Toyota Motor Philippines Corporation vs Toyota Motor Philippines

Corporation Workers Association

Facts:
In May 2000, Mediator-Arbiter Ma. Zosima Lameyra issued an order
certifying Toyota Motor Philippines Corporation Workers Association as the
exclusive bargaining agent of all Toyota rank-and-file employees. Toyota filed
a motion for reconsideration assailing the said order. Lameyra denied the
motion and Toyota eventually appealed the order before the DOLE Secretary.
Meanwhile, the Union submitted its collective bargaining agreement (CBA)
proposals to Toyota but the latter refused to bargain pending its appeal
before the DOLE Secretary. The Union then filed a notice of strike with the
National Conciliation and Mediation Board (NCMB). The NCMB converted the
notice of strike to a preventive mediation considering that the DOLE
Secretary was yet to decide on Toyotas appeal.
In relation to Toyotas appeal, the parties were invited to a hearing. Union
members were not allowed to attend the hearing as they were aptly
represented by the Union. But despite this, many Union members and
officers failed to render overtime and work on the following day which
caused Toyota to lose P53,849,991.00. The union members went to the
hearing and assembled before the Bureau of Labor Relations.
Subsequently, Toyota terminated 227 employees. The terminated employees
allegedly abandoned their work.
This resulted to another rally within Toyotas premises as the strikers
barricaded the entrances of Toyota preventing non-strikers from going to
work.
In April 2001, the DOLE Secretary assumed jurisdiction over the labor dispute
and issued a return-to-work order. The Union ended its strike in the same
month. However, in May and June 2001, union members still conducted
rallies and pickets.
Issue:

Whether or not the strikes conducted by the Union on different

occasions are illegal.
Held:
Yes. The strike conducted before the BLR as well as the strike
conducted when the 227 employees were terminated is illegal because both
did not go through the proper procedure required by the Labor Code. It
cannot be said that the strike conducted before the BLR is beyond the ambit
of the strikes contemplated in the Labor Code. The Union argues that the
strike is actually a protest directed against the government and is covered
by their constitutional right to peaceably assemble and petition the
government for redress of grievances. The SC disagreed with this argument
because the Union failed to provide evidence that the Mediator-Arbiter was
biased against them. Further, if this were the kind of protest they were
claiming, they should have secured a rally permit. Further still, this case
involves a labor dispute. The employees may shroud their strike as mere
demonstrations covered by the constitution but in reality these are
temporary work stoppages.
The strikes conducted after the DOLE Secretary assumed jurisdiction over
the labor dispute are illegal for they violated the return-to-work order.
The Supreme Court also cited the 6 categories of illegal strikes which are:
1. When it is contrary to a specific prohibition of law, such as strike by
employees performing governmental functions; or
2. When it violates a specific requirement of law, [such as Article 263 of the
Labor Code on the requisites of a valid strike]; or
3. When it is declared for an unlawful purpose, such as inducing the
employer to commit an unfair labor practice against non-union employees; or
4. When it employs unlawful means in the pursuit of its objective, such as a
widespread terrorism of non-strikers [for example, prohibited acts under Art.
264(e) of the Labor Code]; or

5. When it is declared in violation of an existing injunction, [such as

injunction, prohibition, or order issued by the DOLE Secretary and the NLRC
under Art. 263 of the Labor Code]; or
6. When it is contrary to an existing agreement, such as a no-strike clause or
conclusive arbitration clause.

Uniwide Sales Warehouse Club v. NLRC, 547 SCRA 222

Facts:
Amalia P. Kawada is an employee of Uniwide. Sometime in 1998,
Uniwide received reports from the other employees regarding some
problems in the departments managed by the private respondent. Thus, on
March 15, 1998, Uniwide, through Store Manager Apduhan, issued a
Memorandum addressed to the private respondent summarizing the various
reported incidents signifying unsatisfactory performance on the latters part
which include the commingling of good and damaged items, sale of a
voluminous quantity of damaged toys and ready-to-wear items at
unreasonable prices, and failure to submit inventory reports. Uniwide asked
private respondent for concrete plans on how she can effectively perform her
job.

She was constantly being bombarded with memorandum seeking to explain

the reports of incidents. She was unable to answer them. It got to a point
that she was being shouted at because of her unsatisfactory performance.
On August 2, 1998, Apduhan issued a Memorandum received on the same
day by Edgardo Kawada, the husband of private respondent, advising the
latter of a hearing scheduled on August 12, 1998 to be held at the Uniwide
Office in Quirino Highway, and warning her that failure to appear shall
constitute as waiver and the case shall be submitted for decision based on
available papers and evidence.
Respondent did not attend the hearing and was terminated. She then filed
for an illegal dismissal because she constructively dismissed which is the
reason for her failure to attend the hearing.

Issue:
Was there constructive dismissal? Respondent argues that since the
investigation was conducted after she was constructively dismissed.
Therefore, according to her, there was no point to still attend the
investigation set on August 12, 1998. Hence there was denial of due process.

Held:
Case law defines constructive dismissal as a cessation of work because
continued employment is rendered impossible, unreasonable or unlikely;
when there is a demotion in rank or diminution in pay or both; or when a
clear discrimination, insensibility, or disdain by an employer becomes
unbearable to the employee.
- The test of constructive dismissal is whether a reasonable person in the
employees position would have felt compelled to give up his position
under the circumstances. It is an act amounting to dismissal but made to
appear as if it were not. In fact, the employee who is constructively
dismissed may be allowed to keep on coming to work. Constructive
dismissal is therefore a dismissal in disguise. The law recognizes and
resolves this situation in favor of employees in order to protect their rights
and interests from the coercive acts of the employer.
- In the present case, private respondent claims that from the months of
February to June 1998, she had been subjected to constant harassment,
ridicule and inhumane treatment by Apduhan, with the hope that the latter
can get the private respondent to resign] The harassment allegedly came

in the form of successive memoranda which private respondent would

receive almost every week, enumerating a litany of offenses and maligning
her reputation and spreading rumors among the employees that private
respondent shall be dismissed soon. The last straw of the imputed
harassment was the July 31, 1998 incident wherein private respondents
life was put in danger when she lost consciousness due to hypertension as
a result of Apduhans alleged hostility and shouting. The Court finds that
private respondents allegation of harassment is a specious statement
which contains nothing but empty imputation of a fact that could hardly be
given any evidentiary weight by this Court. Private respondents bare
allegations of constructive dismissal, when uncorroborated by the evidence
on record, cannot be given credence.
2.) The termination of private respondent was grounded on the existence of
just cause under Article 282 (c) of the Labor Code or willful breach by the
employee of the trust reposed on him by his employer or a duly authorized
representative.
Private respondent occupies a managerial position.
As a managerial
employee, mere existence of a basis for believing that such employee has
breached the trust of his employer would suffice for his dismissal.

Woodridge School vs. Benito and Balaguer | Nachura

G.R. No. 160240, October 29, 2008 |570 SCRA 164
PROBATIONARY EMPLOYMENT; SECURITY OF TENURE
FACTS
Woodridge School, a private educational institution, hired Benito and
Balaguer as probationary school teachers effective June 1998 and June
1999.

Sometime February 2001, the respondents, along with 20 other

teachers presented Woodridge a Manifesto Establishing Relevant
Issues Concerning the School. Some issues raised were with regard to
an NSAT/NEAT anomaly, Teachers right to due process, Issuance of
Individual Contracts and Non-Clear-Cut School Policies.
A confrontation between the school administrators and concerned
teachers was held but no settlement was arrived at.
For failure to resolve the issues, especially the one with regard to the
NSAT/NEAT anomaly, the respondents filed a formal complaint against
Woodridge with the DECS, requesting for a formal investigation,
institute appropriate charges, and impose proper sanctions against
Woodridge.
During the pendency of the DECS case, and for lack of a positive action
from Woodridge, respondents appeared on television and spoke over
the radio on the alleged NEAT/NSAT anomaly.
February 28, 2001, Woodridge sent 2 separate memos to respondents
placing them under preventive suspension for a period of thirty days
on the following grounds: 1) uttering defamatory remarks against the
school principal in the presence of their co-teachers; 2) announcing to
the students and teachers their alleged immediate termination from
service; 3) tardiness; 4) spreading false accusations against petitioner;
5) absence without official leave; and 6) appearing on television and
speaking over the radio to malign petitioner. In the same memoranda,
respondents were required to explain in writing within seventy-two (72)
hours why they should not be terminated from their employment. This
prompted respondents to commence an action for illegal suspension
before the NLRC.
The respondents then filed for illegal suspension before the NLRC
Barely a month after, Woodridge issued the respondents their Notice
of Termination citing the same grounds. In addition, they informed the
respondents that they did not qualify as regular employees for their
failure to meet the performance standards made known to them at the
start of their probationary period.
The respondents then amended their initial complaint to include illegal
dismissal.
LA dismissed their complaint. The NLRC affirmed the LAs disposition in
its entirety. The CA granted the petition and set aside the NLRC ruling.
It ruled that the 30 day suspension as illegal and ordered the school to
pay both Benito and Balaguer their salaries and benefits accruing
during said period of illegal suspension. Woodridge was also ordered to
pay Balaguer backwages and each of them P50,000 as moral damages
and P50,000 as exemplary damages and attorneys fees.

ISSUES

W/N THE DISMISSAL OF THE RESPONDENTS WAS VALID SINCE AS

PROBATIONARY EMPLOYEES, THE EMPLOYER MAY TERMINATE THE
EMPLOYMENT
W/N THEY MAY BE DISMISSED ON THE GROUND OF SERIOUS MISCONDUCT.
W/N THE PREVENTIVE SUSPENSION WAS VALID
W/N THE AWARD OF MORAL AND EXEMPLARY DAMAGES HAVE SUFFICIENT
BASIS TO SUPPORT THE AWARD
HOLDING & RATIO
No, the dismissal of the respondents was not valid. It is necessary that the
employer terminates the employment on justifiable ground.

On the effective date of their dismissal, respondents were not regular

or permanent employees; they had not yet completed three (3) years
of satisfactory service as academic personnel which would have
entitled them to tenure as permanent employees in accordance with
the Manual of Regulations for Private Schools. On that date, Benitos
contract of employment still had two months to run, while Balaguers
probationary employment was to expire after one year and two
months.
A probationary employee is one who, for a given period of time, is
being observed and evaluated to determine whether or not he is
qualified for permanent employment. A probationary appointment
affords the employer an opportunity to observe the skill, competence
and attitude of a probationer. The word probationary, as used to
describe the period of employment, implies the purpose of the term or
period. While the employer observes the fitness, propriety and
efficiency of a probationer to ascertain whether he is qualified for
permanent employment, the probationer at the same time, seeks to
prove to the employer that he has the qualifications to meet the
reasonable standards for permanent employment.
Probationary employees enjoy security of tenure in the sense that
during their probationary employment, they cannot be dismissed
except for cause or when he fails to qualify as a regular employee.
However, upon expiration of their contract of employment,
probationary employees cannot claim security of tenure and compel
their employers to renew their employment contracts. There is nothing
that would hinder the employer from extending a regular or permanent
appointment to an employee once the employer finds that the
employee is qualified for regular employment even before the
expiration of the probationary period
The notices of termination sent by Woodridge to respondents stated
that the latter failed to qualify as regular employees. However,
nowhere in the notices did petitioner explain the details of said failure
to qualify and the standards not met by respondents.

No, they may not be dismissed on the ground of serious misconduct.

The Labor Code commands that before an employer may legally
dismiss an employee from the service, the requirement of substantial
and procedural due process must be complied with. Under the
requirement of substantial due process, the grounds for termination of
employment must be based on just or authorized causes.
Petitioner anchored its imputation of serious misconduct principally on
the respondents expose of the NSAT/NEAT anomaly.
Misconduct is defined as improper or wrong conduct. It is the
transgression of some established and definite rule of action, a
forbidden act, a dereliction of duty, willful in character, and implies
wrongful intent and not mere error of judgment. The misconduct to be
serious within the meaning of the Act, must be of such a grave and
aggravated character and not merely trivial or unimportant. Such
misconduct, however serious, must nevertheless be in connection with
the work of the employee to constitute just cause for his separation. It
is not sufficient that the act or conduct complained of has violated
some established rules or policies. It is equally important and required
that the act or conduct must have been performed with wrongful
intent.
As correctly observed by the CA, the tenor of the manifesto indicated
good faith, as the teachers, in fact, expressly stated that their ultimate
objective was not to put the school down, but to work for some
changes which would be beneficial to the students, teachers, the
school and the country as a whole. The chronology of events,
therefore, supports the view that respondents suspension and
eventual dismissal from service were tainted with bad faith, as obvious
retaliatory acts on the part of Woodridge.
The totality of the acts of respondents cannot be characterized as
misconduct under the law, serious enough to warrant the severe
penalty of dismissal. This is especially true because there is no finding
of malice or wrongful intent attributable to respondents. In light of this
disquisition, it is settled that petitioner failed to comply with the
requirement of substantial due process in terminating the employment
of respondents.

With regard to the procedural aspect of the case, respondents were

afforded their rights to answer to petitioners allegation and were given
the opportunity to present evidence in support of their defense.
However, the SC still finds that the dismissal is illegal, because of
petitioners failure to satisfy the substantive aspect.

No, their preventive suspension was illegal.

While the employer may place the worker concerned under preventive
suspension, it can do so only if the latters continued employment
poses a serious and imminent threat to the life or property of the
employer or of his co-workers. The grounds relied upon by Woodridge
do not show that their employment poses a threat to the employer or
other co-workers.
As probationary employees, respondents security of tenure is limited
to the period of their probation for Pe Benito, until June 2001 and for
Balaguer, June 2002. As they were no longer extended new
appointments, they are not entitled to reinstatement and full
backwages. Rather, Pe Benito is only entitled to her salary for her 30day preventive suspension. As to Balaguer, in addition to his 30-day
salary during his illegal preventive suspension, he is entitled to his
backwages for the unexpired term of his contract of probationary
employment.

YES, there is enough basis to support the award of damages.

A dismissed employee is entitled to moral damages when the dismissal
is attended by bad faith or fraud; or constitutes an act oppressive to
labor; or is done in a manner contrary to good morals, good customs or
public policy. Exemplary damages, on the other hand, may be awarded
if the dismissal is effected in a wanton, oppressive or malevolent
manner. The award of said damages cannot be justified solely upon
the premise that the employer fired his employee without just cause or
due process. It is necessary that additional facts be pleaded and
proven that the act of dismissal was attended by bad faith, fraud, et
al., and that social humiliation, wounded feelings and grave anxiety
resulted therefrom.
The SC finds that the award of the damages proper.

Arellano, et. al. vs. PowerTech, et.al.

G.R. No. 150861
January 22, 2008
FACTS:
In 1999, the LA declared that Powertech illegally terminated the
petitioners and granted their monetary claims for Php2.5M. During the
pendency of the appeal to NLRC by Powertech, Carlos Gestiada for himself
and on behalf of other petitioners executed a quitclaim, release and waiver
in favor of Powertech for Php150, 000. He was also appointed as their
attorney-in-fact evidenced by a special power of attorney. Relying on the
quitclaim and release, Powertech filed a motion for the withdrawal of the
appeal and cash bond which was granted by NLRC. When the check bounced,
by motion of the petitioners, NLRC declared the quitclaim, release and waiver
void for lack of consideration, reinstated the appeal and ordered Powertech
to post a cash or surety bond. Powertech paid Gestiada Php150, 000 for all
petitioner and both parties filed a joint motion to dismiss which was denied
by the NLRC. On appeal, the CA ruled in favour of Powertech annulling the
decision of NLRC in denying the joint motion to dismiss.
ISSUE:
WON the compromise agreement is void.
RULING:

The P150,000 was paid to Gestiada solely as payment for his

backwages, not those of petitioners; there is evident collusion between
Powertech and Gestiada, hence, the compromise agreement is void.
First, the P150,000 compromise is rather measly when taken in light of the
more than P2.5 million judgment on appeal to the NLRC x x x Second, even
granting for the mere sake of argument that the P150,000 was a fair and
reasonable compromise for all, petitioners failed to receive a single centavo
from the compromise x x x Third, We give credence to the admission of
Gestiada that he received the P150,000.00 as payment for his own
backwages x x x Fourth, the events that led to the execution of the
compromise agreement show that Powertech was negotiating in bad faith.
All these circumstances indicate that the P150,000.00 was received by
Gestiada solely as payment for his backwages and not a whit of a settlement
for the monetary claim of petitioners.

Abelardo P. Abel v. Philex Mining Corporation

G.R. NO. 178976
July 31, 2009
Facts:
Petitioner, Abelardo P. Abel was first hired by respondent, Philex Mining
Corporation, as a Contract Claims Assistant of its Legal Department which he
occupied for five years prior to his transfer to the Mine Engineering and Draw
Department wherein he was appointed as a Unit Head. Sometime in 2002,
petitioners co-worker, Danilo Lupega, a subsidence Checker at the min site
executed an affidavit charging the petitioner of irregularities occurring in the
subsidence area of respondents mine site. Lupega alleged that petitioner
failed to report the incidents of underloading of ANSECAs trucks during
backfilling operations as well as extortion from ANSECA in which the
respondent has contract for its backfilling operations. Petitioner denied the
allegations. After some investigations and conducting several fact-finding
meetings, respondents Administrative Division, Litigation, and Investigation
Section found petitioner guilty of (1.) fraud resulting in loss of trust and
confidence and (2.) gross neglect of duty and was dismissed from

employment. Thus, petitioner filed a complaint for illegal dismissal with the
NLRC. The Labor Arbiter ruled that petitioner was dismissed illegally since
respondent failed to prove by substantial evidence the alleged fraud
committed by the petitioner which would not suffice to lay the basis for
respondents loss of trust and confidence in petitioner. On respondents
appeal, NLRC reversed the decision of the Labor Arbiter finding petitioner
guilty of gross and habitual neglect of duty as the continually reported
ANSECAs backfilling operations as okay per his inspection and did not act
on Lupegas report concerning irregularities. Petitioners failure to perform
his duty of inspecting ANSECAs operations constituted sufficient basis for
respondents loss of trust and confidence. Petitioner appealed to the Court of
Appeals which was dismissed by the latter. Thus, this petition.
Issue:
Whether or not the petitioner was validly dismissed on the following
grounds: (1.) fraud resulting in lost of trust and confidence and (2.) gross
neglect of duty.
Ruling:
The Supreme Court reversed and set aside the decision of the Court of
Appeals.
Article 282 (c) of the Labor Code allows the employer to terminate the
services of an employee for loss of trust and confidence. Loss of trust and
confidence to be a valid cause for dismissal, must be based on a wilful
breach of trust and founded on clearly established facts. Respondents
evidence against petitioner fails to meet this standard. With regard to the
second ground, Article 282 (b) of the Labor Code provides that an employer
may terminate an employment due to the gross and habitual neglect by the
employee of his duties to warrant removal from service, the negligence
should not merely be gross but also habitual. The single or isolated act of
negligence does not constitute a just cause for the dismissal of the
employee. The petitioner did not repeatedly fail to perform his duties for a
period of time and the events do not constitute gross and habitual
negligence. The petitioner, although not entirely faultless, was dismissed
without just cause and procedural due process and consequently, entitled to
reinstatement and full backwages without loss of seniority rights and
privileges. If reinstatement is no longer feasible, to give him separation pay
equivalent to at least one month salary for every year of service.

OLDARICO S. TRAVEO, et al v. BOBONGON BANANA GROWERS

MULTI-PURPOSE COOPERATIVE, TIMOG AGRICULTURAL
CORPORATION, DIAMOND FARMS, INC., and DOLE ASIA PHILIPPINES
G.R. No. 164205, September 3, 2009
Facts:
Oldarico Traveo and his 16 co-petitionersclaim to have been hired in
1992 by Timog Agricultural Corporation (TACOR) and Diamond Farms, Inc.
(DFI), to work at a banana plantation at Davao Del Norte, converted from rice
and corn lands, whose owners agreed to the conversion upon being
convinced that TACOR and DFI could provide the needed capital, expertise,
and equipment. Petitioners helped prepare the lands and planted the banana
suckers.

While they worked under the direct control of supervisors assigned by

TACOR and DFI, these companies used different schemes to make it appear
that they were hired through independent contractors; that despite the
successive changes in the names of their employers they continued to
perform the same work under the direct control of TACOR and DFI
supervisors. Under the last scheme adopted by these companies, the
nominal individual contractors were required to join a cooperative and
became members of Bobongon Banana Growers Multi-purpose Cooperative
(the Cooperative).
The Labor Arbiter, found the Cooperative guilty of illegal dismissal, a
decision sustained by the Labor Arbiter.
Issue:
Whether or not the Cooperative is guilty of illegal dismissal
Held:
Instead of remanding the case to the appellate court, the Supreme
Court decided to resolve the issue whether DFI (with which TACOR had been
merged) and DPI should be held solidarily liable with the Cooperative for
petitioners illegal dismissal and money claims. Job contracting or
subcontracting refers to an arrangement where a principal agrees to farm
out with a contractor or subcontractor the performance of a specific job,
work or service within a definite or predetermined period, regardless of
whether such job, work or service is to be performed or completed within or
outside the premises of the principal. This arrangement does not exist in the
present case. DFI did not farm out to the Cooperative the performance of a
specific job, work, or service. It entered into a Banana Production and
Purchase Agreement with the Cooperative, where the Cooperative would
handle and fund the production of bananas and operation of the plantation
covering lands owned by its members , while DFI committed to provide
financial and technical assistance, supply of information and equipment in
growing, packing, and shipping bananas. The Cooperative would hire its own
workers and pay their wages and benefits, and sell exclusively to DFI all
export quality bananas that met the specifications. The Contract between
the Cooperative and DFI, is a joint venture. The rules on job contracting are
inappropriate. The Court abides by the autonomy of contracts principle under
Article 1306 of the Civil Code.

The Petitioners claim fails the four-fold test.

On selection and engagement, DFI has a total lack of knowledge on
who actually were engaged by the Cooperative to work in the banana
plantation. No employment contract was submitted to substantiate how
petitioners were hired and by whom.
On the payment of wages, it was the Cooperative that paid the same.
On the power of dismissal, and the power of control, both were retained by
the Cooperative.
There being no employer-employee relationship between petitioners
and the Cooperatives co-respondents, the latter are not solidarily liable with
the Cooperative for petitioners illegal dismissal and money claims.
The social justice policy of labor laws and the Constitution is not meant
to be oppressive of capital.

Eastern Shipping Lines, Inc. v. Ferrer Antonio

G.R. No. 171587
October 13, 2009
Facts:

Respondent was hired by petitioner to work as a seaman on board its

various vessels.
Petitioner took the licensure examination for 2 nd Engineer
while petitioners vessel was dry docked for repairs.
On February 1996,
while in Japan, and in the employ of petitioner, respondent suffered a
fractured left transverse process of the fourth lumbar vertebra.
He was
advised to rest for a month. He was later examine and declared fit to work.
However, he was not admitted back to work
In dire for financial need, he
applied for an optional retirement on January 1997. Petitioner disapproved
on the ground that his shipboard employment history and track record as a
seaman did not meet the standard required in granting the optional
retirement benefits.
Respondent filed a complaint with the DOLE, for failure to reach
amicable settlement, the case was forwarded to NLRC for proper
proceedings.
The LA in its decision, rendered judgment in favor of
respondent. On appeal, NLRC affirmed the decision of LA. On appeal to CA,
it affirmed the decision of NLRC but modified the award of moral damages in
the reduced amount. Hence, this petition.
Issue:
Whether CA erred in awarding the respondent of the optional
retirement benefit being applied for in US Dollars under the gratuity plan of
petitioner.
Ruling:
The petition is meritorious.
Respondent is not entitled to optional
retirement benefits under the Labor Code. Clearly, the age of retirement is
primarily determined by the existing agreement or employment contract. In
the absence of such agreement, the retirement age shall be fixed by law.
Under the law, the mandated compulsory retirement age is set at 65 years,
while the minimum age for optional retirement is set at 60 years.
In the case at bar, there is a retirement gratuity plan between the
petitioner and the respondent. Under paragraph B of the plan, a shipboard
employee, upon his written request, may retire from service if he has
reached the eligibility age of 60 years. In this case, the option to retire lies
with the employee.

Records shows that respondent was only 41 years old when he applied
for optional retirement, which was 19 years short of the required eligibility
age. Thus, he cannot claim optional retirement benefits as a matter of right.

Due to foregoing findings of facts of the CA, although generally

deemed conclusive, may admit review by this Court if the CA failed to notice
certain relevant facts which, if properly considered, will justify a different
conclusion and when the judgment of the CA is premised on
misapprehension of facts. The CA erred in affirming the rulings of L and the
NLRC, as the availment of the optional retirement benefits is subject to the
exclusive prerogative of the sole option of the petitioner.

The petition is granted.

Wallem Maritime Services Inc. v. NLRC

G.R. No. 108433
October 15, 1996

Facts:

Private respondent Joselito V. Macatuno was hired by Wallem

Shipmanagement Limited thru its local manning agent, Wallem Maritime
Services, Inc., as an able-bodied seaman on board the M/T Fortuna, a vessel
of Liberian registry. Pursuant to the contract of employment, private
respondent was employed for ten (10) months covering the period February
26, 1989 until December 26, 1989 with a monthly salary of two hundred
seventy-six US dollars (US $276); hourly overtime rate of one dollar and
seventy-two cents (US $1.72), and a monthly tanker allowance of one
hundred twenty-seven dollars and sixty cents (US $127.60), with six (6) days
leave with pay for each month.
On June
24,
1989,
while
the
vessel
was
berthed
at
the port of Kawasaki, Japan, an altercation took place between private
respondent and fellow Filipino crew member, Julius E. Gurimbao, on the one
hand, and a cadet/apprentice officer of the same nationality as the captain of
the vessel on the other hand. The master entered the incident in the
tankers logbook.
As a consequence, private respondent and Gurimbao were repatriated to
the Philippines where they lost no time in lodging separate complaints for
illegal dismissal with the POEA. According to the affidavit private respondent
executed before a POEA administering officer, the following facts led to the
filing of the complaint.
At about 5:50 a.m. of June 24, 1989, private respondent was on duty along
with Gurimbao, checking the manifold of the vessel and looking for oil
leakages, when a cadet/apprentice who was of the same nationality as the
vessels captain (Singh), approached them. He ordered Gurimbao to use a
shovel in draining the water which, mixed with oil and dirt, had accumulated
at the rear portion of the upper deck of the vessel.

Gurimbao explained to the cadet/apprentice that throwing dirty and oily

water overboard was prohibited by the laws of Japan; in fact, port authorities
were roaming and checking the sanitary conditions of the port. The
cadet/apprentice got mad and, shouting, ordered Gurimbao to get a hose
and siphon off the water. To avoid trouble, Gurimbao used a shovel in
throwing the dirty water into the sea.
Having finished his job, Gurimbao complained to private respondent about
the improper and unauthorized act of the cadet/apprentice. The two went
to the cadet/apprentice who was idly standing in a corner. They reminded
him that as a mere apprentice and not an officer of the vessel, he had no
right whatsoever to order around any member of the crew. However, the
cadet/apprentice reacted violently - shouting invectives and gesturing as if
challenging the two to a fight. To prevent him from intimidating them,
private respondent pushed twice the cadet/apprentices chest while
Gurimbao mildly hit his arm. Frantic and shouting, the cadet/apprentice
ran to the captain who happened to witness the incident from the cabins
window.
The captain summoned private respondent and Gurimbao. With their bosun
(head of the deck crew), they went to the captains cabin. The captain told
them to pack up their things as their services were being terminated. They
would disembark at the next port, the Port of Ube, from where they would be
flown home to the Philippines, the repatriation expenses to be shouldered by
them. The two attempted to explain their side of the incident but the captain
ignored them and firmly told them to go home.
Before disembarking, they were entrusted by the bosun with a letter of their
fellow crew members, addressed to Capt. Dio, attesting to their
innocence. At the Port of Ube, an agent of the company handed them their
plane
tickets
and
accompanied
them
the
following
day
to
the Fukoka Airport where they boarded a Cathay Pacific airplane bound
for Manila.
A few days after their arrival in Manila or on July 1, 1989, the two gave the
letter to Capt. Dio and conferred with him and Mr. James Nichols. The latter
told private respondent that they could not secure a reimbursement of their
repatriation expenses nor could they get their salaries for the month of
June. Private respondent, in a letter addressed to Capt. Dio, asked for a
reconsideration of their dismissal but the latter did not respond. Frustrated,

private respondent sought the assistance of a lawyer who wrote Wallem a

demand letter dated August 28, 1989 but the same was ignored.[4]
Petitioners, defending their position, alleged that the incident was not the
first infraction committed by the two. In his aforementioned decision
of September 14, 1990 finding private respondents dismissal to be illegal.
Granting that the entries in the logbook are true, a perusal thereof will
readily show that complainant was not afforded due process. The warnings
allegedly given to complainant were not submitted in evidence. Likewise, no
investigation report was presented to prove that complainant was given the
opportunity to air his side of the incident.
It is also noteworthy to mention that complainant was able to describe with
particularity the circumstances which led to his misunderstanding with the
cadet/apprentice and which we believe is not sufficient to warrant his
dismissal. NLRC affirmed the decision of the POEA, adopting as its own the
latters findings and conclusions.

Isuue:
WON private respondent was validly dismissed. No.

Held:
An employer may dismiss or lay off an employee only for just and
authorized causes enumerated in Articles 282 and 283 of the Labor
Code. However, this basic and normal prerogative of an employer is subject
to regulation by the State in the exercise of its paramount police power
inasmuch as the preservation of lives of citizens, as well as their means of
livelihood, is a basic duty of the State more vital them the preservation of
corporate profits. Ones employment, profession, trade or calling is a
property right within the protection of the constitutional guaranty of due
process of law.

The ship captains logbook is vital evidence as Article 612 of the Code of
Commerce requires him to keep a record of the decisions he had adopted as
the vessels head.
Under the Table of Offenses and Corresponding Administrative Penalties
appended to the contract of employment entered into by petitioners and
private respondent, the offense described by the logbook entry may well fall
under insubordination and may constitute assaulting a superior officer with
the use of deadly weapon punishable with dismissal if the victim is indeed a
superior officer. However, an apprentice officer cannot be considered a
superior officer. An apprentice is a person bound in the form of law to a
master, to learn from him his art, trade, or business, and to serve him during
the time of his apprenticeship.
Physical violence against anyone at any time and any place is
reprehensible. However, in cases such as this, where a persons livelihood is
at stake, strict interpretation of the contract of employment in favor of the
worker must be observed to affirm the constitutional provision on protection
to labor. Moreover, the aforequoted entry in the logbook is so sketchy that,
unsupported by other evidence, it leaves so many questions
unanswered. Although private respondent candidly admitted in his affidavit
having hit Sason on the chest twice, he did not admit using a spanner.
Hence, as the typewritten excerpts from the logbook were the only pieces
of evidence presented by petitioners to support the dismissal of private
respondent, have no probative value at all, petitioners cause must fail.
Petitioners failure to substantiate the grounds for a valid dismissal was
aggravated by the manner by which the employment of private respondent
was terminated. It must be borne in mind that the right of an employer to
dismiss an employee is to be distinguished from and should not be confused
with the manner in which such right is exercised. Dismissal from
employment must not be effected abusively and oppressively as it affects
ones person and property.
Neither is the ship captains having witnessed the altercation an excuse for
dispensing with the notice and hearing requirements. Serving notice to
private respondent under the circumstances cannot be regarded as an
absurdity and superfluity. The petition at bar is DISMISSED.

SANTIAGO ALCANTARA, JR., petitioner, vs. THE COURT OF

APPEALS and THE PENINSULA MANILA, INC., respondents.

FACTS:
Petitioner Santiago Alcantara, Jr., an employee of respondent The
Peninsula Manila, Inc., seeks the reversal of the decision and resolution of
the Court of Appeals upholding his dismissal for willful disobedience. At the
time of his dismissal, petitioner worked as Commis II of the Food and
Beverage Department of the Peninsula Manila Hotel, Inc. He was also a
Director of the National Union of Workers in Hotels Restaurants and Allied
Industries (NUWHRAIN)-Manila Peninsula Chapter.
The controversy stems from a Memorandum dated August 7, 1998
issued by respondent Hotel prohibiting the union from using the union office
from midnight until 6:00 in the morning.
On August 18, 1998, at about 1:30 in the morning, petitioner was seen
inside the union office with Conrad Salanguit and a certain Ma. Theresa Cruz.
They left the office at about 2:20 in the morning of the same day.
On August 20, 1998, petitioner and a male companion were seen
entering the union office. Later that evening, petitioner was again seen in
the office, seated with both legs resting on a table. His male companion,
who turned out to be Mr. Salanguit, was lying on the bench. The office lights
were off. DPO Lt. Caronan approached petitioner and reminded him of the
Memorandum dated August 7, 1998. Petitioner and Mr. Salanguit refused to
leave, however, and replied, Consult that to our President because we gave
a reply to that memorandum. Both petitioner and Mr. Salanguit stayed in
the office until 3:30 in the morning of August 21, 1998.

On August 28, 1998, Arsenio Olmedilla, Sous Chef-Production, sent a

memorandum to petitioner informing him about the Security Department
Report dated August 21, 1998. The memorandum stated that he was seen
inside the union office between midnight until the morning of the following
day and directed him to submit his written explanation within 24 hours from
receipt thereof.
Petitioner submitted his letter-explanation dated August 28, 1998
intimating that the Memorandum prohibiting the use of the union office was
inconsistent with the CBA and was necessarily ineffective. Petitioner argued
that inasmuch as the Hotel operated 24 hours a day, the union office should
be available whenever the union found it necessary. This was how the CBA
had always been applied. Petitioner also pointed out that the charge against
him did not pertain to his duties in the Hotel. He claimed he used the union
office only during his breaks or when he was off duty.
On November 26, 1998, at around 12:50 until 5:50 in the morning,
petitioner was again seen lying on the bench inside the union office. DPO Lt.
Caronan politely informed him again about the existing Memorandum and
asked him to leave. Petitioner refused and left the union office only at around
5:50 in the morning of November 26, 1998.
In a Memorandum to petitioner dated December 7, 1998, Mr. Noel
Silva, Assistant Food and Beverage Manager informed petitioner that
Security had reportedly seen him lying on the bench at the basement rankand-file union office on November 26, 1998 in violation of the Memorandum
dated August 7, 1998. Petitioner was required to explain in writing why no
disciplinary action should be taken against him.
On December 9, 1998, petitioner sent a letter to Mr. Silva explaining
that the union had contested the Memorandum dated August 7, 1998. He
reiterated that the Memorandum was unreasonable and unlawful. Petitioner
invoked Section 4, Article IV of the Collective Bargaining Agreement (CBA)
between the Union and the Hotel, stating that the hotel shall provide the
Union with an office for its exclusive use. He further argued that the
Memorandum constituted unlawful interference with the employees right to
self-organization.
On January 4, 1999, private respondent sent petitioner a Notice of
Termination for alleged willful and blatant refusal to comply with a lawful and
valid order (HRD Memorandum dated August 7, 1998) issued by his
employer.

Meanwhile, the Union threatened to go on strike unless the

memorandum in question was lifted and petitioner reinstated. Respondent
requested the National Conciliation and Mediation Board to intervene and
conduct preventive mediation proceedings.

ISSUE:
WON dismissal is valid

RULING:
Willful disobedience of the employers lawful orders, as a just cause for
the dismissal of an employee, envisages the concurrence of at least two
requisites: (1) the employees assailed conduct must have been willful or
intentional, the willfulness being characterized by a wrongful and perverse
attitude; and (2) the order violated must have been reasonable, lawful,
made known to the employee and must pertain to the duties which he had
been engaged to discharge.[9]
Petitioner avers that his dismissal for willful disobedience is
unwarranted because: (1) the Memorandum dated August 7, 1998 is not in
connection with the duties which the employee had been engaged to
discharge; (2) the same Memorandum is not reasonable and lawful; and (3)
petitioner did not exhibit a wrongful and perverse attitude in disobeying
said Memorandum.
Petitioner further posits that the use of the union office has no
connection whatsoever with petitioners duties as Commis II, one of the
kitchen personnel. However, as respondent points out, every employee is
charged with the implicit duty of caring for the employers property;
consequently, he is bound to obey the reasonable and lawful orders of the
employer regulating the use and preservation thereof. Thus, this Court has
upheld the dismissal of an employee for violation of a rule prohibiting
employees from using company vehicles for private purpose without
authority from management.[10] This is not only to prevent loss on the part
of the employer but also to prevent injury to the employees as well as the
customers of the employer.

Whether the Memorandum in question is reasonable and lawful is

beside the point. 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.
The subject Memorandum is not grossly oppressive. It is not patently
contrary to law.
While petitioner argues that its application was
discriminatory the two employees found with him in the union room were
not at all subjected to disciplinary action the Memorandum was not
discriminatory on its face. Petitioners violation of his employers order, prior
to its revocation, was therefore inexcusable.
We agree with petitioner that his behavior did not constitute the
wrongful and perverse attitude that would sanction his dismissal. The
surrounding circumstances indicate that petitioner was motivated by his
honest belief that the Memorandum was indeed unlawful and unreasonable.
Previous practice allowed the use of the union office 24 hours a day. Section
1, Article III of the Collective Bargaining Agreement for 1996-2001 provided
that, All practices not expressly provided for in this Agreement which are
presently being enjoyed by the employees shall be continued by the
HOTEL. Moreover, the Memorandum regulated the use of the union office
and petitioner, a union officer, interpreted such regulation as an unlawful
interference with legitimate union activities. Viewed in this light, petitioners
attitude can hardly be characterized as wrongful and perverse.
While
these circumstances do not justify his violation of the regulation, they do not
justify his dismissal either.
The Hotel cites previous infractions committed by petitioner as
additional grounds for his dismissal. The Court finds these to be nothing
more than belated rationalizations; the Hotel did not refer to these violations
in its Notice of Termination to petitioner.
The subject Memorandum purports to [secure] the hotel against
damage to property in consonance with the hotels concern to keep the
premises peaceful, orderly and safe. In short, it is a safety regulation.
Under respondents House Code of Discipline, the failure to observe safety
rules/requirements of the hotel is a Class A Offense, the third violation of
which the same Code imposes a three-day suspension. Petition is GIVEN DUE
COURSE and GRANTED.

PHILIPPINE RURAL RECONSTRUCTION MOVEMENT( RRM)v.VIRGILIO

E. PULGAR,
G.R. No. 169227
July 5, 2010
Facts:
PRRM is a non-stock, non-profit, non-governmental organization. Pulgar
was the manager of PRRMs branch office the Tayabas Bay Field Office
(TBFO) in Quezon Province. When Pulgar was reassigned to PRRMs central
office, PRRM, through Goyena Solis (Solis), conducted an investigation into
alleged financial anomalies committed at the TBFO.

The PRRM management sent Pulgar a copy of the report, together with
a memorandum, asking him to explain these findings.5
In a letter dated February 24, 1997, Pulgar admitted that TBFOs
reported expenses did not reflect its actual expenses. He explained that as
field manager, he presumed he had the discretion to determine when and
how the funds would be used, as long as the use was devoted to the
implementation of TBFO projects. Thus, there were instances when he used
the funds intended for one project to sustain the activities of other projects.
On March 4, 1997, Pulgar met with PRRM representatives to discuss
the findings of the investigation report. During the meeting, Pulgar furnished
these representatives with a photocopy of a savings account passbook
with Account Number 1103508 under Pulgars name at the
Cooperative Bank of Quezon. The passbook showed that the account had
a balance of P207,693.10. According to Pulgar, this balance represented the
TBFO savings he mentioned in his response. At this point, two versions of the
story develop.
PRRM maintains that while the investigation was ongoing, Pulgar went
on leave on March 3-10, March 20-25, and April 1-15, 1997. After the lapse of
his last leave on April 15, 1997, Pulgar no longer reported to work, leading
PRRM to believe that Pulgar had abandoned his work to evade any liability
arising from the investigation. PRRM was therefore surprised to learn that
Pulgar had filed an illegal dismissal case on April 3, 1997.
Pulgar tells another tale. According to him, on March 17, 1997, he
submitted a letter to PRRM to complain that he was not given the right to
confront and question Solis,8 but his letter went unanswered. Thereafter, on
March 31, 1997, he was not allowed to enter the premises of the
organization. Pulgar also alleges that PRRMs representatives removed his
personal properties and records from his office, placed them in boxes and
kept them in storage.
Believing he was constructively dismissed by PRRMs actions, Pulgar
filed a complaint against PRRM on April 3, 1997 for illegal dismissal, illegal
suspension, and nonpayment of service incentive leave pay and 13th month
pay. On March 31, 1999, the Labor Arbiter found in his decision 10 that Pulgar
had been illegally dismissed and ordered PRRM to pay full backwages.
However, the Labor Arbiter chose not to award Pulgar moral or exemplary
damages after finding that PRRM had legitimate grounds to investigate

Pulgar. Due to the strained relations between PRRM and Pulgar, the Labor
Arbiter opted to award Pulgar separation pay instead of ordering his
reinstatement.
On appeal, the NLRC reversed the Labor Arbiter in its January 28, 2000
decision and dismissed Pulgars complaint.
On May 25, 2005, the CA rendered the assailed decision, 13 granting
Pulgars petition and reinstating the Labor Arbiters decision.
In the present petition, filed after the appellate court denied PRRMs Motion
for Reconsideration.
Issues:
Whether or not Pulgar was illegally dismissed.
Held:
While the Constitution is committed to the policy of social justice and
the protection of the working class, it should not be supposed that every
labor dispute will be automatically decided in favor of labor. Management
also has its rights which are entitled to respect and enforcement in the
interest of simple fair play. Out of its concern for those with less privileges in
life, the Supreme Court has inclined, more often than not, toward the worker
and upheld his cause in his conflicts with the employer. Such favoritism,
however, has not blinded the Court to the rule thatjustice is in every case for
the deserving, to be dispensed in the light of the established facts and the
applicable law and doctrine. The substantial evidence proffered by the
employer that it had not, in the first place, terminated the employee, should
not simply be ignored on the pretext that the employee would not have filed
the complaint for illegal dismissal if he had not really been dismissed.
Although under normal circumstances, an employees act of filing an illegal
dismissal complaint against his employer is inconsistent with abandonment;
in the present case, we simply cannot use that one act to conclude that
Pulgar did not terminate his employment with PRRM, and in the process
ignore the clear, substantial evidence presented by PRRM that proves
otherwise. While we recognize the rule that in illegal dismissal cases, the
employer bears the burden of proving that the termination was for a valid or
authorized cause, in the present case, however, the facts and the evidence
do not establish a prima facie case that the employee was dismissed from

employment. Before the employer must bear the burden of proving that the
dismissal was legal, the employee must first establish by substantial
evidence the fact of his dismissal from service. Logically, if there is no
dismissal, then there can be no question as to its legality or illegality. Bare
allegations of constructive dismissal, when uncorroborated by the evidence
on record, cannot be given credence.
JOSE P. ARTIFICIO v. NATIONAL LABOR RELATIONS COMMISSION
G.R. No. 172988
July 26, 2010

Facts:
Petitioner Jose P. Artificio was employed as security guard by
respondent RP Guardians Security Agency, Inc., a corporation duly organized
and existing under Philippine Laws and likewise duly licensed to engage in
the security agency business.
Sometime in June 2002, Artificio had a heated argument with a fellow
security guard, Merlino B. Edu (Edu). On 25 July 2002, Edu submitted a
confidential report5 to Antonio A. Andres (Andres), Administration &
Operations Manager, requesting that Artificio be investigated for maliciously
machinating Edus hasty relief from his post and for leaving his post during
night shift duty to see his girlfriend at a nearby beerhouse.
On 29 July 2002, another security guard, Gutierrez Err (Err), sent a
report 6 to Andres stating that Artificio arrived at the office of RP Guardians
Security Agency, Inc. on 25 June 2002, under the influence of liquor. When
Artificio learned that no salaries would be given that day, he bad-mouthed
the employees of RP Guardians Security Agency, Inc. and threatened to
"arson" their office.
Andres issued a Memorandum8 temporarily relieving Artificio from his post
and placing him under preventive suspension pending investigation for
conduct unbecoming a security guard. He also directed Artificio to report to
the office of RP Guardians Security Agency, Inc. and submit his written
answer immediately upon receipt of the memorandum.
In another memorandum, Andres informed Artificio that a hearing will be
held on 12 August 2002.9
Without waiting for the hearing to be held, Artificio filed on 5 August 2002, a
complaint for illegal dismissal, illegal suspension, non-payment of overtime

pay, holiday pay, premium pay for holiday and rest days, 13th month pay,
and damages. He also prayed for payment of separation pay in lieu of
reinstatement.10
After hearing, the Labor Arbiter rendered a decision dated 6 October 2003,
finding respondents guilty of illegal suspension and
On appeal, the NLRC set aside the decision of the Labor Arbiter. The
motion for reconsideration filed by Artificio was denied for lack of merit by
the NLRC.
On 31 March 2006, the Court of Appeals rendered a decision which
affirmed the NLRC decision.17 Artificio filed a motion for reconsideration
which the Court of Appeals again denied for lack of merit.
Issue:
Whether or not the preventive suspension of petitioner Artificio is valid.
Held:
Preventive suspension is justified where the employees continued
employment poses a serious and imminent threat to the life or property of
the employer or of the employees co-workers. Without this kind of threat,
preventive suspension is not proper. In this case, Artificios preventive
suspension was justified since he was employed as a security guard tasked
precisely to safeguard respondents client. His continued presence in
respondents or its clients premises poses a serious threat to respondents,
its employees and client in light of the serious allegation of conduct
unbecoming a security guard such as abandonment of post during night shift
duty, light threats and irregularities in the observance of proper relieving
time. As the employer, respondent has the right to regulate, according to its
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. Management has the prerogative to
discipline its employees and to impose appropriate penalties on erring
workers pursuant to company rules and regulations. This Court has upheld a
companys management prerogatives so long as they are exercised in good
faith for the advancement of the employers interest and not for the purpose

of defeating or circumventing the rights of the employees under special laws

or under valid agreements.
Issue:
Whether or not the petitioner is entitled to separation pay.
Held:
After Artificio was placed under preventive suspension on 29 July 2002,
he forthwith, or on 5 August 2002, filed a complaint for illegal dismissal and
illegal suspension. From that date until the present, he has insisted on his
submission that he was illegally dismissed and that he is not seeking
reinstatement as in fact right from the start, his prayer was for separation
pay. Having determined that the imposition on Artificio of preventive
suspension was proper and that such suspension did not amount to illegal
dismissal, we see no basis for the grant of backwages. Nonetheless, given
the attendant circumstances in this case, namely, that Artificio had been
working with the company for a period of sixteen (16) years and without any
previous derogatory record, the ends of social and compassionate justice
would be served if Artificio be given some equitable relief in the form of
separation pay. Artificio is entitled to separation pay considering that while
reinstatement is an option, Artificio himself has never, at anytime after the
notice of preventive suspension intended to remain in the employ of private
respondents.