Académique Documents
Professionnel Documents
Culture Documents
CASE DIGESTS
Interpretation in favor of labor
Continental Steel Manufacturing Corporation vs. Montao
GR No. 182836, October 13, 2009
Facts:
Hortillano filed his claims for Paternity Leave, Bereavement Leave, and Death and
Accident Insurance for dependent based on the death of his unborn child when his wife had
a premature delivery in the 38th week of her pregnancy. The company alleges however that
he is not entitled to Bereavement Leave and Death and Accident Insurance because the
express provision of the CBA did not contemplate the death of an unborn child, a fetus,
without legal personality.
Issue:
Can an employee claim benefits pursuant to a provision of a CBA which does not
properly define the pertinent terms connected with his claim?
Ruling:
Yes. CBA provisions should be interpreted liberally to give life to the intentions
thereof. The Labor Code is specific in enunciating that in case of doubt in the interpretation
of any law or provision affecting labor, such should be interpreted in favor of labor. In the
same way, the CBA and its provisions should be interpreted in favor of labor.
In the case at bar, Arbitrator Montao was correct in pointing out that the employee
was able to satisfy the requirements of the said claims. The Court found it unnecessary to
establish the legal personality of the unborn child because it is not an issue on this case.
Hortillano was able to establish that there was death of his legitimate dependent and was
able to provide documents in the proof of such. Hence, his claims were sustained.
Is the introduction of a new marketing scheme tending to reduce the take-home pay
of the employees a valid exercise of the companys management prerogatives?
Ruling:
Yes. An employer is free to regulate, according to his own discretion and judgment,
all aspects of employment, including processes to be followed, with limitations as provided
by special laws. 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 companys management
prerogatives are exercised in good faith for the advancement of the employers interest and
not for the purpose of defeating or circumventing the rights of the employees under special
laws or under valid agreements, the Court will uphold them.
Can the registration of a labor union be cancelled for failure to submit the required
documents to the BLR on time?
Ruling:
Yes, if in the determination of the Regional Director, the labor union has not
substantially complied with the requirements prescribed by law. According to the Court, it
is sufficient to give the Regional Director license to treat the late filing of the required
documents as sufficient compliance with the legal requirements. Labor authorities should,
indeed, act with circumspection in treating petitions for cancellation of labor union
registration, lest they be accused of interfering with union activities. They must take into
consideration the fundamental rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities.
In compliance with our international obligations as embodied in the International
Labour Organization (ILO) Convention No. 87, Congress enacted RA 9481 which provides for
the non-dissolution of workers organizations by administrative authority, effectively
amending the Labor Code provisions to strengthen the workers right to self-organization.
Ruling:
No. The mere fact that the labor union is such does not mean that it cannot be
considered as employer of the persons who work for it. Much less should it be exempted
from the labor laws which it espouses as a labor organization. So long as the elements of an
employer-employee relationship exist the selection and engagement of the employee, the
payment of wages, the power of dismissal, and the power to control the employees conduct
the entity is considered the employer of the putative employee.
In the case at bar, it was sufficiently proven that all four elements are present. It was
also reflected in Bautistas payroll sheets, and his membership coverage with the SSS and
ALUs contribution as employer. Even bolstering such fact is the act of ALU in filing a
clearance application to terminate Bautistas employment.
10
Can employees exercising the power to hire, suspend, or dismiss other employees
subject to a review be considered managerial employees for the purpose of inclusion in the
bargaining unit of the company?
Ruling:
No. The test of supervisory or managerial status depends on whether a person
possesses authority to act in the interest of his employer as specified by the Labor Code and
its IRR, and whether such authority is not merely routinary or clerical in nature, but requires
the use of independent judgment. Where such recommendatory powers are subject to
evaluation, review, and final action of department heads and other higher executives, the
same, although present, are not effective and not an exercise of independent judgment as
required by law.
It was shown that the aforementioned employees are exercising the power to hire.
However, in the performance of their functions and duties and in the exercise of
recommendatory powers, subject employees may only recommend, as the ultimate power
to hire, fire or suspend, rests upon the plant personnel manager. Hence, the Court did not
consider them as managerial employees.
11
12
13
14
15
16
17
Ruling:
No. According to the Court, the provisions of P.D. No. 1508 requiring the submission
of disputes before the barangay Lupong Tagapayapa prior to their filing with the court or
other government offices are not applicable to labor cases. The decree was intended to be
applicable only to courts of justice, and not to labor relations commissions or labor
arbitrators' offices. The express reference to "judicial resources", to "courts of justice", "court
dockets", or simply to "courts" are significant. There is no mention at all of labor relations or
controversies and labor arbiters or commissions in the clauses involved. The term other
government offices cannot be construed to include the Office of the Labor Arbiter and the
Med-Arbiter, for it refers only to such offices as the Fiscal's Office or, in localities where there
is no fiscal, the Municipal Trial Courts. Requiring conciliation of labor disputes before the
barangay courts would defeat the very salutary purposes of the law. Instead of simplifying
labor proceedings designed at expeditious settlement or referral to the proper court or office
to decide it finally, the position taken by the petitioner would only duplicate the conciliation
proceedings and unduly delay the disposition of the labor case.
18
19
20
Is a replevin case filed by a charterer against the crew holding possession of a vessel,
due to unheeded labor demands, intertwined with the crews complaint for unfair labor
practices?
Ruling:
NO. According to the Court, the labor dispute involved is not intertwined with the
issue in the Replevin Case. Replevin is a possessory action, the gist of which is the right of
possession in the plaintiff. The primary relief sought therein is the return of the property in
specie wrongfully detained by another person. With respect to the other issue, the NLRC in
the case before it had issued an Injunctive Writ, this aspect of the controversy, and the crews
right to picket, is properly settled under the Labor Code. The respective issues raised in the
RTC and the NLRC can be resolved independently of the other. The Court is not sanctioning
split jurisdiction but defining avenues of jurisdiction as laid down by pertinent laws.
Hence, this petition for review was denied, affirming the RTCs decision on the
replevin case.
21
Does the Regional Director have jurisdiction over money claims of workers
concurrent with the Labor Arbiter?
Ruling:
Yes, provided that the requisites of the law, due to the Labor Codes amendment by
RA 6715, be present, namely: 1) that the claim is presented by an employee or person
employed in domestic or household service, or househelper under the code; 2) that the
claimant, no longer being employed, does not seek reinstatement; and 3) that the aggregate
money claim of the employee or househelper does not exceed five thousand pesos
(P5,000.00). In the absence of these requisites, the Labor Arbiter has exclusive original
jurisdiction over all claims arising from employer-employee relations, other than those
claims for employees compensation, social security, medicare, and maternity benefits. As
explained by then Justice Narvasa, in the resolution, of any question of jurisdiction over a
money claim arising from employer-employee relations, the first inquiry should be into
whether the employment relation does indeed still exist between the claimant and the
respondent. If the relation no longer exists, and the claimant does not seek reinstatement, the
case is cognizable by the Labor Arbiter, not by the Regional Director. On the other hand, if
the employment relation still exists, or reinstatement is sought, the next inquiry should be
into the amount involved. If the amount involved does not exceed P5,000.00, the Regional
Director undeniably has jurisdiction. But even if the amount of the claim exceeds P5,000.00,
the claim is not on that account necessary removed from the Regional Director's competence.
22
23
Does the NLRC have jurisdiction over a complaint filed by a corporate executive vicepresident for illegal dismissal, resulting from a board resolution dismissing him as such
officer?
Ruling:
No. Section 5 of Presidential Decree No. 902-A vests in the SEC original and exclusive
jurisdiction over controversies in the election or appointments of directors, trustees, officers
or managers of such corporations, partnership or associations. As pointed out by the
Solicitor General, the election, appointment and/or removal of an executive vice-president
is a prerogative vested upon a corporate board. A corporate officer's dismissal is always a
corporate act and/or intra-corporate controversy and that nature is not altered by the
reason or wisdom which the Board of Directors may have in taking such action. The
relationship of a person to a corporation, whether as officer or as agent or employee is not
determined by the nature of the services performed, but by the incidents of the relationship
as they actually exist.
24
Do the regular courts have jurisdiction over civil cases for damages arising from a
labor dispute?
Ruling:
No. As pronounced by the Court in several cases, a CFI is devoid of jurisdiction on
matters appropriately for the CIR. The right to damages would still depend on the evidence
in the unfair labor practice case in the CIR. To hold otherwise is to sanction split jurisdiction,
which is not according to the orderly administration of justice. Where the subject matter is
within the competence of the CIR, it must be deemed to have jurisdiction of all incidental
matters connected with the main issue.
25
26
27
28
Does the RTC have jurisdiction over claims for damages of an employer arising from
a picketing that accompanied a strike by its employees?
Ruling:
No. It is a labor arbiter, not a court, which possesses original and exclusive jurisdiction
to decide a claim for damages arising from picketing or a strike. Article 217, Section 3 of the
Labor Code states that the labor arbiters have exclusive and original jurisdiction over all
money claims of workers, including those based on nonpayment or underpayment of wages,
overtime compensation, separation pay and other benefits provided by law or appropriate
agreement, except claims for employees' compensation, social security, medicare and
maternity benefits. Section 5 of the same article also provides that all other claims arising
from employer-employee relations, unless expressly excluded by the Code also belong to
such jurisdiction. Certainly, the present Labor Code is even more committed to the view that
on policy grounds, and equally so in the interest of greater promptness in the disposition of
labor matters, a court is spared the often onerous task of determining what essentially is a
factual matter, namely, the damages that may be incurred by either labor or management as
a result of disputes or controversies arising from employer-employee relations.
29
30
Facts:
Abraham Tumala, Jr. averred that he was declared winner of the Lapu-Lapu Award
in the annual Sumakwel contest conducted by his employer Pepsi Cola Bottling Co. in 1979
as top salesman of that year. This award entitled him to a prize of house and lot. Pepsi Cola
refused to deliver him the prize allegedly due to fraudulent manipulations in his
performance as a salesman. His employment was also terminated. He filed this case with the
CFI, praying that the company deliver him the prize of house and lot or its cash equivalent.
He also prayed for the payment of back salaries and separation benefits, plus damages.
Tumala argues that this action was a civil controversy, hence, the CFI has jurisdiction over
his case. Pepsi Cola moved for the cases dismissal for the CFI has no jurisdiction.
Issue:
Does the CFI [now RTC] have jurisdiction over an employees claim of prize pursuant
to a contest conducted by his employer in relation to the formers work performance?
Ruling:
No. The Court said that the claim for the prize of house and lot unquestionably arose
from an employer-employee relationship. Therefore, this case falls within the coverage of
Article 217 of the Labor Code, which speaks of all other claims arising from employeremployee relations, unless expressly excluded by this Code. The Court explains that Tumala
would not have qualified for the said contest had he not been the employee of Pepsi Cola.
Also, the ground provided by the company in refusing to deliver the prize fraudulent
manipulations in Tumalas performance as a salesman involved an inquiry into his
actuations as employee. To hold that Tumala's claim for the prize should be passed upon by
the regular court of justice, independently and separately from his claim for back salaries,
retirement benefits and damages, would be to sanction split jurisdiction and multiplicity of
suits which are prejudicial to the orderly administration of justice.
31
Philippine Association of Free Labor Unions (PAFLU) filed a complaint for unfair
labor practice with the Court of Industrial Relations (CIR) against Northwest Manufacturing
Corporation and a certain Gan Hun. The CIR ruled in favor of the union and issued a writ of
execution, levying the personal properties of Gan Hun. Wong King Yuen, however, filed a
complaint for recovery of his properties and damages with the Court of First Instance (CFI)
against the provincial sheriff, because the properties inside the apartment unit levied by the
provincial sheriff belong to him and not to Gan Hun. The union, in this civil case, sought for
intervention. They moved for the dismissal of this complaint for damages, saying that the CFI
had no jurisdiction over the case filed by the private respondent because the execution
relates to a labor dispute.
Issue:
Does the CFI have jurisdiction over a complaint for the recovery of property and
damages after an execution wrongfully levied by the sheriff, wherein the writ of execution
issued arose from a labor dispute?
Ruling:
Yes. The civil case is an ordinary civil action for damages, not a labor dispute. The case
is directed against the provincial sheriff and the recovery of damages is sought against the
bond provided for Section 17, Rule 39 of the Rules of Court governing execution and
satisfaction of judgments. Even if the act complained of by Wong King Yuen arose from a
labor dispute between the union and Gan Hun, the inevitable conclusion remains the same
there is no labor dispute between the union and Wong King Yuen. The civil case has no
direct bearing with the case filed with the industrial court and is distinct from the labor
dispute pending with the CIR.
32
Does the jurisdiction of Labor Arbiters include employee claims for damages arising
from illegal dismissal complaints?
Ruling:
Yes. At the time that Primero filed his complaints for illegal dismissal and recovery of
back wages, etc. with the Labor Arbiter, the latter possessed original and exclusive
jurisdiction also over claims for moral and other forms of damages; this, in virtue of Article
265 of the Labor Code, effective from May 1, 1974. In the proceedings before the Labor
Arbiter, Primero plainly had the right to plead and prosecute a claim not only for the reliefs
specified by the Labor Code itself for unlawful termination of employment, but also for moral
or other damages under the Civil Code arising from or connected with that termination of
employment. The legislative intent appears clear to allow recovery in proceedings before
Labor Arbiters of moral and other forms of damages, in all cases or matters arising from
employer-employee relations. An employee who has been illegally dismissed (i.e.,
discharged without just cause or being accorded due process), in such a manner as to cause
him to suffer moral damages (as determined by the Civil Code), has a cause of action for
reinstatement and recovery of back wages and damages. When he institutes proceedings
before the Labor Arbiter, he should make a claim for all said reliefs. He cannot, to be sure, be
permitted to prosecute his claims piecemeal. He cannot institute proceedings separately and
contemporaneously in a court of justice upon the same cause of action or a part thereof. He
cannot and should not be allowed to sue in two forums: one, before the Labor Arbiter for
reinstatement and recovery of back wages, or for separation pay, upon the theory that his
dismissal was illegal; and two, before a court of justice for recovery of moral and other
damages, upon the theory that the manner of his dismissal was unduly injurious, or tortious.
33
Does the Labor Arbiter have exclusive and original jurisdiction over employees
money claims exceeding the aggregate amount of Php5,000.00?
Ruling:
Yes. According to the Court, this exclusive jurisdiction of the Labor Arbiter is
confirmed by the provisions of Article 129 which excludes from the jurisdiction of the
Regional Director or any hearing officer of the Department of Labor the power to hear and
decide claims of employees arising from employer-employee relations exceeding the amount
of Php5,000.00 for each employee. The inspection conducted by the Secretary of Labor,
through labor regulation officers or industrial safety engineers, may yield findings of
violations through labor standards under labor laws; the Secretary of Labor may order
compliance with said labor standards, if necessary, through appropriate writs of execution
but when the findings disclose an employee claim of over Php5,000.00, the matter should be
referred to the Labor Arbiter in recognition of his exclusive jurisdiction over such claims.
34
Carlos Cruz was offered employment as Engineer Officer of Singapore Airlines with
the opportunity to undergo a B-707 I conversion training course. In this offer, he was
required to enter into a bond with the airline company for a period of five years. Cruz
accepted the offer, and signed an agreement, stipulating among others that he shall agree to
remain in the service of the Company for a period of five years from the date of
commencement of such aforesaid conversion training if so required by the Company. In the
event he leaves the company within the period stated or he is dismissed for misconduct, he
and his surety shall be liable solidarily to pay liquidated sums as damages. Singapore Airlines
claimed that Cruz went on leave without its approval during the 2nd year, thus prompting
them to file a suit for damages. The trial court dismissed the suit, contending that the case
involves a money claim arising from an employer-employee relation or at the very least a
case arising from employer-employee relations, which under Art. 216 of the Labor Code is
vested exclusively with the Labor Arbiters of the National Labor Relations Commission.
Issue:
Does the trial court have jurisdiction over the employers claim for liquidated
damages, arising from an employees breach of its contractual obligation?
Ruling:
Yes. While seemingly petitioner's claim for damages arises from employer-employee
relations, and the latest amendment to Article 217 of the Labor Code provides that all other
claims arising from employer-employee relationship are cognizable by Labor Arbiters, in
essence, petitioner's claim for damages is grounded on the "wanton failure and refusal"
without just cause of private respondent Cruz to report for duty despite repeated notices
served upon him of the disapproval of his application for leave of absence without pay. The
complaint was anchored not on the abandonment per se by Cruz of his job as the latter was
not required in the Complaint to report back to work but on the manner and consequent
effects of such abandonment of work translated in terms of the damages which petitioner
had to suffer.
Singapore Airlines sought protection under the civil laws and claims no benefits
under the Labor Code. The primary relief sought is for liquidated damages for breach of a
contractual obligation. The other items demanded are not labor benefits demanded by
workers generally taken cognizance of in labor disputes, such as payment of wages, overtime
compensation or separation pay. The items claimed are the natural consequences flowing
from breach of an obligation, intrinsically a civil dispute.
35
Does the admission by the Labor Arbiter of position papers filed after the
reglementary period constitute grave abuse of discretion?
Ruling:
No. The delay of private respondents in the submission of their position paper is a
procedural flaw, and the admission thereof is within the discretion of the Labor Arbiter.
Well-settled is the rule that technical rules of procedure are not binding in labor cases, for
procedural lapses may be disregarded in the interest of substantial justice, particularly
where labor matters are concerned. As provided also by the NLRC Rules of Procedure, the
failure to submit a position paper on time is not one of the grounds for the dismissal of a
complaint in labor cases. It cannot therefore be invoked by petitioners to declare private
respondents as non-suited. This stance is in accord with Article 4 of the Labor Code of the
Philippines, which resolves that all doubts in the interpretation of the law and its
implementing rules and regulations shall be construed in favor of labor.
36
37
Can the offer of reinstatement by an employer, during the hearing for an illegal
dismissal complaint, cure the defect of the employees dismissal without prior notice, cause,
or formal investigation (arbitrary dismissal)?
Ruling:
No. The Court doubted if Changs offer would have been made if Ranara had not
complained against him. At any rate, sincere or not, the offer of reinstatement could not
correct the earlier illegal dismissal of the petitioner. Chang incurred liability under the Labor
Code from the moment Carlo was illegally dismissed, and the liability did not abate as a result
of Chang's repentance.
The Court viewed Carlos refusal to be re-employed justified, as this was a case of
strained relations between the employer and the employee. Carlo would have found it
uncomfortable to continue working under the hostile eyes of the employer who had been
forced to reinstate him.
Note:
Article 221 [now 227], first paragraph:
it is the spirit and intention of this Code that the Commission and its members and
the Labor Arbiters shall use every and all reasonable means to ascertain the facts in each
MARAO, REBBEKAH GRACE G. Block B
38
39
40
41
Does the court have discretion to modify the attorney's fees previously agreed upon
by the parties under a valid contractual stipulation?
Ruling:
Yes, if by its determination the amount stipulated by the parties is unconscionable.
For the law recognizes the validity of stipulations included in documents such as negotiable
instruments and mortgages with respect to attorney's fees in the form of penalty provided
that they are not unreasonable or unconscionable. Attorney's fees provided in contracts as
recoverable against the other party and damages are not, strictly speaking, the attorney's
fees recoverable as between attorneys and client spoken of and regulated by the Rules of
Court. Rather, the attorney's fees here are in the nature of liquidated damages and the
stipulations therefor is aptly called a penal clause, So long as such stipulation does not
contravene law, morals, or public order, it is strictly binding upon the defendant
42
Jose M. Chua was employed as a Sales Manager of Chong Guan Trading. On a certain
date, a customer accidentally dropped the telephone directory on the top-glass of the stores
showcase, causing it to break. Chua, in order to cover up for the customer, admitted that he
accidentally broke it. It was in this incident that Chua was allegedly dismissed by his
employer, and this prompted him to file a complaint. The Labor Arbiter decided he was not
illegally dismissed by the employer, but the NLRC reversed this decision. In this appeal, the
employer argues that there was a procedural lapse Chua appealed the decision of the Labor
Arbiter beyond the reglementary period of ten days thus the NLRC had no jurisdiction over
the complaint. Furthermore, while the employer concedes that Chua must be reinstated
since there was no intentional abandonment on the latters part, it challenges the order for
the payment of back wages and separation pay.
Issues:
1) Does the NLRC lose its jurisdiction to entertain an appeal filed after the reglementary
period of ten days, the decision having become final and executory after the lapse of
said period from the receipt of said decision?
2) Are the findings of fact of the NLRC always binding with the Courts?
3) Can the NLRC grant a decision to reinstate an employee and award the same with
back wages in a case of an alleged illegal dismissal found out to be a result of the
employees misinterpretation of facts?
Ruling:
1) No. Article 223 of the Labor Code provides for a reglementary period of ten (10) days
within which to appeal a decision of the labor arbiter to the NLRC. The ten-day period
has been interpreted by this Court as ten (10) "calendar" days and not ten (10)
"working" days. The perfection of an appeal in the manner and within the period
prescribed by law is not only mandatory but jurisdictional, and failure to perfect an
appeal has the effect of rendering the judgment final and executory. However, the
NLRC may disregard the procedural lapse where there is an acceptable reason to
excuse tardiness in the taking of an appeal.
2) No. While it is well-established that the findings of facts of the NLRC are entitled to
great respect and are generally binding on this Court, it will not uphold erroneous
conclusions of the NLRC when the Court finds that the latter committed grave abuse
of discretion in reversing the decision of the labor arbiter or when the findings of facts
from which the conclusions were based were not supported by substantial evidence.
3) No. The Court was convinced that there was no illegal dismissal, as Chua did not
return to his work after his heated argument with his employer and was also negated
MARAO, REBBEKAH GRACE G. Block B
43
44
Nestor Flores was a Managing Consultant of John Clements Consultants Inc. Due to an
infringement of standing company policy, JCCI directed a decrease in his salary to pay for his
indebtedness, but Flores expressed his desire to resign from the company. Flores was
directed to take a vacation leave, but it was noted that he rendered services for a rival firm.
After his leave, his resignation was accepted by the company, but he failed to tender the
required resignation letter. JCCI issued a memorandum announcing his resignation from the
company. However, Flore filed a complaint for illegal dismissal. While the proceedings went
on, he still rendered services for the same rival firm, and even succeeded in pirating one of
JCCIs clients. The Labor Arbiter dismissed the complaint. Fifteen days after receipt of the
notice of the decision, Flores appealed to the NLRC, which reversed the Labor Arbiters
decision.
Issues:
1) Does the NLRC have jurisdiction over appeals on Labor Arbiters decisions filed after
the lapse of the reglementary period of ten days from the receipt of the assailed
decision?
2) Can a writ of certiorari be granted against the decisions of NLRC tainted with grave
abuse of discretion?
Ruling:
1) Yes. In taking cognizance of Flores appeal, notwithstanding the recorded actuality
that it was filed 15 days after notice of the judgment sought to be appealed and
therefore beyond the 10-day period of appeal set by law, the NLRC had acted without
jurisdiction, in deliberate disregard of this Courts holding in the aforecited Vir-Jen
case that the ten-day period of appeal set out in Article 223 of the Labor Code, as
amended, meant calendar and not working days.
2) Yes. As the Solicitor General correctly points out, Flores appeal was indeed filed out
of time: and the facts clearly establish that Flores had not been illegally dismissed but
had in truth voluntarily resigned, his offer to resign being unconditional and
irrevocable, and Flores clearly had acted in bad faith: he deliberately withheld
submission of his written resignation in order to retain employment in JCCI while
"moonlighting" in a rival enterprise, contrary to JCCI company policy. This Court is
satisfied, after a thoroughgoing review of the record that the findings of fact of the
Labor Arbiter are warranted by the evidence, and the rejection and reversal thereof
by the NLRC was without justification, and was therefore whimsical and capricious.
45
Starting 1966, private respondent Dominador Amante worked as driver for Hacienda
Colisap managed by Hernan Lopez, Jr. Sometime in 1987, he transferred to Bea Agricultural
Corporation managed by Javier Lopez Tanjanco, a nephew of Hernan. Javier dismissed him
on April 25, 1990 and paid his separation pay. He worked again with Hacienda Colisap. His
work was, however, short-lived. He was also dismissed by Hernan without a valid reason on
July 5, 1990. Dominador filed a complaint for illegal dismissal against Hernan. Hernan
alleged that it was Bea Agricultural Corporation that terminated the employment of private
respondent. He likewise contended that he was abroad when private respondent was
dismissed and could not be responsible for the same. The Labor Arbiter dismissed the
complaint for lack of cause of action. The NLRC however reversed the decision, stating that
Dominador was a probationary employee and that he was also entitled to back wages and
separation pay based on pay rolls presented only during the time of appeal.
Issues:
1) Can evidence be admitted if presented for the first time on appeal with the NLRC?
2) Are probationary employees entitled to security of tenure?
3) Can separation pay be also granted even if the decision provides an order for
reinstatement?
Ruling:
1) Yes. Article 221 of the Labor Code provides that "in any proceeding before the
Commission or any of the Labor Arbiters, the rules of evidence prevailing in courts of
law or equity shall not be controlling." It further mandates the NLRC to use every and
all reasonable means to ascertain the facts in each case speedily and objectively and
without regard to technicalities of law or procedure. Technicality should not be
permitted to stand in the way of equitably and completely resolving the rights and
obligations of the parties.
2) Yes. Article 281 of the Labor Code states that The services of an employee who has
been engaged on a probationary basis may be terminated for a just cause It is true
that probationary employees do not enjoy permanent status but they can only be
removed from their work during their probationary period for a valid reason. As
probationary employees, they are likewise protected by the security of tenure
provision of the Constitution. Consequently, they cannot be removed from their
positions unless for cause.
No. Back wages and separation pay are distinct reliefs given to alleviate the economic
damage suffered by an illegally dismissed employee. Payment of back wages is
specifically designed to restore an employee's income that was lost because of his
MARAO, REBBEKAH GRACE G. Block B
46
47
Does the NLRC lose its jurisdiction over an appeal filed one day late of the period
prescribed by law for its perfection?
Ruling:
Yes. The shortened period of ten (10) days fixed by Art. 223 of the Labor Code
contemplates calendar days and not working days. The purpose for providing this period is
that the law has commanded that labor cases be promptly, if not pretemporarily disposed of.
Long periods for any acts to be done by the contending parties can be taken advantage of
more by management than by labor. Most labor claims are decided in their favor and
management is generally the appellant. Delay in most instances gives the employers more
opportunity not only to prepare even ingenious defenses, what with well-paid talented
lawyers they can afford, but even to wear out the efforts and meager resources of the
workers, to the point that not infrequently the latter.
48
49
Edilberto Alvarez injured his wrist while at work. He was then given fifty-day work
concerned accident leave with pay by his employer. He was asked to return to work and was
assigned to do light work as recommended by his doctor. He was again examined, and was
qualified then to do moderate work, but Alvarez continued to absent himself from work,
exhausting his leave credits. Alvarez went to a total of five doctors, and all of them
recommended his fitness to work. His employer addressed him several letters serving as
warning, but Alvarez never heeded these letters. Under company policy, employees who
incur unauthorized absences of six days or more are subject to dismissal. As a consequence,
he was terminated from work. Alvarez filed a complaint for illegal dismissal. The Labor
Arbiter ruled that his dismissal was valid and justified, but on appeal with the NLRC, the
decision was reversed. Be it noted that the appeal was filed after fifteen days for receipt.
Issues:
1) Can the NLRC admit appeals filed later than the reglementary period of ten days?
2) Is an employer validly dismissed for absenting himself from work despite
recommendations of several doctors of his fitness to return to work and several
letters of his employer warning him of his dismissal?
Ruling:
1) Yes. The broader interest of justice and the desired objective of deciding the case on
the merits demand that appeals of such nature be given due course.
2) Yes. Article 282(b) of the Labor Code provides that an employer may validly dismiss
an employee for gross and habitual neglect by the employee of his duties. While it is
true that compassion and human consideration should guide the disposition of casses
involving termination of employment since it affects one's source or means of
livelihood, it should not be overlooked that the benefits accorded to labor do not
include compelling an employer to retain the services of an employee who has been
shown to be a gross liability to the employer. The law in protecting the rights of the
employees authorizes neither oppression nor self-destruction of the employer. In the
present case, it is clear that Nitural was guilty of seriously neglecting his duties. His
employer validly dismissed him not only for violation of company policy but also for
violation of Section 282(c) of the Labor Code.
50
51
52
Teodoro Rances entered into an amicable settlement with his employer Gulf-East
Ship Management Limited for payment of money in Dubai. Rances sought to enforce the
agreement in the Philippines through the POEA. The Court ruled that POEA has no
jurisdiction to hear and decide the claim for enforcement of foreign judgment, and stated
that Rances can initiate another proceeding before the POEA against private respondent on
the basis of the contract of employment. Rances filed another complaint for non-payment of
salary allotments, but his employer raised the defenses of payment and prescription. POEA
dismissed the case on the ground of prescription, so Rances appealed to the NLRC by filing a
notice of appeal and a motion for extension of time to file his appeal brief. The appeal was
dismissed on the ground that the memorandum of appeal was belatedly filed.
Issues:
1) Can the NLRC dismiss an appeal of a POEA decision filed belatedly?
2) Is the claim for payment of monetary awards barred by prescription filed after a
period of three years has elapsed?
Ruling:
1) Yes. Rule V, Book VII of the Rules Governing Overseas Employment provides: The
appeal shall be filed within the reglementary period as provided in Section 1 of this
Rule; shall be under oath with proof of payment of the required appeal fee and the
posting of a cash or surety bond as provided in Section 6 of this Rule; shall be
accompanied by a memorandum of appeal which shall state the grounds relied upon
and the arguments in support thereof; the relief prayed for; and a statement of the
date when the appellant received the appealed decision, and/or proof of service on
the other party of such appeal. A mere notice appeal without complying with the other
requisites aforestated shall not stop the running of the period for perfecting an
appeal. Section 7 further provides no extension of the period provided. The Court has
allowed the belated filing of appeals to NLRC in some cases. This liberal practice is
done only when it would serve the demands of substantial justice and in the exercise
of the court's equity jurisdiction, but it was not shown in this case.
2) Yes. As provided by Article 291 of the Labor Code, All money claims arising from
employer-employee relations accruing during the effectivity of this Code shall be filed
within three (3) years from the time the cause of action accrued; otherwise they shall
be forever barred.
53
An appeal was filed to the NLRC by the former CEO of Clark Development Corporation
on a decision of the Labor Arbiter granting the money claims of Antonio Salenga. This appeal
was however dismissed for the memorandum was not verified and it lacked a certification
of non-forum shopping, considering that there was also another appeal pending before the
NLRC on the same claims. There was also no board resolution attached, which authorized
the filing of the appeal. The NLRC, however, still admitted the appeal and reversed the Labor
Arbiters decision. The case was elevated to the CA, and the said court ruled that Salenga was
a corporate officer, thus the issue was an intra-corporate controversy not within the NLRCs
jurisdiction.
Issue:
Should an appeal filed with the NLRC by a corporation be dismissed if no board
resolution authorizing the filing of such and no certificate of non-forum shopping were
attached, and the memorandum was not verified?
Ruling:
Yes. The NLRC Rules of Procedure provides for the requirements for the perfection of
appeals. Among these is the requirement that the appeal must be verified by the appellant
himself. A corporation can only exercise its powers and transact its business through its
board of directors and through its officers and agents when authorized by a board resolution
or its bylaws. The power of a corporation to sue and be sued is exercised by the board of
directors. The physical acts of the corporation, like the signing of documents, can be
performed only by natural persons duly authorized for the purpose by corporate bylaws or
by a specific act of the board. The purpose of verification is to secure an assurance that the
allegations in the pleading are true and correct and have been filed in good faith. The counsel
for the corporation, for failure to provide the authorization from the board, cannot be
considered the appellant as provided for by law.
54
This case is a petition for certiorari and prohibition assailing the writ of execution and
garnishment of the National Labor Relations Commission (NLRC) against Danao
Development Corporation, containing orders of reinstatement and payment of back wages
to private respondents who were employees of the corporation. The implementation of said
writ was transferred to said commission after the abolition of the CIR. Prior to the execution,
Mr. Aurelio Cruz was ordered to make the necessary computation of the amount of back
wages. In his report, Cruz made mention of the different factors to consider in computing the
said amount. There was also a purported compromise agreement entered into by the Union
of the private respondents and the employer.
Issues:
1) Can a judgments regarding the grant of back wages attain immediate finality?
2) Can a labor union validly enter into a compromise agreement with an employer in
behalf of its member-complainants in a case claiming for reinstatement and back
wages?
Ruling:
1) No. The usual concept of finality which makes a judgment executory does not attach
to judgments of the nature herein concerned. A judgment ordering payment of back
wages does not necessarily contemplate a simple and straight computation of the
corresponding wages of the prevailing claimants on the basis of the number of days
or months from the date of unlawful dismissal to the date of reinstatement or the date
fixed by the Court. There are other factors which must be indispensably looked into
also. such a judgment is incomplete until after the definite amounts of back wages due
the respective claimants have been finally settled, albeit, as a matter of social justice
and expediency, such determination may be made individually, if feasible, and the
execution carried out as the computation for each worker is finished, assuming that
there would be considerable delay in the computation of the respective amounts for
the others. The Court has evolved a policy in such cases to just grant a straight award
for a reasonable period, say three years, regardless of the actual number of years of
lay-off, thereby relieving the parties from the work, time and expenses needed to
prove circumstances that would otherwise go into the exact determination of what is
due.
2) No. It bears making it unmistakably clear here that the beneficiaries in this case are
the individual claimants or complainants themselves. Nothing short of personal
acknowledgments on their part may be deemed as legal satisfaction of this judgment.
The union to which they belong and their counsel can only assist them; they cannot
decide for their even as they are entitled to their corresponding dues and fees in
accordance with the by-laws and the corresponding contract for services.
MARAO, REBBEKAH GRACE G. Block B
55
In the case of Pacific Mills vs NLRC (GR No. 79535, 1988), the Court dismissed the
petition questioning the decision of the NLRC because it was not sufficiently shown that the
Commission committed grave abuse of discretion. When the decision attained finality, the
NLRC made a computation of the award to complainants and issued a partial writ of
execution. Pacific Mills filed a motion to stay execution, contending several supervening
events that would affect the computation of the award. The NLRC denied such motion and
issued an order for the immediate implementation of the partial writ of execution without
further delay. In this instant case, Pacific Mills questions the validity of the issuance of the
said orders.
Issue:
May the execution of a final judgment of NLRC be stayed in view of supervening
events?
Ruling:
Yes. There can be no question that the supervening events cited by petitioner would
certainly affect the computation of the award in the decision of the NLRC. It is the duty of the
NLRC to consider the same and inquire into the correctness of the execution, as such
supervening events may affect such execution. Despite lack of objections on the part of
Pacific Mills, the fact cannot be denied that such supervening events as the length of service
of the private respondents, the wage exemptions granted, and payments already made on
the award would certainly affect the computation of the total award under the decision. Thus,
a prompt and immediate determination of these objections and a recomputation of the
award should be made. A denial of this opportunity to right a clear error in the execution of
the judgment constitutes a grave abuse of discretion.
56
Emilia Santos was charged with theft by her employer for attempting to bring out of
company premises a piece of cloth belonging to the latter without authority. Sampaguita
Garments dismissed her on this ground. Emilia filed a complaint for illegal dismissal; the case
was dismissed by the labor arbiter, but the NLRC reversed the decision and awarded her
with reinstatement and payment of back wages. Meanwhile, Sampaguita Garments filed a
criminal action against Emilia. Both the MTC and RTC sustained Emilias conviction for theft.
The decision of the NLRC, when it reached the Supreme Court, was sustained for lack of
showing that it was tainted with grave abuse of discretion. The decision of the trial courts
were also sustained by the SC. Both decisions became final and executory. Emilia then moved
for the execution of the NLRC decision, but Sampaguita Garments invoke her conviction in
the criminal case. The NLRC granted Emilias motion, thus prompting Sampaguita Garments
to seek relief from the Court. In this petition, it is asserted that the decision of the NLRC
calling for Emilias reinstatement and the payment of back wages should not now be
enforced. Otherwise, she would in effect be undeservedly rewarded when she should instead
be punished for her offense.
Issue:
If an employee is absolved of an offense that led to her dismissal and is ordered
reinstated, will her subsequent conviction in a criminal prosecution for the same offense
affect the administrative decision?
Ruling:
Yes. It is true that once a judgment has become final and executory, it can no longer
be disturbed except only for the correction of clerical errors or where supervening events
render its execution impossible or unjust. In the latter event, the interested party may ask
the court to modify the judgment to harmonize it with justice and the facts. But this Court
held that the power of the NLRC to issue a writ of execution carries with it the right to look
into the correctness of the execution of the decision and to consider supervening events that
may affect such execution. The private respondents conviction of the crime of theft of
property belonging to the petitioner has affirmed the existence of a valid ground for her
dismissal and thus removed the justification for the administrative decision ordering her
reinstatement with back wages. Nevertheless, the petitioner is still subject to sanction for its
failure to accord the private respondent the right to an administrative investigation in
conformity with the procedural requirements of due process.
57
Leopoldo Medrano was asked to resign by his supervisor in Industrial and Transport
Equipment Inc. (INTECO) after being confronted for working with another firm during his
leave of absence. He filed a complaint for illegal dismissal, and the Labor Arbiter ruled in his
favor by ordering his reinstatement. The judgment became final and executory, thus
Medrano moved for the issuance of a writ of execution which was granted. Medrano was not
reinstated. He filed for a motion to cite INTECO for indirect contempt which was again
granted. In this instant petition, INTECO asks the Court to set aside this decision of the labor
arbiter which was subsequently affirmed by the NLRC.
Issue:
Can the labor arbiter cite an employer for indirect contempt for not complying with
the formers order to reinstate an employee?
Ruling:
Yes. Section 2, Rule X of the New Rules of Procedure of the NLRC provides that the
Commission or any labor arbiter may cite any person for indirect contempt upon grounds
and in the manner prescribed under Section 3(b), Rule 71 of the 1997 Rules of Civil
Procedure. Section 3(b), Rule 71 provides disobedience of or resistance to a lawful writ,
process, order, or judgment of a court as a ground to cite a person for indirect contempt.
The Court defines contempt as a disobedience to the Court by setting up an opposition to its
authority, justice and dignity. It signifies not only a willful disregard or disobedience of the
courts orders but such conduct as tends to bring the authority of the court and the
administration of law into disrepute or in some manner to impede the due administration of
justice. There is no question that disobedience or resistance to a lawful writ, process, order,
judgment or command of a court or injunction granted by a court or judge constitutes
indirect contempt punishable under Rule 71 of the Rules of Court.
58
59
Petitioners Barles, Elomina, and Sayo are union officers of Ilaw Buklod ng
Manggagawa Local Chapter No. 15. Private respondents Oquendo and Ragasa also ran as
union officers but they lost to petitioners. The Executive Board of the union passed a
resolution increasing union dues. At this instance, Oquendo, etc. filed a petition with the
Bureau of Labor Relations (BLR) for an immediate audit and examination of union funds. The
BLR then issued an order granting the petition. Petitioners appealed the order with the Office
of the Secretary. After several motions for reconsideration, the Office sustained the order of
conducting the audit, but endorsed such task with the Regional Office. Petitioners filed a
petition for certiorari, and the Court dismissed it. Acting on the endorsement, the Regional
Office conducted an examination based on the records sent by the employer and ordered the
union officers to conduct a general membership meeting to open their books of accounts.
The petitioners filed an appeal with the Secretary of Labor, but the Undersecretary endorsed
the appeal to the BLR. The latter found the appeal unmeritorious and authorizing the
Regional Director to proceed with the audit. The petitioners moved to strike out the order
challenging the jurisdiction of the BLR over appeals on petitions for union accounts
examination, but was denied. In this petition, petitioners assert that the BLR Director, in
taking cognizance of the appeal from the Order of the Regional Director upon the Secretary
of Labor's endorsement, acted with grave abuse of discretion amounting to lack of
jurisdiction or excess in the exercise thereof because the latter can "neither delegate nor
abdicate his appellate jurisdiction to a subordinate body or entity" like the BLR.
Issue:
Does the BLR have jurisdiction to review the decision of the DOLE Regional Director
endorsed to it by the Secretary of Labor?
Ruling:
Yes. Appellate authority over decisions of the Regional Directors involving
examinations of union accounts is expressly conferred on the BLR under the Rules of
Procedure on Mediation-Arbitration. The DOLE Secretary has no appellate jurisdiction over
decisions of Regional Directors involving petitions for examinations of union accounts. He
does not possess such power hence he cannot delegate, much more, abdicate powers which
he does not own. The DOLE Secretary, however, can properly delegate to the BLR his
visitorial power under Article 274 which includes the power to examine the financial
accounts of legitimate labor organizations. The DOLE Secretary can also delegate his other
functions and duties pursuant to Section 40, Chapter 8, Book IV of the Administrative Code
provided that the delegation is in writing, indicating the officer or class of officers or
employees to whom the delegation is made and only insofar as the delegation is necessary
for the latter to implement plans and programs adequately.
60
Catalino Silvestre and 13 other employees of the Franklin Baker Company filed a
written request for accounts examination of the KMP. The union accounts examiner
conducted an investigation and found out that the union had several violations and that its
constitution and by-laws was illegal for lack of required ratification from its members. With
this, Silvestre, etc. filed for the expulsion of the union officers for gross violation of the Labor
Code. Med-Arbiter Cabihan ordered for the holding of a referendum to decide on the issue of
expulsion. The union officers appealed the order to Director Trajano of the BLR, stating that
the alleged misrepresentation was not supported by substantial evidence. Silvestre, on the
other hand, appealed that Med-Arbiter Cabihan erred in ordering for the conduct of the
referendum. Director Trajano dismissed both appeals. The union, through the officers, filed
this petition with the Court.
Issue:
Does the BLR have authority to order a referendum among union members to decide
whether or not its officers may be expelled?
Ruling:
No. In this case the Court said that if the union officers were guilty of the alleged acts
imputed against them, the Director of BLR pursuant to Article 242 of the New Labor Code
and in the light of Our ruling in Duyag vs. Inciong, should have meted out the appropriate
penalty on them, i.e., to expel them from the Union, as prayed for, and not call for a
referendum to decide the issue.
61
Plum Federation of Industrial and Agrarian Workers filed a petition for certification
election as the sole bargaining representative of the rank-and-file workers of Manila Jockey
Club, Inc. The Manila Jockey Club Race Day Operation Employees Labor Union-PTGWO
opposed said petition, contending that it is the recognized bargaining representative and
also invoked that the requirement of the written consent of at least 30% of all the employees
in the bargaining unit was not met, pursuant to the Code of Ethics of the Trade Union
Congress of the Philippines (TUCP). This case was forwarded to the president of the TUCP,
but the same was returned to the Secretary of Labor, which was later on transmitted to the
BLR. The BLR Director endorsed the case to the Regional Director, which dismissed the case,
upholding the letter of the president of TUCP referring back to the BLR the case and that the
BLR declare MJCR-OELU-PTGWO as the sole and exclusive bargaining agent.
Issue:
Does the director of BLR have authority to forward a case to the TUCP for arbitration
and decision?
Ruling:
No. The Director of BLR should have ordered for the certification election instead of
dismissing the appeal. Certification election is the fairest and most effective way of
determining which labor organization can truly represent the working force. The dismissal
of the appeal was considered by the Court as an impairment of the freedom of the workers
to voice out their choice of the union to represent them. If there is any doubt as to the
required number having met, there would be no better way than the holding of a certification
election to ascertain which union really commands the allegiance of the rank-and-file
employees. If the desired goal is for the execution of a collective bargaining contract to
protect the workers, then certification election is the most appropriate means to attain said
end.
62
The Federation of Free Workers filed with the Bureau of Labor Relations against Litex
Employees Association to hold a referendum among the members to determine whether
they desired to be affiliated with such Federation. The contention of Litex acting through its
counsel was that only about 700 out of more than 2,200 employees of the company had
manifested their desire to affiliate with the Federation and that a substantial number of such
had since then repudiated their signatures. It also raised the point that what was sought was
a certification election which was not proper as there was a certified collective bargaining
agreement between the union and the company. The Compulsory Arbitrator, after a careful
study of the pleadings, reached the conclusion that the truth of the matter could best be
ascertained by a referendum election. Eduvala, then OIC of the BLR, affirmed the decision. In
this petition, Litex contends that there is no statutory authorization for the holding of such a
referendum election.
Issue:
Does the BLR have authority to hold a referendum election among the members of a
union to determine whether or not to affiliate with a federation?
Ruling:
Yes. A cursory reading of Article 226 [now Article 232] of the Labor Code readily
yields the conclusion that in the interest of industrial peace and for the promotion of the
salutary constitutional objectives of social justice and protection to labor, the competence of
the governmental entrusted with supervision over disputes involving employers and
employees as well as "inter-union and intra-union conflicts," is broad and expansive. The
active participation in the implementation of the codal objective is entrusted to the executive
department. There is no support for any allegation of jurisdictional infirmity, considering
that the language employed is well-nigh inclusive with the stress on its "and exclusive
authority to act.
63
The Philippine Airlines Employees Association (PALEA) held its election of national
officers. Due to an election protest, its own Commission on Election (COMELEC) ordered for
the opening of the questioned ballot boxes. The previously proclaimed winners filed with the
Regional Office of the Minister of Labor and Employment a complaint against the PALEA
COMELEC members, seeking for the latters disqualification on the ground of alleged
partiality for the protesters. The Med-Arbiter then issued an order to enjoin from the
opening of the ballot boxes, but then the COMELEC proceeded despite the order and also
disposed the election protest by ordering holding of special elections for those who allegedly
were not able to vote. The Med-Arbiter issued an order declaring the COMELEC members
disqualified and the special election null and void. Upon appeal with the Bureau of Labor
Relations, Director Trajano decided to set aside the order of the Med-Arbiter, opining that by
disqualifying the PALEA COMELEC members, the government interferes with the right to
self-organization of the workers. Hence, the petitioners sought recourse from the Court.
Issue:
Does the BLR have jurisdiction over complaints of disqualification of election officers
of a union?
Ruling:
Yes. Article 226 [now Article 232] of the Labor Code provides that the BLR has
exclusive and original jurisdiction over inter-union and intra-union conflicts as
supplemented by Policy Instructions No. 6, which provides that the Med-Arbiters have
exclusive original jurisdiction over intra-union cases. The Court concluded from these
provisions that the freedom of the unions from interference from the government
presupposes that there is no inter-union or intra-union conflict. Hence, the Med-Arbiter
rightly exercised jurisdiction over the case.
64
Members of the La Tondea Workers Union petitioned the NCR Office of the
Department of Labor and Employment (DOLE) for an audit examination of funds and
financial records of the union. Accordingly an audit was ordered. A report was submitted
finding petitioners Ramon de la Cruz and Norma Marin accountable for for P367,553.00 for
union dues remitted by La Tondea Inc. to LTWU. De la Cruz and Marin appealed to the
Secretary of Labor; the latter indorsed the case to the Bureau of Labor Relations. The BLR
Director found for the petitioners and ordered to set aside the findings and for another
audit/examination to be conducted. LTWU moved for reconsideration, raising the issue on
jurisdiction that pursuant to Article 274 of the Labor Code, the power to order an
examination of the books of accounts and financial activities of a union is vested in the
Secretary of Labor and Employment or his representative and the BLR cannot be considered
the Secretary's representative. The BLR denied the motion, thus an appeal to the Secretary
was made. But the appeal was again referred to the BLR which denied the petition for being
moot and academic. Hence, this instant petition.
Issue:
Can the BLR be considered as the Secretary of Labors representative with respect to
authority to order an examination of the books of accounts and financial activities of a union?
Ruling:
Yes. The "union accounts examiners of the Bureau" mentioned in Rule 1, sec. 1(ff) of
the implementing rules as having the power to audit the books of accounts of unions are
actually officials of the BLR because the word "Bureau" is defined in Rule 1, sec. 1(b) of the
same rules as the Bureau of Labor Relations. The delegation of authority to union accounts
examiners in Rule 1, sec. 1(ff) is not exclusive. By indorsing the case to the BLR, the Secretary
of Labor and Employment must be presumed to have authorized the BLR to act on his behalf.
65
Petitioners were the fishermen-crew members of 7/B Sandyman II. For services
rendered in the conduct of private respondent's regular business of "trawl" fishing, they
were paid on percentage commission basis in cash by the cashier of their employer, De
Guzman Fishing Enterprises. As agreed upon, they received thirteen percent (13%) of the
proceeds of the sale of the fish-catch if the total proceeds exceeded the cost of crude oil
consumed during the fishing trip, otherwise, they received ten percent (10%) of the total
proceeds of the sale. The patron/pilot, chief engineer and master fisherman received a
minimum income of P350.00 per week while the assistant engineer, second fisherman, and
fisherman-winchman received a minimum income of P260.00 per week. On September 11,
1983 upon arrival at the fishing port, they were told by Jorge de Guzman to proceed to the
police station at Camaligan, Camarines Sur, for investigation on the report that they sold
some of their fish-catch at midsea to the prejudice of private respondent. No criminal charges
were formally filed against them but their employer refused to allow them to return to the
fishing vessel to resume their work on the same day. Hence, they individually filed their
complaints for illegal dismissal and non-payment of 13th month pay, emergency cost of
living allowance and service incentive pay, with the then Ministry (now Department) of
Labor and Employment. Their employer contends however that a joint venture exists
between them and the petitioners.
Issue:
Are fishermen-crew members of a trawl fishing vessel the employees of its owneroperator?
Ruling:
Yes. From the four (4) elements of an employer-employee relationship, the Court has
generally relied on the so-called right-of-control test where the person for whom the services
are performed reserves a right to control not only the end to be achieved but also the means
to be used in reaching such end. The conduct of the fishing operations was undisputably
shown by the testimony of Ruga, the patron/pilot of 7/B Sandyman II, to be under the control
and supervision of their employers operations manager. Matters dealing on the fixing of the
schedule of the fishing trip and the time to return to the fishing port were shown to be the
prerogative of the employer. While performing the fishing operations, petitioners received
instructions via a single-side band radio from private respondent's operations manager who
called the patron/pilot in the morning. They are told to report their activities, their position,
and the number of tubes of fish-catch in one day. Clearly thus, the conduct of the fishing
operations was monitored by the employer thru the patron/pilot of 7/B Sandyman II who is
responsible for disseminating the instructions to the crew members.
66
Prado and Tuscano filed complaints against their employer Loyola Security and
Detective Agency for illegal dismissal, illegal deduction, underpayment of wages, nonpayment of labor standard benefits, and violation of PD 851. The Labor Arbiter ruled in their
favor and the NLRC affirmed the decision on appeal. They moved for the execution of the
decision. However, they subsequently filed a Joint Manifestation acknowledging complete
satisfaction of the award. They again filed a motion for issuance of alias writ of execution for
the recovery of the balance, claiming they have received less than the Labor Arbiters award.
The employer believes that the acts of Prado in entering into a compromise agreement and
in accepting an advance of P5,000.00 constituted a novation of the award adjudged by the
Labor Arbiter. Records show that the satisfaction of judgment was executed by the
complainants without the assistance of their counsel and without the approval of the Labor
Arbiter. Also, it was noted that the compromise was entered by Prado not only in his own
behalf but also for Tuscano; however, such authority was not shown. Hence, this petition.
Issue:
67
Can a compromise agreement entered into by employees and their employer under
the compulsion of dire necessity be valid?
Ruling:
Yes, but only upon a showing that the person making the waiver did so voluntarily
and with full understanding of what he was doing and the consideration being credible.
Although the Court recognized that the complainants in this case voluntarily entered the
compromise agreement, it however considered the amount of Php 12,000.00 per worker as
inordinately low and exceedingly unreasonable as compared to the award by the Labor
Arbiter. Palpably inequitable, the quitclaim cannot be considered an obstacle to the pursuit
of their legitimate claims. The Court also recognizes "dire necessity" of laborers as ample
justification to accept even sufficient sums of money from their employers. The main
difference, however, lies in the existence of a voluntary acceptance of the agreement and the
reasonable consideration for it, making the agreement intrinsically valid and binding, thus
rendering the "dire necessity" excuse immaterial and irrelevant. Thus, the undisputed and
concurrent circumstances of dire necessity and unconscionability obtaining in the case at
bar constitute more than sufficient ground to invalidate the compromise agreement.
68
69
1) May a compromise agreement be effected even when there is already a final and
executory judgment?
2) Can a waiver be invalidated due to the absence of a partys counsel and the labor
arbiter during its execution?
Ruling:
1) Yes. There is no justification to disallow a compromise agreement, solely because
it was entered into after final judgment. The validity of the agreement is
determined by compliance with the requisites and principles of contracts, not by
when it was entered into. A reciprocal concession inherent in a compromise
agreement assures benefits for the contracting parties. For the defeated litigant,
obvious is the advantage of a compromise after final judgment. Liability arising
from the judgment may be reduced. As to the prevailing party, a compromise
agreement assures receipt of payment. Litigants are sometimes deprived of their
winnings because of unscrupulous mechanisms meant to delay or evade the
execution of a final judgment.
2) No. The presence or the absence of counsel when a waiver is executed does not
determine its validity. There is no law requiring the presence of a counsel to
validate a waiver. The test is whether it was executed voluntarily, freely and
intelligently; and whether the consideration for it was credible and reasonable.
The labor arbiters absence when the waivers were executed was remedied upon
compliance with the proceedings during the pre-execution conference, when the
Labor Arbiter made searching questions during the pre-execution conference to
ascertain whether petitioners had voluntarily and freely executed the waivers.
MARAO, REBBEKAH GRACE G. Block B
70
Can a compromise agreement executed without the assistance of the BLR or the
regional office of DOLE be valid?
Ruling:
No. Article 227 of the Labor Code provides that for a compromise agreement to be
valid, it should be voluntarily agreed by the parties with the assistance of the BLR or the
regional office of the DOLE. The assistance of the BLR or the regional office of the DOLE in
the execution of a compromise settlement is a basic requirement; without it, there can be no
valid compromise settlement. In this case, the petitioner admits that the purported
compromise settlement was executed by the private respondents without such required
assistance. The closest form of assistance adverted to by the petitioner in this case was that
of Bacays counsel when the latter appeared before the Office of the Regional Director to file
the following: the Sama-samang Salaysay sa Pag-uurong ng Sakdal executed by the private
respondents; a Sinumpaang Salaysay executed by Bacay withdrawing the complaint; and the
Motion to Dismiss. Such assistance, however, is not the "assistance" required by Article 227.
As such, the joint affiddavit executed by the respondents cannot qualify as a valid
compromise settlement.
71
72
Was there a valid compromise agreement binding among the employees although
executed only by their appointed attorney-in-fact purportedly for himself?
Ruling:
No. The Court considered the act of Gestiada as a form of collusion, which is a
ground for the NLRC to declare a compromise agreement void. As provided for by law, The
National Labor Relations Commission or any court shall not assume jurisdiction over issues
involved therein except in case of non-compliance thereof or if there is prima facie
evidence that the settlement was obtained through fraud, misrepresentation, or coercion.
The Court took into account the bad faith on the part of Powertech in negotiating with the
employees for fear of the higher amount of liability if the Labor Arbiters decision will be
accorded with finality.
73
Are employees quitclaims and waivers executed freely without any coercion valid
and binding?
Ruling:
Yes. Not all waivers and quitclaims are invalid as against public policy. If the
agreement was voluntarily entered into and represents a reasonable settlement, it is binding
on the parties and may not later be disowned simply because of a change of mind. It is only
where there is clear proof that the waiver was wangled from an unsuspecting or gullible
person, or the terms of settlement are unconscionable on its face, that the law will step in to
annul the questionable transaction. But where it is shown that the person making the waiver
did so voluntarily, with full understanding of what he was doing, and the consideration for
the quitclaim is credible and reasonable, the transaction must be recognized as a valid and
binding undertaking.
74
Can a CBA being assailed for its invalidity contract-bar a petition for certification
election?
Ruling:
Yes. According to the Court, the contract-bar rule does not apply to the case. The
contract-bar rule would preclude a certification election. That was to ignore the
decertification of the collective bargaining agreement which was hastily and prematurely
entered into precisely for the purpose of avoiding the holding of the certification election.
From the foregoing facts, the renewed CBA between ATU and the company cannot substitute
a bar to the instant petition for certification election. In the first place, the said CBA was
certified after the instant petition for certification had been filed by herein respondent union,
and its certification was conditioned upon the fact that there was no pending petition for
certification election with the Bureau of Labor Relations. The new CBA was not yet in
existence when the instant petition for certification election was filed. It is undubitably clear
from the facts heretofore unfolded that management and petitioner herein proceeded with
such indecent haste in renewing their CBA way ahead of the 'sixty-day freedom period' in
their obvious desire to frustrate the will of the rank-and-file employees in selecting their
collective bargaining representative. To countenance the actuation of the company and the
petitioner herein would be violative of the employees' constitutional right to selforganization.
MARAO, REBBEKAH GRACE G. Block B
75
Can a labor union not yet being issued with a certificate of registration validly file a
petition for certification election?
Ruling:
No. If a labor organizations application for registration is vitiated by falsification and
serious irregularities, a labor organization should be denied recognition as a legitimate labor
organization. And if a certificate of registration has been issued, the propriety of its
registration could be assailed directly through cancellation of registration proceedings in
accordance with Arts. 238 and 239 of the Labor Code, or indirectly, by challenging its petition
for the issuance of an order for certification election. In the present case, since TMPCEWU
had not acquired legal personality for the reason that its composition, being a mixture of
supervisory and rank-and-file employees, it cannot validly file a petition for election, moreso
can it become a bargaining representative of the workers in the company.
76
77
Was the BLR correct in dismissing a petition for certification election despite the fact
that no CBA was then existing and that a majority of the bargaining unit expressed consent
thereto?
Ruling:
No. According to the Court, with both the employer and the majority of the rank-andfile workers in agreement that a certification election should be held, so be it. The last
certification election was held on September 26, 1977. There is no existing CBA. The petition
for a certification election has the written consent of more than 30% of the members of the
bargaining unit. In the light of these facts, Art. 258 of the New Labor Code makes it mandatory
for the Bureau of Labor Relations to conduct a certification election.
78
Can disaffiliated members of a union claim illegal dismissal despite the CBA
containing a union shop agreement?
Ruling:
No. The Court held that the union shop clause was validly enforced against them and
justified the termination of their services. It is the policy of the State to promote unionism to
enable the workers to negotiate with management on the same level and with more
persuasiveness than if they were to individually and independently bargain for the
improvement of their respective conditions. To this end, the Constitution guarantees to them
the rights "to self-organization, collective bargaining and negotiations and peaceful
concerted actions including the right to strike in accordance with law." There is no question
that these purposes could be thwarted if every worker were to choose to go his own separate
way instead of joining his co-employees in planning collective action and presenting a united
front when they sit down to bargain with their employers. It is for this reason that the law
has sanctioned stipulations for the union shop and the closed shop as a means of encouraging
the workers to join and support the labor union of their own choice as their representative
in the negotiation of their demands and the protection of their interest vis-a-vis the
employer.
79
This case consists of four cause of actions filed by the president of the union Leyte
United Workers. First, the LUW, a duly registered labor union, sought to recover from several
defendants the amounts of money collected as contribution to the funds of LUW. Second, it
seeks to enforce the alleged agreement with the International Trust Corporation and Pacific
Copra Export Company to increase the wages by 20% of the member-employees, which the
union abandoned upon filing a complaint with the CIR for a wage increase of 50% instead.
Third and fourth, this case involved an action for certiorari and for declaratory relief against
the Secretary of Labor for granting licenses to the unions Leyte Stevedoring and Terminal
Dock Workers Union and the Visayan Workers Union, the registration of which is alleged to
be detrimental to Leyte United Workers because these new labor unions were organized by
old members of the Leyte United Workers, with the aid of the employers, and the result may
be the death of the Leyte United Workers.
Issues:
1) Does a labor union have the capacity to sue in its own name?
2) Can a labor union enforce an agreement, which it abandoned, with the CIR?
3) Did the Secretary of Labor commit grave abuse of discretion when it granted
licenses to new labor unions alleged to be detrimental to an existing labor union?
Ruling:
1) Yes. A labor union, being duly registered [under then CA No. 213] has a capacity
to sue and therefore the action should be brought in its own name.
2) No. Under the circumstances, the Leyte United Workers cannot now be allowed to
press upon the supposed agreement of 20% increase which was abandoned in the
Court of Industrial Relations which is the court with the jurisdiction over that
subject matter.
3) No. The petition for certiorari does not lie because the Secretary of Labor did not
exercise judicial function. Furthermore, there is no allegation that the new labor
unions have the purpose of undermining or destroying the constituted
Government or of violating any law or laws of the Philippines, and therefore, they
cannot be denied registration and permission to operate under section 2, of CA
No. 213.
80
A CBA was existing with ALU and Vassar Industries. Prior to its expiration, 111 out of
150 employees disaffiliated from ALU and formed their own union VIEU. They applied for
registration with the BLR, complying with all the legal requirements. They then filed a
petition for certification election. The Med-Arbiter denied their petition on the ground that
the union was not registered with the Department of Labor. The BLR also denied
registration, saying that there is still an existing bargaining agent in the company.
Issue:
Can a labor unions registration be denied even if the requirements of the law were
already complied?
Ruling:
No. In one case, the SC held that mandamus lies to compel the registration of a labor
organization. There is both a constitutional and statutory recognition that laborers have the
right to form unions to take care of their interests vis-a-viz their employees. Their freedom
to form organizations would be rendered nugatory if they could not choose their own leaders
to speak on their behalf and to bargain for them." It cannot be otherwise, for the freedom to
choose which labor organization to join is an aspect of the constitutional mandate of
protection to labor. There is then the incontrovertible right of any individual to join an
organization of his choice. That option belongs to him. A workingman is not to be denied that
liberty. He may be, as a matter of fact, more in need of it the institution of collective
bargaining as an aspect of industrial democracy is to succeed. No obstacle that may possibly
thwart the desirable objective of militancy in labor's struggle for better terms and conditions
is then to be placed on his way. Once the fact of disaffiliation has been demonstrated beyond
doubt, as in this case, a certification election is the most expeditious way of determining
which labor organization is to be the exclusive bargaining representative.
Nonetheless, it is quite obvious that when the two parties entered into such a
collective bargaining agreement, such a move was motivated by the desire to impart a moot
and academic aspect to this petition. It should not therefore elicit the approval of this Court,
especially so as upon the expiration oil the collective contract, it is made "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 sixty-day period and/or until a new agreement is
reached by the parties." With a pending petition for certification, any such agreement
entered into by management with a labor organization is fraught with the risk that such a
labor union may not be chosen thereafter as the collective bargaining representative.
81
The Adamson and Adamson, Inc. Supervisory Union (FFW) informed the petitioner
about its having organized on the same date that the Adamson and Adamson, Inc. Salesmen
Association (FFW) advised the petitioner that the rank and file salesmen had formed their
own union. During pendency of this petition, the rank-and-file employees formed their own
union, naming it Adamson and Adamson Independent Workers (FFW). The company argues
that the affiliation of the respondent union of supervisors, the salesmen's association, and
the Adamson and Adamson independent Workers Union of rank and file personnel with the
same national federation (FFW) violates Section 3 of the Industrial Peace Act, as amended,
because (1) it results in the indirect affiliation Of supervisors and rank-and-file employees
with one labor organization; (2) since respondent union and the unions of non-supervisors
in the same company are governed by the same constitution and by-laws of the national
federation, in practical effect, there is but one union; and (3) it would result in the respondent
union's losing its independence because it becomes the alter ego of the federation.
Issue:
Can the affiliation of a supervisory employees union with the same federation where
the rank-and-file union of the same employer be valid?
Ruling:
Yes. The inclusion of FWW in the registration is merely to stress that they are its
affiliates at the time of registrations. It does not mean that said local unions cannot stand on
their own Neither can it be construed that their personalities are so merged with the mother
federation that for one difference or another they cannot pursue their own ways,
independently of the federation. This is borne by the fact that FFW, like other federation is a
legitimate labor organization separate and distinct from its locals and affiliates and to
construe the registration certificates of the aforecited unions, would tie up any affiliates to
the shoe string of the federation. The Adamson and Adamson Supervisory Union and the
Adamson and Adamson, Inc., Salesmen Association (FFW), have their own respective
constitutions and by-laws. They are separately and independently registered of each other.
Both sent their separate proposals for collective bar agreements with their employer. There
could be no employer influence on rank-and-file organizational activities nor there could be
any rank and file influence on the supervisory function of the supervisors because of the
representation sought to be proscribed.
82
Cebu Stevedores Association filed a petition for certification election to determine the
collective bargaining unit to represent the employees of Cebu Stevedoring Co. Three labor
unions intervened Democratic Labor Association, Cebu Trade Union, and Katubsanan sa
Mamumuo. Hearings were held, and the judge ruled that the Department of Labor conduct
an election among the casual laborers, designating DLA and CTU as the only labor unions
that may be voted. Cebu Stevedores Association filed a motion for reconsideration, disputing
the finding of the trial judge that there should be two collective bargaining units that would
represent two sets of workers based on their terms of employment, as well as the finding
that the two labor unions above-mentioned are ineligible to take part or be voted for in the
certification election.
Issue:
Considering that there are two sets of employees or laborers working within an
employer, one regular and permanent and the other casual or temporary, is it proper and,
convenient that there should be one collective bargaining unit for each?
Ruling:
Yes. While the existence of a bargaining history is a factor that may be reckoned with
in determining the appropriate bargaining unit, the same is not decisive nor conclusive.
There are other factors that can be considered depending upon the circumstances of each
case. The Court in this case laid down four factors in determining the proper constituency of
the bargaining unit: (1) will of employees (Globe Doctrine); (2) affinity and unity of
employees' interest, such as substantial similarity of work and duties, or similarity of
compensation and working conditions; (3) prior collective bargaining history; and (4)
employment status, such as temporary, seasonal and probationary employees. In this case,
the mere existence of a prior collective bargaining history is not a decisive factor in the
determination of a collective bargaining agency. Where the circumstances had been so
altered or where the reciprocal relationship of the employer and the particular bargaining
unit has been so changed that the past mutual experience cannot be considered as a reliable
guide to the present determination of the bargaining unit, then prior collective bargaining
history should be brushed aside and only the prevailing facts and factors should control the
determination. We have also seen that an important factor to consider is the employment
status of the workers and employees to be affected by the collective bargaining agency. The
positions or categories of work to which, they belong should also be considered. This rule
requires that temporary, seasonal or probational employees be grouped as one category and
be treated separately from permanent employees. The test of the grouping is community or
mutuality of interest. And this is so because the basic test of an asserted bargaining unit's
acceptability is whether or not it is fundamentally the combination which will best assure to
all employees the exercise of their collective bargaining rights.
MARAO, REBBEKAH GRACE G. Block B
83
Does the provision of Article 257 of the Labor Code deem mandatory the MedArbiters order to conduct a certification election upon filing of the petition?
Ruling:
No. According to the Court, while Article 257 directs the automatic conduct of a
certification election in an unorganized establishment, it also requires that the petition for
certification election must be filed by a legitimate labor organization. Indeed, the law did not
reduce the Med-Arbiter to an automaton which can instantly be set to impulse by the mere
filing of a petition for certification election. He is still tasked to satisfy himself that all the
conditions of the law are met, and among the legal requirements is that the petitioning union
must be a legitimate labor organization in good standing.
84
KILUSAN-TUCP filed with the DOLE a petition for certification election among the
rank-and-file employees of Progressive Development Corporation (PDC). PDC filed its
opposition, saying the KILUSAN-TUCP has no legal personality to file such petition,
contending that the local union Progressive Development Employees Union (PDEU) has not
complied with the requirements set by law (submission of CBL, list of officers and members,
and books of accounts). The Med-Arbiter held that a certification election should be
conducted and that there was substantial compliance of the necessary requirements due to
the mere issuance of the charter certificate by the federation in favor of the local union.
Issue:
Is a local union merely granted with a charter certificate by the federation eligible to
file a petition for certification election?
Ruling:
Yes. When an unregistered union becomes a branch, local or chapter of a federation,
some of the requirements for registration are no longer required. The intent of the law in
imposing lesser requirements in the case of the branch or local of a registered federation or
national union is to encourage the affiliation of a local union with the federation or national
union in order to increase the local union's bargaining powers respecting terms and
conditions of labor. A local or chapter therefore becomes a legitimate labor organization only
upon submission of the following to the BLR: 1) A charter certificate, within 30 days from its
issuance by the labor federation or national union, and 2) The constitution and by-laws, a
statement on the set of officers, and the books of accounts all of which are certified under
oath by the secretary or treasurer, as the case may be, of such local or chapter, and attested
to by its president. Absent compliance with these mandatory requirements, the local or
chapter does not become a legitimate labor organization. However, in the case at bar, the
failure of the secretary of PDEU-Kilusan to certify the required documents under oath is fatal
to its acquisition of a legitimate status.
The mother union, acting for and in behalf of its affiliate, had the status of an agent
while the local union remained the basic unit of the association, free to serve the common
interest of all its members subject only to the restraints imposed by the constitution and bylaws of the association. Thus, where as in this case the petition for certification election was
filed by the federation which is merely an agent, the petition is deemed to be filed by the
chapter, the principal, which must be a legitimate labor organization. The chapter cannot
merely rely on the legitimate status of the mother union.
85
Amigo Employees Union (AEU)-PAFLU had a CBA with Amigo Manufacturing Inc.
Within the last 60 days of the CBA, some members, comprising only the minority, decided to
disaffiliate with PAFLU and designated themselves as the AEU. They then filed a petition for
certification election. PAFLU demanded for the dismissal of these employees, invoking the
security clause in the CBA. Petitioners in this case insist that their disaffiliation from PAFLU
and filing of a petition for certification election are not acts of disloyalty but merely an
exercise of their right to self-organization. They contend that this was done within the 60day period when questions of representation may freely be raised.
Issue:
Does the union formed by a minority of the disaffiliating union members acquire a
legal personality to validly file a petition for certification election?
Ruling:
No. Under Article 257 of the Labor Code and Section 3, Rule 2, Book 2 of its
Implementing Rules, questions of exclusive bargaining representation are entertainable
within the sixty (60) days prior to the expiry date of an existing CBA, and that they did file a
petition for certification election within that period. But the petition was filed in the name of
the Amigo Employees Union which had not disaffiliated from PAFLU, the mother union.
Petitioners being a mere minority of the local union may not bind the majority members of
the local union. Had petitioners merely disaffiliated from the. Amigo Employees UnionPAFLU, there could be no legal objections thereto for it was their right to do so. But what
petitioners did by the very clear terms of their "Sama-Samang Kapasiyahan" was to
disaffiliate the Amigo Employees Union-PAFLU from PAFLU, an act which they could not
have done with any effective consequence because they constituted the minority in the
Amigo Employees Union-PAFLU.
86
Was there a violation of due process in a case for cancellation of union registration
when the BLR Director did not rule on the admissibility of the evidence submitted by the
parties?
Ruling:
Yes. Due process is mandated by the Constitution. Also, the Labor Code provides that
"the certificate of registration of any legitimate labor organization, whether national or local,
shall be cancelled by the Bureau if it has reason to believe, after due hearing, that the said
labor organization no longer meets one or more of the requirements herein prescribed." The
cancellation of a certificate of registration is the equivalent of snuffing out the life of a labor
organization. For without such registration, it loses as a rule its rights under the Labor
Code. Under the circumstances, petitioner was indisputably entitled to be heard before a
judgment could be rendered cancelling its certificate of registration. It will be noted that the
Director of the Bureau of Labor Relations never made any ruling on whether the exhibits
submitted by CLASS were admissible in evidence. That being so, the said exhibits cannot be
made use of in deciding the case. And, in the absence of this evidence, there is nothing in the
record to support the assailed decision. Therefore, the latter must necessarily fall for lack of
substantial basis. "A decision with absolutely nothing to support it is a nullity."
87
Itogon-Suyoc Mines, Inc., through its general superintendent Claude Fertig, had been
dismissing from its employ members of respondent Sagilo-Itogon Workers' Union. Fiftyfour members of Sagilo were already fired when Department of Labor conciliators
conferred with petitioner's representative to explore the possibility of their reinstatement.
Petitioner refused reinstatement, alleged that dismissal of the 54 was for cause. Sensing that
its members were being eased out of employment one by one, Sagilo called a strike,
accompanied by picketing carried out at or near petitioner's mine premises in Itogon. Work
was paralyzed. The union filed a suit against the company for the illegal dismissal of one of
its members. The petitioner company contends that the union ceased to be a legitimate labor
union when the Department of Labor cancelled the former's registration permit for failure
to comply with statutory requirements. Contrariwise Sagilo avers that at the time the
complaint below was filed it was a legitimate labor organization, and continues to be so. Be
it noted that in the case for cancellation, no final decision has been made.
Issue:
Does the labor union lose its capacity to sue upon failure to submit the reportorial
requirements and without a final order providing its cancellation?
Ruling:
No. The Court perceived of no reason why the judgment in favor of the fifteen
individual respondent laborers should be overturned simply because the union of which
they were members ceased to be a legitimate labor union. It cannot be disputed that CIR's
prosecutor brought this case not merely for Sagilo; it was also on behalf of the 107
employees enumerated therein. This accounts for the fact that CIR's judgment for
reinstatement and backpay was rendered in favor of the fifteen respondent laborers. To
accept petitioner's argument as valid is to shunt aside substance to give way to form. Error,
if any, was harmless. It does not affect the substantial rights of the parties in interest. It is no
ground for reversal. At this stage this Court may even strike out Sagilo-Itogon Workers'
Union and leave the fifteen individual respondents alone. So it is, that there is no order final
in character cancelling Sagilo's registration permit and dropping its name from the roster
of legitimate labor unions. Sangilo's status does not appear in the record to have changed.
Therefore, Sagilo still enjoys all the rights accorded by law to a legitimate labor union. One
of those rights is the right to sue.
88
89
Because the labor union had engaged in an illegal strike, the petitioner company in
this case seeks for the cancellation of its registration, on the basis of the provision of the law
which states that acting as a labor contractor or engaging in the "cabo" system, or otherwise
engaging in any activity prohibited by law is a ground for the cancellation of union
registration.
Issue:
Can the engagement of a labor union in an illegal strike be a valid ground for the
cancellation of its union registration?
Ruling:
No. The phrase engaging in any activity prohibited by law should not be interpreted
or construed to include an illegal strike engaged into by any union. This is so because the
phrase 'or otherwise engaging in any activity prohibited by law' should be construed to mean
such activity engaged into by a union that partakes of the nature of a labor contractor or
'cabo' system. The law does not intend to include in the said phrase illegally declared strike
simply because strike per se is legal. Also, if the law intends to include illegally declared
strike, the same could have been expressly placed therein as had been previously done in
Presidential Decree No. 823." Clearly, an awareness of the relevance of the maxims noscitur
a sociis and ejusdem generis ought to have cautioned counsel for petitioner to shy away from
this approach.
90
The Benguet-Balotoc Workers Union (BBWU) entered into a CBA with Benguet
Consolidated Inc. Before its expiration, a certification election was conducted by the
Department of Labor among all the rank-and-file employees of Benguet. BCI Employees and
Workers Union (BCIEWU) was then certified as the sole and exclusive bargaining
representative in the company. As a result, allegedly, of the strike staged by (BCIEWU) and
its members, the company had to incur expenses for the rehabilitation of mine openings,
repair of mechanical equipment, cost of pumping water out of the mines, value of explosives,
tools and supplies lost and/or destroyed, and other miscellaneous expenses. So, the company
sued the union, PAFLU and their respective Presidents to recover said amount in the Court
of First Instance of Manila, on the sole premise that said defendants breached their
undertaking in the existing CONTRACT not to strike during the effectivity thereof. The
company invokes the Doctrine of Substitution, which states that if a bargaining agent other
than the union or organization that executed the contract, is elected, said new agent would
have to respect said contract, but that it may bargain with the management for the
shortening of the life of the contract if it considers it too long, or refuse to renew the contract
pursuant to an automatic renewal clause.
Issue:
Can the principle of substitution be validly invoked by the company against the new
bargaining representative in order to recover damages resulting from a strike staged by the
latters members?
Ruling:
No. The Court said that the doctrine merely states that even during the effectivity of
a collective bargaining agreement executed between employer and employees thru their
agent, the employees can change said agent but the contract continues to bind them up to its
expiration date. They may bargain however for the shortening of said expiration date. In
formulating the "substitutionary" doctrine, the only consideration involved was the
employees' interest in the existing bargaining agreement. The agent's interest never entered
the picture. Stated otherwise, the "substitutionary" doctrine only provides that the
employees cannot revoke the validly executed collective bargaining contract with their
employer by the simple expedient of changing their bargaining agent. And it is in the light of
this that the phrase "said new agent would have to respect said contract" must be
understood. It only means that the employees, thru their new bargaining agent, cannot
renege on their collective bargaining contract, except of course to negotiate with
management for the shortening thereof. The "substitutionary" doctrine, therefore, cannot be
invoked to support the contention that a newly certified collective bargaining agent
automatically assumes all the personal undertakings like the no-strike stipulation here
in the collective bargaining agreement made by the deposed union.
MARAO, REBBEKAH GRACE G. Block B
91
The Federation of Tenants and Laborers Organization (FTLO) Rizal Chapter entered
into a CBA with Peoples Industrial and Commercial Corporation (PICC), including provisions
on No Strike, No Lockout and a Union Security Maintenance Shop. Subsequently, with the
knowledge of PICC, an election of officers of FTLO Rizal Chapter was conducted. Afterwards,
51 out of 60 employees executed a certification stating that they are members of FTLO but
they have changed their name to PICEWO and affiliated with the Federation of Free Workers
(FFW). Said certification did not include any reason for the change of name. The employees
were then charged with disloyalty, paving its way to their termination from work. The
employee contend that no disloyalty is involved, since what they did was merely to change
the name FTLO to PICEWO.
Issue:
Can a change of union name be construed as disloyalty which merits the dismissal of
the union members from work?
Ruling:
No. While the Court was not convinced with the argument that the act was only a
change of name and affiliated it with the FFW, it ruled that such act would not warrant the
dismissal of the employees. The Court said that the validity of dismissals pursuant to the
security clause of a CBA hinges on the validity of the disaffiliation of the local union from the
federation. The federation had the status of an agent, acting for and in behalf of its affiliate,
while the local union remained the basic unit of the association free to serve the common
interest of all its members including the freedom to disaffiliate when the circumstances
warrant. The right of the local members to withdraw from the federation and to form a new
local depends upon the provisions of the unions CBL and charter. In the absence of
enforceable provisions in the federations constitution preventing disaffiliation of a local
union, a local may severe its relationship with its parent. In this case, there was nothing
shown in the records nor was it claimed by the federation that the local union was expressly
forbidden to disaffiliate. Except for the union security clause, the federation claims no other
ground in expelling those who signed the certification. There is no merit to the contention of
the federation that the act of disaffiliation is disloyalty to the union. The federation and the
union are two different entities and it was the federation which actively initiated the
dismissal of the petitioners. A local union does not owe its existence to the federation to
which it affiliated. It is a separate and distinct voluntary association owing its creation and
existence to the will of its members.
92
The rank-and-file workers of Tropical Hut Food Market formed a local union which
they named as Tropical Hut Food Employees Union, and sought affiliation with the National
Association of Trade Unions (NATU). It appears, however, that NATU was not registered as
a federation with the Department of Labor. A CBA between THEU-NATU and the company
was then executed, which included a union shop clause. NATU then received a letter from
the local union of the latters intention to disaffiliate from the former. With this disaffiliation,
the member-employees were terminated from work, allegedly due to the violation of the
union shop clause.
Issue:
93
Volkschel Labor Union (VLU) was once affiliated with the Associated Labor Union for
Metal Workers (ALUMETAL). Both unions, using the name Volkschel Labor Union Associated
Labor Union for Metal Workers, jointly entered into a collective bargaining agreement with
respondent companies. A majority of VLU's members decided to disaffiliate from respondent
federation in order to operate on its own as an independent labor group pursuant to Article
241. A resolution was adopted and signed by petitioner's members revoking their check-off
authorization in favor of ALUMETAL and notices thereof were served on ALUMETAL and
respondent companies. ALUMETAL wrote respondent companies advising them to continue
deducting union dues and remitting them to said federation. With this, the respondent
companies sought the legal opinion of the respondent Bureau as regards the controversy
between the two unions. The BLR held that the disaffiliation was legal, but the members
should continue paying their dues to ALUMETAL in the concept of agency fees.
Issue:
Is the federation still entitled to union dues payments from the union's members
notwithstanding their disaffiliation from said federation?
Ruling:
Yes. A local union which has validly withdrawn from its affiliation with the parent
association and which continues to represent the employees of an employer is entitled to the
check-off dues under a collective bargaining contract. ALUMETAL is entitled to receive the
dues from respondent companies as long as petitioner union is affiliated with it and
respondent companies are authorized by their employees (members of petitioner union) to
deduct union dues. Without said affiliation, the employer has no link to the mother union.
The obligation of an employee to pay union dues is coterminous with his affiliation or
membership. The employees' check-off authorization, even if declared irrevocable, is good
only as long as they remain members of the union concerned." A contract between an
employer and the parent organization as bargaining agent for the employees is terminated
by the disaffiliation of the local of which the employees are members. Respondent companies
therefore were wrong in continuing the check-off in favor of respondent federation since
they were duly notified of the disaffiliation and of petitioner's members having already
rescinded their check-off authorization.
94
De La Salle University was being accused of unfair labor practice due to its refusal to
bargain collectively with the De La Salle University Employees Association (DLSUEANAFTEU). Petitioner institution contends that its refusal to bargain collectively is justified
by the finding of the Labor Arbiter that there is an absolute void in the leadership of the
union. Also, DLSU opened a savings account for the union where all the collected union dues
and agency fees will be deposited and held in trust for the union. Subsequently, an election
of union officers was held pursuant to an order by the Regional Director.
Issues:
union?
Ruling:
No. The Court quoted the findings of the Secretary of Labor, saying that the issue of
union leadership is distinct and separate from the duty to bargain. It is then guilty of unfair
labor practice. The official determination of the BLR Director, saying that there was actually
no void leadership, removed whatever cloud of doubt on the authority of the incumbent to
negotiate for and in behalf of the union as the bargaining agent of the covered employees.
Furthermore, this issue of void leadership has already been long extinguished upon the
conduct of the election of the union officers.
95
Benjamin Victoriano is a member of the Iglesia ni Cristo (INC). He was also a member
of the Elizalde Rope Workers Union which had a CBA with Elizalde Rope Factory, Inc.
containing a closed shop provision. Being a member of a religious sect that prohibits the
affiliation of its members with any labor organization, Victoriano presented his resignation
to the Union. Thereupon, the Union asked the employer to separate Victoriano from his
employment in view of the fact that the latter was resigning from the Union as a member. In
this petition, the Union asserts that the closed shop provision in the CBA cannot be violative
of religious freedom.
Issue:
Does a closed shop agreement violate the right to religious freedom of an employee
belonging to a sect which prohibits the affiliation of its members with labor organizations?
Ruling:
Yes. The exemption clause in the (old) Labor Code provides that members of religious
sects with such prohibition cannot be compelled or coerced to join labor unions even when
said unions have closed shop agreements with employers; that in spite of any closed shop
agreement, members of said religious sectors cannot be refused employment or dismissed
from their jobs on the sole ground that they are not members of the union. The Court
emphasized that the free exercise of religious profession or belief is superior to contract rights.
In case of conflicts, the latter must, therefore, yield to the former.
96
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). Petitioner Holy Child Catholic School (HCCS) Petitioner raised that
members of the union do not belong to the same class; it is not only a mixture of managerial,
supervisory, and rank-and-file employees as three (3) are vice-principals, one (1) is a
department head/supervisor, and eleven (11) are coordinators but also a combination of
teaching and non-teaching personnel as twenty-seven (27) are non-teaching personnel. It
insisted that, for not being in accord with Article 245 of the Labor Code, the union is an
illegitimate labor organization lacking in personality to file a petition for certification
election and an inappropriate bargaining unit for want of community or mutuality of
interest.
Issue:
97
98
ALU and SUGECO entered into a CBA. Prior to its expiry, renewal was sought through
negotiations but SUGECOs employees resigned from the union, which in turn broke the
negotiations. Request was made that unless the 12 resigned employees could produce a
clearance from the Union, they be not allowed in the meantime to report for work. SUGECO
made it understood that after the 12 men would have returned into the Union fold, said
company would then be "in a position to negotiate again for the renewal of the collective
bargaining contract." The Union wrote Sugeco, charged the latter with bargaining in bad
faith, and its supervisors with "campaigning for the resignation of members of this Union".
SUGECO sought recourse from the CFI to enjoin the strike engaged by the union. Judge Gomez
issued an ex parte writ of preliminary injunction. The union also lodged with the CIR a charge
for unfair labor practice against SUGECO, averring that the employers coerced and exerted
pressure upon the union members to resign, as they did resign, from the Union; and that such
resignations were seized upon by SUGECO to refuse further negotiations with the Union. In
this petition, the union assails the jurisdiction of the CFI over the complaint for injunction.
Issue:
Is the CFI lodged with jurisdiction over ULP cases and its ancilliary remedies?
Ruling:
99
Geronimo Q. Quadra was the Chief Legal Officer of respondent Philippine Charity
Sweepstakes Office (PCSO) when he organized and actively participated in the activities of
Philippine Charity Sweepstakes Employees Association (CUGCO), and then later the
Association of Sweepstakes Staff Personnel and Supervisors (CUGCO) (ASSPS [CUGCO]). He
was administratively charged for neglect of duty and misconduct and/or conduct prejudicial
to the interest of the service and was penalized with dismissal. He filed a motion for
reconsideration of the decision of the Civil Service Commission. Also, together with ASSPS
(CUGCO), he filed with the CIR a complaint for unfair labor practice against respondent PCSO
and its officers. The CIR issued its decision finding PCSO guilty of unfair labor practice for
having committed discrimination against the union and for having dismissed petitioner due
to his union activities. In this petition, Quadra assails the decision of the CA on the
jurisdiction of the over claims of moral and exemplary damages. He asserts that the CIR has
jurisdiction to award moral and exemplary damages arising out of illegal dismissal and
unfair labor practice.
Issue:
Does the CIR have jurisdiction over claims for damages arising out of illegal dismissal
and ULP?
Ruling:
YES. In a precedent case, the Court found it proper to award moral and exemplary
damages to illegally dismissed employees as their dismissal was tainted with unfair labor
practice. The filing of a petition for damages before the CIR did not constitute splitting of
cause of action under the Revised Rules of Court. The Revised Rules of Court prohibits parties
from instituting more than one suit for a single cause of action. Splitting a cause of action is
the act of dividing a single cause of action, claim or demand into two or more parts, and
bringing suit for one of such parts only, intending to reserve the rest for another separate
action. The purpose of the rule is to avoid harassment and vexation to the defendant and
avoid multiplicity of suits. The prevailing rule at the time that the action for unfair labor
practice and illegal dismissal was filed and tried before the CIR was that said court had no
jurisdiction over claims for damages. Hence, petitioner, at that time, could not raise the issue
of damages in the proceedings. However, the Supreme Court rendered its ruling in Rheem of
the Philippines, Inc., et al. v. Ferrer, et al. upholding the jurisdiction of the CIR over claims for
damages incidental to an employee's illegal dismissal. Petitioner properly filed his claim for
damages after the declaration by the Court and before the ruling on their case became final.
Such filing could not be considered as splitting of cause of action.
100
101
102
In this petition, the employer asserts that pursuant to its CBA with the union, funeral
and bereavement aid should be granted upon the death of a legal dependent of a regular
employee; that consistent with the definition provided by the SSS Law, the term legal
dependent referred to the spouse and children of a married regular employee, and to the
parents and siblings, 18 years old and below, of a single regular employee; that the CBA
considered the term dependents to have the same meaning as beneficiaries, as provided in
Section 5, Article XIII of the CBA on the payment of death benefits; that its earlier granting of
claims for funeral and bereavement aid without regard to the foregoing definition of the legal
dependents of married or single regular employees did not ripen into a company policy
whose unilateral withdrawal would constitute a violation of Article 100 of the Labor Code,
the law disallowing the non-diminution of benefits; that it had approved only four claims
from 1999 to 2003 based on its mistaken interpretation of the term legal dependents, but
later corrected the same.
Issue:
Notwithstanding the silence of the CBA on the definition of its terms, can the
definitions provided under the current social legislations be used in its interpretation?
Ruling:
Yes. Considering that existing laws always form part of any contract, and are deemed
incorporated in each and every contract, the definition of legal dependents under the social
legislations (SSS Law, RA 7875 as amended, PD 1146) applies in the absence of a contrary or
different definition mutually intended and adopted by the parties in the CBA. Accordingly,
the concurrence of a legitimate spouse does not disqualify a child or a parent of the employee
from being a legal dependent provided substantial evidence is adduced to prove the actual
dependency of the child or parent on the support of the employee. The differentiation among
the legal dependents is significant only in the event the CBA has prescribed a hierarchy
among them for the granting of a benefit; hence, the use of the terms primary beneficiaries
and secondary beneficiaries for that purpose. But considering that Section 4, Article XIII of
the CBA has not included that differentiation, petitioner had no basis to deny the claim for
funeral and bereavement aid of Alfante for the death of his parent whose death and fact of
legal dependency on him could be substantially proved. Pursuant to Article 100 of the Labor
Code, petitioner as the employer could not reduce, diminish, discontinue or eliminate any
benefit and supplement being enjoyed by or granted to its employees. This prohibition
against the diminution of benefits is founded on the constitutional mandate to protect the
rights of workers and to promote their welfare and to afford labor full protection.
103
At the collective bargaining negotiation by the SMTFM with the employer Top Form
Manufacturing Philippines, Inc., it requested for the implementation of wage orders, but
demanded that the increase be on an across-the-board basis. The employer, however,
refused to this demand and implemented instead a scheme of increases purportedly to avoid
wage distortion. Such refusal was aggravated by the fact that prior to the issuance of said
wage orders, the employer allegedly promised at the collective bargaining conferences to
implement any government-mandated wage increases on an across-the-board basis. With
this, the union charged the employer with bargaining in bad faith, thus constituting ULP.
Issue:
Can an alleged promise of implementing government-mandated wage orders not
reduced into writing in the CBA be a basis of charging an employer with ULP?
Ruling:
No. The CBA is the law between the contracting parties the collective bargaining
representative and the employer-company. Compliance with a CBA is mandated by the
expressed policy to give protection to labor. In the same vein, CBA provisions should be
construed liberally rather than narrowly and technically, and the courts must place a
practical and realistic construction upon it, giving due consideration to the context in which
it is negotiated and purpose which it is intended to serve." This is founded on the dictum that
a CBA is not an ordinary contract but one impressed with public interest. It goes without
saying, however, that only provisions embodied in the CBA should be so interpreted and
complied with. Where a proposal raised by a contracting party does not find print in the
CBA, it is not a part thereof and the proponent has no claim whatsoever to its
implementation.
104
Does an employer commit ULP when a collective bargaining resulted into a deadlock
despite its active participation in such undertaking?
Ruling:
No. For a charge of unfair labor practice to prosper, it must be shown that CAB was
motivated by ill will, "bad faith, or fraud, or was oppressive to labor, or done in a manner
contrary to morals, good customs, or public policy, and, of course, that social humiliation,
wounded feelings or grave anxiety resulted x x x" in suspending negotiations with CABEUNFL. Notably, CAB believed that CABEU-NFL was no longer the representative of the
workers. It just wanted to foster industrial peace by bowing to the wishes of the
overwhelming majority of its rank and file workers and by negotiating and concluding in
good faith a CBA with CABELA." Such actions of CAB are nowhere tantamount to antiunionism, the evil sought to be punished in cases of unfair labor practices. Furthermore,
basic is the principle that good faith is presumed and he who alleges bad faith has the duty
to prove the same. By imputing bad faith to the actuations of CAB, CABEU-NFL has the burden
of proof to present substantial evidence to support the allegation of unfair labor practice.
Apparently, CABEU-NFL refers only to the circumstances mentioned in the letter-response,
namely, the execution of the supposed CBA between CAB and CABELA and the request to
suspend the negotiations, to conclude that bad faith attended CABs actions. The Court is of
the view that CABEU-NFL, in simply relying on the said letter-response, failed to substantiate
its claim of unfair labor practice to rebut the presumption of good faith.
105
106
In consideration of the impending expiration of the CBA between Nestl and UFEDFA-KMU, the union informed the employer of its intention to renegotiate, especially on the
terms of the Retirement Plan offered to the employees. Nestl however contends that the
retirement plan is in the nature of a unilateral grant which, by their very nature, cannot be
the proper subject of a CBA negotiation. Nestl requested the NCMB for conciliation
proceedings, but still no agreement was reached. The Union, alleging that Nestl bargained
in bad faith in that it was setting pre-conditions in the ground rules by refusing to include
the issue of the Retirement Plan in the CBA negotiations, charged the employer with ULP.
The Secretary of Labor assumed compulsory jurisdiction over the matter.
Issues:
1) Can a retirement plan, which is in the form of a unilateral grant of the employer, be
the valid subject of a CBA negotiation?
2) Did the Secretary of Labor committed grave abuse of discretion when it assumed
compulsory jurisdiction over the labor dispute, including incidental matters such as
the substantive issue of validity of CBA negotiation subjects?
3) Can an employer be validly charged with ULP solely for its refusal to include a subject
matter in a CBA negotiation?
Ruling:
1) YES. In a previous ruling of the Court involving the same parties, the inclusion of the
retirement plan in the collective bargaining agreement as part of the package of
economic benefits extended by the company to its employees to provide them a
measure of financial security after they shall have ceased to be employed in the
company, reward their loyalty, boost their morale and efficiency and promote
industrial peace, gives a consensual character to the plan so that it may not be
terminated or modified at will by either party. The fact that the retirement plan is
non-contributory, i.e., that the employees contribute nothing to the operation of the
plan, does not make it a non-issue in the CBA negotiations.
2) NO. The Secretarys assumption of jurisdiction power necessarily includes matters
incidental to the labor dispute, that is, issues that are necessarily involved in the
dispute itself, not just to those ascribed in the Notice of Strike; or, otherwise
submitted to him for resolution. This authority to assume jurisdiction over the said
labor dispute must include and extend to all questions and controversies arising
therefrom, including cases over which the Labor Arbiter has exclusive jurisdiction.
Secretary Sto. Tomas correctly assumed jurisdiction over the questions incidental to
the current labor dispute and those matters raised by the parties. In any event, the
query as to whether or not the Retirement Plan is to be included in the CBA
negotiations between the parties ineluctably dictates upon the Secretary of the DOLE
to go into the substantive matter of the CBA negotiations.
MARAO, REBBEKAH GRACE G. Block B
107
Nelson Dulay was employed as an ordinary seaman and later as bosun by the General
Charterers Inc. (GCI), a subsidiary of Aboitiz Jebsen Maritime Inc. He 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. The employer contends that the widow is not entitled to death
benefits because the former are only liable for such in case of death of the seafarer during
the term of his contract pursuant to the POEA contract and the cause of his death is not
work-related. In this petition, Merridy Jane asserts that Section 10 of Republic Act (R.A.)
8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995, 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. However, Aboitiz insists that in the present case, Article 217, paragraph (c) as well
as Article 261 of the Labor Code remain to be the governing provisions of law with respect
to unresolved grievances arising from the interpretation and implementation of collective
bargaining agreements. Under these provisions of law, jurisdiction remains with voluntary
arbitrators.
Issue:
Does the Labor Arbiter have jurisdiction over the money claims of migrant workers
granted in a CBA?
Ruling:
NO. 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.
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
MARAO, REBBEKAH GRACE G. Block B
108
109
DEU was the certified exclusive bargaining agent in Digitel. However, no CBA was
executed. Ten years after, DEU initiated negotiation proceedings. Digitel refused, and
demanded that the Union show compliance with the provisions of its CBL on union
membership and election of officers, prompting the Union to file a notice of strike. The
Secretary of Labor assumed compulsory jurisdiction over the matter. During the pendency
of the controversy, Digitel proceeded to close Digiserv, a non-profit enterprise engaged in
call center servicing, filed with the Department of Labor and Employment (DOLE) an
Establishment Termination Report stating that it will cease its business operation. The
closure affected at least 100 employees, 42 of whom are members of the herein respondent
Union. Also, a petition for cancellation of the Unions registration was filed. The Secretary
thereafter ordered for the commencement of the CBA negotiations.
Issues:
1) Does the pendency of a petition for cancellation of union registration preclude
collective bargaining?
2) Did Digitel commit ULP when it closed the servicing unit composed of several union
members during the pendency of the labor dispute?
Ruling:
1) No. It is well-settled that the pendency of a petition for cancellation of union
registration does not preclude collective bargaining. That there is a pending
cancellation proceeding against the respondent Union is not a bar to set in motion the
mechanics of collective bargaining. If a certification election may still be ordered
despite the pendency of a petition to cancel the unions registration certificate, more
so should the collective bargaining process continue despite its pendency. The
majority status of the respondent Union is not affected by the pendency of the Petition
for Cancellation pending against it. Unless its certificate of registration and its status
as the certified bargaining agent are revoked, the employer is, by express provision
of the law, duty bound to collectively bargain with the Union.
2) Yes. The finding of unfair labor practice hinges on Digitels contracting-out certain
services performed by union member-employees to interfere with, restrain or coerce
them in the exercise of their right to self-organization. There is no doubt that Digitel
defied the assumption order by abruptly closing down Digiserv. The closure of a
department is not illegal per se. What makes it unlawful is when the closure is
undertaken in bad faith. Bad faith was manifested by the timing of the closure of
Digiserv and the rehiring of some employees to Interactive Technology Solutions, Inc.
(I-tech), a corporate arm of Digitel. The assumption order directs employees to return
to work, and the employer to reinstate the employees. The existence of the
assumption order should have prompted Digitel to observe the status quo. Instead,
Digitel proceeded to close down Digiserv.
MARAO, REBBEKAH GRACE G. Block B
110
Does the failure of an employer to secure a government permit for its operations,
despite its utmost efforts to obtain such, justify its unilateral call of suspending CBA
negotiations?
Ruling:
YES. The lay-off is neither illegal nor can it be considered as unfair labor practice. For
a charge of unfair labor practice to prosper, it must be shown that the employer was
motivated by ill-will, bad faith or fraud, or was oppressive to labor. The employer must have
acted in a manner contrary to morals, good customs, or public policy causing social
humiliation, wounded feelings or grave anxiety. While the law makes it an obligation for the
employer and the employees to bargain collectively with each other, such compulsion does
not include the commitment to precipitately accept or agree to the proposals of the other. All
it contemplates is that both parties should approach the negotiation with an open mind and
make reasonable effort to reach a common ground of agreement. The Union based its
contention on the letter request by MMC for the suspension of the collective bargaining
negotiations until it resumes operations. Verily, it cannot be said that MMC deliberately
avoided the negotiation. It merely sought a suspension and in fact, even expressed its
willingness to negotiate once the mining operations resume. There was valid reliance on the
suspension of mining operations for the suspension, in turn, of the CBA negotiation. The
Union failed to prove bad faith in MMCs actuations.
111
112
Angelito Caragdag was dismissed by his employer Hyatt Regency Manila after
committing several infractions in his work. Pursuant to the Hotels Code of Discipline, an
employee committing offenses penalized with 3 suspensions during a 12-month period shall
be meted the penalty of dismissal. The Union questioned the validity of Caragdags dismissal,
and was referred to Voluntary Arbitration. The VA found the 3 suspensions of Cargdag valid,
reasoning that the union officers and members had no right to breach company rules and
regulations on security and employee discipline on the basis of certain suspicions against
management and an ongoing CBA negotiation standoff. The VA also awarded financial
assistance to Caragdag. In this petition, the union questions CAs outright dismissal of the
appeal pursuant to Rule 43 of the Rules of Court and its deletion of the award of financial
assistance to Caragdag.
Issue:
Does the CA have appellate jurisdiction over the decisions and awards of a voluntary
arbitrator?
Ruling:
YES. The decision or award of the voluntary arbitrator or panel of arbitrators should
likewise be appealable to the Court of Appeals, in line with the procedure outlined in Revised
Administrative Circular No. 1-95 (now embodied in Rule 43 of the 1997 Rules of Civil
Procedure), just like those of the quasi-judicial agencies, boards and commissions
enumerated therein, and consistent with the original purpose to provide a uniform
procedure for the appellate review of adjudications of all quasi-judicial entities.
On the issue of the deletion of the award of financial assistance, the Court found that
the CA did not err on this matter. Caragdags dismissal being due to serious misconduct, it
follows that he should not be entitled to financial assistance. To rule otherwise would be to
reward him for the grave misconduct he committed. We must emphasize that social justice
is extended only to those who deserve its compassion.
113
Eddie Albarico was dismissed from his work with 7K Corporation allegedly due to his
poor sales performance. He then submitted his money claims for separation pay and sales
commission reserved for him against the employer with the NCMB. He also filed a complaint
for illegal dismissal with the NLRC. The Labor Arbiter in favor of Albarico, who was awarded
separation pay in lieu of reinstatement, backwages and attorneys fees, and the order stated
that it was without prejudice to the pending NCMB case. The employer appealed the LAs
decision, alleging that Albarico committed forum shopping. Subsequently, the NCMB then
found the employer guilty of illegal dismissal. The case was elevated with the CA, which
upheld the assumption of jurisdiction of the VA to decide the legality of the dismissal.
Issue:
Can the VA act upon a complaint for illegal dismissal and the claim for separation pay,
which is within the competence of the Labor Arbiter?
Ruling:
YES. Voluntary arbitrators may, by agreement of the parties, assume jurisdiction over
a termination dispute such as the present case, contrary to the assertion of petitioner that
they may not. Article 262 of the Labor Code provides that the Voluntary Arbitrator or panel
of Voluntary Arbitrators, upon agreement of the parties, shall also hear and decide all other
labor disputes including unfair labor practices and bargaining deadlocks. The circumstances
of the instant case lead to no other conclusion than that the claim of respondent Albarico for
separation pay was premised on his allegation of illegal dismissal. Thus, the voluntary
arbitrator properly assumed jurisdiction over the issue of the legality of his dismissal. There
is no claim that the issue of entitlement to separation pay is being resolved in the context of
any authorized cause of termination undertaken by corporation. Neither is there any
allegation that a consideration of social justice is being resolved here. In fact, even in
instances in which separation pay is awarded in consideration of social justice, the issue of
the validity of the dismissal still needs to be resolved first. Only when there is already a
finding of a valid dismissal for a just cause does the court then award separation pay for
reason of social justice. The other circumstances when separation pay may be awarded are
not present in this case. Hence, the voluntary arbitrator correctly assumed that the core issue
behind the issue of separation pay is the legality of the dismissal of respondent.
114
115
Two factions within the Employees Union of Bayer Philippines (the EBR) were
asserting their rights to bargain with employer Bayer Philippines, Inc.: the Facundo faction
and the splinter union, Remigio faction. Barely six months after the new CBA was signed by
the employer and the EBR, the Remigio faction solicited signatures from the union members
to support the resolution of disaffiliating with the Union and forming the REUBP. Both of the
factions sought recognition from Bayer and demanding remittance of the union dues
collected. The employer responded by refusing to deal with either of the two groups and by
placing the union dues collected in a trust account. EUBP then filed a complaint for ULP
against Bayer for refusing to remit the union dues. During the pendency of this case, Bayer
then turned over the said dues to EUBP. The Labor Arbiter dismissed the complaint for lack
of jurisdiction. Another complaint for ULP was filed by EUBP against Bayer, Remigio and
Villareal, the grounds of which are the allegations of organizing a company union, gross
violation of the CBA, and violation of the duty to bargain. Subsequently, Bayer and REUBP
executed a CBA. The second ULP complaint was also dismissed for lack of jurisdiction.
Issue:
1) Does the Labor Arbiter lack jurisdiction over the propriety of the disaffiliation and
the legality of a splinter union necessarily incorporated in a complaint for ULP?
2) Can the act of the management in dealing and negotiating with a splinter union
despite its validly existing CBA with the then existing exclusive bargaining
representative be considered unfair labor practice?
Ruling:
1) YES. The issue of EUBP against Remigio and Villareal essentially involves an intraunion dispute. To rule on the the validity or illegality of their acts, the Labor
Arbiter and the NLRC will necessarily touch on the issues respecting the propriety
of their disaffiliation and the legality of the establishment of REUBP issues that
are outside the scope of their jurisdiction. Accordingly, the dismissal of the
complaint was validly made, but only with respect to these two respondents.
2) YES. When an employer proceeds to negotiate with a splinter union despite the
existence of its valid CBA with the duly certified and exclusive bargaining agent,
the former indubitably abandons its recognition of the latter and terminates the
entire CBA.
116
Is a petition for certiorari under Rule 65 of the Rules of Court a proper remedy to
question the decision of the CA affirming the dismissal of the NLRC?
Ruling:
NO. A petition for certiorari under Rule 65 of the Rules of Court is a special civil action
that may be resorted to only in the absence of appeal or any plain, speedy and adequate
remedy in the ordinary course of law. For purposes of appeal, the Decision dated July 1, 2002
of the Court of Appeals was a final judgment as it denied due course to, and dismissed, the
petition. Thus, the Decision disposed of the petition of petitioner in a manner that left
nothing more to be done by the Court of Appeals in respect to the said case. Thus, petitioner
should have filed an appeal by petition for review on certiorari under Rule 45, not a petition
for certiorari under Rule 65, in this Court. Where the rules prescribe a particular remedy for
the vindication of rights, such remedy should be availed of. The proper remedy to obtain a
reversal of judgment on the merits, final order or resolution is appeal. This holds true even
if the error ascribed to the court rendering the judgment is its lack of jurisdiction over the
subject matter, or the exercise of power in excess thereof, or grave abuse of discretion in the
findings of fact or of law set out in the decision, order or resolution. The existence and
availability of the right of appeal prohibits the resort to certiorari because one of the
requirements for the latter remedy is that there should be no appeal.
117
118
Can an employer be charged for ULP for effectively reducing the number of its
employees?
Ruling:
YES, if such reduction of employment would be shown to affect in whatever manner
the right of the employees to self-organize. In this case, it could not be shown that the
company committed ULP. There was no proof that the program was meant to encourage the
employees to disassociate themselves from the Union or to restrain them from joining any
union or organization. There was no showing that it was intentionally implemented to stunt
the growth of the Union or that Bankard discriminated, or in any way singled out the union
members who had availed of the retirement package under the MRP. True, the program
might have affected the number of union membership because of the employees voluntary
resignation and availment of the package, but it does not necessarily follow that Bankard
indeed purposely sought such result. It must be recalled that the MRP was implemented as a
valid cost-cutting measure, well within the ambit of the so-called management prerogatives.
Bankard contracted an independent agency to meet business exigencies. In the absence of
any showing that Bankard was motivated by ill will, bad faith or malice, or that it was aimed
at interfering with its employees right to self-organize, it cannot be said to have committed
an act of unfair labor practice.
119
Does the Secretary of Labor have jurisdiction over issues with which a strike is
grounded, even if such issues are not within its competence?
Ruling:
YES. There was already an actual existing deadlock between the parties. What was
lacking was the formal recognition of the existence of such a deadlock because the union
refused a declaration of deadlock. Thus, the unions view that, at the time the Secretary of
Labor and Employment exercised her power of assumption of jurisdiction, the issue of
deadlock was neither an incidental issue to the matter of unfair labor practice nor an existing
issue is incorrect. More importantly, however, the unions mistaken theory that the deadlock
issue was neither incidental nor existing is based on its premise that the case is all about the
companys alleged unfair labor practice of bargaining in bad faith, which is the ground stated
in its first Notice of Strike. The Secretary of the DOLE has been explicitly granted by Article
263(g) of the Labor Code the authority to assume jurisdiction over a labor dispute causing
or likely to cause a strike or lockout in an industry indispensable to the national interest, and
decide the same accordingly. And, as a matter of necessity, it includes questions incidental
to the labor dispute; that is, issues that are necessarily involved in the dispute itself, and not
just to that ascribed in the Notice of Strike or otherwise submitted to him for resolution. The
totality of the companys Petition for Assumption of Jurisdiction, including every allegation
therein, also guided the Secretary of Labor and Employment in the proper determination of
the labor dispute over which he or she was being asked to assume jurisdiction.
120
Due to a bargaining deadlock during the CBA negotiations, the Union filed a notice of
strike. Then Acting Secretary of Labor assumed jurisdiction over the dispute, thus enjoining
any strike whether actual or intended. Despite the assumption order, the Union proceeded
with its strike, prompting the Acting Secretary to issue a return-to-work order. The company
then issued letters of termination to those union members who did not report back to work.
In this petition, the Union asserts that the presumption of legality of strikes is enshrined in
the Constitution, which is why the termination cannot be justified.
Issue:
Despite assumption orders from the Secretary of Labor, can a union validly hold a
strike against its employer?
Ruling:
NO. It is clear from Article 263 of the Labor Code that the moment the Secretary of
Labor assumes jurisdiction over a labor dispute in an industry indispensable to national
interest, such assumption shall have the effect of automatically enjoining the intended or
impending strike. It was not even necessary for the Secretary of Labor to issue another order
directing them to return to work. The mere issuance of an assumption order by the Secretary
of Labor automatically carries with it a return-to-work order, even if the directive to return
to work is not expressly stated in the assumption order. Also, Article 264 provides that No
strike or lockout shall be declared after the assumption of jurisdiction by the President or
the Secretary or after certification or submission of the dispute to compulsory or voluntary
arbitration or during the pendency of cases involving the same grounds for the strike or
lockout. The rationale of this prohibition is that once jurisdiction over the labor dispute has
been properly acquired by the competent authority, that jurisdiction should not be
interfered with by the application of the coercive processes of a strike. It was held in a
number of cases that defiance to the assumption and return-to-work orders of the Secretary
of Labor after he has assumed jurisdiction is a valid ground for loss of the employment status
of any striking union officer or member.
121
The Union of Filipro Employees staged a strike against Nestle Philippines. Benito
Chua participated in the said strike. During the strike, several of the striking employees
threw stones at the trucks entering and leaving the company premises. One truck, whose
driver was rendered unconscious by a stone hitting him on the head, rammed a private
vehicle and crashed into a beauty parlor resulting in the death of three persons and extensive
damage to private property. The strike was declared illegal by the NLRC. The union and its
striking members offered to return to work and were readmitted by the company except 69
union officers and 33 union members, including Chua. Subsequently, the union's counsel
wrote to the Nestle requesting the reinstatement of five employees, including Chua. The
request, however, was denied. Chua received a notice of dismissal from Nestle for having
participated in the illegal strike. He then questions the legality of his dismissal, in this
petition for certiorari.
Issue:
Can a union member in an unlawful and violent strike constitute a valid cause for his
dismissal from employment?
Ruling:
YES. His participation in the unlawful and violent strike, which strike resulted in
multiple deaths and extensive property damage, constituted serious misconduct on his part.
Since his participation in the unlawful and violent strike was amply shown by substantial
evidence, the NLRC was correct in holding that the dismissal of Chua was valid being based
on lawful or authorized cause.
On the issue of granting financial assistance, the Court disagrees with the Labor
Arbiter that Chua should be entitled to it. Under the circumstances of this case, the Court
considers that such award of "financial assistance" was obviously unjustified. This Court has
several times ruled that "financial assistance", whatever form it might assume, is permissible
where the employee has been validly dismissed, only in those instances where the cause of
dismissal was something other than serious misconduct on the part of the employee or other
cause reflecting adversely on the employee's moral character.
122
The officers and members of the Union in PINA walked out of its premises in support
of its officer charged by the personnel manager and the latters secretary with oral
defamation. PINA preventively suspended all officers of the Union because of the walkout.
The Union filed a notice of strike, claiming the PINA is guilty of union busting through the
constructive dismissal of its officers. Both PINA and Union filed ULP charges against each
other. The Labor Arbiter, and the NLRC on appeal, held that the strike was illegal. But the
NLRC ordered for the reinstatement of the employees without back wages. In this petition,
the union claims that the reinstated employees should be entitled to back wages, for they
have not abandoned their work.
Issue:
Are the participants of an illegal strike entitled to reinstatement with back wages?
Ruling:
NO. Contemplating two causes for the dismissal of an employee, that is: (a) unlawful
lockout; and (b) participation in an illegal strike, the third paragraph of Article 264(a)
authorizes the award of full back wages only when the termination of employment is a
consequence of an unlawful lockout. On the consequences of an illegal strike, the provision
distinguishes between a union officer and a union member participating in an illegal strike.
A union officer who knowingly participates in an illegal strike is deemed to have lost his
employment status, but a union member who is merely instigated or induced to participate
in the illegal strike is more benignly treated. Part of the explanation for the benign
consideration for the union member is the policy of reinstating rank-and-file workers who
are misled into supporting illegal strikes, absent any finding that such workers committed
illegal acts during the period of the illegal strikes. The petitioners were terminated for joining
a strike that was later declared to be illegal. The NLRC ordered their reinstatement or, in lieu
of reinstatement, the payment of their separation pay, because they were mere rank-and-file
workers whom the Unions officers had misled into joining the illegal strike. They were not
unjustly dismissed from work.
123
124
Saidali Pasawilan, Wilfredo Verceles and Melchor Bulusan were security guards
employed by Alert Security and Investigation Agency, Inc. They alleged that they were being
underpaid, hence a complaint for money claims against their employer. Because of said
complaint, they were relieved from their posts and were not given new assignments despite
the lapse of six months. They then filed a complaint for illegal dismissal. In its defense, the
employer asserts that the security guards abandoned their work, for failure to report to their
new assignment.
Issues:
1) Is a complaint filed against the employer by the employee a valid ground for
dismissal?
2) Is there abandonment of work when an employee fails to report to his new
assignment?
Ruling:
1) NO. The Labor Code, as amended, enumerates several just and authorized causes
for a valid termination of employment. An employee asserting his right and asking
for minimum wage is not among those causes. Dismissing an employee on this
ground amounts to retaliation by management for an employees legitimate
grievance without due process. Such stroke of retribution has no place in
Philippine Labor Laws.
2) NO. For abandonment of work to fall under Article 282 (b) of the Labor Code, as
amended, as gross and habitual neglect of duties there must be the concurrence
of two elements. First, there should be a failure of the employee to report for work
without a valid or justifiable reason, and second, there should be a showing that
the employee intended to sever the employer-employee relationship, the second
element being the more determinative factor as manifested by overt acts. A
complaint for illegal dismissal is inconsistent with the charge of abandonment,
because when an employee takes steps to protect himself against a dismissal, this
cannot, by logic, be said to be abandonment by him of his right to be able to work.
125
Archbuild Masters and Construction Inc. informed several of its employees whose
services it no longer needed as its project with the US government was nearing its
completion. According to ARMACON, the phase of work for which the employees, including
private respondent Cayanga, were hired neared its completion so that a lesser number of
workers and construction materials were required to be transported to the digging sites,
which meant fewer trips to the construction site and a reduction in the number of drivers.
Cayanga then filed for illegal dismissal, asserting that the proximate project completion was
not really the ground for his dismissal, but the purported absences he incurred allegedly
without leave.
Issue:
Can project employees be dismissed on the ground of the proximate completion of
the project for which their employment was engaged?
Ruling:
NO. As a project employee of ARMACON, Cayangas employment may be terminated
upon the completion of the project as there would be no further need for his services. Since
a project employee's work depends on the availability of projects, necessarily the duration
of his employment is not permanent but coterminous with the work to which he is assigned.
However, for project workers employed in the construction industry, employers are allowed
to reduce their work force into a number suited for the remaining work to be done upon the
completion or proximate accomplishment of the construction project. The employment of a
project worker hired for a specific phase of a construction project is understood to be
coterminus with the completion of such phase and not upon the accomplishment of the
whole project. Project workers in the construction industry may also be terminated as the
phase of a construction project draws nearer to completion when their services are no longer
needed provided they are not replaced.
If a project employee is dismissed his removal must still comply with the substantive
and procedural requirements of due process. Therefore, a project employee hired for a
specific task also enjoys security of tenure. A termination of his employment must be for a
lawful cause and must be done in a manner which affords him the proper notice and hearing.
Thus, a project employee must be duly furnished a written notice of his impending dismissal
and must be given the opportunity to dispute the legality of his removal. We find it in the
interest of justice to require employers to state the reason for their project employees'
dismissal and prove this ground once its veracity is challenged. Employers who hire project
employees are mandated to prove the actual basis for the latter's dismissal. A mere claim of
project completion is not sufficient to terminate a project worker's employment without
adequate proof to demonstrate such claims. In termination cases, the burden of proving that
an employee has been lawfully dismissed lies with the employer.
MARAO, REBBEKAH GRACE G. Block B
126
Alfonso Fianza was employed as Officer for Social Acceptance of Binga Hydroelectric
Plant, Inc. Almost two years in his employment, there was an instance where he did not
receive his salary and was advised not to report to work until his status was clarified. After
he made several inquiries, he was told to report to work by his supervisor, but the
management committee still had to concur with his reappointment before he could be
reinstated in the payroll. When the management committee did not act on his inquiries,
Fianza filed a complaint for illegal dismissal. His employer however asserts that he
abandoned his work and that he was merely a confidential employee, his employment being
coterminous with the term of the then president and chairperson of the company.
Issues:
Is an employee said to have abandoned his work during the pendency of his
reinstatement to the companys payroll?
Ruling:
NO. For a valid finding of abandonment, these two factors should be present: (1) the
failure to report for work or absence without valid or justifiable reason; and (2) a clear
intention to sever employer-employee relationship, with the second as the more
determinative factor which is manifested by overt acts from which it may be deduced that
the employees has no more intention to work. The intent to discontinue the employment
must be shown by clear proof that it was deliberate and unjustified. The very act of filing the
Complaint for illegal dismissal should have negated any intention on petitioners part to
sever his employment. In fact, it should already have been sufficient evidence to declare that
there was no abandonment of work. Moreover, petitioner went back to the company several
times to inquire about the status of his employment. The fact that his inquiries were not
answered does not prejudice this position.
127
Roy Pasos started working for PNCC as Accounting Clerk for the NAIA II Project. His
employment was extended two more years after the termination of his project employment
contract. He was again rehired twice. The latter rehiring did not specify when his
employment will end, but it was only specified in his contract that it will be coterminous with
the completion of the project. When he was informed of another appointment, he had taken
his medical examinations, only to find out that he contracted an illness which required him
to take a leave of absence. However, the personnel officer informed him that his services
were already terminated. Pasos then claims for illegal dismissal, stating that he already was
a regular employee, indicated by several appointments given to him for several projects.
Issue:
Did a project employee become a regular employee after reappointments for several
projects? If such is the case, can he be dismissed on the ground of contract expiration or
project completion?
Ruling:
YES. A project employee is one whose "employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined at the
time of the engagement of the employee or where the work or services to be performed is
seasonal in nature and the employment is for the duration of the season." Thus, the principal
test used to determine whether employees are project employees is whether or not the
employees were assigned to carry out a specific project or undertaking, the duration or scope
of which was specified at the time the employees were engaged for that project. In the case
at bar, Pasos worked continuously for more than two years after the supposed three-month
duration of his project employment for the NAIA II Project. While his appointment for said
project allowed such extension since it specifically provided that in case his "services are still
needed beyond the validity of the contract, the Company shall extend his services," there was
no subsequent contract or appointment that specified a particular duration for the extension.
While for first three months, Pasos can be considered a project employee of PNCC, his
employment thereafter, when his services were extended without any specification of as to
the duration, made him a regular employee of PNCC. And his status as a regular employee
was not affected by the fact that he was assigned to several other projects and there were
intervals in between said projects since he enjoys security of tenure.
His regular employment was terminated by PNCC due to contract expiration or
project completion, which are both not among the just or authorized causes provided in the
Labor Code, as amended, for dismissing a regular employee. Thus, Pasos was illegally
dismissed.
128
Arthur Cabusas was hired by Primary Structures Corporation (PSC) as transit mixer.
It was stated in his employment contract that he is a project employee, and as such, his
employment is coterminous with the completion of the project or any phase thereof. Incident
reports of violations of company rules and regulations reached the management. Cabusas
was then preventively suspended pending investigation. He asked for the result of the
investigation and waited for such result. However, the company took it as his abandonment
from work. Thus, his services were terminated. Cabusas then filed a complaint for illegal
dismissal.
Issue:
Was there a deliberate abandonment of work which would justify a dismissal when
an employee merely waited for the result of a pending investigation on charges
administratively filed against him?
Ruling:
NO. To constitute abandonment, two elements must concur, to wit: (1) the failure to
report for work or absence without valid or justifiable reason; and (2) a clear intention to
sever the employer-employee relationship, with the second element as the more
determinative factor and being manifested by some overt acts. Abandonment is a matter of
intention and cannot lightly be presumed from certain equivocal acts. To be a valid cause for
dismissal for abandonment, there must be clear proof of deliberate and unjustified intent to
sever the employer-employee relationship. Clearly, the operative act is still the employee's
ultimate act of putting an end to his employment. The Court ruled that the two elements of
abandonment were lacking. The Court found his absence from work not sufficient to
establish that he already had intention of abandoning his job. Besides, settled is the rule that
mere absence or failure to report for work is not tantamount to abandonment of work. Even
the failure to report for work after a notice to return to work has been served does not
necessarily constitute abandonment. There is no showing of respondent's intent to sever the
employer-employee relationship. It is also notable that when respondent was refused entry
to petitioners' premises and the letter of former's counsel was refused acceptance by the
latter, there is already constructive dismissal which led respondent to seek recourse by filing
an illegal dismissal case.
129
Can a probationary employee, who was not informed of the regularization standards
by his employer, be dismissed even before the completion of his probationary status?
Ruling:
NO. In this instance, he is deemed to have been hired from day one as a regular
employee due to the employers failure to specify the reasonable standards by which
Sorianos alleged poor performance was evaluated as well as to prove that such standards
were made known to him at the start of his employment. Probationary employment shall not
exceed six (6) months from the date the employee started working, unless it is covered by
an apprenticeship agreement stipulating a longer period. The services of an employee who
has been engaged on a probationary basis may be terminated for a just cause or when he
fails to qualify as a regular employee in accordance with reasonable standards made known
by the employer to the employee at the time of his engagement. An employee who is allowed
to work after a probationary period shall be considered a regular employee. It is primordial
that at the start of the probationary period, the standards for regularization be made known
to the probationary employee. In this case, the employer failed to present adequate evidence
to substantiate its claim that respondent was apprised of said standards. Equally important
is the requirement that in order to invoke "failure to meet the probationary standards" as a
justification for dismissal, the employer must show how these standards have been applied
to the subject employee. In this case, aside from its bare allegation, it was not shown that a
performance evaluation was conducted to prove that his performance was indeed
unsatisfactory. Indeed, the power of the employer to terminate a probationary employee is
subject to three limitations, namely: (1) it must be exercised in accordance with the specific
requirements of the contract; (2) the dissatisfaction on the part of the employer must be real
and in good faith, not feigned so as to circumvent the contract or the law; and (3) there must
be no unlawful discrimination in the dismissal. In this case, not only did petitioner fail to
show that respondent was apprised of the standards for regularization but it was likewise
not shown how these standards had been applied in his case.
130
Pearlie Ann Alcaraz was accepted as a probationary employee for the position of
Regulatory Affairs and Information Manager for six months. She was informed of her
responsibilities and tasks as such. She was also informed of company policies. However, the
management deemed her not fit for regularization, thus her services were terminated even
before the end of her probationary period. Alcaraz then filed a complaint for illegal dismissal,
claiming that she should have already been considered as a regular and not a probationary
employee given Abbotts failure to inform her of the reasonable standards for her
regularization upon her engagement as required under Article 29525 of the Labor Code.
Issue:
Is the act of the employer in informing the probationary employee of his/her tasks
during the probationary period constitutive of informing the latter of the reasonable
standards for regularization?
Ruling:
YES. The employer is made to comply with two (2) requirements when dealing with
a probationary employee: first, the employer must communicate the regularization
standards to the probationary employee; and second, the employer must make such
communication at the time of the probationary employees engagement. If the employer fails
to comply with either, the employee is deemed as a regular and not a probationary employee.
Keeping with these rules, an employer is deemed to have made known the standards that
would qualify a probationary employee to be a regular employee when it has exerted
reasonable efforts to apprise the employee of what he is expected to do or accomplish during
the trial period of probation. This goes without saying that the employee is sufficiently made
aware of his probationary status as well as the length of time of the probation. The exception
to the foregoing is when the job is self-descriptive in nature, for instance, in the case of maids,
cooks, drivers, or messengers. The rule on notifying a probationary employee of the
standards of regularization should not be used to exculpate an employee who acts in a
manner contrary to basic knowledge and common sense in regard to which there is no need
to spell out a policy or standard to be met. In the same light, an employees failure to perform
the duties and responsibilities which have been clearly made known to him constitutes a
justifiable basis for a probationary employees non-regularization.
131
Efren Sagad was hired allegedly as a probationary bus driver of Sampaguita Auto
Transport Corporation. During the evaluation of his work performance, the evaluator noted
Sagads reckless manner of driving. Despite such evaluation, as shown in the records,
Sampaguita retained Sagad as bus driver even after his probationary period. However,
because of the negative evaluation, the company terminated his services, asserting he did
not qualify as a regular employee. Sagad filed a complaint for illegal dismissal.
Issue:
Was the employee validly dismissed as a probationary employee for failure to qualify
as regular employee despite being retained after the probationary period?
Ruling:
NO. He was, instead, dismissed as a regular employee. The Court found that Sagad
already attained regular status when the records indicate that he was retained even after his
probationary period. Thus, as a regular employee, Sagad can only be dismissed for just
causes under Article 282 of the Labor Code. The irregularities or infractions committed by
Sagad in connection with his work as a bus driver constitute a serious misconduct or, at the
very least, conduct analogous to serious misconduct, under the above-cited Article 282 of
the Labor Code. To be sure, his tendency to speed up during his trips, his reckless driving,
his picking up passengers in the middle of the road, his racing with other buses and his
jostling for vantage positions do not speak well of him as a bus driver. While he denies being
informed, when he was hired, of the duties and responsibilities of a driver contained in a
document submitted in evidence by the company the requirement "3. to obey traffic rules
and regulations as well as the company policies. 4. to ensure the safety of the riding public
as well as the other vehicles and motorists" is so fundamental and so universal that any bus
driver is expected to satisfy the requirement whether or not he has been so informed.
132
Then DECS issued a regulation requiring college faculty members to have a masters
degree as a minimum qualification for acquiring regular status. The UE President issued a
policy that it would hire those who have no postgraduate units or masters degree for its
college teaching staff, in the absence of qualified applicants, only on a semester-to-semester
basis. Mariti Bueno and Analiza Pepanio were hired both on a semester-to-semester basis
for they could not qualify for probationary or regular status because they lack postgraduate
studies. UE then extended their appointments. They then both sought to be considered as
regular employees, Bueno having served for 6 years and Pepanio for 3 years on a fullload basis. When UE did not heed such demands, they both filed cases of illegal dismissal.
Issue:
Pursuant to a school CBA, can college faculty without post graduate studies attain
regular status despite a government regulation requiring such degree?
Ruling:
NO. A school CBA must be read in conjunction with statutory and administrative
regulations governing faculty qualifications. Such regulations form part of a valid CBA
without need for the parties to make express reference to it. While the contracting parties
may establish such stipulations, clauses, terms and conditions, as they may see fit, the right
to contract is still subject to the limitation that the agreement must not be contrary to law or
public policy. In promulgating the Manual of Regulations, DECS was exercising its power of
regulation over educational institutions, which includes prescribing the minimum academic
qualifications for teaching personnel. The requirement of a masteral degree for tertiary
education teachers is not unreasonable. The operation of educational institutions involves
public interest. The government has a right to ensure that only qualified persons, in
possession of sufficient academic knowledge and teaching skills, are allowed to teach in such
institutions. Government regulation in this field of human activity is desirable for protecting,
not only the students, but the public as well from ill-prepared teachers, who are lacking in
the required scientific or technical knowledge. They may be required to take an examination
or to possess postgraduate degrees as prerequisite to employment.
133
Raquel Calimbas and Luisa Mahilom were engaged by De Guzman Manpower Services
to perform secretarial and clerical jobs for First Philippine Industrial Corporation. For five
years, they have rendered services to FPIC. After which, they were informed that their
services were no longer needed by FPIC, effective one month after such notice. FPIC cited
that the reason for their termination is the expiration of the contract with DGMS. They both
filed for illegal dismissal cases against FPIC.
Issue:
Can the principal terminate the services of employees engaged by a labor-only
contractor on the ground of the expiration of the contract to provide services?
Ruling:
NO. In this case, it was sufficiently established that there exists an employeremployee relationship between FPIC and the workers, the former exercising the power of
control over their work performance. And having served for almost five years at FPIC,
Calimbas and Mahilom have already attained the status of regular employees. Therefore,
they could only be dismissed for just causes as provided for by Article 282 of the Labor Code.
FPIC failed to show any valid or just cause under the Labor Code on which it may justify the
termination of services of the employees. Also, apart from notifying that their services had
already been terminated, FPIC failed to comply with the rudimentary requirement of
notifying respondents regarding the acts or omissions which led to the termination of their
services as well as giving them an ample opportunity to contest the legality of their dismissal.
Having failed to establish compliance with the requirements of termination of employment
under the Labor Code, the employees dismissal is tainted with illegality.
134
Poseidon hired Tito Tamala, Felipe Saurin Jr., Artemio Bo-oc and Joel Fernandez to
man the fishing vessels of Van Doorn and its partners. Two months after they were hired and
started to work, the operations abruptly stopped and did not resume. Before disembarking,
the employees executed an agreement providing them 50% of their unpaid salaries. The
employees, after disembarking, filed a complaint for illegal dismissal. They also claim for
their unpaid salaries. When the case reached the CA, said court applied Section 10 of RA
8042.
Issue:
135
Luciano Canedo was hired as security guard and was assigned in one of the power
barges of the National Power Corporation. He was suspended for a month for not wearing
the proper uniform while on duty. Prior to the expiration of the suspension period, NPC
informed Kampilan, Canedos agency, that it was no longer interested in Canedos services.
He was issued with a certification for his intended retirement; however, the certification
stated that he was terminated from service. He filed a complaint for illegal dismissal.
Issue:
Is an employee effectively dismissed even before the expiration of the suspension
period?
Ruling:
NO. In the present case, the Court held that the employee then was merely on a
floating status. Such a floating status is lawful and not unusual for security guards employed
in security agencies as their assignments primarily depend on the contracts entered into by
the agency with third parties. Canedo relies on the word "terminated" as used in the
Certification issued him and argues that the same is a clear indication that he was dismissed
from service. The Court said the Canedo cannot simply rely on this piece of document since
the fact of dismissal must be evidenced by positive and overt acts of an employer indicating
an intention to dismiss. Here, aside from this single document, he proffered no other
evidence showing that he was dismissed from employment. While it is true that he was not
allowed to report for work after the period of his suspension expired, the same was due to
NPCs request for his replacement as NPC was no longer interested in his services.
Countering such status, Canedo contends that even at present, he is still not given any new
duties. A floating status can ripen into constructive dismissal only when it goes beyond the
six-month maximum period allowed by law. In this case, Canedo filed the Complaint for
illegal dismissal even before the lapse of the six-month period. Hence, his claim of illegal
dismissal lacks basis. Moreover, it was in fact Canedo who intended to terminate his
relationship with respondents through his planned retirement. This is further bolstered by
his prayer in his Complaint where he sought for separation pay and not for reinstatement.
136
Petitioner was hired as master of the vessel M/V Themistocles by PAL Maritime
Corporation, the manning agent of respondent Western Shipping Agencies, PTE., LTD. On
July 31, 1995, a telex message was sent to petitioner enumerating complaints received from
Colonial Shipping, the owner of the vessel. On the following day, petitioner sent a telex
message, imputing ill-motive on the part of the foreign inspectors who were making false
accusations against Filipino crew members. In the same message, petitioner addressed all
complaints raised against him. On August 2, petitioner sent another telex message informing
Western Shipping of the unbearable situation on board; petitioner asked that he be relieved
from his post. In response to said message, Western Shipping informed petitioner that the
owners had decided to grant his relieve and that the pre-matured ending of his contract was
mutually agreed. Petitioner accepted the decision. On October 25, 1996, Petitioner filed a
complaint for illegal dismissal.
Issue:
Was the act of the employee asking for relief from his post constitute resignation?
Held:
YES. Cervantes resigned from his employment. Records show that a telex message
containing the poor work performance of petitioner as the master of the vessel was
forwarded by the ship owner to respondent PAL Maritime. In connection with the
deficiencies, petitioner was given one month by the owner to take corrective measures to
improve on the deficiencies. Instead of complying with the request of the ship owners,
petitioner opted to be relieved from his post. While it is true that his resignation was an
offshoot of the complaint of the ship owners but the latter were merely requesting petitioner
and its chief officers to improve in their performance. The dismissal aspect was not
dismissed at all. It was the petitioner who brought out the idea and which was accepted by
the ship owner.
137
Viajar was an employee of GMC who was terminated on the ground of redundancy.
She filed a complaint before the Regional Arbitration Branch in Cebu City after she was
denied entry from the companys premises a month prior to the effective of her severance
and was subsequently asked to sign an application for retirement and benefits. She also
found that the company hired 15 new employees arousing her suspicion that her dismissal
was not necessary. However, GMC reasoned out that the termination of Viajar was necessary
because of the economic setbacks that the company was suffering. The Labor Arbiter
rendered a decision favoring GMC saying that it acted in good faith in terminating Viajar and
said decision was upheld by the NLRC upon the appeal by Viajar.
Issue:
Was the employee validly terminated on the ground of redundancy?
Ruling:
NO, the termination of Viajar due to redundancy was invalid. Article 283 of the Labor
Code validly provides redundancy as one of the authorized causes for dismissal provided
that the employer must comply with the requirements for a valid implementation of the
companys redundancy program. In the case at hand, the petitioner failed to present
substantial proof to support GMCs general allegations of redundancy. The lettermemorandum which contains general allegations is insufficient in supporting Viajars
termination of employment due to redundancy as there was no proof showing that GMC
made evaluations of the existing positions in the company nor did they show proof that the
company is experiencing business slow down or over hiring.
138
Jereme Villanueva, Sr. entered into a ten-month employment contract with Baliwag
Navigation, Inc. His pre-employment medical examination indicated his fitness for work,
although it was provided that he had heart disease. While on work, he suddenly felt chest
pains and difficulty in breathing. He was given medication to alleviate the pain. He was
repatriated upon the expiration of his contract. He filed a claim for disability benefits from
the employer, claiming that his heart ailment was work-related, because he asserts that the
employer still engaged him for work despite such ailment.
Issue:
Can an employee claim compensability on a heart ailment he had even prior to his
work engagement?
Ruling:
NO. Villanueva was repatriated for finished contract, not for medical reasons. More
importantly, while the 2000 POEA-Standard Employment Contract (Section 32-A11)
considers a heart disease as occupational, Villanueva failed to satisfy by substantial evidence
the condition laid down in the Contract that if the heart disease was known to have been
present during employment, there must be proof that an acute exacerbation was clearly
precipitated by the unusual strain brought about by the nature of his work.
139
Jonathan Sang-an was the Assistant Operation Manager of Equator Knights Detective
and Security Agency, Inc. Among his duties was the safekeeping of Eqautors firearms. On a
certain occasion, Equator discovered, on inventory, that two firearms were missing and that
Sang-an was responsible for such loss. He was temporarily suspended from work pending
investigation. While under suspension, a security guard was apprehended by policeman in
violation of the Comelec gun ban. The unlicensed firearm, according to the guard, was issued
to him by Sang-an. He filed a case for illegal suspension, but treated such as illegal dismissal,
claiming violation of due process. Equator argued that Sang-an was not illegally dismissed,
as his infractions were just causes as provided by Article 282 of the Labor Code.
Issue:
Was the employee validly dismissed despite the absence of the two-notice
requirement?
Ruling:
NO. On the substantive aspect, there was indeed a just cause for Sang-ans
termination, i.e. serious misconduct. By losing two firearms and issuing an unlicensed
firearm, Sang-an committed serious misconduct. He did not merely violate a company policy;
he violated the law itself. However, Equator failed to accord Sang-an procedural due process,
as he was not given any written notice informing him of the acts he committed to justify his
dismissal. The notice of suspension given to Sang-an only pertained to the first offense, i.e.,
the loss of Equators firearms underSang-an watch. With respect to his second offense (i.e.,
the issuance of an unlicensed firearm to Equators security guard that became the basis for
his dismissal), Sang-an was never given any notice that allowed him to air his side and to
avail of the guaranteed opportunity to be heard. In order to validly dismiss an employee, the
observance of both substantive and procedural due process by the employer is a condition
sine qua non. Procedural due process requires that the employee be given a notice of the
charge against him, an ample opportunity to be heard, and a notice of termination.
140
Did the act of the company in informing the employee of the managements decision
of terminating his employment after discovering that the latters time card can no longer be
found constitute as sufficient notice to dismiss?
Ruling:
NO. In fact, there was no abandonment in the case, as opposed to the allegations of
Polyfoam. The latter failed to show any valid or authorized cause under the Labor Code
which allowed it to terminate the services of respondent. Neither was it shown that
Concepcion was given ample opportunity to contest the legality of his dismissal. No notice of
termination was given to him. Clearly, Concepcion was not afforded due process. Having
failed to establish compliance with the requirements of termination of employment under
the Labor Code, the dismissal of respondent was tainted with illegality.
141
Valle Verde hired Dolores Esguerra as Head Food Checker and was promoted to Cost
Control Supervisor. After a function, the management found out that the proceeds were not
entirely remitted to the accounting department and that there were unauthorized food
charges against the account of one of its members who participated in the said function. The
management then sent a memorandum requiring Esguerra to explain why no disciplinary
action should be taken against her, and placing her in preventive suspension. Even though
she submitted her explanation, such was not found to be satisfactory by the management;
thus, she was dismissed from employment. It prompted Esguerra to file a complaint for
illegal dismissal. The NLRC found she was not illegally dismissed on the ground of loss and
confidence. In this petition, Esguerra contends she could not be dismissed on such ground,
for she was only a mere regular employee, with a position not vested with trust and
confidence.
Issues:
1) Does a memorandum directing an employee to explain why a disciplinary action
should not be taken against her constitute a sufficient notice?
2) Is a cost control supervisor an employee vested with trust and confidence?
Ruling:
1) YES. The law does not require that an intention to terminate ones employment
should be included in the first notice. It is enough that employees are properly
apprised of the charges brought against them so they can properly prepare their
defenses; it is only during the second notice that the intention to terminate ones
employment should be explicitly stated. Also, the existence of an actual, formal
"trial-type" hearing, although preferred, is not absolutely necessary to satisfy the
employee's right to be heard. Esguerra was able to present her defenses; and only
upon proper consideration of it did Valle Verde send the second memorandum
terminating her employment. Since Valle Verde complied with the two-notice
requirement, no procedural defect exists in Esguerras termination.
2) YES. Esguerra held the position of Cost Control Supervisor and had the duty to
remit to the accounting department the cash sales proceeds from every
transaction she was assigned to. This is not a routine task that a regular employee
may perform; it is related to the handling of business expenditures or finances.
For this reason, Esguerra occupies a position of trust and confidence. Any breach
of the trust imposed upon her can be a valid cause for dismissal. Loss of confidence
as a just cause for termination of employment can be invoked when an employee
holds a position of responsibility, trust and confidence. In order to constitute a
just cause for dismissal, the act complained of must be related to the performance
of the duties of the dismissed employee and must show that he or she is unfit to
continue working for the employer for violation of the trust reposed in him or her.
MARAO, REBBEKAH GRACE G. Block B
142
Vallota was employed as a junior programmer of PGAI. After a spot security check of
the computer unit he was using in the company, it was discovered that he was keeping
certain information which the company believed to be confidential in nature. He was sent a
memorandum directing him to explain why he should not be dismissed. He replied, asking
for a conference, but it was turned down by the management. He was dismissed from his
work on the ground of loss of confidence.
Issues:
1) Can a junior programmer of a company be validly terminated on the ground of
loss of confidence?
2) Was there a valid dismissal of an employee despite his request of a conference
being turned down by his employer?
Ruling:
1) YES. Loss of confidence should ideally apply only to cases involving employees
occupying positions of trust and confidence or to those situations where the
employee is routinely charged with the care and custody of the employer's money
or property. Vallotas position is included in the second class of employees
occupying positions of trust and confidence, thus satisfying the first requisite.
However, although his position made him privy to confidential data, his act of
keeping such confidential data in his computer could not have been an act
justifying his dismissal, had it been proven by his employer that such was an
attempt to defraud his employer or to use the files in any purpose other than for
which it was intended. Absent this intention, the act of Vallota does not warrant
his dismissal.
2) NO. The Court said that when Vallota asked for a conference, the formal hearing
allowed by law to be conducted became mandatory. After PGAI failed to
affirmatively respond to such request, it follows that the hearing requirement was
not complied with and, therefore, Vallota was denied his right to procedural due
process.
143
Ruling:
No, petitioner was not illegally dismissed. Gutang was a managerial employee whose
position is vested with confidence on delicate matters which he failed to uphold in one event,
where he failed to account for and to turn over his sales collections. Article 282 (c) of the
Labor Code allows an employer to terminate an employees employment on the ground of
the latters fraud or willful breach of trust and confidence reposed in him if the employer has
a reasonable ground to believe that the employee was responsible for the misconduct. Such
requirement was proven to exist in the given case.
However, he was not accorded due process. Article 277 of the Labor Code provides
that in order to finally dismiss the employee, an employer is obligated to send him two
written notices: (a) one informing him of the acts or omissions for his dismissal and (b)
second notifying him of the employers decision to dismiss him after he was given the
opportunity to be heard and to defend himself. In the case at bar, although the company
issued a demand letter to Gutang, this would not constitute as sufficient to comply with said
requirement as its purpose is different from the requirement under the law, hence, the
company did not comply with the twin-notice requirement. No notices were issued and he
was not given the opportunity to be heard. This lack of statutory due process would not
nullify the dismissal of the employee since the dismissal was for just cause. Therefore, Gutang
is still entitled to nominal damages.
144
145
De Jesus was employed by Supersonic and held the position of Sales Promotion
Officer, tasked to solicit clients and sell plane tickets to various agencies on credit. Her
employer dismissed her because a certain amount of ticket sales were not turned over to the
company. Several demands for the turnover of the ticket sales were given to De Jesus, but
despite such she was not able to settle her obligations. She was filed with estafa. De Jesus
alleged she was not granted notice and opportunity to be heard prior to the dismissal.
Issue:
Can the failure to turn over sales be a ground to dismiss an employee for loss of trust
and confidence?
Ruling:
YES. In termination of employment based on just cause, it is not enough that the
employee is guilty of misfeasance towards his employer, or that his continuance in service is
patently inimical to the employers interest. The law requires the employer to furnish the
employee concerned with two written notices one, specifying the ground or grounds for
termination and giving said employee reasonable opportunity within which to explain his
side, and another, indicating that upon due consideration of all the circumstances, rounds
have been established to justify his termination. In addition to this, a hearing or conference
is also required, whereby the employee may present evidence to rebut the accusations
against him. De Jesus failure to fully account her collections is sufficient justification for the
company to lose its trust and confidence in her. Loss of trust and confidence as a ground for
dismissing an employee does not require proof beyond reasonable doubt. It is sufficient if
there is "some basis" for such loss of confidence, or if the employer has reasonable grounds
to believe that the employee concerned is responsible for the misconduct, as to be unworthy
of the trust and confidence demanded by his position.
Despite the non-compliance with the two-notice rule, the dismissal is still valid.
However, De Jesus is entitled to the award of Php 50,000.00 as nominal damages.
146
After 13 years of service with the bank, Rowena Cruz was dismissed on grounds of
negligence and breach of trust, allegedly on approving several fraudulent transactions.
Notice and hearing were granted. However, Cruz posits she could not be terminated on such
grounds, her position merely being a Cash Officer at the time of those transactions.
Issue:
Can an employee being remiss of her duties be validly terminated on the ground of
breach of trust?
Ruling:
YES. Cruz holds a managerial position since she is tasked to act in the interest of her
employer as she exercises independent judgment when she approves pre-termination of
USD CDs or the withdrawal of deposits. Petitioner was remiss in the performance of her duty
to approve the pre-termination of certificates of deposits by legitimate depositors or their
duly-authorized representatives, resulting in prejudice to the bank, which reimbursed the
monetary loss suffered by the affected clients. Hence, respondent was justified in dismissing
petitioner on the ground of breach of trust. As long as there is some basis for such loss of
confidence, such as when the employer has reasonable ground to believe that the employee
concerned is responsible for the purported misconduct, and the nature of his participation
therein renders him unworthy of the trust and confidence demanded of his position, a
managerial employee may be dismissed.
147
Dejan was hired to collect payments for electric service installations and issue
corresponding meter sockets after payment of such deposit. He was, one time, asked to
explain why one private electrician was seen to take some meter sockets home. He admitted
issuing meter sockets without authorization of the applicants for electric connection.
Meralco dismissed him on the grounds of serious misconduct and loss of trust and
confidence.
Issue:
Was the employees act of taking company property without authorization a justified
cause of his dismissal?
Ruling:
YES. Meralco cannot be blamed for losing its trust and confidence in Dejan. He is no
ordinary employee. As branch representative, "he was principally charged with the function
and responsibility to accept payment of fees required for the installation of electric service
and facilitate issuance of meter sockets." The duties of his position require him to always act
with the highest degree of honesty, integrity and sincerity, as the company puts it. In light of
his fraudulent act, Meralco, an enterprise imbued with public interest, cannot be compelled
to continue Dejan's employment, as it would be inimical to its interest. Needless to say, the
law, in protecting the rights of the laborer, authorizes neither oppression nor selfdestruction of the employer. For sure, Dejan was validly dismissed for serious misconduct,
and loss of trust and confidence.
148
Does an acquittal in a criminal case for qualified theft render the loss of confidence
baseless?
Ruling:
NO. Notwithstanding petitioners acquittal in the criminal case for qualified theft,
PLDT had adequately established the basis for the companys loss of confidence as a just
cause to terminate petitioner. This Court finds that approach to be correct, since proof
beyond reasonable doubt of an employees misconduct is not required in dismissing an
employee. Rather, as opposed to the "proof beyond reasonable doubt" standard of evidence
required in criminal cases, labor suits require only substantial evidence to prove the validity
of the dismissal. To warrant dismissal based on loss of confidence, there must be some basis
for the loss of trust or the employer must have reasonable grounds to believe that the
employee is responsible for misconduct that renders the latter unworthy of the trust and
confidence demanded by his or her position. Here, petitioner disputes the sufficiency of
PLDTs basis for loss of trust and confidence. He alleges that he did not steal the plant
materials, considering that he had lawful possession. However, assuming that he lawfully
possessed the materials, PLDT still had ample reason or basis to already distrust petitioner.
For more than a month, he did not even inform PLDT of the whereabouts of the plant
materials. Instead, he stocked these materials at his residence even if they were needed in
the daily operations of the company. In keeping with the honesty and integrity demanded by
his position, he should have turned over these materials to the plants warehouse.
149
Apo Cement received information that some of its personnel, including Baptisma, the
Power Plant Manager, were receiving kickbacks from its suppliers. Upon investigation, he
was asked to explain, but he merely denied the accusations. Series of hearings were
conducted. The management was convinced of Baptismas fault, hence he was dismissed on
the ground of loss of trust and confidence.
Issue:
Was the employee validly dismissed due to loss of trust and confidence for receiving
kickbacks from the companys suppliers?
Ruling:
YES. To validly dismiss an employee on the ground of loss of trust and confidence
under Article 282 (c) of the Labor Code of the Philippines, the following guidelines must be
observed: "1) loss of confidence should not be simulated; 2) it should not be used as
subterfuge for causes which are improper, illegal or unjustified; 3) it may not be arbitrarily
asserted in the face of overwhelming evidence to the contrary; and 4) it must be genuine, not
a mere afterthought to justify earlier action taken in bad faith." More important, it "must be
based on a willful breach of trust and founded on clearly established facts." As the power
plant manager, Baptisma had some power or authority "vital and indispensable to the
procurement process." Jurisprudence consistently holds that for managerial employees "the
mere existence of a basis for believing that such employee has breached the trust of his
employer would suffice for his dismissal."
150
Can loss of trust and confidence be a ground to dismiss erring employees tasked with
handling company funds?
Ruling:
YES. The loss of trust and confidence must be based on willful breach of the trust
reposed in the employee by his employer. Such breach is willful if it is done intentionally,
knowingly, and purposely, without justifiable excuse, as distinguished from an act done
carelessly, thoughtlessly, heedlessly or inadvertently. Moreover, it must be based on
substantial evidence and not on the employers whims or caprices or suspicions otherwise,
the employee would eternally remain at the mercy of the employer. Loss of confidence must
not be indiscriminately used as a shield by the employer against a claim that the dismissal of
an employee was arbitrary. And, in order to constitute a just cause for dismissal, the act
complained of must be work-related and shows that the employee concerned is unfit to
continue working for the employer. In addition, loss of confidence as a just cause for
termination of employment is premised on the fact that the employee concerned holds a
position of responsibility, trust and confidence or that the employee concerned is entrusted
with confidence with respect to delicate matters, such as handling or case and protection of
the property and assets of the employer. The betrayal of this trust is the essence of the
offense for which an employee is penalized.
151
Victorino Angelo was employed by Nissan Motors as one of its payroll staff. He had
been on sick leave and vacation leave on two occasions, causing the non-preparation of the
payroll. He was then sent with a notice to explain, in consideration of a dismissal on the
ground of serious misconduct, willful disobedience, and gross neglect of duties. An
investigation was then conducted, but then the employer was convinced that Angelo was to
be dismissed; hence, a notice to terminate was sent.
Issue:
Was an employee guilty of gross neglect of duties for not being able to perform his
tasks during his approved leave of absences?
Ruling:
YES. 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. 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. 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.
152
Yabut was then a Branch Field Representative when Meralco was informed of an
illegal service connection at his residence. A notice was send to Yabut, informing him of an
investigation to be conducted. He denied such allegations. The investigating team found out
that Yabuts electric service was already disconnected, but his meter still registered
consumption. Thus, he was terminated on the ground of dishonesty, in violation of the
company rules.
Issue:
Is dishonesty a valid ground for dismissing an employee?
Ruling:
YES. The Court said that such violation constituted serious misconduct, which is a just
cause for terminating an employee. Article 282 (a) provides that an employer may terminate
an employment because of an employee's serious misconduct, a cause that was present in
this case in view of the petitioner's violation of his employer's code of conduct. Misconduct
is defined as 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." For serious misconduct to justify dismissal, the following requisites must be
present: (a) it must be serious; (b) it must relate to the performance of the employee's duties;
and (c) it must show that the employee has become unfit to continue working for the
employer. It also qualified as a fraud or willful breach of trust. As a supervisor with duty and
power that included testing of service meters and investigation of violations of contract of
customers, his position can be treated as one of trust and confidence, requiring a high degree
of honesty as compared with ordinary rank-and-file employees.
153
Dongons job was to facilitate the loading and unloading of Tanduays trucks. He and
his driver went to Tanduay to get the goods for distribution. The security guard called their
attention, as the driver was not wearing an ID. Dongon then lent his ID to the driver. The
guard saw this misrepresentation and reported the same with Tanduay management.
Dongon believed he acted in good faith of lending his ID to the driver in order to facilitate the
deliveries. After an investigation, Dongon was dismissed on the ground of willful
disobedience.
Issue:
Was the employee guilty of willful disobedience even if he acted in good faith?
Ruling:
NO. The disobedience attributed to Dongon could not be justly characterized as willful
within the contemplation of Article 296 of the Labor Code. He neither benefitted from it, nor
thereby prejudiced the business interest of Rapid Movers. His explanation that his deed had
been intended to benefit Rapid Movers was credible. There could be no wrong or perversity
on his part that warranted the termination of his employment based on willful disobedience.
Willful disobedience to the lawful orders of an employer is one of the valid grounds to
terminate an employee under Article 296 (formerly Article 282) of the Labor Code. For
willful disobedience to be a ground, it is required that: (a) the conduct of the employee must
be willful or intentional; and (b) the order the employee violated must have been reasonable,
lawful, made known to the employee, and must pertain to the duties that he had been
engaged to discharge. Willfulness must be attended by a wrongful and perverse mental
attitude rendering the employees act inconsistent with proper subordination. In any case,
the conduct of the employee that is a valid ground for dismissal under the Labor Code
constitutes harmful behavior against the business interest or person of his employer. It is
implied that in every act of willful disobedience, the erring employee obtains undue
advantage detrimental to the business interest of the employer.
154
Despite the necessity of the absences and presentation of proofs of such, can an
employee be validly dismissed for habitual absenteeism?
Ruling:
NO. The Court did not consider the absences habitual, and did not apply the doctrine
of totality of infractions. Neglect of duty, to be a ground for dismissal under Article 282 of the
Labor Code, must be both gross and habitual. Gross negligence implies want of care in the
performance of ones duties. Habitual neglect imparts repeated failure to perform ones
duties for a period of time, depending on the circumstances. Based on the records, there
simply cannot be a case of gross and habitual neglect of duty against Michelle. Even assuming
that she failed to present a medical certificate for her sick leave on May 8, 2000, the records
are bereft of any indication that apart from the four occasions when she did not report for
work, Michelle had been cited for any infraction since she started her employment with the
company in 1994. Four absences in her six years of service cannot be considered gross and
habitual neglect of duty, especially so since the absences were spread out over a six-month
period.
Although Michelle was fully aware of the company rules regarding leaves of absence,
and her dismissal might have been in accordance with the rules, it is well to stress that the
Court is not bound by such rules. Even when there exist some rules agreed upon between
the employer and employee on the subject of dismissal, the same cannot preclude the State
from inquiring on whether their rigid application would work too harshly on the employee.
This Court will not hesitate to disregard a penalty that is manifestly disproportionate to the
infraction committed.
155
156
Fermin was charged for theft by his co-employee. He explained it was merely a
practical joke and had every intention to return the phone. After an investigation, COSMOS
found Fermin guilty of stealing his co-employees phone and terminated him after 27 years
of service. Afterwards, his co-employee desisted and withdrew his complaint for theft.
Fermin claims he was illegally dismissed.
Issue:
157