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1. Leslie Okol vs. Slimmers World International, Behavior Modifications, Inc.,

and Ronald Joseph Moy
G.R. No. 160146. December 11, 2009.
Respondent Slimmers World International operating under the name Behavior
Modifications, Inc. (Slimmers World) employed petitioner Leslie Okol (Okol) as a
management. She rose up the ranks to become Head Office Manager and then
Director and Vice President until her dismissal.

Prior to Okol's dismissal, Slimmers World preventively suspended Okol. The

suspension arose from the seizure by the Bureau of Customs of seven Precor
elliptical machines and seven Precor treadmills belonging to or consigned to
Slimmers World. The shipment of the equipment was placed under the names of
Okol and two customs brokers for a value less than US$500. For being undervalued,
the equipment were seized.

Okol filed her written explanation. However, Slimmers World found Okol's
explanation to be unsatisfactory. Through a letter signed by its president Moy,
Slimmers World terminated Okol's employment.

Okol filed a complaint with the Arbitration branch of the NLRC against Slimmers
World, Behavior Modifications, Inc. and Moy for illegal suspension, illegal dismissal,
unpaid commissions, damages and attorney's fees.

Petitioner insists that the CA erred in ruling that she was a corporate officer and
that the case is an intra-corporate dispute falling within the jurisdiction of the
regular courts. Petitioner asserts that even as vice-president, the work that she
performed conforms to that of an employee rather than a corporate officer.

Whether or not the NLRC has jurisdiction over the illegal dismissal case filed by
The charges of illegal suspension, illegal dismissal, unpaid commissions,
reinstatement and back wages imputed by petitioner against respondents fall squarely
within the ambit of intra-corporate disputes.
Before, intra-corporate disputes fall within the jurisdiction of the Securities and
Exchange Commission (SEC). Subsection 5.2, Section 5 of Republic Act No. 8799,
transferred to RTCs the SEC's jurisdiction over all cases listed in Section 5 of PD 902-A.
The determination of the rights of a director and corporate officer dismissed from his
employment as well as the corresponding liability of a corporation, if any, is an intracorporate dispute subject to the jurisdiction of the regular courts. Thus, the appellate
court correctly ruled that it is not the NLRC but the regular courts which have
jurisdiction over the present case.
In the motion, respondents attached the General Information Sheet, Minutes of the
meeting of the Board of Directors and Secretary's Certificate, and the Amended ByLaws of Slimmers World as submitted to the SEC to show that petitioner was a
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corporate officer whose rights do not fall within the NLRC's jurisdiction. The GIS and
minutes of the meeting of the board of directors indicated that petitioner was a
member of the board of directors, holding one subscribed share of the capital stock,
and an elected corporate officer.
The Court ruled that an "office" is created by the charter of the corporation and the
officer is elected by the directors or stockholders. On the other hand, an "employee"
usually occupies no office and generally is employed not by action of the directors or
stockholders but by the managing officer of the corporation who also determines the
compensation to be paid to such employee.
G.R. No. 183233 December 23, 2009
The petitioner was hired by respondent Asian Construction (Asiakonstrukt) as radio
technician/operator . His services were terminated on the ground of retrenchment. He
thus filed a complaint for illegal dismissal and illegal deduction of his pay.
Because Asiakonstrukt failed to submit financial statements to prove losses, the Labor
Arbiter ruled that petitioner was not validly dismissed. Respondents are ordered to pay
Virgilio Anade his 13th month pay, illegal deductions and overtime pay
When the case was elevated to the NLRC, Asiakonstrukt submitted the certified true
copies of the Audited Financial Statements from 1998 to 2000, NLRC modified the
Labor Arbiters Decision by holding that petitioner was not illegally dismissed and
reduced the reimbursable amount of illegal deductions.
Petitioner filed a Motion for Reconsideration but it was denied. He then appealed to the
Court of Appeals which affirmed the decision rendered by the NLRC.
Hence, this appeal.
Whether or not the petitioners dismissal on the ground of retrenchment was justified
The SC granted the petition and remanded the case to the NLRC for recomputation of
the monetary award. Retrenchment is the termination of employment initiated by the
employer through no fault of and without prejudice to the employees. It is resorted to
during periods of business recession and is recognized by Article 283 of the Labor
To effect a valid retrenchment, the following elements must be present: (1) the
retrenchment is reasonably necessary and likely to prevent business losses; (2) the
employer serves written notice both to the employee/s concerned and the Department
of Labor and Employment at least a month before the intended date of retrenchment;
(3) the employer pays the retrenched employee separation pay in an amount
prescribed by the Code; (4) the employer exercises its prerogative to retrench in good
faith; and (5) the employer uses fair and reasonable criteria in ascertaining who would
be retrenched or retained.
In the present case, Asiakonstrukt failed to prove that it was suffering business losses
to warrant a valid retrenchment of its employees and it failed to submit its audited
financial statements within the two years that the case was pending before the Labor
Arbiter. It submitted them only after it received the adverse judgment of the Labor
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On appeal, the NLRC is not precluded from receiving evidence on appeal as technical
rules of evidence are not binding in labor cases. Here, the delay in the submission of
evidence should have been clearly explained and should adequately prove the
employers allegation of the cause for termination but the employer did not provide
any explanation.
Thus, the Labor arbiters decision was affirmed and the dismissal of the petitioner on
account of retrenchment is held unjustified. Petitioner is thus entitled to the twin
reliefs of payment of backwages and other benefits from the time of his dismissal up
to the finality of this Courts Decision, and reinstatement without loss of seniority
rights or, in lieu thereof, payment of separation pay.


G.R. No. 182626

December 4, 2009

Respondent Mario Valcueba filed a Complaint for illegal dismissal and nonpayment of
wage differential, 13th month pay differential, holiday pay, premium pay for holidays
and rest days, and service incentive leaves with claims for moral and exemplary
damages and attorneys fees, against Hilario Ramirez. Valcueba claimed that Ramirez
hired him as mechanic and was paid per day from 1999 to 2006. On Feb. 27, 2006,
Valcueba was advised not to return to work unless he would agree to work on a
pakyaw basis. On the other hand, Ramirez contended that Valcueba fails to obey the
formers lawful order when he had an emergency call and requested Valcueba to
report to Calawisan Station to repair a taxi unit of Ramirez since the mechanic
assigned in the said station was absent. Ramirez insisted that he did not terminate the
complainant, it was the latter who abandoned his job following his absence the
following day after the emergency call without any leave of absence. The Labor Arbiter
rendered a decision finding Ramirez not guilty of illegal dismissal and awarded
complainant for 13th month pay and wage differential for a total of P45, 825.98 and
the reinstatement of complainant. Ramirez filed a memorandum of appeal with urgent
motion to reduce bond before the NLRC. For failure to post a reasonable amount and
to offer meritorious grounds, NLRC dismissed his appeal. He went to the Court of
Appeals. The Court of Appeals dismissed the Petition outright for failure of Ramirez to
properly verify his petition and to state material dates. Hence, this petition.
Whether or not Ramirez has complied with the requirements to perfect his appeal.
Under Rule VI of the New Rules of Procedure of NLRC which explicitly reaffirms the
jurisdictional principle in Art. 223 of the Labor Code, appeals involving monetary
awards are perfected only upon compliance with the following mandatory requisites,
namely: (1) payment of the appeal fees; (2) filing of the memorandum of appeal; and
(3) payment of the required cash or surety bond. The posting of a bond is
indispensable to the perfection of an appeal in cases involving monetary awards from
the decision of the labor arbiter. Clearly, the filing of the bond is not only mandatory
but also a jurisdictional requirement that must be complied with in order to confer
jurisdiction upon the NLRC. Non-compliance with the requirement renders the decision
of the Labor Arbiter final and executory. While the bond may be reduced upon motion
by the employer, this is subject to the conditions that (1) the motion to reduce the
bond shall be based on meritorious grounds; and (2) a reasonable amount in relation
to the monetary award is posted by the appellant; otherwise, the filing of the motion
to reduce bond shall not stop the running of the period to perfect an appeal. The NLRC
was justified in denying the motion for there was no meritorious grounds offered by
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the appellant and the P10, 000.00 bond posted by the latter is not a reasonable
amount in relation to the monetary award of P45, 825.98.
Ramirezs failure to verify and state material dates as required under the rules
warranted the outright dismissal of his petition before the Court of Appeals. In an
actions filed under Rule 65, the petition shall further indicate the material dates
showing when notice of the judgment or final order or resolution subject thereof was
received, when a motion for new trial or reconsideration, if any, was filed and when
notice of the denial thereof was received. Failure to comply shall be a ground for
Hence, the Supreme Court finds no sufficient justification to set aside the NLRC and
Court of Appeals resolutions. Thus, the decision of the Labor Arbiter is already final
and executory and binding upon this Court.


G.R. No. 177664

December 23, 2009

The present petition traces its roots to the complaint for illegal dismissal filed by the
respondent against petitioners CRC Agricultural Trading and its owner, Rolando B.
Catindig (collectively, petitioners), before the Labor Arbiter. In his Sinumpaang
Salaysay, the respondent alleged that the petitioners employed him as a driver. The
respondent worked for the petitioners until he met an accident, after which the
petitioners no longer allowed him to work. After six years, the petitioners again hired
the respondent as a driver and offered him to stay inside the companys premises.
Sometime in March 2003, the petitioners ordered respondent to have the alternator of
one of its vehicles repaired. The respondent brought the vehicle to a repair shop and
subsequently gave the petitioners two receipts issued by the repair shop. The latter
suspected that the receipts were falsified and stopped talking to him and giving him
work assignments. Petitioners no longer gave him any salary after that. As a result, the
respondent and his family moved out of the petitioners compound. The respondent
claimed that the petitioners paid him a daily wage of P175.00, but did not give him
service incentive leave, holiday pay, rest day pay, and overtime pay. He also alleged
that the petitioners did not send him a notice of termination.
Was respondents dismissal justified?
No. To justify the dismissal of an employee for a just cause, the employer must furnish
the worker with two written notices. The first is the notice to apprise the employee of
the particular acts or omissions for which his dismissal is sought. This may be loosely
considered as the charge against the employee. The second is the notice informing the
employee of the employers decision to dismiss him. This decision, however, must
come only after the employee is given a reasonable period from receipt of the first
notice within which to answer the charge, and ample opportunity to be heard and
defend himself with the assistance of his representative, if he so desires. The
requirement of notice is not a mere technicality, but a requirement of due process to
which every employee is entitled.

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The employer clearly failed to comply with the two-notice requirement. Nothing in the
records shows that the company ever sent the employee a written notice informing
him of the ground for which his dismissal was sought. It does not also appear that the
company held a hearing where the employee was given the opportunity to answer the
charges of abandonment. Neither did the company send a written notice to the
employee informing him that his service had been terminated and the reasons for the
termination of his employment. Under these facts, the respondents dismissal was
G.R. No. 171023 December 18, 2009
Petitioner was employed as branch teller by respondent Manila Electric CompanyMandaluyong Office for the handling and processing of payments. Petitioner has
violated the Company Code
Discipline specifically
excessive unauthorized absences. Through a Notice of Dismissal, petitioners
employment was terminated effective March 29, 2000.On July 3, 2001, petitioner filed
a complaint before the Arbitration Branch of the NLRC against respondent assailing the
legality of his dismissal. He also claimed that he was denied due process. The Labor
Arbiter dismissed the complaint for a lack of merit. Petitioner appealed to the NLRC
which affirmed the legality of his dismissal due to habitual absenteeism. On appeal to
the Court of Appeals, the CA nullified the NLRCs Decision and reinstated the Labor
Arbiters Decision dismissing the complaint. It ruled that the award of separation pay is
neither justified nor warranted under the circumstances The Motion for
Reconsideration was denied, hence this petition for review on certiorari.
Whether or not a validly dismissed employee may be entitled to separation pay.
The Supreme Court DENIED petition for lack of merit. The Labor Arbiter, the NLRC and
the Court of Appeals found that petitioners unauthorized absences and repeated
infractions of company rules on employee discipline manifest gross and habitual
neglect of duty that merited the imposition of the supreme penalty of dismissal from
work. Serious misconduct is said to be a transgression of some established and
definite rule of action, a forbidden act, a dereliction of duty, willful in character, and
indicative of wrong full intent and not mere error of judgment. Oddly, petitioner never
advanced any valid reason to justify his absences.
Following jurisprudence, it is held that a series of irregularities when put together may
constitute serious misconduct. Hence, the petitioner is not entitled to separation pay.
The liberality of the law can never be extended to the unworthy and undeserving.
G.R. No. 167286
February 5, 2014
Gross inefficiency is a just case since it is closely related to gross neglect
Complainant Evangeline Santos filed a labor complaint for illegal dismissal against her
employer defendant International School Manila and Brian McCauley. Previously,
complainant was first hired by the School in 1978 as a full-time Spanish language
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teacher. After filing for a leave of one academic year, she agreed to teach the only
available Spanish class and four other classes of Filipino.
Since it was her first time to teach Filipino, the Schools high school administrators
observed the way she conducted her classes. The results of the observations on her
classes were summarized in Classroom Standards Evaluation Forms accomplished by
the designated observers. In accordance with said forms, Santos was evaluated in the
areas of Planning, the Teaching Act, Climate, Management and Communication.
Subsequently, after making observations, the Assistant Principal completed his
Classroom Standards Evaluation Form. He remarked that the lesson plan that Santos
provided was written with little detail given. Santos was also noted as needing
improvement in the following criteria: (1) uses effective questioning techniques; (2) is
punctual and time efficient; (3) states and enforces academic and classroom behavior
expectations in a positive manner; and (4) reinforces appropriate behavior. Hill also
stated that Santoss management of the class left much to be desired. Hill added that
[t]he beginning and the end of the class were poorly structured with students both
coming late and leaving early with no apparent expectations to the contrary. Almost
similar remarks were made on the Spanish class of Santos.
After another observation on the Filipino classes, the new Assistant Principal noted
that Santos needed improvement on certain areas. Thereafter, Santos was made to
undergo a remediation phase of the evaluation process through a Professional Growth
Plan. After the implementation of the plan, there were noticeable improvements on
Santos. However, the positive reviews were gradually replaced by renewed concerns
on her planning. Thus, a written notice to explain was sent to complainant directing
her to explain in writing why her employment from the School should not be
terminated because of her failure to meet the criteria for improvement set out in her
Professional Growth Plan and her substandard performance as a teacher.
In response, Santos blamed the School for her predicament. She said that, in the last
few years, she had been forced to teach Filipino, a subject which she had no
preparation for. The School allegedly made this happen against her objections and
despite the fact that she had no training in Filipino linguistics and literature. Santos
also asked for clarification on why she was being asked to explain and the reasons
Thereafter, a series of conferences were held to clarify matters. Afterwards, the
management rendered a decision terminating her employment.
Defendants were not liable. Termination was valid and legal. In all cases involving
termination of employment, the burden of proving the existence of the above just
causes rests upon the employer. The quantum of proof required in these cases is
substantial evidence, that is, such relevant evidence that a reasonable mind might
accept as adequate to support a conclusion, even if other equally reasonable minds
might conceivably opine otherwise.
Citing jurisprudence, the concept of gross negligence connotes want or absence of or
failure to exercise slight care or diligence, or the entire absence of care. It evinces a
thoughtless disregard of consequences without exerting any effort to avoid them.
Fraud and willful neglect of duties imply bad faith of the employee in failing to perform
his job, to the detriment of the employer and the latters business. On the other hand,
habitual neglect implies repeated failure to perform ones duties for a period of time,
depending upon the circumstances.
Further, in dismissing an employee for gross and habitual neglect of duties, the
negligence should not merely be gross, it should also be habitual.

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Meanwhile, gross inefficiency, while not stated in the Labor Code, falls within the
purview of other causes analogous to the foregoing. Hence, it is a just cause to
terminate an employee. Citing caselaw, one is analogous to another if it is susceptible
of comparison with the latter either in general or in some specific detail; or has a close
relationship with the latter. Gross inefficiency is closely related to gross neglect, for
both involve specific acts of omission on the part of the employee resulting in damage
to the employer or to his business. [In a previous case], this Court ruled that failure to
observe prescribed standards of work, or to fulfill reasonable work assignments due to
inefficiency may constitute just cause for dismissal.
In this case, the actuations of Santos cannot constitute gross and habitual neglect of
her duties. From the very beginning of her tenure as a teacher of the Filipino
language, the recurring problem observed of Santos was that her lesson plans lacked
details and coherent correlation to each other, to the course, and to the curriculum,
which in turn affected how lessons and instructions were conveyed to the students.
After Santos was placed in a Professional Growth Plan on March 29, 1996, petitioners
observed a noticeable improvement on her part. In his memo dated May 24, 1996,
then Assistant Principal Loy even stated that Santoss improvement was a result of her
positive attitude in approaching her growth plan. Unfortunately, though, Santos could
not sustain this progress. Not long after, the School administrators were again
admonishing Santos for her vague lesson plans that lacked specifics.
However, based on records, the inadequacies of Santos as a teacher did not stem
from a reckless disregard of the welfare of her students or of the issues raised by the
School regarding her teaching. Far from being tainted with bad faith, Santoss failings
appeared to have resulted from her lack of necessary skills, in-depth knowledge, and
expertise to teach the Filipino language at the standards required of her by the
School. Consequently, defendants sufficiently proved the charge of gross
inefficiency, which warranted the dismissal of Santos from the School.
As previously held, it is the prerogative of the school to set high standards of
efficiency for its teachers since quality education is a mandate of the Constitution. As
long as the standards fixed are reasonable and not arbitrary, courts are not at liberty
to set them aside. Further, this is also in in line with the academic freedom accorded
to schools.
Going further, the CBA between ISAE and the School for the years 1992-1995 also
recognized the exclusive right of the School to hire and appoint qualified faculty
subject to such reasonable rules and regulations as it may prescribe, as well as the
right of the School to discipline its faculty and determine reasonable levels of
performance. Section 8 of Appendix A of the CBA also states that [a]ll faculty
members must meet the high standard of performance expected by the SCHOOL and
abide by all its policies, procedures and contractual terms.
Here, it is not accurate to state that Santos was dismissed by the School for
inefficiency on account of the fact that she was caught only once without a lesson
plan. The documentary evidence submitted by [defendants], the contents of which we
laid down in detail in our statement of facts, pointed to the numerous instances when
Santos failed to observe the prescribed standards of performance set by the School in
several areas of concern, not the least of which was her lack of adequate planning for
her Filipino classes. Said evidence established that the School administrators informed
Santos of her inadequacies as soon as they became apparent; that they provided
constructive criticism of her planning process and teaching performance; and that
regular conferences were held between Santos and the administrators in order to
address the latters concerns. In view of her slow progress, the School required her to
undergo the remediation phase of the evaluation process through a Professional
Growth Plan. Despite the efforts of the School administrators, Santos failed to show
any substantial improvement in her planning process. Having failed to exit the
remediation process successfully, the School was left with no choice but to terminate
her employment.
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Lastly, it must be pointed out that Santos voluntarily agreed to teach the Filipino
classes given to her when she came back from her leave of absence. Said classes were
not forced upon her by the School. This much she admitted in the hearing of the case
before the Labor Arbiter. She stated therein that for the school year 1993-1994, she
was given the option to teach only one Spanish class and not have any Filipino
teaching loads. She, however, said that if she took that option she would have been
underpaid and her salary would not have been the same. Moreover, for the school
years 1994-1995 and 1995-1996, she made known to the School that she did not
prefer a change in teaching assignment. Thus, when she consented to take on the
Filipino classes, it was Santoss responsibility to teach them well within the standards
of teaching required by the School, as she had done previously as a teacher of
Spanish. Failing in this, she must answer for the consequences.
While employees who were validly terminated are ordinarily not entitled to separation
pay, an exception is when the court finds justification in applying the principle of
social justice according to the equities of the case. In this case, the Court finds
equitable and proper the award of separation pay in favor of Santos in view of the
length of her service with the School prior to the events that led to the termination of
her employment. To recall, Santos was first employed by the School in 1978 as a
Spanish language teacher. During this time, the records of this case are silent as to the
fact of any infraction that she committed and/or any other administrative case against
her that was filed by the School. Thus, an award of separation pay equivalent to onehalf (1/2) month pay for every year of service is awarded in favor of Santos on grounds
of equity and social justice.
G.R. No. 201298

February 5, 2014

Complainant Raul C. Cosare instituted a labor complaint primarily for constructive
dismissal against his employer defendant Broadcom Asia, Inc., and its president
defendant Dante Arevalo.
Complainant claimed that sometime in April 1993, he was employed as a salesman
by Arevalo, who was then in the business of selling broadcast equipment needed by
television networks and production houses. In December 2000, Arevalo set up the
company Broadcom, still to continue the business of trading communication and
broadcast equipment. Cosare was named an incorporator of Broadcom In October
2001, Cosare was promoted to the position of Assistant Vice President for Sales (AVP
for Sales) and Head of the Technical Coordination, having a monthly basic net salary
and average commissions of P18,000.00 and P37,000.00, respectively.
Thereafter, sometime in 2003, Alex F. Abiog (Abiog) was appointed as Broadcoms
Vice President for Sales and thus, became Cosares immediate superior. On March 23,
2009, Cosare sent a confidential memo to Arevalo to inform him of the following
anomalies which were allegedly being committed by Abiog against the company: (a)
he failed to report to work on time, and would immediately leave the office on the
pretext of client visits; (b) he advised the clients of Broadcom to purchase camera
units from its competitors, and received commissions therefor; (c) he shared in the
under the-table dealings or confidential commissions which Broadcom extended to
its clients personnel and engineers; and (d) he expressed his complaints and disgust
over Broadcoms uncompetitive salaries and wages and delay in the payment of other
benefits, even in the presence of office staff. Cosare ended his memo by clarifying that
he was not interested in Abiogs position, but only wanted Arevalo to know of the
irregularities for the corporations sake.
There appears to be no response from Defendant Arevalo regarding the above
accusations. Cosare claimed that he was instead called for a meeting by Arevalo on
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March 25, 2009, wherein he was asked to tender his resignation in exchange for
financial assistance in the amount of P300,000.00. Cosare refused to comply with the
directive, as signified in a letter dated March 26, 2009 which he sent to Arevalo.
Thereafter, on 30 March 2009, Complainant received a memo charging him with
serious misconduct and willful breach of trust and required him to respond within fortyeight (48) hours. The memo was signed by Defendant Arevalo. Complainant was also
suspended from having access to any and all company files/records and use of
company assets effective immediately. Thus, on the following day, he was refused
entry. On the 4th day from receipt of the memo, Complainant furnished his employer
his reply but it was refused to be received on the ground of late filing. Thus,
Complainant sent it via registered mail. As a result, Complainant instituted this labor
complaint for constructive dismissal.
Defendant Corporation and Individual Arevalo are jointly and solidarily liable.
Constructive and illegal dismissal were present. Constructive dismissal occurs when
there is cessation of work because continued employment is rendered impossible,
unreasonable, or unlikely as 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 leaving the latter with no other option but to quit.
Citing jurisprudence, 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 is made to appear as
if it were not. 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.
Based on the records, [defendants] already rejected Cosares continued involvement
with the company. Even their refusal to accept the explanation which Cosare tried to
tender on April 2, 2009 further evidenced the resolve to deny Cosare of the
opportunity to be heard prior to any decision on the termination of his employment.
The [defendants] allegedly refused acceptance of the explanation as it was filed
beyond the mere 48-hour period which they granted to Cosare under the memo dated
March 30, 2009. However, even this limitation was a flaw in the memo or notice to
explain which only further signified the [defendants] discrimination, disdain and
insensibility towards Cosare, apparently resorted to by the [defendants] in order to
deny their employee of the opportunity to fully explain his defenses and ultimately,
retain his employment.
Evidently, defendants were already resolute on a severance of their working
relationship with Cosare, notwithstanding the facts which could have been established
by his explanations and the respondents full investigation on the matter. In addition to
this, the fact that no further investigation and final disposition appeared to have been
made by the respondents on Cosares case only negated the claim that they actually
intended to first look into the matter before making a final determination as to the
guilt or innocence of their employee. This also manifested from the fact that even
before Cosare was required to present his side on the charges of serious misconduct
and willful breach of trust, he was summoned to Arevalos office and was asked to
tender his immediate resignation in exchange for financial assistance.
As for abandonment, there is no merit to the claim. Abandonment is the deliberate
and unjustified refusal of an employee to resume his employment. To constitute
abandonment of work, two elements must concur: (1) the employee must have failed
to report for work or must have been absent without valid or justifiable reason; and (2)
there must have been a clear intention on the part of the employee to sever the
employer-employee relationship manifested by some overt act.
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Here, complainants failure to report to work beginning April 1, 2009 was neither
voluntary nor indicative of an intention to sever his employment with Broadcom. It was
illogical to be requiring him to report for work, and imputing fault when he failed to do
so after he was specifically denied access to all of the companys assets.
As there is constructive dismissal in this case, an illegally or constructively dismissed
employee is entitled to: (1) either reinstatement, if viable, or separation pay, if
reinstatement is no longer viable; and (2) backwages. The award of exemplary
damages was also justified given the NLRCs finding that the respondents acted in bad
faith and in a wanton, oppressive and malevolent manner when they dismissed
Cosare. It is also by reason of such bad faith that Arevalo was correctly declared
solidarily liable for the monetary awards.
G.R. No. 200575
February 5, 2014
Complainant Jeremias Cabiles filed a labor complaint primarily to recover retirement
benefits from his employer Defendant Intel Technology Philippines, Inc. Cabiles was
initially hired by Intel Phil. on April 16, 1997 as an Inventory Analyst. He was
subsequently promoted several times over the years and was also assigned at Intel
Arizona and Intel Chengdu. He later applied for a position at Intel Semiconductor
Limited Hong Kong (Intel HK). He was offered by the latter the position of Finance
Prior to accepting the post, Complainant sent an email to Defendant which read:
Are there any clearance requirements I need to fulfil as I move as a local hire to Hong
Kong starting February 1?? I am still on my expat assignment in Chengdu till it ends
January 31. Then immediately I become a HK local employee so I dont technically
repatriate and work back to my home site Philippines at all.
Nevertheless, I still need to close I think my employment there and so that all my ES
benefits and clearance will be closed like conversion of my vacation leaves to cash,
carry over of my service tenure in CV to HK etc. Please do let me know what process I
need to go through or would an email notification be enough?
Another issue I would like to clarify is with regard to my retirement benefits. Will
celebrate my 10th year of service with Intel on April 16, 2007. However, because I will
be moving to Hong Kong as a local hire starting February 1, would I still be entitled to
retirement benefits?? Do we round up the years of service if its close enough to 10
years?? If not, what other alternatives I have or do I just lose my years of service at
Intel Philippines? Any possibility that I keep my 9.5 years and start it from there when I
work in the Philippines again in the future?? [Emphases supplied]
In response, Defendant stated that Complainant was not yet entitled to the retirement
benefit as he has not yet rendered at least 10 years of service. Afterwards,
Complainant received his final pay and executed a Release, Waiver, and Quitclaim
(Waiver). After seven (7) months with Intel HK, Complainant resigned. Two years after
that, he filed the present labor case alleging non-payment of retirement benefits and
for moral and exemplary damages. He insists that he has been employed with by Intel
for 10 years and 5 months, including his Intel HK stint.
Complainant was not entitled to his retirement benefits as he did not render 10 years
of service. Complainant resigned prior to making it on his 10th year. Resignation is
the formal relinquishment of an office, the overt act of which is coupled with an intent
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to renounce. This intent could be inferred from the acts of the employee before and
after the alleged resignation.
Here, [Complainant], while still on a temporary assignment in Intel Chengdu, was
offered by Intel HK the job of a Finance Manager.
In his letter, it showed two of Complainants main concerns: a) clearance procedures;
and b) the probability of getting his retirement pay despite the non-completion of the
required 10 years of employment service. Beyond these concerns, however, was his
acceptance of the fact that he would be ending his relationship with Intel Phil. as his
employer. The words he used local hire, close, clearance denote nothing but his
firm resolve to voluntarily disassociate himself from Intel Phil. and take on new
responsibilities with Intel HK.
Even if there was no favorable response to that letter, Complainant still accepted the
Intel HK post. His acceptance of the offer meant letting go of the retirement benefits
he now claims as he was informed through email correspondence that his 9.5 years of
service with Intel Phil. would not be rounded off in his favor. He, thus, placed himself in
this position, as he chose to be employed in a company that would pay him more than
what he could earn in Chengdu or in the Philippines.
Complainant made a choice. The choice of staying with Intel Phil. vis--vis a very
attractive opportunity with Intel HK put him in a dilemma. If he would wait to complete
ten (10) years of service with Intel Phil. (in about 4 months) he would enjoy the fruits
of his retirement but at the same time it would mean forfeiture of Intel HKs
compensation offer in the amount of HK $ 942,500.00, an amount a lot bigger than
what he would receive under the plan. He decided to forfeit and became Intel HKs
newest hire.
As such, Complainant did resign. All these are indicative of the clearest intent of
Cabiles to sever ties with Intel Phil. He chose to forego his tenure with Intel Phil., with
all its associated benefits, in favor of a more lucrative job for him and his family with
Intel HK.
Regarding his claim that he was merely assigned Intel HK or an extension of his
employment with Intel Phil., there is no such secondment contract. The continuity,
existence or termination of an employer-employee relationship in a typical
secondment contract or any employment contract for that matter is measured by the
following yardsticks: 1. the selection and engagement of the employee; 2. the
payment of wages; 3. the power of dismissal; and 4. the employers power to
control the employees conduct.
Applying the four-fold test, Intel HK became the new employer. It provided Cabiles his
compensation. Cabiles then became subject to Hong Kong labor laws, and necessarily,
the rights appurtenant thereto, including the right of Intel HK to fire him on available
grounds. Lastly, Intel HK had control and supervision over him as its new Finance
Manager. Evidently, Intel Phil. no longer had any control over him.
Complainants Waiver was valid. Citing jurisprudence, [n]ot all waivers and quitclaims
are invalid as against public policy. If the agreement was voluntarily entered into and
represents a reasonable settlement, it is binding on the parties and may not later be
disowned simply because of a change of mind. It is only where there is clear proof that
the waiver was wangled from an unsuspecting or gullible person, or the terms of
settlement are unconscionable on its face, that the law will step in to annul the
questionable transaction. But where it is shown that the person making the waiver did
so voluntarily, with full understanding of what he was doing, and the consideration for
the quitclaim is credible and reasonable, the transaction must be recognized as a valid
and binding undertaking.
11 | P a g e

9. GOYA Inc. vs GOYA Inc. Employees Union FFW

G.R. No. 170054 : January 21, 2013
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.
Whether the act of hiring contractual employees is a valid exercise of management
The petition must fail.
LABOR LAW: management prerogative; ULP; collective bargaining agreement.
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.
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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.
Petition is DENIED.
G.R. No. 181738 : January 30, 2013
GMC is a domestic corporation with principal office in Makati City and a manufacturing
plant in Lapu-Lapu City. GMC terminated the services of thirteen (13) employees for
redundancy, including herein respondent, Violeta Viajar (Viajar). GMC alleged that it
has been gradually downsizing its Vismin (Visayas-Mindanao) Operations in Cebu
where a sizeable number of positions became redundant over a period of time. When
Viajar reported for, a month before the effectivity of her severance from the company,
the guard on duty barred her fromentering GMCs premises. She was also denied
access to her office computer and was restricted from punching her daily time record
in the bundy clock. Viajar was then invited to the HRD Cebu Office where she was
asked to sign certain documents, which turned out to be an "Application for
Retirement and Benefits." The respondent refused to sign and sought clarification
because she did not apply for retirement and instead asserted that her services were
terminated for alleged redundancy. Viajar also claimed that between the period of July
4, 2003 and October 13, 2003, GMC hired fifteen (15) new employees which aroused
her suspicion that her dismissal was not necessary. For its part, GMC insisted that
Viajars dismissal was due to the redundancy of her position. GMC reasoned out that it
was forced to terminate the services of the respondent because of the economic
setbacks the company was suffering which affected the companys profitability, and
the continuing rise of its operating and interest expenditures. Redundancy was part of
the petitioners concrete and actual cost reduction measures. GMC also presented the
required "Establishment Termination Report" which it filed before the Department of
Labor and Employment (DOLE) on October 28, 2003, involving thirteen (13) of its
employees, including Viajar.
Whether or not Viajar was validly dismissed on the ground of redundancy
Article 283 of the Labor Code provides that redundancy is one of the authorized
causes for dismissal. It reads:
Article 283. Closure of establishment and reduction of personnel.
The employer may also terminate the employment of any employee due to the
installment of labor-saving devices, redundancy, retrenchment to prevent losses or the
closing or cessation of operation of the establishment or undertaking unless the
closing is for the purpose of circumventing the provisions of this Title, by serving a
written notice on the worker and the Ministry of Labor and Employment at least one
(1) month before the intended date thereof. In case of termination due to the
installation of labor-saving devices or redundancy, the worker affected thereby shall be
entitled to a separation pay equivalent to at least his one (1) month pay or to at least
one (1) month pay for every year of service, whichever is higher. In case of
retrenchment to prevent losses and in cases of closures or cessation of operations of
establishment or undertaking not due to serious business losses or reverses, the
separation pay shall be equivalent to one (1) month pay or at least one-half (1/2)
month pay for every year of service, whichever is higher. A fraction of at least six (6)
months shall be considered one (1) whole year.
From the above provision, it is imperative that the employer must comply with the
13 | P a g e

requirements for a valid implementation of the companys redundancy program, to

(a) the employer must serve a written notice to the affected employees and the
DOLE at least one (1) month before the intended date of retrenchment;
(b) the employer must pay the employees a separation pay equivalent to at
least one month pay or at least one month pay for every year of service,
whichever is higher;
(c) the employer must abolish the redundant positions in good faith; and
(d) the employer must set fair and reasonable criteria in ascertaining which
positions are redundant and may be abolished.
Furthermore, the Court cannot overlook the fact that Viajar was prohibited from
entering the company premises even before the effectivity date of termination; and
was compelled to sign an "Application for Retirement and Benefits." These acts exhibit
the petitioners bad faith since itcannot be denied that the respondent was still
entitled to report for work until November 30, 2003. The demand for her to sign the
"Application for Retirement and Benefits" also contravenes the fact that she was
terminated due to redundancy. Indeed, there is a difference between voluntary
retirement of an employee and forced termination due to authorized causes.
G.R. No. 199338 : January 21, 2013
Petitioner, the late Eleazar Padillo (Padillo), was an employee of respondent Rural Bank
of Nabunturan, Inc. (Bank) as its SA Bookkeeper. Due to liquidity problems in 2003, the
Bank took out retirement/insurance plans with Philippine American Life and General
Insurance Company (Philam Life) for all its employees in anticipation of its possible
closure and the concomitant severance of its personnel. Respondent Mark Oropeza is
the president and major stockholder of the bank.
Padillo suffered a mild stroke due to hypertension which consequently impaired his
ability to effectively pursue his work. He wrote a letter addressed to Oropeza
expressing his intention to avail of an early retirement package. Despite several
follow-ups, his request remained unheeded. Not having received his claimed
retirement benefits, Padillo filed with the NLRC a complaint for the recovery of unpaid
retirement benefits.
The Labor Arbiter dismissed Padillos complaint on the ground that the latter did not
qualify to receive any benefits under Article 300 of the Labor Code as he was only fiftyfive (55) years old when he resigned, while the law specifically provides for an optional
retirement age of sixty (60) and compulsory retirement age of sixty-five (65).
Padillo elevated the matter to the NLRC. The NLRC reversed the Labor Arbiters ruling.
Aggrieved, Oropeza and the Bank filed a petition for certiorari with the CA. The CA
reversed the NLRCs ruling but with modification. It directed the respondents to pay
Padillo the amount of P50,000.00 as financial assistance exclusive of the P100,000.00
Philam Life Plan benefit.
Displeased with the CAs ruling, Padillo (now substituted by his legal heirs due to his
death) filed the instant petition before the Supreme Court.
Whether or not Padillo is entitled to claim for separation and retirement benefits under
the Labor Code?
The petition is partly meritorious.
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LABOR LAW: disease as ground for termination; retirement benefits

At the outset, it must be maintained that the Labor Code provision on termination on
the ground of disease under Article 297 does not apply in this case, considering that it
was Padillo and not the Bank who severed the employment relations. A plain reading
of the Article 297 of the Labor Code clearly presupposes that it is the employer who
terminates the services of the employee found to be suffering from any disease and
whose continued employment is prohibited by law or is prejudicial to his health as well
as to the health of his co-employees. It does not contemplate a situation where it is
the employee who severs his or her employment ties.
What remains applicable, however, is the Labor Code provision on retirement. In the
absence of any applicable agreement, an employee must (1) retire when he is at least
sixty (60) years of age and (2) serve at least (5) years in the company to entitle
him/her to a retirement benefit of at least one-half (1/2) month salary for every year of
service, with a fraction of at least six (6) months being considered as one whole year.
Notably, these age and tenure requirements are cumulative and non- compliance with
one negates the employees entitlement to the retirement benefits under Article 300 of
the Labor Code altogether.
In this case, it is undisputed that there exists no retirement plan, collective bargaining
agreement or any other equivalent contract between the parties which set out the
terms and condition for the retirement of employees, with the sole exception of the
Philam Life Plan which premiums had already been paid by the Bank.
Unfortunately, while Padillo was able to comply with the five (5) year tenure
requirement as he served for twenty-nine (29) years he, however, fell short with
respect to the sixty (60) year age requirement given that he was only fifty-five (55)
years old when he retired. Therefore, without prejudice to the proceeds due under the
Philam Life Plan, petitioners claim for retirement benefits must be denied.
Nevertheless, the Court concurs with the CA that financial assistance should be
awarded but at an increased amount. With a veritable understanding that the award of
financial assistance is usually the final refuge of the laborer, considering as well the
supervening length of time which had sadly overtaken the point of Padillos death an
employee who had devoted twenty-nine (29) years of dedicated service to the Bank
the Court, in light of the dictates of social justice, holds that the CAs financial
assistance award should be increased from P50,000.00 to P75,000.00, still exclusive of
the P100,000.00 benefit receivable by the petitioners under the Philam Life Plan which
remains undisputed.
CIVIL LAW: abuse of right; damages
Finally, the Court finds no bad faith on the part of the Bank and Oropeza as they were
within their right, absent any proof of its abuse, to ignore Padillos misplaced claim for
retirement benefits. Oropezas and the Banks obstinate refusal to accede to Padillos
request is precisely justified by the fact that here lies no basis under any applicable
agreement or law which accords the latter the right to demand any retirement benefits
from the Bank. While the Court mindfully notes that damages may be recoverable due
to an abuse of right under Article 21 in conjunction with Article 19 of the Civil Code the
following elements must, however, obtain: ( 1) there is a legal right or duty; (2)
exercised in bad faith; and (3) for the sole intent of prejudicing or injuring another.
Records reveal that none of these elements exists in the case at bar and thus, no
damages on account of abuse of right may he recovered.

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G.R. No. 193897 : January 23, 2013
In 1992, DECS issued the Revised Manual of Regulations for Private Schools, which
requires college faculty members to have a master's degree as a minimum
educational qualification for acquiring regular status.
University of the East hired respondent Mariti D. Bueno (Bueno) in 1997 and
respondent Analiza F. Pepanio (Pepanio) in 2000, both on a semester-to-semester basis
to teach in its college. During this time, the 1994 CBA was still in force. It provided that
UE shall extend only semester-to-semester appointments to college faculty staffs who
did not possess the minimum qualifications. Meantime, DECS-CHED-TESDA-DOLE Joint
Order 1 was issued which provides that teaching or academic personnel who do not
meet the minimum academic qualifications shall not acquire tenure or regular status.
Then in 2001, UE and the faculty union entered into a new CBA that would have the
school extend probationary full-time appointments to full-time faculty members who
did not yet have the required postgraduate degrees provided that the latter would
obtain such requirement during their probationary period. Hence, UE extended
probationary appointments to Bueno and Pepanio. The two, however, failed to obtain
post-graduate degrees.
UE informed Bueno and Pepanio that their probationary status is about to expire since
they lack the required post-graduate qualification. However, Bueno and Pepanio
demanded that they should be considered as regular employees since they were hired
in 1997 and 2000, when what was in force was the 1994 CBA which did not require a
masters degree before attaining regular status. UE did not heed to their demands.
Thus, they filed a case for illegal dismissal before the Labor Arbiter. The LA ruled in
their favor. Dissatisfied, UE appealed to the NLRC. The NLRC reversed the LAs ruling.
On petition for certiorari, the Court of Appeals rendered a Decision reinstating the LAs
Decision by reason of technicality. This prompted UE to file the present petition.
Whether or not Bueno and Pepanio were validly terminated from their employment?
Petition is granted.
LABOR LAW: collective bargaining agreement
The policy requiring postgraduate degrees of college teachers was provided in the
Manual of Regulations as early as 1992. Indeed, recognizing this, the 1994 CBA
provided even then that UE was to extend only semester- to-semester appointments
to college faculty staffs, like Bueno and Pepanio, who did not possess the minimum
qualifications for their positions.
Besides, as the Court held in Escorpizo v. University of Baguio, a school CBA must be
read in conjunction with statutory and administrative regulations governing faculty
16 | P a g e

qualifications. Such regulations form part of a valid CBA without need for the parties to
make express reference to it. While the contracting parties may establish such
stipulations, clauses, terms and conditions, as they may see fit, the right to contract is
still subject to the limitation that the agreement must not be contrary to law or public
Here, UE gave Bueno and Pepanio more than ample opportunities to acquire the
postgraduate degree required of them. But they did not take advantage of such
opportunities. Justice, fairness, and due process demand that an employer should not
be penalized for situations where it had little or no participation or control.
NLRC's decision is reinstated.
G.R. No. 175209, January 16, 2013
Petitioner Rolando Cervantes (Cervantes) was hired as Master on board the vessel M/V
Themistocles by respondent PAL Maritime Corporation, the manning agent of
respondent Western Shipping Agencies, PTE., LTD., (Western Shipping) for a 10-month
period. In less than a month on-board, a telex message was sent to Cervantes
enumerating several complaints against him received from Colonial Shipping, the
owner of the vessel. On the following day, petitioner sent a telex message and
imputed ill-motive on the part of the foreign inspectors who were making false
accusations against Filipino crew members. In the same message, petitioner
addressed all the complaints raised against him. Cervantes sent another telex
message informing Western Shipping of the unbearable situation on board. In
response to said message, Western Shipping sent a letter informing the former that
the owners have decided to relieve him upon passing Panama Canal or next
convenient port and that the pre-mature ending of contract is mutually agreed and for
the benefits of the parties. Cervantes replied that he had no choice but to accept the
decision and thanked them for relieving him. Petitioner was, then, repatriated to
Manila. Petitioner filed a Complaint for illegal dismissal. He prayed for actual, moral
and exemplary damages
plus attorneys fees.
In their Answer, respondents alleged that petitioner voluntarily and freely preterminated his own contract.
Whether or not Cervantes resigned from his employment
Resignation is the voluntary act of an employee who finds himself in a situation where
he believes that personal reasons cannot be sacrificed in favor of the exigency of the
service, such that he has no other choice but to disassociate himself from his
employment. This is precisely what obtained in this case. The statements of petitioner
were simple and straightforward. There is no merit to his claim that he was forced to
resign due to extreme pressure. Only two (2) days had elapsed from the time
petitioner received a copy of the complaint from the owners of the vessel until his
letter demanding his relief. The telex message outlining numerous complaints against
petitioner probably bruised his ego, causing petitioner to react impulsively by
resigning. Petitioner failed to substantiate his claim that he and the Filipino crew
members were being subjected to racial discrimination on board. Petitioner presented
a letter-petition against a Greek technician who allegedly maltreated Filipino crew
members. However, there was no showing that the Greek technician spearheaded nor
had any participation in the complaint of Colonial Shipping against petitioner.

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G.R. No. 192558 February 15, 2012
1. Since 2007, Danilo Bitoy Javier was an employee of Fly Ace

Performed various tasks, such as cleaning and arranging the canned items
before their delivery, except in instances when he would be ordered to
accompany the company's delivery vehicles, as pahinante

Reported for work M to S from 7AM to 5PM

He wasnt issued an ID and payslips

2. May 6, 2008: He was no longer allowed to enter the premises, upon instruction of
Mr. Ong, his superior

As he was begging the security guard to let him enter, he saw Mr. Ong, whom he
approached and asked why he was being barred from entering

Tanungin mo anak mo Mr. Ong

Bitoy discovered that Mr. Ong had been courting his daughter Annalyn; that
Annalyn tried to talk to Mr. Ong and convince him to spare Bitoy from trouble,
but he refused; that Mr. Ong then fired Bitoy
3. May 23, 2008: Bitoy filed a complaint with the NLRC for underpayment of salaries
and other labor standard benefits

His evidence: affidavit of Bengie Valenzuela, who alleged that Bitoy was a
stevedore or pahinante of Fly Ace from Sept. 2007 to Jan. 2008

Fly Ace said it was in the business of importation and sales of groceries
o That Bitoy was contracted by Mr. Ong as extra helper on a pakyaw basis for 5-6
times a month, whenever the vehicle of its contracted hauler, Milmar Hauling
Services, was unavailable;
o Rate was P300 (increased to P325)
o That on April 30, they no longer needed his services
o That Bitoy was not their employee, and there was no illegal dismissal
o Evidence: Agreement with Milmar Hauling Services (the contracted hauler) and
copies of acknowledgment receipts evidencing payment to Javier daily
manpower (pakyaw/piece rate pay)
4. LA: Dismissed, Bitoy failed to present proof he was a regular employee of Fly Ace

He has no ID nor any document showing he received benefits accorded to

regular employees

Bitoy was contracted on pakiao basis because Fly Ace has a regular hauler to
deliver its products

Claim for underpayment of salaries unfounded; payroll presented had Bitoys

signature, which, despite not being uniform, appeared to be his true signature
5. NLRC: Favored Bitoy

LA wrong because it immediately concluded Bitoy as not a regular employee

simply because he failed to present proof

That a pakyaw-basis arrangement did not preclude the existence of employeremployee relationship because payment is a method of compensation, it does
not define the essence of the relation It is a mere method of computing
compensation, not a basis for determining the existence or absence of an
employer-employee relationship.

Just because the work done was not directly related to the trade or business or
the work was considered as extra, it does not follow that Bitoy is a job
contractor, rather than an employee

There was sufficient basis on the existence of an ER-EE relationship

o There was a reasonable connection between the activity performed (as
pahinante) in relation to the business or trade of the employer (importation,
sales, delivery of groceries)
o Not an independent contractor because he could not exercise judgment in the
delivery of products, he was only a helper
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Bitoy is entitled to security of tenure; Fly Ace did not present proof for a valid
cause of termination, so it is liable for illegal dismissal, backwages, and
separation pay
6. CA: Annulled the NLRC, reinstated the LA

In an illegal dismissal case, the onus probandi rests on the employer; however,
before an illegal dismissal case can prosper, an ER-EE relationship must first be

Incumbent upon Bitoy to prove he is an employee, but he failed to discharge this


Bitoys failure to present salary vouchers, playslips or other pieces of evidence

to bolster his contention

The facts alleged by Bitoy did NOT pass the control test
o He contracted work outside the premises
o He was not required to observe definite hours
o He was not required to report daily
o He was free to accept work elsewhere
7. Appeal to the SC

1. WON Bitoy is a regular employee
2. WON he is entitled to his monetary claims
1. NO, he is not a regular employee; affirmed CA
- Bitoy: Fly Ace has nothing to substantiate that he was engaged on a pakyaw
basis; and assuming he was hird on pakyaw basis, it does not preclude his
regular employment; acknowledgement receipts with his signature do not show
true nature of employment (relied on Chavez v. NLRC)
o His tasks as pahinante are related to Fly Airs business
o He was subject to the control and supervision of the company (reported M to S,
7AM to 5PM)
o List of deliverable goods prepared by Fly Ace Bitoy was subject to compliance
with company rules
o He was illegally dismissed by Fly Ace
- Fly Ace: Bitoy had no substantial evidence to prove ER-EE relationship
o Despite having Milmar Hauling under service contract, they contracted Bitoy as
an extra helper or pahinante, on a mere per trip basis
o Bitoy and the company driver would have the vehicle and products in their
custody, and when they left company premises, they use their own means,
method, best judgment and discretion (i.e., no control by Fly Ace)
o Claims of employment by Bitoy are BASELESS, and nothing was presented to
substantiate this
o Lopez v. Bodega City: In an illegal dismissal case, the burden of proof is upon
the complainant w ho claims to be an employee. It is essential that an
employer-employee relationship be proved by substantial evidence
o Bitoy merely offers factual assertions, unsupported by proof
o Bitoy was not subject to Fly Aces control, he performed his work outside the
premises, he was not made to report at regular work hours, he was free to
leave any time
- SC: Evoked equity jurisdiction to examine the factual issues
- The LA and CA found that Bitoys claim of employment is wanting and deficient;
the Court is constrained to agree
- Bitoy needs to show by substantial evidence (Sec. 10, Rule VII, New Rules of
Procedure of the NLRC) that he was indeed an employee against which he claims
illegal dismissal
- In sum, the rule of thumb remains: the onus probandi falls on petitioner to
establish or substantiate such claim by the requisite quantum of evidence.32
"Whoever claims entitlement to the benefits provided by law should establish his
19 | P a g e

or her right thereto . . . ." Bitoy failed to adduce substantial evidence as basis
for the grant of relief
- All Bitoy presented were self-serving statements showing his activities as
employee, but failed to pass the substantiality requirement (as concluded also
by the LA and the CA), from which the SC sees no reason to depart
o Affidavit of Bengie Valenzuela that Bitoy presented was insufficient because all
it provided was that he would frequently see Bitoy at the workplace where he
(Bengie) was a stevedore
o SC: Mere presence falls short of proving employment
- SC: The burden is on Bitoy to pass the control test
o Bitoy was not able to persuade the Court that the elements exist (no
competent proof that he was a regular employee, that Fly Ace paid wages as
an employee, that Fly Ace could dictate what his conduct wuld be while at
- SC: Fly Ace does not dispute having contracted Javier and paid him on a "per
trip" rate as a stevedore, albeit on a pakyaw basis.
o They presented documentary proof acknowledgment receipts
2. Moot. No need to resolve the second issue.
Obiter: "payment by the piece is just a method of compensation and does not define
the essence of the relation."

Payment on a piece-rate basis does not negate regular employment. "The term
'wage' is broadly defined in Article 97 of the Labor Code as remuneration or
earnings, capable of being expressed in terms of money whether fixed or
ascertained on a time, task, piece or commission basis

Payment by the piece is just a method of compensation and does not define the
essence of the relations
Disposition: Petition is DENIED.
G.R. No. 185829. April 25, 2012
Nature of the Case:
This Petition for Review on Certiorari under Rule 45 assails and seeks to set aside the
July 3, 2008 Decision and December 15, 2008 Resolution of the Court of Appeals (CA),
in CA-G.R. SP No. 101309, entitled Armando Aliling v. National Labor Relations
Commission, Wide Wide World Express Corporation, Jose B. Feliciano, Manuel F. San
Mateo III and Joseph R. Lariosa.
Respondent Wide Wide World Express Corporation (WWWEC) offered to employ
petitioner Armando Aliling (Aliling) on June 2, 2004 as Account Executive (Seafreight
Sales), with a compensation package of a monthly salary of PhP 13,000,
transportation allowance of PhP 3,000, clothing allowance of PhP 800, cost of living
allowance of PhP 500, each payable on a per month basis and a 14 th month pay
depending on the profitability and availability of financial resources of the company.
The offer came with a six (6)-month probation period condition with this express
caveat: Performance during probationary period shall be made as basis for
confirmation to Regular or Permanent Status.
On June 11, 2004, Aliling and WWWEC inked an Employment Contract under the
terms of conversion to regular status shall be determined on the basis of work
performance; and employment services may, at any time, be terminated for just cause
or in accordance with the standards defined at the time of engagement.
20 | P a g e

However, instead of a Seafreight Sale assignment, WWWEC asked Aliling to

handle Ground Express (GX), a new company product launched on June 18, 2004
involving domestic cargo forwarding service for Luzon. Marketing this product and
finding daily contracts for it formed the core of Alilings new assignment.
A month after, Manuel F. San Mateo III (San Mateo), WWWEC Sales and Marketing
Director, emailed Aliling to express dissatisfaction with the latters performance.
On September 25, 2004, Joseph R. Lariosa (Lariosa), Human Resources Manager
of WWWEC, asked Aliling to report to the Human Resources Department to explain his
absence taken without leave from September 20, 2004.
Aliling responded two days later. He denied being absent on the days in question,
attaching to his reply-letter a copy of his timesheet which showed that he worked from
September 20 to 24, 2004. Alilings explanation came with a query regarding the
withholding of his salary corresponding to September 11 to 25, 2004.
On October 15, 2004, Aliling tendered his resignation to San Mateo. While WWWEC
took no action on his tender, Aliling nonetheless demanded reinstatement and a
written apology, claiming in a subsequent letter dated October 1, 2004 to
management that San Mateo had forced him to resign.
Lariosas response-letter of October 1, 2004, informed Aliling that his case
was still in the process of being evaluated. On October 6, 2004, Lariosa again
wrote, this time to advise Aliling of the termination of his services effective as of that
date owing to his non-satisfactory performance during his probationary period.
Records show that Aliling, for the period indicated, was paid his outstanding salary.
However, or on October 4, 2004, Aliling filed a Complaint for illegal dismissal due to
forced resignation, nonpayment of salaries as well as damages with the NLRC against
WWWEC. Appended to the complaint was Alilings Affidavit dated November 12,
2004, in which he stated: 5. At the time of my engagement, respondents did not
make known to me the standards under which I will qualify as a regular employee.
Refuting Alilings basic posture, WWWEC stated that in
the letter offer and
employment contract adverted to, WWWEC and Aliling have signed a letter of
appointment on June 11, 2004 containing the terms of engagement.
WWWEC also attached to its Position Paper a memo dated September 20,
2004 in which San Mateo asked Aliling to explain why he should not be terminated for
failure to meet the expected job performance, considering that the load factor for the
GX Shuttles for the period July to September was only 0.18% as opposed to the
allegedly agreed upon load of 80% targeted for August 5, 2004. According to WWWEC,
Aliling, instead of explaining himself, simply submitted a resignation letter.
On April 25, 2006, the Labor Arbiter issued a decision declaring that the grounds upon
which complainants dismissal was based did not conform not only the standard but
also the compliance required under Article 281 of the Labor Code, Necessarily,
complainants termination is not justified for failure to comply with the mandate the
law requires. Respondents should be ordered to pay salaries corresponding to the
unexpired portion of the contract of employment and all other benefits amounting to a
total of P35,811.00 covering the period from October 6 to December 7, 2004.
The Labor Arbiter explained that Aliling cannot be validly terminated for noncompliance with thw quota threshold absent a prior advisory of the reasonable
standards upon which his performance would be evaluated.
Both parties appealed the decision to the NLRC, which affirmed the decision of the
Labor Arbiter. The separate motions for reconsideration were also denied by the NLRC.
The CA anchored its assailed action on the strength of the following premises: (a)
respondents failed to prove that Alilings dismal performance constituted gross and
habitual neglect necessary to justify his dismissal; (b) not having been informed at the
time of his engagement of the reasonable standards under which he will qualify as a
regular employee, Aliling was deemed to have been hired from day one as a regular
employee; and (c) the strained relationship existing between the parties argues
against the propriety of reinstatement.
Hence, the instant petition.
1) Whether petitioner is a regular employee.
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2) Whether petitioner was illegally dismissed.or his right to security of tenure was
3) Whether Alilings right to procedural due process was violated.
4) Whether Aliling is entitled to backwages and separation pay in lieu of
1) Petitioner was regularized from the time of the execution of the employment
contract on June 11, 2004, although respondent company had arbitrarily
shortened his tenure. As pointed out, respondent company did not make known
the reasonable standards under which he will qualify as a regular employee at
the time of his engagement. Hence, he was deemed to have been hired from
day one as a regular employee.
2) To justify fully the dismissal of an employee, the employer must, as a rule, prove
that the dismissal was for a just cause and that the employee was afforded due
process prior to dismissal. As a complementary principle, the employer has the
onus of proving with clear, accurate, consistent, and convincing evidence the
validity of the dismissal.
The attendant circumstances in the instant case aptly show that the issue of
petitioners alleged failure to achieve his quota, as a ground for terminating
employment, strikes the Court as a mere afterthought on the part of WWWEC.
Consider: Lariosas letter of September 25, 2004 already betrayed
managements intention to dismiss the petitioner for alleged unauthorized
absences. Aliling was in fact made to explain and he did so satisfactorily. But, lo
and behold, WWWEC nonetheless proceeded with its plan to dismiss the
petitioner for non-satisfactory performance, although the corresponding
termination letter dated October 6, 2004 did not even specifically state Alilings
non-satisfactory performance, or that Alilings termination was by reason of his
failure to achieve his set quota.
Employees must be reminded that while probationary employees do not enjoy
permanent status, they enjoy the constitutional protection of security of tenure.
They can only be terminated for cause or when they otherwise fail to meet the
reasonable standards made known to them by the employer at the time of their
engagement. Respondent WWWEC miserably failed to prove the termination of
petitioner was for a just cause nor was there substantial evidence to
demonstrate the standards were made known to the latter at the time of his
engagement. Hence, petitioners right to security of tenure was breached.
3) To effect a legal dismissal, the employer must show not only a valid ground
therefor, but also that procedural due process has properly been observed.
When the Labor Code speaks of procedural due process, the reference is usually
to the two (2)-written notice rule envisaged in Section 2 (III), Rule XXIII, Book V
of the Omnibus Rules Implementing the Labor Code.
MGG Marine Services, Inc. v. NLRC tersely described the mechanics of what may
be considered a two-part due process requirement which includes the two-notice
rule, x x x one, of the intention to dismiss, indicating therein his acts or
omissions complained against, and two, notice of the decision to dismiss; and an
opportunity to answer and rebut the charges against him, in between such
King of Kings Transport, Inc. v. Mamac expounded on this procedural
requirement in this manner: a. first written notice, b. hearing or conference, and
c. written notice of termination. WWWEC did not comply with the first notice
requirement. Neither was there compliance with the imperatives of a hearing or
conference. The Court need not dwell at length on this particular breach of the
due procedural requirement. Suffice it to point out that the record is devoid of
any showing of a hearing or conference having been conducted. On the
contrary, in its October 1, 2004 letter to Aliling, or barely five (5) days after it
served the notice of termination, WWWEC acknowledged that it was still
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evaluating his case. And the written notice of termination itself did not indicate
all the circumstances involving the charge to justify severance of employment.
4) As of that date June 11, 2004, Aliling became part of the WWWEC organization
as a regular employee of the company without a fixed term of employment.
Thus, he is entitled to backwages reckoned from the time he was illegally
dismissed on October 6, 2004, with a PhP 17,300.00 monthly salary, until the
finality of this Decision. Article 279 of the Labor Code, as amended by Section 34
of Republic Act 6715 instructs:
Art. 279. Security of Tenure. - In cases of regular employment, the employer
shall not terminate the services of an employee except for a just cause or when
authorized by this Title. An employee who is unjustly dismissed from work shall
be entitled to reinstatement without loss of seniority rights and other privileges
and to his full backwages, inclusive of allowances, and to his other benefits or
their monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.
The law intends the award of backwages and similar benefits to accumulate past
the date of the Labor Arbiters decision until the dismissed employee is actually
reinstated. But if, as in this case, reinstatement is no longer possible, this Court
has consistently ruled that backwages shall be computed from the time of illegal
dismissal until the date the decision becomes final.
Additionally, Aliling is entitled to separation pay in lieu of reinstatement on the
ground of strained relationship.
The basis for the payment of backwages is different from that for the
award of separation pay. Separation pay is granted where reinstatement is
no longer advisable because of strained relations between the employee
and the employer. Backwages represent compensation that should have
been earned but were not collected because of the unjust dismissal. The
basis for computing backwages is usually the length of the employee's
service while that for separation pay is the actual period when the
employee was unlawfully prevented from working.
Dispositive Portion:
The assailed Resolutions of respondent (Third Division) National Labor Relations
MODIFICATION/CLARIFICATION: Respondent Wide Wide World Express Corp.
is liable to pay Armando Aliling the following: (a) backwages reckoned from
October 6, 2004 up to the finality of this Decision based on a salary of PhP
17,300 a month, with interest at 6% per annum on the principal amount from
October 6, 2004 until fully paid; (b) the additional sum equivalent to one (1)
month salary for every year of service, with a fraction of at least six (6) months
considered as one whole year based on the period from June 11, 2004 (date of
employment contract) until the finality of this Decision, as separation pay; (c)
PhP 30,000 as nominal damages; and (d) Attorneys Fees equivalent to 10% of
the total award.

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