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1 |L A B O R R E L A T I O N S | B O O K V | A r t i c l e 2 1 1 : P o l i c y

Prepared by: BUENAVENTURA, JAMES ANDREW A.

G.R. No. 182836 October 13, 2009

Case 1-6

Interpretation and Application of Labor Laws: Case No. 1

CONTINENTAL STEEL MANUFACTURING CORPORATION, Petitioner,


vs.
HON. ACCREDITED VOLUNTARY ARBITRATOR ALLAN S. MONTAO and NAGKAKAISANG
MANGGAGAWA NG CENTRO STEEL CORPORATION-SOLIDARITY OF UNIONS IN THE
PHILIPPINES FOR EMPOWERMENT AND REFORMS (NMCSC-SUPER), Respondents.
FACTS:
Hortillano, an employee of petitioner Continental Steel Manufacturing Corporation (Continental Steel) filed a claim
for Paternity Leave, Bereavement Leave and Death and Accident Insurance for dependent, pursuant to the Collective
Bargaining Agreement (CBA). The claim was based on the death of Hortillanos unborn child. The female fetus died during
premature labor due to fetal Anoxia secondary to uteroplacental insufficiency. Petitioner immediately granted Hortillanos
claim for paternity leave but denied his claims for bereavement leave and other death benefits. It was maintained by
Hortillano, through the Labor Union, that the provisions of the CBA did not specifically state that the dependent should
have first been born alive or must have acquired juridical personality so that his/her subsequent death could be covered by
the CBA death benefits. Continental Steel argued that the express provision of the CBA did not contemplate the death of an
unborn child, a fetus, without legal personality. It claimed that there are two elements for the entitlement to the benefits,
namely: (1) death and (2) status as legitimate dependent, none of which existed in Hortillanos case. Continental Steel
contended that only one with civil personality could die, relying on Articles 40, 41 and 42 of the Civil Code. According to
the Continental Steel, the unborn child never died because it never acquired juridical personality. Proceeding from the same
line of thought, Continental Steel reasoned that a fetus that was dead from the moment of delivery was not a person at all.
Hence, the term dependent could not be applied to a fetus that never acquired juridical personality. Labor arbiter Montao
argued that the fetus had the right to be supported by the parents from the very moment he/she was conceived. The fetus
had to rely on another for support; he/she could not have existed or sustained himself/herself without the power or aid of
someone else, specifically, his/her mother. Petitioner appealed with the CA, who affirmed the Labor Arbiters resolution.
Hence this petition.
ISSUE:
Is it necessary to establish that an unborn child have acquired juridical personality to be
considered as a dependent for the purpose of claiming bereavement leave and other death benefits?
RULING:
No, we need not establish civil personality of the unborn child herein since his/her juridical
capacity and capacity to act as a person are not in issue. It is not a question before us whether the
unborn child acquired any rights or incurred any obligations prior to his/her death that were passed
on to or assumed by the childs parents. The rights to bereavement leave and other death benefits in
the instant case pertain directly to the parents of the unborn child upon the latters death. The unborn
child can be considered a dependent under the CBA. As Continental Steel itself defines, a dependent
is "one who relies on another for support; one not able to exist or sustain oneself without the power
or aid of someone else." Under said general definition, even an unborn child is a dependent of its
parents. Hortillanos child could not have reached 38-39 weeks of its gestational life without
depending upon its mother, for sustenance. Additionally, it is explicit in the CBA provisions in
question that the dependent may be the parent, spouse, or child of a married employee; or the parent,
brother, or sister of a single employee. The CBA did not provide a qualification for the child dependent,
such that the child must have been born or must have acquired civil personality, as Continental Steel
avers. Without such qualification, then child shall be understood in its more general sense, which
includes the unborn fetus in the mothers womb.

2 |L A B O R R E L A T I O N S | B O O K V | A r t i c l e 2 1 1 : P o l i c y
Prepared by: BUENAVENTURA, JAMES ANDREW A.

G.R. No. 164774 April 12, 2006

Case 1-6

Interpretation and Application of Labor Laws: Case No. 2

STAR PAPER CORPORATION, JOSEPHINE ONGSITCO & SEBASTIAN CHUA, Petitioners,


vs.
RONALDO D. SIMBOL, WILFREDA N. COMIA & LORNA E. ESTRELLA, Respondents.
FACTS:
Ronaldo Simbol (Simbol), one of the employees of Star Paper Corporation (Star Paper) met Alma
Dayrit, also an employee of the company, whom he married. Prior to their marriage, the manager of
the Personnel and Administration Department, Josephine Ongsito, advised the couple that should
they get married, one of them must resign because of a company policy. Simbol then resigned before
they got married. A similar occurrence happened to Wilfreda Comia (Comia) and she also resigned
before her marriage to Howard Comia. Consequently, Lorna Estrella (Estrella) met Luisito Zuiga
(Zuiga), a married co-worker, who got her pregnant. The company allegedly could have terminated
her services due to immorality but she opted to resign. The three respondents Simbol, Comia, and
Estrella, on separate instances signed a Release and Confirmation agreement. Simbol and Comia
alleged that they did not resign voluntarily and that they were only compelled to resign because of an
illegal company policy. Estrella alleges that she had a relationship with Zuiga who misrepresented
himself as a married but separated man. After she got pregnant, she found out that he was not
separated. She severed her relationship with him to avoid dismissal due to company policy. One day
she met an accident which necessitated her to recuperate for 21 days and be absent from work. When
she returned to work, she was denied entry into the office. She was directed to proceed to the
personnel office where she was handed a memo which states that she was being dismissed for
immoral conduct. nShe refused to sign the memo because she was on leave for 21 days and wasnt
given chance to explain. When she finally submitted her explanation, she was nonetheless dismissed
by the company. Due to her urgent need for money, she submitted a letter of resignation in exchange
for her 13th month pay. The respondents filed a complaint for unfair labor practices, constructive
dismissal, separation pay and attorneys fees. The Labor Arbiter dismissed the complaint for lack of
merit, The NLRC affirmed the decision but the CA reversed the NLRC. Hence, the petition.
ISSUE:
a) Is the 1995 Policy of Star Paper violative of the constitutional rights towards marriage and the
family of employees and of Article 136 of the Labor Code?
b) Was there an illegal dismissal in the case?
RULING:
Yes, the no-spouse employment policy was invalid because it arbitrarily discriminates against
all spouses of present employees without regard to the actual effect on the individual's
qualifications or work performance. Further, the employer failed to present any evidence of business
necessity other than the general perception that spouses in the same workplace might adversely
affect the business. The court held that the absence of such a bona fide occupational qualification
invalidates a rule denying employment to one spouse due to the current employment of the other
spouse in the same office. Thus, unless the employer can prove that the reasonable demands of the
business require a distinction based on marital status and there is no better available or acceptable
policy which would better accomplish the business purpose, an employer may not discriminate
against an employee based on the identity of the employees spouse. This is known as the bona fide
occupational qualification exception.
There was an illegal dismissal in the case of Etstrella because her resignation was
involuntary. She was merely compelled to submit the resignation letter because of her urgent need
for the money offered if she resigns. Moreover, given the lack of sufficient evidence on the part of
Star Paper that the resignation was voluntary, Estrellas dismissal is declared illegal.

3 |L A B O R R E L A T I O N S | B O O K V | A r t i c l e 2 1 1 : P o l i c y
Prepared by: BUENAVENTURA, JAMES ANDREW A.

G.R. No. 111105 June 27, 1995

Case 1-6

Interpretation and Application of Labor Laws: Case No. 3

ROLANDO REVIDAD, PABLITO LALUNA, RAFAEL ANGELES, TEODORO ROSARIO, ROMEO


REVIDAD, JACINTO GRUTA, JOSE ESPAOL, FLORENTINO LOCSIN, ROGELIO PARADERO,
MARCELINO DEROTA, ARMANDO CABALES, BENJAMIN MONTESA and RAYMOND
VIDAL, Petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and ATLANTIC, GULF AND PACIFIC COMPANY
OF MANILA, INC., Respondents.
FACTS:
Atlantic, Gulf and Pacific Company of Manila, Inc. (AG&P) terminated the services of 178
employees, including herein petitioners, under a redundancy program. As a consequence, a complaint
for illegal dismissal with prayer for reinstatement was filed by the petitioners with the Labor Arbiter.
Thecases were subsequently decided in favor of petitioners, as a result of which they were reinstated
on July 8, 1991 and assigned to the Batangas plant of AG&P. Subsequently, however, a directive was
issued by the company's president containing management's decision to lay off 40% of the employees
due to financial losses incurred from 1989-1990, AG & P implemented and effected, starting August
3, 1991, the temporary lay-off of some 705 employees. By reason thereof, the AG & P United Rank
and File Association (URFA, for facility), which was the employees' union, staged a strike. After which,
a settlement was reached in a conciliation conference over the labor dispute held before the National
Conciliation and Mediation Board. It was agreed that employees, including the petitioners, who will
be temporarily laid off shall receive financial assistance consisting of basic salary for two months and
said financial assistance shall be deductible from the employees' separation pay should they not be
resolved by the company within the six-month lay off period or from cook benefit due them should
they not be recalled. On September 17, 1991, herein petitioners were served a notice of temporary
lay-off. On February 11, 1992, considering that petitioners were not being recalled by the AG&P
management, they filed a complaint for illegal dismissal and unfair labor practice against AG&P before
NLRC. Petitioners contend that there was an illegal dismissal because AG&P failed to give notice to
the Department of Labor about the retrenchment 1 month before the implementation of the mass layoff. NLRC ruled in favor of AG&P, hence the current petition.
ISSUE:
Whether or not the failure of AG&P to give 1 month prior notice of the mass lay-off due to
financial losses of the company, to the DOLE, as required by law, warrants an illegal dismissal case
against AG&P.
RULING:
No, the court held that the proceedings had before the voluntary arbitrator, where both parties
were given the opportunity to be heard and present evidence in their favor, constitute substantial
compliance with the requirement of the law. The purpose of this notice requirement is to enable the
proper authorities to ascertain whether the closure of the business is being done in good faith and is
not just a pretext for evading compliance with the just obligations of the employer to the affected
employees. In fact, the voluntary arbitration proceedings more than satisfied the intendment of the
law considering that the parties were accorded the benefit of a hearing, in addition to the right to
present their respective position papers and documentary evidence. At any rate, considering that the
Office of the Voluntary Arbitrator is under the jurisdiction of the Department of Labor and
Employment, it would be superfluous to still require the service of notice with the latter when
proceedings have already been initiated with the former precisely to carry out the very purpose for
which said notice is intended.

4 |L A B O R R E L A T I O N S | B O O K V | A r t i c l e 2 1 1 : P o l i c y
Prepared by: BUENAVENTURA, JAMES ANDREW A.

G.R. No. 75662 September 15, 1989

Case 1-6

Interpretation and Application of Labor Laws: Case No. 4

MERCURY DRUG CORPORATION, Petitioner


vs.
NATIONAL LABOR RELATIONS COMMISSION, NLRC SHERIFF and CESAR E. LADISLA,
Respondents.
FACTS:
Cesar Ladisla (Ladisla) was employed by petitioner, Mercury Drug Corporation (Mercury) as
Stock Analyst. On Aug. 15, 1977, he was apprehended by representatives of Mercury while in the act
of pilfering company property. He admitted the guilt to the investigating representatives. Mercury
drug filed an application for the termination of Ladislas employment. Ladisla opposed the aforesaid
application for clearance to terminate his services alleging among others, that his suspension and
proposed dismissal were unfounded and baseless being premised on the machinations and
incriminatory acts of Ms. Leonora Suarez and Edgardo Imperial, Manager and Retail Supervisor,
respectively, of Mercury's C.M. Recto Branch and that he was not given the opportunity to be heard
nor allowed to explain his side before he was summarily suspended. Meanwhile a case of qualified
theft was filed against Ladisla. The Labor Arbiter sustained the dismissal of Ladisla.Ladisla appealed
with the NLRC. Pending resolution, the RTC, convicted Ladisla of the crime charged but was
eventually released after availing the benefits of the Probation Law. NLRC reversed the decision of
the Labor Arbiter because it found no substantial evidence establishing the charge against Ladisla.
Hence this petition.
ISSUE:
May an employee who was convicted by the RTC of a work related crime associated with
dishonesty such as qualified theft be ordered reinstated by the NLRC for lack of substantial evidence
to sustain the charge against the employee?
RULING:
No, the NLRC committed a grave abuse of discretion amounting to lack of jurisdiction in finding
no substantial evidence to sustain the charge against Ladisla. This conclusion is in complete and
utter disregard of the Regional Trial Court's conviction of Ladisla for the crime of simple theft which
decision was rendered prior to its own assailed decision. It must be remembered that proceedings in
criminal cases such as that held in the subject criminal case require proof beyond reasonable doubt
to establish the guilt of the accused and findings of fact of the trial court on this matter are generally
accorded great weight by appellate courts most especially where no appeal had been filed thereafter,
thus rendering the said findings final. The eventual conviction of the employee who is prosecuted for
his misconduct is not indispensable to warrant his dismissal by his employer. More specifically, an
employee who has been exonerated from a criminal charge of theft of gasoline on the basis of
technicality may still be dismissed from employment if the employer has ample reason to mistrust
him. If acquittal from the criminal charge does not negate the existence of a ground for loss of trust
and confidence, with more reason should conviction for such criminal charge fortify said mistrust.
Dismissal of a dishonest employee is to the best interest not only of management but also of labor.
As a measure of self-protection against acts inimical to its interest, a company has the right to dismiss
its erring employees. An employer cannot be compelled to continue in employment an employee guilty
of acts inimical to its interest, justifying loss of confidence in him. The law does not impose unjust
situations on either labor or management. While the constitution is committed to the policy of social
justice and the protection of laborers, it should not be supposed that labor dispute will be
automatically decided in favor of labor. Management has also its own rights which are the
enforcement of interest of simple fair play.

5 |L A B O R R E L A T I O N S | B O O K V | A r t i c l e 2 1 1 : P o l i c y
Prepared by: BUENAVENTURA, JAMES ANDREW A.

G.R. No. L-5206 April 29, 1953

Interpretation and Application of Labor Laws: Case No. 5

CALTEX (PHILIPPINES), INC., Petitioner,


vs.
PHILIPPINE LABOR ORGANIZATIONS, CALTEX CHAPTER, Respondent.
FACTS:
ISSUE:
RULING:

Case 1-6

6 |L A B O R R E L A T I O N S | B O O K V | A r t i c l e 2 1 1 : P o l i c y
Prepared by: BUENAVENTURA, JAMES ANDREW A.

G.R. No. L-53515 February 8, 1989

Case 1-6

Interpretation and Application of Labor Laws: Case No. 6

SAN MIGUEL BREWERY SALES FORCE UNION (PTGWO), Petitioner,


vs.
HON. BLAS F. OPLE, as Minister of Labor and SAN MIGUEL CORPORATION, Respondents.
FACTS:
In September 1979, SAN MIGUEL CORPORATION (SMC) introduced a marketing scheme
known as the "Complementary Distribution System" (CDS) whereby its beer products were offered for
sale directly to wholesalers through San Miguel's sales offices. The labor union filed a complaint for
unfair labor practice in the Ministry of Labor, with a notice of strike on the ground that the CDS was
contrary to the existing marketing scheme whereby the Route Salesmen were assigned specific
territories within which to sell their stocks of beer, and wholesalers had to buy beer products from
them, not from the company. It was alleged that the new marketing scheme violates Section 1, Article
IV of the collective bargaining agreement because the introduction of the CDS would reduce the takehome pay of the salesmen and their truck helpers for the company would be unfairly competing with
them. The Minister of Labor dismissed the unions complaint, hence the current petition.
ISSUE:
Whether or not the unilateral implementation of SMC of the CDS was violative of the CBA and
an indirect way of busting the union.
RULING:
No, the CDS is a valid exercise of management prerogatives. Except as limited by special laws,
an employer is free to regulate, according to his own discretion and judgment, all aspects of
employment, including hiring, work assignments, working methods, time, place and manner of work,
tools to be used, processes to be followed, supervision of workers, working regulations, transfer of
employees, work supervision, lay-off of workers and the discipline, dismissal and recall of work. Every
business enterprise endeavors to increase its profits. In the process, it may adopt or devise means
designed towards that goal. So long as a company's management prerogatives are exercised in good
faith for the advancement of the employer's interest and not for the purpose of defeating or
circumventing the rights of the employees under special laws or under valid agreements, this Court
will uphold them

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