MARCOPPER Mining Corporation vs National Labor
Relations Commission (NLRC) and National Mines and
Allied Workers’ Union
G.R. No. 103525 / 255 SCRA 322
March 29, 1996
SPECIAL CIVIL ACTION. Certiorari.
Facts:
• Petitioner Marcopper is a corporation engaged
in the business of mineral prospecting, exploration
and extraction. Respondent is the labor federation to
which Marcopper’s employees union is affiliated.
• Both parties entered into a Collective
Bargaining Agreement effective from 1-May-1984 to
30-April-1987. Sec. 1 of Art. V of the CBA provides
that petitioner agrees to grant general wage increase to
all employees as follows:
• Increase per day on the Basic Wage =
5%, effective 01-May-1985;
• Increase per day on the Basic Wage =
5%, effective 01-May-1986.
• It is expressly understood that this
wage increase shall be exclusive of any
increase in the minimum wage and/or
mandatory living wage allowance that may be
promulgated during the life of this agreement.
• Prior to the expiration of the CBA, on 25 July
1986, both parties executed a Memorandum of
Agreement, changing the terms of Sec. 1 Art. V, as
follows:
• Petitioner grants a wage increase of
10% of basic rate:
• 5% effective 01-May-1986;
• 5% effective 01-May-1987
• Petitioner grants an increase of
facilities allowance from P50.00 to P100.00 per
month effective 01-May-1986.
• Petitioner then implemented the initial 5%
wage increase due 01-May-1986.
• On 01-June-1987, E.O. 178 was passed,
mandating the integration of cost of living allowance
(COLA) into the basic wage of workers, its effectivity
retroactive to 01-May-1987.
• Petitioner implemented the second 5% wag
increase due on 01-May-1987, then added the
integrated COLA. Respondent assailed the manner in
which the second wage increase was implanted. It
argued that the COLA should be integrated first
before the 5% wage increase is computed.
Labor Arbiter: Ruling for RESPONDENTS.
• The LA noted that the last sentence in Sec. 1
of Art. V was a non-chargeability clause, where both
parties acknowledged the never-ending rise of COLA.
However, petitioner is not allowed to deny workers
the benediction endowed by E.O. 178.
NLRC: LA decision AFFIRMED.
• The NLRC further ruled that petitioner, as
employer, may not be allowed to renege on its
obligation under a CBA should, at the same time, the
law grants the employees the same or better terms and
conditions of employment.
• Employee benefits derived from law
are exclusive of benefits arrived at through
negotiations unless otherwise provided by the
agreement or by the law.

Issue: Whether or not the wage increase should be
implemented with the integrated COLA.
SC: Petition DISMISSED.
• The principle that the CBA is the law between
the contracting parties stands strong and true.
However, the present controversy requires a
determination of the effect of an executive order on
the terms of the CBA.
• Petitioner contends that the term ‘basic
wage’ should not include the additional COLA
since the CBA was made prior to the executive
order. The definition of the term ‘basic wage’
in the CBA did not include COLA as part of or
integrated into the regular salary of the
employee.
• When E.O. 178 became effective on
01-May-1987, basic wage then included
COLA. As such, the monetary benefits were
integrated into the basic pay of workers.
• While the terms and conditions of
the CBA constitute the law between the
parties, it is not an ordinary contract, but as
a labor contract impressed with public
interest, and must therefore yield to the
common good.
• As such, it must be construed liberally
rather than narrowly and technically, in favor of
labor.
• When conflicting interests of labor and
capital are to be weighed, the heavier influence
of capital should be counter-balanced by
sympathy and compassion the law must accord
the underprivileged worker. Any doubt
concerning the rights of labor should be
resolved in its favor pursuant to the social
justice policy.
Ester ASUNCION vs National Labor Relations
Commission and Mabini Medical Clinic
G.R. No. 129329 / 362 SCRA 56
July 31, 2001
SPECIAL CIVIL ACTION. Certiorari.
Facts:
• Petitioner was employed as
accountant/bookkeeper by respondent Mabini Medical
Clinic.
• Sometime in May 1994, certain officials of
the DOLE conducted a routine inspection of the
premises of respondent company and discovered
violations of labor standards law, such as non-
coverage from the SSS of the employees. Respondent
was made to correct these violations.
• Thereafter, Medical Director Wifrido Juco
issued a memorandum charging petitioner the
following offenses:
• Chronic absenteeism;
• Habitual tardiness;
• Loitering and wasting of company
time;
• Getting salary of an absent employee
without acknowledging or signing for it;
• Disobedience and insubordination.
 • Petitioner was required to explain within 2
days, but she submitted her response 3 days later.
Petitioner then was dismissed for disobedience of
lawful orders and her failure to reply within the two-
day period.
• Petitioner filed a case for illegal termination
before the NLRC.
Labor Arbiter: Ruling for PETITIONER.
• The LA ruled that petitioner was illegally
dismissed since private respondent was unable to
prove the allegation of chronic absenteeism, as it
failed to produce evidence on the same.
• The non-presentation of hard evidence
gives rise to the presumption that they were
intentionally suppressed since they would be
adverse to private respondent’s claim.
NLRC: LA decision REVERSED.
• It held that petitioner admitted the tardiness
and absences through offering justifications for the
infractions.
Issue: Whether or not petitioner was illegally dismissed.
SC: LA decision REINSTATED.
• The Court stressed that a worker’s
employment is property in the constitutional sense.
He/She cannot be deprived of work without due
process.
• In order for a dismissal to be valid:
• It must be based on just cause;
• Supported by clear and convincing
evidence;
• Employee must also be given an
opportunity to be heard and defend
himself/herself.
• It is the employer who has the burden of
proving that the dismissal was with just or authorized
cause.
• In the case at bar, there was a lack of
evidence to establish the charges of
absenteeism and tardiness. Respondent
submitted mere unsigned handwritten listings
and computer printout whose time entries and
other annotations were likewise unsigned.
• Hence, the evidence presented were
unauthenticated and, thus, unreliable. Such
evidence without any probative value may not
be made basis of order or decision of
administrative bodies.
• Ironically, the record book, upon which
respondent based its termination, was never
presented in evidence, despite having the
opportunity to present the same.
• The record was also bereft of any showing
that petitioner was ever warn of her absences or
tardiness prior to her dismissal. Respondent never
gave any warning nor reprimanded her for alleged
tardiness and absences.
• Given that respondent failed to present a
single piece of credible evidence to serve as the basis
for their charges against petitioner and consequently,
failed to fulfill their burden of proving facts which
constitute just cause for the dismissal of petitioner, the
NLRC’s decision must be reversed, and the LA’s
decision must be reinstated.
 • Apart from the fact that the two-day period
within which petitioner should submit her explanation
was most unreasonable, respondent actually ordered
its staff not to accept her explanation, which
resulted in her submitting the same a day later.
• The law mandates that every
opportunity and assistance must be accorded
the employee to enable him/her to prepare
adequately for his defense.
Philippine National Construction Corporation (PNCC)
v. NLRC
Facts:
PNCC employed Mendoza as Driver II at its Magat Dam
Project (more than 1 year). A few days after his previous
employment, Mendoza was again employed as Driver II at
PNCC’s LRT Project (6 months). Later, PNCC deployed
Mendoza, also as a Driver II, in its Saudi Arabia Project
(more than 1 year).
It took more than 6 months for Mendoza to be repatriated to
the Philippines (after the last project). Upon his return he
resumed his work as Driver UU in the PG-7B Project of
PNCC (more than 1 year). For more than 2 years afterwards,
Mendoza was not given any work assignment. He was then
hired anew as Driver II for the Molave Project of PNCC
(around 8 months).
Thereafter, Mendoza claimed the benefits of PNCC’s
Retrenchment Program (note that the coverage will be for
employees who have rendered at least 1 year of continuous
service and are actively employed in the company as of the
date of their separation). However, PNCC denied his claim.
Thus, Mendoza filed a complaint for non-payment of
separation pay. The LA granted Mendoza’s plea, which
NLRC affirmed.
Issue: WON Mendoza’s service was continuous.
Held: Yes.
The Court held that under the separation program, an
employee may qualify if he has rendered “at least one year
of continuous service.” As public respondent has stated, the
plain language of the program did not require that
continuous service be immediately prior to the employee’s
separation. Thus, private respondent’s other stints at PNCC
prior to his last service in 1989 can properly be considered
in order to qualify him under the program. That the duration
of private respondent’s last stint was less than one year does
not militate against his qualification under the program. We
grant this liberality in favor of private respondent in the light
of the rule in labor law that “when a conflicting interest of
labor and capital are weighed on the scales of social justice,
the heavier influence of the latter must be counter-balanced
by the sympathy and compassion the law must accord the
underprivileged worker.”
Also, In the interpretation of an employer’s program
providing for separation benefits, all doubts should be
construed in favor of labor. After all, workers are the
intended beneficiaries of such program and our Constitution
mandates a clear bias in favor of the working class.
Gurango v. Best Chemicals
G.R. No. 174593, Aug. 25, 2010
Carpio
Doctrine: In termination cases, the employer has the
burden of proving, by substantial evidence,that the
dismissal was for a just cause. If the employer fails to
discharge the burden of proof, the dismissal is deemed
illegal.  dismissal under the Labor Code, it is not sufficient that the
Facts:
Gurango had in his pocket a camera without film. BCPI
issued a memorandum that prohibited its employees from
bringing in personal items to their work station and if found
violating the same, the employee will be suspended for six
days. Albao was a security guard who sought to confiscate
the camera from Gurango but the latter refused. Albao then
started hitting Gurango with the help of another security
guard. Gurango sustained physical injuries and was placed
under preventive suspension. Thereafter, he was terminated
by BCPI for gross misconduct by violating the
memorandum and allegedly engaging in the fistfight with
Albao.
The LA and NLRC found Gurango’s dismissal as illegal
but the CA set aside the NLRC’s decision.  to go on leave, and albeit she had exceeded her approved
Issue: W/N BCPI proved that Gurango engaged in a
fistfight therefore legally dismissing him from service
Held: NO.
The findings of the LA & NLRC and CA are conflicting. At
the same time, the CA’s finding that Gurango engaged in a
fistfight is a conclusion without citation of specific evidence
on which it is based. 
BCPI did not present any evidence to show that Gurango
engaged in a fistfight. Moreover, there was no showing that
Gurango’s actions were performed with wrongful intent. 
In order to constitute serious misconduct that will warrant
act or conduct complained of has violated some established
rules or policies. It is equally important and required that the
act or conduct must have been performed with wrongful
intent. 
LILIA P. LABADAN vs FOREST HILLS ACADEMY
Facts:
Lilian L. Labadan (Labadan) was hired by Forest
Hills Mission Academy (Forest Hills) as an elementary
school teacher in 1989. After one year of employment, she
was made registrar and secondary school teacher. In 2003,
Labadan filed a complaint against Forest Hills for illegal
dismissal, non-payment of overtime pay, holiday pay,
allowances, 13th month pay, service incentive leave, illegal
deductions, and damages. She alleged that she was allowed
leave period, its extension was impliedly approved by the
school principal because Labadan received no warning or
reprimand, and was in fact retained in the payroll. Labadan
further alleged that since 1990, tithes to the Seventh
Day Adventist church, of which she was a member, have
been illegally deducted from her salary; and she was not
paid overtime pay for overtime service, 13th month pay, five
days service incentive leave pay, and holiday pay; and that
her SSS contributions have not been remitted.
Forest Hills claims that Labadan was permitted to go on
leave for two weeks but did not return for work after the
expiration of the period granted. Because of Labadan’s
failure to report to work despite promises to do so, Forest
Hills hired a temporary employee to accomplish the needed
reports. When Labadan did return for work, classes for the
school year were already underway. With regard to the
charge for illegal deduction, Forest Hills claimed that the
Seventh Day Adventist church requires its members to pay
tithes equivalent to 10% of their salaries, and that Labadan
never questioned the deduction of the tithe from her salary.
As regards the non-payment of overtime pay, holiday pay,
and allowances, Forest Hills noted that petitioner proffered
no evidence to support the same.
The Labor Arbiter decided in favor of Labadan, and found
that she was illegally dismissed, and dismissed her claims
for overtime pay, holiday pay, allowances, 13th month pay,
service incentive leave. The National Labor Relations
Commission (NLRC) reversed and set aside the
Labor Arbiter’s decision with regard to the finding of illegal
dismissal. Labadan then filed a Petition for Certiorari with
the Court of Appeals, which was dismissed by the same.
Hence, this Petition for Review on Certiorari.
Issue: Whether Labadan was illegally dismissed by Forest
Hills.
Held:
While in cases of illegal dismissal, the employer bears the
burden of proving that the dismissal is for a valid or
authorized cause, the employee must first establish by
substantial evidence the fact of dismissal.
The records do not show that petitioner was dismissed from
the service. They in fact show that despite petitioner’s
absence from July 2001 to March 2002 which, by her own
admission, exceeded her approved leave, she was still
considered a member of the Forest Hills faculty which
retained her in its payroll.
Labadan argues, however, that she was constructively
dismissed when Forest Hills merged her class with another
“so much that when she reported back to work, she has no
more claims to hold and no more work to do.” Labadan,
however, failed to refute Forest Hills’ claim that when she
expressed her intention to resume teaching, classes were
already ongoing for School Year 2002-2003. It bears noting
that petitioner simultaneously held the positions of
secondary school teacher and registrar and, as the NLRC
noted, she could have resumed her work as registrar had she
really wanted to continue working with Forest Hills.
Labadan’s affidavit and those of her former colleagues,
which she attached to her Position Paper, merely attested
that she was dismissed from her job without valid cause,
but gave no particulars on when and how she was dismissed.
NIGHTOWL WATCHMAN & SECURITY AGENCY,
INC., Petitioner, v. NESTOR LUMAHAN, Respondent.
G.R. No. 212096, October 14, 2015
Facts:
Sometime in December 1996, Nightowl hired Nestor P.
Lumahan (Lumahan) as a security guard. Lumahan's last
assignment was at the Steelworld Manufacturing
Corporation (Steelworld) On January 9, 2000, Lumahan
filed before the labor arbiter a complaint for illegal
dismissal; underpayment of wages; nonpayment of overtime
pay, premium pay for holiday and rest day, holiday pay, and
service incentive leave; separation pay; damages and
attorney's fees against Nightowl and/or Engr. Raymundo
Lopez.
On March 10, 2000, he filed an amended complaint to
include nonpayment of 13th month pay and illegal
suspension. He also corrected his date of employment and
the date of his dismissal from May 1999 to June 9, 1999.
Lumahan admitted that he did not report for work from May
16, 1999 to June 8, 1999, but claimed in defense that he had
to go to Iloilo to attend to his dying grandfather. He alleged
that when he asked for permission to go on leave, Nightowl
refused to give its consent. Steelworld, however, gave him
permission to leave for Iloilo. When he reported back to
work on June 9, 1999, Nightowl did not allow him to return
to duty.
Nightowl, on the other hand, claimed that on April 22, 1999,
Lumahan left his post at Steelworld and failed to report back
to work since then. It argued that it never dismissed
Lumahan and that he only resurfaced when he filed the
present complaint.
Labor Arbiter’s Decision: LA Espiritu dismissed the
complaint for illegal dismissal, separation pay, and damages,
but ordered Nightowl and/or Engr. Raymundo Lopez to
jointly and solidarity pay Lumahan wage differentials, 13th
month pay differentials, service incentive leave, holiday pay,
premium pay for holiday and rest day differentials, and
overtime pay. (Both parties elevated the matter to the NLRC
which remanded the case back to the LA for lack of factual
matters) LA Demaisip declared that Lumahan had been
illegally dismissed, and ordered Nightowl to pay backwages
and separation pay in lieu of reinstatement. LA Demaisip
dismissed Lumahan's other money claims for lack of merit.
NLRC’s Decision: Dismissed the complaint for illegal
dismissal; deleted the award of backwages and separation
pay in lieu of reinstatement; and affirmed the dismissal of
the money claims.
Issue: Whether or not Lumahan was illegally dismissed.
Ruling:
In every employee dismissal case, the employer bears the
burden of proving the validity of the employee's dismissal,
i.e., the existence of just or authorized cause for the
dismissal and the observance of the due process
requirements. The employer's burden of proof, however,
presupposes that the employee had in fact been dismissed,
with the burden to prove the fact of dismissal resting on the
employee. Without any dismissal action on the part of the
employer, valid or otherwise, no burden to prove just or
authorized cause arises. It should be remembered that in
cases before administrative and quasi-judicial agencies like
the NLRC, the degree of evidence required to be met is
substantial evidence, or such amount of relevant evidence
that a reasonable mind might accept as adequate to justify a
conclusion. In a situation where the word of another party is
taken against the other, as in this case, we must rely on
substantial evidence because a party alleging a critical fact
must duly substantiate and support its allegation. We agree
with the NLRC that Lumahan stopped reporting for work on
April 22, 1999, and never returned, as Nightowl sufficiently
supported this position with documentary evidence.
Nightowl did not say that Lumahan "abandoned his work";
rather, Nightowl stated that Lumahan "abandoned his post"
at Steelwork. When read together with its arguments, what
this phrase simply means is that Lumahan abandoned his
assignment at Steelwork; nonetheless, Nightowl still
considered him as its employee whose return they had been
waiting for. Finally, failure to send notices to Lumahan to
report back to work should not be taken against Nightowl
despite the fact that it would have been prudent, given the
circumstance, had it done so. Report-to-work notices are
required, as an aspect of procedural due process, only in
situations involving the dismissal, or the possibility of
dismissal, of the employee. Verily, report-to-work notices
could not be required when dismissal, or the possibility of
dismissal, of the employee does not exist. Separation pay in
lieu of reinstatement is the proper award in this case. In
cases where no dismissal took place, the proper award is
reinstatement, without backwages, not as a relief for any
illegal dismissal but on equitable grounds. When, however,
reinstatement of the employee is rendered impossible, as
when the employee had been out for a long period of time,
the award of separation pay is proper.
Manolo PENAFLOR vs OUTDOOR CLOTHING
MANUFATURING CORPORATION, et al.
G.R. No. 177114 / 618 SCRA 208
April 13, 2010
Motion for Reconsideration of a Decision of the Supreme
Court.
Facts:
• Petitioner was hired as probationary HRD
Manager of respondent on 02-Sept-1999. More than 6
months later, on 13-Mar-2000, petitioner learned that
respondent’s president appointed one Buenaobra as
concurrent HRD and Accounting Manager.
• Petitioner eventually resigned, claiming
discriminatory treatment at work. He treated
Buenaobra’s appointment to his position the last
straw, and filed his irrevocable resignation effective
15-Mar-2000. He then filed an illegal dismissal case
against respondent.
Labor Arbiter: Ruling in favor of PETITIONER.
NLRC: LA decision REVERSED.
CA: NLRC decision UPHELD.
Issue: Whether or not petitioner’s resignation was
voluntary or forced.
1st SC Decision: CA decision REVERSED. LA decision
UPHELD.
• The SC ruled the first time that petitioner was
constructively dismissed, hence his dismissal was
illegal.
• It was found that his resignation was a
forced one since it was made after the
appointment of Buenaobra. His resignation was
a response to the unacceptable appointment of
another person to a position he still occupied.
 • It is ludicrous to believe the
explanation by respondent that petitioner
submitted his resignation prior to Buenaobra’s
appointment; more specifically, respondent
claims that petitioner submitted his resignation
letter on 01-Mar-2000, the same day he would
have become a regular employee by law.
Issue (on MR): Whether or not the ‘irrevocable
resignation letter’ constituted a voluntary resignation.
2nd SC Decision: 1st Decision SUSTAINED. MR DENIED.
• Respondent posits that since it was petitioner
who filed the resignation letter, the burden of proving
whether or not the resignation was voluntary rests in
him as well.
• Respondent is mistaken. The fact of
filing a resignation letter alone does not shift
the burden of proving that the employee’s
dismissal was for a just and valid cause from
the employer to the employee. Should the
employer raise the defense of resignation in
illegal dismissal cases, it is still incumbent
upon the employer that the employee
voluntarily resigned.
• While the letter states that petitioner’s
resignation was ‘irrevocable’, it does not
necessarily signify that it was also voluntary
executed.
• His resignation falls squarely within
the concept of constructive dismissal when
petitioner decided to permanently sever ties
with respondent due to the hostile and
discriminatory working environment.
• Moreover, respondent presented evidence on
its claim of voluntary resignation belatedly.
• It was only during the appeal to the
NLRC did they present such evidence. Such
presentation was correctly questioned by
petitioner.
Abduljuahid Pigcaulan v. Security and Credit
Investigation, Inc.
Facts:
Canoy and Pigcaulan, employed by SCII as security guards,
were assigned to SCII’s different clients. Subsequently,
Canoy and Pigcaulan filed with the LA separate complaints
for underpayment of salaries and non-payment of overtime,
holiday, rest day, SIL and 13th month pays. Complaints were
later consolidated.
Canoy and Pigcaulan submitted their respective daily time
records and presented itemized lists of their claims. SCII
maintained that Canoy and Pigcaulan were paid their just
salaries and other benefits under the law and the rates
provided by PADPAO (Philippine Association of Detective
and Protective Agency Operators) for security guards. In
support thereof, copies of payroll listings and lists of
employees who received 13th month pay were presented.
In addition, respondents contended that Canoys and
Pigcaulans monetary claims should only be limited to the
past three years of employment pursuant to the rule on
prescription of claims.
The LA held in favor of Canoy and Pigcaulan, giving
credence to the itemized computations and representative
daily time records.
The NLRC sustained the decision of LA and dismissed
SCII’s appeal and held that the evidence show
underpayment of salaries as well as non-payment of SIL.
The CA on the other hand set aside the rulings of both the
LA and the NLRC after noting that there were no factual and
legal bases mentioned.
Issue: WON Canoy and Pigcaulan are entitled to their
claims.
Held: Yes.
There was no substantial evidence to support the grant of
overtime pay. The handwritten itemized computations are
self-serving, unreliable and unsubstantial evidence to sustain
the grant of salary differentials, particularly the overtime
pay.
However Pigcaulan is entitled to holiday pay, SIL, and 13th
month pay.
The Court held that Article 94 of the Labor Code
provides that: ART. 94. RIGHT TO HOLIDAY PAY.—
(a) Every worker shall be paid his regular daily wage during
regular holidays, except in retail and service establishments
regularly employing less than ten (10) workers; x x x x
While Article 95 of the Labor Code provides: ART. 95.
RIGHT TO SERVICE INCENTIVE LEAVE.—(a) Every
employee who has rendered at least one year of service shall
be entitled to a yearly service incentive of five days with
pay. x x x x Under the Labor Code, Pigcaulan is entitled to
his regular rate on holidays even if he does not work.
Likewise, express provision of the law entitles him to
service incentive leave benefit for he rendered service for
more than a year already. Furthermore, under Presidential
Decree No. 851, he should be paid his 13th month pay. As
employer, SCII has the burden of proving that it has paid
these benefits to its employees.
SCII presented payroll listings and transmittal letters to the
bank to show that Canoy and Pigcaulan received their
salaries as well as benefits which it claimed are already
integrated in the employees’ monthly salaries. However, the
documents presented do not prove SCII’s allegation.
SCII failed to show any other concrete proof by means of
records, pertinent files or similar documents reflecting that
the specific claims have been paid. With respect to 13 th
month pay, SCII presented proof that this benefit was paid
but only for the years 1998 and 1999. To repeat, the burden
of proving payment of these monetary claims rests on SCII,
being the employer. It is a rule that one who pleads payment
has the burden of proving it. “Even when the plaintiff
alleges non-payment, still the general rule is that the
burden rests on the defendant to prove payment, rather
than on the plaintiff to prove non-payment.”
NOTES: It is not for an employee to prove non-payment of
benefits to which he is entitled by law. Rather, it is on the
employer that the burden of proving payment of these claims
rests.
Since SCII failed to provide convincing proof that it has
already settled the claims, Pigcaulan should be paid his
holiday pay, service incentive leave benefits and
proportionate 13th month pay for the year 2000.
NO WORK NO PAY RULE
AKLAN ELECTRIC COOPERATIVE v. NLRC
G.R. No. 121439, Jan. 25, 2000
Gonzaga-Reyes
Doctrine: The age-old rule governing the relation
between labor and capital, or management and employee
of a "fair days wage for a fair days labor" remains as the
basic factor in determining employees wages. If there is
no work performed by the employee there can be no
wage or pay unless, of course, the laborer was able,
willing and ready to work but was illegally locked out,
suspended or dismissed, or otherwise illegally prevented
from working.
Facts:
Rodolfo Retiso and 165 others were employed by AKELCO
whose main office was located at Lezo, Aklan. On Jan. 22,
1992, by way of resolution, the Board of Directors of
AKELCO allowed the temporary transfer holding of office
at Amon Theater, Kalibo, Aklan per information by their
Project Supervisor that their head office is closed and that it
is dangerous to hold office thereat. Nevertheless, majority of
the employees continued to report for work at Lezo, Aklan
and were paid of their salaries. On Feb. 6, 1992, the
administrator of NEA wrote a letter addressed to the Board
of AKELCO, that he is not interposing any objections to the
action taken by Atty. Mationg (general manager)
On Feb. 11, 1992, unnumbered resolution was allegedly
passed by the Board of AKELCO withdrawing the
temporary designation of office at Kalibo, Aklan, and that
the daily operations must be held again at the main office of
Lezo, Aklan. The complainants who were then reporting at
the Lezo office from January 1992 up to May 1992 were
duly paid of their salaries, while in the meantime some of
the employees through the instigation of respondent Mationg
continued to remain and work at Kalibo, Aklan. From June
1992 up to March 18, 1993, complainants who continuously
reported for work at Lezo, Aklan in compliance with the
aforementioned resolution were not paid their salaries. On
Mar. 19, 1993 up to the present, complainants were again
allowed to draw their salaries; with the exception of a few
complainants who were not paid their salaries for the months
of April and May 1993.
AKELCO averred that Retiso et al. abandoned their
respective work assignments without any justifiable reason
and without notifying the management. It claimed to have
suffered damages and system loss and that the complainants
defied the lawful orders and other issuances of the company.
LA: DISMISSED
NLRC: REVERSED that they are entitled to unpaid wages
form June 16, 1992 to March 18, 1993
Issue: W/N the complainants were entitled to their
unpaid wages
Held: NO.
Retiso et al. did not render any service from June 16, 1992
to March 18, 1993 so as to entitle them to payment of
wages. The evidence presented by them did not constitute
substantial evidence to support their claim. Likewise, their
excuse that the transfer to Kalibo was illegal so they
continued to work at Lezo could not help support their cause
as it was not for them to declare the managements act of
temporarily transferring the AKELCO office to Kalibo as an
illegal act. There is no allegation nor proof that the transfer
was made in bad faith or with malice.
AKELCO’s Board in a Resolution No. 411 dated Sept. 9,
1992 dismissed Retiso et al. who were on illegal strike and
who refused to report for work at Kalibo office effective Jan.
31, 1992; since no services were rendered they were not paid
their salaries. Retiso et al. never questioned nor controverted
the Resolution dismissing them and nowhere in their
Comment is it stated that they questioned such dismissal.
They also have not rebutted AKELCO’S claim that Retiso et
al. illegally collected fees and charges due the former and
appropriated the collections among themselves to satisfy
their salaries from January to May 1992, for which reason,
Retiso et al. are merely claiming salaries only for the period
from June 16, 1992 to March 1993.
They were dismissed by petitioner effective Jan. 31, 1992
and were accepted back by petitioner, as an act of
compassion, subject to the condition of "no work, no pay"
effective March 1993 which explains why they were
allowed to draw their salaries again. Notably, the letter-
request of Mr. Leyson for the payment of backwages and
other fringe benefits in behalf of private respondents was
made only in April 1993, after a Board Resolution accepting
them back to work out of compassion and humanitarian
reason. It took them about ten months before they requested
for the payment of their backwages, and the long inaction of
private respondents to file their claim for unpaid wages cast
doubts as to the veracity of their claim.
TOMAS LAO CONSTRUCTION vs NATIONAL
LABOR RELATIONS COMMISSION, MARIO O.
LABENDIA, SR., ROBERTO LABENDIA, NARCISO
ADAN, FLORENCIO GOMEZ, ERNESTO
BAGATSOLON, SALVADOR BABON, PATERNO
BISNAR, CIPRIANO BERNALES, ANGEL
MABULAY, SR., LEO SURIGAO, and ROQUE
MORILLO
Facts:
Private respondents filed complaints for illegal dismissal
against petitioners with NLRC. Respondents were hired for
various periods as construction workers in different
capacities they described in the terms. They alternately
worked for Tomas Lao Corp., Tomas and James Developer,
LVM Construction, altogether as Lao Group of Companies.
They engaged in construction of public roads and bridges.
Each one would also allow the utilization of the employees.
With the arrangement workers were transferred whenever
necessary to on-going projects of the same company or
rehired after the completion of the project or project phase
which they were assigned. In 1989 memorandum was issued
requiring all workers and company personnel to sign
employment contracts forms and clearances. To ensure
compliance with the directive, the company ordered the
withholding of the salary of any employee who refused to
sign. All respondents refused to sign contending that this
scheme was designed by their employer to downgrade their
status from their regular employees to mere project
employees.
Their salaries were withheld. Since the workers stood firm
in their refusal to comply with the directives their services
were terminated.
The NLRC dismissed the complaint finding that
respondents were project employees whose employees could
be terminated upon the completion of the project.
However, the decision of LA was reversed on appeal
finding that respondents were regular employees who were
dismissed without just cause and denied due process.
The petitioners’ expostulation is that respondents have no
valid cause to complain about their employment contracts
since documents formalized their status as project
employees. They cite Policy Instruction No. 20 of DOLE
which defines project employees as those employed in
connection with particular construction project.
Issue: Whether the dismissal of private respondents was
illegal.
Held:
The court ruled that, the principal test in determining
whether particular employees are project employees
distinguished from regular employees is whether the project
employees are assigned to carry out specific project or
undertaking, the duration of which are specified at the time
of the employees are engaged for the project. Project in the
realm of industry and business refers to a particular job or
undertaking that it is within the regular or usual business of
employer, but which is distinct and separate and identifiable
as such from the undertakings of the company.
They allowed to workers hired for specific projects and
hence can be classified as project employees, the repeated
re-hiring and the continuing need for the services over a
long span of time have undeniably made them regular
employees.
Length of time may not be a controlling test for project
employment, it can be a strong factor in determining
whether the employee was hired for a specific
undertaking or in fact tasked to perform functions which
are vital, necessary and indispensable to the usual
business or trade of the employer.
In the case at bar, private respondents had already gone
through the status of project employees. But their
employments became non-coterminous with specific
projects when they started to be continuously re-hired due to
demands of petitioners’ business and were re-engaged for
many more projects without interruption. The denial by
petitioners of the existence of a work pool in the company
because their projects were not continuous.
A work pool may exist although the workers in the pool do
not receive salaries and are free to seek other employment
during temporary breaks in the business, provided that the
worker shall be available when called to report for a project.
The court finds that the continuous re- hiring of of the same
set of employees within the framework is strongly indicative
that private respondents were an integral part of a work pool
in which petitioners drew its workers for its various projects.
The court finally finds that the NLRC was correct in finding
the workers were illegally dismissed. Private respondents
were dismissed because of insubordination or blatant refusal
to comply with lawful directive of their employer.
But willful disobedience envisages the concurrence of at
least 2 requisites:
• the employee’s assailed conduct must have
been willful or intentional;
• the order violated must have been reasonable,
lawful.
The allegation of petitioners that private respondents are
guilty of abandonment of duty is without merit. The
elements of abandonment are:
a.) failure to report for work or absence without valid
or justifiable reason;
b.) clear intention to sever the employer-employee
relationships. Private respondents did not intend to
sever ties with petitioner and permanently abandon
their jobs.
The burden of proving that an employee has been
lawfully dismissed lies with the employer.
In the case at bar, the assertions were self-serving and
insufficient to substantiate their claim of proximate project
completion. The services of employees were terminated not
because of contract expiration but as sanction for their
refusal to sign the project employment forms and quitclaims.
The dismissal is without just cause, we find it unnecessary to
dwell on the non-observance of procedural due process.
Petition is denied and petitioners ordered to reinstate private
respondents to their former positions without loss of
seniority rights and other privileges with full back wages,
inclusive of allowances, computed from the time
compensation was withheld up to the time of actual
reinstatement.
VIVIAN Y. IMBUIDO, petitioner, vs. NATIONAL
LABOR RELATIONS COMMISSION,
INTERNATIONAL INFORMATION SERVICES, INC.
and GABRIEL LIBRANDO, respondents.
G.R. No. 114734. March 31, 2000
Facts:
Petitioner Imbuido (Imbuido) was employed as a date
encoder by private respondent International Information
Services, Inc (IISI). From 1988 until 1991, Imbuido entered
into 13 employment contracts with IISI, each contract for a
period of 3 months. Aside from the basic hourly rate,
specific job contract number and period of employment,
each contract contains the following terms and conditions:
a. This Contract is for a specific project/job contract only
and shall be effective for the period covered as above-
mentioned unless sooner terminated when the job contract is
completed earlier or withdrawn by client, or when employee
is dismissed for just and lawful causes provided by law. The
happening of any of these events will automatically
terminate this contract of employment.
b. Subject shall abide with the Companys rules and
regulations for its employees attached herein to form an
integral part hereof.
c. The nature of your job may require you to render overtime
work with pay so as not to disrupt the Companys
commitment of scheduled delivery dates made on said job
contract."
In September 1991, Imbuido and 12 other employees
allegedly agreed to the filing of a Petition for Certification
of Election of the rank and file employees of IISI.
Subsequently, Imbuido received a termination letter due to
“low volume of work.” Imbuido filed a complaint for illegal
dismissal.
The LA found in favor of Imbuido ruling that she was a
regular employee.
NLRC reversed the decision stating that although Imbuido
is a regular employee, she has no tenurial security beyond
the period for which she was hired (only up to the time the
specific project for which she was hired was completed).
Hence this appeal.
Issue: Whether or not petitioner is a regular employee
entitled to tenurial security and was therefore unjustly
dismissed.
Ruling: Yes.
Even though petitioner is a project employee, as in the case
of Maraguinot, Jr. v. NLRC, the court held that a project
employee or member of a work pool may acquire the status
of a regular employee when the following concur:
1. there is continuous rehiring of project employees even
after the cessation of a project;
2. the tasks performed by the alleged “project employee” are
vital, necessary and indispensable to the usual business and
trade of the employer.
Imbuido was employed as a data encoder performing duties,
which are usually necessary or desirable in the usual
business or trade of the employer, continuously for a period
of more than 3 years. Being a regular employee, Imbuido is
entitled to security of tenure and could only be dismissed for
a just and authorized cause; low volume of work is not a
valid cause for dismissal under Art. 282 or 283. Having
worked for more than 3 years, petitioner is also entitled to
service incentive leave benefits from 1989 until her actual
reinstatement since such is demandable after one year of
service, whether continuous or broken.
International School Alliance of Educators vs DOLE Sec.
Leonardo QUISIMBING, International School Manila,
et al.
G.R. No. 128845 / 333 SCRA 13
June 1, 2000
SPECIAL CIVIL ACTION. Certiorari.
Facts:
• Private respondent is an education institution
created pursuant to P.D. 732, primarily catering to
dependents of foreign diplomatic personnel and other
temporary residents. To enable it to continue carrying
out its program, the same decree authorized the school
to employ its own teaching and management
personnel, either locally or abroad, from Philippine or
other nationalities, such personnel being exempt
from otherwise applicable laws attending their
employment, except those that have been enacted
for the protection of employees.
• Accordingly, the School hires both foreign
and local teachers, and are classified separately.
Foreign-hires are granted certain benefits not
accorded local-hires, like housing, transportation,
taxes, home leave travel allowance, etc. Foreign-hires
are also paid 25% more than local-hires.
• When negotiations for a new CBA were
held, being a representative of all faculty members
 of the respondent school, contested the difference
in salary between local and foreign-hires. It also
questioned whether foreign-hires should be included
in the appropriate bargaining unit. Both issues caused
a deadlock between the parties.
• The National Conciliation and Mediation
Board failed to bring the parties to a compromise,
prompting the DOLE to assume jurisdiction.
DOLE: Order in favor of RESPONDENT.
• It ruled that the principle of “equal pay for
equal work” does not find application in this case
since the school requires hiring foreign personnel to
deal with students of different nationalities.
• It further held that certain amenities have to
be provided for foreign-hires in order to entice them
to render services in the Philippines, and in the
process remain competitive in the international
market.
• It also took note of the fact that foreign-hires
have limited contract of employment. To apply parity,
they are given a higher salary.
Issue: Whether or not the school’s salary scheme
regarding foreign hires constitute discrimination.
SC: DOLE decision REVERSED.
• Public policy abhors inequality and
discrimination. Labor is protected by the Constitution
against these evils.
• Congress is urged to give highest
priority to the enactment of measures that guard
against social, economic, and political
inequalities.
• Even international law proscribes
discrimination.
• The Constitution directs the State to promote
equality of employment opportunities for all, and to
ensure equal work opportunities regardless of sex,
race, or creed.
• The Constitution also provides that
labor is entitled to ‘humane conditions of
work.’ Among these conditions are manners by
which employers treat their employees.
• If an employer accords employees the same
position and rank, the presumption is that these
employees perform equal work.
• The school contends that petitioner has
not adduced evidence that local-hires perform
work equal to that of foreign-hires. But for the
school to pay one employee less than the rest,
and ask that employee to explain why he/she
receives less, or why others receive more,
would be adding insult to injury.
• The school in this case, as the
employer, has failed to discharge the burden
of proof that foreign-hires perform 25%
more efficiently or effectively than local
hires.
• Persons who work with substantially
equal qualifications, skill, effort, and
responsibility, under same conditions, should
be paid similar salaries (equal work for
equal pay).
• The school cannot also invoke the need to
entice foreign-hires as reason for higher salaries.
 • Salary is defined as a recompense or
consideration made to a person for his pains
or industry in another man’s business.
• Local-hires perform the same service
as foreign-hires, and they ought to be paid the
same salaries as the latter.
• On the issue of whether or not foreign-hires
should be included in the same bargaining unit, the
Court ruled in the negative.
• It does not appear that foreign-hires
have indicated their intention to be grouped
together with the local-hires for purposes of
collective bargaining.
• Factors that determine the appropriate
collective bargaining unit:
• Will of the employees;
• Affinity and unity of the
employee’s interest (substantial
similarity of work and duties, or of
compensation and working conditions);
• Prior collective bargaining
history;
• Similarity of employment
status.
• The basic test of an asserted bargaining
unit’s acceptability is whether or not it is
fundamentally the combination which will
best assure to all employees the exercise of
their collective bargaining rights.
Maya Farms vs NLRC
FACTS: Maya farms announced the adoption of an early
retirement program as a cost cutting measure considering
their operations suffered major setbacks. Such program
could only be availed by employees who 8 years of service
but later on was reduced to 5 years.
However, there were only few takers so the early retirement
program was converted into a special redundancy program
intended to reduce the work force to an optimum number so
as to make operations more viable. These were availed by 69
employees.
The company sent letters informing them of their respective
positions had been declared redundant. That their services
would be terminated effective 30 days from receipt thereof.
A notice of strike was then filed by petitioners which
accused private respondents unfair labor practice, violation
of CBA, and discrimination. Conciliation proceedings were
held but the parties failed to arrive at a settlement.
In their position papers petitioners averred that the
dismissal on the ground of redundancy program violated
the provision in their CBA and Section 2 Article 3: LIFO
rule: In all cases of lay-off or retrenchment LIFO must
be strictly observed. furthermore with the termination of
the employees, the remaining work force, especially
drivers, were overworked and performing overtime
work and reporting even on rest days.
Now petitioners prayed for reinstatement, private respondent
contend that it was a proper exercise of management
prerogative
LABOR SECRETARY: ruled in favor of the private
respondent
ISSUE: WON the termination was accordance with the
LIFO rule in the CBA and if it was in accordance with
Article 283
HELD: YES. The termination of the employees were in
accordance of article 283 of the labor code. The court fully
agree with the findings of the labor secretary or the public
respondent. We sustain the companies' prerogative to adopt
the alleged redundancy/retrenchment program to minimize if
not, to avert losses in the conduct of its operations.
However, the companies' decision on this matter is not
absolute. The basis for such an action must be far from
being whimsical and the same must be proved by substantial
evidence.
As to the LIFO rule it withhold the decision of the NLRC
that it was not violated.
The LIFO rule under the CBA is explicit. It is ordained that
in cases of retrenchment resulting in termination of
employment in line of work, the employee who was
employed on the latest date must be the first one to go. The
provision speaks of termination in the line of work. This
contemplates a situation where employees occupying the
same position in the company are to be affected by the
retrenchment program. Since there ought to be a reduction
in the number of personnel in such positions, the length of
service of each employees is the determining factor, such
that the employee who has a longer period of employment
will be retained.
Philtranco Service Enterprises v. Bureau of Labor
Relations
Facts:
Philtranco is a land transportation company engaged in the
business of carrying passengers and freight. Its employees
included field workers consisting of drivers, conductors,
coach drivers, coach stewards and mechanics and office
employees like clerks, cashiers, programmers, telephone
operators, etc.
The Kapisanan ng mga Kawani, Assistant, Manggagawa at
Konpidensyal sa Philtranco (KASAMA KO) filed a petition
for certification election with DOLE alleging among others
that they desire to represent all professional, technical,
administrative and confidential employees of Philtranco for
purposes of CBA as they are always expressly excluded
from participating in the certification election among the
rank and file employees and are excluded from the
bargaining unit.
Later, the National Mines and Allied Workers Union
(NAMAWU-MIF) filed a motion for intervening alleging
that it is the bargaining agent of the workers at Philtranco
and as such it has a substantial interest in the outcome of the
petition.
The LA dismissed the petition.
KASAMA KO appealed to the Bureau of Labor
Relations (BLR), which reversed the resolution of the Med-
Arbiter.
Later, as prayed by Philtranco, the Court issued a TRO
restraining the BLR from enforcing and/or carrying out the
decision.
Issue: WON the certification election filed by KASAMA
KO be granted.

Held: No.
The Court provided that supervisors performing managerial
functions are prohibited from forming or joining labor
organizations. Also, managerial and confidential employees
are no qualified to join, much less, form a union.
The Court adds that they are constrained to disallow the
formation of another union. There is no dispute that there
exists a labor union in the company, herein intervenor, the
NAMAWU-MIF which is the collective bargaining agent of
the rank and file employees in PHILTRANCO. x x x We see
no need for the formation of another union in
PHILTRANCO. The qualified members of the KASAMA
KO may join the NAMAWU-MIF if they want to be union
members, and to be consistent with the one-union, one-
company policy of the Department of Labor and
Employment, and the laws it enforces.
As held in the case of General Rubber and Footwear Corp.
v. Bureau of Labor Relations (155 SCRA 283 [1987]): “x x
x It has been the policy of the Bureau to encourage the
formation of an employer unit ‘unless circumstances
otherwise require.’ The proliferation of unions in an
employer unit is discouraged as a matter of policy unless
there are compelling reasons which would deny a certain
class of employees the right to self-organization for
purposes of collective bargaining. This case does not fall
squarely within the exception.” (Emphasis supplied). There
are no compelling reasons in this case such as a denial to the
KASAMA KO group of the right to join the certified
bargaining unit or substantial distinctions warranting the
recognition of a separate group of rank and file workers.
Precisely, NAMAWU-MIF intervened to make it clear it has
no objections to qualified rank and file workers joining its
union.
The respondents state that this case is an exception to the
general rule considering that substantial differences exist
between the office employees or professional, technical,
administrative and confidential employees vis-a-vis the field
workers or drivers, conductors and mechanics of the
petitioner. Against this contention, we find that the
“substantial differences” in the terms and conditions of
employment between the private respondent’s members and
the rest of the company’s rank and file employees are more
imagined than real. We agree with the petitioner that the
differences alleged are not substantial or significant enough
to merit the formation of another union, x x x There may be
differences as to the nature of their individual assignments
but the distinctions are not enough to warrant the formation
of separate unions. The private respondent has not even
shown that a separate bargaining unit would be beneficial to
the employees concerned. Office employees also belong to
the rank and file. There is an existing employer wide unit in
the company represented by NAMAWU-MIF. And as
earlier stated, the fact that NAMAWU-MIF moved to
intervene in the petition for certification election filed by
KASAMA KO negates the allegation that “substantial
differences” exist between the employees concerned. We
find a commonality of interest among them. There are no
compelling reasons for the formation of another union.
CESAR LIRIO v. WILMER GENOVIA
G.R. NO. 169757, Nov. 23, 2011
Peralta
DOCTRINE: The elements to determine the existence of
an employment relationship are:
(a) the selection and engagement of the employee;
(b) the payment of wages;
(c) the power of dismissal; and
(d) the employers power to control the employees
conduct. The most important element is the employers
control of the employees conduct, not only as to the
result of the work to be done, but also as to the means
and methods to accomplish it. It is settled that no
particular form of evidence is required to prove the
existence of an employer-employee relationship. Any
competent and relevant evidence to prove the
relationship may be admitted.
FACTS: Wilmer was hired as a studio manager by Cesar,
who was the owner of Celkor. Cesar approached Wilmer
and told him to produce the album of his daughter. Cesar
asked Wilmer to compose and arrange songs for Celine and
promised that he would draft a contract to assure Wilmer of
his compensation for such services. Later on, Wilmer
reminded Cesar about his compensation as composer and
arranger of the album and Cesar verbally assured him that he
would be duly compensated.
The album was finished, promotion for the same was being
undertaken and Wilmer again reminded Cesar about his
compensation. In response, Cesar told Wilmer that he was a
nobody and he had not proven himself in the music industry
so he does not deserve a high compensation. Cesar informed
Wilmer that he was entitled only to 20% of the net profit,
and not of the gross sales of the album, and that the salaries
he received and would continue to receive as studio manager
of Celkor would be deducted from the said 20% net profit
share. Wilmer objected and insisted that he be properly
compensated. On March 14, 2002, Cesar verbally terminated
Wilmer’s services, and he was instructed not to report for
work.
Wilmer then filed a complaint for illegal dismissal with the
Labor Arbiter, asserting that he was already a regular
employee when he was terminated without any valid ground.
His designation may have been “studio manager” but he was
merely an employee for he did not possess any managerial
powers. Cesar denied that he hired Wilmer as the recording
studio had no personnel except himself. The LA found that
an employer-employee relationship existed between them
therefore Wilmer was illegally dismissed. The NLRC
reversed the LA’s decision as Wilmer failed to prove his
employment with substantial evidence. The CA reinstated
the LA’s decision.
ISSUE: W/N an employer-employee relationship existed
between Cesar and Wilmer
HELD: YES.
The documentary evidence presented by Wilmer to prove
that he was an employee of Cesar are as follows: (a) a
document denominated as "payroll" (dated July 31, 2001 to
March 15, 2002) certified correct by Cesar, which showed
that respondent received a monthly salary of P7,000.00
(P3,500.00 every 15th of the month and another P3,500.00
every 30th of the month) with the corresponding deductions
due to absences incurred by Wilmer; and (2) copies of petty
cash vouchers, showing the amounts he received and signed
for in the payrolls.
The said documents showed that Cesar hired Wilmer as an
employee and he was paid monthly wages of P7,000.00.
Petitioner wielded the power to dismiss as respondent stated
that he was verbally dismissed by petitioner, and respondent,
thereafter, filed an action for illegal dismissal against Cesar.
The power of control refers merely to the existence of the
power. It is not essential for the employer to actually
supervise the performance of duties of the employee, as it
is sufficient that the former has a right to wield the
power. Nevertheless, Cesar stated in his Position Paper that
it was agreed that he would help and teach respondent how
to use the studio equipment. In such case, petitioner
certainly had the power to check on the progress and
work of respondent.
Cesar failed to prove that his relationship with Wilmer was
one of partnership. Such claim was not supported by any
written agreement. The Court notes that in the payroll dated
July 31, 2001 to March 15, 2002, there were deductions
from the wages of Wilmer’s for his absence from work,
which negates Cesar’s claim that the wages paid were
advances for Wilmer’s work in the partnership.
MARTICIO SEMBLANTE and DUBRICK PILAR, vs
COURT OF APPEALS, 19TH DIVISION, now
SPECIAL FORMER 19TH DIVISION, GALLERA DE
MANDAUE /SPOUSES VICENTE and MARIA LUISA
LOOT
Facts:
Petitioners Marticio Semblante (Semblante) and Dubrick
Pilar (Pilar) assert that they were hired by respondents-
spouses Vicente and Maria Luisa Loot, the owners of
Gallera de Mandaue (the cockpit), as the official masiador
and sentenciador, respectively, of the cockpit sometime in
1993.
As the masiador, Semblante calls and takes the bets from the
gamecock owners and other bettors and orders the start of
the cockfight. He also distributes the winnings after
deducting the arriba, or the commission for the cockpit.
Meanwhile, as the sentenciador, Pilar oversees the proper
gaffing of fighting cocks, determines the fighting cocks
physical condition and capabilities to continue the cockfight,
and eventually declares the result of the cockfight.
For their services as masiador and sentenciador, Semblante
receives PhP 2,000 per week or a total of PhP 8,000 per
month, while Pilar gets PhP 3,500 a week or PhP 14,000 per
month. They work every Tuesday, Wednesday, Saturday,
and Sunday every week, excluding monthly derbies and
cockfights held on special holidays. Their working days start
at 1:00 p.m. and last until 12:00 midnight, or until the early
hours of the morning depending on the needs of the cockpit.
Petitioners had both been issued employees identification
cards that they wear every time they report for duty. They
alleged never having incurred any infraction and/or violation
of the cockpit rules and regulations.
On November 14, 2003, however, petitioners were denied
entry into the cockpit upon the instructions of respondents,
and were informed of the termination of their services
effective that date. This prompted petitioners to file a
complaint for illegal dismissal against respondents.
Issue: Are the petitioners’ employees of the private
respondents?
Held: No.
As found by both the NLRC and the CA, respondents had no
part in petitioners’ selection and management; petitioners’
compensation was paid out of the arriba (which is a
percentage deducted from the total bets), not by petitioners;
and petitioners performed their functions as masiador and
sentenciador free from the direction and control of
respondents. In the conduct of their work, petitioners relied
mainly on their expertise that is characteristic of the
cockfight gambling, and were never given by respondents
any tool needed for the performance of their work.
Respondents, not being petitioners’ employers, could never
have dismissed, legally or illegally, petitioners, since
respondents were without power or prerogative to do so in
the first place. The rule on the posting of an appeal bond
cannot defeat the substantive rights of respondents to be free
from an unwarranted burden of answering for an illegal
dismissal for which they were never responsible.
Strict implementation of the rules on appeals must give way
to the factual and legal reality that is evident from the
records of this case. After all, the primary objective of our
laws is to dispense justice and equity, not the contrary.
De La Salle University, Petitioner, v. De La Salle
University Employees Association, Respondent.
G.R. No. 110072.
April 12, 2000
Facts:
De La Salle University (UNIVERSITY) and De La Salle
University Employees Association – National Federation of
Teachers and Employees Union (DLSUEA-NAFTEU),
which is composed of regular non-academic rank and file
employees(UNION) entered for a new collective bargaining
agreement which, however, turned out to be unsuccessful.
After several conciliation-mediation meetings, five (5) out
of the eleven (11) issues raised were resolved by the parties.
The parties entered into a Submission Agreement,
identifying the remaining six (6) unresolved issues for
arbitration, namely:
(1) scope of the bargaining unit,
(2) union security clause,
(3) security of tenure,
(4) salary increases
(5) indefinite union leave, reduction of the union presidents
workload, special leave, and finally,
(6) duration of the agreement.
The parties appointed Buenaventura Magsalin as voluntary
arbitrator. Voluntary arbitrator rendered the assailed
decision as follows:
On the first issue, VA ruled that the Computer Operators
assigned at the Computer Services Center, should be
included as members of the bargaining unit. The discipline
officers, belong to the rank-and-file on the basis of the
nature of their job. With respect to the employees of the
College of St. Benilde, they had a personality separate and
distinct from the University and thus, they are outside the
bargaining unit of the Universitys rank-and-file employees.
On the second issue regarding the propriety of the inclusion
of a union shop clause, the VA opined that a union shop
clause is a valid form of union security while the CBA is in
force and in accordance with the Constitutional policy to
promote unionism and collective bargaining and
negotiations.
With respect to the use of the “last-in-first-out” method
in case of retrenchment and transfer to other schools or
units, the VA upheld the “elementary right and
prerogative of the management of the University to select
and/or choose its employees, a right equally recognized
by the Constitution and the law.
Regarding the fourth issue concerning salary increases, the
VA opined that the proposed budget of the University for
SY 1992-93 could not sufficiently cope up with the demand
for increases by the Union.
As to the Unions demand for a reduction of the workload of
the union president, special leave benefits and indefinite
union leave with pay, the VA denied the Unions demand for
special leave benefits.
On the last issue, regarding the duration of the collective
bargaining agreement, the VA ruled the same became a
binding agreement between them.
Subsequently, both parties filed their respective motions for
reconsideration.
ISSUES:
(1) whether the computer operators assigned at the
Universitys Computer Services Center and the University’s
discipline officers may be considered as confidential
employees and should therefore be excluded from the
bargaining unit which is composed of rank and file
employees of the University, and whether the employees of
the College of St. Benilde should also be excluded in the
same bargaining unit;
(2) whether a union shop clause should be included in the
parties collective bargaining agreement, in addition to the
existing maintenance of membership clause;
(3) whether the denial of the Unions proposed “last-in-first-
out” method of laying-off employees, is proper;
(4) whether the ruling that on the basis of the Universitys
proposed budget, the University can no longer be required to
grant a second round of wage increases, is correct;
(5) whether the denial of the Unions proposals on the
deloading of the union president, improved leave benefits
and indefinite union leave with pay, is proper;
(6) whether the finding that the multi-sectoral committee in
the University is the legitimate group which determines and
scrutinizes the annual salary increases and fringe benefits of
the employees of the University, is correct;
(7) whether the ruling that the 70% share in the incremental
tuition proceeds is the only source of salary increases and
fringe benefits of the employees, is proper.
RULING:
The Court affirmed in part and modified in part the decision
of the arbitrator.
On the first issue, the Court agrees that the express exclusion
of the computer operators and discipline officers from the
bargaining unit of rank-and-file employees in the 1986
collective bargaining agreement does not bar any re-
negotiation for the future inclusion of the said employees in
the bargaining unit.
As to the discipline officers, the Court agree that based on
the nature of their duties, they are not confidential
employees and should therefore be included in the
bargaining unit of rank-and-file employees.
As to the the employees of the College of St. Benilde, they
should be excluded from the bargaining unit of the rank-and-
file employees of De La Salle University, because the two
educational institutions have their own separate juridical
personality and no sufficient evidence was shown to justify
the piercing of the veil of corporate fiction.
On the issue regarding the use of the “last-in-first-out”
method, the Court agree that as an exercise of
management prerogative, the University has the right to
adopt valid and equitable grounds as basis for
terminating or transferring employees.
On the issue involving the Unions proposals on the
deloading of the union president, The Court we agree with
the rejection of the said demands, there being no justifiable
reason for the granting of the same.
On the sixth issue, the Court finds that the voluntary
arbitrator did not gravely abuse his discretion on this matter.
On last issue involving the ruling that the 70% share in the
incremental tuition proceeds, the Court deems that any
determination of this alleged error is unnecessary and
irrelevant.
San Miguel Brewery Sales Force Union vs Honorable
Blas Ople and San Miguel Corporation
G.R. No. L-53515 / 170 SCRA 25
February 8, 1989
Petition for Review on Certiorari of the Decision of the
Minister of Labor.
Facts:
• A collective bargaining agreement was
entered into by petitioner and private respondent. Sec.
1 Article IV provides:
• Employees within the appropriate
bargaining unit shall be entitled to basic
monthly compensation plus commission based
on their respective sales.
• In September 1979, respondent introduced a
marketing scheme called “Complementary
Distribution System”, where its beer products were
offered for sale directly to wholesalers through
respondent’s offices.
• Petitioner filed a complaint for unfair labor
practice on the ground that the CDS was contrary to
existing marketing schemes where Route Salesmen
were assigned specific territories within which to sell
their stocks of beer, and wholesalers had to buy from
them, not directly from the company.
• It further alleged that the new scheme
violates the aforementioned Sec. 1 because it
would reduce the take-home pay of salesmen.
Minister of Labor: Ruled in favor of PRIVATE
RESPONDENT.
• It held that there was nothing to suggest that
the unilateral action by SMC was designed to
discourage union organization or diminish its
influence, but rather such new scheme was designed
as part of its overall plan to improve efficiency and
economy, at the same time gain profit to the highest.
• Petitioner may have failed to consider the fact
that corollary to the adoption of CDS is the effort of
 the company to compensate whatever loss the works
may suffer due to CDS.
Issue: Whether or not CDS was a valid exercise of
management prerogative.
• Whether or not CDS violates the CBA
provision.
• Whether or not CDS is an indirect way of
union-busting.
SC: Labor Minister’s order SUSTAINED.
• Minister Ople was correct in holding that CDS
was a valid exercise of management prerogative.
• Every business enterprise endeavors to
increase its profits. In the process, it may adopt
or devise means designed towards such goal.
• So long as a company’s management
prerogatives are exercised in good faith, for the
advancement of the employer’s interest, and not
for defeating or circumventing the rights of the
employees, this Court will uphold the same.
• SMC’s offer to compensate members
of its sales force who will be adversely affected
(via a back adjustment commission) proves the
company’s good faith and lack of intention to
bust their union.
CAPITOL MEDICAL CENTER AND Dr. Thelma
Navarette-Clemente vs Dr. Cesar MERIS
G.R. No. 155098 / 470 SCRA 125
September 16, 2005
Petition for Review of the Decision of the Court of
Appeals.
Facts:
• Respondent was hired by petitioner on 16-Jan-
1974 to be in charge of its Industrial Service Unit.
Respondent was one of petitioner’s stockholders.
• The ISU closed on 30-April-1992. Prior to its
closure, respondent performed dual functions of
providing medical services to Capitol’s employees, as
well as to employees of companies with retainer
contracts with Capitol.
• Capitol’s president, Dr. Thelma, informed
respondent on 31-Mar-1992 of the closure of the ISU.
She stated that it was due to the ‘almost extinct
demand for direct medical services by private and
semi-government corporations in providing health
care for their employees.’ She further stated that
management considered the ‘existing trend of
companies ‘allocating their health care requirements
to HMOs, or thru a tripartite agreement with medical
insurance carriers and designated hospitals.’
• Respondent, however, did not believe this. He
instead believed that management was closing the
ISU since he rejected petitioner’s prodding to retire.
To him, this was a mere ploy to oust him from his
position.
Labor Arbiter: Ruling for RESPONDENT.
NLRC: LA decision REVERSED.
CA: NLRC decision REVERSED.
 • Respondent filed a petition for review, but the
CA treated it as one for certiorari, in the interest of
substantial justice.
• It ruled that petitioner failed to meet the
standard of sufficient and adequate proof of loss
necessary to justify the abolition of the ISU. In fact, it
held further that the ISU was not abolished, but
merely being transferred to Dr. Clemente from Dr.
Meris.
Issue: Whether or not the CA erred in deciding the
petition on the merits instead of merely determining
whether the NLRC acted with grave abuse of discretion.
SC: CA decision UPHELD.
• While it is correct that a Rule 65 petition was
the appropriate mode of review of the NLRC decision
the appellate court’s relaxation of procedural
technicality to give way to a substantive
determination of the case was in order.
• The SC found that the LA and the
NLRC overlooked some material facts decisive
of the instant controversy.
• The right to close the operation of an
establishment is explicitly recognized under the
Labor Code as one of the authorized causes in
terminating employment of workers, the only
limitation being that the closure must not be for
the purpose of circumventing provisions on
termination of employment (Art.. 283).
• The Labor Code recognizes the right
of the employer to close or cease business
even if he is not suffering from serious
business or financial losses, as long as he
pays his employees their correct termination
pay.
• As long as the company exercises
such prerogative in good faith to advance its
interest and not to circumvent the rights of
employees, such exercise will be upheld.
• The ultimate test of validity of closure is that
it must be bona fide in character, and the burden of
proving the same rests upon the employer. In the case
at bar, petitioner failed to prove its good faith in
closing the ISU.
• Records of the case show that, despite
petitioners’ claims that there was extinct
demand for medical services by ISU, the
number of client companies of the ISU
increased from 11 to 18, from 1986 to 1991.
Petitioners were not able to explain such
increase.
• The Income/Expense analysis of the
ISU, albeit showing losses, was prepared by Dr.
Clemente’s relative, and not by an independent
external auditor. Hence, such record is not
beyond doubt.
• In fact, Capitol’s own accounting
records show that the ISU had increasing
revenue from 1989 to 1991.
• The closure of the ISU, then, appears to be
contrary to Labor Code provisions on termination of
employment. Respondent’s, therefore, was terminated
without just cause.
• Dr. Meris, however, is only entitled
now to separation pay and award for attorney’s
 fees. Reinstatement was not feasible due to the
strained employer-employee relationship.
(Manila Pavillion vs Delada)
Blue Dairy Corporation v. NLRC
Facts:
Blue Dairy, engaged in the processing of dairy and
chocolate products, juices and vegetables, hired Recalde as a
food technologist in its laboratory – she did, among others,
microanalysis of toppings and syrup, physical and chemical
analysis, etc.
On May 22, 1994, Recalde reported for work but claimed
that she was not given her premium pay.
On October 21, 1994, Recalde together with the Production
Manager met an accident while on their way back to the
office – a post fell on the company vehicle due to a raging
typhoon.
December 3, 1994, Recalde was transferred laboratory
where she cored, minced and repacked vegetables. She was
unhappy. She considered her new job humiliating and
menial. On December 14, 1994, she stopped reporting for
work. The following day she sent a letter to Aviguetero,
President and Chairman of the Board of Directors, informing
him that she will no longer report for work because of his
drastic and oppressive action.
Recalde filed a complaint for constructive dismissal and
non-payment of premium pay, among others. Blue Dairy
contended that Recalde was given a less sensitive
assignment outside of the laboratory on account of her
dishonesty which resulted in loss of trust and confidence.
They seriously took into account the result of the
investigation concerning the October 21 incident that
Recalde was actually scouting a new resident using
company vehicle without prior permission, in violation of
the company’s General Rules and Regulations.
The LA was convinced that Blue Dairy was guilty of
constructive dismissal, which the NLRC affirmed.
Blue Dairy insist that the transfer of Recalde was effected in
the exercise of management prerogative.
Issue: WON Recalde was constructively dismissed.
Held: Yes.
The Court held that no grave abuse of discretion was
committed by the NLRC. Indeed, it is the prerogative of
management to transfer an employee from one office to
another within the business establishment based on its
assessment and perception of the employee’s
qualifications, aptitudes and competence, and in order to
ascertain where he can function with maximum benefit
to the company. This is a privilege inherent in the
employer’s right to control and manage his enterprise
effectively. The freedom of management to conduct its
business operations to achieve its purpose cannot be
denied.
But, 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.
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.
Petitioners failed to justify Recalde’s transfer from the
position of food technologist in the laboratory to a worker in
the vegetable processing section. We recall that what
triggered Recalde’s transfer was the 21 October incident
where she was found to have allegedly utilized company
vehicle in looking for a new residence during office hours
without permission from management. In petitioners’ view,
she was dishonest such that they lost their trust and
confidence in her. Yet, it does not appear that Recalde was
provided an opportunity to refute the reason for the transfer.
Petitioners merely relied on the narrations of the company
driver. Nor was Recalde notified in advance of her
impending transfer which was, as we shall elucidate later, a
demotion in rank. In Gaco v. NLRC we noted— While
due process required by law is applied in dismissals, the
same is also applicable to demotions as demotions
likewise affect the employment of a worker whose right
to continued employment, under the same terms and
conditions, is also protected by law. Moreover,
considering that demotion is, like dismissal, also a
punitive action, the employee being demoted should, as
in cases of dismissals, be given a chance to contest the
same.
FARLE ALMODIEL v. NLRC
G.R. No. 100641, June 14, 1993
Nocon
Doctrine: An employer has no legal obligation to keep
more employees than are necessary for the operation of
its business; An employer has a much wider discretion in
terminating employment relationship of managerial
personnel compared to rank and file employees.
Facts:
Farle was a CPA who was hired as a Cost Accounting
Manager by Raytheon Philippines, Inc. He recommended
and submitted a Cost Accounting/Finance Reorganization,
affecting the whole finance group but the same was
disapproved by the Controller. However, Farle was assured
by the Controller that should his position or department
which was apparently a one-man department with no staff
becomes untenable or unable to deliver the needed service
due to manpower constraint, he would be given a three year
advance notice. In the meantime, the standard cost
accounting system was installed and used at the Raytheon
plants and subsidiaries worldwide. It was likewise adopted
and installed in the Philippine operations. As a consequence,
the services of a Cost Accounting Manager allegedly
entailed only the submission of periodic reports that would
use computerized forms prescribed and designed by the
international head office of the Raytheon Company in
California, USA.
Farle was summoned by his immediate boss and in the
presence of IRD Manager, Mr. Rolando Estrada, he was told
of the abolition of his position on the ground of
redundancy. He pleaded with management to defer its
action or transfer him to another department, but he was told
that the decision of management was final and that the same
has been conveyed to the Department of Labor and
Employment. Thus, he was constrained to file the complaint
for illegal dismissal before the Arbitration Branch of the
National Capital Region, NLRC, Department of Labor and
Employment.
Issue: W/N Farle’s termination was valid as his position
in the company as Cost Accounting Manager was
redundant
Held: YES.
Farle did not dispute the fact that a cost accounting system
was installed and used at Raytheon subsidiaries and plants
worldwide; and that the functions of his position involve the
submission of periodic reports utilizing computerized forms
designed and prescribed by the head office with the
installation of said accounting system. Farle attempted to
controvert these realities by alleging that some of the
functions of his position were still indispensable and were
actually dispersed to another department. What these
indispensable functions that were dispersed, he failed
however, to specify and point out. Besides, the fact that
the functions of a position were simply added to the
duties of another does not affect the legitimacy of the
employer's right to abolish a position when done in the
normal exercise of its prerogative to adopt sound
business practices in the management of its affairs.
Considering further that petitioner herein held a position
which was definitely managerial in character, Raytheon had
a broad latitude of discretion in abolishing his position. An
employer has a much wider discretion in terminating
employment relationship of managerial personnel
compared to rank and file employees. The reason
obviously is that officers in such key positions perform not
only functions which by nature require the employer's full
trust and confidence but also functions that spell the success
or failure of an enterprise.
INTERPHIL LABORATORIES EE UNION vs
INTERPHIL LABORATORIES
Facts:
Petitioner is the sole and exclusive bargaining agent of the
rank-and-file employees of Respondent. They had a CBA.
Prior to the expiration of the CBA, respondent company was
approached by the petitioner, through its officers. The Union
inquired about the stand of the company regarding the
duration of the CBA which was set to expire in a few
months. Salazar told the union officers that the matter could
be best discussed during the formal negotiations which
would start soon.
All the rank-and-file employees of the company refused to
follow their regular two-shift work schedule. The employees
stopped working and left their workplace without sealing the
containers and securing the raw materials they were working
on.
To minimize the damage the overtime boycott was causing
the company, Salazar immediately asked for a meeting with
the union officers. In the meeting, Enrico Gonzales, a union
director, told Salazar that the employees would only return
to their normal work schedule if the company would agree
to their demands as to the effectivity and duration of the new
CBA. Salazar again told the union officers that the matter
could be better discussed during the formal renegotiations of
the CBA. Since the union was apparently unsatisfied with
the answer of the company, the overtime boycott continued.
In addition, the employees started to engage in a work
slowdown campaign during the time they were working,
thus substantially delaying the production of the company.
Respondent company filed with the National NLRC a
petition to declare illegal petitioner union’s “overtime
boycott” and “work slowdown” which, according to
respondent company, amounted to illegal strike.
It was ruled that those who spearheaded the who
spearheaded and led the overtime boycott and work
slowdown, to have lost their employment status; and
(3) Finding the respondents guilty of unfair labor practice
for violating the then existing CBA which prohibits the
union or any employee during the existence of the CBA
from staging a strike or engaging in slowdown or
interruption of work and ordering them to cease and desist
from further committing the aforesaid illegal acts.
Petitioners argue that the ruling was incorrect since the act
of extending substantial separation package to almost all
involved officers of petitioner union, during the pendency of
the case, was tantamount to condonation, if indeed, there
was any misdeed committed.
Issue: Was the contention of the petitioners correct?
Held: No.
The Court cannot agree with the proposition that respondent
company, in extending substantial separation package to
some officers of petitioner union during the pendency of this
case, in effect, condoned the illegal acts they committed.
Respondent company correctly postured that at the time
these union officers obtained their separation benefits, they
were still considered employees of the company. Hence, the
company was merely complying with its legal obligations.
Respondent company could have withheld these benefits
pending the final resolution of this case. Yet, considering
perhaps the financial hardships experienced by its
employees and the economic situation prevailing,
respondent company chose to let its employees avail of their
separation benefits. The Court views the gesture of
respondent company as an act of generosity for which it
should not be punished.