BASIS

a. Economic Basis
ART II, SECTION 18. The State affirms labor as a
primary social economic force. It shall protect the
rights of workers and promote their welfare.
b. Legal Basis
1. 1987 Consti: State Mandate to Afford Full
Protection to Labor/to Gurantee Workers 7
Cardinal Rights
ART II,
SECTION 5. The maintenance of peace and order,
the protection of life, liberty, and property, and the
promotion of the general welfare are essential for
the enjoyment by all the people of the blessings of
democracy.
SECTION 9. The State shall promote a just and
dynamic social order that will ensure the
prosperity and independence of the nation and free
the people from poverty through policies that
provide adequate social services, promote full
employment, a rising standard of living, and an
improved quality of life for all.
SECTION 10. The State shall promote social
justice in all phases of national development.
SECTION 11. The State values the dignity of every
human person and guarantees full respect for
human rights.
SECTION 13. The State recognizes the vital role of
the youth in nation-building and shall promote and
protect their physical, moral, spiritual, intellectual,

and social well-being. It shall inculcate in the

youth patriotism and nationalism, and encourage
their involvement in public and civic affairs.
SECTION 14. The State recognizes the role of
women in nation-building, and shall ensure the
fundamental equality before the law of women and
men.
SECTION 18. The State affirms labor as a primary
social economic force. It shall protect the rights of
workers and promote their welfare.
SECTION
20.
The
State
recognizes
the
indispensable
role
of
the
private
sector,
encourages private enterprise, and provides
incentives to needed investments
ART III
SECTION 1. No person shall be deprived of life,
liberty, or property without due process of law, nor
shall any person be denied the equal protection of
the laws.
SECTION 4. No law shall be passed abridging the
freedom of speech, of expression, or of the press,
or the right of the people peaceably to assemble
and petition the government for redress of
grievances.
SECTION 8. The right of the people, including
those employed in the public and private sectors,
to form unions, associations, or societies for
purposes not contrary to law shall not be abridged.
SECTION 18. (1) No person shall be detained
solely by reason of his political beliefs and
aspirations.

(2) No involuntary servitude in any form shall exist

except as a punishment for a crime whereof the
party shall have been duly convicted.

that will enhance their welfare and enable them to

realize their full potential in the service of the
nation.

ART XIII
SECTION 1. The Congress shall give highest
priority to the enactment of measures that protect
and enhance the right of all the people to human
dignity, reduce social, economic, and political
inequalities, and remove cultural inequities by
equitably diffusing wealth and political power for
the common good.
To this end, the State shall regulate the
acquisition, ownership, use, and disposition of
property and its increments.
SECTION 2. The promotion of social justice shall
include the commitment to create economic
opportunities based on freedom of initiative and
self-reliance.
SECTION 3. The State shall afford full protection
to labor, local and overseas, organized and
unorganized, and promote full employment and
equality of employment opportunities for all.
SECTION 14. The State shall protect working
women by providing safe and healthful working
conditions, taking into account their maternal
functions, and such facilities and opportunities

DIAMOND TAXI v FELIPE LLAMAS (the dismissal of

an employees appeal on purely technical ground is
inconsistent with the constitutional mandate on
protection to labor)
Llamas worked as a taxi driver for petitioner
Diamond Taxi, owned and operated by petitioner
Bryan Ong.
On July 18, 2005, Llamas filed before the Labor
Arbiter (LA) a complaint for illegal dismissal
against the petitioners.
Petitioners denied dismissing Llamas. They
claimed that Llamas had been absent without
official leave for several days, beginning July 14,
2005 until August 1, 2005. The petitioners
submitted a copy of the attendance logbook to
prove Llamas absence. Also pointed out Llamas
several traffic violations in 2000 to 2005 and that
they had issued him several memoranda for acts of
insubordination and refusal to heed management
instructions
Llamas failed to seasonably file his position paper.
Changed counsel.
LA dismissed Llamas complaint.
o Llamas was not dismissed, legally or
illegally. Rather, the LA declared that Llamas
left his job and had been absent for several
days without leave.

Complaint of llamas: he had a misunderstanding

with Aljuver Ong, Bryans brother and operations
manager of Diamond Taxi, on July 13, 2005 (July
13, 2005 incident). When he reported for work on
July 14, 2005, Bryan refused to give him the key to
his assigned taxi cab unless he would sign a
prepared resignation letter. He did not sign the

resignation letter. He reported for work again on

July 15 and 16, 2005, but Bryan insisted that he
sign the resignation letter prior to the release of
the key to his assigned taxi cab. Thus, he filed the
illegal dismissal complaint.
NLRC affirmed LA. Certificate of non-forum
shopping was not attached.
CA: reversed. It was Constructive Dismissa

CA pointed out that non-compliance with the

requirement on the filing of a certificate of nonforum shopping, while mandatory, may nonetheless
be excused upon showing of manifest equitable
grounds proving substantial compliance
petitioners failed to prove overt acts showing
Llamas clear intention to abandon his job. On the
contrary, the petitioners placed Llamas in a
situation where he was forced to quit as his
continued employment has been
rendered
impossible
Under Article 221 (now Article 227)24 of the
Labor Code,
o "the Commission and its members and
the Labor Arbiters shall 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, all in
the
interest
of
due
25
process." Consistently,
we
have
emphasized that "rules of procedure are
mere tools designed to facilitate the
attainment of justice. A strict and rigid
application which would result in
technicalities that tend to frustrate
rather than promote substantial justice
should not be allowed x x x. No
procedural rule is sacrosanct if such
shall
result
in
subverting
26
justice." Ultimately, what should guide

judicial action is that a party is given

the fullest opportunity to establish the
merits of his action or defense rather
than for him to lose life, honor, or
property on mere technicalities
Abandonment is the deliberate and unjustified
refusal of an employee to resume his employment.
(1) x x x the employee must have failed to report
for work or must have been absent without valid or
justifiable reason; and (2) x x x there must have
been a clear intention [on the part of the
employee] to sever the employer-employee
relationship manifested by some overt act."
Constructive dismissal exists when there is
cessation of work because continued employment
is rendered impossible, unreasonable or unlikely.
Constructive dismissal is a dismissal in disguise or
an act amounting to dismissal but made to appear
as if it were not. In constructive dismissal cases,
the employer is, concededly, charged with the
burden of proving that its conduct and action were
for valid and legitimate grounds.43

1.1
Entitlement
of
all
Filipinos
to
Constitutional protection
1.2
Overarching right to Human Dignity
ARTII, SECTION 11. The State values the dignity
of every human person and guarantees full respect
for human rights.
ARTXIII, SECTION 1. The Congress shall give
highest priority to the enactment of measures that
protect and enhance the right of all the people to

human dignity, reduce social, economic, and

political
inequalities,
and
remove
cultural
inequities by equitably diffusing wealth and
political power for the common good.
To this end, the State shall regulate the
acquisition, ownership, use, and disposition of
property and its increments.
1.3
Right to Security of Tenure
LC, ART. 3. Declaration of basic policy. - The State
shall afford protection to labor, promote full
employment, ensure equal work opportunities
regardless of sex, race or creed and regulate the
relations between workers and employers. The State
shall assure the rights of workers to self-organization,
collective bargaining, security of tenure, and just and
humane conditions of work.
ART XIII, SECTION 3. The State shall afford full
protection to labor, local and overseas, organized and
unorganized, and promote full employment and
equality of employment opportunities for all.
It shall guarantee the rights of all workers to selforganization, collective bargaining and negotiations,
and peaceful concerted activities, including the right
to strike in accordance with law. They shall be entitled
to security of tenure, humane conditions of work, and
a living wage. They shall also participate in policy and
decision-making processes affecting their rights and
benefits as may be provided by law.
The State shall promote the principle of shared
responsibility between workers and employers and
the preferential use of voluntary modes in settling

disputes, including conciliation, and shall enforce

their mutual compliance therewith to foster industrial
peace.
The State shall regulate the relations between
workers and employers, recognizing the right of labor
to its just share in the fruits of production and the
right of enterprises to reasonable returns on
investments, and to expansion and growth.
INNODATAPHILIPPINES INC V QUEJADA-LOPEZ
Estrella Natividad and Jocelyn Quejada were
employed by Innodata Ph. Wich was engaged in
the encoding/data conversion business
They were employed from March 4, 1997 until
their separation on March 3, 1998.
They claimed that pursuant to Art 280 of the Labor
Code they were considered as regular employees.
Hence, they filed this complain for illegal
dismissal.
Petitioner Company contends that respondents
employment contracts have expired for it had a
fixed period of only 1 year. Hence, they were
terminated
LA ruled in favour of respondents and ordered that
they be reinstated to their former positions without
the loss of their seniority rights
Petitioner corporation appealed to the NLRC which
set aside LA. It declared that the contracts were
for a fixed term, hence dismissal was valid
WoN respondents were regular employees which
consequently rendered their dismissal illegal- YES

Regular employees pursuant to Sect 280 of the

Labor Code and the fixed-term contract was a
crude attempt to circumvent the right of tenure of
the respondents
WoN the alleged fixed-term employment contracts
issued by the company were valid- NO
While the court recognizes the validity of fixedterm contracts, it emphasized that if should
circumstances show that they were imposed to
block the right of security of tenure, then they
must be struck down
Like the case of Villanueva and Servidad, the
employment contracts provided for two periods
o Employment for a fixed term (1 year)
o Employment for a probationary period
(should the employees fail to meet a certain
standard)
Aforementioned mentioned periods for the
employment contract clearly was intended to avoid
the regularization of the employees
The employer should not have been given the
discretion to dismiss the employees during the one
year of employment for reasons other than those
just and authorized under the Labor Code
Employers may terminate their employees only for
valid and just causes which must be shown by
clear and convincing evidence
The contract of employment is impressed with
public interest.
Petitioner argues that the nature of their business
is dependent on the demands of their clients and

hence, service of the employees too cannot be

ascertained
Being an inherent enterprise, it is the company
who should absorb the risk and this must not be
used as an excuse to circumvent the Labor Laws.

1.4
Right to Human Conditions of Work
LC, ART 3. And Consti ART XIII, Sec 3, par 2
INTERNATIONAL
SCHOOL
ALLIANCE
OF
EDUCATORS V QUISUMBING
Private Resp Intl School Inc pursuant to Presidential
Decree 732, is a domestic educational institution
established primarily for dependents of foreign
diplomatic personnel and other temporary residents.
The school hires both foreign and local teachers. The
School grants foreign-hires certain benefits not accorded
local-hires (housing, transportation, shipping costs,
taxes, and home leave travel allowance). Foreign-hires
are also paid a salary rate twenty-five percent (25%)
more than local-hires. The School justifies the difference
on two "significant economic disadvantages" foreignhires have to endure, namely: (a) the "dislocation factor"
and (b) limited tenure.
A negotiation for a new collective bargaining agreement
was held on June 1995. During this time the labor union
contested the difference in salary rates between the local
and foreign hires.
Sept 7, 1995: petitioner filed a notice of strike. The
failure of the National Conciliation and Mediation Board
to bring the parties to a compromise prompted the
Department of Labor and Employment (DOLE) to assume
jurisdiction over the dispute.

June 10, 1996: DOLE Acting Sec Crescenciano B. Trajano

issued an Order resolving the representation issues in
favour of the school
It is an established principle of constitutional law that the
guarantee of equal protection of the laws is not violated
by legislation or private covenants based on reasonable
classification. A classification is reasonable if it is based
on substantial distinctions and apply to all members of
the same class.
Quisumbing (DOLE Sec) denied MR.
PET now seeks relief.

Remuneration which provides all workers,

as a minimum, with:
i.....Fair wages and equal remuneration for
work of equal value without distinction of
any kind, in particular women being
guaranteed conditions of work not inferior
to those enjoyed by men, with equal pay for
equal work;
Equal pay for equal work: the School has failed to
prove that the foreign-hires perform 25% more
efficiently or effectively than the local hires

WN the foreign-hires are given humane conditions

of work? -- NO
The Constitution specifically provides that labor is
entitled to "humane conditions of work." These
conditions are not restricted to the physical workplace
but include as well the manner by which employers treat
their employees.
Discrimination, particularly in terms of wages, is frowned
upon by the Labor Code.

1.5
Right to a living wage
ART XIII, Sec 3, par 2
XV, SECTION 1. The State recognizes the Filipino
family as the foundation of the nation. Accordingly,
it shall strengthen its solidarity and actively
promote its total development.

International Conventions, Recommendations

International law, which springs from general principles
of law, likewise proscribes discrimination. General
principles of law include principles of equity
International Covenant on Economic, Social, and
Cultural Rights in Article 7: The States Parties to
the present Covenant recognize the right of
everyone to the enjoyment of just and favourable
conditions of work, which ensure, in particular:

1.6
Right to participate
decision-making processes
rights and benefits
ART XIII, Sec 3, par 2

SECTION 3. The State shall defend:..(3) The

right of the family to a family living wage and
income
in policy and
affecting their

1.7
Three
Rights
Pertinent
to
Labor
Relations: (a) Right to Self-organization, (b)
Collective Bargaining, (c) peaceful concerted
activities including the right to strike in
accordance with the law ART XIII, Sec 3, par 2

2. Civil code
2.1
Contract as the Law between the parties
/ freedom of contract
MAYNILAD WATER SUPERVISORS ASSOCIATION V
MAYNILAD WATER SERVICES INC.
Former employees of MWSS, the MWSA, claim that
during their employment with MWSS, they were
receiving a monthly cost of living allowance (COLA)
equivalent to 40% of their basic pay.
The payment of these allowances and other
additional compensation, including the COLA were,
however,
discontinued without qualification effective 1 November
1989 when the Department of Budget and Management
(DBM) issued Corporate Compensation Circular No. 10 (
CCC No. 10). In 1997, MWSS was privatized and part of
it, MWSS West, was acquired by Maynilad Water Services
, Inc. (Maynilad). Some of the employees of MWSS,
which included members of MWSA, were absorbed
by Maynilad subject to the terms and conditions of
a
Concession Agreement
:
shall grant to all Concessionaire Employees employee be
nefits no less favorable than those
granted to such employees by the MWSS at the time of th
eir separation from MWSS
COLA was not among those listed in the benefits.

SC subsequently declared DBM No 10 ineffective for

failure to comply with the publication requirement.
Since declared ineffective,
MWSA filed a complaint before the Labor Arbiter praying
for the payment of their COLA from the year 1997.
LA: directed Maynilad to pay COLA
NLRC reversed.
CA: set aside NLRC and reinstated LA.
SC:
COLA is not among the benefits to be received by the abs
orbed
employees. Contrary to the contention of MWSA, the decl
aration by
the Court of the ineffectiveness of DBM
No. 10 due to its nonpublication in the Official Gazette or
in a newspaper of general circulation in the country,did n
ot give rise to the employees right to demand payment.A
s early as 1989, the government already resolved to remo
ve the COLA, among others, from the list of
allowances being received by government employees.
Hence, the enactment of Republic Act R.A. No. 6758 or th
eCompensation and Position Classification Act of
1989 which integrated the COLA into the standardized sa
lary rate.
Rule that a contract is the law between the parties,
and courts have no choice but to enforce
such contract so long as it is not
contrary to law, morals, good customs or public poli
cy. Otherwise, courts would
be interfering with the freedom of
contract of the parties.

2.2Relations between labor and capital, not

merely contractual/impressed with public
interest
CC:
Art. 1700. The relations between capital and labor are
not merely contractual. They are so impressed with
public interest that labor contracts must yield to the
common good. Therefore, such contracts are subject to
the special laws on labor unions, collective bargaining,
strikes and lockouts, closed shop, wages, working
conditions, hours of labor and similar subjects.
Art. 1701. Neither capital nor labor shall act oppressively
against the other, or impair the interest or convenience
of the public.
Art. 19. Every person must, in the exercise of his rights
and in the performance of his duties, act with justice,
give everyone his due, and observe honesty and good
faith.
Art. 20. Every person who, contrary to law, wilfully or
negligently causes damage to another, shall indemnify
the latter for the same.

Art. 21. Any person who wilfully causes loss or injury to

another in a manner that is contrary to morals, good
customs or public policy shall compensate the latter for
the damage.

OLYMPIA HOUSING, INC V ALLAN LAPASTORA

&IRENE UBALUBAO
That there is an existing contract of services betwe
en OHI and Fast Manpower where both parties
acknowledged the latter as the employer
of the housekeeping staff, including Lapastora, did
not alter established facts proving the contrary.
The parties cannot evade the application of labor la
ws by mere expedient of a contract considering
that labor and employment are matters imbued
with public interest.
It cannot be subjected to the agreement of the parti
es but rather on
existing laws designed
specifically
for
the
protection of labor.
Thus, it had been repeatedly stressed in a
number
of
jurisprudence that "[a] party cannot dictate, by the
mere expedient of a unilateral declaration in a
contract, the character of its business, i.e., whether
as laboronly contractor or as job contractor, it
being crucial that its character be measured in
terms of and determined by the criteria set by
statute."
Olympia Executive Residences (OER)
is
a condominium hotel building situated in Makati City, ow
ned by a Philippineregistered corporation known as

the Olympia Condominium Corporation (OCC).

Employees Allan Lapastora and Irene Ubalubao filed a
case of illegal dismissal.
subjected to investigations regarding alleged
involvement in theft of personal items and cash
belonging to hotel guests.
They assert that they are employees of the hotel.
They alleged that they were directly hired by the
company and received salaries directly from its
operations clerk Myrna Jaylo. They also claimed OHI
exercised control over them as they were issued time car
ds,
disciplinary action reports and checklists of room assign
ments.
OHI alleged that they were not employees.
Lapastora and Ubalubao were not employees of the
company but of Fast Manpower, with which it had a contr
act of services, particularly, for the provision
of room attendants.
Fast Manpower attested to this fact.
Lapastora and Ubalubao were, however, found to have vi
olated house rules andregulations and were
reprimanded accordingly.
It denied the employees' claim that they were
dismissed and maintained they were only placed on
floating status for lack of available work assignments.

Aug 22, 2000: memorandum of Fast Manpower that there

was a transfer of management of OER from OHI to HSAIRaintree. It soon informed DOLE that it terminated all its
employees. This led to some of its employees to file a
complaint of illegal dismissal.
LA: employer-employee relationship exists. OHI paid for
salaries and was responsible for the selection of its
employees.
That there is a contract of services between OHI
and Fast Manpower did not rule out the existence of
employer-employee relationship.
NLRC and CA affirmed. They upheld that the closure of
the business was a valid ground for termination.
SC: Lapastora was illegally dismissed

Art 280 LC: an employment shall be deemed to be

regular where the employee has been engaged to
perform activities which are necessary or desirable
in the usual business.
o Lapastora was continuously employed.
PROCEDURAL: no two notice rule compliance
SUBSTANTIVE: no just cause. He had not been
notified or disciplined. Theft was not proven.
Existence of contract between hotel and Fast
Manpower does not change OHIs responsibility.
The parties cannot evade the application of labor
laws.
Star decisis not applicable:
o Differenct set of facts. CAB: theft insidents.
Ocampo v HI: validity of closure of business.

But termination of business is a supervening

event! Changes the award: reinstatement is
impossible. Separation pay from termination to
when company ceased operations.

3. Labor Code (PD 442) and Omnibus Rules

Implementing the Labor Code
4. International Conventions, Recommendations
ARTII, SECTION 2. The Philippines renounces war
as an instrument of national policy, adopts the
generally accepted principles of international law
as part of the law of the land and adheres to the
policy of peace, equality, justice, freedom,
cooperation, and amity with all nations.
(See ISAE v Quisumbing)
5. The Labor Code of the Philippines
a. Brief History
1968: writing of the Civil Code began with
Minister Labor Blas F Ople Father of the Labor
Code
Objectives:
1. Consolidate existing pieces of labor
legislation
2. Reorient them to the needs of economic
development and justice
After seven times of drafting and redrafting:
April 28, 1973: ratified by a National Tripartite
Congress
May 1, 1973: submitted to the President

May 1, 1974: signed into law as PD No. 442

Nov 1, 1974: took effect; earlier amended by PD
No. 570-A
b. Name of Decree Art 1.
ART 1, LC: This decree shall be known as the
Labor Code of the Philippines
c. Date of Effectivity 2
ART 2, LC: This Code shall take effect 6 months
after its promulgation.
d. Declaration of Basic Policy
ART 3, LC: Declaration of basic policy. - The
State shall afford protection to labor, promote
full
employment,
ensure
equal
work
opportunities regardless of sex, race or creed
and regulate the relations between workers and
employers. The State shall assure the rights of
workers
to
self-organization,
collective
bargaining, security of tenure, and just and
humane conditions of work.
e. Construction in favour of Labor
ART 4, LC: Construction in favor of labor. - All
doubts
in
the
implementation
and
interpretation of the provisions of this Code,
including
its
implementing
rules
and
regulations, shall be resolved in favor of labor.
ART 1702, CC: In case of doubt, all labor
legislation and all labor contracts shall be
construed in favor of the safety and decent
living for the laborer.

HOCHENG V FARRALES
PETITIONER: Hocheng Philippines Corporation
RESPONDENT: Antonio Farrales
SUMMARY: Farrales was accused of stealing another
employees motorcycle helmet, as seen in footage from a
CCTV. He claimed he mistakenly took the said helmet
thinking it was a different helmet he borrowed from
another employee. Whendiscovered hw took the wrong
helmet, he asked help from the guard to return it and to
apologize. Despote this, he was terminated. The SC,
however, ruled in his favor, holding that HPC failed to
discharge the burden of proving that the taking of the
helmet was with intent to gain. There was no serious or
willful misconduct or disobedience
DOCTRINE: Where there is no showing of a clear, valid
and legal cause for termination of employment, the law
considers the case a matter of illegal dismissal. If doubts
exist between the evidence presented by the employer
and that of the employee, the scales of justice must be
tilted in favor of the latter. The employer must
affirmatively show rationally adequate evidence that the
dismissal was for a justifiable cause.
Farrales employed by HPC as:
Production Operator in 1998
Leadman in 2004
Acting Assistant Unit Chef in 2007
Assistant unit chef of production in 2008
(supervisory position, P17,600 per month

He was a constant recipient of citations for

outstanding performance, as well as appraisal
and year-end bonuses, However, in 2009, a
report was sent to HPC management accusing
him of stealing another employee's helmet. The
CCTV showed him walking to and from the
motorcycle. He then instructed a certain Andy
Lopega to get the helmet for him.
HPC sent Farrales a notice to explain. He
claims he borrowed a helmet from his coworker Eric Libutan since they reside in the
same barangay. Eric told him his motorcycle
was black. A lot of other motorcycles were
black, so he asked Andy where he could find
Eric's. Andy handed him a helmet he believed
to be owned by Eric.
The next day, he saw Eric in their barangay and
Farrales told him to get the helmet from his
house. Eric could not get it because he was in a
rush to go to work. The next day, he asked Eric
why he did not get the helmet. Eric then
informed Farrales that the helmet he got was
not his. He asked around and found that the
actual owner was Jun Reyes' nepheew Reymar.
He promptly apologized to Jun and undertook
to return the helmet the following day and
explained that it was an honest mistake.
In the hearing, Andy revealed that he was
seated on his motorcycle when Farrales asked

him to hand to him a yellow helmet hanging

from the motorcycle next to him. He complied
when Farrales told him that he owned the
helmet.
But Eric specifically told Farrales that his
helmet was red and black and his motorcycle
was a black Honda XRM-125 with plate number
8746-DI, parked near the perimeter fence away
from the walkway to the pedestrian gate. The
CCTV showed Farrales instructing Andy to
fetch a yellow helmet from a blue Rossi 110
motorcycle with plate number 3653-DN parked
in the middle of the parking lot, opposite the
location given by Eric. Farrales in his defense
claimed he could no longer remember the
details of what transpired that time, nor could
he explain why he missed Erics specific
directions
Feb 2010, HPC issued a notice of termination
for violation of the HPC code of discipline,
which states that stealing is akin to serious
misconduct and fraud or wilfull breach of trust.
March 25, Farrales filed a complaint for illegal
dismissal
During the mandatory conference, HPC paid
Farrales
10,914.51
(13th
month
and
vacation/sick leave conversion
Farrales agreed to waive his claim for
incentive bonus

LA ruled in favor of Farrales. HPC guilty of

illegal dismissal
NLRC Reversed LA and denied Farrales' MR
CA held that Farrales' act of taking the
helmet was not theft. HPC failed to induce his
conduct was induced by a perverse and
wrongful intent to gain
ISSUE
W/N there was illegal dismissal -YES
RULING: Petition for review is DENIED.
RATIO
HPC failed to discharge the burden of proving
that the taking of the helmet was with intent to
gain. There was no serious or willful
misconduct or disobedience. SC agreed with
the LA in stating that HPC tried to blow the
indiscretion out of proportion. Upon finding
that the dismissal for theft is unavailing, HPC
immediately offered Farrales' to restore his
former position
Farrales lost no time in returning the helmet
Immediately admitted his error and he
asked the guard to help
When Farrales told Andy the helmet was his,
his intent was not to put up a pretense of
ownership, but simply to assuage Andy's
reluctance to give him the helmet

 Although the theft occurred in HPC grounds,

it was not prejudiced since the helmet did not
belong to it.
Theft committed by an employee against a
person other than his employer, if proven by
substantial evidence, is a cause analogous to
serious misconduct. Misconduct is improper or
wrong conduct, it is the transgression of some
established and definite rule of action, a
forbidden act, a dereliction of duty, willful in
character, and implies wrongful intent and not
mere error in judgment. The misconduct to be
serious must be of such grave and aggravated
character
and
not
merely
trivial
or
unimportant.
Such
misconduct,
however
serious, must, nevertheless, be in connection
with the employees work to constitute just
cause for his separation.
But where there is no showing of a clear, valid
and legal cause for termination of employment,
the law considers the case a matter of illegal
dismissal. If doubts exist between the evidence
presented by the employer and that of the
employee, the scales of justice must be tilted in
favor of the latter. The employer must
affirmatively show rationally adequate evidence
that the dismissal was for a justifiable cause.

f. Labor Arbiters Jurisdiction over Labor

cases
ART 224: Except as otherwise provided
under this Code, the Labor Arbiters shall
have original and exclusive jurisdiction to
hear and decide, within thirty (30) calendar
days after the submission of the case by the
parties for decision without extension, even
in the absence of stenographic notes, the
following cases involving all workers,
whether agricultural or non-agricultural:
1. Unfair

labor

2. Termination

practice

cases;
disputes;

3. If accompanied with a claim for

reinstatement,
those
cases
that
workers may file involving wages,
rates of pay, hours of work and other
terms and conditions of employment;
4. Claims for actual, moral, exemplary
and other forms of damages arising
from
the
employer-employee
relations;
5. Cases arising from any violation of
Article 264 of this Code, including
questions involving the legality of

strikes

and

lockouts;

and

6. Except
claims
for
Employees
Compensation,
Social
Security,
Medicare and maternity benefits, all
other claims arising from employeremployee relations, including those of
persons in domestic or household
service,
involving
an
amount
exceeding
five
thousand
pesos
(P5,000.00) regardless of whether
accompanied with a claim for
reinstatement.
The Commission shall have exclusive
appellate jurisdiction over all cases decided
by
Labor
Arbiters.
Cases arising from the interpretation or
implementation of collective bargaining
agreements and those arising from the
interpretation or enforcement of company
personnel policies shall be disposed of by
the Labor Arbiter by referring the same to
the grievance machinery and voluntary
arbitration as may be provided in said
agreements.

SEC. 10. MONEY CLAIMS. - Notwithstanding any

provision of law to the contrary, the Labor Arbiters of the
National Labor Relations Commission (NLRC) shall have

the original and exclusive jurisdiction to hear and decide,

within ninety (90) calendar days after filing of the
complaint, the claims arising out of an employeremployee 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.
The liability of the principal/employer and the
recruitment/placement agency for any and all claims
under this section shall be joint and several. This
provisions shall be incorporated in the contract for
overseas employment and shall be a condition precedent
for its approval. The performance bond to be filed by the
recruitment/placement agency, as provided by law, shall
be answerable for all money claims or damages that may
be awarded to the workers. If the recruitment/placement
agency is a juridical being, the corporate officers and
directors and partners as the case may be, shall
themselves be jointly and solidarily liable with the
corporation or partnership for the aforesaid claims and
damages.
Such liabilities shall continue during the entire
period or duration of the employment contract and shall
not be affected by any substitution, amendment or
modification made locally or in a foreign country of the
said contract.
Any
compromise/amicable
settlement
or
voluntary agreement on money claims inclusive of
damages under this section shall be paid within four (4)

months from the approval of the settlement by the

appropriate authority.

laws or rules and regulations as a consequence of

violating the provisions of this paragraph.

In case of termination of overseas employment

without just, valid or authorized cause as defined by law
or contract, the workers shall be entitled to the full
reimbursement of his placement fee with interest of
twelve percent (12%) per annum, plus his salaries for the
unexpired portion of his employment contract or for
three (3) months for every year of the unexpired term,
whichever is less.

BARBA v. LICEO DE CAGAYAN UNIVERSITY

Non-compliance with the mandatory periods

for resolutions of cases provided under this section shall
subject the responsible officials to any or all of the
following penalties:
(a) The salary of any such official who fails to
render his decision or resolutions within the prescribed
period shall be, or caused to be, withheld until the said
official complies therewith;
(b) Suspension for not more than ninety (90)
days; or
(c)
Dismissal
from
the
service
with
disqualifications to hold any appointive public office for
five (5) years.
Provided, however, that the penalties herein
provided shall be without prejudice to any liability which
any such official may have incurred under other existing

G.R. No. 193857 / NOV 28, 2012 / VILLARAMA, JR., J. /

LABOR-LABOR ARBITERS JURISDICTION / RPNICOLAS
NATURE: Petition for Review on Certiorari
PETITIONERS: Ma. Mercedes L. Barba
RESPONDENTS: Liceo De Cagayan University
SUMMARY. Barba was the Dean of the College of Physical
Therapy of Liceo. Barba decided to take a leave without pay
when Liceo ceased the operation of the College of Physical
Therapy indefinitely due to a decline in the number of
enrollees. Liceo sent a letter to Barba to report to the Acting
Dean of the College of Nursing but did not comply. Another
letter was sent but still Barba refused to comply. Liceo sent
a notice of termination. Barba filed a complaint before the
LA. LA ruled that Barba was constructively dismissed. NLRC
reversed LA decision. CA reversed the NLRC decision but
later amended and set aside their original ruling. SC ruled
that there was no constructive dismissal.
DOCTRINE. A position must be expressly mentioned in the
By-Laws in order to be considered as a corporate office. The
rest of the corporate officers could be considered only as
employees of subordinate officials.

Petitioner Dr. Ma. Mercedes L. Barba (Barba) was the

Dean of the College of Physical Therapy of respondent
Liceo de Cagayan University, Inc. (Liceo).

In the school year 2003 to 2004, the College of

Physical Therapy suffered a dramatic decline in the
number of enrollees from a total of 1,121 students in
the school year 1995 to 1996 to only 29 students in
the first semester of school year 2003 to 2004.
Due to the low number of enrollees, Liceo decided to
freeze the operation of the College of Physical
Therapy indefinitely. Thereafter, the College of
Physical Therapy ceased operations and Barba went
on leave without pay. Subsequently, Liceo sent Barba
a letter dated April 27, 2005 instructing Barba to
return to work on and report to Ma. Chona Palomares,
the Acting Dean of the College of Nursing, to receive
her teaching load and assignment as a full-time
faculty member in that department.
Barba did not report to Palomares and requested for
the processing of her separation benefits in view of
the closure of the College of Physical Therapy.
Another letter was sent to Barba but the latter still
refused to return to work. Hence, Liceo sent Barba a
notice terminating her services on the ground of
abandonment.
Barba filed a complaint before the Labor Arbiter for
illegal dismissal, payment of separation pay and
retirement benefits against Liceo. She alleged that
her transfer to the College of Nursing as a faculty
member is a demotion amounting to constructive
dismissal.
The LA ruled that Barba was not constructively
dismissed. The NLRC reversed the LA. Liceo went to
the CA and filed a Supplemental Petition raising for

the first time the issue of lack of jurisdiction of the

Labor Arbiter and the NLRC over the case. Liceo
claimed that a College Dean is a corporate officer
under its by-laws and Barba was a corporate officer of
Liceo since her appointment was approved by the
board of directors. Thus, Liceo maintained that the
jurisdiction over the case is with the regular courts
and not with the labor tribunals.
In its original Decision, the CA reversed the NLRC
resolutions. The CA did not find merit in Liceos
assertion in its Supplemental Petition that the position
of Barba as College Dean was a corporate office. The
CA further found that no constructive dismissal
occurred nor has Barba abandoned her work.
Unsatisfied,
both
Barba
and
Liceo
sought
reconsideration of the CA decision. Thereafter, the CA
reversed its earlier ruling. Hence,Barba filed the
present petition.

ISSUES & RATIO.

1. WON the Labor Arbiter and NLRC has jurisdiction
over the case YES.
Corporate officers are elected or appointed by the
directors or stockholders, and are those who are given
that character either by the Corporation Code or by the
corporations by-laws. Section 25 of the Corporation Code
enumerates corporate officers as the president, the
secretary, the treasurer and such other officers as may be
provided for in the by-laws. In Matling Industrial and

Commercial Corporation v. Coros, the phrase "such other

officers as may be provided for in the by-laws" has been
clarified, thus: "Conformably with Section 25, a position
must be expressly mentioned in the By-Laws in order to
be considered as a corporate office. The rest of the
corporate officers could be considered only as employees
of subordinate officials."
However, an assiduous perusal of these documents does
not convince us that Barba occupies a corporate office
position in the university. In Liceos by-laws, there are
four officers specifically mentioned, namely, a president,
a vice president, a secretary and a treasurer. In addition,
it is provided that there shall be other appointive
officials, a College Director and heads of departments
whose appointments, compensations, powers and duties
shall be determined by the board of directors. It is
worthy to note that a College Dean is not among the
corporate officers mentioned in Liceos by-laws. Barba
was not directly elected nor appointed by the board of
directors to any corporate office but her appointment
was merely approved by the board together with the
other academic deans of respondent university in
accordance with the procedure prescribed in Liceos
Administrative Manual. Though the board of directors
may create appointive positions other than the positions
of corporate officers, the persons occupying such
positions cannot be deemed as corporate officers as
contemplated by Section 25 of the Corporation Code.
Thus, petitioner, being an employee of respondent, her
complaint for illegal/constructive dismissal against

respondent was properly within the jurisdiction of the

Labor Arbiter and the NLRC.

2. WON Barba was constructively dismissed NO

On the issue of constructive dismissal, we agree with the
Labor Arbiter and the appellate courts earlier ruling that
Barba was not constructively dismissed. Barbas letter of
appointment specifically appointed her as Dean of the
College of Physical Therapy and Doctor-in-Charge of the
Rehabilitation Clinic "for a period of three years effective
July 1, 2002 unless sooner revoked for valid cause or
causes." Evidently, Barbas appointment as College Dean
was for a fixed term, subject to reappointment and
revocation or termination for a valid cause. When Liceo
decided to close its College of Physical Therapy due to
drastic decrease in enrollees, Barbas appointment as its
College Dean was validly revoked and her subsequent
assignment to teach in the College of Nursing was
justified as it is still related to her scholarship studies in
Physical Therapy. Particularly, for a transfer not to be
considered a constructive dismissal, the employer must
be able to show that such transfer is not unreasonable,
inconvenient, or prejudicial to the employee.
DECISION.
WHEREFORE, the petition for review on certiorari is
GRANTED.
NOTES

ART. 217. Jurisdiction

Commission.

of

Labor

Arbiters

and

the

6. Except claims for Employees Compensation, Social

Security, Medicare and maternity benefits, all other
claims arising from employer-employee relations,
including those of persons in domestic or household
service, involving an amount exceeding five thousand
pesos (P5,000.00) regardless of whether accompanied
with a claim for reinstatement.

1. DOLE v NLRC Jurisdiction

KAPISANAN NG PANGKAUNLARAN NG
KABABAIHAN POTRERO INC. v
REMEDIOS BARRERO
Nov 97: Technology and Livelihood Resource
Center (TLRC) tapped KPKPI to participate
in its microlending program and was
granted a loan for microfinance or relending for the poor.
KPKPI hired Respondents Barreno, Ametin,
Nonay, Dionisio and Casio.
Sep 20, 2001: filed complaint with DOLE for
underpayment,
non-payment
of
labor
standard benefits.
During pendency, Barreno received a memo
that effective Oct 1, her employment was
terminated.
Other respondents received memo that
effective Oct 9, their employment was
terminated as well. But they continued to
work until Oct 15, when they were
disallowed.
They filed a complaint.
PET: not employees but mere volunteers
who
received
allowances
and
reimbursements. Thus not allowed to
recover money claims.
RESP: memo respecting rules on absences
as proof they are employees

(b) The Commission shall have exclusive appellate

jurisdiction over all cases decided by Labor Arbiters.

LA: employees not mere volunteers. No

justification of dismissal and twin notice.

(a) Except as otherwise provided under this Code, the

Arbiters shall have original and exclusive jurisdiction to
hear and decide xxx the following cases involving all
workers, whether agricultural or nonagricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those
cases that workers may file involving wage, rates of pay,
hours of work and other terms and conditions of
employment;
4. Claims for actual, moral, exemplary and other forms of
damages arising from the employer-employee relations;
5. Cases arising from any violation of Article 264 of this
Code, including questions involving the legality of strikes
and lockouts; and

NLRC: reversed. Guilty of forum shopping

for filing with NLRC and DOLE (pending
then). CA affirmed this.
SC: not guilty of forum shopping. DOLE:
violation of labor standard provisions.
NLRC: propriety of dismissal.
Under Article 217 of the Labor Code,
termination cases fall under the jurisdiction
of Labor Arbiters.1wphi1 Whereas, Article
128 of the same Code vests the Secretary of
Labor or his duly authorized representatives
with the power to inspect the employer's
records
to
determine
and
compel
compliance with labor standard laws. The
exercise of the said power by the Secretary
or his duly authorized representatives is
exclusive to cases where the employeremployee relationship still exits. Thus, in
cases where the complaint for violation of
labor
standard
laws
preceded
the
termination of the employee and the filing of
the illegal dismissal case, it would not be in
consonance with justice to charge the
complainants with engaging in forum
shopping when the remedy available to them
at the time their causes of action arose was
to file separate cases before different for a
2. Labor Dispute v Civil Dispute
MANESE V. JOLLIBEE FOODS CORP (2012)
October 11, 2012 | Peralta, J. |Labor Dispute v. Civil

Dispute
Petitioners: Cecilia Manese, Julietes Cruz, Eufemio
Peano
Respondents: Jollibee Foods Corp., Tony Tan Caktiong,
Elizabeth Dela CruzDivina Evangelista, and Sylvia M.
Mariano et al.
SUMMARY. Manese et. al. were Jollibee employees who
failed to report and correctly state that there were 2,130
pieces of Chickenjoy rejects in their branch. Jollibee
terminated them due to breach of trust. SC held that the
dismissals were legal. Also, the unpaid balance on
Maneses car loan cannot be set off against the monetary
benefits due her.
DOCTRINE. The employer's demand for payment of the
employees' amortization on their car loans, or, in the
alternative, the return of the cars to the employer, is not
a labor, but a civil, dispute. It involves debtor-creditor
relations, rather than employee-employer relations.
Petitioners were employees of respondent Jollibee. At the
time of their termination, petitioner Cecilia T. Manese
was First Assistant Store Manager Trainee; petitioner
Julietes E. Cruz was Second Assistant Store; and
Eufemio M. Peano II was Shift Manager, who
functioned as Assistant Store Manager Trainee
(equivalent to Kitchen Manager)
Petitioners were part of the team tasked to open a new
Jollibee branch at Festival Mall, Level 4, in Alabang,
Muntinlupa City on Dec. 12, 2000.

 In preparation for the opening of the new branch,

petitioner Julietes Cruz requested the Commissary
Warehouse and Distribution (commissary) for the
delivery of wet and frozen goods on December 9, 2000
to comply with the 30-day thawing process of the wet
goods, particularly the Jollibee product called
Chickenjoy.
However, the opening of the store was postponed thrice.
When the opening was rescheduled to December 24,
2000, petitioner Cruz made another requisition for the
delivery of the food on December 23, 2000, but the
opening date was again postponed. Thereafter,
Jollibees Engineering Team assured the operations
manager, respondent Elizabeth dela Cruz that the new
store could proceed to open on December 28, 2000.
Petitioner Cruz, upon the advice of their Opening Team
Manager Jun Reonal, did not cancel the request for
delivery of the products.
The following events took place:
o December 23 450 packs (4,500 peices) of
chickenjoy were delivered and placed in the
freezer.
o December 26 thawed 450 packs of Chickenjoy
(ten pieces in each pack) for the branch
opening on the 28th
Shelf life of chickenjoy is 25 days from being
marinated, and should be served on the 3rd day upon
thawing (so the 29th)
o Cannot serve beyond the 3 days. The remaining
chickens are then packed in plastic and placed
in a garbage bag to be stored in a freezer. Then
returned to commissary and disposed of.

Despite the postponements, the stores sale targets

for Dec. 28 & 29 were not revised by the operations
manager.
o Dec. 28 P200k (expected) vs. P164k (actual)
o Dec. 29 P225k vs P159k
Sometime in January 2001, petitioner Cruz
attempted to return 150 pieces of Chickenjoy
rejects to the commissary, but the driver of the
commissary refused to accept them due to the
discoloration and deteriorated condition of the
Chickenjoy rejects, and for fear that the rejects
may be charged against him. Thus, the Chickenjoy
rejects were returned to the freezer.
During the first week of March 2001, the team of
petitioners had a meeting on what to do with the
stored Chickenjoy rejects. They decided to soak
and clean the Chickenjoy rejects in soda water and
segregate the valid rejects from the wastes.
On April 2, 2001, petitioner Cruz was transferred to
Jollibee Shell South Luzon Tollway branch in
Alabang, Muntinlupa. She estimated that the total
undisposed Chickenjoy rejects from the 450 packs
(4,500 pieces of Chickenjoy) delivered on
December 23, 2000 was only about 1,140 pieces as
of January 2001. She failed to make the proper
indorsement as the area manager directed her to
report immediately to her new assignment.
On May 3, 2001, the area manager, Divina Evangelista,
visited four stores, including the subject Jollibee branch
at Festival Mall, Level 4. When Evangelista arrived at
the subject Jollibee branch, she saw petitioner Peano

cleaning the Chickenjoy rejects. Evangelista told

petitioner Manese to dispose of the Chickenjoy rejects,
but Manese replied that they be allowed to find a way
to return them to the Commissary.
On May 8, 2001, Evangelista required petitioners Cruz
and Manese to submit an incident report on the
Chickenjoy rejects. On May 10, 2001, a corporate audit
was conducted to spot check the waste products.
According to the audit, 2,130 pieces of Chickenjoy
rejects were declared wastage.
On May 15, 2001, Evangelista issued a memorandum
with a charge sheet, requiring petitioners to explain in
writing within 48 hours from receipt why they should
not be meted the appropriate penalty under the
respondent companys Code of Discipline for extremely
serious
misconduct,
gross
negligence,
product
tampering, fraud or falsification of company records
and insubordination in connection with their findings
that 2,130 pieces of Chickenjoy rejects were kept inside
the walk-in freezer, which could cause product
contamination and threat to food safety.
Explanations of petitioners
o Cecilia Manese- Foul smell and discoloration of
the Chickenjoy rejects were due to the
breakdown of the walk-in facilities prior to the
stores grand opening. During that time, the
store was using temporary power supply, so
that it could open during Christmas Day and
the Metro Manila Film Festival. She admitted
that she was not able to immediately inform
Area Manager about it. They did their best, but
they were not able to save a bulk of the said

Chickenjoy due to the holiday season. They

asked for assistance from other stores, but they
could only accommodate a few stocks, as most
of their storage areas were filled with their own
stocks. They did not immediately dispose of the
Chickenjoy rejects out of fear of being
reprimanded and it would add to the existing
problems of the branch regarding low sales and
profit.
o Eufemio Penamo- He was not familiar with
managerial duties in the kitchen since he had
no proper training, hence, he only followed
Cecilia Manases instructions.
o Julietes Cruz-Before her transfer, there were
only 1,200 rejects. Some were greenish
because they were the ones delivered when the
walk-in freezers were still on pre-setting
temperature and operating on temporary
power.
Petitioners contended that they did not waste the
Chickenjoy rejects, because there were so many rejects
since the opening of the store. Hence, they planned to
report the Chickenjoy rejects to the commissary on a
staggered basis, but the driver of the commissary
refused to accept the rejects. They tried to find some
solutions so that they could convince the driver of the
commissary to accept their rejects, and they were able
to return some 400 pieces of Chickenjoy rejects. They
emphasized that their food cost was relatively high and
the profit margins were low, so they could not declare
the rejects as wastes and charge it to the store. Their
purpose was salutary, and they even decided to pay for

the rejects themselves if the same would no longer be

accepted by the commissary.
Petitioners further argued that there was no product
contamination, as the rejects were packed by tens and
wrapped in plastic, placed in garbage bags, then placed
in a crate before being stored in the freezer. From the
opening of the store until their dismissal, they had not
experienced any wastage of other wet and frozen items.
In addition, they claimed that there was no
insubordination, considering that the last word of Area
Manager Evangelista on the wastage was [s]ige kung
gusto niyong remedyuhan at makapagsasauli kayo.
She allegedly did not direct petitioner Manese to waste
the Chickenjoy. Her parting words to Manese were
considered the green light to their attempts to find a
solution for the proper disposal of the rejects.
Jollibee replied that as a policy, a store can request for
the return of the ordered products to the commissary
for re-delivery on another date, especially if there are
reasons to return them like postponement of the store
opening or defective storage freezers. A store can also
request other nearby Jollibee stores to accommodate
wet products in their walk-in freezers and even allow
the use of these products. Petitioner Cruz failed to
resort to these remedies.
The management conducted an investigation and sent
petitioners notifying them that they are terminated due
to loss of trust and confidence.
Petitioners filed a complaint for illegal dismissal.
LA: Cruz could not be held liable therefor; hence, her
dismissal was illegal. The Labor Arbiter also found no
sufficient basis for the other charges foisted on Cruz.

However, the Labor Arbiter awarded separation pay to

Cruz, considering the strained relationship between the
parties. Further, the Labor Arbiter held that petitioner
Manese was not entitled to her money claims because
she was either not entitled thereto by reason of
company policy and practice, or her accountabilities to
the company/cooperative far exceed that which may be
due her.
NLRC: LA erred in ruling that petitioner Cruz was
illegally dismissed as it found that she committed the
offenses enumerated in paragraphs 1.1 to 1.5 and
paragraph 2 of the Memorandum sent to her.
Nevertheless, since respondents failed to interpose a
timely appeal, the NLRC stated that it was constrained
to affirm the findings and award of separation pay
granted to petitioner Cruz by the Labor Arbiter.
CA: affirmed NLRC with modification. The Court of
Appeals found that petitioners were terminated based
on the result of the clarificatory hearing and
administrative findings of respondent company. The
Court held that since petitioners were managerial
employees, the mere existence of a basis for believing
that they have breached the trust of their employer
would suffice for their dismissal.
ISSUES+RATIO
1. WoN CA acted with grave abuse of discretion in
passing upon the legality of Cruz dismissal
considering the LA decision has become final and
executory since there was no timely appeal filed by
Jollibee.- YES, CA acted with grave abuse.

An appellee who has not himself appealed cannot obtain

from the appellate court any affirmative relief other than
those granted in the decision of the court below.
Jollibee did not appeal from the decision of the Labor
Arbiter who ruled that the dismissal of petitioner Cruz
was illegal. They only filed an Opposition to Appeal,
which prayed for the reversal of the Labor Arbiters
orders declaring as illegal the dismissal of Cruz and
directing payment of her separation pay. The LAs
decision was received on August 28 and they had 10 days
(September 8) to file an appeal. Instead of an appeal,
they filed this opposition which could have been treated
as an appeal but was filed beyond the 10 days, around
October.
Failure to appeal from the decision of the Labor Arbiter
renders the decision on the illegal dismissal of Cruz final
and executory.
2. WoN CA misappreciated the facts when it affirmed
the dismissal on the ground of loss of trust and
confidence (managerial employees) NO, CA did
not misappreciate the facts.
The respective memorandum with a notice of termination
given by respondent company to each of the petitioners
clearly expressed that their respective acts and omissions
enumerated in the said memoranda made respondent
com-managerial employees; hence, they were terminated
from employment.

The mere existence of a basis for the loss of trust and

confidence justifies the dismissal of the managerial
employee because when an employee accepts a
promotion to a managerial position or to an office
requiring full trust and confidence, such employee gives
up some of the rigid guaranties available to ordinary
workers. Infractions, which if committed by others would
be overlooked or condoned or penalties mitigated, may
be visited with more severe disciplinary action. Proof
beyond reasonable doubt is not required provided there
is a valid reason for the loss of trust and confidence, such
as when the employer has a reasonable ground to believe
that the managerial employee concerned is responsible
for the purported misconduct and the nature of his
participation renders him unworthy of the trust and
confidence demanded by his position.
In this case, the acts and omissions enumerated in the
respective memorandum with notice of termination of
petitioners Cruz and Peano were valid bases for their
termination, which was grounded on gross negligence
and/or loss of trust and confidence.
3. WoN CA erred in finding that they served the
Chickenjoy beyond the three-day serving period,
thus, exposing the public health to jeopardy CAs
finding respected.
Only questions of law may be entertained. It may resolve
some factual questions but only in exceptional cases,
which is not present here.

4. WoN Maneses unpaid balance on her car loan

can be offset with the monetary claims due to
her? NO. [RELEVANT TO THE TOPIC]
The unpaid balance on her car loan cannot be set off
against the monetary benefits due her.
In Nestl Philippines, Inc. v. NLRC the employer's
demand for payment of the employees' amortization on
their car loans, or, in the alternative, the return of the
cars to the employer, is not a labor, but a civil, dispute. It
involves debtor-creditor relations, rather than employeeemployer relations.
Manese has an obligation to pay the balance on the car
loan to Jollibee. If she cannot afford to pay the balance,
she can return the car to Jollibee. Otherwise, Jollibee can
file a civil case for the payment of the balance on the car
loan or for the return of the car. The legal remedy of
respondent company is civil in nature, arising from a
contractual obligation.
DISPOSITIVE:
The decision of CA that Julietes Cruz is validly
dismissed is deleted since LAs decision is already
final and executory.
Manese and Penano validly dismissed for lost of trust
and confidence.
Jollibee to pay Manese her monetary claims (unpaid
salary, sick leave, other leave credits)
Labor Arbiter to compute said monetary claims

3. Labor Dispute v Intra-corporate Dispute

JOSE EMMANUEL P. GUILLERMO V CRISANTO P.
USON
Crisanto P. Uson (Uson) began his employment with
Royal Class Venture Phils., Inc. (Royal Class Venture) as
an accounting clerk. Eventually, he was promoted to the
position of accounting supervisor, with a salary of Php
3,000.00 a month, until he was allegedly dismissed from
employment on December 20, 2000. On March 2, 2001,
Uson filed with the Sub-Regional Arbitration Branch No.
1, Dagupan City, of the NLRC a Complaint for Illegal
Dismissal, with prayers for backwages, reinstatement,
salaries and 13 month pay, moral and exemplary
damages and attorney's fees against Royal Class Venture.
Royal Class Venture did not make an appearance in the
case despite its receipt of summons.
On May 15, 2001, Uson filed his Position Paper as
complainant.
LABOR ARBITER FOR USON
On October 22, 2001, Labor Arbiter Jose G. De Vera
rendered a Decision in favor of the complainant Uson and
ordering therein respondent Royal Class Venture to
reinstate him to his former position and pay his
backwages, 13 month pay as well as moral and
exemplary damages and attorney's fees.
Royal Class Venture, as the losing party, did not file an
appeal of the decision. Consequently, upon Uson's
motion, a Writ of Execution dated February 15, 2002 was

issued to implement the Labor Arbiter's decision. On May

17, 2002, an Alias Writ of Execution was issued. But with
the judgment still unsatisfied, a Second Alias Writ of
Execution was issued on September 11, 2002. Again, it
was reported in the Sheriffs Return that the Second Alias
Writ of Execution dated September 11, 2002 remained
"unsatisfied." Thus, on November 14, 2002, Uson filed a
Motion for Alias Writ of Execution and to Hold Directors
and Officers of Respondent Liable for Satisfaction of the
Decision.
Quoted from Sheriffs Return
On September 12, 2002, the undersigned proceeded at
the stated present business office address of the
respondent which is at Minien East, Sta. Barbara
Pangasinan to serve the writ of execution. Upon arrival, I
found out that the establishment erected thereat is not
[in] the respondent's name but JOEL and SONS
CORPORATION, a family corporation owned by the
Guillermos of which, Jose Emmanuel F. Guillermo the
General Manager of the respondent, is one of the
stockholders who received the writ using his nickname
"Joey," [and who] concealed his real identity and
pretended that he [was] the brother of Jose, which [was]
contrary to the statement of the guard-on-duty that Jose
and Joey ]were] one and the same person. The former
also informed the undersigned that the respondent's (sic)
corporation has been dissolved. On the succeeding day,
as per [advice] by the [complainant's] counsel that the
respondent has an account at the Bank of Philippine
Islands Magsaysay Branch, A.B. Fernandez Ave.,
Dagupan City, the undersigned immediately served a
notice of garnishment, thus, the bank replied on the same
day stating that the respondent [does] not have an
account with the branch.

LABOR ARBITER GRANTED USONS MOTION

Held that officers of a corporation are jointly and
severally liable for the obligations of the corporation to
the employees and there is no denial of due process in
holding them so even if the said officers were not parties
to the case when the judgment in favor of the employees
was rendered. Thus, the Labor Arbiter pierced the veil of
corporate fiction of Royal Class Venture and held herein
petitioner Jose Emmanuel Guillermo (Guillermo), in his
personal capacity, jointly and severally liable with the
corporation for the enforcement of the claims of Uson.
LABOR ARBITER DENIED GUILLERMOS MOTION
FOR CONSIDERATION
even castigated Guillermo for his unexplained absence in
the prior proceedings despite notice, effectively putting
responsibility on Guillermo for the case's outcome
against him.
USON FILED AN ALIAS WRIT OF EXECUTION
GUILLERMO FILED A COMMENT
LABOR ARBITER GRANTED USONS MOTION
GUILLERMO ELEVATED THE MATTER TO THE
NLRC
NLRC DISMISSED GUILLERMOS MOTION
GUILLERMO APPEALED TO THE CA
CA DENIED GUILLERMOS PETITION
The appellate court found that summons was in fact
served on Guillermo as President and General Manager
of Royal Class Venture, which was how the Labor Arbiter
acquired jurisdiction over the company. But Guillermo
subsequently refused to receive all notices of hearings
and conferences as well as the order to file Royal Class
Venture's position paper. Then, it was learned during
execution that Royal Class Venture had been dissolved.

ALSO HELD
that although the judgment had become final and
executory, it may be modified or altered "as when its
execution becomes impossible or unjust."
CA DENIED GUILLERMOS MR
SUPREME COURT
GUILLERMOS FIRST ISSUE
Guillermo asserts that he was impleaded in the
case only more than a year after its Decision had
become final and executory, an act which he claims
to be unsupported in law and jurisprudence. He
contends that the decision had become final,
immutable and unalterable and that any
amendment thereto is null and void. Guillermo
assails the so-called "piercing the veil" of
corporate fiction which allegedly discriminated
against him when he alone was belatedly
impleaded despite the existence of other directors
and officers in Royal Class Venture.
TO WHICH THE SC SAYS
The common thread running among the aforementioned
cases, however, is that the veil of corporate fiction can be
pierced, and responsible corporate directors and officers
or even a separate but related corporation, may be
impleaded and held answerable solidarily in a labor case,
even after final judgment and on execution, so long as it
is established that such persons have deliberately used
the corporate vehicle to unjustly evade the judgment
obligation, or have resorted to fraud, bad faith or malice
in doing so. When the shield of a separate corporate
identity is used to commit wrongdoing and opprobriously
elude responsibility, the courts and the legal authorities
in a labor case have not hesitated to step in and shatter

the said shield and deny the usual protections to the

offending party, even after final judgment. The key
element is the presence of fraud, malice or bad faith. Bad
faith, in this instance, does not connote bad judgment or
negligence but impo1is a dishonest purpose or some
moral obliquity and conscious doing of wrong; it means
breach of a known duty through some motive or interest
or ill will; it partakes of the nature of fraud.
Then, it is also clearly reflected in the records that it was
Guillermo himself, as President and General Manager of
the company, who received the summons to the case, and
who also subsequently and without justifiable cause
refused to receive all notices and orders of the Labor
Arbiter that followed.
GUILLERMOS
LESSON)

SECOND

ISSUE

(RELATED

TO

He also claims that the Labor Arbiter has no jurisdiction

because the case is one of an intra-corporate controversy,
with the complainant Uson also claiming to be a
stockholder and director of Royal Class Venture.
TO WHICH THE SC SAYS
the nature of an action and the jurisdiction of a
tribunal are determined by the allegations of the
complaint at the time of its filing, irrespective of
whether or not the plaintiff is entitled to recover
upon all or some of the claims asserted therein.
Although Uson is also a stockholder and director of
Royal Class Venture, it is settled in jurisprudence
that not all conflicts between a stockholder and the
corporation are intra-corporate; an examination of
the complaint must be made on whether the

complainant is involved in his capacity as a

stockholder or director, or as an employee.
If the latter is found and the dispute does not meet
the test of what qualifies as an intracorporate
controversy, then the case is a labor case
cognizable by the NLRC and is not within the
jurisdiction of any other tribunal.
In the case at bar, Uson's allegation was that he
was maliciously and illegally dismissed as an
Accounting Supervisor by Guillermo, the Company
President and General Manager, an allegation that
was not even disputed by the latter nor by Royal
Class Venture.
It raised no intra-corporate relationship issues
between him and the corporation or Guillermo;
neither did it raise any issue regarding the
regulation of the corporation.
As correctly found by the appellate court,
Uson's complaint and redress sought were
centered alone on his dismissal as an employee,
and not upon any other relationship he had with
the company or with Guillermo. Thus, the matter is
clearly a labor dispute cognizable by the labor
tribunals.

g. Technical Rules, not binding 227(221)

MANILA ELECTRIC COMPANY V JAN CARLO GALA
Jan Carlo Gala commenced employment with
Meralco as a probationary lineman. He was
assigned at Meralcos Valenzuela Sector. He joined
the crew of Truck No. 1837 under the supervision
of Foreman Raymond Zuniga, Sr.

After four months, he was dismissed for alleged

complicity in pilferages of Meralcos electrical
supplies.
o Together with other workers, Gala was
instructed to replace a worn-out electrical
pole at the Pacheco Subdivision in
Valenzuela City.
o When they arrived at the worksite, they saw
that Truck No. 1837 was already there and
the other linemen were already at work.
They were instructed to help in digging the
hole of a pole to be installed.
o Norberto Bing Llanes, a non-Meralco
employee, arrived and conversed with the
Meralco foremen.
o Llanes boarded the trucks and took out what
were later found as electrical supplies.
o Unknown to them, a Meralco surveillance
task force was monitoring their activities
and recording everything with a video
camera.
o Gala, the foremen and linemen were
charged with misconduct and dishonesty.
During the investigation, Gala denied involvement.
o He was at some distance away from the
trucks.
o He did not have an inkling than an illegal
activity was taking place.
o He was just following instructions in
connection with his work.
Meralco terminated Galas employment. Gala filed
a complaint for illegal dismissal.
LA dismissed the complaint and held that Galas
participation in the pilferage rendered him
unqualified to become a regular employee.

NLRC reversed.
o No concrete showing of complicity with
alleged misconduct.
o Ruled out Galas reinstatement since his
tenure lasted only up to the end of his
probationary period.
CA denied Meralcos petition and partially granted
Galas.

Issues
1 WoN the petition should be dismissed on
procedural grounds, since the Verification and
Certification, Secretarys Certificate and
Affidavit of Service did not contain the details of
the CTC of the affiants, and the lawyer who signed
the petition failed to indicate their updated MCLE
certificate numbers
NO
It is the spirit and intention of labor legislation that
the NLRC and the labor arbiters shall use every
reasonable means to ascertain the facts in each
case speedily and objectively, without regard to
technicalities of law or procedure, provided due
process is duly observed.
It is deemed proper to give due course to the
petition, especially in view of the conflict between
the findings of the labor arbiter, on the one hand,
and the NLRC and the CA, on the other.
2

WoN Gala was illegally dismissed

NO
There is substantial evidence supporting Meralcos
position that Gala had become unfit to continue his
employment with the company. G

Gala was found to have failed to meet the

standards expected of him to become a regular
employee and this failure was mainly due to his
undeniable knowledge, if not participation, in the
pilferage activities done by their group, all to the
prejudice of the companys interests.
o As a probationary member, his overall job
performance and behaviour was being
monitored and measured in accordance with
standards.
o Evidence established Galas presence in the
worksite where the pilferage happened.
o If Gala had seen Llanes in earlier projects, it
is incredulous for him to say that he did not
know why Llanes was there.

1. Liberality in application of rules

INDUSTRIAL TIMBER CORP V ABABON
Industrial Timber Corp. v. Ababon (2006)
Technical rules, not binding 227 (221) / Liberality in
application of rules
SUMMARY: ITC filed its MR late because of excusable
negligence of counsel. Such procedural defect should be
absolved because under Art. 221, the NLRC and LAs
shall 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, all in the
interest of due process. Otherwise, a greater injustice
would be done to ITC by ordering it to reinstate the
employees to their former positions that no longer exist.

Industrial Plywood Group Corporation (IPGC) is the

owner of a plywood plant leased to Industrial Timber
Corporation (ITC) in 1985 for a period of five years. ITC
commenced operation of the plywood plant and hired 387
workers.
On March 16, 1990, ITC notified the Department of
Labor and Employment (DOLE) and its workers that
effective March 19, 1990 it will undergo a no plant
operation due to lack of raw materials and will resume
only after it can secure logs for milling. Meanwhile, IPGC
notified ITC of the expiration of the lease contract in
August 1990 and its intention not to renew the same.
On June 26, 1990, ITC notified the DOLE and its workers
of the plants shutdown due to the non-renewal of antipollution permit that expired in April 1990. This fact and
the alleged lack of logs for milling constrained ITC to lay
off all its workers until further notice. This was followed
by a final notice of closure or cessation of business
operations on August 17, 1990.
IPGC took over the plywood plant. This prompted Virgilio
Ababon, et al. to file a complaint against ITC and IPGC
for illegal dismissal, alleging that the cessation of ITCs
operation was intended to bust the union and that both
corporations are one and the same entity being
controlled by one owner.
The Labor Arbiter refused to pierce the veil of corporate
fiction for lack of evidence to prove that it was used to
perpetuate fraud or illegal act, and upheld the validity of
the closure. Ababon et al. appealed to the NLRC, which
reversed the LA decision. Hence, ITC and IPGC filed a
Motion for Reconsideration but this was dismissed
for being filed three days late. Thus, they filed a

Petition for Relief from Resolution, which was treated as

a second Motion for Reconsideration, but this was
dismissed for lack of merit. They again filed a Motion
for Reconsideration/Second Petition for Relief with
the NLRC, which was finally granted. (At this point,
the LAs decision was reinstated and the closure valid)
Ababon, et al. filed a Petition for Certiorari with the SC,
which petition was referred to the CA. The CA set aside
the new NLRC decision and reinstated its old
decision, because the old decision had become
immutable for failure of IPGC and ITC to file their
motion for reconsideration within the reglementary
period. (At this point, the closure was invalid)
Since the motions for reconsideration of both parties
were denied, they filed a petition for certiorari with the
SC.
ISSUE/S:

WoN the CA erred in reversing the NLRC decision

YES. IPGC and ITC filed late due to excusable negligence
of their counsels secretary.
It is true that after a judgment has become final and
executory, it can no longer be modified or otherwise
disturbed. However, where facts and circumstances
transpire which render its execution impossible or unjust,
it therefore becomes necessary, in the interest of justice,
to direct its modification in order to harmonize the
disposition with the prevailing circumstances.
Substantial justice is best served by allowing the petition
for relief despite filing the motion for reconsideration

three days late, for to rule otherwise, a greater injustice

would be done to ITC by ordering it to reinstate the
employees to their former positions that no longer exist
due to valid and legitimate cessation of business and pay
huge judgment award.
Moreover, under Art. 218(c), the NLRC may, in the
exercise of its appellate powers, correct, amend, or
waive any error, defect or irregularity whether in
substance or in form. Article 221 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 and 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 case
speedily and objectively and without regard to
technicalities of law or procedure, all in the
interest of due process.
The real purpose behind the limitation of the period is to
forestall or avoid an unreasonable delay in the
administration of justice, from which the NLRC absolved
ITC and IPGC because the filing of their motion for
reconsideration three days later than the prescribed
period was due to excusable negligence.
WoN Ababon et al. were illegally dismissed
NO. Under Art. 283, the right to close the operation of an
establishment or undertaking is one of the authorized
causes in terminating employment of workers, the only
limitation being that the closure must not be for the
purpose of circumventing the provisions on termination
of employment. It would be stretching the intent and
spirit of the law if a court interferes with management's

prerogative to close or cease its business operations just

because the business is not suffering from any loss or
because of the desire to provide the workers continued
employment.
Under Article 283 of the Labor Code, three requirements
are necessary for a valid cessation of business
operations:
(a) service of a written notice to the employees and to the
DOLE at least one month before the intended date
thereof;
(b) the cessation of business must be bona fide in
character; and
(c) payment to the employees of termination pay
amounting to one month pay or at least one-half month
pay for every year of service, whichever is higher.
The decision to permanently close business operations
was arrived at after a suspension of operation for several
months precipitated by lack of raw materials used for
milling operations, the expiration of the anti-pollution
permit, and the termination of the lease contract. Closing
the plant was the only remedy available in order to
prevent imminent heavy losses. Moreover, the nonrenewal of the lease contract may be considered an event
beyond petitioners control, in the nature of a
force majeure situation. As such, there was an authorized
cause for termination.
However, ITC did not comply with the notice
requirement. Notice should have been furnished both the
employees and the DOLE at least one month before the
intended date of closure.
Despite not having complied with the notice requirement,
the validity of the closure is upheld. To hold otherwise

would absurd situations where there is a just or

authorized cause for dismissal but a procedural infirmity
invalidates the termination. Invalidating the dismissal
would not serve public interest. It could also discourage
investments that can generate employment in the local
economy. There is instead a sanction upon the employer,
which should be stiff as the dismissal process was
initiated by the employers exercise of his management
prerogative. Hence, the Court awarded P50,000.00 to
each employee as nominal damages.

2. Industrial compliance with the Rules

MA. LIGAYA B. SANTOS V LITTON MILLS
INC.
Review on certiorari
Dec 1989: Litton Mills, a textile manufacturer, hired Ate
Ligaya as a clerk in the Plant Admin and Services Dept,
which sells the sludge oil and waste materials of the
plant.
Sept 2002: Manager Atty. Marino directed Ligaya to
explain why the company shouldnt impose disciplinary
sanctions after having been caught engaging in an
unauthorized arrangement with a waste buyer. Allegedly,
petitioner has been demanding money from a certain
Leonardo A. Concepcion (Concepcion) every time he
purchases scrap and sludge oil from the company and
threatening to withhold the release of the purchased

materials by delaying the release of official delivery

receipt and gate pass if he would not oblige.
Petitioner: averred that the P2,000.00 she obtained from
Concepcion was in payment for the loan she had
extended to Concepcions wife
Oct 2002: Atty. Mario notified petitioner that an
administrative investigation is scheduled. During the
hearing, petitioner, represented by three officers of the
union of which she was a member, pointed out that it is
not within her power to intimidate or threaten any buyer
regarding the release of the companys waste items and
presented a copy of her handwritten notes showing a list
of entries representing the debts owed to her by different
debtors including Concepcions wife.
Oct 2002: received a Letter of Termination from
respondents for obtaining or accepting money as a result
of an unauthorized arrangement with a waste buyer, an
act considered as affecting company interests, in
violation of Section 2.04 of the companys Code of
Conduct for Employee Discipline.
Feb 2003: petitioner filed a Complaint for illegal
dismissal against respondents which was later amended
to include a prayer for moral and exemplary damages
and attorneys fees.
LA: pendency of criminal case for extortion indicates
there is sufficient evidence for her offense. Only
substantial proof necessary for valid dismissal, not

reasonable doubt complaint dismissed

Before NLRC: RTC acquits petitioner of crim charge
declaring she merely demanded load payment which was
not illegally exacted from Concepcion
NLRC: affirmed

petition a sworn certification that

a

CA: (IMPT PART): dismissed denied for the ff reasons:

1 Actual addresses of the parties were not
disclosed in the petition in contravention
of Sec. 3, Rule 46, 1997 Rules of Civil
Procedure;
2 Non-conformity to the required verification
and certification of non-forum shopping by
failure to state that there were no other
pending cases between the parties at the
time of filing
CA: motion for reconsideration also denied (despite
subsequent and substantial compliance)
ISSUE:
The propriety of the CA.s dismissal of her petition
despite correction of the deficiencies in faithful
compliance with the rules.
1. Petitions for certiorari shall contain, among others, the
full names and actual addresses of all the petitioners and
respondents;
2. Petitioner should also submit together with the

he has not theretofore commenced any other

action involving the same issues in any court,
tribunal or quasi-judicial agency and, to the best
of his knowledge, no such other action or claim is
pending therein;
if there is such other pending action or claim, he
must state the status of the same; and
if he should thereafter learn that the same or
similar action or claim has been filed or is
pending, he shall promptly inform the court within
five days therefrom.

In the petition for certiorari filed before the CA,

petitioner indeed failed to indicate the actual addresses
of the parties. However, she clearly mentioned that the
parties may be served with the Courts notices or
processes through their respective counsels whose
addresses were clearly specified. the mention of the
parties respective counsels addresses constitutes
substantial compliance. Section 2, Rule 13 which
pertinently provides that if any party has appeared by
counsel, service upon him shall be made upon his counsel
or one of them, unless service upon the party himself is
ordered by the Court.
in her motion for reconsideration, petitioner explained
that she was of the honest belief that the mention of the
counsels address was sufficient compliance with the
rules. At any rate, she fully complied with the same when
she indicated in her Motion for Reconsideration the
actual addresses of the parties.

On the second ground given by the CA, A reading of said

Verification with Certification reveals that petitioner
nonetheless certified therein that she has not filed a
similar case before any other court or tribunal and that
she would inform the court if she learns of a pending
case similar to the one she had filed therein. This, to our
mind is more than substantial compliance. Besides, in her
Motion for Reconsideration, petitioner rectified the
deficiency in said Verification with Certification
It is settled that subsequent and substantial compliance
may call for the relaxation of the rules of procedure.
There was substantial and subsequent compliance in this
case, we resolve to apply the liberal construction of the
rules if only to secure the greater interest of justice.
Petition for Review on Certiorari is PARTLY GRANTED.
The case is REMANDED to the Court of Appeals which is
directed to give due course to the petition
3. Non-applicability
of
technical
rules
of
procedure in labor cases, not a license to
disregard
right
of
employer
against
unreasonable claims
RICARDO N. AZUELO V ZAMECO II ELECTRIC
COOP INC. (2014)
October 22, 2014 | Reyes, J. | Third Division | Nonapplicability of technical rules of procedure in labor
cases, not a license to disregard the right of the employer
against unreasonable claims

Petitioners: Ricardo Azuelo

Respondents: Zameco II Electric Cooperative Inc
Azuelo was employed by Zameco as a
maintenance worker.
In March 2006, Azuelo filed a complaint for
illegal dismissal and non-payment of benefits
in the Regional Arbitration Branch of the
NLRC in San Fernando Pampanga. After several
mediations, LA Bactin ordered the parties to
submit their position papers on July 14, 2006.
On July 14, Azuelo, instead of submitting his
position paper, moved that the submission of his
position paper be extended to August 4, 2006,
which was granted by LA Bactin.
On August 4, 2006, Azuelo again failed to submit
his position paper. LA Bactin then directed Azuelo
to submit his position papers on August 22, 2006.
On the said date, Azuelo, instead of submitting his
position paper, moved for the issuance of an order
directing ZAMECO to furnish him with a
complete copy of the investigation report as
regards his dismissal. ZAMECO opposed the
motion, claiming that it has already furnished
Azuelo with a copy of its investigation report.
On Nov 6, LA Bactin dismissed the complaint for
lack of Azuelos position paper.
Azuelo filed another complaint for illegal
dismissal with money claims against Zameco in
the same venue, and the case was assigned to LA
Abdon.
On Dec 20, Zameco filed a motion to dismiss on
the grounds of res judicata. They also argue that

Azuelo should have appealed the dismissal instead

of filing a new complaint.
Azuelo opposed ZAMECO's motion to
dismiss, alleging that the dismissal of his first
complaint by LA Bactin was without prejudice.
His failure to submit his position paper was due to
ZAMECO's refusal to furnish him with the
complete documents pertaining to his illegal
dismissal. He also claimed that since the dismissal
of his first complaint was without prejudice, his
remedy was either to file a motion for
reconsideration or to re-file the case within 10
days from receipt of the order of dismissal.
On March 12, 2007, LA Abdon dismissed his
complaint, agreeing with the stance of Zameco.
On appeal, the NLRC affirmed the LAs decision.
It argued that Azuelo was given ample opportunity
to submit his position paper, which he still failed to
do. That his failure to prosecute his action for
unreasonable length of time indeed warranted the
dismissal of his first complaint.
On appeal to the CA by certiorari, the CA denied
his motion. It held that the NLRC did not commit
any abuse of discretion in affirming the dismissal
of Azuelo's second complaint for illegal dismissal
on the ground of res judicata. That the dismissal of
the first complaint, which was with prejudice, bars
the filing of a subsequent complaint for illegal
dismissal based on the same allegations.

ISSUE/S:

WON dismissal of the first complaint (for lack of

interest on his part to prosecute based on his lack
of a position paper) bars the filing of another
complaint based on the same allegations YES
o The unjustified failure of a complainant in
arbitration proceedings before the LA to
submit his position paper is akin to the case
of a complainant's failure to prosecute his
action for an unreasonable length of time in
ordinary civil proceedings. If he was not
able to file because of the documents he
needed, he should have filed for an order
requesting those documents immediately,
not only after his third extension and a
period of 1 month has passed.
o Following Sec. 3, Rule 17 of the Rules of
Court, the dismissal of a case for failure to
prosecute has the effect of adjudication
on the merits (meaning res judicata can
apply), and is necessarily understood to be
with prejudice to the filing of another
action, unless otherwise provided in the
order of dismissal.
o While technical rules of procedure are
not binding in labor, it should not be
made a license to disregard the rights of
employers against unreasonable and/or
unjustified claims. Azuelo was given
sufficient chances to establish his claim
against ZAMECO, which he failed to do
when he did not submit his position paper

despite several extensions granted him. He

cannot now be allowed to raise anew his
supposed illegal dismissal as it would be
plainly unjust to ZAMECO. The Court notes
that the expeditious disposition of labor
cases is mandated not only for the
benefit of the employees, but of the
employers as well.
It should be made clear that when the law
tilts the scale of justice in favor of labor, it is
but a recognition of the inherent economic
inequality between labor and management.
The intent is to balance the scale of justice;
to put up the two parties on relatively equal
positions. There may be cases where the
circumstances warrant favoring labor over
the interests of management but never
should the scale be so tilted if the result
is an injustice to the employer, Justicia
remini regarda est(Justice is to be denied to
none)
What Azuelo should have done in this
case: filed a verified memorandum of
appeal with the RAB of the NLRC in
San Fernando City, Pampanga within
10 calendar days from receipt of the
said order pursuant to Section 1, Rule
VI of the 2005 Revised Rules instead
of re-filing his complaint for illegal
dismissal. His failure to do so
rendered LA Bactin's Order dated
November 6, 2006, which dismissed

his first complaint for illegal

dismissal, final and executory.
h. Rule-making/ Limitation 5
KAPISANANG
MANGGAGAWANG
PINAGYAKAP V NLRC & FRANKLIN BAKER
CO OF THE PHIL

Respondent Franklin Baker Company and its workers

union Kapisanang Manggagawang Pinagyakap (KMP)
agreed in their CBA of March 7, 1977 that there
would be P1.33 increase of the daily wage retroactive
to January 1, 1977.
PD. 1123 or Across-The-Board Increase of Emergency
Allowance for Private Sector and Increase Salaries for
Public Sector was issued on April 21, 1977, to take
effect on May 1, 1977. It requires a P60.00 monthly or
P2.00 daily cost of living allowance to be given to
employees or ECOLA.
Respondent Franklin Baker Company said that the
daily wage increase could be credited and deducted
from the said required allowance.
KMP filed a complaint in the Labor Arbiter saying that
the deduction is contrary to the spirit and intent of
P.D. 1123 which is to protect the wages against
inflation; and that the workers belong to the lowest
income group and that what the workers obtained
through a CBA should be protected and not be
deducted from the decreed additional P60.00 monthly
(or P2.00 daily) living allowance.
LA: Ruled for the Company by relying primarily on
Section 1 (k) of the Labor Department's rules and
regulations implementing PD. 1123, which provides:

"Section 1. Coverage. These rules shall apply

to all employees EXCEPT the following: (k)
Those that have granted, in addition to the
allowance under P.D. 525, at least P60.00
monthly wage increase on or after January 1,
1977 provided that those who paid less than
this amount shall pay the difference."
The questioned decision was appealed by petitioner to
respondent commission which summarily dismissed
the appeal on the ground that the adverse party was
not furnished with a copy of its memorandum of
appeal.

ISSUES:
1 W/N the Labor Arbiter erred in ruling that negotiated
daily allowance in the CBA between the Company and
its workers can be deducted from the required
allowance mandated by PD 1123 YES
a The Labor Arbiter ruled contrary to jurisprudence
when it allowed the deduction of the negotiated
increase from the mandated allowance. This in
effect nullified the hard-earned P1.33 daily wage
increase negotiated and obtained by petitionersworkers in their collective bargaining agreement.
b The LAs reliance on the exemption paragraph (k)
in PD 1123 is misplaced. In Philippine Apparel
Workers Union v NLRC, this paragraph was
declared void as it contravenes the statutory
authority granted to the Secretary of Labor.
i To implement the same, the then Secretary
was authorized in Section 4 of the same
decree to issue appropriate rules and
regulations. 'Section 4.
The Secretary of
Labor and the Commissioner of the Budget
shall issue appropriate rules and regulations
to implement this Decree for their respective

sectors. Under such rules and regulations,

distressed employers whether public or
private may be exempted while in such
condition in the interest of development and
employment.'
ii By virtue of such rule-making authority, the
Secretary of Labor issued on May 1, 1977 a
set of rules which exempts not only distressed
employers but also 'those who have granted
in addition to the allowance under P.D. 525, at
least P60.00 monthly wage increase on or
after January 1, 1977, provided that those
who paid less than this amount shall pay the
difference.
Whether the failure of appellant to serve a copy of his
memorandum of appeal upon the appellee would
warrant the dismissal of a meritorious appeal NO
a The resolution of respondent commission
peremptorily dismissing petitioner's meritorious
timely appeal on the mere procedural technicality
that it did not furnish the adverse party with a
copy of its memorandum of appeal is likewise set
aside.
b Estrada vs. NLRC: The commission's dismissal of
the employee's appeal, on a motion for
reconsideration, was based on mere procedural
technicality and not a jurisdictional defect, as
follows: "Considering that there is no basis for the
dismissal of petitioner, it would be inconsistent
with the requirement of social justice to
terminate his employment on mere grounds of
technicality.
c Respondent never touched on the merits of the
case in his aforementioned MOR. Instead, it
relied solely on technicality to oppose petitioner's

appeal which thereby reasonably creates the

impression that its case is weak as in fact it is.
d Moreover, the dismissal of petitioner's appeal on
a purely technical ground is inconsistent with the
constitutional mandate on protection to labor.
Where the rules are applied to labor cases, the
interpretation must proceed in accordance with
the liberal spirit of the labor laws. Indeed, the
Court has stressed that "where a decision may be
made to rest on informed judgment rather than
rigid rules, all the equities of the case must be
accorded their due weight . . . labor
determinations . . . should be not only secundum
rationem but also secundum caritatem." (not only
according to reason but also according to
charitable heart)
e It certainly would work against reason and
compassion to hold that the hard-earned P1.33
daily wage increase finally negotiated and
secured by petitioners-workers in the CBA of
March 7, 1977 was meant to be wiped out by the
later issuance of P.D. 1123 on April 21, 1977
recognizing the need to grant the workers a
P2.00 daily cost of living allowance (ECOLA).
f To sustain respondent employer's claim that the
negotiated wage increase should be credited
against and deducted from the decreed cost of
living allowance would be to nullify the wage
increase granted and enjoyed by the workers
under the collective bargaining agreement. P.D.
1123 did not authorize such a credit and
deduction.
i. Applicability 6, 291 (276); Constitution,
Art IX-B, Sec. 2 (1)

PNOC ENERGY DEVELOPMENT CORP V

NLRC & DANILO MERCADO
PNOC Energy Development Corporation v
NLRC, Danilo Mercado, 1991
FACTS:
- DM employed by PNOC (13 Aug 1979) as
clerk, general clerk, shipping clerk in Cebu
until his transfer to Dumaguete Oriental Negros
(5 Sep 84)
o Dismissed 30 Jun 1985
Ordered to buy 1.4k pieces of nipa shingles
from Leonardo Nodado for 1,680p but withdrew
the shingles from the supplier for only 1k
against company policy and regulations and
orders and appropriated the balance for
personal use
Supplier agreed to 70p discount which he
didnt report to the company
Ordered to contract serviced of Fred Melon
of Dumaguete to make rubber stamps for
28.66p where he paid 20p and appropriated the
balance for personal use
He was absent from work without leave and
proper turnover of work = disruption and delay
Vacation leave without prior leave against
company policy, rules, regulations
o Last salary: 1,585/mn basic pay + 800 living
allowance
- He filed complaint for illegal dismissal,
retirement benefits, separation pay, unpaid

wages, etc. with NLRC Regional Arbitration

Branch PNOC prayed for dismissal on
ground that LA and/or NLRC no jurisdiction
o LA ruled in favour of DM: reinstate, 10k
personal share of savings account with them,
damages NLRC dismissed for lack of merit
ISSUES:
W/N matters of employment affecting PNOC
(GOCC) within jurisdiction of LA and NLRC.
- PNOC: being GOCC, governed by civil
service law (Sec 1 Art 12B Consti, Sec 56 PD
807 civil service decree, 277 PD 442 LC)
o 1973 Consti: civil service embraces every
branch, agency, subdivision, instrumentality of
the government including GOCCs in force
when LA ruled so its null and void b/c GOCC so
under CSL
o Sec 2.i Art 9B 87 Consti: civil service
embraces all branches, subdivision,
instrumentalities, agencies of government
including GOCCs with original charters even
assuming PNOC no original/special charter its
still part
- Employees of GOCCs whether created by
special law/formed as subsidiaries under
General Corporation Law are governed by CSL
not LC
o Test in determining GOCC subject to CSL:
manner of its creation created by special
charter = subject to its provisions, those

incorporated under GCL are not within its

coverage
- Fact that 73 Consti in place doesnt deprive
NLRC of jurisdiction on the premise 87 Consti
governs b/c its the one in place at time of
decision
W/N illegally dismissed. YES
- Accusations of dishonesty and violations of
company rules arent supported by evidence
BUT admin bodies arent governed by strict
rules of evidence
- Findings of admin agencies which have
acquired expertise b/c their jurisdiction is
confined to specific matters are accorded
respect and finality
- Loss of trust/breach of confidence = valid
ground for dismissal but it must have basis
o LA says no basis: LN (shingles) said in
affidavit that he paid 1,680p and alleged
discount has no evidence + appropriation from
stamps have no basis in evidence + no basis for
violation of company rules
o DMs affidavit re: alleged violations
satisfactorily explained, findings never
contradicted by PNOC
j. Enforcement and Sanctions 217 (a) (2),
(3), (4), (6); 128-129; 288-292; See also
Constitution, Art III, Secs. 11 and 16

WORK RELATIONSHIP
a Definition: Employer and Employee. 97
(a), (b), (c); 167 (f), (g). (h); 212 (e), (f)

b Employer-Employee Relationship
1 Factors/ Tests/ Four-Fold Test

NELSON V BEGINO ET AL V
ABS-CBN CORP &AMALIA
VILLAFUERTE
ABS-CBN Corp. with Amalia Villafuerte as its
Manager in its Regional Network Group for Naga
City engaged the services of Nelson Begino and
Gener Del Valle (cameramen/editors) as well as
Ma. Cristina Sumayao and Monina Avila-Llorin
(reporters).
Their services were engaged through talent
Contracts which though were renewed over the
years, provided terms from three months to one
year.
The petitioners were given their Project
Assignment Forms detailing the duration of a
particular project and other matters. In their
capacities, they were tasked with coverage of news
items for subsequent daily airings on TV Patrol
Bicol.
The Talent Contracts included provisions on ABSCBNs professional standards and policies /
guidelines. Industry codes, as well as the rules /
regulations of the Kapisanan ng mga Broadcasters
sa Pilipinas (KBP). It also contained a non-compete

clause and the declaration of flexible working

hours.
Petitioners claimed that they were regular
employees of ABS-CBN since they performed
functions necessary and desirable in ABS-CBNs
business thus they filed suit before the NLRC.
o Worked under the direct control and
supervision of Villafuerte
o Bound by companys policy on attendance
and punctuality
o Subjected to an annual competency
assessment alongside other ABS-CBN
employees as condition for continued
employment
ABS-CBN alleged that it does not have the full
manpower to produce its own programs so it
resorted to engaging independent contractors who
offered their services in relation to a particular
program; also alleged that the petitioners were
talents pursuant to the Talen Contracts and the
Project Assignment Form.
o Argued that they were fully aware that they
were not considered employees and were
engaged on the basis of skills they had
o Also argued that although some degree of
control was exercised over them, it was only
for the purpose of upholding the standards
of the company.
Petitioners were terminated during the pendency
of the case so they filed a second complaint against
ABS-CBN.

o
o

LA: ruled in favor of the dismissed

employees deeming them to be regular due
to length of sevice and control over them
NLRC: affirmed LA
CA: overturned the LA and NLRC
petitioners engaged as talents under their
contracts / assessment form; salaries were
talent fees depending on the budget for the
program; ABS-CBN did not exercise control
over the manner the work was to be carried
out; E-E relationship can be established on
terms and conditions which the parties can
stipulate

WoN there was an employer-employee relationship

between petitioners and ABS-CBN: YES
o Notwithstanding the terms and conditions
within the talent Contracts and Project
Assignment Forms, it has been ruled that
the test to determine whether employment
is regular or not is reasonable connection
between the activity performed by the
employee in relation to the business of the
employer according to Art. 280 of the LC
o As cameramen/reporters, the petitioners
were undoubtedly performing functions
necessary to ABS-CBNs business. It matters
little that petitioners were engaged for
specific periods they were regularly
renewed for years.
o They were also subject to the control and
supervision of ABS-CBN which provided

them with the equipment necessary for their

duties and tasks. The Talent Contract
provided that all creative control of the
program is retained by the company.
The fact that they were under an Exclusivity
Clause and prohibitions in their Talent
Contracts were indicative of control as well.
The test used to determine whether the
existence of an employer-employee
relationship exists is the so-called Four-Fold
Test:
Selection and Engagement of the
employee
Application to case at bar: In
the selection and engagement
of respondents, no peculiar or
unique skill, talent or celebrity
status was required from them
because they were merely hired
through petitioners personnel
department just like any
ordinary employee.
Payment of wages
Application to case at bar: The
so-called "talent fees" of
respondents correspond to
wages given as a result of an
employer-employee
relationship.1wphi1 Responde
nts did not have the power to
bargain for huge talent fees, a
circumstance negating

independent contractual
relationship.
Power of dismissal
Application to case at bar:
Petitioner could always
discharge respondents should it
find their work unsatisfactory,
and respondents are highly
dependent on the petitioner for
continued work.
Employers power to control the
employee on the means and methods
by which the work is accomplished
(most important)
Application to case at bar: The
degree of control and
supervision exercised by
petitioner over respondents
through its supervisors negates
the allegation that respondents
are independent contractors.

ART. 280. Regular and Casual Employment. The

provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of
the parties, an employment shall be deemed to be
regular where the employee has been engaged to
perform activities which are usually necessary or
desirable in the usual business or trade of the employer,
except where the 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

service to be performed is seasonal in nature and the
employment is for the duration of the season.
An employment shall be deemed to be casual if it is not
covered by the preceding paragraph: Provided, That, any
employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be
considered a regular employee with respect to the
activity in which he is employed and his employment
shall continue while such actually exists.
1.1
Control
reality Test

Test

Economic

OROZCO V FIFTH DIVISION

PDI engaged the services of Orozco to write a weekly
column for its Lifestyle section. She religiously submitted
her articles except for a 6-month stint when she went to
NY City. Nevertheless, she continued to send her articles
through mail. She also received compensation for every
column that was published.

When Orozcos column appeared in the newspaper

for the last time, her editor, Logarta, told her that the
PDIs editor-in-chief, Magsanoc, wanted to stop
publishing her columns for no reason at all and advised
her to talk to the editor-in-chief. When Orozco talked to
Magsanoc, the latter told her that it was the PDI
chairperson who wanted to stop the publication of her

column. However, when Orozco talked to Apostol, the

latter told her that Magsanoc informed her that the
Lifestyle section had already many columnists.

PDI claims that Magsanoc met with the editor of

the Lifestyle section to discuss how to improve said
section. They agreed to cut down the number of
columnists by keeping only those whose columns were
well-written, with regular feedback and following. In
their judgment, petitioners column failed to improve,
continued to be superficially and poorly written, and
failed to meet the high standards of the newspaper.
Hence, they decided to terminate petitioners column.

Orozco filed a complaint for illegal dismissal. The

LA decided in favor of petitioner. On appeal, the NLRC
dismissed the appeal and affirmed the LAs decision. The
CA on the other hand, set aside the NLRCs decision and
dismissed Orozcos complaint.

Issue:

Petition
affirmed.

dismissed.

Judgment

and

Resolution

Applying the four-fold test, the Court held that PDI

lacked control over the petitioner. Though PDI issued
guidelines for the petitioner to follow in the course of
writing her columns, careful examination reveals that the
factors enumerated by the petitioner are inherent
conditions in running a newspaper. In other words, the
so-called control as to time, space, and discipline are
dictated by the very nature of the newspaper business
itself. Aside from the constraints presented by the space
allocation of her column, there were no restraints on her
creativity; petitioner was free to write her column in the
manner and style she was accustomed to and to use
whatever research method she deemed suitable for her
purpose. The apparent limitation that she had to write
only on subjects that befitted the Lifestyle section did not
translate to control, but was simply a logical
consequence of the fact that her column appeared in that
section and therefore had to cater to the preference of
the readers of that section.

Whether petitioner is an employee of PDI.

Whether petitioner was illegally dismissed.

Decision:

Orozco in this case is considered as an

independent contractor. As stated in the case of Sonza vs.
ABS-CBN, independent contractors often present
themselves to possess unique skills, expertise or talent to

distinguish them from ordinary employees. Like the

petitioner in the cited case, Petitioner was engaged as a
columnist for her talent, skill, experience, and her unique
viewpoint as a feminist advocate. How she utilized all
these in writing her column was not subject to dictation
by respondent. As in Sonza, respondent PDI was not
involved in the actual performance that produced the
finished product. It only reserved the right to shorten
petitioners articles based on the newspapers capacity to
accommodate the same. This fact was not unique to
petitioners column. It is a reality in the newspaper
business that space constraints often dictate the length
of articles and columns, even those that regularly appear
therein.
Furthermore, respondent PDI did not supply
petitioner with the tools and instrumentalities she
needed to perform her work. Petitioner only needed her
talent and skill to come up with a column every week. As
such, she had all the tools she needed to perform her
work. Hence, since Orozco is not an employee of PDI, the
latter cannot be held guilty of illegally dismissing the
petitioner.

Name

Date of
Hiring

Date of
Dismissal

Salary

Bernard A.
Tenazas

10/1997

07/03/07

Boundary
System

Jaime M.
Francisco

04/10/04

06/04/07

Boundary
System

Isidro G.
Endraca

04/2000

03/06/06

Boundary
System

1.2

Evidence of Employee Status

BERNARD A TENAZAS ET AL V
R. VILLEGAS TAXI TRANSPORT

Tenazas & Francisco filled a complaint for illegal

dismissal against Villegas Taxi && Romualdo &&
Villegas
Petitioners alleged that they were hired and
dismissed by the respondents

Cause of dismissal: Tenazas alleged that July

7,2007 the taxi unit assigned to him was hit by
anther vehicle
The cost to repair the damage was estimated at
500,000php
He was scolded by respondents Romualdo and
Andy and told him he was fired. He was threatened
of physical harm if he were to be seen within the
premises again
The next day, he reported to work but was not
given a vehicle because he was already fired
Francisco alleged that the cause of his dismissal
was because of the companys alleged unfounded

suspicion that he was organizing a labor union

immediately terminated w/o due process
Endraca alleged that his dismissal was instigated
by an occasion when he fell short of the required
boundary for his taxi unit.
o Before he was dismissed, he brought his taxi
unit to an auto shop for an urgent repair. He
payed for the P700.00 for the repair
services and the replacement parts.
o Hence, he was not able to meet his
boundary for the day.
When he told the company about the accident,
they confiscated his license until he first pay for
the deficiency. No longer to drive a taxi
Respondents admitted that Tenazas and Endraca
were employees but denied Francisco because he
was only able to drive one of the companys units
They further contend that Tenazas was never
terminated and that the day he went to the
company garage, he was informed that his taxi was
being overhauled for some mechanical defects.
He was told that he will be advised when the taxi
was fixed. But never reported back
Endraca, the respondents alleged that they hired
him as a spare driver in February 2001
That he would be given a taxi incase any of the
regular drivers would fail to come to work
July 2003, however, Endraca stopped reporting for
work without informing the company of his reason.
S
Then respondents found out that he had filled a
complaint for illegal dismissal without their
knowledge

Reposndents claim that they could have never

terminated Endraca March 2006 for he already
stopped reporting for work July 2003
And yet, they expressed willingness to
accommodate Endraca should he wish to work as a
spare driver for the company again since he was
never really dismissed from employment

WON petitioners were illegally

Tenazas & Endraca NO Franciso

dismissed-

YES

LA

Francisco- respondents denied the existence of

employer-employee relationship. Burden of proof
shifts to the complainant which he failed to do,
Endraca- respondents claim he was only an extra
driver. They offered him reinstatement which he
refused.
Tenazas- he was told that his taxi was under repair
but never actually reported back to work after that
FOR ALL THREE: No formal investigations, no
show cause memos, suspension memos or
termination memos were never issued.
No proof of overt act of dismissal committed by
herein respondents.

NLRC

Aggrieved petitioners appealed. NLRC reversed on

the ground hat additional pieces of evidence were
submitted by petitioners which were sufficient to
establish such relationship

ALL were employees- evidence sufficient

establish there was illegal termination

to

CA

Respondents now assail NLRC decision.

CA affirms NLRS w modifications
The court agreed that there was a relationship
between the company and petitiioners Tenazas &
Endraca but ruled otherwise for Francisco- failure
to prove
IF there is no employer-employee relationship in
the first place, the duty of R. Transport to adhere
to the labor standards provisions of the Labor
Code with respect to Francisco is questionable.
Transports payroll, this Court would have affirmed
the finding of employer-employee relationship
On Tenazas and Endraca
o Court rejects respondents argument that
petitioners herein abandoned their jobs
because complaints for dismissal are in itself
pleas for continuance of employment
WON
there
existed
an
employer-employee
relationship- YES Tenazas & Endraca NO Franciso

No substantial evidence was presented to support

the conclusion that Francisco was an employee of
the respondents
Respondents denial of employer-employee
relationship, it behooved Francisco to present
substantial evidence to prove that he is an
employee before any question on the legality of his

supposed dismissal becomes appropriate for

discussion- which he did NOT do
CA correctly ruled that Francisco could not be
considered an employee of the respondents.
2. Burden
of
proving
employeremployee
relationship
vis--vis
burden of proving illegality of
dismissal

BITOY JAVIER V
FLY ACE CORPORATION
Javier an employee of Fly Ace performing various work
for the latter filed a complaint before the NLRC for
underpayment of salaries and other labor standard
benefits. His allegations were that:

He reported for work from Monday to Saturday

from 7:00 oclock in the morning to 5:00 oclock in
the afternoon;
He was not issued an identification card and pay
slips by the company; that he reported for work
but he was no longer allowed to enter the
company premises by the security guard upon the
instruction of Ruben Ong (Mr. Ong), his superior;
When he asked the guard as to why he was not
allowed to work anymore, Ong answered
Tanungin mo anak mo;that he discovered that
Ong had been courting his daughter Annalyn after
the two met at a fiesta celebration in Malabon
City;
Javier was terminated from his employment
without notice

Fly Ace denied the existence of employer-employee

relationship between them and Javier as the latter was
only called roughly 5 to 6 times only in a month
whenever the vehicle of its contracted hauler, Milmar
Hauling Services, was not available. He was only a
pahinante.
Labor Arbiter dismissed the complaint ruling that
respondent Fly Ace is not engaged in trucking business
but in the importation and sales of groceries. There is a
regular hauler. Javier was only hired on a pakiao basis.
NLRC reversed the decisin of the LA.

pakyaw-basis arrangement did not preclude the

existence of employer-employee relationship.
o Payment by result x x x is a method of
compensation and does not define the
essence of the relation. It is a mere method
of computing compensation, not a basis for
determining the existence or absence of an
employer-employee relationship.
just because the work he was doing was not
directly related to the employers trade or business
or the work did not follow that a worker was a job
contractor and not an employee
o Relationship of an employer and an
employee was determined by law and the
same would prevail whatever the parties
may call it.
entitled to a security of tenure.

CA reversed. Javiers failure to present salary

vouchers, payslips, or other pieces of evidence to
bolster his contention, pointed to the inescapable
conclusion that he was not an employee of Fly Ace
and that he was just a helper.
(He contracted work outside the company premises;
he was not required to observe definite hours of work;
he was not required to report daily; and he was free
to accept other work elsewhere as there was no
exclusivity of his contracted service to the company,
the same being co-terminous with the trip only. Since
no substantial evidence was presented to establish an
employer-employee relationship, the case for illegal
dismissal could not prosper)
WN there exist an employer-employee relationship
between Javier and Fly Ace, thereby holding the latter
guilty of illegal dismissal? NO.

In sum, the rule of thumb remains: the onus

probandi falls on petitioner to establish or
substantiate such claim by the requisite
quantum of evidence. Whoever claims
entitlement to the benefits provided by law
should establish his or her right thereto.
CA in resolving this issue said: In an illegal
dismissal case the onus probandi rests on
the employer to prove that its dismissal
was for a valid cause. However, before a
case for illegal dismissal can prosper, an
employer-employee relationship must first
be established. x x x it is incumbent upon

private respondent to prove the employeeemployer relationship by substantial

evidence.
Javier merely offers factual assertions that he
was an employee of Fly Ace, which are
unfortunately not supported by proof,
documentary or otherwise. Javier simply
assumed that he was an employee of Fly Ace,
absent any competent or relevant evidence to
support it.
Although Section 10, Rule VII of the New Rules
of Procedure of the NLRC allows a relaxation of
the rules of procedure and evidence in labor
cases, this rule of liberality does not mean a
complete dispensation of proof. Labor officials
are enjoined to use reasonable means to
ascertain the facts speedily and objectively with
little regard to technicalities or formalities but
nowhere in the rules are they provided a
license to completely discount evidence, or the
lack of it. The quantum of proof required,
however, must still be satisfied.
No particular form of evidence is required to
prove the existence of such employer-employee
relationship. Any competent and relevant
evidence to prove the relationship may be
admitted. While no particular form of evidence
is required, a finding that such relationship
exists must still rest on some substantial
evidence. Moreover, the substantiality of the
evidence depends on its quantitative as well as
its qualitative aspects.

Thus, with employer-employees relationship not shown,

there was no illegal dismissal.
3. Piercing the corporate veil
TIMOTEO H SARONA V
NLRC ROYALE SECUIRTY AGENCY
The petitioner, who was hired by Sceptre as a security
guard, was asked by Karen Therese Tan, Sceptre's
Operations Manager, to submit a resignation letter as the
same was supposedly required for applying for a position
at Royale.
Martin informed him that he would no longer be given
any assignment per the instructions of Aida SabalonesTan, general manager of Sceptre. This prompted him to
file a complaint for illegal dismissal. While complainant is
entitled to backwages, we are aware that his stint with
respondent Royale lasted only for one (1) month and
three (3) days such that it is our considered view that his
backwages should be limited to only three (3) months.
The petitioner does not deny that he has received the full
amount of his backwages and separation pay as provided
under the NLRC's November 2005 Decision. However, he
claims that this does not preclude this Court from
modifying a decision that is tainted with grave abuse of
discretion or issued without jurisdiction.
ISSUE: Whether the petitioner's backwages should be
limited to his salary for three (3) months

RULING: No. In case separation pay is awarded and

reinstatement is no longer feasible, backwages shall be
computed from the time of illegal dismissal up to the
finality of the decision should separation pay not be paid
in the meantime. It is the employee's actual receipt of the
full amount of his separation pay that will effectively
terminate the employment of an illegaly dismissed
employee.
Otherwise,
the
employer-employee
relationship subsists and the illegally dismissed employee

is entitled to backwages, taking into account the

increases and other benefits, including the 13th month
pay, that were received by his co-employees who are not
dismissed. It is the obligation of the employer to pay an
illegally dismissed employee or worker the whole amount
of the salaries or wages, plus all other benefits and
bonuses and general increases, to which he would have
been normally entitled had he not been dismissed and
had not stopped working.