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

Pre p a re d b y: B U E N AVE N T U RA , JAM E S A N D R E W A.

G.R. No. 182836 October 13, 2009

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Interpretation and Application of Labor Laws: Case No. 1

CONTINENTAL STEEL MANUFACTURING CORPORATION, Petitioner,

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

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qualification for the child dependent, such that the child must have been born or must have
acquired civil personality, as Continental Steel avers. Without such qualification, then child shall be
understood in its more general sense, which includes the unborn fetus in the mothers womb.

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G.R. No. 164774 April 12, 2006

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Interpretation and Application of Labor Laws: Case No. 2

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

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

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policy which would better accomplish the business purpose, an employer may not discriminate
against an employee based on the identity of the employees spouse. This is known as the bona fide
occupational qualification exception.
There was an illegal dismissal in the case of Etstrella because her resignation was
involuntary. She was merely compelled to submit the resignation letter because of her urgent need
for the money offered if she resigns. Moreover, given the lack of sufficient evidence on the part of
Star Paper that the resignation was voluntary, Estrellas dismissal is declared illegal.

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G.R. No. 111105 June 27, 1995

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Interpretation and Application of Labor Laws: Case No. 3

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

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

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affected employees. In fact, the voluntary arbitration proceedings more than satisfied the
intendment of the law considering that the parties were accorded the benefit of a hearing, in
addition to the right to present their respective position papers and documentary evidence. At any
rate, considering that the Office of the Voluntary Arbitrator is under the jurisdiction of the
Department of Labor and Employment, it would be superfluous to still require the service of notice
with the latter when proceedings have already been initiated with the former precisely to carry out
the very purpose for which said notice is intended.

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G.R. No. 75662 September 15, 1989

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Interpretation and Application of Labor Laws: Case No. 4

MERCURY DRUG CORPORATION, Petitioner

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

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continue in employment an employee guilty of acts inimical to its interest, justifying loss of
confidence in him. The law does not impose unjust situations on either labor or management. While
the constitution is committed to the policy of social justice and the protection of laborers, it should
not be supposed that labor dispute will be automatically decided in favor of labor. Management has
also its own rights which are the enforcement of interest of simple fair play.

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G.R. No. L-5206 April 29, 1953 Interpretation and Application of Labor Laws: Case No. 5
CALTEX (PHILIPPINES), INC., Petitioner,
vs.
PHILIPPINE LABOR ORGANIZATIONS, CALTEX CHAPTER, Respondent.
FACTS:
After the 2nd world war 11 female, who were previous employees of Caltex before the
war, requested for one year gratuity to prewar female employees who were not readmitted to
the service of the respondent-company after the liberation, in the same manner that the
prewar male employees of the company presented on the demand. These female employees
used to handle machineries that were functioning a little differently from the ones now in
operation in Caltex which are presently being handled by the male employees. It is precisely
for the fact that they were not reinstated that they were now requesting for one year
gratuity given to prewar male employees by the respondent-company. There is no denial on
the part of the respondent as to the fact of its having given one year gratuity to the prewar
male employees of the company. The CIR found no reason why the female prewar employees
should be treated differently from the prewar male employees. Upon the whole, it proceeds,
in justice and equity, that the prewar female employees of Caltex should be extended the
same treatment as to the prewar male employees, hence, CIR ordered Caltex to pay the 11
female employees their corresponding gratuity. Caltex filed a motion for reconsideration but
the same was denied. Hence, this petition.
ISSUE:
Was there a discrimination when the company refused to give its former pre-war
female employees the benefits accorded to the re-employed male employees of the
company?
RULING:
There was no discrimination in the case at bar. In the settlement of industrial
disputes it is proper and convenient for the court to insist, in exercising its ample powers,
that capital shall make no discrimination between male and female laborers. However,
discrimination only exists when one is denied privileges given to the other under identical
or similar conditions. Material conditions of course. And the condition as to actual
employment required by the company is undoubtedly material, the purpose of gratuity
being obviously to induce the company's workers to render better service in return for such
generosity, or simply to improve the finances and morale of its helpers with consequent
beneficial effects upon the corporate business operations. In the instant controversy, the
conditions were different: the male beneficiaries were employees; whereas these female

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claimants were not. Courts are not permitted to render judgments solely upon the basis of
sympathies and inclinations. Neither are they authorized, in the guise of affording
protection to labor, to distribute charities at the expense of natural or judicial persons,
because our constitutional government assures the latter against deprivation of their
property except in accordance with the statutes of supplementary equitable principles.

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

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Interpretation and Application of Labor Laws: Case No. 6

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

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