;
(2) payment of separation pay equivalent to at least one month pay or at least one month pay for every
year of service, whichever is higher;
(3) good faith in abolishing the redundant positions; and
(4) fair and reasonable criteria in ascertaining what positions are to be declared redundant and
accordingly abolished

To establish good faith, the company must provide substantial proof that the services of the employees
are in excess of what is required of the company, and that fair and reasonable criteria were used to
determine the redundant positions.

Philippine Long-Distance Telephone Company's declaration of redundancy was backed by substantial

evidence showing a consistent decline for operator-assisted calls for both local and international calls
because of cheaper alternatives like direct dialing services, and the growth of wireless communication.
Thus, the National Labor Relations Commission did not commit grave abuse of discretion when it upheld
the validity of PLDT's redundancy program. Redundancy is ultimately a management prerogative, and
the wisdom or soundness of such business judgment is not subject to discretionary review by labor
tribunals or even this Court, as long as the law was followed and malicious or arbitrary action was not
shown.

Issue no. 2:
The return-to-work order from the Secretary of Labor and Employment aims to preserve the status quo
ante while the validity of the redundancy program is being threshed out in the proper forum. However
on October 28, 2005 the NLRC upheld the validity of the redundancy program, thus Secretary of Labor
and Employment's return-to-work order had been superseded by the National Labor Relations
Commission's Resolution.

The petitioner cited the case of Garcia v. Philippine Airline which upholds the prevailing doctrine that
even if a Labor Arbiter's order of reinstatement is reversed on appeal, the employer is obligated "to
reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the
higher court."

However, this case has no order of reinstatement from a Labor Arbiter, instead, what is at issue is the
return-to-work order from the Secretary of Labor and Employment. An order of reinstatement is
different from a return-to-work order.

Issue no. 3:
For either redundancy or retrenchment, the law requires that the employer give separation pay
equivalent to at least one (1) month pay of the affected employee, or at least one (1) month pay for
every year of service, whichever is higher. The employer must also serve a written notice on both the
 CASE DIGESTS IN LABOR RELATIONS – PART 1

employees and the Department of Labor and Employment at least one (1) month before the effective
date of termination due to redundancy or retrenchment.

While we agree that Philippine Long Distance Telephone Company complied with the notice
requirement, the same cannot be said as regards the separation pay received by some of the affected
workers.

While PLDT claims that it gave a generous offer of payment, it was found out that the payment included
both the separation pay plus retirement benefit. The Separation pay consisted only of 75% of the
monthly salary and contrary to the mandate of law which provides for the entire amount of the monthly
salary. It seems that the retirement benefits of the terminated workers were added to the separation
pay due them, hence the large payout. This should not be the case.

Separation pay is required in the cases enumerated in Articles 283 and 284 of the Labor Code, which
include retrenchment, and is computed at at least one month salary or at the rate of one-half month
salary for every month of service, whichever is higher. We have held that it is a statutory right designed
to provide the employee with the wherewithal during the period that he is looking for another
employment.

Retirement benefits, where not mandated by law, may be granted by agreement of the employees and
their employer or as a voluntary act on the part of the employer. Retirement benefits are intended to
help the employee enjoy the remaining years of his lifelessening the burden of worrying for his financial
sup ort, and are a form of reward for his loyalty and service to the employer.

Separation pay brought about by redundancy is a statutory right, and it is irrelevant that the retirement
benefits together with the separation pay given to the terminated workers resulted in a total amount
that appeared to be more than what is required by the law.

N.B.: Reinstatement order vs. Return-to-work order

A reinstatement order is one which reinstates an employee without loss of seniority rights and
other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their
monetary equivalent computed from the time his compensation was withheld from him up to the time
of his actual reinstatement. On the other hand, a return-to-work order is issued by the Secretary of
Labor and Employment when he or she assumes jurisdiction over a labor dispute in an industry that is
considered indispensable to the national interest.

Return-to-work and reinstatement orders are both immediately executory; however, a return-
to-work order is interlocutory in nature, and is merely meant to maintain status quo while the main
issue is being threshed out in the proper forum. In contrast, an order of reinstatement is a judgment on
the merits handed down by the Labor Arbiter pursuant to the original and exclusive jurisdiction provided
for under Article 224(a)118 of the Labor Code.
 CASE DIGESTS IN LABOR RELATIONS – PART 1

Bebiano Banez vs. Hon. Downey C. Valdevilla (May 9, 2000)

Facts:
 Herein petitioner was sales manager in private respondent’s store branch. Private respondent
indefinitely suspended petitioner which led to the filing of the latter of an illegal dismissal case.
 The labor arbiter found petitioner to have been illegally dismissed and ordered separation pay in
lieu of reinstatement.
 Private respondent then filed an action for damages before the RTC of Misamis Oriental. The
Respondent Judge ruled on the case rationing that the action is one which does not seek any
relief under the labor code and seeks to recover damages for breach of his contractual
obligation and that the action was one within the realm of civil law.
 The case was elevated to the SC.

Issue:
WON the respondent judge is correct in ruling that the case for damages was within the jurisdiction of
the regular courts of justice.

Held:
Article 217 of the Labor code provides the jurisdiction of the Labor Arbiters and one of those
enumerated is Claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relations.

The above provisions are a result of the amendment by Section 9 of Republic Act ("R.A.") No. 6715,
which took effect on March 21, 1989, and which put to rest the earlier confusion as to who between
Labor Arbiters and regular courts had jurisdiction over claims for damages as between employers and
employees.

It will be recalled that years prior to R.A. 6715, jurisdiction over all money claims of workers, including
claims for damages, was originally lodged with the Labor Arbiters and the NLRC by Article 217 of the
Labor Code. On May 1, 1979, however, Presidential Decree ("P.D.") No. 1367 amended said Article 217
to the effect that "Regional Directors shall not indorse and Labor Arbiters shall not entertain claims for
moral or other forms of damages." This limitation in jurisdiction, however, lasted only briefly since on
May 1, 1980, P.D. No. 1691 nullified P.D. No. 1367 and restored Article 217 of the Labor Code almost to
its original form. Presently, and as amended by R.A. 6715, the jurisdiction of Labor Arbiters and the NLRC
in Article 217 is comprehensive enough to include claims for all forms of damages "arising from the
employer-employee relations.

The lawmaking authority had second thoughts about depriving the Labor Arbiters and the NLRC of the
jurisdiction to award damages in labor cases because that setup would mean duplicity of suits, splitting
the cause of action and possible conflicting findings and conclusions by two tribunals on one and the
same claim.

This is, of course, to distinguish from cases of actions for damages where the employer-employee
relationship is merely incidental and the cause of action proceeds from a different source of obligation.
Thus, the jurisdiction of regular courts was upheld where the damages, claimed for were based on tort,
malicious prosecution, or breach of contract, as when the claimant seeks to recover a debt from a
former employee or seeks liquidated damages in enforcement of a prior employment contract.
 CASE DIGESTS IN LABOR RELATIONS – PART 1

Telephilippines Inc. Vs. Ferrando Jacolbe (February 18, 2019)

Facts
 Jacolbe is a customer service representative of petitioner TP. As such, he was required to meet
an Average Handle Time of 7.0 minutes or below. Jacolbe failed to meet such requirement so he
was placed under a Performance Improvement Plan after he failed to meet the 7 minute
requirement in two previous instances.
 The HR sent him a Notice to Explain informing him of the incident and further stating that what
he did could warrant termination of his employment. Unsatisfied with the explanation, he was
dismissed for failure to meet account specific performance metrics under the Code of Conduct
and Zero Tolerance Policy.
 Jacolbe filed an illegal dismissal case before he Labor Arbiter.
 LA found Jacolbe to have been illegally dismissed. The NLRC reversed the LA’s ruling and held
that the dismissal was valid. The CA reversed the NLRC’s ruling and found Jacolbe to have been
illegally dismissed.

Issue: WON Jacolbe’s dismissal was valid.

WON the due process requirement was satisfied.

Held:
1. YES. A valid dismissal necessita tes compliance with both substantive and procedural due
process requirements. Substantive due process mandates that an employee may be
dismissed based only on just or authorized causes under Articles 297, 298, and 299
(formerly Articles 282, 283, and 284) of the Labor Code, as amended.

On the other hand, procedural due process requires the employer to comply with the
requirements of notice and hearing before effecting the dismissal. In all cases involving
termination of employment, the burden of proving the existence of the above valid causes rests
upon the employer. The quantum of proof required in these cases is substantial evidence as
discussed above.

Thus, Jurisprudence defines Gross Inefficiency as analogous to gross and habitual

neglect of duty under Art. 297-e of the Labor Code in relation to Article 297-b for both involve
specific acts of omission on the part of the employee resulting to damage to the employer or his
business.

 Buiser vs. Leogardo Jr. - Such inefficiency is understood to mean failure to attain work goals or
work quotas, either by failing to complete the same within the allotted reasonable period, or by
producing unsatisfactory results
 SMC vs. NLRC - an employer is entitled to prescribe reasonable work standards, rules, and
regulations necessary for the conduct of its business, to provide certain disciplinary measures in
order to implement them, and to assure that the same would be complied with. This
management prerogative of requiring standards may be availed of so long as they are exercised
in good faith for the advancement of the employer's interest.

In this case, it was shown that Jacolbe’s AHT scores were well above the 7 minute requirement and
as such, TP allowed him to continue in his employment and enrolled him in its SMART Action and
performance Improvement plan twice. That notwithstanding, JAcolbe’s AHT scores still remained
 CASE DIGESTS IN LABOR RELATIONS – PART 1

above the 7 minute requirement. Undoubtedly, Jacolbe's repeated and consistent failure to meet
the prescribed AHT mark over a prolonged period of time falls squarely under the concept of gross
inefficiency and is analogous to gross and habitual neglect o f duty under Article 297 of the Labor
Code which justified his dismissal.

2. The due process requirement of two written notices; first, a notice specifying the ground or
grounds for termination, and giving to said employee reasonable opportunity within which
to explain his side; and second, a notice of termination indicating that upon due
consideration of all the circumstances, grounds have been established to justify his
dismissal.

In this case, it is found that TP has complied with this jurisprudential requirement.

N.B.: While security of tenure is indeed constitutionally guaranteed, this should not be indiscriminately
invoked to deprive an employer of its management prerogatives and right to shield itself from
incompetence, inefficiency, and disobedience displayed by its employees, as the Court finds in this case.
CASE DIGESTS IN LABOR RELATIONS – PART 1
 CASE DIGESTS IN LABOR RELATIONS – PART 1

Slord Development Corporation vs. Benerando Noya (February 4, 2019)

Facts:
