Definition of labor law

Social legislation

ORO ENTERPRISES, INC., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and LORETO L.
CECILIO, respondents.

G.R. No. 110861 November 14, 1994

Ponente: Vitug, J.

Facts:

Private respondent was employed to the petitioner. After working

continuously with the company for forty one (41) years, private
respondent manifested her intention to retire from work by filing with
petitioner a “Claim for Retirement Pay.”

Petitioner wrote private respondent, informing her that it was in no

financial position to give her any retirement benefit apart from the
retirement pay she was already receiving from the Social Security
System (“SSS”). Nonetheless, she was offered a house and lot located
in San Jose, del Monte, Bulacan, in accordance with a “plan” which was
then still being conceived by the company president for retiring
employees. The offer did not materialize, nor did the proposed company
plan come into being.

During the pendency of the appeal, Republic Act No. 7641 took effect.
Providing the following:

Art. 287. Retirement. — Any employee may be retired upon reaching the

retirement age established in the collective bargaining agreement or
other applicable employment contract.

xxx xxx xxx

In the absence of a retirement plan or agreement providing for retirement

benefits of employees in the establishment, an employee upon reaching
the age of sixty (60) years or more, but not beyond sixty five (65) years
which is hereby declared the compulsory retirement age, who has
served at least five (5) years in the said establishment, may retire and
shall be entitled to retirement pay equivalent to at least one half (1/2)
month salary for every year of service, a fraction of at least six (6)
months being considered as one whole year.

Unless the parties provide for broader inclusions, the term “one half (1/2)
month salary” shall mean fifteen (15) days plus one twelfth (1/12) of the
13th month pay and the cash equivalent of not more than five (5) days of
service incentive leaves.

xxx xxx xxx

Violation of this provision is hereby declared unlawful and subject to the

penal provisions under Article 288 of this Code. 7

NLRC rendered its decision awarding to private respondent a retirement

pay on the basis of Republic Act 7641. Petitioner argues that the law,
which became effective only on 07 January 1993, cannot be given any
such retroactive effect as to cover private respondent who, at the age of
65 years, retired from employment with petitioner on 03 September
1990.

Issue:

Whether or not R.A. 7641 can favorably apply to private respondent’s

case.

Held:

RA 7641 is undoubtedly a social legislation. The law has been enacted

as a labor protection measure and as a curative statute that — absent a
retirement plan devised by, an agreement with, or a voluntary grant from,
an employer — can respond, in part at least, to the financial well-being
of workers during their twilight years soon following their life of labor.
There should be little doubt about the fact that the law can apply to labor
contracts still existing at the time the statute has taken effect, and that its
benefits can be reckoned not only from the date of the law ’s
enactment but retroactively to the time said employment contracts have
started.

Petitioner’s insists the assumption that it should not be given a

retroactive effect. That would be to ignore the well-settled principle that
police power legislation intended to promote public welfare applies to
existing contracts. The contracts of employment were entered into at a
time when there was no law granting the workers said right. Such being
the case, it was then contended that the application as to them of the
subsequent enactment would amount to an impairment of contractual
obligations. In refuting such a view, it was made clear in the opinion that
“constitutional guaranty of non-impairment . . . is limited by the exercise
of the police power of the State, in the interest of public health, safety,
morals and general welfare.”

Charlito Penaranda v Banganga

Plywood Corporation and Chua
Facts:
Charlito Penaranda was hired as an employee of Baganga Corporation with a monthly salary of P5,000
as Foreman/Boiler Head/ Shift Engineer  to take charge of the operations and maintenance of its steam
plant boiler.

He alleges that he was illegally terminated and that his termination was without due process and valid
grounds. Furthermore, he was not paid his OT pay, premium pay for working during holidays, and night
shift differentials. So he filed an action for illegal dismissal.

Hudson Chua, the General Manager of Baganga alleges that Penaranda’s separation was done pursuant
to Art. 238 of the Labor Code.  The company was on temporary closure due to repair and general
maintenance and it applied for clearance with the DOLE to shut down and dismiss employees. He claims
that due to the insistence of complainant, he was paid his separation benefits. But when the company
partially re-opened, Penaranda faild to re-apply.

Chua also alleges that since he is a managerial employee, he is not entitled to OT pay and if ever he
rendered services beyond the normal hours of work, there was no office order/authorization for him to do
so.

The Labor Arbiter ruled that there was no illegal dismissal and that Penaranda’s complaint was premature
because he was still employed with Baganga. As regards the benefits, the Labor Arbiter found petitioner
entitled to OT pay, premium pay for working on rest days and attorney’s fees.

On appeal, NLRC deleted the award of OT pay, premium pay and attorney’s fees.

The CA dismissed Penaranda’s Petition for Certiorari based on procedural failures.

Issue:
 Whether or not Penaranda is a regular employee entitled to monetary benefits under Art. 82 of
the Labor Code.

Held:
NO. Penaranda is part of the managerial staff which takes him out of the coverage of labor
standards. The Implementing Rules define members of a managerial staff as those with the ff.
responsibilities:
Article 82 of the Labor Code exempts managerial employees from the coverage of labor
standards. Labor standards provide the working conditions of employees, including entitlement to
overtime pay and premium pay for working on rest days.29 Under this provision, managerial
employees are "those whose primary duty consists of the management of the establishment in which
they are employed or of a department or subdivision.

(1) The primary duty consists of the performance of work directly related to management policies
of the employer;
(2) Customarily and regularly exercise discretion and independent judgment;
(3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty
consists of the management of the establishment in which he is employed or subdivision thereof; or (ii)
execute under general supervision work along specialized or technical lines requiring special training,
experience, or knowledge; or (iii) execute under general supervision special assignments and tasks; and
(4) who do not devote more than 20 percent of their hours worked in a workweek to activities
which are not directly and closely related to the performance of the work described in paragraphs (1), (2),
and (3) above."

Petitioner supervised the engineering section of the steam plant boiler. His work involved
overseeing the operation of the machines and the performance of the workers in the engineering section.
This work necessarily required the use of discretion and independent judgment to ensure the proper
functioning of the steam plant boiler. As supervisor, petitioner is deemed a member of the managerial
staff.

Even Penaranda admitted that he was a supervisor. In his Position Paper, he stated that he was
the foreman responsible for the operation of the boiler. The term foreman implies that he was the
representative of management over the workers and the operation of the department. His classification as
supervisor is further evident from the manner his salary was paid. He belonged to the 10% of
respondent’s 354 employees who were paid on a monthly basis; the others were paid only on a daily
basis.

*No justification to award overtime pay and premium pay for rest days to Penaranda
-

Legal bases

Police power

G.R. No. 120095 August 5, 1996

JMM PROMOTION AND MANAGEMENT, INC., and KARY INTERNATIONAL, INC., petitioner, 

vs.

HON. COURT OF APPEALS, HON. MA. NIEVES CONFESSOR, then Secretary of the Department of
Labor and Employment, HON. JOSE BRILLANTES, in his capacity as acting Secretary of the
Department of Labor and Employment and HON. FELICISIMO JOSON, in his capacity as
Administrator of the Philippine Overseas Employment Administration, respondents.
The Facts:

Assailed is the government's power to control deployment of female entertainers to Japan by

requiring an Artist Record Book (ARB) as a precondition to the processing by the POEA of any
contract for overseas employment. By contending that the right to overseas employment is a
property right within the meaning of the Constitution, petitioners vigorously aver that deprivation
thereof allegedly through the onerous requirement of an ARB violates the due process clause and
constitutes an invalid exercise of the police power.

The Issue:

Is Department Order No. 3, establishing procedures and requirements for screening performing
artists before an Artist's Record Book (ARB) can be issued, as a necessary prerequisite to
processing of any contract of employment by the POEA, a valid exercise of police power by the
state?

Decision:

The court finds in the affirmative.

It is true that a profession, trade of calling is a property right within the meaning of our
constitutional guarantees. One cannot be deprived of the right to work and right to make a living
because these rights are property rights, the arbitrary and unwarranted deprivation of which
normally constitutes an actionable wrong.  

However, no right is absolute, and the proper regulation of a profession, calling, business or trade
has always been upheld as a legitimate subject of a valid exercise of the police power by the state
particularly when their conduct affects either the execution of legitimate governmental functions,
the preservation of the State, the public health, welfare and public morals.

To pretend that licensing or accreditation requirements violates the due process clause is to ignore
the settled practice, under the mantle of the police power, of regulating entry to the practice of
various trades or professions. Professionals leaving for abroad are required to pass rigid written
and practical exams before they are deemed fit to practice their trade. (Ex. Seamen are required to
take tests determining their seamanship.)

In the case at bar, the challenged Department Order clearly applies to all performing artists and
entertainers destined for jobs abroad. This order enforces the Constitutional mandate of requiring
government to protect our workforce, particularly those who may be prone to abuse and
exploitation as they are beyond the physical reach of government regulatory agencies. 

In any event, apart from the State's police power, the Constitution itself mandates government to
extend the fullest protection to our overseas workers. The basic constitutional statement on labor,
embodied in Section 18 of Article II of the Constitution provides:

Sec. 18. The State affirms labor as a primary social economic force. It shall protect the rights
of workers and promote their welfare.
More emphatically, the social justice provisions on labor of the 1987 Constitution in its first
paragraph states:

The State shall afford full protection to labor, local and overseas, organized and unorganized
and promote full employment and equality of employment opportunities for all.

Obviously, protection to labor does not indicate promotion of employment alone. Under the welfare
and social justice provisions of the Constitution, the promotion of full employment, while desirable,
cannot take a backseat to the government's constitutional duty to provide mechanisms for the
protection of our workforce, local or overseas. As this Court explained in Philippine Association of
Service Exporters (PASEI) v. Drilon,  in reference to the recurring problems faced by our overseas
11

workers:

What concerns the Constitution more paramountly is that such an employment be above all,
decent, just, and humane. It is bad enough that the country has to send its sons and
daughters to strange lands because it cannot satisfy their employment needs at home.
Under these circumstances, the Government is duty-adequate protection, personally and
economically, while away from home.

CMS ESTATE, INC. V SOCIAL SECURITY SYSTEM

CUEVAS; September 28, 1984
NATURE
 Appeal by the CMS Estate, Inc.
FACTS
- Petitioner is a domestic corporation organized primarily for the purpose of engaging in real
estate business. On December 1, 1952, it started doing businesswith only six (6) employees.-
January 28, 1957: petitioner entered into a contract of management with one Eufracio D. Rojas
for the operation and exploitation of the forest concession. Thelogging operation actually started
on April 1, 1957 with four monthly-salaried employees.
As of September 1, 1957, petitioner had 89 employees and laborers in the logging
operation.
 - December 26, 1957: petitioner revoked its contract of management with Mr. Rojas.-
August 1, 1958: petitioner became a member of the Social Security System with respect
to its real estate business.
 
On September 6, 1958,
 
Petitioner remitted to the System the sum of P203.13 representing the initial premium on
the monthly salaries of the employees in its logging business.
 -
October 9, 1958: petitioner demanded the refund of the said amount.
- On November 10, 1958, petitioner filed a petition with the Social Security Commission praying
for the determination of the effectivity date of the compulsory coverage of petitioner's logging
business.
 
- January 14, 1960: the instant petition was denied and petitioner was adjudged to be subject to
compulsory coverage as Sept. 1, 1957 and the Social Security System was directed to effect
such coverage of petitioner's employees in its logging and real estate business conformably to
the provisions of Rep. Act No. 1161,as amended.-
Petitioner’s Claim
 
CMS Estate, Inc. is not yet subject to compulsory coverage with respect to its logging business
because it does not have the minimum required number ofemployees (per company).-
Respondent’s Comments
 
The logging business was a mere expansion of petitioner's activities and for purposes of the
Social Security Act, petitioner should be considered a member of theSystem since December 1,
1952 when it commenced its real estate business.
ISSUES
1. WON the contributions required of employers and employees under our Social Security Act of
1954 are obligatory because the said Act was allegedly enactedby Congress in the exercise of
the police power of the State, not of its taxing power
2. WON a contractee-independent contractor relationship existed between petitioner and
Eufracio Rojas. during the time that he was operating its forestconcession at Baganga, Davao
3. WON Section 9 of the Social Security Act on the question of compulsory membership and
employers should be given a liberal interpretation
HELD
1.
 Ratio
 The said enactment implements the general welfare mandate of the Constitution and
constitutes a legitimate exercise of the police power of theState.
Reasoning 
 - The Social Security Law was enacted pursuant to the policy of the government "
to develop, establish gradually and perfect a social security system whichshall be
suitable to the needs of the people throughout the Philippines, and shall provide
protection against the hazards of disability, sickness, oldage and death
" (Sec. 2, RA 1161, as amended).- Membership in the SSS is
not a result of bilateral, concensual agreement where the rights and obligations of the
parties are defined by and subject totheir will
, RA 1161 requires compulsory coverage of employees and employers under the System. It is
actually a legal imposition on said employers andemployees, designed to provide social security
to the workingmen. The principle of non-impairment of the obligation of contract as provided in
the Bill of Rights isnot a proper defense, the enactment being a lawful exercise of the police
power of the State.- The taxing power of the State is exercised for the purpose of raising
revenues. However, under our Social Security Law, the
emphasis is more on thepromotion of the general welfare
. The Act is not part of out Internal Revenue Code nor are the contributions and premiums
therein dealt with and provided for,collectible by the Bureau of Internal Revenue. The funds
contributed to the System belong to the members who will receive benefits, as a matter of
right,whenever the hazards provided by the law occur.- Together with the contributions imposed
upon employees and the Government, they are intended for the protection of said employees
against the hazards ofdisability, sickness, old age and death in line with the constitutional
mandate to promote social justice to insure the well-being and economic security of all
thepeople.
 
- It is the intention of the law to cover as many persons as possible so as to promote the
constitutional objective of social justice. It is clear that a later law prevailsover a prior statute and
moreover the legislative intent must be given effect.2.

Ratio
 Rojas was not an independent contractor but merely an employee of the petitioner.
Reasoning 
 - Rojas was appointed as operations manager of the logging concession; he has no power to
appoint or hire employees; as the term implies, he only managesthe employees and it is
petitioner who furnishes him the necessary equipment for use in the logging business; and he
is not free from the control and direction ofhis employer in matter connected with the
performance of his work. Rojas should be entitled to the compulsory coverage of the Act.3.
Ratio
Because of the broad social purpose of the Social Security Act, all doubts in construing the Act
should favor coverage rather than exemption.
Reasoning
-
 
Prior to its amendment, Sec. 9 of the Act provides that before an employer could be compelled
to become a member of the System, he must have been inoperation for at least two years and
has at the time of admission at least six employees.
It should be pointed out that it is the employer, either natural, or judicial person, who is
subject to compulsory coverage and not the business.
- It is the intention of the law to cover as many persons as possible so as to promote the
constitutional objective of social justice. It is axiomatic that a later lawprevails over a
prior statute and moreover the legislative in tent must be given effect
Sec. 10, Art. II of the 1987 Constitution

SECTION 10. The State shall promote social justice in all phases of national development.

Sec. 5, Art. II of the 1987 Constitution

SECTION 5. The maintenance of peace and order, the protection of life, liberty, and property, and the
promotion of the general welfare are essential for the enjoyment by all the people of the blessings of
democracy.

ARTICLE XIII

Social Justice and Human Rights

SECTION 1. The Congress shall give highest priority to the enactment of measures that protect and
enhance the right of all the people to human dignity, reduce social, economic, and political inequalities,
and remove cultural inequities by equitably diffusing wealth and political power for the common good.
To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its
increments.

SECTION 2. The promotion of social justice shall include the commitment to create economic
opportunities based on freedom of initiative and self-reliance.

Calalang v Williams (Labor Standards)

Calalang v Williams 
GR No. 47800 
December 2, 1940  

FACTS:    

Pursuant to the power delegated to it by the Legislature, the Director of Public Works
promulgated rules and regulations pertaining to the closure of Rosario Street and Rizal
Avenue to traffic of 

animal-drawn vehicles for a year from the date of the opening of the Colgante Bridge to
traffic.   

Among others, the petitioner Calalang, concerned citizen, aver that the rules and
regulations complained of:  
 infringe upon constitutional precept on the promotion of social justice to insure the well
being and economic security of all people; 
 and that it constitutes unlawful interference with legitimate business or trade and abridge
the right to personal liberty and freedom of locomotion.  

ISSUE:  Whether or not the rules and regulation promote social justice.  

HELD:  
YES, it still promotes social justice. In enacting the said law, the National Assembly was
prompted by considerations of public convenience and welfare.  

The promotion of Social Justice is to be adhered not through a mistaken sympathy towards
any given group (e.g. the poor - because social justice is bringing the greatest good to the
greatest number, not necessarily just the poor like the drivers of the animal-drawn
vehicles).  

Social justice:   
: "neither communism, nor despotism, nor atomism, nor anarchy," but the humanization of
laws and the equalization of social and economic force by the State so that justice in its
rational and objectively secular conception may at least be approximated.      

: the promotion of the welfare of all the people, the adoption by the Government of
measures calculated to insure economic stability of all the competent elements of society,
through the maintenance of a proper economic and social equilibrium in the interrelations of
the members of the     community, constitutionally, through the adoption of measures
legally justifiable, or extra-constitutionally, through the exercise of powers underlying the
existence of all governments on the time-honored principle of salus populi est suprema lex.
: must be founded on the recognition of the necessity of interdependence among divers and
diverse units of a society and of the protection that should be equally and evenly extended
to all groups as a combined force in our social and economic life, consistent with the
fundamental and paramount     objective of the state of promoting the health, comfort and
quiet of all persons, and of bringing about "the greatest good to the greatest number."  

The petitioner finally avers that the rules and regulations complained of infringe upon
the constitutional precept regarding the promotion of social justice to insure the well-
being and economic security of all the people. The promotion of social justice, however,
is to be achieved not through a mistaken sympathy towards any given group. Social
justice is "neither communism, nor despotism, nor atomism, nor anarchy," but the
humanization of laws and the equalization of social and economic forces by the State so
that justice in its rational and objectively secular conception may at least be
approximated. Social justice means the promotion of the welfare of all the people, the
adoption by the Government of measures calculated to insure economic stability of all
the competent elements of society, through the maintenance of a proper economic and
social equilibrium in the interrelations of the members of the community,
constitutionally, through the adoption of measures legally justifiable, or extra-
constitutionally, through the exercise of powers underlying the existence of all
governments on the time-honored principle of salus populi est suprema lex.

Social justice, therefore, must be founded on the recognition of the necessity of

interdependence among divers and diverse units of a society and of the protection that
should be equally and evenly extended to all groups as a combined force in our social
and economic life, consistent with the fundamental and paramount objective of the
state of promoting the health, comfort, and quiet of all persons, and of bringing about
"the greatest good to the greatest number." cralaw virtua1aw library

In view of the foregoing, the writ of prohibition prayed for is hereby denied, with costs
against the petitioner. So ordered.
terminal facilities and services corp vs nlrc and ASSOCIATED LABOR UNIONS (ALU)

f:

Respondent Associated Labor Unions (ALU) is the exclusive bargaining agent of the on-and-off rank and
file workers as well as the monthly paid employees of petitioner Terminal Facilities and Services
Corporation (TEFASCO), a domestic corporation engaged in the business of wharf services and facilities
operating for profit and with business operation located at Davao City.

On the ground that petitioner TEFASCO failed to comply with the law on the payment of the mandated
cost of living allowance under existing wage order to its monthly-paid employees who are members of
respondent ALU, the latter, in a complaint dated September 5, 1985 filed with the National Labor
Relations Commission (NLRC) Labor Arbitration Branch, Regional Office No. XI, Davao City charged the
former with underpayment of emergency cost of living allowance
Respondent ALU alleged that petitioner TEFASCO pays each monthly-paid employee only P455.00 a
month as emergency cost of living allowance which is less than the prescribed amount of P517.08 per
month as stated in the table of computations released by the Ministry (now Department) of Labor and
Employment. ALU filed the complaint after TEFASCO refused to adjust the union members’ allowances.

The petitioner explained that the basis of the computation of the basic wages allowance is 26 days per
month for monthly paid employees, the four (4) rest days excluded. Furthermore, petitioner TEFASCO
averred that its stand is in consonance with Section 5 of the Implementing Rules of Wage No. 6

LA and NLRC ruled in favor of ALU

H:

As already pointed out, the facts show that the divisor used to find the daily equivalent of the salary of
ALU’s members is 26 working day in one month. That means to say that the monthly salary of ALU’s
members do not include pay for unworked rest days. the number of their work days in one year is 314 or
approximately 26 days in one month.

2. ID.; ID.; ABSENT PROVISION IN COLLECTIVE BARGAINING AGREEMENT, THE PRESUMPTION THAT A
MONTHLY PAID EMPLOYEE IS CONSIDERED PAID EVEN ON REST DAY PREVAILS. — Wage Order No. 6 was
issued by then President Ferdinand E. Marcos to increase the statutory minimum wage rates and cost of
living allowances of the employee in the private sector. In line with the wage order and its rules
implementing the wage order, the Ministry of Labor and Employment released a table of computations
to guide the employer on the amount of the cost of living allowance which a group of employees should
receive. It is to be noted that the petitioner is not questioning the table of computations. Furthermore,
we rule that the company practice to use a divisor of 26 days in determining the deductions from the
monthly salary of an employee when he incurs absences during the period does not mean that the same
procedure should also be followed in determining the monthly cost of living allowance due the
employee. In the absence of any provision in any collective bargaining agreement of the parties, the
presumption that a monthly paid employee is considered paid even on rest days must prevail.

3. CONSTITUTIONAL LAW; SOCIAL JUSTICE; DETERMINATION OF DAILY WAGE RESOLVED IN FAVOR OF

LABOR IN KEEPING WITH CONSTITUTIONAL MANDATE. — The issue in this case is whether or not
petitioner in line with company practice may use the divisor of 26 days per month in determining the
daily wage of an employee to fix the amount of deduction from the employee’s monthly salary when the
employee incurs absences during the month. In resolving the issues raised in the instant case, we are
once again reminded of the constitutional mandate that: "The state shall afford full protection to labor,
local and overseas, organized and unorganized, and promote full employment and equality of
employment opportunities for all (Par. 1, Section 3, Article XIII, Constitution). We rule that in keeping
with the constitutional mandate of social justice, the questioned resolutions of the NLRC in favor of
respondent union should be upheld.

Philippine Telegraph v. National Labor Relations

Commission
G.R. No. 118978, 23 May 1997

FACTS:

PT&T (Philippine Telegraph & Telephone Company) initially hired Grace de Guzman specifically as
reliever for C.F. Tenorio who went on maternity leave. She was again invited for employment as
replacement of Erlina F. Dizon who went on leave on 2 periods. De Guzman was again asked to join
PT&T as a probationary employee. She indicated in the portion of the job application form under civil
status that she was single although she had contracted marriage a few months earlier.

When petitioner learned later about the marriage, its branch supervisor sent de Guzman a
memorandum requiring her to explain the discrepancy including a reminder about the company’s
policy of not accepting married women for employment. She was dismissed from the company and
Labor Arbiter handed down a decision declaring that petitioner illegally dismissed de Guzman, who
had already gained the status of a regular employee. It was apparent that she had been
discriminated on account of her having contracted marriage in violation of company policies.

ISSUE:

Whether or not the alleged concealment of civil status can be grounds to terminate the services of
an employee.

RULING:

No. Private respondent’s act of concealing the true nature of her status from PT&T could not be
properly characterized as in bad faith as she was moved to act the way she did mainly because she
wanted to retain a permanent job in a stable company. Thus, could not be a ground to terminate her
services.

Article 136 of the Labor Code, one of the protective laws for women, explicitly prohibits
discrimination merely by reason of marriage of a female employee. It is recognized that company is
free to regulate manpower and employment from hiring to firing, according to their discretion and
best business judgment, except in those cases of unlawful discrimination or those provided by law.

PT&T’s policy of not accepting or disqualifying from work any woman worker who contracts marriage
is afoul of the right against discrimination provided to all women workers by our labor laws and by
our Constitution. The record discloses clearly that de Guzman’s ties with PT&T were dissolved
principally because of the company’s policy that married women are not qualified for employment in
the company, and not merely because of her supposed acts of dishonesty.
The policy of PT&T is in derogation of the provisions stated in Art.136 of the Labor Code on the right
of a woman to be free from any kind of stipulation against marriage in connection with her
employment and it likewise is contrary to good morals and public policy, depriving a woman of her
freedom to choose her status, a privilege that is inherent in an individual as an intangible and
inalienable right. The kind of policy followed by PT&T strikes at the very essence, ideals and
purpose of marriage as an inviolable social institution and ultimately, family as the foundation of the
nation. Such policy must be prohibited in all its indirect, disguised or dissembled forms as
discriminatory conduct derogatory of the laws of the land not only for order but also imperatively
required. However, SC nevertheless ruled that Grace did commit an act of dishonesty, which should
be sanctioned and therefore agreed with the NLRC’s decision that the dishonesty warranted
temporary suspension of Grace from work.

MANILA WATER COMPANY v. DEL ROSARIO

G.R. No. 188747, January 29, 2014

Facts:

Previously, complainant was hired as an Instrument Technician. Sometime afterwards, Defendant

discovered that 24 meters were missing in its stockroom. “Upon initial investigation, it appeared that
[complainant] and his co-employee, a certain Danilo Manguera, were involved in the pilferage and the
sale of water meters to the company’s contractor. Consequently, Manila Water issued a Memorandum
dated 23 June 2000, directing [complainant] to explain in writing within 72 hours why he should not be
dealt with administratively for the loss of the said water meters. In his letter-explanation, [complainant]
confessed his involvement in the act charged and pleaded for forgiveness, promising not to commit
similar acts in the future.” To give ample opportunity for him to explain, an administrative hearing was
conducted wherein complainant was found responsible for the loss of the water meters. Thus, he was
found liable for violating the company’s Code of Conduct. Accordingly, he was dismissed. As a result,
complainant filed this labor complaint. Throughout the proceedings, it was held that there was no illegal
dismissal but complainant was awarded separation pay considering that he had served 21 years to the
company.

Issue:

The issue raised is with respect to the award by the appellate court of separation pay.

Ruling:

The award of separation pay is deleted. “As a general rule, an employee who has been dismissed for any
of the just causes enumerated under Article 282 of the Labor Code is not entitled to a separation pay.”
However, in exceptional cases, separation pay has been granted to a legally dismissed employee as an
act of “social justice” or on “equitable grounds.” In either case, “it is required that the dismissal (1) was
not for serious misconduct; and (2) did not reflect on the moral character of the employee.”

Citing the leading case of PLDT v. NLRC (247 Phil. 641, 1988), the Supreme Court laid down the rule “that
separation pay shall be allowed as a measure of social justice only in the instances where the employee
is validly dismissed for causes other than serious misconduct reflecting his moral character…”

In subsequent cases, the high tribunal “expanded the exclusions and elucidated that separation pay shall
be allowed as a measure of social justice only in instances where the employee is validly dismissed for
causes other than serious misconduct, willful disobedience, gross and habitual neglect of duty, fraud or
willful breach of trust, commission of a crime against the employer or his family, or those reflecting on
his moral character… the labor officials [were instructed] that they must be most judicious and
circumspect in awarding separation pay or financial assistance as the constitutional policy to provide full
protection to labor is not meant to be an instrument to oppress the employers. The commitment of the
court to the cause of the labor should not embarrass us from sustaining the employers when they are
right… In fine, [the Court] should be more cautious in awarding financial assistance to the undeserving
and those who are unworthy of liberality of the law.”

Here, complainant’s claim for separation pay was denied “since the admitted cause of his dismissal
amounts to serious misconduct. He is not only responsible for the loss of the water meters in flagrant
violation of the company’s policy but his act is in utter disregard of his partnership with his employer in
the pursuit of mutual benefits.”

It should be noted that the years of service may determine the separation pay to be awarded if proper.
However, that is not the reason why such pay should be granted at all. “That Del Rosario rendered 21
years of service to the company will not save the day for him.”

Philippine Long Distance Telephone Company (PLDT) v. National Labor Relations Commission
(NLRC) 164 SCRA 671 (1988)

FACTS: Marilyn Abucay, a traffic operator of the Philippine Long Distance Telephone Company, was
accused by two complainants of having demanded and received from them the total amount of
P3,800.00 in consideration of her promise to facilitate approval of their applications for telephone
installation. Investigated and heard, she was found guilty as charged and accordingly separated from the
service. She went to the Ministry of Labor and Employment claiming she had been illegally removed.
Despite of her being dismissed for cause, (as contended by PLDT) the labor arbiter (from NLRC) in his
decision ruled that the complainant (herein private respondent) must be given one month pay for every
year of service as financial assistance. The labor arbiter finds the same as equitable, taking into
consideration her long years of service to the company whereby she had undoubtedly contributed to
the success of the company.
 NOTE: Marilyn Abucay had served in the company for 10 years. Thus, she must be awarded 10
months separation pay for every year of her service.

ISSUE: Whether or not the award of separation pay for the private respondent is just.

RULING: NO. The rule embodied in the Labor Code is that a person dismissed for cause as defined
therein is not entitled to separation pay. The separation pay, when it was considered warranted, was
required regardless of the nature or degree of the ground proved, be it mere inefficiency or something
graver like immorality or dishonesty. Separation pay shall be allowed as a measure of social justice only
in those instances where the employee is validly dismissed for causes other than serious misconduct or
those reflecting on his moral character. Where the reason for the valid dismissal is, for example, habitual
intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow
worker, the employer may not be required to give the dismissed employee separation pay, or financial
assistance, or whatever other name it is called, on the ground of social justice. If the employee who
steals from the company is granted separation pay even as he is validly dismissed, it is not unlikely that
he will commit a similar offense in his next employment because he thinks he can expect a like leniency
if he is again found out. This kind of misplaced compassion is not going to do labor in general any good
as it will encourage the infiltration of its ranks by those who do not deserve the protection and concern
of the Constitution. Those who invoke social justice may do so only if their hands are clean and their
motives blameless and not simply because they happen to be poor.

We hold that the grant of separation pay in the case at bar is unjustified. The private
respondent has been dismissed for dishonesty, as found by the labor arbiter and affirmed by the NLRC
and as she herself has impliedly admitted. The fact that she has worked with the PLDT for more than a
decade, if it is to be considered at all, should be taken against her as it reflects a regrettable lack of
loyalty that she should have strengthened instead of betraying during all of her 10 years of service with
the company. If regarded as a justification for moderating the penalty of dismissal, it will actually
become a prize for disloyalty, perverting the meaning of social justice and undermining the efforts of
labor to cleanse its ranks of all undesirables.
The policy of social justice is not intended to countenance wrongdoing simply because it is
committed by the underprivileged. At best it may mitigate the penalty but it certainly will not condone
the offense. Compassion for the poor is an imperative of every humane society but only when the
recipient is not a rascal claiming an undeserved privilege. Social justice cannot be permitted to be
refuge of scoundrels any more than can equity be an impediment to the punishment of the guilty.
Those who invoke social justice may do so only if their hands are clean and their motives blameless
and not simply because they happen to be poor. This great policy of our Constitution is not meant for
the protection of those who have proved they are not worthy of it, like the workers who have tainted
the cause of labor with the blemishes of their own character.

Protection of Labor Clause

Labor

SECTION 3. The State shall afford full protection to labor, local and overseas, organized and unorganized,
and promote full employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations,
and peaceful concerted activities, including the right to strike in accordance with law. They shall be
entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate
in policy and decision-making processes affecting their rights and benefits as may be provided by law.

The State shall promote the principle of shared responsibility between workers and employers and the
preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their
mutual compliance therewith to foster industrial peace.

The State shall regulate the relations between workers and employers, recognizing the right of labor to
its just share in the fruits of production and the right of enterprises to reasonable returns on
investments, and to expansion and growth.

The right to labor is a constitutional as well as statutory right. Every

man has a natural right to the fruits of his own industry. A man who
has been employed to undertake certain labor and has put into it his
time and effort is entitled to be protected. The right of a person to
his labor is deemed to be property within the meaning of
constitutional guarantees. That is his means of livelihood. He cannot
be deprived of his labor or work without due process of law (11 Am.
Jur., 333, pp. 1151-1153; 11 Am. Jur., section 344. pp. 1168-
1171).   chanroblesvirtualawlibrary chanrobles virtual law library

Although the Court of Industrial Relations, in the determination of

any question or controversy, may adopt its own rules of procedure
and may act according to justice and equity without regard to
technicalities, and for that matter is not bound by any technical
rules of evidence (section 20, Commonwealth Act No. 103), this
broad grant of power should not be interpreted to mean that it can
ignore or disregard the fundamental requirements of due process in
the trials and investigation of cases brought before it for
determination. As aptly pointed out by this court, there are certain
cardinal primary rights which the Court of Industrial Relations must
respect in the trial of every labor case. One of them is the right to a
hearing which includes the right of the party interested to present
his own case and submit evidence in support thereof (Manila
Trading and Supply Co. vs. Philippine Labor Union, 71 Phil., 124,
 129). An ocular inspection of the establishment or premise involved
is proper if the court finds it necessary, but such is authorized only
to help the court in clearing a doubt, reaching a conclusion, or
finding the truth. But it is not the main trial nor should it exclude
the presentation of other evidence which the parties may deem
necessary to establish their case. It is merely an auxiliary remedy
the law affords the parties or the court to reach an enlightened
determination of the case.

PHILIPPINE MOVIE PICTURES WORKERS' ASSOCIATION vs. PREMIERE PRODUCTIONS, INC.

92 Phil 843 (1953)
Facts:

1.     Respondent filed with the Court of Industrial Relations (CIR) an urgent petition seeking authority to lay off 44
men working in three of its departments,  first batch to be laid off  30 days after the filing of the petition and the
rest 45 days thereafter.
a.     in order that in the intervening period it may finish the filming of its pending picture. The ground for the lay off is
the financial losses which respondent was allegedly suffering during the current year.

2.     Petitioner opposed, alleging that

a.     the claim of financial losses has no basis in fact it being only an act of retaliation for the strike staged by the
workers days before in an attempt to harass and intimidate them and weaken and destroy the union to which they
belong.

3.     When the urgent petition was set for hearing, at the request of counsel for respondent, judge Roldan of the CIR,
held an ocular inspection of the studios and filming premises of respondent. He interrogated about 15 laborers
who were then present in the place.
a.     Judge Roldan allowed respondent to lay off the workers with respect to Unit No. 2 and those assigned to the
Ground Maintenance Department subject to the condition that, in the event that work is available in the future,
they should be reemployed. (nov 8 order)

4.     A subsequent hearing was held in connection with the workers assigned to Unit No. 1 and on the strength of the
evidence submitted by respondent, Judge Roldan again found the petition justifiable and authorized their lay off in
an order under the same condition as those contained in his previous order.
5.     Petitioner moved for the reconsideration of both orders- Court in banc DENIED; Hence this petition for review.

Issue:
May the CIR authorize the layoff of workers on the basis of an ocular inspection without receiving full evidence to
determine the cause or motive of such layoff?

Petitioner (contention)- such a procedure is unfair to the labor union in that it deprived the workers affected of the opportunity to disprove what
apparently was represented to the court during the ocular inspection which at best may only be the result of a prearrangement devised by the
company to justify its claim of lack of work and that what the court should have done was to make a full-dress investigation if not a formal
hearing giving both parties all the time and opportunity to present their evidence before deciding such an important matter which affects the
position and the only means of livelihood of the workers affected by the petition.

*With the procedure adopted by the court, the workers were deprived of their employment without due process of law.
 Respondent- claims that the labor union had its day in court because its counsel was present in the investigation or ocular inspection and even
presented some witnesses to protect its interest.

Held: No
In the course of the ocular inspection Judge Roldan proceeded to interrogate the workers he found in the place in the
presence of the counsel of both parties. The testimony of those interrogated was taken down and the counsel of both
parties were allowed to cross-examine them. Judge Roldan also proceeded to examine some of the records of
respondent company among them the time cards of some workers which showed that while the workers reported for
work, when their presence was checked they were found to be no longer in the premises. And on the strength of the
findings made by Judge Roldan in this ocular inspection he reached the conclusion that the petition for layoff was
justified because there was no more work for the laborers to do in connection with the different jobs given to
them.

The record before the court on this matter is not clear and for such reason it has no way of determining the truth of
both claims.
-        The stenographic notes taken during the ocular inspection have not been elevated for the reason undoubtedly that
this is a petition for review and the only issue before the court is one of law.
-        The only guide that the court finds is the order itself of the court of origin which contains a reference to the
evidence that it has considered for the  layoff of the workers. – NOV 8 Order

It is true, as counsel for respondent avers, that hearings were conducted by the court a quo  xxx but it is likewise true
that those hearings do not necessarily refer to the petition under consideration but to other matters such as the
petition of the labor union containing 14 demands and the petition of the same union to declare respondent in
contempt for having violated certain directives of the court. At any rate, this matter does not appear clear and we are
inclined to resolve the doubt in favor of labor considering the spirit of our Constitution.

* The right to labor is a constitutional as well as a statutory right. Every man has a natural right to the fruits of his own industry. A man who has
been employed to undertake certain labor and has put into it his time and effort is entitled to be protected. The right of a person to his labor is
deemed to be property within the meaning of constitutional guarantees. That is his means of livelihood. He cannot be deprived of his labor or
work without due process of law
An ocular inspection of the establishment or premises involved is proper if the court finds it necessary, but such is
authorized only to help the court in clearing a doubt, reaching a conclusion, or finding the truth.  But it is not
the main trial nor should it exclude the presentation of other evidence which the parties may deem necessary to
establish their case. It is merely an auxiliary remedy the law affords the parties or the court to reach an enlightened
determination of the case.

Considering the merits of the controversy before us, we are of the opinion that the required due process has not
been followed. The court a quo merely acted on the strength of the ocular inspection it conducted in the premises of
the respondent company. The petition for layoff was predicated on the lack of work and of the further fact that the
company was incurring financial losses. These allegations cannot be established by a mere inspection of the
place of labor specially when such inspection was conducted at the request of the interested party.

cause be remanded to the court o

Doctrine of Incorporation

SECTION 2. The Philippines renounces war as an instrument of national policy, adopts

the generally accepted principles of international law as part of the law of the land and
adheres to the policy of peace, equality, justice, freedom, cooperation, and amity with all
nations.

Labor and the Constitution

i. Due Process of Law SECTION 1. No person shall be deprived of life, liberty, or property
without due process of law, nor shall any person be denied the equal protection of the
laws.

Ang Tibay vs. CIR (G.R. No. L-46496)

Facts:
Ang Tibay was a manufacturer of rubber slippers. There was a shortage of leather soles, and it was necessary to temporarily lay
off members of the National Labor Union. According to the Union however, this was merely a scheme to systematically terminate
the employees from work, and that the shortage of soles is unsupported. It claims that Ang Tibay is guilty of unjust labor practice
because the owner, Teodoro, is discriminating against the National Labor Union, and unjustly favoring the National Workers
Brotherhood, which was allegedly sympathetic to the employer. The Court of Industrial Relation decided the case and elevated it
to the Supreme Court, but a motion for new trial was raised by the NLU. But the Ang Tibay filed a motion for opposing the said
motion. 

The motion for new trial was raised because according to NLU, there are documents that are so inaccessible to them that even
with the exercise of due diligence they could not be expected to have obtained them and offered as evidence in the Court of
Industrial Relations. That these documents, which NLU have now attached as exhibits are of such far-reaching importance and
effect that their admission would necessarily mean the modification and reversal of the judgment rendered therein.

Issue:
WON the union was denied due process by CIR.

Held:
To begin with the issue before us is to realize the functions of the CIR. The CIR is a special court whose functions are
specifically stated in the law of its creation which is the Commonwealth Act No. 103). It is more an administrative board than a
part of the integrated judicial system of the nation. It is not intended to be a mere receptive organ of the government. Unlike a
court of justice which is essentially passive, acting only when its jurisdiction is invoked and deciding only cases that are
presented to it by the parties litigant, the function of the CIR, as will appear from perusal of its organic law is more active,
affirmative and dynamic. It not only exercises judicial or quasi-judicial functions in the determination of disputes between
employers and employees but its functions are far more comprehensive and extensive. It has jurisdiction over the entire
Philippines, to consider, investigate, decide, and settle any question, matter controversy or disputes arising between, and/ or
affecting employers and employees or laborers, and landlords and tenants or farm-laborers, and regulates the relations between
them, subject to, and in accordance with, the provisions of CA 103.

SC had the occasion to point out that the CIR is not narrowly constrained by technical rules of procedure, and equity and
substantial merits of the case, without regard to technicalities or legal forms and shall not be bound by any technical rules of
legal evidence but may inform its mind in such manner as it may deem just and equitable.

The fact, however, that the CIR may be said to be free from rigidity of certain procedural requirements does not mean that it can
in justiciable cases coming before it, entirely ignore or disregard the fundamental and essential requirements of due process in
trials and investigations of an administrative character. There are cardinal primary rights which must be respected even in
proceedings of this character:

(1) the right to a hearing, which includes the right to present one's cause and submit evidence in support thereof;
(2) The tribunal must consider the evidence presented;
(3) The decision must have something to support itself;
(4) The evidence must be substantial;
(5) The decision must be based on the evidence presented at the hearing; or at least contained in the record and disclosed to
the parties affected;
(6) The tribunal or body or any of its judges must act on its own independent consideration of the law and facts of the
controversy, and not simply accept the views of a subordinate;
(7) The Board or body should, in all controversial questions, render its decision in such manner that the parties to the proceeding
can know the various Issue involved, and the reason for the decision rendered.

SC said there was a failure to grasp the fundamental issue involved due to failure to receive all relevant evidence. Thus, the
motion for a new trial was granted and the entire record of this case is remanded to the CIR.

https://ebvlaw.com/2017/10/19/loss-trust-confidence-rank-file-employee-requires-proof-involvement/
Distribution & Control Products, Inc. v. Santos
As to whether or not respondent was afforded procedural due process, the settled rule is that in
termination proceedings of employees, procedural due process consists of the twin requirements of
notice and hearing.  The employer must furnish the employee with two written notices before the
29

termination of employment can be effected: (1) the first apprises the employee of the particular acts
or omissions for which his dismissal is sought; and (2) the second informs the employee of the
employer's decision to dismiss him.  The requirement of a hearing is complied with as long as there
30

was an opportunity to be heard, and not necessarily that an actual hearing was conducted. 31

In Unilever Philippines, Inc. v. Rivera,  this Court laid down the guidelines on how to comply with
32

procedural due process in terminating an employee, to wit:

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

(2) After serving the first notice, the employers should schedule and conduct a hearing or
conference wherein the employees will be given the opportunity to: (1) explain and clarify their
defenses to the charge against them; (2) present evidence in support of their defenses; and (3) rebut
the evidence presented against them by the management. During the hearing or conference, the
employees are given the chance to defend themselves personally, with the assistance of a
representative or counsel of their choice. Moreover, this conference or hearing could be used by the
parties as an opportunity to come to an amicable settlement.

(3) After determining that termination of employment is justified, the employers shall serve the
employees a written notice of termination indicating that: (1) all circumstances involving the
charge against the employees have been considered; and (2) grounds have been established to
justify the severance of their employment. 33

In the instant case, the LA, the NLRC and the CA again uniformly ruled that respondent was
dismissed sans procedural due process. The only notice given by petitioners to respondent was the
notice of his 30-day preventive suspension and, as found by the LA, nothing therein indicated that he
was required nor was given the opportunity to explain his side, considering that he was being
implicated in the theft of the subject circuit breakers and other electrical products. It is true that
petitioners conducted their own investigation but the same was made without the participation of
respondent.

ii. Right to Assemble

1. Section 4, Art. III of the 1987 Constitution
SECTION 4. No law shall be passed abridging the freedom of speech, of expression, or of the
press, or the right of the people peaceably to assemble and petition the government for redress
of grievances.
PHIMCO INDUSTRIES, INC. vs. PHIMCO INDUSTRIES LABOR ASSOCIATION
(PILA)
G.R. No. 170830; August 11, 2010

FACTS: PHIMCO is a corporation engaged in the production of matches. Respondent

Phimco Industries Labor Association (PILA) is the duly authorized bargaining
representative of PHIMCO’s daily-paid workers. When the last collective bargaining
agreement was about to expire on December 31, 1994, PHIMCO and PILA negotiated
for its renewal. The negotiation resulted in a deadlock on economic issues, mainly due
to disagreements on salary increases and benefits.

PILA staged a strike. PHIMCO filed with the NLRC a petition for preliminary
injunction and temporary restraining order (TRO), to enjoin the strikers from
preventing – through force, intimidation and coercion – the ingress and egress of non-
striking employees into and from the company premises. The NLRC issued an ex-parte
TRO, effective for a period of twenty (20) days.

LA found the strike illegal; the respondents committed prohibited acts during the strike
by blocking the ingress to and egress from PHIMCO’s premises and preventing the
non-striking employees from reporting for work. He observed that it was not enough
that the picket of the strikers was a moving picket, since the strikers should allow the
free passage to the entrance and exit points of the company premises. Thus, LA
declared that the respondent employees, PILA officers and members, have lost their
employment status.

On appeal, the NLRC set aside the LA’s decision. The NLRC did not give weight to
PHIMCO’s evidence, and relied instead on the respondents’ evidence showing that the
union conducted a peaceful moving picket. PHIMCO filed a motion for reconsideration
in the illegal strike case. In a parallel development, the LA in the union’s illegal
dismissal case ruled the respondents’ dismissal as illegal, and ordered their
reinstatement with payment of backwages. PHIMCO appealed LA decision to the
NLRC. Pending the resolution of PHIMCO’s motion for reconsideration in the illegal
strike case and the appeal of the illegal dismissal case, the two cases were consolidated.

The NLRC rendered its Decision in the consolidated cases, ruling totally in the union’s
favor. It dismissed the appeal of the illegal dismissal case, and denied PHIMCO’s
motion for reconsideration in the illegal strike case.

ISSUE: Whether the CA correctly ruled that the NLRC did not act with grave abuse of
discretion in ruling that the union’s strike was legal.

HELD: The strike was illegal for the commission of prohibited acts.
Despite the validity of the purpose of a strike and compliance with the procedural
requirements, a strike may still be held illegal where the means employed are illegal.
The means become illegal when they come within the prohibitions under Article 264(e)
of the Labor Code which provides:

No person engaged in picketing shall commit any act of violence, coercion or

intimidation or obstruct the free ingress to or egress from the employer's premises for
lawful purposes, or obstruct public thoroughfares.

To strike is to withhold or to stop work by the concerted action of employees as a result

of an industrial or labor dispute. The work stoppage may be accompanied by picketing
by the striking employees outside of the company compound. While a strike focuses on
stoppage of work, picketing focuses on publicizing the labor dispute and its incidents to
inform the public of what is happening in the company struck against. A picket simply
means to march to and from the employer’s premises, usually accompanied by the
display of placards and other signs making known the facts involved in a labor dispute.
It is a strike activity separate and different from the actual stoppage of work. While the
right of employees to publicize their dispute falls within the protection of freedom of
expression and the right to peaceable assemble to air grievances, these rights are by no
means absolute. Protected picketing does not extend to blocking ingress to and egress
from the company premises. That the picket was moving, was peaceful and was not
attended by actual violence may not free it from taints of illegality if the picket
effectively blocked entry to and exit from the company premises.

With a virtual human blockade and real physical obstructions (benches and makeshift
structures both outside and inside the gates), it was pure conjecture on the part of the
NLRC to say that "[t]he non-strikers and their vehicles were x x x free to get in and out
of the company compound undisturbed by the picket line." Notably, aside from non-
strikers who wished to report for work, company vehicles likewise could not enter and
get out of the factory because of the picket and the physical obstructions the
respondents installed. The blockade went to the point of causing the build up of traffic
in the immediate vicinity of the strike area, as shown by photographs. This, by itself,
renders the picket a prohibited activity. Pickets may not aggressively interfere with the
right of peaceful ingress to and egress from the employer’s shop or obstruct public
thoroughfares; picketing is not peaceful where the sidewalk or entrance to a place of
business is obstructed by picketers parading around in a circle or lying on the sidewalk

Davao doc

Section 8, Art. III of the 1987 Constitution

SECTION 8. The right of the people, including those employed in the public and private sectors,
to form unions, associations, or societies for purposes not contrary to law shall not be abridged.
2. Who may Exercise the Right. The right of association may be exercised by the employed or the
unemployed and by those employed in the government or in the private sector. It likewise embraces
the right to form unions both in the government and private sector. The right of civil servants to
unionize is expressly provided in Section 2(5), Article IX-B: “The right to self-organization shall not
be denied to government employees.” The right of labor in general to unionize is likewise provided in
Section 3, Article XIII: “[The State] shall guarantee the rights of all workers to self-organization,
collective bargaining and negotiations, and peaceful concerted activities, including the right to strike
in accordance with law.”
3. Right to Strike not Included. The right to form associations or to self-organization does not include
the right to strike. Thus, public school teachers do not enjoy the right to strike even if they are given
the constitutional right of association.[35] The terms and conditions of employment in the
Government, including in any political subdivision or instrumentality thereof and government
owned and controlled corporations with original charters, are governed by law and the employees
therein shall not strike for purposes of securing changes.[36]
Non-Impairment of Contracts

1. Section 10, Art. III of the 1987 Constitution

SECTION 10. No law impairing the obligation of contracts shall be passed.

ANTONIO M. SERRANO VS. GALLANT MARITIME SERVICES, INC. AND

MARLOW NAVIGATION CO., INC.
GR No. 167614 - March 24, 2009
En banc

FACTS:

Petitioner Antonio Serrano was hired by respondents Gallant Maritime Services, Inc. and
Marlow Navigation Co., Inc., under a POEA-approved contract of employment for 12 months, as
Chief Officer, with the basic monthly salary of US$1,400, plus $700/month overtime pay, and 7
days paid vacation leave per month.

On March 19, 1998, the date of his departure, Serrano was constrained to accept a downgraded
employment contract for the position of Second Officer with a monthly salary of US$1,000 upon
the assurance and representation of respondents that he would be Chief Officer by the end of
April 1998.

Respondents did not deliver on their promise to make Serrano Chief Officer. Hence, Serrano
refused to stay on as second Officer and was repatriated to the Philippines on May 26, 1998,
serving only two (2) months and seven (7) days of his contract, leaving an unexpired portion of
nine (9) months and twenty-three (23) days.

Serrano filed with the Labor Arbiter (LA) a Complaint against respondents for constructive
dismissal and for payment of his money claims in the total amount of US$26,442.73 (based on
the computation of $2590/month from June 1998 to February 199, $413.90 for March 1998, and
$1640 for March 1999) as well as moral and exemplary damages.

The LA declared the petitioner's dismissal illegal and awarded him US$8,770, representing his
salaray for three (3) months of the unexpired portion of the aforesaid contract of employment,
plus $45 for salary differential and for attorney's fees equivalent to 10% of the total amount;
however, no compensation for damages as prayed was awarded.

On appeal, the NLRC modified the LA decision and awarded Serrano $4669.50, representing
three (3) months salary at $1400/month, plus 445 salary differential and 10% for attorney's fees.
This decision was based on the provision of RA 8042, which was made into law on July 15,
1995.

Serrano filed a Motion for Partial Reconsideration, but this time he questioned the
constitutionality of the last clause in the 5th paragraph of Section 10 of RA 8042, which reads:
Sec. 10. Money Claims. - x x x In case of termination of overseas employment
without just, valid or authorized cause as defined by law or contract, the workers
shall be entitled to the full reimbursement of his placement fee with interest of
twelve percent (12%) per annum, plus his salaries for the unexpired portion of his
employment contract or for three (3) months for every year of the unexpired
term, whichever is less.

The NLRC denied the Motion; hence, Serrano filed a Petition for Certiorari with the Court of
Appeals (CA), reiterating the constitutional challenge against the subject clause. The CA
affirmed the NLRC ruling on the reduction of the applicable salary rate, but skirted the
constitutional issue raised by herein petitioner Serrano.

ISSUES:

1. Whether or not the subject clause violates Section 10, Article III of the Constitution on non-
impairment of contracts;
2. Whether or not the subject clause violate Section 1, Article III of the Constitution, and Section
18, Article II and Section 3, Article XIII on labor as a protected sector.

HELD:

On the first issue.

The answer is in the negative. Petitioner's claim that the subject clause unduly interferes with
the stipulations in his contract on the term of his employment and the fixed salary package he
will receive is not tenable.
Section 10, Article III of the Constitution
provides: No law impairing the obligation of contracts shall be passed.

The prohibition is aligned with the general principle that laws newly enacted have only a
prospective operation, and cannot affect acts or contracts already perfected; however, as to
laws already in existence, their provisions are read into contracts and deemed a part
thereof. Thus, the non-impairment clause under Section 10, Article II is limited in application to
laws about to be enacted that would in any way derogate from existing acts or contracts by
enlarging, abridging or in any manner changing the intention of the parties thereto.

As aptly observed by the OSG, the enactment of R.A. No. 8042 in 1995 preceded the execution
of the employment contract between petitioner and respondents in 1998. Hence, it cannot be
argued that R.A. No. 8042, particularly the subject clause, impaired the employment contract of
the parties. Rather, when the parties executed their 1998 employment contract, they were
deemed to have incorporated into it all the provisions of R.A. No. 8042.

But even if the Court were to disregard the timeline, the subject clause may not be declared
unconstitutional on the ground that it impinges on the impairment clause, for the law was
enacted in the exercise of the police power of the State to regulate a business, profession or
calling, particularly the recruitment and deployment of OFWs, with the noble end in view of
ensuring respect for the dignity and well-being of OFWs wherever they may be
employed. Police power legislations adopted by the State to promote the health, morals, peace,
education, good order, safety, and general welfare of the people are generally applicable not
only to future contracts but even to those already in existence, for all private contracts must
yield to the superior and legitimate measures taken by the State to promote public welfare.

v. Right against Involuntary Servitude

1. Section 18, Art. III of the 1987 Constitution

SECTION 18. (1) No person shall be detained solely by reason of his political beliefs
and aspirations.

(2) No involuntary servitude in any form shall exist except as a punishment for a crime
whereof the party shall have been duly convicted.

e. Protection to employer

1. Section 20, Art. II of the 1987 Constitution

SECTION 20. The State recognizes the indispensable role of the private sector, encourages
private enterprise, and provides incentives to needed investments.

2. Management prerogative

St Lukes Medical Center v Maria Theresa V. Sanchez

GR No 212054

Mar 11 2015

FACTS:
Sanchez was hired as Staff Nurse by St Lukes Medical Centeruntil her termination for her purported
violation of SLMC’s Code of Discipline particularly Sec. 1 Rule 1 on Acts of Dishonesty for taking property
of SLMC’s clients for her own benefit.

The Labor Arbiter ruled that Sachez was validly dismissed as Sanchez’s act of theft was evinced by her
attempt to bring the questioned items that did not belong to her out of SLMC’s premises . The NLRC
upon appeal however and set aside the LA ruling and held that Sanchez was illegally dismissed. It held
that the alleged that the alleged violation of Sanchez was a unique case, considering that keeping excess
hospital stocks or “hoarding”was an admitted practice amongst nurses in the Pediatric Unit which had
been tolerated by SLMC management for a long time.

The CA upheld the NLRC ruling. It ruled that Sanchez’s offense did not qualify as serious misconduct,
given that: (a) the questioned items found in her possession were not SLMC property since said items
were paid for by discharged patients, thus discounting any material or economic damage on SLMC’s
part; (b) the retention of excess medical supplies was an admitted practice amongst nurses in the
Pediatric Unit which was tolerated by SLMC; (c) it was illogical for Sanchez to leave the pouch in her bag
since she would be subjected to a routine inspection; (d) Sanchez’s lack of intention to bring out the
pouch was manifested by her composed demeanor upon apprehension and offer to return the pouch to
the treatment room; and (e) had SLMC honestly believed that Sanchez committed theft or pilferage, it
should have filed the appropriate criminal case, but failed to do so.

The Supreme Court ruled that Sanchez was validly dismissed by SLMC for her willful disregard and
disobedience of Section 1, Rule I of the SLMC Code of Discipline, which reasonably punishes acts of
dishonesty, i.e., “theft, pilferage of hospital or co-employee property, x x x or its attempt in any form or
manner from the hospital, co-employees, doctors, visitors, [and] customers (external and internal)” with
termination from employment.60 Such act is obviously connected with Sanchez’s work, who, as a staff
nurse, is tasked with the proper stewardship of medical supplies. Significantly, records show that
Sanchez made a categorical admission61 in her handwritten letter62 – i.e., “[k]ahit alam kong bawal ay
nagawa kong [makapag-uwi] ng gamit”63 – that despite her knowledge of its express prohibition under
the SLMC Code of Discipline, she still knowingly brought out the subject medical items with her.

The right of an employer to regulate all aspects of employment, aptly called

“management prerogative,” gives employers the freedom to regulate, according to their
discretion and best judgment, all aspects of employment, including work assignment,
working methods, processes to be followed, working regulations, transfer of
employees, work supervision, lay-off of workers and the discipline, dismissal and recall
of workers.55 In this light, courts often decline to interfere in legitimate business
decisions of employers.  In fact, labor laws discourage interference in employers’
judgment concerning the conduct of their business.56 cralawred

Among the employer’s management prerogatives is the right to prescribe reasonable

rules and regulations necessary or proper for the conduct of its business or concern, to
provide certain disciplinary measures to implement said rules and to assure that the
same would be complied with. At the same time, the employee has the corollary duty to
obey all reasonable rules, orders, and instructions of the employer; and willful or
intentional disobedience thereto, as a general rule, justifies termination of the contract
of service and the dismissal of the employee. 57 Article 296 (formerly Article 282) of the
Labor Code provides:58 cralawred
Article 296. Termination by Employer. - An employer may terminate an employment for
any of the following causes:

(a) Serious misconduct or willful disobedience by the employee of the lawful

orders of his employer or his representative in connection with his work; ChanRoblesVirtualawlibrary

xxxx cralawlawlibrary

Note that for an employee to be validly dismissed on this ground, the employer’s
orders, regulations, or instructions must be: (1) reasonable and
lawful, (2) sufficiently known to the employee, and (3) in connection with the
duties which the employee has been engaged to discharge.”

CASE DIGEST: JENNY F. PECKSON, Petitioner, v. ROBINSONS

SUPERMARKET CORPORATION, JODY GADIA, ROENA SARTE, and
RUBY ALEX, Respondents.

FACTS: The petitioner first joined the Robinsons Supermarket Corporation

(RSC) as a Sales Clerk on November 3, 1987. On October 26, 2006, she was
holding the position of Category Buyer when respondent Roena Sarte (Sarte),
RSCs Assistant Vice-President for Merchandising, reassigned her to the position
of Provincial Coordinator, effective November 1, 2006. Claiming that her new
assignment was a demotion because it was non-supervisory and clerical in
nature, the petitioner refused to turn over her responsibilities to the new
Category Buyer, or to accept her new responsibilities as Provincial Coordinator.
Jody Gadia (Gadia) and Ruby Alex (Alex) were impleaded because they were
corporate officers of the RSC.

Sarte demanded an explanation from petitioner for her refusal to accept her new
assignment despite written and verbal demands. Petitioner ignored the demand.
Sarte issued another memorandum reiterating her demand and warning her that
this could be her final chance to present her side or be deemed to have waived her
right to be heard. Petitioner then replied stating that she could not accept the
position of Provincial Coordinator since she saw it as a demotion. Sarte issued an
instruction to petitioner in preparation for the Christmas holidays but the
petitioner refused to heed.

The LA ruled that job reassignment or classification is a strict prerogative of the

employer, and that the petitioner cannot refuse her transfer since both positions
commanded the same salary structure. The LA also ruled that petitioners
persistent refusal to accept her new position amounted to insubordination,
entitling RSC to dismiss her from employment.
A month later, petitioner tendered her written forced resignation. The NLRC
sustained the findings of the LA. The CA sustained the findings of the NLRC.

ISSUE:

Was petitioner's transfer a demotion?

HELD: In Philippine Japan Active Carbon Corporation v. NLRC, held that the
exercise of managements prerogative concerning the employee's work
assignments is based on its assessment of the qualifications, aptitudes and
competence of its employees, and by moving them around in the various areas of
its business operations it can ascertain where they will function with maximum
benefit to the company.

Under the doctrine of management prerogative, every employer has the inherent
right to regulate, according to his own discretion and judgment, all aspects of
employment, including hiring, work assignments, working methods, the time,
place and manner of work, work supervision, transfer of employees, lay-off of
workers, and discipline, dismissal, and recall of employees. The only limitations
to the exercise of this prerogative are those imposed by labor laws and the
principles of equity and substantial justice.

Concerning the transfer of employees, these are the following jurisprudential

guidelines: (a) a transfer is a movement from one position to another of
equivalent rank, level or salary without break in the service or a lateral movement
from one position to another of equivalent rank or salary; (b) the employer has
the inherent right to transfer or reassign an employee for legitimate business
purposes; (c) a transfer becomes unlawful where it is motivated by discrimination
or bad faith or is effected as a form of punishment or is a demotion without
sufficient cause; (d) the employer must be able to show that the transfer is not
unreasonable, inconvenient, or prejudicial to the employee. (Rural Bank of
Cantilan, Inc. v. Julve)

As a privilege inherent in the employers right to control and manage its

enterprise effectively, its freedom to conduct its business operations to achieve its
purpose cannot be denied. We agree with the appellate court that the
respondents are justified in moving the petitioner to another equivalent position,
which presumably would be less affected by her habitual tardiness or inconsistent
attendance than if she continued as a Category Buyer, a frontline position in the
day-to-day business operations of a supermarket such as Robinsons.

In Philippine Japan Active Carbon Corporation, when the transfer of an

employee is not unreasonable, or inconvenient, or prejudicial to him, and it does
not involve a demotion in rank or a diminution of his salaries, benefits and other
privileges, the employee may not complain that it amounts to a constructive
dismissal.

IMASEN PHILIPPINE MANUFACTURING CORPORATION, Petitioner,

vs

RAMONCHITO T. ALCON and JOANN S. PAPA, Respondents.

G.R. No. 194884               October 22, 2014

PONENTE: Brion

TOPIC: Sexual intercourse in workplace during work hours as serious misconduct

FACTS:

                Petitioner Imasen Philippine Manufacturing Corporation is a domestic

corporation engaged in the manufacture of auto seat-recliners and slide-adjusters. It
hired the respondents as manual welders in 2001.

                On October 5, 2002, the respondents reported for work on the second shift –
from 8:00 pm to 5:00 am of the following day. At around 12:40 am, Cyrus A. Altiche,
Imasen’s security guard on duty, went to patrol and inspect the production plant’s
premises. When Altiche reached Imasen’s Press Area, he heard the sound of a running
industrial fan. Intending to turn the fan off, he followed the sound that led him to the
plant’s “Tool and Die” section.

                At the “Tool and Die” section, Altiche saw the respondents having sexual
intercourse on the floor, using a piece of carton as mattress. Altiche immediately went
back to the guard house and relayed what he saw to Danilo S. Ogana, another security
guard on duty.

                Respondent’s defense: they claimed that they were merely sleeping in the “Tool
and Die” section at the time of the incident. They also claimed that other employees
were near the area, making the commission of the act charged impossible.

                Both LA and NLRC held that the dismissal was valid. CA however nullified
NLRC’s decision and held that sexual intercourse inside company premises is not
serious misconduct.
ISSUE:

                Whether the respondents’ infraction – engaging in sexual intercourse inside

company premises during work hours – amounts to serious misconduct justifying their
dismissal.

H: https://www.chanrobles.com/cralaw/2014octoberdecisions.php?id=819

CASE DIGEST: GOYA, INC. v. GOYA, INC. EMPLOYEES UNION-

FFW. (G.R. No. 170054; January 21, 2013).

FACTS: Petitioner Goya Inc. (Goya) hired contractual employees from PESO

Resources Development Corporation (PESO). This prompted Goya, Inc.
Employees Union-FFW (Union) to request for a grievance conference on the
ground that the contractual workers do not belong to the categories of employees
stipulated in their CBA. The Union also argued that hiring contractual employees
is contrary to the union security clause embodied in the CBA.

When the matter remained unresolved, the grievance was referred to the NCMB
for voluntary arbitration. The Union argued that Goya is guilty of ULP for gross
violation of the CBA. The voluntary arbitrator dismissed the Unions charge of
ULP but Goya was directed to observe and comply with the CBA. While the Union
moved for partial consideration of the VA decision, Goya immediately filed a
petition for review before the Court of Appeals to set aside the VAs directive to
observe and comply with the CBA commitment pertaining to the hiring of casual
employees. Goya argued that hiring contractual employees is a valid management
prerogative. The Court of Appeals dismissed the petition.

ISSUE: Was the act of hiring contractual employees a valid exercise of

management prerogative?

HELD: The CA did not commit serious error when it sustained the ruling that
the hiring of contractual employees from PESO was not in keeping with the intent
and spirit of the CBA. In this case, a complete and final adjudication of the
dispute between the parties necessarily called for the resolution of the related and
incidental issue of whether the Company still violated the CBA but without being
guilty of ULP as, needless to state, ULP is committed only if there is gross
violation of the agreement.
Goya kept on harping that both the VA and the CA conceded that its engagement
of contractual workers from PESO was a valid exercise of management
prerogative. It is confused. To emphasize, declaring that a particular act falls
within the concept of management prerogative is significantly different from
acknowledging that such act is a valid exercise thereof. What the VA and the CA
correctly ruled was that the Companys act of contracting out/outsourcing is
within the purview of management prerogative. Both did not say, however, that
such act is a valid exercise thereof. Obviously, this is due to the recognition that
the CBA provisions agreed upon by Goya and the Union delimit the free exercise
of management prerogative pertaining to the hiring of contractual employees.

A collective bargaining agreement is the law between the parties. A

collective bargaining agreement or CBA refers to the negotiated contract between
a legitimate labor organization and the employer concerning wages, hours of
work and all other terms and conditions of employment in a bargaining unit. As
in all contracts, the parties in a CBA may establish such stipulations, clauses,
terms and conditions as they may deem convenient provided these are not
contrary to law, morals, good customs, public order or public policy. Thus, where
the CBA is clear and unambiguous, it becomes the law between the parties and
compliance therewith is mandated by the express policy of the law.

As repeatedly held, the exercise of management prerogative is not unlimited; it is

subject to the limitations found in law, collective bargaining agreement or the
general principles of fair play and justice. DENIED.
SUPREME STEEL v NAGKAKAISANG MANGGAGAWA NG SUPREME INDEPENDENT
UNION (NMS-IND-APL) [supra case; ratio and issue modified]
TOPIC: Labor Contract
Emergency Recit: Respondent and petitioner underwent compulsory arbitration before the NLRC for
alleged violations in the CBA. One of respondent’s claim was that petitioner violated the provision in the
CBA which prohibited it from hiring contractual workers. Petitioner admitted to hiring temporary
workers but claimed it was a management prerogative. The Court ruled that the exercise of management
prerogative is not unlimited and must take a backseat if in direct violation of a CBA.
FACTS: Supreme Steel (Petitioner) is a domestic corporation engaged in the business of manufacturing
steel pipes. Nagkakaisang Manggagawa (Respondent) is the certified bargaining agent of petitioner’s
rank-and-file employees. Respondent filed a notice of strike with the National Conciliation and Mediation
Board (NCMB) against petitioner for alleged violations of their CBA. They failed to settle, so the case
was certified to the NLRC for Compulsory arbitration. One of the allegations was that petitioner violated
Art. 2, Sec. 6 of the CBA which prohibited contracting-out labor or the hiring of contractual employees.
Petitioner admitted that it hired temporary employees, due to increase of job orders from abroad, but
claimed that the same was a management prerogative. (other violations of CBA are found in ratio)
NLRC and CA ruled in favor of respondent. Petitioner filed a petition for review on certiorari.
The CA further held that management prerogative is not unlimited: it is subject to limitations found in
law, a CBA, or the general principles of fair play and justice. It stressed that the CBA provided such
limitation on management prerogative to contract-out labor, and compliance with the CBA is mandated
by the express policy of the law.
ISSUE: WON Supreme Steel violated their CBA – as the law between the two parties?
HELD: Yes.
RATIO:
 - a familiar and fundamental doctrine in labor law that the CBA is the law between the
parties and compliance therewith is mandated by the express policy of the law. If the terms
of a CBA are clear and there is no doubt as to the intention of the contracting parties, the literal
meaning of its stipulation shall prevail.
- Any doubt in the interpretation of any law or provision affecting labor should be resolved in favor
of labor
- The wording of the CBA on general wage increase cannot be interpreted any other way: The
CBA increase should be given to all employees "over and above" the amount they are receiving,
even if that amount already includes an anniversary increase. Stipulations in a contract must be
read together, not in isolation from one another.
- CBA must be construed liberally rather than narrowly and technically. It is the duty of the
courts to place a practical and realistic construction upon the CBA, giving due
consideration to the context in which it is negotiated and the purpose which it is intended to
serve. Absurd and illogical interpretations should be avoided. A CBA, like any other
contract, must be interpreted according to the intention of the parties.
- Again, on the issue of contracting-out labor, we sustain the CA. Petitioner, in
effect, admits having hired "temporary" employees, but it maintains that it was
an exercise of management prerogative, necessitated by the increase in demand
for its product.

Indeed, jurisprudence recognizes the right to exercise management prerogative.

Labor laws also discourage interference with an employer's judgment in the
conduct of its business. For this reason, the Court often declines to interfere in
legitimate business decisions of employers. The law must protect not only the
welfare of employees, but also the right of employers. [63] However, the exercise
of management prerogative is not unlimited. Managerial prerogatives are subject
to limitations provided by law, collective bargaining agreements, and general
principles of fair play and justice. [64]  The CBA is the norm of conduct between
the parties and, as previously stated, compliance therewith is mandated by the
express policy of the law.[65]

The CBA is clear in providing that temporary employees will no longer be allowed
in the company except in the Warehouse and Packing Section. Petitioner is
bound by this provision. It cannot exempt itself from compliance by invoking
management prerogative. Management prerogative must take a backseat when
faced with a CBA provision. If petitioner needed additional personnel to meet the
increase in demand, it could have taken measures without violating the CBA.

** Specific violations in CBA and Court’s ruling:

a. Contracting-out labor [Union won]
- The CBA is clear in providing that temporary employees will no longer be allowed in the
company except in the Warehouse and Packing Section. Petitioner is bound by this provision.
It cannot exempt itself from compliance by invoking management prerogative. Management
prerogative must take a backseat when faced with a CBA provision. If petitioner needed
additional personnel to meet the increase in demand, it could have taken measures without
violating the CBA.
b. Denial to four employees of the CBA- provided wage increase [Union won]
 - The wording of the CBA on general wage increase cannot be interpreted any other way: The
CBA increase should be given to all employees "over and above" the amount they are
receiving, even if that amount already includes an anniversary increase. Stipulations in a
contract must be read together, not in isolation from one another.
c. Failure to provide shuttle service [Union won]
- Petitioner’s excuse in not providing a shuttle service to its employees is unacceptable. In fact,
it can hardly be considered as an excuse. Petitioner simply says that it is difficult to
implement the provision. It relies on the fact that "no time element [is] explicitly stated [in
the CBA] within which to fulfill the undertaking." We cannot allow petitioner to dillydally in
complying with its obligation and take undue advantage of the fact that no period is provided
in the CBA. Petitioner should recondition the company vehicle at once, lest it be charged with
and found guilty of unfair labor practice.
d. Refusal to answer for the medical expenses incurred by three employees [Union won]
- The CA was correct in pointing out that the concerned employees were not seeking
hospitalization benefits under Article VIII, Section 1 of the CBA, but under Section 4 thereof;
hence, confinement in a hospital is not a prerequisite for the claim. Petitioner should
reimburse Solitario for the first aid medicines; after all, it is the duty of the employer to
maintain first- aid medicines in its premises.61 Similarly, Guevara and Canizares should also
be reimbursed for the transportation cost incurred in going to the hospital. The Omnibus
Rules Implementing the Labor Code provides that, where the employer does not have an
emergency hospital in its premises, the employer is obliged to transport an employee to the
nearest hospital or clinic in case of emergency.
e. Failure to comply with the time-off with pay provision [Union won]
- We likewise agree with the CA on the issue of nonpayment of the time-off for attending
grievance meetings. The intention of the parties is obviously to compensate the employees for
the time that they spend in a grievance meeting as the CBA provision categorically states that
the company will pay the employee "a paid time-off for handling of grievances,
investigations, labor-management conferences." It does not make a qualification that such
meeting should be held during office hours or within the company premises.
f. Visitors’ free access to company premises [SS won]
- The issue on Visitors’ Free Access to Company Premises is dismissed for being moot and
academic after it was settled during the scheduled conferences.
g. Failure to comply with reporting time-off provision [Union won]
- The employees should also be compensated for the time they were prevented from working
due to the brownout. The CBA enumerates some of the instances considered as
"emergencies" and these are "typhoons, flood earthquake, transportation strike." As correctly
argued by respondent, the CBA does not exclusively enumerate the situations which are
considered "emergencies." Obviously, the key element of the provision is that employees
"who have reported for work are unable to continue working" because of the incident. It is
therefore reasonable to conclude that brownout or power outage is considered an
"emergency" situation.
h. Denial of paternity leave benefit to two employees [SS won]
i. Discrimination and harassment (w/ regard to transfer of employees from one dept to
another)
j. Non-implementation of COLA in Wage Order [SS won]

Pldt vs paguio

Rules on Marriage and Non-compete clause

Philippine Telegraph and Telephone Company v. NLRC

Philippine Telegraph v. National Labor Relations

Commission
G.R. No. 118978, 23 May 1997

FACTS:

PT&T (Philippine Telegraph & Telephone Company) initially hired Grace de Guzman specifically as
reliever for C.F. Tenorio who went on maternity leave. She was again invited for employment as
replacement of Erlina F. Dizon who went on leave on 2 periods. De Guzman was again asked to join
PT&T as a probationary employee. She indicated in the portion of the job application form under civil
status that she was single although she had contracted marriage a few months earlier.

When petitioner learned later about the marriage, its branch supervisor sent de Guzman a
memorandum requiring her to explain the discrepancy including a reminder about the company’s
policy of not accepting married women for employment. She was dismissed from the company and
Labor Arbiter handed down a decision declaring that petitioner illegally dismissed de Guzman, who
had already gained the status of a regular employee. It was apparent that she had been
discriminated on account of her having contracted marriage in violation of company policies.

ISSUE:

Whether or not the alleged concealment of civil status can be grounds to terminate the services of
an employee.

RULING:

No. Private respondent’s act of concealing the true nature of her status from PT&T could not be
properly characterized as in bad faith as she was moved to act the way she did mainly because she
wanted to retain a permanent job in a stable company. Thus, could not be a ground to terminate her
services.

Article 136 of the Labor Code, one of the protective laws for women, explicitly prohibits
discrimination merely by reason of marriage of a female employee. It is recognized that company is
free to regulate manpower and employment from hiring to firing, according to their discretion and
best business judgment, except in those cases of unlawful discrimination or those provided by law.

PT&T’s policy of not accepting or disqualifying from work any woman worker who contracts marriage
is afoul of the right against discrimination provided to all women workers by our labor laws and by
our Constitution. The record discloses clearly that de Guzman’s ties with PT&T were dissolved
principally because of the company’s policy that married women are not qualified for employment in
the company, and not merely because of her supposed acts of dishonesty.

The policy of PT&T is in derogation of the provisions stated in Art.136 of the Labor Code on the right
of a woman to be free from any kind of stipulation against marriage in connection with her
employment and it likewise is contrary to good morals and public policy, depriving a woman of her
freedom to choose her status, a privilege that is inherent in an individual as an intangible and
inalienable right. The kind of policy followed by PT&T strikes at the very essence, ideals and
purpose of marriage as an inviolable social institution and ultimately, family as the foundation of the
nation. Such policy must be prohibited in all its indirect, disguised or dissembled forms as
discriminatory conduct derogatory of the laws of the land not only for order but also imperatively
required. However, SC nevertheless ruled that Grace did commit an act of dishonesty, which should
be sanctioned and therefore agreed with the NLRC’s decision that the dishonesty warranted
temporary suspension of Grace from work.

G.R. No. 162994             September 17, 2004

DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and PEDRO A.

TECSON, petitioners, 
vs.
GLAXO WELLCOME PHILIPPINES, INC., Respondent.
FACTS: Petitioner Pedro A. Tecson (Tecson) was hired by respondent Glaxo
Wellcome Philippines, Inc. (Glaxo) as medical representative on October 24, 1995,
after Tecson had undergone training and orientation.
Thereafter, Tecson signed a contract of employment which stipulates, among
others, that he agrees to study and abide by existing company rules; to disclose to
management any existing or future relationship by consanguinity or affinity with co-
employees or employees of competing drug companies and should management find
that such relationship poses a possible conflict of interest, to resign from the company.
Code of Conduct of Glaxo similarly provides these conditions; that otherwise, the
management and the employee will explore the possibility of a “transfer to another
department in a non-counterchecking position” or preparation for employment outside
the company after six months.
Tecson was initially assigned to market Glaxo’s products in the Camarines Sur-
Camarines Norte sales area. Subsequently, Tecson entered into a romantic relationship
with Bettsy, an employee of Astra Pharmaceuticals3(Astra), a competitor of Glaxo.
Bettsy was Astra’s Branch Coordinator in Albay. She supervised the district managers
and medical representatives of her company and prepared marketing strategies for
Astra in that area.
Even before they got married, Tecson received several reminders from his District
Manager regarding the conflict of interest which his relationship with Bettsy might
engender. Still, love prevailed, and Tecson married Bettsy in September 1998.
Tecson’s superior reminded him that he and Bettsy should decide which one of them
would resign from their jobs. Tecson requested for time to comply with the company
policy against entering into a relationship with an employee of a competitor company.
He explained that Astra, Bettsy’s employer, was planning to merge with Zeneca,
another drug company; and Bettsy was planning to avail of the redundancy package to
be offered by Astra.
Tecson again requested for more time resolve the problem. Thereafter, Tecson applied
for a transfer in Glaxo’s milk division, thinking that since Astra did not have a milk
division, the potential conflict of interest would be eliminated. His application was
denied in view of Glaxo’s “least-movement-possible” policy.
Glaxo transferred Tecson to the Butuan City-Surigao City-Agusan del Sur sales area.
Tecson asked Glaxo to reconsider its decision, but his request was denied. Tecson
defied the transfer order and continued acting as medical representative in the
Camarines Sur-Camarines Norte sales area.
DEVELOPMENT OF THE CASE: Because the parties failed to resolve the issue at
the grievance machinery level, they submitted the matter for voluntary arbitration, but
Tecson declined the offer. On November 15, 2000, the National Conciliation and
Mediation Board (NCMB) rendered its Decision declaring as valid Glaxo’s policy on
relationships between its employees and persons employed with competitor
companies, and affirming Glaxo’s right to transfer Tecson to another sales territory.
CA sustained; MR denied.
Petitioner’s Contention: that Glaxo’s policy against employees marrying employees of
competitor companies violates the equal protection clause of the Constitution because
it creates invalid distinctions among employees on account only of marriage. They
claim that the policy restricts the employees’ right to marry; that Tecson was
constructively dismissed
GLAXO argues: that the company policy prohibiting its employees from having a
relationship with and/or marrying an employee of a competitor company is a valid
exercise of its management prerogatives and does not violate the equal protection
clause;
The policy is also aimed at preventing a competitor company from gaining access to
its secrets, procedures and policies; that Tecson can no longer question the assailed
company policy because when he signed his contract of employment, he was aware
that such policy was stipulated therein.
ISSUE: WON Glaxo’s policy against its employees marrying employees from
competitor companies is valid
HELD: The Court finds no merit in the petition.
Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing
strategies and other confidential programs and information from competitors,
especially so that it and Astra are rival companies in the highly competitive
pharmaceutical industry.
The prohibition against personal or marital relationships with employees of
competitor companies upon Glaxo’s employees is reasonable under the circumstances
because relationships of that nature might compromise the interests of the company.
In laying down the assailed company policy, Glaxo only aims to protect its interests
against the possibility that a competitor company will gain access to its secrets and
procedures.
That Glaxo possesses the right to protect its economic interests cannot be denied. No
less than the Constitution recognizes the right of enterprises to adopt and enforce such
a policy to protect its right to reasonable returns on investments and to expansion and
growth.
Indeed, while our laws endeavor to give life to the constitutional policy on social
justice and the protection of labor, it does not mean that every labor dispute will be
decided in favor of the workers. The law also recognizes that management has rights
which are also entitled to respect and enforcement in the interest of fair play.21
EQUAL-PROTECTION: Glaxo does not impose an absolute prohibition against
relationships between its employees and those of competitor companies. Its
employees are free to cultivate relationships with and marry persons of their own
choosing. What the company merely seeks to avoid is a conflict of interest between
the employee and the company that may arise out of such relationships.
Moreover, records show that Glaxo gave Tecson several chances to eliminate the
conflict of interest brought about by his relationship with Bettsy.
PETITION DENIED.

______________
Other Issue on Constructive dismissal:
The Court finds no merit in petitioners’ contention that Tescon was constructively
dismissed when he was transferred from the Camarines Norte-Camarines Sur sales
area to the Butuan City-Surigao City-Agusan del Sur sales area, and when he was
excluded from attending the company’s seminar on new products which were directly
competing with similar products manufactured by Astra. Constructive dismissal is
defined as a quitting, an involuntary resignation resorted to when continued
employment becomes impossible, unreasonable, or unlikely; when there is a demotion
in rank or diminution in pay; or when a clear discrimination, insensibility or disdain
by an employer becomes unbearable to the employee.30 None of these conditions are
present in the instant case.

Tiu v. Platinum Plans Philippines, Inc.

She  worked for “ PLATINUM PLANS PHIL., INC. “, a pre-need company as Senior
Assistant Vice-President and Territorial Operations Head in charge of its Hongkong
and Asean operations under a 5-year employment contract which contains a clause,
a part of which reads: “in case of separation from the Company, Daisy shall not, for
the next two years thereafter, engage in or be involved in the same business or
belonging to the same pre-need industry as the Company .” However, shortly after
two years from her employment with ABC Plans, Daisy stopped reporting for work
and assumed the position of Vice-President for Sales in Professional Pension Plans,
Inc.,Professional., a similar pre-need company. Consequently, ABC Plans  sued
Daisy for damages in view of the latter’s violation of her employment contract.

In her defense, Daisy argued that the non-compete clause was unenforceable for
being against public order or public policy. She claimed, among others, that ABC
Plans did not invest in her training or improvement and a strict application of such
clause would amount to a deprivation of her right to engage in the only work she
knew.

In upholding the validity of the non-involvement clause, the High Court ruled that
“a non-involvement clause is not necessarily void for being in restraint of trade as
long as there are reasonable limitations as to time, trade and place .” Applying
said parameters, the Court held that Daisy’s involvement clause has a time limit:
two years from the time her employment ends with ABC Plans. Further, it is also
limited as to trade, since it only prohibits Daisy from engaging in any pre-need
business akin to ABC Plans. The Court  continued, “more significantly, since Daisy
was the Senior Assistant Vice-President and Territorial Operations Head in charge
of ABC Plans in charge of its Hongkong and Asean opeations, she had been privy to
confidential and highly sensitive marketing strategies or ABC Plans’ business. To
allow Daisy to engage in a rival business soon after she leaves would make the
Company’s trade secrets vulnerable especially in a highly competitive marketing
environment.” As penalty for violating the non-compete clause, the Court ordered
Daisy to pay Php100,000 as liquidated damages. ( Daisy B. Tiu v. Platinum Plans
Philippines, Inc., G.R. No. 163512, 28 February 2007 ).

CENTURY PROPERTIES, INC., Petitioner, v. EDWIN J. BABIANO AND EMMA

B. CONCEPCION, Respondents.

f:

Babiano was hired by CPI as Director of Sales, and was eventually6 appointed as
Vice President for Sales. Babiano was remunerated with, inter alia, the following
benefits: (a) monthly salary of P70,000.00; (b) allowance of P50,000.00; and (c)
0.5% override commission for completed sales. His employment contract7 also
contained a "Confidentiality of Documents and Non-Compete Clause"8 which,
among others, barred him from disclosing confidential information, and from
working in any business enterprise that is in direct competition with CPI "while [he
is] employed and for a period of one year from date of resignation or termination
from [CPI]." Should Babiano breach any of the terms thereof, his "forms of
compensation, including commissions and incentives will be forfeited."
After receiving reports that Babiano provided a competitor with information
regarding CPFs marketing strategies, spread false information regarding CPI and its
projects, recruited CPI's personnel to join the competitor, and for being absent
without official leave (AWOL) for five (5) days, CPI, through its Executive Vice
President for Marketing and Development, Jose Marco R. Antonio (Antonio), sent
Babiano a Notice to Explain16 on February 23, 2009 directing him to explain why
he should not be charged with disloyalty, conflict of interest, and breach of trust
and confidence for his actuations.17chanrobleslaw

On February 25, 2009, Babiano tendered18 his resignation and revealed that he had
been accepted as Vice President of First Global BYO Development Corporation
(First Global), a competitor of CPI.19 On March 3, 2009, Babiano was served a
Notice of Termination20 for: (a) incurring AWOL; (b) violating the "Confidentiality
of Documents and Non-Compete Clause" when he joined a competitor enterprise
while still working for CPI and provided such competitor enterprise information
regarding CPFs marketing strategies; and (c) recruiting CPI personnel to join a
competitor

On August 8, 2011, respondents filed a complaint23 for non-payment of

commissions and damages against CPI and Antonio before the NLRC, docketed as
NLRC Case No. NCR-08-12029-11, claiming that their repeated demands for the
payment and release of their commissions remained unheeded.

H:

https://www.chanrobles.com/cralaw/2016julydecisions.php?id=560

. Company practice and Company policy

CENTRAL AZUCARERA DE TARLAC, 

vs.  
CENTRAL AZUCARERA DE TARLAC LABOR UNION-NLU,

 G.R. No. 188949,  July 26, 2010

Justice Nachura

Labor Law; Labor Standard; 13 month pay;

FACTS:
The formula used by petitioner in computing the 13th-month pay was: Total Basic
Annual Salary divided by twelve (12). Included in petitioner’s computation of the Total Basic
Annual Salary were the following: basic monthly salary; first eight (8) hours overtime pay on
Sunday and legal/special holiday; night premium pay; and vacation and sick leaves for each
year. Throughout the years, petitioner used this computation until 2006 from 1975.
                After the strike and temporary cessation of operations in 2005, all the striking union
was allowed to return to work. Subsequently, petitioner declared another temporary cessation of
operations for the months of April and May 2006. After the suspension was lifted on June 2006,
the workers were allowed to report for work on a fifteen day-per-month rotation basis until
September 2005. In December 2006, petitioner gave the employees their 13th-month pay based
on the employee’s total earnings during the year divided by 12. In December 2006, petitioner
gave the employees their 13th-month pay based on the employee’s total earnings during the
year divided by 12.
Respondent objected to this computation. It claimed that the divisor should have been
eight (8) instead of 12, because the employees worked for only 8 months in 2006.
Petitioner and respondent tried to thresh out their differences in accordance with the
grievance procedure as provided in their collective bargaining agreement. Despite four (4)
conciliatory meetings, the parties still failed to settle the dispute, hence a complaint by for
money claims based on the alleged diminution/erroneous computation of 13th month
pay   before the Labor arbiter (LA).
The LA dismissed the complaint. NLRC reversed. MR denied. Petitioner then filed a
petition for certiorari under Rule 65 of the Rules of Court before the CA. CA dismissed the
petition and affirm the NLRC. Hence petition before the SC (R45)
ISSUE:
Whether the computation of 13th month pay by the petitioner is correct.
HELD:
YES. "Thirteenth-month pay" shall mean one twelfth (1/12) of the basic salary of an
employee within a calendar year; the term "basic salary" of an employee for the purpose of
computing the 13th-month pay was interpreted to include all remuneration or earnings paid by
the employer for services rendered, but does not include allowances and monetary benefits
which are not integrated as part of the regular or basic salary, such as the cash equivalent of
unused vacation and sick leave credits, overtime, premium, night differential and holiday pay,
and cost-of-living allowances. However, these salary-related benefits should be included as part
of the basic salary in the computation of the 13th-month pay if, by individual or collective
agreement, company practice or policy, the same are treated as part of the basic salary of the
employees.
As correctly ruled by the CA, the practice of petitioner in giving 13th-month pay based on
the employees’ gross annual earnings which included the basic monthly salary, premium pay for
work on rest days and special holidays, night shift differential pay and holiday pay continued for
almost thirty (30) years and has ripened into a company policy or practice which cannot be
unilaterally withdrawn. Article 100 of the Labor Code, otherwise known as the Non-Diminution
Rule, mandates that benefits given to employees cannot be taken back or reduced unilaterally
by the employer because the benefit has become part of the employment contract, written or
unwritten.
Article 100 of the Labor Code, otherwise known as the Non-Diminution Rule,
mandates that benefits given to employees cannot be taken back or reduced
unilaterally by the employer because the benefit has become part of the employment
contract, written or unwritten. The rule against diminution of benefits applies if it is
shown that the grant of the benefit is based on an express policy or has ripened into a
practice over a long period of time and that the practice is consistent and deliberate.
Nevertheless, the rule will not apply if the practice is due to error in the construction
or application of a doubtful or difficult question of law. But even in cases of error, it
should be shown that the correction is done soon after discovery of the error.
The argument of petitioner that the grant of the benefit was not voluntary and was due
to error in the interpretation of what is included in the basic salary deserves scant
consideration. No doubtful or difficult question of law is involved in this case. The
guidelines set by the law are not difficult to decipher. The voluntariness of the grant of
the benefit was manifested by the number of years the employer had paid the benefit
to its employees. Petitioner only changed the formula in the computation of the 13th-
month pay after almost 30 years and only after the dispute between the management
and employees erupted. This act of petitioner in changing the formula at this time
cannot be sanctioned, as it indicates bad faith
Metropolitan Bank and Trust Company vs. National Labor Relations Commission,
589 SCRA 376, G.R. No. 152928 June 18, 2009

FACTS:
Respondents Patag and Flora were former employees of petitioner Metrobank. Both
respondents availed of the bank’s compulsory retirement plan in accordance with the 1995
Officers’ Benefits Memorandum. Patag retired on February 1, 1998 as an Assistant Manager
with a monthly salary of P32,100.00. Flora retired on April 1, 1998 as a Senior Manager with a
monthly salary of P48,500.00. Consequently, the new 1998 CBA was issued increasing the
retirement benefits from 185% to 200%. The 1998 CBA covers employees for year 1998-2000
provided that they should not resign before June 15, 1998. With this, the private respondents
requested to extend the benefits of the 1998 CBA to them but they were denied by the
petitioner because they had already resigned before June 15, 1998. The LA dismissed the
complaint. NLRC reversed the LA by granting the respondents the benefits endowed by the
1998 CBA. The CA affirmed the NLRC by stating that notwithstanding the stipulation of the 1998
CBA, it has been the petitioner’s long practice to extend the newly issued CBAs towards its
employees every 1st of January for 11 years from 1986 to 1997 without any conditions that an
employee must not resign prior to a settled date. Hence, this petition.
ISSUE:
Whether respondents can still recover higher benefits under the 1998 Officers’ Benefits
Memorandum despite the fact that they have compulsorily retired prior to the issuance of said
memorandum
RULING:
YES. It is a jurisprudential rule that where there is an established employer practice of
regularly, knowingly and voluntarily granting benefits to employees over a significant period
of time, despite the lack of a legal or contractual obligation on the part of the employer to do
so, the grant of such benefits ripens into a vested right of the employees and can no longer be
unilaterally reduced or withdrawn by the employer
To be considered a company practice, the giving of the benefits should have been done over a
long period of time, and must be shown to have been consistent and deliberate. The test or
rationale of this rule on long practice requires an indubitable showing that the employer agreed
to continue giving the benefits knowing fully well that said employees are not covered by the
law requiring payment thereof.
In the case at bar, petitioner Metrobank favorably adjusted its officers’ benefits, including
retirement benefits, after the approval of each CBA with the rank and file employees, to be
effective every January 1st of the same year as the CBA’s approval, and without any condition
regarding the date of employment of the officer, from 1986 to 1997 or for about eleven (11)
years. This constitutes voluntary employer practice which cannot be unilaterally withdrawn
or diminished by the employer without violating the spirit and intent of Art. 100 of the Labor
Code which prohibits the diminution of benefits of the employee. The condition that an officer
must still be in the service of petitioner bank as of June 15, 1998 effectively reduced benefits of
employees who retired prior to the issuance of the 1998 Officers’ Benefits Memorandum
despite the fact in the past no such condition was imposed by the bank and previous retirees
presumably enjoyed the higher benefits regardless of their date of retirement as long as they
were still employees of petitioner as of the January 1st effectivity date.
SUMMARY: The respondents, who were the former employees of the petitioner, requested
the benefits endowed by the 1998 CBA but they were denied by the petitioner because the
latter resigned prior to the settled date conditioned by the said CBA. The Court ruled in favor of
the respondents by stating that the long practice of the petitioner of voluntarily covering the
employees’ benefits in every CBA for 11 years from 1986 to 1997 every 1 st of January without
any conditions must apply also to the 1998 CBA.

LABOR LAW CONCEPTS:

1.) It is a jurisprudential rule that where there is an established employer practice of
regularly, knowingly and voluntarily granting benefits to employees over a significant
period of time, despite the lack of a legal or contractual obligation on the part of the
employer to do so, the grant of such benefits ripens into a vested right of the employees
and can no longer be unilaterally reduced or withdrawn by the employer
 2.) Wages and Benefits and Retirement - To be considered a company practice, the giving of
the benefits should have been done over a long period of time, and must be shown to
have been consistent and deliberate.

3.) The right to file a labor complaint or assert a cause of action against an employer is a
personal right of each employee

4.) It is a time-honored rule that in controversies between a laborer and his master, doubts
reasonably arising from the evidence or in the interpretation of agreements and writings
should be resolved in the former’s favor

Chester Cabalza recommends his visitors to please read the original & full text of the case cited. Xie
xie!

China Banking Corporation v Borromeo

G.R. No. 156515

Facts:

Respondent Mariano Borromeo was Assistant Vice-President of the Branch Banking Group of China
Banking Corporation for the Mindanao Area.

Without authority from the Executive Committee or Board of Directors of the bank, he approved several
DAUD/BP (Drawn Against Uncollected Deposits/Bills Purhcased) accommodations amounting to
P2,441,375 in favour of Joel Maniwan. Such checks, which are not sufficiently funded by cash, are
generally not honoured by banks. This came to the knowledge of the bank authorities. A memorandum
was issued to the Mariano seeking clarification relative to the matter. The respondent accepted full
responsibility for committing an error in judgment and abuse of discretion.

Mariano resigned from the Bank and apologized “for all the trouble I have caused because of the
Maniwan case.” The respondent, however, vehemently denied benefitting therefrom.

His acts having constituted violation of the Bank’s Code of Ethics, the respondent was directed to
restitute the amount of P1,507,736.79 representing 90% of the total loss of P1,675,263.10 incurred by
the Bank. However, in view of his resignation and considering the years of service in the Bank, the
management earmarked only P836,637.08 from the respondent’s total separation benefits or pay. The
said amount would be released upon recovery of the sums demanded from Maniwan in a civil case filed
against him by the bank with the RTC in Cagayan de Oro City.

The respondent made a demand on the bank for the payment of his separation pay and other benefits,
but the bank maintained its position to withhold the sum of P836,637.08. Thus, Mariano filed with the
NLRC a complaint for payment of separation pay, mid-year bonus, profit share and damages against the
bank.

The Labor Arbiter ruled in favour of the bank. Respondent appealed to the NLRC but it affirmed in toto
the findings of the Labor Arbiter. The CA, however, alleging that respondent was denied his right to due
process, set aside the NLRC decision and ordered that the records of the case be remanded to the Labor
Arbiter for further hearings on the factual issues involved.

The bank filed a motion for reconsidered but denied the same. Hence, this petition.

Issue:

Whether or not the bank has the prerogative/right to impose on the respondent what it considered the
appropriate penalty under the circumstances pursuant to its company rules and regulations.

Held:

The petition is meritorious.

It is well recognized that company policies and regulations are, unless shown to be
grossly oppressive or contrary to law, generally binding and valid on the parties and
must be complied with until finally revised or amended unilaterally or preferably
through negotiation or by competent authority.29 Moreover, management has the
prerogative to discipline its employees and to impose appropriate penalties on erring
workers pursuant to company rules and regulations.30 With more reason should these
truisms apply to the respondent, who, by reason of his position, was required to act
judiciously and to exercise his authority in harmony with company policies. 31

Contrary to the respondent's contention that the petitioner Bank could not properly
impose the accessory penalty of restitution on him without imposing the principal
penalty of "Written Reprimand/Suspension," the latter's Code of Ethics expressly
sanctions the imposition of restitution/forfeiture of benefits apart from or independent
of the other penalties. Obviously, in view of his voluntary separation from the petitioner
Bank, the imposition of the penalty of reprimand or suspension would be futile. The
petitioner Bank was left with no other recourse but to impose the ancillary penalty of
restitution. It was certainly within the petitioner Bank's prerogative to impose on the
respondent what it considered the appropriate penalty under the circumstances
pursuant to its company rules and regulations

The bank was left with no other course but to impose the ancillary penalty of restitution. It was
certainly within the bank’s prerogative to impose on the respondent what it considered the
appropriate penalty under the circumstances pursuant to its company rules and regulations.
The petitioner’s bank business is essentially imbued with public interest and owes great fidelity
to the public it deals with. It is expected to exercise the highest degree of diligence in the
selection and supervision of their employees. As a corollary, and like all other business
enterprises, its prerogative to discipline its employees and to impose appropriate penalties on
erring workers pursuant to company rules and regulations must be respected. The law, in
protecting the rights of labor, authorized neither oppression nor self-destruction of an employer
company which itself is possessed of rights that must be entitled to recognition and respect.

Significantly, the respondent is not wholly deprived of his separation benefits. As the Labor
Arbiter stressed in his decision, “the separation benefits due the complainant were merely
withheld. Even the petitioner bank itself gives “the assurance that as soon as the bank has
satisfied a judgment in the civil case, the earmarked portion of his benefits will be released
without delay.

WHEREFORE, the petition is granted. The decision of the CA is reversed and set aside. The
Resolution of the NLRC is reinstated.