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G.R. No. 157802, October 13, 2010
Bersamin, J.
FACTS: Respondent Ricardo Coros was dismissed by Petitioner Matling as its VP for
Finance and Administratation. Coros then filed an illegal dismissal case with the NLRC,
Sub-Regional Arbitration Branch XII, Iligan City. Petitioners moved to dismiss the case
on the ground that the complaint pertained to the jurisdiction of the Securities and
Exchange Commission (SEC) due to the controversy being intra-corporate inasmuch as
the respondent was a member of Matlings Board of Directors aside from being its VicePresident for Finance and Administration prior to his termination. Coros opposed the
same insisting that his status as a member of Matlings Board of Directors was doubtful,
considering that he had not been formally elected as such; that he did not own a single
share of stock in Matling, considering that he had been made to sign in blank an
undated indorsement of the certificate of stock he had been given in 1992; that Matling
had taken back and retained the certificate of stock in its custody; and that even
assuming that he had been a Director of Matling, he had been removed as the Vice
President for Finance and Administration, not as a Director, a fact that the notice of his
termination dated April 10, 2000 showed.
The Labor Arbiter dismissed the case. On Appeal, the NLRC set aside the
decision of the LA, stating that such VP position was not listed in the Company's
Constitution and By-Laws; hence, Coros was not a corporate officer. The motion for
reconsideration by petitioners was denied.
Petitioners filed a petition for certiorari with the CA, to which the latter dismissed:
Coros' position was not a corporate office but an ordinary office. Hence, this petition
ISSUE: Whether the LA or the RTC had jurisdiction over his complaint for illegal
HELD: Coros position was an ordinary office, not a corporate office. The Board of
Directors of Matling could not validly delegate the power to create a corporate office to
the President, in light of Section 25 of the Corporation Code requiring the Board of
Directors itself to elect the corporate officers. Verily, the power to elect the corporate
officers was a discretionary power that the law exclusively vested in the Board of
Directors, and could not be delegated to subordinate officers or agents. The office of
Vice President for Finance and Administration, created by Matlings President
pursuant to By Law No. V, was an ordinary, not a corporate, office.
Also, the LA has jurisdiction over the case. Even though he might have become a
stockholder of Matling in 1992, his promotion to the position of Vice President for
Finance and Administration in 1987 was by virtue of the length of quality service he had
rendered as an employee of Matling. His subsequent acquisition of the status of
Director/stockholder had no relation to his promotion. Besides, his status of
Director/stockholder was unaffected by his dismissal from employment as Vice

President for Finance and Administration. The criteria for distinguishing between
corporate officers who may be ousted from office at will, on one hand, and
ordinary corporate employees who may only be terminated for just cause, on the
other hand, do not depend on the nature of the services performed, but on the
manner of creation of the office. In the respondents case, he was supposedly at
once an employee, a stockholder, and a Director of Matling.


G.R. No. 146728, February 11, 2004
Quisumbing, J.:
FACTS: General Milling Corporation (GMC) and the General Milling Corporation
Independent Labor Union concluded a collective bargaining agreement (CBA) which
included the issue of representation effective for a term of three years. The CBA was
effective for three years retroactive to December 1, 1988. Hence, it would expire on
November 30, 1991. On November 29, 1991, the Union tried to renew the CBA after it
expired but the Company did not recognize them to be existing due to alleged massive
disaffiliation of members with it.
On January 13, 1992, GMC dismissed Marcia Tumbiga, a union member, on the
ground of incompetence. The Union protested and requested to have the matter
submitted to the grievance procedure in the CBA, but the Company refused based on
its previous letter stating that it felt there was no basis to negotiate with a union which
no longer existed.
Thus, the union filed, on July 2, 1992, a complaint against GMC with the NLRC,
Arbitration Division, Cebu City. The complaint alleged unfair labor practice on the part of
GMC. The labor arbiter dismissed the case with the recommendation that a petition for
certification election be held to determine if the union still enjoyed the support of the
workers. The union appealed to the NLRC.
NLRC set aside the decision of the LA, stating that the Company abide by the
1991-1993 CBA draft that the union proposed, being still the exclusive bargaining agent.
Upon GMCs Motion for Reconsideration, NLRC set aside its decision. CA however
reversed the decision of the NLRC. Hence, this petition
ISSUE: Whether GMC is guilty of unfair labor practice for violating the duty to bargain
collectively and/or interfering with the right of its employees to self-organization.
Whether the CA gravely abused its discretion in imposing upon GMC the draft
CBA proposed by the union for two years to begin from the expiration of the original
HELD: GMC is guilty on the first issue. It is indisputable that when the union
requested for a renegotiation of the economic terms of the CBA on November 29,
1991, it was still the certified collective bargaining agent of the workers, because
it was seeking said renegotiation within five (5) years. GMCs failure to make a
timely reply to the proposals presented by the union is indicative of its utter lack of
interest in bargaining with the union. Its excuse that it felt the union no longer
represented the workers, was mainly dilatory as it turned out to be utterly baseless.
There is no abuse. SC was not inclined to gratify GMC with an extended term of
the old CBA after it resorted to delaying tactics to prevent negotiations. Since it was

GMC which violated the duty to bargain collectively, based on Kiok Loy and Divine Word
University of Tacloban, it had lost its statutory right to negotiate or renegotiate the terms
and conditions of the draft CBA proposed by the union. Article 253 of the Labor Code,
as amended, mandates the parties to keep the status quo while they are still in
the process of working out their respective proposal and counter proposal. The
general rule is that when a CBA already exists, its provision shall continue to
govern the relationship between the parties, until a new one is agreed upon. The
rule necessarily presupposes that all other things are equal. That is, that neither party is
guilty of bad faith. However, when one of the parties abuses the grace period by
purposely delaying the bargaining process, a departure from the general rule is


G.R. No. 141471, September 18, 2000
Kapunan, J.
FACTS: On December 1992, Salvador Abtria, then President of respondent union
initiated the renegotiation of its Collective Bargaining Agreement with petitioner Colegio
de San Juan de Letran for the last two (2) years of the CBA's five (5) year lifetime from
1989-1994. Ambas, newly elected union president wanted to continue the renegotiation
of the CBA but petitioner, through Fr. Edwin Lao, claimed that the CBA was already
prepared for signing by the parties. The parties submitted the disputed CBA to a
referendum by the union members, who eventually rejected the said CBA.
On January 18, 1996, the parties agreed to disregard the unsigned CBA and to
start negotiation on a new five-year CBA starting 1994-1999. During the course of the
renegotiation, Ambas was dismissed on the ground of insubordination. Later on, the
union held a strike. The Secretary of Labor and Employment assumed jurisdiction and
ordered all striking employees including the union president to return to work and for
petitioner to accept them back under the same terms and conditions before the actual
strike. Petitioner readmitted the striking members except Ambas. The parties then
submitted their pleadings including their position papers which were filed on July 17,
1996. Illegal dismissal case on 2 counts of unfair labor practice was filed against the
School. The Secretary and the CA, on appeal to it, held in favor of the union. Hence this
ISSUE: Whether petitioner is guilty of unfair labor practice by refusing to bargain with
the union when it unilaterally suspended the ongoing negotiations for a new CBA upon
mere information that a petition for certification has been filed by another legitimate
labor organization?
Whether the termination of the union president amounts to an interference of the
employees' right to self-organization?
HELD: The petition is without merit.
Article 252 of the Labor Code defines the meaning of the phrase "duty to bargain
collectively," as follows:
Art. 252. Meaning of duty to bargain collectively. - The duty to bargain collectively
means the performance of a mutual obligation to meet and convene promptly and
expeditiously in good faith for the purpose of negotiating an agreement with respect to
wages, hours of work and all other terms and conditions of employment including
proposals for adjusting any grievances or questions arising under such agreement and
executing a contract incorporating such agreements if requested by either party but such
duty does not compel any party to agree to a proposal or to make any concession.

Noteworthy in the above definition is the requirement on both parties of the

performance of the mutual obligation to meet and convene promptly and

expeditiously in good faith for the purpose of negotiating an agreement.

Undoubtedly, respondent Association of Employees and Faculty of Letran (AEFL)
(hereinafter, "union") lived up to this requisite when it presented its proposals for the
CBA to petitioner on February 7, 1996. On the other hand, petitioner devised ways and
means in order to prevent the negotiation.
Petitioner's utter lack of interest in bargaining with the union is obvious in its
failure to make a timely reply to the proposals presented by the latter and is an
indication of bad faith. More than a month after the proposals were submitted by the
union, petitioner still had not made any counter-proposals, in violation of the procedure
in Article 250 of the Labor Code, as amended.
Art. 250. Procedure in collective bargaining. - The following procedures shall be
observed in collective bargaining:
(a) When a party desires to negotiate an agreement, it shall serve a written
notice upon the other party with a statement of its proposals. The other party shall make
a reply thereto not later than ten (10) calendar days from receipt of such notice.

In order to allow the employer to validly suspend the bargaining process

there must be a valid petition for certification election raising a legitimate
representation issue. Hence, the mere filing of a petition for certification election does
not ipso facto justify the suspension of negotiation by the employer. The petition must
first comply with the provisions of the Labor Code and its Implementing Rules. Foremost
is that a petition for certification election must be filed during the sixty-day
freedom period. The "Contract Bar Rule" under Section 3, Rule XI, Book V, of the
Omnibus Rules Implementing the Labor Code, provides that: "If a collective
bargaining agreement has been duly registered in accordance with Article 231 of
the Code, a petition for certification election or a motion for intervention can only
be entertained within sixty (60) days prior to the expiry date of such agreement."
The rule is based on Article 232, in relation to Articles 253, 253-A and 256 of the Labor
Code. No petition for certification election for any representation issue may be filed after
the lapse of the sixty-day freedom period. The old CBA is extended until a new one is
signed. The rule is that despite the lapse of the formal effectivity of the CBA the law still
considers the same as continuing in force and effect until a new CBA shall have been
validly executed. Hence, the contract bar rule still applies. The purpose is to ensure
stability in the relationship of the workers and the company by preventing frequent
modifications of any CBA earlier entered into by them in good faith and for the stipulated
original period.
The factual backdrop of the termination of Ms. Ambas leads us to no other
conclusion that she was dismissed in order to strip the union of a leader who would fight
for the right of her co-workers at the bargaining table. Ms. Ambas, at the time of her
dismissal, had been working for the petitioner for ten (10) years already. In fact, she was
a recipient of a loyalty award. Moreover, for the past ten (10) years her working
schedule was from Monday to Friday. However, things began to change when she was
elected as union president and when she started negotiating for a new CBA. Thus, it

was when she was the union president and during the period of tense and difficult
negotiations when her work schedule was altered from Mondays to Fridays to Tuesdays
to Saturdays. When she did not budge, although her schedule was changed, she was
outrightly dismissed for alleged insubordination.
Admittedly, management has the prerogative to discipline its employees for
insubordination. But when the exercise of such management right tends to
interfere with the employees' right to self-organization, it amounts to unionbusting and is therefore a prohibited act. The dismissal of Ms. Ambas was clearly
designed to frustrate the Union in its desire to forge a new CBA with the College that is
reflective of the true wishes and aspirations of the Union members. Her dismissal was
merely a subterfuge to get rid of her, which smacks of a pre-conceived plan to oust her
from the premises of the College. It has the effect of busting the Union, stripping it of its
strong-willed leadership. When management refused to treat the charge of
insubordination as a grievance within the scope of the Grievance Machinery, the action
of the College in finally dismissing her from the service became arbitrary, capricious and
whimsical, and therefore violated Ms. Ambas' right to due process."


223 SCRA 779, 1993
Melo, J.
FACTS: Private respondent SLMCEA-AFW brought to the attention of petitioner a letter
dated July 4, 1990 that the 1987-1990 was about to expire, and manifested in the
process that private respondent wanted to renew the CBA. This development triggered
round-table talks on which occasions petitioner proposed, among other items, a
maximum across-the-board monthly salary increase of P375.00 per employee, to which
proposal private respondent demanded a P1,500.00 hike or 50% increase based on the
latest salary rate of each employee, whichever is higher.
A deadlock on issues, especially that bearing on across-the-board monthly and
meal allowances followed and to pre-empt the impending strike as voted upon by a
majority of private respondent's membership, petitioner lodged the petition below. The
Secretary of Labor immediately assumed jurisdiction and the parties submitted their
respective pleadings.
On January 28, 1991, public respondent Secretary of Labor issued the Order
now under challenge. Said Order contained a disposition on both the economic and
non-economic issues raised in the petition. One of the rulings in the order is the granting
of the retroactive effect to the enforceability of the CBA.
Petitioner argues that the Order of January 28, 1991 is violative of Article 253-A
of the Labor Code, particularly its provisions on retroactivity. Said Article pertinently
xxx Any agreement on such other provisions of the collective bargaining
agreement entered into within six (6) months from the date of expiry of the
term of such other provisions as fixed in the collective bargaining
agreement, shall retroact to the day immediately following such date. If
any such agreement is entered into beyond six months, the parties shall
agree on the duration of retroactivity thereof. In case of a deadlock in the
renegotiation of the collective bargaining agreement, the parties may
exercise their rights under this Code.
Petitioner argues that in granting retroactive effect to the enforceability of the
CBA, public respondent committed an act contrary to the above provision of law,
pointing out that the old CBA expired on July 30, 1990 and the questioned order was
issued on January 28, 1991.
ISSUE: Whether the CBA should be given retroactive effect
HELD: The effectivity of the Order of January 28, 1991, must retroact to the date of the
expiration of the previous CBA, contrary to the position of petitioner. Under the
circumstances of the case, Article 253-A cannot be property applied to herein case. As

correctly stated by public respondent in his assailed Order of April 12, 1991 dismissing
petitioner's Motion for Reconsideration
Anent the alleged lack of basis for the retroactivity provisions awarded, we
would stress that the provision of law invoked by the Hospital, Article 253A of the Labor Code, speak of agreements by and between the parties,
and not arbitral awards . . . (p. 818, Rollo.)
Therefore, in the absence of a specific provision of law prohibiting retroactivity of
the effectivity of arbitral awards issued by the Secretary of Labor pursuant to Article 263
(g) of the Labor Code, such as herein involved, public respondent is deemed vested
with plenary and discretionary powers to determine the effectivity thereof.


G.R. No. 110854, February 13, 1995
Puno, J.
FACTS: Petitioner corporation and private respondent labor union entered into a threeyear Collective Bargaining Agreement (CBA) with expiry date on November 27, 1991.
During the freedom period, the National Federation of Labor Unions (NAFLU)
questioned the majority status of Private respondent through a petition for certification
election. The election conducted on February 27, 1992 was won by private respondent.
On March 19 19912, private respondent was certified as the sole and exclusive
bargaining agent of petitioners rank and file employees.
On June 22, 1992, private respondents CBA proposals were received by
petitioner. Counter-proposals were made by petitioner. Negotiations collapsed, and on
August 24, 1992, private-respondent filed a notice of strike with the NCMB. The NCMB
tried but failed to settle the parties controversy. On September 30, 1992, the Secretary
of Labor assumed jurisdiction over the dispute. She resolved the bargaining deadlock
between the parties through an Order, dated March 4, 1993.
On her order with regard to the effectivity of the CBA, she held that the CBA shall
be effective from the time she assumed jurisdiction over the dispute, that is, on 22
September 1992, and shall remain effective for five (5) years thereafter. Petitioner
sought partial reconsideration of the order. On June 8, 1993, public respondent affirmed
her findings, except for the date of effectivity of the CBA which was changed to
September 30, 1992. This is the date when she assumed jurisdiction over the deadlock.
ISSUE: When should the new CBA be given effect?
HELD: The applicable laws are Articles 253 and 253- A of the Labor Code, thus:
Art. 253.
Duty to bargain collectively when there exists a collective
bargaining agreement. When there is a collective bargaining agreement, the duty to
bargain collectively shall also mean that neither party shall terminate nor modify such
agreement during its lifetime. However, either party can serve a written notice to
terminate or modify the agreement at least sixty (60) days prior to its expiration date. It
shall be the duty of both parties to keep the status quo and to continue in full force and
effect the terms and conditions of the existing agreement during the 60-day period and/or
until a new agreement is reached by the parties.

Art. 253-A.
Terms of a collective bargaining agreement. Any Collective Bargaining
Agreement that the parties may enter into shall, insofar as the representation aspect is
concerned, be for a term of five (5) years. No petition questioning the majority status of
the incumbent bargaining agent shall be entertained and no certification election shall be
conducted by the Department of Labor and Employment outside the sixty-day period
immediately before the date of expiry of such five year term of the Collective Bargaining
Agreement. All other provisions of the Collective Bargaining Agreement shall be
renegotiated not later than three (3) years after its execution. Any agreement on such

other provisions of the Collective Bargaining Agreement entered into within six (6)
months from the date of expiry of the term of such other provisions as fixed in such
Collective Bargaining Agreement, shall retroact to the day immediately following such
date. If any such agreement is entered into beyond six months, the parties shall agree on
the duration of collective bargaining agreement, the parties may exercise their rights
under this Code.

In Union of Filipino Employees v. NLRC, 192 SCRA 414 (1990), this court
interpreted the above law as follows:
In light of the foregoing, this Court upholds the pronouncement
of the NLRC holding the CBA to be signed by the parties effective
upon the promulgation of the assailed resolution. It is clear and
explicit from Article 253-A that any agreement on such other provisions of
the CBA shall be given retroactive effect only when it is entered into within
six (6) months from its expiry date. If the agreement was entered into
outside the six (6) month period, then the parties shall agree on the
duration of the retroactivity thereof.
The assailed resolution which incorporated the CBA to be signed by
the parties was promulgated June 5, 1989, the expiry date of the past
CBA. Based on the provision of Section 253-A, its retroactivity should be
agreed upon by the parties. But since no agreement to that effect was
made, public respondent did not abuse its discretion in giving the said
CBA a prospective effect. The action of the public respondent is within the
ambit of its authority vested by existing law.
In the case of Lopez Sugar Corporation v. Federation of Free Workers, 189
SCRA 179 (1991), this Court reiterated the rule that although a CBA has expired, it
continues to have legal effects as between the parties until a new CBA has been
entered into. It is the duty of both parties to keep the status quo, and to continue
in full force and effect the terms and conditions of the existing agreement during
the 60-day freedom period and/or until a new agreement is reached by the parties.
Applied to the case at bench, the legal effects of the immediate past CBA between
petitioner and private respondent terminated, and the effectivity of the new CBA
began, only on March 4, 1993 when public respondent resolved their dispute.


G.R. No. 127598, January 27, 1999
Martinez, J.
FACTS: On September 7, 1995, Meralco Employees and Workers Association (MEWA)
informed MERALCO of its intention to re-negotiate the terms and conditions of their
existing 1992-1997 Collective Bargaining Agreement (CBA) covering the remaining
period of two years starting from December 1, 1995 to November 30, 1997. However,
despite the series of meetings between the negotiating panels of MERALCO and
MEWA, the parties failed to arrive at terms and conditions acceptable to both of them.
On April 23, 1996, MEWA filed a Notice of Strike with the NCMB. The NCMB then
conducted a series of conciliation meetings but the parties failed to reach an amicable
The Secretary assumed jurisdiction and made a Return-To-Work Order. The
Secretary resolved and awarded to respondents an alleged grossly exorbitant package
and others, and also making the CBA effective not on the time the Secretary resolved
such matter exercising its discretion.
ISSUE: Whether the retroactivity of arbitral awards shall commence at such time as
granted by Secretary.
HELD: Article 253-A serves as the guide in determining when the effectivity of the CBA
at bar is to take effect. It provides that the representation aspect of the CBA is to be for
a term of 5 years, while
x x x [A]ll other provisions of the Collective Bargaining Agreement shall be
re-negotiated not later than 3 years after its execution. Any agreement on
such other provisions of the Collective Bargaining Agreement entered into
within 6 months from the date of expiry of the term of such other
provisions as fixed in such Collective Bargaining Agreement shall retroact
to the day immediately following such date. If such agreement is entered
into beyond 6 months, the parties shall agree on the duration of the
effectivity thereof. x x x.
Under these terms, it is clear that the 5-year term requirement is specific to the
representation aspect. What the law additionally requires is that a CBA must be renegotiated within 3 years after its execution. It is in this re-negotiation that gives rise
to the present CBA deadlock. If no agreement is reached within 6 months from the
expiry date of the 3 years that follow the CBA execution, the law expressly gives
the parties - not anybody else - the discretion to fix the effectivity of the
Significantly, the law does not specifically cover the situation where 6 months
have elapsed but no agreement has been reached with respect to effectivity. In this

eventuality, we hold that any provision of law should then apply for the law abhors a
One such provision is the principle of hold over, i.e., that in the absence of a
new CBA, the parties must maintain the status quo and must continue in full
force and effect the terms and conditions of the existing agreement until a new
agreement is reached. In this manner, the law prevents the existence of a gap in the
relationship between the collective bargaining parties. Another legal principle that
should apply is that in the absence of an agreement between the parties, then, an
arbitrated CBA takes on the nature of any judicial or quasi-judicial award; it operates
and may be executed only respectively unless there are legal justifications for its
retroactive application.
Consequently, we find no sufficient legal ground on the other justification
for the retroactive application of the disputed CBA, and therefore hold that the
CBA should be effective for a term of 2 years counted from December 28, 1996
(the date of the Secretary of Labors disputed order on the parties motion for
reconsideration) up to December 27, 1999.
HELD: (February 22, 2000)
Labor laws are silent as to when an arbitral award in a labor dispute where the
Secretary had assumed jurisdiction by virtue of Article 263 (g) of the Labor Code shall
retroact. In general, a CBA negotiated within six months after the expiration of the
existing CBA retroacts to the day immediately following such date and if agreed
thereafter, the effectivity depends on the agreement of the parties. On the other
hand, the law is silent as to the retroactivity of a CBA arbitral award or that granted not
by virtue of the mutual agreement of the parties but by intervention of the government.
Despite the silence of the law, the Court rules herein that CBA arbitral awards granted
after six months from the expiration of the last CBA shall retroact to such time
agreed upon by both employer and the employees or their union. Absent such an
agreement as to retroactivity, the award shall retroact to the first day after the sixmonth period following the expiration of the last day of the CBA should there be
one. In the absence of a CBA, the Secretarys determination of the date of
retroactivity as part of his discretionary powers over arbitral awards shall control.
By petitioners own actions, the Court sees no reason to retroact the subject CBA
awards to a different date. The period is herein set at two (2) years from December 1,
1995 to November 30, 1997.
(August 1, 2000)
Upon a reconsideration of the Decision, this Court issued the assailed Resolution
which ruled that where an arbitral award granted beyond six months after the
expiration of the existing CBA, and there is no agreement between the parties as
to the date of effectivity thereof, the arbitral award shall retroact to the first day

after the six-month period following the expiration of the last day of the CBA. In
the dispositive portion, however, the period to which the award shall retroact was
inadvertently stated as beginning on December 1, 1995 up to November 30, 1997.
This Court turned to the dictates of fairness and equitable justice and thus arrived
at a formula that would address the concerns of both sides. Hence, this Court held that
the arbitral award in this case be made to retroact to the first day after the six-month
period following the expiration of the last day of the CBA, i.e., from June 1, 1996 to May
31, 1998. This Court, therefore, maintains the foregoing rule in the assailed Resolution
pro hac vice. It must be clarified, however, that consonant with this rule, the two-year
effectivity period must start from June 1, 1996 up to May 31, 1998, not December 1,
1995 to November 30, 1997.
During the interregnum between the expiration of the economic provisions of the
CBA and the date of effectivity of the arbitral award, it is understood that the hold-over
principle shall govern, viz:
"[I]t shall be the duty of both parties to keep the status quo and to
continue in full force and effect the terms and conditions of the existing
agreement during the 60-day freedom period and/or until a new
agreement is reached by the parties." Despite the lapse of the formal
effectivity of the CBA the law still considers the same as continuing in
force and effect until a new CBA shall have been validly executed


G.R. No. 127422, April 17, 2001
Sandoval-Gutierrez, J.
FACTS: LMG Chemicals Corp, (petitioner) is a domestic corporation engaged in the
manufacture and sale of various kinds of chemical substances, including aluminum
sulfate which is essential in purifying water, and technical grade sulfuric acid used in
thermal power plants. Petitioner has three divisions, namely: the Organic Division,
Inorganic Division and the Pinamucan Bulk Carriers. There are two unions within
petitioners Inorganic Division. One union represents the daily paid employees and the
other union represents the monthly paid employees. Chemical Workers Union,
respondent, is a duly registered labor organization acting as the collective bargaining
agent of all the daily paid employees of petitioners Inorganic Division.
Sometime in December 1995, the petitioner and the respondent started
negotiation for a new CBA as their old CBA was about to expire. They were able to
agree on the political provisions of the new CBA, but no agreement was reached on the
issue of wage increase With the CBA negotiations at a deadlock, on March 6, 1996,
respondent union filed a Notice of Strike with the National Conciliation and Mediation
Board, National Capital Region. Despite several conferences and efforts of the
designated conciliator-mediator, the parties failed to reach an amicable settlement. The
Secretary of Labor and Employment assumed jurisdiction over the dispute and issued
the disputed orders.
ISSUE: Whether the Secretary abused its discretion in setting the effectivity of the
arbitral awards
HELD: It is well settled in our jurisprudence that the authority of the Secretary of Labor
to assume jurisdiction over a labor dispute causing or likely to cause a strike or lockout
in an industry indispensable to national interest includes and extends to all questions
and controversies arising therefrom. The power is plenary and discretionary in nature to
enable him to effectively and efficiently dispose of the primary dispute.
In St. Lukes Medical Center, Inc. vs. Torres, a deadlock developed during the
CBA negotiations between the management and the union. The Secretary of Labor
assumed jurisdiction and ordered that their CBA shall retroact to the date of the
expiration of the previous CBA. The management claimed that the Secretary of Labor
gravely abused his discretion. This Court held:
Finally, the effectivity of the Order of January 28, 1991, must retroact to the
date of the expiration of the previous CBA, contrary to the position of the
petitioner. Under the circumstances of the case, Art. 253-A cannot be properly
applied to herein case. As correctly stated by public respondent in his assailed
Order of April 12, 1991 -

Anent the alleged lack of basis for retroactivity provisions

awarded, We would stress that the provision of law invoked by the
Hospital, Article 253-A of the Labor Code, speaks of agreement by
and between the parties, and not arbitral awards.
Therefore in the absence of the specific provision of law prohibiting
retroactivity of the effectivity of the arbitral awards issued by the Secretary of
Labor pursuant to Article 263(g) of the Labor Code, such as herein involved, public
respondent is deemed vested with plenary powers to determine the effectivity

Finally, to deprive respondent Secretary of such power and discretion would run
counter to the well-established rule that all doubts in the interpretation of labor laws
should be resolved in favor of labor. In upholding the assailed orders of respondent
Secretary, this Court is only giving meaning to this rule. Indeed, the Court should help
labor authorities in providing workers immediate benefits, without being hampered by
arbitration or litigation processes that prove to be not only nerve-wracking but financially
burdensome in the long run.
As we said in Maternity Childrens Hospital vs. Secretary of Labor:
Social Justice Legislation, to be truly meaningful and rewarding to our
workers, must not be hampered in its application by long winded-arbitration and
litigation. Rights must be asserted and benefits received with the least
inconvenience. Labor laws are meant to promote, not to defeat, social justice.


G.R. No.174287, August 12, 2013
Peralta, J.
FACTS: Respondent Philippine National Bank (PNB) used to be a government-owned
and controlled banking institution established under Public Act 2612, as amended by
Executive Order No. 80 dated December 3, 1986 (otherwise known as The 1986
Revised Charter of the Philippine National Bank). Its rank-and-file employees, being
government personnel, were represented for collective negotiation by the Philnabank
Employees Association (PEMA), a public sector union.
In 1996, the Securities and Exchange Commission approved PNBs new Articles
of Incorporation and By-laws and its changed status as a private corporation. PEMA
affiliated with petitioner National Union of Bank Employees (NUBE), which is a labor
federation composed of unions in the banking industry, adopting the name NUBE-PNB
Employees Chapter (NUBE-PEC). Later, NUBE-PEC was certified as the sole and
exclusive bargaining agent of the PNB rank-and-file employees. A collective bargaining
agreement (CBA) was subsequently signed between NUBE-PEC and PNB covering the
period of January 1, 1997 to December 31, 2001.
Following the expiration of the CBA, the Philnabank Employees Association-FFW
(PEMA-FFW) filed on January 2, 2002 a petition for certification election among the
rank-and-file employees of PNB. The petition sought the conduct of a certification
election to be participated in by PEMA-FFW and NUBE-PEC.
While the petition for certification election was still pending, two significant events
transpired the independent union registration of NUBE- PEC and its disaffiliation with
PEMA sent a letter to the PNB management informing its disaffiliation from
NUBE and requesting to stop, effective immediately, the check-off of the P15.00 due for
NUBE. Acting thereon, on July 4, 2003, PNB informed NUBE of PEMAs letter and its
decision to continue the deduction of the P15.00 fees, but stop its remittance to NUBE
effective July 2003. PNB also notified NUBE that the amounts collected would be held
in a trust account pending the resolution of the issue on PEMAs disaffiliation.
Alleging unfair labor practice (ULP) for non-implementation of the grievance
machinery and procedure, NUBE brought the matter to the National Conciliation and
Mediation Board (NCMB) for preventive mediation.
ISSUE: Whether PEMA validly disaffiliated itself from NUBE, the resolution of which, in
turn, inevitably affects the latters right to collect the union dues held in trust by PNB.
HELD: The right of the local members to withdraw from the federation and to form a
new local union depends upon the provisions of the union's constitution, by-laws and

charter and, in the absence of enforceable provisions in the federation's constitution

preventing disaffiliation of a local union, a local may sever its relationship with its parent.
In the case at bar, there is nothing shown in the records nor is it claimed by
NUBE that PEMA was expressly forbidden to disaffiliate from the federation nor were
there any conditions imposed for a valid breakaway. This being so, PEMA is not
precluded to disaffiliate from NUBE after acquiring the status of an independent labor
organization duly registered before the DOLE.
Consequently, by PEMA's valid disaffiliation from NUBE, the vinculum that
previously bound the two entities was completely severed. As NUBE was divested of
any and all power to act in representation of PEMA, any act performed by the former
that affects the interests and affairs of the latter, including the supposed expulsion of
Serrana et al., is rendered without force and effect.
Also, in effect, NUBE loses it right to collect all union dues held in its trust by
PNB. The moment that PEMA separated from and left NUBE and exists as an
independent labor organization with a certificate of registration, the former is no longer
obliged to pay dues and assessments to the latter; naturally, there would be no longer
any reason or occasion for PNB to continue making deductions.


G.R. No. 179146, July 23, 2013
Peralta, J.
FACTS: On May 31, 2002, a petition for certification election was filed by private
respondent Pinag-Isang Tinig at Lakas ng Anakpawis Holy Child Catholic School
Teachers and Employees Labor Union (HCCS-TELUPIGLAS), alleging that: PIGLAS is
a legitimate labor organization duly registered with the Department of Labor and
Employment (DOLE) representing HCCS-TELU-PIGLAS; HCCS is a private educational
institution duly registered and operating under Philippine laws; there are approximately
one hundred twenty (120) teachers and employees comprising the proposed
appropriate bargaining unit; and HCCS is unorganized, there is no collective bargaining
agreement or a duly certified bargaining agent or a labor organization certified as the
sole and exclusive bargaining agent of the proposed bargaining unit within one year
prior to the filing of the petition.
Petitioner school assails the petition for certification election filed by private
respondent. Among the 120 members, some are vice-principals, department heads,
coordinators, supervisors, and other non-teaching personnel along with regular teaching
staff. It insisted that, for not being in accord with Article 245 of the Labor Code, private
respondent is an illegitimate labor organization lacking in personality to file a petition for
certification election, as held in Toyota Motor Philippines Corporation v. Toyota Motor
Philippines Corporation Labor Union; and an inappropriate bargaining unit for want of
community or mutuality of interest, as ruled in Dunlop Slazenger (Phils.), Inc. v.
Secretary of Labor and Employment and De La Salle University Medical Center and
College of Medicine v. Laguesma.
ISSUE: Whether a petition for certification election is dismissible on the ground that the
labor organizations membership allegedly consists of supervisory and rank-and-file
HELD: Following the doctrine laid down in Kawashima and SMCC-Super, it must be
stressed that petitioner cannot collaterally attack the legitimacy of private respondent by
praying for the dismissal of the petition for certification election:
Except when it is requested to bargain collectively, an employer is a mere
bystander to any petition for certification election; such proceeding is non-adversarial
and merely investigative, for the purpose thereof is to determine which organization will
represent the employees in their collective bargaining with the employer. The choice of
their representative is the exclusive concern of the employees; the employer cannot
have any partisan interest therein; it cannot interfere with, much less oppose, the
process by filing a motion to dismiss or an appeal from it; not even a mere allegation
that some employees participating in a petition for certification election are actually
managerial employees will lend an employer legal personality to block the certification
election. The employer's only right in the proceeding is to be notified or informed

Article 212(g) of the Labor Code defines a labor organization as "any union or
association of employees which exists in whole or in part for the purpose of collective
bargaining or of dealing with employers concerning terms and conditions of
On the other hand, a bargaining unit has been defined as a "group of employees
of a given employer, comprised of all or less than all of the entire body of employees,
which the collective interests of all the employees, consistent with equity to the
employer, indicated to be best suited to serve reciprocal rights and duties of the parties
under the collective bargaining provisions of the law
The teaching and non-teaching personnel of petitioner school must form
separate bargaining units. Thus, the order for the conduct of two separate certification
elections, one involving teaching personnel and the other involving non-teaching
personnel. It should be stressed that in the subject petition, private respondent union
sought the conduct of a certification election among all the rank-and-file personnel of
petitioner school.


G.R. No. 170054, January 21, 2013
Peralta, J.
FACTS: Petitioner Goya Inc. (Goya) hired contractual employees from PESO
Resources Development Corporation (PESO). This prompted Goya, Inc. Employees
Union-FFW (Union) to request for a grievance conference on the ground that the
contractual workers do not belong to the categories of employees stipulated in their
CBA. The Union also argued that hiring contractual employees is contrary to the union
security clause embodied in the CBA.
When the matter remained unresolved, the grievance was referred to the NCMB
for voluntary arbitration. The Union argued that Goya is guilty of ULP for gross violation
of the CBA. The voluntary arbitrator dismissed the Unions charge of ULP but Goya was
directed to observe and comply with the CBA. While the Union moved for partial
consideration of the VA decision, Goya immediately filed a petition for review before the
Court of Appeals to set aside the VAs directive to observe and comply with the CBA
commitment pertaining to the hiring of casual employees. Goya argued that hiring
contractual employees is a valid management prerogative. The Court of
Appeals dismissed the petition.
ISSUE: Whether the act of hiring contractual employees is a valid exercise of
management prerogative?
HELD: The CA did not commit serious error when it sustained the ruling that the hiring
of contractual employees from PESO was not in keeping with the intent and spirit of the
CBA. The said ruling is interrelated and intertwined with the sole issue to be resolved
that is, "Whether or not the Company is guilty of unfair labor practice in engaging the
services of PESO, a third party service provider, under existing CBA, laws, and
jurisprudence." Both issues concern the engagement of PESO by the Company which is
perceived as a violation of the CBA and which constitutes as unfair labor practice on the
part of the Company.
On the jurisdiction of the Voluntary Arbitrator
In the case of Ludo & Luym Corporation v. Saornido, the court ruled that:
Generally, the arbitrator is expected to decide only those questions expressly
delineated by the submission agreement. Nevertheless, the arbitrator can assume that
he has the necessary power to make a final settlement since arbitration is the final
resort for the adjudication of disputes. The succinct reasoning enunciated by the CA in
support of its holding, that the Voluntary Arbitrator in a labor controversy has jurisdiction
to render the questioned arbitral awards, deserves our concurrence.


G.R. No. 179001, August 28, 2013
Peralta, J.
FACTS: On Feb. 8, 2000, petitioner Marilou Quiroz, Owner and Vice-President for
Finance and Marketing of MZR, hired respondent Majen Colambot as messenger.
Colambot's duties and responsibilities included field, messengerial and other liaison
However, beginning 2002, Colambot's work performance started to deteriorate.
Petitioners issued several memoranda to Colambot for habitual tardiness, negligence,
and violations of office policies. He was also given written warnings for insubordination
committed, for negligence caused by careless handling of confidential office documents,
for leaving his post without proper turnover and insubordination.
Colambot was thereafter suspended from November 26, 2004 until December 6,
2004 for insubordination. Petitioners claimed they waited for Colambot to report back for
work on December 7, 2004, but they never heard from him anymore. Later, petitioners
were surprised to find out that Colambot had filed a complaint for illegal suspension,
underpayment of salaries, overtime pay, holiday pay, rest day, service incentive leave
and 13th month pay. The complaint was later on amended to illegal dismissal.
ISSUE: Whether there was abandonment.
HELD: In a number of cases, this Court consistently held that to constitute
abandonment of work, two elements must be present: first, the employee must have
failed to report for work or must have been absent without valid or justifiable reason;
and second, there must have been a clear intention on the part of the employee to
sever the employer-employee relationship manifested by some overt act.
In the instant case, other than Colambot's failure to report back to work after
suspension, petitioners failed to present any evidence which tend to show his intent to
abandon his work. It is a settled rule that mere absence or failure to report for work is
not enough to amount to abandonment of work. There must be a concurrence of the
intention to abandon and some overt acts from which an employee may be deduced as
having no more intention to work. On this point, the CA was correct when it held that:
Mere absence or failure to report for work, even after notice to return, is not
tantamount to abandonment. The burden of proof to show that there was unjustified
refusal to go back to work rests on the employer. Abandonment is a matter of intention
and cannot lightly be presumed from certain equivocal acts. To constitute abandonment,
there must be clear proof of deliberate and unjustified intent to sever the employeremployee relationship. Clearly, the operative act is still the employees ultimate act of
putting an end to his employment. Furthermore, it is a settled doctrine that the filing of a
complaint for illegal dismissal is inconsistent with abandonment of employment. An
employee who takes steps to protest his dismissal cannot logically be said to have

abandoned his work. the filing of such complaint is proof enough of his desire to return
to work, thus negating any suggestion of abandonment.
Suffice it to say that, it is the employer who has the burden of proof to show a
deliberate and unjustified refusal of the employee to resume his employment without
any intention of returning. It is therefore incumbent upon petitioners to ascertain the
respondents interest or non-interest in the continuance of their employment. This,
petitioners failed to do so.


G.R. No. 173489, February 25, 2013
FACTS: Respondent was employed by petitioner as bookkeeper. Petitioner's Board of
Directors received a letter from a certain Napoleon Gao-ay reporting the alleged
immoral conduct and unbecoming behavior of respondent by having an illicit
relationship with Napoleons sister, Thelma G. Palma. A preliminary investigation was
therefore conducted. On June 7, 1997, the Board received a petition from about fifty
members of the cooperative asking the relief of respondent due to his illicit affair with
Thelma. In a Memorandum, respondent was informed of the Boards decision to
terminate his services. Thus, a complaint for Illegal Dismissal was filed.
ISSUE: Whether the dismissal was valid.
HELD: It is undisputed that respondent was dismissed from employment for
engaging in extramarital affairs, a ground for termination of employment stated in
petitioners Personnel Policy. This basis of termination was made known to
respondent as early as the first communication made by petitioner. In its June 20, 1997
letter, petitioner directed respondent to explain in writing or personal confrontation why
he should not be terminated for violation of Section 4.1.4 of the Personnel Policy.
Respondent merely denied the accusation against him and did not question the basis of
such termination. When the LA was called upon to decide the illegal dismissal case, it
ruled in favor of petitioner and upheld the basis of such dismissal which is the cited
Personnel Policy.
To be sure, an employer is free to regulate all aspects of employment. It may
make reasonable rules and regulations for the government of its employees
which become part of the contract of employment provided they are made known
to the employee. In the event of a violation, an employee may be validly terminated
from employment on the ground that an employer cannot rationally be expected to
retain the employment of a person whose lack of morals, respect and loyalty to his
employer, regard for his employers rules and application of the dignity and
responsibility, has so plainly and completely been bared.
While respondents act of engaging in extra--marital affairs may be considered
personal to him and does not directly affect the performance of his assigned task as
bookkeeper, aside from the fact that the act was specifically provided for by petitioners
Personnel Policy as one of the grounds for termination of employment, said act raised
concerns to petitioner as the Board received numerous complaints and petitions from
the cooperative members themselves asking for the removal of respondent because of
his immoral conduct.


G.R. No. 160828, August 9, 2010
On February 13, 2001, respondents filed a Complaint for unfair labor
practice, illegal dismissal and money claims against petitioner PICOP Resources,
Incorporated (PRI). Respondents were regular rank-and-file employees of PRI and bona
fide members of Nagkahiusang Mamumuo sa PRI Southern Philippines Federation of
Labor (NAMAPRI-SPFL), which is the collective bargaining agent for the rank-and-file
employees of petitioner PRI. PRI has a CBA with NAMAPRI-SPFL. On May 16, 2000,
Atty. Fuentes, President of Southern Philippines Federation of Labor (SPFL), sent a
letter to the management of PRI demanding the termination of employees who allegedly
campaigned for, supported and signed the Petition for Certification Election of the
Federation of Free Workers Union (FFW) during the effectivity of the CBA. NAMAPRISPFL considered said act of campaigning for and signing the petition for certification
election of FFW as an act of disloyalty and a valid basis for termination for a cause in
accordance with its Constitution and By-Laws, and the terms and conditions of the CBA,
specifically Article II, Sections 6.1 and 6.2 on Union Security Clause.
On October 16, 2000, PRI served notices of termination for causes to employees
whom NAMAPRIL-SPFL sought to be terminated on the ground of acts of disloyalty
committed against it when respondents allegedly supported and signed the Petition for
Certification Election of FFW before the freedom period during the effectivity of the
CBA. A Notice dated October 21, 2000 was also served on the DOLE, Caraga Region.
The Labor Arbiter declared the respondents dismissal to be illegal. The NLRC,
on appeal, reversed the decision of the Labor Arbiter. The CA however reversed the
decision of the NLRC and reinstated the decision of the Labor Arbiter. Hence, this
ISSUE: Whether the Union Security Clause may be a ground for termination of
HELD: Union security" is a generic term, which is applied to and comprehends
"closed shop," union shop," "maintenance of membership," or any other form of
agreement which imposes upon employees the obligation to acquire or retain
union membership as a condition affecting employment. There is union shop when
all new regular employees are required to join the union within a certain period as a
condition for their continued employment. There is maintenance of membership shop
when employees, who are union members as of the effective date of the agreement, or
who thereafter become members, must maintain union membership as a condition for
continued employment until they are promoted or transferred out of the bargaining unit,
or the agreement is terminated. A closed shop, on the other hand, may be defined as an
enterprise in which, by agreement between the employer and his employees or their
representatives, no person may be employed in any or certain agreed departments of
the enterprise unless he or she is, becomes, and, for the duration of the agreement,

remains a member in good standing of a union entirely comprised of or of which the

employees in interest are a part.
However, in terminating the employment of an employee by enforcing the
union security clause, the employer needs to determine and prove that: (1) the
union security clause is applicable; (2) the union is requesting for the
enforcement of the union security provision in the CBA; and (3) there is sufficient
evidence to support the decision of the union to expel the employee from the
union. These requisites constitute just cause for terminating an employee based on the
union security provision of the CBA.
As to the first requisite, there is no question that the CBA between PRI and
respondents included a union security clause, specifically, a maintenance of
membership as stipulated in Sections 6 of Article II, Union Security and Check-Off.
Following the same provision, PRI, upon written request from the Union, can indeed
terminate the employment of the employee who failed to maintain its good standing as a
union member.
Secondly, it is likewise undisputed that NAMAPRI-SPFL, in two (2) occasions
demanded from PRI, in their letters dated May 16 and 23, 2000, to terminate the
employment of respondents due to their acts of disloyalty to the Union.
However, as to the third requisite, we find that there is no sufficient evidence to
support the decision of PRI to terminate the employment of the respondents.


G.R. No. 167218, July 2, 2010
Peralta, J.
FACTS: Petitioner Erector Advertising Sign Group, Inc. is a domestic corporation
engaged in the business of constructing billboards and advertising signs. Sometime in
the middle of 1996, petitioner engaged the services of ExpeditoCloma (Cloma) as
company driver and the latter had served as such until his dismissal from service in May
2000. Cloma filed a Complaint with the NLRC for alleged illegal suspension and
thereafter dismissal from his employment without due process of law.
The Labor Arbiter dismissed the Complaint for lack of merit but was reversed by
the NLRC. The CA affirmed the decision of the NLRC. Hence, this petition.
ISSUE: Whether Cloma was dismissed with just cause and with due process of law.
HELD: We find no merit in the petition.
The validity of an employees dismissal from service hinges on the satisfaction of
the two substantive requirements for a lawful termination. These are, first, whether the
employee was accorded due process the basic components of which are the
opportunity to be heard and to defend himself. This is the procedural aspect. And
second, whether the dismissal is for any of the causes provided in the Labor Code
of the Philippines. This constitutes the substantive aspect.
With respect to due process requirement, the employer is bound to furnish
the employee concerned with two (2) written notices before termination of
employment can be legally effected. One is the notice apprising the employee of the
particular acts or omissions for which his dismissal is sought and this may loosely be
considered as the proper charge. The other is the notice informing the employee of the
managements decision to sever his employment. 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, thereby giving him ample opportunity to be heard
and defend himself with the assistance of his representative should he so desire. The
requirement of notice, it has been stressed, is not a mere technicality but a
requirement of due process to which every employee is entitled.
In this case, we find that Clomas dismissal from service did not comply with this
basic precept.


G.R. No. 166970, August 17, 2011
Peralta, J.
FACTS: Petitioner Ma. Ana M. Tamonte was a regular employee of the Hongkong and
Shanghai Banking Corporation Ltd. and a member of the Hongkong and Shanghai
Banking Corporation Staff Retirement Plan (HSBC SRP). Petitioner Ana applied for a
housing loan with the HSBC SRP secured by a real estate mortgage contract over their
property covered by TCT No. 17169 of the Register of Deeds of Paraaque. The
monthly amortizations of the loan were paid by petitioner Ana through automatic payroll
deductions. Ana was however included in those who were dismissed from service for
abandonment after a labor dispute arose between the bank and the union which
culminated in a strike. The Labor Arbiter dismissed the case for illegal dismissal stating
that the strike was illegal.
On November 28, 1994 HSBC SRP demanded for the payment of Anas unpaid
accounts which included her housing loan. Petitioners failed to settle their obligation;
thus, the real estate mortgage was foreclosed. A Complaint for Annulment of the Entire
Proceedings in Foreclosure was thereafter filed with the RTC which dismissed the
same. The CA, on appeal, affirmed the RTC decision. Hence, this petition.
ISSUE: Whether the petitioners had cause of action.
HELD: Petitioners were already in default in the payment of their loan obligations; thus,
foreclosure of the mortgage property was resorted to by respondents. Respondents
were only enforcing the civil obligation of petitioners under their mortgage contract.
There is no labor aspect involved in the enforcement of petitioners' obligation.
In Nestle Philippines, Inc. v. National Labor Relations Commission (NLRC), the
Court held that:
Nestl's demand for payment of the private respondents' amortizations on
their car loans, or, in the alternative, the return of the cars to the company, is not a
labor, but a civil, dispute. It involves debtor-creditor relations, rather than
employee-employer relations.
As noted, the options given to the private respondents are civil in nature arising
from contractual obligations. There is no labor aspect involved in the enforcement of
those obligations.
The NLRC gravely abused its discretion and exceeded its jurisdiction by issuing
the writ of injunction to stop the company from enforcing the civil obligation of the private
respondents under the car loan agreements and from protecting its interest in the cars
which, by the terms of those agreements, belong to it (the company) until their purchase
price shall have been fully paid by the employee. The terms of the car loan agreements
are not in issue in the labor case. The rights and obligations of the parties under

those contracts may be enforced by a separate civil action in the regular courts,
not in the NLRC.

In Hongkong and Shanghai Banking Corporation, Ltd. Staff Retirement Plan

(HSBC SRP) v. Spouses Broqueza, which involved the dismissed co-employees of
herein petitioner Ana who were also unable to pay the monthly amortizations of their
respective loans, and despite HSBC SRP's demand for them to pay their loan, they still
failed to pay their loan obligations, We said, among others, that the enforcement of a
loan agreement involves debtor-creditor relations founded on contracts and does
not in any way concern employee relations.
To reiterate, respondent HSBC SRP and petitioners agreed in their mortgage
contract that HSBC SRP as mortgagee was authorized to foreclose the mortgaged
property in the event that the petitioners-mortgagors failed to pay the sum of money
secured by the mortgage. After petitioners failed to pay upon demand, the civil
obligation of the petitioners under the mortgage contract must be enforced to
protect HSBC SRP's interest in the housing loan. The dismissal of petitioners'
complaint for the annulment of the foreclosure proceedings is, therefore, valid
and proper.

Varorient Shipping Co., INC. vs. Gil A. Flores

G.R. No. 161934, October 6, 2010
Peralta, J.
FACTS: On April 7, 1997, petitioners employed respondent for the position of Chief
Officer on board M/V Aria per Contract of Employment duly approved by the Philippine
Overseas Employment Administration (POEA) for a period of 12 months.
On April 16, 1997, he was deployed aboard M/V Aria in Bangkok, Thailand.
During his employment, the master of the vessel sent respondent to the Centre Medical
de Ngodi at Doula, Cameroon, where he was treated for three days due to the shooting
pain in the lower extremities, particularly on his right foot. In the Medical Certificate
dated June 19, 1997, the attending physician, Dr. R. Mongou Tchouak, stated that he
diagnosed respondent's pain on the right foot as sciatic neuralgia and administered
[drips], injection, and acupuncture. Respondent was declared not fit to work. The doctor
recommended respondents repatriation to the Philippines for continuing treatment.
Thus, he was repatriated on June 21, 1997.
Respondent then underwent several medical examinations and treatment. On
September 19, 1997, respondent filed a Complaint against petitioner for the
reimbursement of his medical expenses. Petitioners however countered that respondent
can no longer seek continuation of his medical treatment and claim for sickness wages
and reimbursement of medical expenses because upon his repatriation, he had
received the amount of US$1,010.00 (or the equivalent then of about P40,400.00) as
settlement for his sickness wages and other benefits, as evidenced by the Receipt and
Quitclaim dated June 25, 1997, executed by respondent. The Labor Arbiter dismissed
the complaint, but was reversed by the NLRC deducting however, the US$1,010.00
from the award of sickness wages. The CA affirmed the decision of the NLRC, hence
this petition.
ISSUES: Whether the quitclaim was valid.
HELD: The Receipt and Quitclaim executed by respondent lacks the elements of
voluntariness and free will and, therefore, does not absolve petitioners from liability in
paying him the sickness wages and other monetary claims.
In More Maritime Agencies, Inc. v. NLRC, the Court ruled that the law does not
consider as valid any agreement to receive less compensation than what a
worker is entitled to recover nor prevent him from demanding benefits to which
he is entitled. Quitclaims executed by the employees are thus commonly frowned upon
as contrary to public policy and ineffective to bar claims for the full measure of the
workers legal rights, considering the economic disadvantage of the employee and the
inevitable pressure upon him by financial necessity. Thus, it is never enough to assert
that the parties have voluntarily entered into such a quitclaim. There are other
requisites, to wit: (a) that there was no fraud or deceit on the part of any of the
parties; (b) that the consideration of the quitclaim is credible and reasonable; and

(c) that the contract is not contrary to law, public order, public policy, morals or
good customs, or prejudicial to a third person with a right recognized by law.
A perusal of the provisions of the Receipt and Quitclaim shows that respondent
would be releasing and discharging petitioners from all claims, demands, causes of
action, and the like in an all-encompassing manner, including the fact that he had not
contracted or suffered any illness or injury in the course of his employment and that he
was discharged in good and perfect health. These stipulations clearly placed
respondent in a disadvantageous position vis--vis the petitioners.


GR No. 165935, February 08, 2012
Peralta, J.
FACTS: A Contract of Employment was executed by petitioner Bright Maritime
Corporation (BMC), a manning agent and respondent Ricardo B. Fantonial, which
contract was verified and approved by the Philippine Overseas Employment
Administration (POEA) on January 17, 2000. The employment contract provided that
respondent shall be employed as boatswain of the foreign vessel M/V AUK for one year,
with a basic monthly salary of US$450, plus an allowance of US$220.
Respondent was made to undergo a medical examination at the Christian
Medical Clinic, which was petitioners accredited medical clinic. Respondent was issued
a Medical Certificate dated January 17, 2000, which certificate had the phrase FIT TO
WORK stamped on its lower and upper portion.
On the day of his departure however, respondent was told by the liaison officer of
the petitioner that he could not leave due to some defects in his medical certificate. He
went back to the clinic and learned that there was nothing wrong with his medical
certificate, thus he proceeded to petitioners office for explanation, but he was merely
told to wait for their call, as he was being lined-up for a flight to the ship's next port of
call. However, respondent never got a call from petitioners.
On May 16, 2000, respondent filed a complaint against petitioners for illegal
dismissal, payment of salaries for the unexpired portion of the employment contract and
for the award of moral, exemplary, and actual damages as well as attorneys fees before
the Regional Arbitration Branch No. 7 of the NLRC in Cebu City.
ISSUE: Whether the employment contract was perfected.
HELD: An employment contract, like any other contract, is perfected at the moment (1)
the parties come to agree upon its terms; and (2) concur in the essential elements
thereof: (a) consent of the contracting parties, (b) object certain which is the subject
matter of the contract, and (c) cause of the obligation. The object of the contract was the
rendition of service by respondent on board the vessel for which service he would be
paid the salary agreed upon.
Hence, in this case, the employment contract was perfected on January 15,
2000 when it was signed by the parties, respondent and petitioners, who entered into
the contract in behalf of their principal, Ranger Marine S.A., thereby signifying their
consent to the terms and conditions of employment embodied in the contract, and the
contract was approved by the POEA on January 17, 2000. However, the employment
contract did not commence, since petitioners did not allow respondent to leave on
January 17, 2000 to embark the vessel M/V AUK in Germany on the ground that he was
not yet declared fit to work on the day of departure, although his Medical Certificate
dated January 17, 2000 proved that respondent was fit to work.

In Santiago v. CF Sharp Crew Management, Inc., the Court held that the
employment contract did not commence when the petitioner therein, a hired seaman,
was not able to depart from the airport or seaport in the point of hire; thus, no employeremployee relationship was created between the parties.
Nevertheless, even before the start of any employer-employee relationship,
contemporaneous with the perfection of the employment contract was the birth of
certain rights and obligations, the breach of which may give rise to a cause of action
against the erring party. If the reverse happened, that is, the seafarer failed or refused to
be deployed as agreed upon, he would be liable for damages.


G.R. No. 168757, November 23, 2011
Peralta, J.
FACTS: On July 9, 2002, respondent Wilmer D. Genovia filed a complaint against
petitioner Cesar Lirio and/or Celkor Ad Sonicmix Recording Studio for illegal dismissal,
non-payment of commission and award of moral and exemplary damages.
In his Position Paper, respondent Genovia alleged, among others, that on August
15, 2001, he was hired as studio manager by petitioner Lirio, owner of Celkor Ad
Sonicmix Recording Studio (Celkor). He was employed to manage and operate Celkor
and to promote and sell the recording studio's services to music enthusiasts and other
prospective clients.
Respondent stated that a few days after he started working as a studio manager,
petitioner approached him and told him about his project to produce an album for his
15-year-old daughter, Celine Mei Lirio, a former talent of ABS-CBN Star Records.
Petitioner asked respondent to compose and arrange songs for Celine and promised
that he (Lirio) would draft a contract to assure respondent of his compensation for such
For several occasions, respondent reminded petitioner about the contract on his
compensation as composer and arranger of the album. Petitioner however informed
respondent that he was entitled only to 20% of the net profit, and not of the gross sales
of the album, and that the salaries he received and would continue to receive as studio
manager of Celkor would be deducted from the said 20% net profit share. Respondent
objected and insisted that he be properly compensated. On March 14, 2002, petitioner
verbally terminated respondents services, and he was instructed not to report for work.
Petitioner asserted that he was illegally dismissed and that having worked for more than
6 months, he was already a regular employee.
ISSUE: Whether there is an employer-employee relationship between petitioner and
HELD: The elements to determine the existence of an employment relationship are: (a)
the selection and engagement of the employee; (b) the payment of wages; (c) the
power of dismissal; and (d) the employers power to control the employees conduct. The
most important element is the employer's control of the employees conduct, not only as
to the result of the work to be done, but also as to the means and methods to
accomplish it.
It is settled that no particular form of evidence is required to prove the existence
of an employer-employee relationship. Any competent and relevant evidence to prove
the relationship may be admitted.

In this case, the documentary evidence presented by respondent to prove that he

was an employee of petitioner are as follows: (a) a document denominated as "payroll"
(dated July 31, 2001 to March 15, 2002) certified correct by petitioner, which showed
that respondent received a monthly salary of P7,000.00 (P3,500.00 every 15th of the
month and another P3,500.00 every 30th of the month) with the corresponding
deductions due to absences incurred by respondent; and (2) copies of petty cash
vouchers, showing the amounts he received and signed for in the payrolls.
The said documents showed that petitioner hired respondent as an employee
and he was paid monthly wages of P7,000.00. Petitioner wielded the power to dismiss
as respondent stated that he was verbally dismissed by petitioner, and respondent,
thereafter, filed an action for illegal dismissal against petitioner. The power of control
refers merely to the existence of the power. It is not essential for the employer to
actually supervise the performance of duties of the employee, as it is sufficient that the
former has a right to wield the power. Nevertheless, petitioner stated in his Position
Paper that it was agreed that he would help and teach respondent how to use the studio
equipment. In such case, petitioner certainly had the power to check on the progress
and work of respondent.
Based on the foregoing, the Court agrees with the Court of Appeals that the
evidence presented by the parties showed that an employer-employee relationship
existed between petitioner and respondent.


GR No. 164181, September 14, 2011
Peralta, J.
FACTS: Respondent Victorino Angelo was employed by Nissan on March 11, 1989 as
one of its payroll staff. On April 7 to 17, 2000, respondent was on sick leave, thus, he
was not able to prepare the payroll for the said period. Again, on April 27 and 28, 2000,
respondent was on an approved vacation leave which again resulted in the nonpreparation of the payroll for that particular period.
On May 8, 2000, respondent received a Memorandum from Petitioner informing
him that the Company is considering his dismissal from employment on the grounds of
serious misconduct, willful disobedience and gross neglect of duties and that a
preventive suspension is imposed against him. After the investigation, petitioner issued
a notice of termination. Thus, a complaint for illegal dismissal was filed.
ISSUE: Whether the termination of the respondent is one of the authorized just causes
of NLRC.
HELD: The Labor Code provides that an employer may terminate the services of an
employee for a just cause. Petitioner, the employer in the present case, dismissed
respondent based on allegations of serious miscounduct, willful disobedience and gross
One of the just causes enumerated in the Labor Code is serious misconduct.
Misconduct is improper or wrong conduct. It is the transgression of some established
and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and
implies wrongful intent and not mere error in judgment. Such misconduct, however
serious, must nevertheless be in connection with the employee's work to constitute just
cause for his separation. Thus, for misconduct or improper behavior to be a just cause
for dismissal, (a) it must be serious; (b) it must relate to the performance of the
employees duties; and (c) it must show that the employee has become unfit to continue
working for the employer. Going through the records, this Court found evidence to
support the allegation of serious misconduct or insubordination.
Another just cause cited by the petitioner is wilful disobedience. One of the
fundamental duties of an employee is to obey all reasonable rules, orders and
instructions of the employer. Disobedience, to be a just cause for termination, must be
wilful or intentional, wilfulness being characterized by a wrongful and perverse mental
attitude rendering the employees act inconsistent with proper subordination. A wilful or
intentional disobedience of such rule, order or instruction justifies dismissal only where
such rule, order or instruction is (1) reasonable and lawful, (2) sufficiently known to the
employee, and (3) connected with the duties which the employee has been engaged to

Petitioner also dismissed respondent because of gross or habitual negligence.

Neglect of duty, to be a ground for dismissal, must be both gross and habitual. In finding
that petitioner was able to adduce evidence that would justify its dismissal of
respondent, the NLRC correctly ruled that the latter's failure to turn over his functions to
someone capable of performing the vital tasks which he could not effectively perform or
undertake because of his heart ailment or condition constitutes gross neglect.
Gross negligence connotes want of care in the performance of one's duties.
Habitual neglect implies repeated failure to perform one's duties for a period of time,
depending upon the circumstances. On the other hand, fraud and willful neglect of
duties imply bad faith on the part of the employee in failing to perform his job to the
detriment of the employer and the latter's business.
It must be emphasized at this point that the onus probandi to prove the
lawfulness of the dismissal rests with the employer. In termination cases, the burden of
proof rests upon the employer to show that the dismissal is for just and valid cause.
Failure to do so would necessarily mean that the dismissal was not justified and,
therefore, was illegal. In this case, both the Labor Arbiter and the NLRC were not amiss
in finding that the dismissal of respondent was legal or for a just cause based on
substantial evidence presented by petitioner. Substantial evidence, which is the
quantum of proof required in labor cases, is that amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion.


G.R. No. 169905, September 7, 2011
Peralta, J.
Respondents Remigio Michael Ancheta II and Cynthia Ancheta were hired
in the School Year (SY) 1996-1997 by the St. Paul College Quezon City as a General
Education teacher with probationary rank and as a part time Mass Communication
teacher, respectively. Their appointments were renewed for SY 1997-1998. On February
13, 1998, the spouses wrote a letter to SPCQC President, Sr. Lilia Tolentino signifying
their intention to renew their contract for SY 1998-1999. College Dean Sr. Bernadette
responded through two letters dated March 9, 1998 informing the spouses that the
school is extending to them new contracts for SY 1998-1999. On April 30, 1998,
however, Sr. Bernadette wrote a letter to Sr. Lilia, endorsing the immediate termination
of the teaching services of the spouses on the following grounds:
1. Non-compliance with the departmental policy to submit their final test questions to their
respective program coordinators for checking/comments (violating par. 7.1, p. 65 of the
Faculty Manual).
This policy was formulated to ensure the validity and reliability of test questions of
teachers for the good of the students. This in effect can minimize if not prevent
unnecessary failure of students.
2. Non-compliance with the standard format (multiple choice) of final test questions as
agreed upon in the department. Mr. Ancheta prepared purely essay questions for the
Well-prepared multiple choice questions are more objective, and develop critical thinking
among students.
3. Failure to encode their modular grade reports as required (violating par. H. 8, p. 66 of
our Faculty manual).

4. Failure to submit and update required modules (syllabi) of their subject despite
reminders (violating D, 1.5, p. 40 of our Faculty Manual).
5. Both spouses have a gross number of failure in their class.

The spouses were given an opportunity to comment. Subsequently, they

received their respective letters of termination on May 14, 1998. Their letter for
reconsideration was denied. Their complaint for illegal dismissal was dismissed by the
Labor Arbiter on November 20, 2000 and was affirmed by the NLRC on February 28,
2003. The CA however, in a petition for certiorari, reversed the decision of the Labor
Arbiter and the NLRC. Hence, this petition.

Whether there was illegal dismissal.

Employment on probationary status of teaching personnel is not
governed purely by the Labor Code. The Labor Code is supplemented with respect to
the period of probation by special rules found in the Manual of Regulations for Private
Schools. On the matter of probationary period, Section 92 of these regulations provides:
Section 92. Probationary Period. - Subject in all instances to
compliance with the Department and school requirements, the
probationary period for academic personnel shall not be more than three
(3) consecutive years of satisfactory service for those in the elementary
and secondary levels, six (6) consecutive regular semesters of
satisfactory service for those in the tertiary level, and nine (9) consecutive
trimesters of satisfactory service for those in the tertiary level where
collegiate courses are offered on a trimester basis.
For the entire duration of this three-year period, the teacher remains under
probation. Upon the expiration of his contract of employment, being simply on
probation, he cannot automatically claim security of tenure and compel the
employer to renew his employment contract.
Section 91 of the Manual of Regulations for Private Schools, states that:
Section 91. Employment Contract. Every contract of employment
shall specify the designation, qualification, salary rate, the period and
nature of service and its date of effectivity, and such other terms and
condition of employment as may be consistent with laws and rules,
regulations and standards of the school. A copy of the contract shall be
furnished the personnel concerned
It is important that the contract of probationary employment specify the period or
term of its effectivity. The failure to stipulate its precise duration could lead to the
inference that the contract is binding for the full three-year probationary period.
Therefore, the letters sent by petitioner Sr. Racadio, which were void of any specifics
cannot be considered as contracts. The closest they can resemble to are that of
informal correspondence among the said individuals. As such, petitioner school has
the right not to renew the contracts of the respondents, the old ones having been
expired at the end of their terms.


G.R. No. 146206, August 1, 2011
Peralta, J.
The Court, in G.R. No. 110399 entitled San Miguel Corporation
Supervisors and Exempt Union v. Laguesma, held that supervisory employees 3 and 4
and the exempt employees of San Miguel Foods, Inc. are not to be considered
confidential employees because the confidential data they handle do not pertain to labor
relations, particularly, negotiation and settlement of grievances, thus they were allowed
to form an appropriate bargaining unit for the purpose of collective bargaining. The
Court also declared that the employees belonging to the three different plants of San
Miguel Corporation Magnolia Poultry Products Plants in Cabuyao, San Fernando, and
Otis, having community or mutuality of interests, constitute a single bargaining unit.
They perform work of the same nature, receive the same wages and compensation, and
most importantly, share a common stake in concerted activities.
Pursuant to such ruling, the DOLE-NCR conducted pre-election conferences. On
September 30, 1998, a certification election was conducted. On the same date,
petitioner filed the Omnibus Objections and Challenge to Voters, questioning the
eligibility to vote by some of its employees on the grounds that some employees do not
belong to the bargaining unit which respondent seeks to represent or that there is no
existence of employer-employee relationship with petitioner.
The Med-Arbiter issued an order, based on the results of the certification
election, stating that respondent is certified to be the exclusive bargaining agent of the
supervisors and exempt employees of petitioner's Magnolia Poultry Products Plants in
Cabuyao, San Fernando, and Otis. The DOLE Undersecretary affirmed the said Order
with modification excluding four employees from the bargaining unit. The CA affirmed
the decision of the DOLE Undersecretary with modification excluding those holding the
positions of Human Resource Assistant and Personnel Assistant from the bargaining
unit. Hence, this petition.
1. Whether the CA departed from jurisprudence when it expanded the
scope of the bargaining unit defined by the ruling in G.R. No. 110399.
2. Whether the CA departed from jurisprudence on the Courts definition of
a confidential employee.
3. Whether the Employer has personality to question a certification

1. In G.R. No. 110399, the Court explained that the employees of San
Miguel Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando, and
Otis constitute a single bargaining unit, which is not contrary to the one-company, oneunion policy. An appropriate bargaining unit is defined as a group of employees of
a given employer, comprised of all or less than all of the entire body of

employees, which the collective interest of all the employees, consistent with
equity to the employer, indicate to be best suited to serve the reciprocal rights
and duties of the parties under the collective bargaining provisions of the law.
There should be only one bargaining unit for the employees in Cabuyao, San
Fernando, and Otis of Magnolia Poultry Products Plant involved in dressed chicken
processing and Magnolia Poultry Farms engaged in live chicken operations. Certain
factors, such as specific line of work, working conditions, location of work, mode of
compensation, and other relevant conditions do not affect or impede their commonality
of interest. Although they seem separate and distinct from each other, the specific
tasks of each division are actually interrelated and there exists mutuality of
interests which warrants the formation of a single bargaining unit.
2. Confidential employees are defined as those who (1) assist or act in a
confidential capacity, in regard (2) to persons who formulate, determine, and
effectuate management policies in the field of labor relations. The two criteria are
cumulative, and both must be met if an employee is to be considered a confidential
employee - that is, the confidential relationship must exist between the employee and
his supervisor, and the supervisor must handle the prescribed responsibilities relating to
labor relations. The exclusion from bargaining units of employees who, in the
normal course of their duties, become aware of management policies relating to
labor relations is a principal objective sought to be accomplished by the
confidential employee rule.
The CA correctly held that the position of Payroll Master does not involve dealing
with confidential labor relations information in the course of the performance of his
functions. Since the nature of his work does not pertain to company rules and
regulations and confidential labor relations, it follows that he cannot be excluded
from the subject bargaining unit.
3. It bears stressing that a certification election is the sole concern of the
workers; hence, an employer lacks the personality to dispute the same. The general
rule is that an employer has no standing to question the process of certification
election, since this is the sole concern of the workers. Law and policy demand that
employers take a strict, hands-off stance in certification elections. The bargaining
representative of employees should be chosen free from any extraneous influence of
management. A labor bargaining representative, to be effective, must owe its loyalty to
the employees alone and to no other. The only exception is where the employer
itself has to file the petition pursuant to Article 258 of the Labor Code because of
a request to bargain collectively.


G.R. Nos. 174040-41, September 22, 2010
Peralta, J.
On November 6, 2000, respondent Waterfront Insular Hotel Davao sent
the DOLE, Region XI, Davao City, a Notice of Suspension of Operations notifying the
same that it will suspend its operations for a period of six months due to severe and
serious business losses. In said notice, respondent assured the DOLE that if the
company could not resume its operations within the six-month period, the company
would pay the affected employees all the benefits legally due to them.
During the period of the suspension, Domy R. Rojas, the President of Davao
Insular Hotel Free Employees Union (DIHFEU-NFL), the recognized labor organization
in Waterfront Davao, sent respondent a number of letters asking management to
reconsider its decision. After series of negotiations, respondent and DIHFEU-NFL
signed a Memorandum of Agreement wherein respondent agreed to re-open the hotel
subject to certain concessions offered by DIHFEU-NFL in its Manifesto. Accordingly,
respondent downsized its manpower structure to 100 rank-and-file employees as set
forth in the terms of the MOA. Moreover, as agreed upon in the MOA, a new pay scale
was also prepared by respondent. On June 15, 2001, respondent resumed its business
On August 22, 2002, Darius Joves and Debbie Planas, claiming to be local
officers of the National Federation of Labor (NFL), filed a Notice of Mediation before the
National Conciliation and Mediation Board (NCMB), Region XI, Davao City. In said
Notice, it was stated that the Union involved was DARIUS JOVES/DEBBIE PLANAS ET.
AL, National Federation of Labor. The issue raised in said Notice was the Diminution of
wages and other benefits through unlawful Memorandum of Agreement.
The Respondent maintained that the NCMB had no the jurisdiction over the
Notice of Mediation and manifested its intention to withdraw from the proceedings. The
Voluntary Arbitrator, however, ruled in favor of petitioner. The CA ruled in favor of
respondent. Hence, this petition.

Whether the NCMB has jurisdiction over the Notice of Mediation.

While it is undisputed that a submission agreement was signed by
respondent and IHEU-NFL, then represented by Joves and Cullo, this Court finds that
there are two circumstances which affect its validity: first, the Notice of Mediation was
filed by a party who had no authority to do so; second, that respondent had
persistently voiced out its objection questioning the authority of Joves, Cullo and
the individual members of the Union to file the complaint before the NCMB.

Procedurally, the first step to submit a case for mediation is to file a notice of
preventive mediation with the NCMB. It is only after this step that a submission
agreement may be entered into by the parties concerned.
Section 3, Rule IV of the NCMB Manual of Procedure provides who may file a
notice of preventive mediation, to wit:
Who may file a notice or declare a strike or lockout or request preventive
mediation. Any certified or duly recognized bargaining representative may file a
notice or declare a strike or request for preventive mediation in
cases of bargaining deadlocks and unfair labor practices. The
employer may file a notice or declare a lockout or request for preventive
mediation in the same cases. In the absence of a certified or duly
recognized bargaining representative, any legitimate labor organization in
the establishment may file a notice, request preventive mediation or
declare a strike, but only on grounds of unfair labor practice.
From the foregoing, it is clear that only a certified or duly recognized
bargaining agent may file a notice or request for preventive mediation. It is curious
that even Cullo himself admitted, in a number of pleadings, that the case was filed not
by the Union but by individual members thereof. Clearly, therefore, the NCMB had no
jurisdiction to entertain the notice filed before it.


G.R. No. 172724, August 23, 2010
Peralta, J.
Respondent Ricardo Albayda, Jr. was an employee of Upjohn, Inc. in 1978
and continued working there until 1996 when a merger between Pharmacia and Upjohn
was created. After the merger, respondent was designated by petitioner Pharmacia and
Upjohn as District Sales Manager assigned to District XI in the Western Visayas area.
During the period of his assignment, respondent settled in Bacolod City. In December
1999, respondent received a memorandum reassigning him as District Sales Manager
to District XII in the Northern Mindanao area. In several letters, respondent requested
that he be reassigned in Western Visayas area but such was denied. Later on, he was
given an option to be assigned in Metro Manila, however respondent reiterated the
concerns he previously raised in his previous letters.
Due to the failure of respondent to report for work, a memorandum, dated June
15, 2000, was sent to him directing him to report for work within 5 working days from
receipt thereof. Another Memorandum was sent on June 26, 2000. Respondent was
warned that the same would be a final notice for him to report for work in Manila within 5
working days from receipt of the memo; otherwise, his services will be terminated on the
basis of being absent without official leave (AWOL). On July 13, 2000 another
memorandum was sent to respondent notifying him of their decision to terminate his
services after he repeatedly refused to report for work despite due notice.
The respondent filed a complaint with the NLRC for constructive dismissal. The
Labor Arbiter dismissed the case. On appeal, the NLRC affirmed the decision of the
Labor Arbiter. Motion for reconsideration was likewise denied. In a petition for Certiorari,
the CA ruled in favor of respondent and denied the motion for reconsideration. Hence,
this petition.

Whether there was valid dismissal.


The petition is meritorious.

On petitioners exercise of management prerogative

Jurisprudence recognizes the exercise of management prerogative to transfer or
assign employees from one office or area of operation to another, provided there is no
demotion in rank or diminution of salary, benefits, and other privileges, and the action is
not motivated by discrimination, made in bad faith, or effected as a form of punishment
or demotion without sufficient cause. To determine the validity of the transfer of
employees, the employer must show that the transfer is not unreasonable, inconvenient,
or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of
his salaries, privileges and other benefits. Should the employer fail to overcome this

burden of proof, the employee's transfer shall be tantamount to constructive dismissal.

Both the LA and the NLRC ruled that the reassignment of respondent was a valid
exercise of petitioners management prerogative. The rule in our jurisdiction is that
findings of fact of the NLRC, affirming those of the LA, are entitled to great weight and
will not be disturbed if they are supported by substantial evidence. Substantial evidence
is an amount of relevant evidence which a reasonable mind might accept as adequate
to justify a conclusion. Based on the foregoing, this Court rules that the CA had
overstepped its legal mandate by reversing the findings of fact of the LA and the NLRC
as it appears that both decisions were based on substantial evidence. There is no proof
of arbitrariness or abuse of discretion in the process by which each body arrived at its
own conclusions. Thus, the CA should have deferred to such specialized agencies
which are considered experts in matters within their jurisdictions.
On the existence of grounds to dismiss respondent from the service
This Court has long stated that the objection to the transfer being grounded
solely upon the personal inconvenience or hardship that will be caused to the
employee by reason of the transfer is not a valid reason to disobey an order of
transfer. Such being the case, respondent cannot adamantly refuse to abide by the
order of transfer without exposing himself to the risk of being dismissed. Hence, his
dismissal was for just cause in accordance with Article 282(a) of the Labor Code.
Lastly, while it is understandable that respondent does not want to relocate his
family, this Court agrees with the NLRC when it observed that such inconvenience is
considered an employment or professional hazard which forms part of the concessions
an employee is deemed to have offered or sacrificed in the view of his acceptance of a
position in sales.
On the observance of due process
In termination proceedings of employees, procedural due process consists of the
twin requirements of notice and hearing. The employer must furnish the
employee with two written notices before the termination of employment can be
effected: (1) the first apprises the employee of the particular acts or omissions for
which his dismissal is sought; and (2) the second informs the employee of the
employers decision to dismiss him. The requirement of a hearing is complied with as
long as there was an opportunity to be heard, and not necessarily that an actual hearing
was conducted. While no actual hearing was conducted before petitioners dismissed
respondent, the same is not fatal as only an ample opportunity to be heard is what is
required in order to satisfy the requirements of due process. The reassignment of
respondent to another territory was a valid exercise of petitioners management
prerogative and, consequently, his dismissal was for cause and in accordance with the
due process requirement of law.
On the payment of separation pay

An employee who is dismissed for cause is generally not entitled to any

financial assistance. Equity considerations, however, provide an exception. Equity
has been defined as justice outside law, being ethical rather than jural and belonging to
the sphere of morals than of law. It is grounded on the precepts of conscience and not
on any sanction of positive law, for equity finds no room for application where there is
In the instant case, this Court rules that an award to respondent of separation
pay by way of financial assistance, equivalent to one-half (1/2) months pay for every
year of service, is equitable. Although respondent's actions constituted a valid ground to
terminate his services, the same is to this Court's mind not so reprehensible as to
warrant complete disregard of his long years of service. It also appears that the same is
respondent's first offense. While it may be expected that petitioners will argue that
respondent has only been in their service for four years since the merger of Pharmacia
and Upjohn took place in 1996, equity considerations dictate that respondent's tenure
be computed from 1978, the year when respondent started working for Upjohn.


G.R. No. 174809, June 27, 2012
Peralta, J.
FACTS: Petitioner Duty Free Philippines Services, Inc. is a manpower agency that
provides personnel to Duty Free Philippines(DFP). Manolo Tria was employed by
Petitioner and was seconded to DFP as a Warehouse Supervisor. In an Audit Report it
was found out that there were glaring discrepancies in the documents of its products
which indicate a malicious attempt to conceal an anomalous irregularity. It was found to
have been fabricated and all signatories therein, namely, Ed Garcia, Stockkeeper;
Catherino A. Bero, DIU Supervisor; and Constantino L. Cruz, were held accountable for
the irregular loss of the unaccounted Marlboro KS Pack of 5.
Garcia disclosed that it was respondent Manolito Tria who ordered him to look for
a van for the supposed direct condemnation of the subject merchandise.
Respondent denied his participation in the illegal transaction. DFP Discipline Committee
issued a Joint Resolution holding respondent GUILTY OF DISHONESTY for (his) direct
participation in the fake condemnation and pilferage of the missing 1,020 Marlboro Pack
of 5s cigarettes and orders (his) DISMISSAL from the service. Petitioner sent
respondent a memorandum terminating his employment with Petitioner. Respondent
filed a Complaint against Petitioner for Illegal Dismissal and for payment of backwages,
attorneys fees and damages. Labor Arbiter rendered a Decision finding respondent to
have been illegally dismissed from employment. NLRC affirmed the LA decision. When
petitioner elevated the case to the CA, it denied for the first time the existence of
employer-employee relationship and pointed to DFP as respondents real employer. The
appellate court, however, considered said defense barred by estoppel for its failure to
raise the defense before the LA and the NLRC. Petitioner elevates the case before the
Court in this petition for review on certiorari.
ISSUE: Whether the absence of employer - employee relationship cannot be raised for
the first time on appeal and is barred by estoppel.
HELD: Yes. It is a matter of law that when a party adopts a particular theory and the
case is tried and decided upon that theory in the court below, he will not be permitted to
change his theory on appeal. The case will be reviewed and decided on that theory and
not approached and resolved from a different point of view.
The review of labor cases is confined to questions of jurisdiction or grave abuse
of discretion. The alleged absence of employer-employee relationship cannot be raised
for the first time on appeal. The resolution of this issue requires the admission and
calibration of evidence and the LA and the NLRC did not pass upon it in their decisions.
We cannot permit petitioner to change its theory on appeal. It would be unfair to the
adverse party who would have no more opportunity to present further evidence, material
to the new theory, which it could have done had it been aware earlier of the new theory
before the LA and the NLRC. More so in this case as the supposed employer of
respondent which is DFP was not and is not a party to the present case.

In this case, petitioner insisted that respondent was dismissed from employment
for cause and after the observance of the proper procedure for termination.
Consequently, petitioner cannot now deny that respondent is its employee. While
indeed, jurisdiction cannot be conferred by acts or omission of the parties, petitioners
belated denial that it is the employer of respondent is obviously an afterthought, a
devise to defeat the law and evade its obligations. We agree with the appellate court
that DFPDCs conclusions are not supported by clear and convincing evidence to
warrant the dismissal of respondent. In case of doubt, such cases should be resolved in
favor of labor, pursuant to the social justice policy of labor laws and the Constitution.
The petition is DENIED for lack of merit. The Court of Appeals Decision is


G.R. No. 172642, June 13, 2012
Peralta, J.
FACTS: Nelson R. Dulay was employed by respondent General Charterers Inc. (GCI), a
subsidiary of Aboitiz Jebsen Maritime Inc. since 1986. On August 13, 2000, or 25 days
after the completion of his employment contract, Nelson died due to acute renal failure
secondary to septicemia. At the time of his death, Nelson was a bona fide member of
the Associated Marine Officers and Seamans Union of the Philippines (AMOSUP),
GCIs collective bargaining agent. Nelsons widow, Merridy Jane, thereafter claimed for
death benefits through the grievance procedure of the Collective Bargaining Agreement
(CBA) between AMOSUP and GCI. However, on January 29, 2001, the grievance
procedure was "declared deadlocked" as petitioners refused to grant the benefits
sought by the widow.
Merridy Jane filed a complaint with the NLRC Sub-Regional Arbitration Board
against GCI for death and medical benefits and damages. Joven Mar, Nelsons brother,
received P20,000.00 from respondents pursuant to the CBA and signed a "Certification"
acknowledging receipt of the amount and releasing AMOSUP from further liability.
Merridy Jane contended that she is entitled to the aggregate sum $90,000. Merridy
Jane averred that the P20,000.00 already received by Joven Mar should be considered
advance payment of the total claim of US$90,000. Respondents, on the other hand,
asserted that the NLRC had no jurisdiction over the action on account of the absence of
employer-employee relationship between GCI and Nelson at the time of the latters
The Labor Arbiter ruled in favor of private respondent. It ordered the petitioner to
pay P4,621,300.00, the equivalent of US$90,000.00 less P20,000.00. NLRC affirmed.
Appeal to the CA. The CA ruled that while the suit filed by Merridy Jane is a money
claim, the same basically involves the interpretation and application of the provisions in
the subject CBA. As such, jurisdiction belongs to the voluntary arbitrator and not the
labor arbiter. Petitioner contends that Section 10 of R.A. 8042 vests jurisdiction on the
appropriate branches of the NLRC to entertain disputes regarding the interpretation of a
collective bargaining agreement involving migrant or overseas Filipino workers.
Petitioner argues that the abovementioned Section amended Article 217 (c) of the Labor
Code which, in turn, confers jurisdiction upon voluntary arbitrators over interpretation or
implementation of collective bargaining agreements and interpretation or enforcement of
company personnel policies. Hence, the instant petition.
ISSUE: Whether the CA committed error in ruling that the Labor Arbiter has no
jurisdiction over the case.
HELD: The petition is without merit. It is true that R.A. 8042 is a special law governing
overseas Filipino workers. However, a careful reading of this special law would readily
show that there is no specific provision thereunder which provides for jurisdiction over

disputes or unresolved grievances regarding the interpretation or implementation of a

CBA. Section 10 of R.A. 8042, which is cited by petitioner, simply speaks, in general, of
"claims arising out of an employer-employee relationship or by virtue of any law or
contract involving Filipino workers for overseas deployment including claims for actual,
moral, exemplary and other forms of damages."
On the other hand, Articles 217(c) and 261 of the Labor Code are very specific in
stating that voluntary arbitrators have jurisdiction over cases arising from the
interpretation or implementation of collective bargaining agreements. Stated differently,
the instant case involves a situation where the special statute (R.A. 8042) refers to a
subject in general, which the general statute (Labor Code) treats in particular. In the
present case, the basic issue raised by Merridy Jane in her complaint filed with the
NLRC is: which provision of the subject CBA applies insofar as death benefits due to the
heirs of Nelson are concerned. The Court agrees with the CA in holding that this issue
clearly involves the interpretation or implementation of the said CBA. Thus, the specific
or special provisions of the Labor Code govern.
In any case, the Court agrees with petitioner's contention that the CBA is the law
or contract between the parties. Article 13.1 of the CBA entered into by and between
respondent GCI and AMOSUP, the union to which petitioner belongs, provides as
The Company and the Union agree that in case of dispute or conflict in the
interpretation or application of any of the provisions of this Agreement, or enforcement
of Company policies, the same shall be settled through negotiation, conciliation or
voluntary arbitration. It is only in the absence of a collective bargaining agreement that
parties may opt to submit the dispute to either the NLRC or to voluntary arbitration.


G.R. No. 176287, January 31, 2011
Peralta, J.
FACTS: Respondent De Castro started working as a staff nurse at petitioner hospital
since September 28, 1990, until she was dismissed on July 20, 1999. While respondent
De Castro and ward-clerk orientee Gina Guillergan were at the nurse station on night,
one Rufina Causaren, an 81-year-old patient of petitioner hospital for "gangrenous
wound on her right anterior leg and right forefoot" scheduled for operation fell from the
right side of the bed as she was trying to reach for the bedpan. Instead of personally
seeing the patient, respondent De Castro directed ward-clerk orientee Guillergan to
check the patient. The vital signs of the patient were normal. Later, the physician on
duty and the nursing staff on duty for the next shift again attended to patient Causaren.
Chief Nurse Josefina M. Villanueva informed Dr. Asuncion Abaya-Morido,
president and hospital director, about the incident and requested for a formal
investigation. The legal counsel of petitioner hospital directed respondent De Castro
and three other nurses on duty, Staff Nurse Janith V. Paderes and Nursing Assistants
Marilou Respicio and Bertilla T. Tatad, to appear before the Investigation Committee.
The committee recommended that despite her more than seven years of service,
respondent De Castro should be terminated from employment for her lapse in
responding to the incident and for trying to manipulate and influence her staff to coverup the incident.
HRD Officer of petitioner hospital, issued a notice of termination for alleged
violation of company rules and regulations, particularly:(1) negligence to follow company
policy on what to do with patient Rufina Causaren who fell from a hospital bed; (2)
failure to record and refer the incident to the physician-[on- duty and allowing a
significant lapse of time before reporting the incident; (3) deliberately instructing the staff
to follow her version of the incident in order to cover up the lapse; and (4) negligence
and carelessness in carrying out her duty as staff nurse-on-duty when the incident
happened. Respondent De Castro, with the assistance of respondent Hospital
Management Services Inc.-Medical Center Manila Employees Association-AFW, filed a
Complaint7 for illegal dismissal against petitioners with prayer for reinstatement and
payment of full backwages without loss of seniority rights, P20,000.00 moral
damages, P10,000.00 exemplary damages, and 10% of the total monetary award as
attorney's fees.
Labor Arbiter rendered a Decision, ordering petitioner hospital to reinstate
respondent De Castro to her former position or by payroll reinstatement, at the option of
the former, without loss of seniority rights, but without backwages. NLRC reversed the
findings of the Labor Arbiter. It observed that respondent De Castro lacked diligence
and prudence in carrying out her duty when, instead of personally checking on the
condition of patient Causaren after she fell from the bed, she merely sent ward-clerk

orientee Guillergan to do the same in her behalf and for influencing her staff to conceal
the incident. CA reversed and set aside the Decision of the NLRC and reinstated the
Decision of the Labor Arbiter. CA ruled that while respondent De Castro's failure to
personally attend to patient Causeran amounted to misconduct, however, being her first
offense, such misconduct could not be categorized as serious or grave that would
warrant the extreme penalty of termination. Hence, this present petition.
ISSUE: Whether the deliberate refusal to attend to patient Causaren after the latter fell
from the bed justifies respondent De Castro's termination from employment due to
serious misconduct.
HELD: No. Article 282 (b) of the Labor Code provides that an employer may terminate
an employment for gross and habitual neglect by the employee of his duties.
Neglect of duty, to be a ground for dismissal, must be both gross and
habitual. Gross negligence connotes want of care in the performance of one's duties.
Habitual neglect implies repeated failure to perform one's duties for a period of time,
depending upon the circumstances. A single or isolated act of negligence does not
constitute a just cause for the dismissal of the employee. Despite our finding of
culpability against respondent De Castro; however, we do not see any wrongful intent,
deliberate refusal, or bad faith on her part when, instead of personally attending to
patient Causaren, she requested Nursing Assistant Tatad and ward-clerk orientee
Guillergan to see the patient, as she was then attending to a newly-admitted patient at
Room 710. It was her judgment call, albeit an error of judgment, being the staff nurse
with presumably more work experience and better learning curve, to send Nursing
Assistant Tatad and ward-clerk orientee Guillergan to check on the health condition of
the patient, as she deemed it best, under the given situation, to attend to a newlyadmitted patient who had more concerns that needed to be addressed accordingly.
Being her first offense, respondent De Castro cannot be said to be grossly negligent so
as to justify her termination of employment.
The Court emphasizes that the nature of the business of a hospital requires a
higher degree of caution and exacting standard of diligence in patient management and
health care as what is involved are lives of patients who seek urgent medical
assistance. However, in some cases, the Court had ruled that sanctioning an erring
employee with suspension would suffice as the extreme penalty of dismissal would be
too harsh. Considering that this was the first offense of respondent De Castro in her
nine (9) years of employment with petitioner hospital as a staff nurse without any
previous derogatory record and, further, as her lapse was not characterized by any
wrongful motive or deceitful conduct, the Court deems it appropriate that, instead of the
harsh penalty of dismissal, she would be suspended for a period of six (6) months
without pay, inclusive of the suspension for a period of 14 days which she had earlier
served. Thereafter, petitioner hospital should reinstate respondent Edna R. De Castro to
her former position without loss of seniority rights, full backwages, inclusive of
allowances and other benefits, or their monetary equivalent, computed from the
expiration of her suspension of six (6) months up to the time of actual reinstatement.


G.R. No. 164118, February 9, 2010
Peralta, J.
FACTS: Respondent Mongcal alleged that on May 7, 1993, he was employed as a
payloader operator by the respondent company. That on June 29, 1995, a dump truck
driver of the respondent company for truck No. 25, requested respondent to load his
dump truck with construction materials at the crusher site. He willingly obliged to do his
job; that it was later on discovered that said Aldrin Rasote had diverted the delivery of
said materials loaded to another person; that as a result of this incident, complainant
was dismissed from his job effective 30 June 1995. Respondent denies having a hand
nor was he involved in the act committed by truck driver Aldrin Rasote.
Mongcal alleged that his dismissal from work was effected without any valid
ground and violative of the rules on due process; that he was not informed of the
reasons for his termination from the service nor was he given an opportunity to explain
his side, and hence, he was deprived of his means of livelihood without due process of
law. Hence, he prays for reinstatement, backwages, and separation pay if reinstatement
is no longer feasible.
The Labor Arbiter ruled in favor of petitioner by dismissing the complaint but
ordered petitioner to pay herein private respondent P1,000.00 for failure to observe due
process requirements of law. On appeal, the NLRC overturned the Labor Arbiter's ruling
ordering Sargasso Construction and Development Corporation to pay Gorgonio
Mongcal separation pay and backwages. CA affirmed NLRC with modification: the
separation pay should be computed from the date of private respondent's employment
until the finality of this decision while his backwages should be computed from the time
of his alleged dismissal up to the finality of this decision, and in both cases, using his
monthly salary of P3,380.00 as basis of computation
ISSUE: Whether the Honorable Court Of Appeals committed grave error in sustaining
the award of separation pay and backwages to private respondent.
HELD: No. Under Article 279 of the Labor Code, an illegally dismissed employee "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." In addition to full backwages, the Court has also
repeatedly ruled that in cases where reinstatement is no longer feasible due to strained
relations, then separation pay may be awarded instead of reinstatement. In Mt. Carmel
College v. Resuena, the Court reiterated that the separation pay, as an alternative to
reinstatement, should be equivalent to one (1) month salary for every year of service.
The Decision and Resolution of the Court of Appeals are affirmed. Petitioner is ordered

to pay respondent Gorgonio Mongcal (a) separation pay in the amount equivalent to
one (1) month pay for every year of service; and (b) backwages, computed from the
time compensation of respondent Mongcal was withheld from him when he was unjustly
terminated, up to the time of payment thereof. For this purpose, the records of this case
are hereby REMANDED to the Labor Arbiter for proper computation of said awards.
Costs against petitioner.