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Labor Law 1 A2010 - 93 - Disini

ISSUE
7.05 CASUAL EMPLOYEES WON the 64 employees were regular employees at the time of
the certification election

NATURE OF WORK HELD


YES
- A280LC provides for two kinds of regular employees: (1) those
A.M. ORETA & CO INC V NLRC (GRULLA) who are engaged to perform activities which are usually
[PAGE 88] necessary or desirable in the usual business or trade of the
employer; and (2) those who have rendered at least one year of
ONE YEAR SERVICE service, whether continuous or broken, with respect to the
activity in which they are employed
- The individual petitioners herein who have been adjudged to
KIMBERLY INDEPENDENT LABOR UNION V DRILON be regular employees (by law) fall under the second category.
185 SCRA 190 These are the mechanics, electricians, machinists, machine
REGALADO; May 9, 1990 shop helpers, warehouse helpers, painters, carpenters,
pipefitters and masons. It is not disputed that these workers
have been in the employ of KIMBERLY for more than one year at
FACTS the time of the filing of the petition for certification election by
- Kimberly-Clark Philippines, Inc. (KIMBERLY) executed a three- KILUSAN-OLALIA.
year collective bargaining agreement (CBA) with United - While the actual regularization of these employees entails the
Kimberly-Clark Employees Union-Philippine Transport and mechanical act of issuing regular appointment papers and
General Workers' Organization (UKCEUPTGWO) which expired compliance with such other operating procedures as may be
on June 30, 1986. adopted by the employer, it is more in keeping with the intent
- Within the 60-day freedom period prior to the expiration of and spirit of the law to rule that the status of regular
and during the negotiations for the renewal of the employment attaches to the casual worker on the day
aforementioned CBA, some members of the bargaining unit immediately after the end of his first year of service
formed another union called "Kimberly Independent Labor - The law is explicit. As long as the employee has rendered at
Union for Solidarity, Activism and Nationalism-Organized Labor least one year of service, he becomes a regular employee with
Association in Line Industries and Agriculture (KILUSAN-OLALIA) respect to the activity in which he is employed. The law does
- April 21, 1986, KILUSAN-OLALIA filed a petition for certification not provide the qualification that the employee must first be
election. KIMBERLY and UKCEU-PTGWO did not object to the issued a regular appointment or must first be formally declared
holding of a certification election but objected to the inclusion of as such before he can acquire a regular status. Obviously,
the so-called contractual workers whose employment with where the law does not distinguish, no distinction should be
KIMBERLY was coursed through an independent contractor, drawn.
Rank Manpower Company (RANK, for short), as among the - On the basis of the foregoing circumstances, and as a
qualified voters. consequence of their status as regular employees, those
- On June 2, 1986, Med-Arbiter Bonifacio I. Marasigan, who was workers not perforce janitorial and yard maintenance service
handling the certification election case issued an order were performance entitled to the payment of salary differential,
declaring the following as eligible to vote in the certification cost of living allowance, 13th month pay, and such other
election, thus: benefits extended to regular employees under the CBA, from
1) regular rank-and-file laborers/employees of the respondent the day immediately following their first year of service in the
company; 2) casuals who have worked at least six (6) months; company.
3) Contractual employees who are allegedly in the employ of an -These regular employees are likewise entitled to vote in the
independent contractor and who have also worked for at least certification election held in July 1, 1986. Consequently, the
six (6) months votes cast by those employees not performing janitorial and
- During the pre-election conference, 64 casual workers were yard maintenance service, which forms part of the 64
challenged by KIMBERLY and UKCEU-PTGWO on the ground that challenged votes, should be opened, counted and considered
they are not employees of KIMBERLY but of RANK. It was agreed for the purpose of determining the certified bargaining
by all the parties that the 64 voters shall be allowed to cast representative.
their votes but that their ballots shall be segregated and subject
to challenge proceedings.
- After the elections, UKCEU-PTGWO won over KILUSAN-OLALIA SAN MIGUEL CORP V ABELLA
by 20 votes. This count considered the votes of the 64 [PAGE 59]
employees as separate.
- In a case regarding the status of the 64 employees in relation
to the certification election, it was held by med-arbiter Sanchez
INTEGRATED CONTRACTOR V NLRC (SOLON)
that: 464 SCRA 265
“…2)The other casual employees not performing janitorial QUISUMBING; August 9, 2005
and yard maintenance services were deemed labor-only
contractuals and since labor-only contracting is prohibited, NATURE
such employees were held to have attained the status of Appeal from a decision of the CA affirming the NLRC’s findings
regular employees, the regularization being effective as of which declared respondent Solon a regular employee of the
the date of the decision; petitioner and awarded him with 13th month pay, service
3. UKCEU-PTGWO, having garnered more votes than incentive leave pay, reinstatement to his former position with
KILUSAN-OLALIA, was certified as the exclusive bargaining full backwages from the time his salary was withheld until his
representative of KlMBERLY's employees;…” reinstatement.
- Since the members were only considered regular at the time
of the decision, their votes were not re-considered as regards FACTS
the election. - Petitioner is a plumbing contractor. Its business depends on
- winning union and company executed a CBA the number and frequency of the projects it is able to contract
- KIMBERLY-OLALIA filed for a TRO on the CBA and included the with its clients.
question of the status of the 64 members in question. - Respondent Solon worked for petitioner several months at a
time from 1994 to 1998.
Labor Law 1 A2010 - 94 - Disini
- On Feb. 1998, while Solon was about to log out from work, he services were necessary and desirable in the usual business of
was informed that it was his last day of work as he had been his employer, and his employment had lasted for five years, he
terminated. He went back to petitioner’s office to sign a had acquired the status of regular employee and could not be
clearance so he could claim his 13th month pay and tax refunds. removed except for valid cause.
However, he refused to sign when he read the clearance - The employment contract of 1971 was executed when the
indicating that he had resigned. He then filed a complaint for Labor Code of the Philippines had not yet been promulgated,
illegal dismissal without due cause and due process. which came into effect some 3 years after the perfection of the
- The Labor Arbiter ruled that Solon was a regular employee contract.
and could only be removed for cause. NLRC affirmed with only a
modification as to the computation of 13th month pay. CA also ISSUE
affirmed. WON the provisions of the Labor Code (regarding
probationary/regular employees) have anathematized “fixed
ISSUE period employment” or employment for a term
WON respondent is a regular employee
HELD
HELD NO
YES Reasoning
Ratio The test to determine whether employment is regular or - Before the Labor Code, there was no doubt about the validity
not is the reasonable connection between the particular activity of term employment. It was impliedly but clearly recognized by
performed by the employee in relation to the usual business or the Termination Pay law, RA 10521
trade of the employer. Also, if the employee has been - The Civil Code, which has always recognized, and continues
performing the job for at least one year, even if the to recognize, the validity and propriety of contracts and
performance is not continuous or merely intermittent, the law obligations with a fixed or definite period, and imposes no
deems the repeated and continuing need for its performance as restraints on the freedom of the parties to fix the duration of a
sufficient evidence of the necessity, if not indispensability of contract, whatever its object, be it specie, goods or services,
that activity to the business. (De Leon v NLRC) except the general admonition against stipulations contrary to
Reasoning law, morals, good customs, public order or public policy. Under
- While length of time may not be the controlling test for project the Civil Code, therefore, and as a general proposition, fixed-
employment, it is vital in determining if the employee was hired term employment contracts are not limited, as they are under
for a specific undertaking or tasked to perform functions vital, the present Labor Code, to those by nature seasonal or for
necessary and indispensable to the usual business or trade of specific projects with pre-determined dates of completion; they
the employer. Here, private respondent had been a project also include those to which the parties by free choice have
employee several times over. His employment ceased to be assigned a specific date of termination.
coterminous with specific projects when he was repeatedly re- -(there’s a long, long history about the changes of provisions in
hired due to the demands of petitioner’s business. the labor code, showing how fixed period employment became
Disposition assailed Decision dated October 30, 2001 and the less and less acceptable...)
Resolution dated February 28, 2002 of CA are AFFIRMED with - Where from the circumstances it is apparent that periods have
MODIFICATION. The petitioner id hereby ORDERED to (1) been imposed to preclude acquisition of tenurial security by the
reinstate the respondent with no loss of seniority rights and employee, they should be struck down or disregarded as
other privileges; and (2) pay respondent his backwages, 13th contrary to public policy, morals, etc.
month pay for the year 1998 and Service Incentive Leave Pay - But where no such intent to circumvent the law is shown,
computed from the date of his illegal dismissal up to the date of where the reason for the law does not exist, e.g., where it is
his actual reinstatement. indeed the employee himself who insists upon a period or
where the nature of the engagement is such that, without being
seasonal or for a specific project, a definite date of termination
7.06 CONTRACT – FIXED PERIOD is a sine qua non, would an agreement fixing a period be
essentially evil or illicit, therefore anathema? Would such an
agreement come within the scope of Article 2802 which
TESTS VALIDITY
BRENT SCHOOL V ZAMORA 1
In cases of employment, without a definite period, in a commercial, industrial, or
181 SCRA 702 agricultural establishment or enterprise, the employer or the employee may
terminate at any time the employment with just cause; or without just cause in the
NARVASA; February 5, 1990 case of an employee by serving written notice on the employer at least one month in
advance, or in the case of an employer, by serving such notice to the employee at
least one month in advance or one-half month for every year of service of the
NATURE employee, whichever is longer, a fraction of at least six months being considered as
Appeal from judgment one whole year.
The employer, upon whom no such notice was served in case of termination of
employment without just cause, may hold the employee liable for damages.
FACTS The employee, upon whom no such notice was served in case of termination of
- Alegre was athletic director at Brent, at a yearly compensation employment without just cause, shall be entitled to compensation from the date of
of P20,000. Her contract fixed a specific term of 5 years for its termination of his employment in an amount equivalent to his salaries or wages
corresponding to the required period of notice.
existence, from July, 1971, to July, 1976. Subsequent subsidiary
agreements in March 1973, August 1973, and Sept. 1974 2
Art. 280. Regular and casual employment. The provisions of written agreement to
reiterated the same terms and conditions, including the expiry
the contrary notwithstanding and regardless of the oral agreement of the parties, an
date, as those contained in the original contract of July, 1971. employment shall be deemed to be regular where the employee has been engaged
- 3 months before the expiration of the stipulated period, in to perform activities which are usually necessary or desirable in the usual business or
April 1976, Alegre was given a copy of the report filed by Brent 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
with the Dep. Of Labor advising of the termination of his at the time of the engagement of the employee or where the work or service to be
services, effective July 16, 1976. The stated ground for performed is seasonal in nature and the employment is for the duration of the
termination was “completion of contract, expiration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding
definite period of employment.” paragraph: Provided, That any employee who has rendered at least one year of
- Alegre protested the announced termination of his service, whether such service is continuous or broken, shall be considered a regular
employment. He argued that although his contract did stipulate employee with respect to the activity in which he is employed and his employment
shall continue while such activity exists.
that the same would terminate on July 17, 1976, since his
Labor Law 1 A2010 - 95 - Disini
admittedly was enacted "to prevent the circumvention of the
right of the employee to be secured in (his) employment?"
- A280LC, under a narrow and literal interpretation would
appear to restrict, without reasonable distinctions, the right of
an employee to freely stipulate with his employer the duration VIERNES V NLRC (BENGUET ELECTRIC COOP)
of his engagement, it logically follows that such a literal 400 SCRA 557
interpretation should be eschewed or avoided. The law must be AUSTRIA-MARTINEZ; April 4, 2003
given a reasonable interpretation, to preclude absurdity in its
application. Outlawing the whole concept of term employment
and subverting to boot the principle of freedom of contract to FACTS
remedy the evil of employer's using it as a means to prevent - The 15 complainants’ services were contracted as meter
their employees from obtaining security of tenure is like cutting readers by Benguet Electric Cooperative (BENECO) for less than
off the nose to spite the face or, more relevantly, curing a a month’s duration from October 8 to 31, 1990. Their
headache by lopping off the head. employment contracts, couched in identical terms, read:
- Familiar examples of employment contracts which may be You are hereby appointed as METER READER (APPRENTICE)
neither for seasonal work nor for specific projects, but to which under BENECO-NEA Management with compensation at the
a fixed term is essential: overseas employment contracts to rate of SIXTY-SIX PESOS AND SEVENTY-FIVE CENTAVOS
which, the concept of regular employment will all that it implies (P66.75) per day from October 08 to 31, 1990.
does not appear ever to have been applied, Article 280 of the - The said term notwithstanding, the complainants were allowed
Labor Code not withstanding; appointments to the positions of to work beyond October 31, 1990, or until January 2, 1991. On
dean, assistant dean, college secretary, principal, and other January 3, 1991, they were each served their identical notices
administrative offices in educational institutions, which are by of termination dated December 29, 1990. The same read:
practice or tradition rotated among the faculty members, and Please be informed that effective at the close of office hours of
where fixed terms are a necessity, without which no reasonable December 31, 1990, your services with the BENECO will be
rotation would be possible. Despite the provisions of Article 280, terminated. Your termination has nothing to do with your
Policy, Instructions No. 8 of the Minister of Labor implicitly performance. Rather, it is because we have to retrench on
recognize that certain company officials may be elected for personnel as we are already overstaffed.
what would amount to fixed periods, at the expiration of which - The complainants filed separate complaints for illegal
they would have to stand down, in providing that these dismissal. It is the contention of the complainants that they
officials," . . . may lose their jobs as president, executive vice- were not apprentices but regular employees whose services
president or vice-president, etc. because the stockholders or were illegally and unjustly terminated in a manner that was
the board of directors for one reason or another did not re-elect whimsical and capricious. On the other hand, the respondent
them." invokes Article 283 of the Labor Code in defense of the
- Since the entire purpose behind the development of legislation questioned dismissal.
culminating in the present Article 280 of the Labor Code clearly - The Labor Arbiter dismissed the complaints for illegal
appears to have been to prevent circumvention of the dismissal but directed BENECO to extend the contract of each
employee's right to be secure in his tenure, the clause in said complainant, with the exception of Viernes who was ordered to
article indiscriminately and completely ruling out all written or be appointed as regular employee, a month’s salary as
oral agreements conflicting with the concept of regular indemnity for failure to give the 30-day notice, and backwages.
employment as defined therein should be construed to refer to - The NLRC declared the complainants’ dismissal illegal, thus
the substantive evil that the Code itself has singled out: ordering their reinstatement to their former position as meter
agreements entered into precisely to circumvent security of readers or to any equivalent position with payment of
tenure. It should have no application to instances where a fixed backwages limited to one year but deleting the award of
period of employment was agreed upon knowingly and indemnity and attorney’s fees. The award of underpayment of
voluntarily by the parties, without any force, duress or improper wages was affirmed.
pressure being brought to bear upon the employee and absent
any other circumstances vitiating his consent, or where it ISSUES
satisfactorily appears that the employer and employee dealt 1. WON the NLRC committed grave abuse of discretion in
with each other on more or less equal terms with no moral ordering the reinstatement of petitioners to their former
dominance whatever being exercised by the former over the position as meter readers on probationary status in spite of its
latter. Unless thus limited in its purview, the law would be made finding that they are regular employees under Article 280 of the
to apply to purposes other than those explicitly stated by its Labor Code
framers; it thus becomes pointless and arbitrary, unjust in its 2. WON the NLRC committed grave abuse of discretion in
effects and apt to lead to absurd and unintended limiting the backwages of petitioners to one year only in spite of
consequences. its finding that they were illegally dismissed, which is contrary
Disposition the public respondent's Decision complained of is to the mandate of full backwages until actual reinstatement but
REVERSED and SET ASIDE. Respondent Alegre's contract of not to exceed 3 years
employment with Brent School having lawfully terminated with 3. WON the NLRC committed grave abuse of discretion in
and by reason of the expiration of the agreed term of period deleting the award of indemnity pay which had become final
thereof, he is declared not entitled to reinstatement and the because it was not appealed and in deleting the award of
other relief awarded and confirmed on appeal in the attorney’s fees because of the absence of a trial-type hearing
proceedings below. 4. WON the mandate of immediately executory on the
reinstatement aspect even pending appeal as provided in the
decision of Labor Arbiters equally applies in the decision of the
CIELO V NLRC NLRC even pending appeal, by means of a motion for
reconsideration of the order reinstating a dismissed employee
MILLARES V NLRC (TRANS-GLOBAL MARITIME or pending appeal because the case is elevated on certiorari
before the Supreme Court
AGENCY, ESSO INTERNATIONAL SHIPPING
COMPANY) HELD
[PAGE 79] 1. YES
Ratio There are two separate instances whereby it can be
determined that an employment is regular: (1) The particular
activity performed by the employee is necessary or desirable in
Labor Law 1 A2010 - 96 - Disini
the usual business or trade of the employer; or (2) if the 4. YES
employee has been performing the job for at least a year. Reasoning
Reasoning - A223 LC is plain and clear that the decision of the NLRC shall
- Petitioners fall under the first category. They were engaged to be final and executory after 10 calendar days from receipt by
perform activities that are necessary to the usual business of the parties. In addition, Section 2(b), Rule VIII of the New Rules
BENECO. We agree with the labor arbiter’s pronouncement that of Procedure of the NLRC provides that “should there be a
the job of a meter reader is necessary to the business of motion for reconsideration entertained pursuant to Section 14,
BENECO because unless a meter reader records the electric Rule VII of these Rules, the decision shall be executory after 10
consumption of the subscribing public, there could not be a calendar days from receipt of the resolution on such motion.”
valid basis for billing the customers. The fact that the We find nothing inconsistent or contradictory between the two.
petitioners were allowed to continue working after the The provision of the NLRC Rules of Procedure merely provides
expiration of their employment contract is evidence of the for situations where a motion for reconsideration is filed. Since
necessity and desirability of their service to BENECO’s business. the Rules allow the filing of a motion for reconsideration of a
In addition, during the preliminary hearing of the case on decision of the NLRC, it simply follows that the ten-day period
February 4, 1991, BENECO even offered to enter into another provided under Article 223 of the Labor Code should be
temporary employment contract with petitioners. This only reckoned from the date of receipt by the parties of the
proves BENECO’s need for the services of the petitioners. With resolution on such motion. In the case at bar, petitioners
the continuation of their employment beyond the original term, received the resolution of the NLRC denying their motion for
petitioners have become full-fledged regular employees. The reconsideration on October 22, 1992. Hence, it is on November
fact alone that the petitioners have rendered service for a 2, 1992 that the questioned decision became executory.
period of less than 6 months does not make their employment Disposition Petition PARTLY GRANTED. Decision of the NLRC
status as probationary. is MODIFIED. BENECO is ordered to reinstate petitioners to their
- The principle [exception to the rule in Ratio] enunciated in former or substantially equivalent position as regular
Brent School vs. Zamora applies only with respect to fixed term employees, without loss of seniority rights and other privileges,
employments. While it is true that petitioners were initially with full back wages from the time of their dismissal until they
employed on a fixed term basis as their employment contracts are actually reinstated. The indemnity to petitioners is
were only for October 8 to 31, 1990, after October 31, 1990, REINSTATED. BENECO is also ordered to pay attorney’s fees in
they were allowed to continue working in the same capacity as the amount of 10% of the total monetary award due to the
meter readers without the benefit of a new contract or petitioners. In all other respects the assailed decision and
agreement or without the term of their employment being fixed resolution are AFFIRMED.
anew. After October 31, 1990, the employment of petitioners is
no longer on a fixed term basis. The complexion of the
PHILIPS SEMICONDUCTORS V FADRIQUELA
employment relationship of petitioners and BENECO is thereby
totally changed. Petitioners have attained the status of regular [PAGE 77]
employees.
2. YES PANGILINAN V GENERAL MILLING CORPORATION
Reasoning [PAGE 74]
- A279 LC, as amended by RA 6715 [effective March 21, 1989],
provides that an illegally dismissed employee is entitled to full
back wages, inclusive of allowances, and to his other benefits or
their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his
actual reinstatement. Since petitioners were employed on
October 8, 1990, the amended provision shall apply to the
present case. Hence, it was patently erroneous, tantamount to
grave abuse of discretion on the part of the NLRC in limiting to SEASONAL EMPLOYEES
one year the back wages awarded to petitioners.
3. YES
Ratio An employer becomes liable to pay indemnity to an MAGCALAS V NLRC (KOPPEL INC)
employee who has been dismissed if, in effecting such 269 SCRA 453
dismissal, the employer fails to comply with the requirements of PANGANIBAN; March 13, 1997
due process
Reasoning
NATURE
- The indemnity is in the form of nominal damages intended not
Appeal from decision of the NLRC
to penalize the employer but to vindicate or recognize the
employee’s right to procedural due process which was violated
FACTS
by the employer. Under A2221 CC, nominal damages are
- Complainants alleged that they were all regular employees of
adjudicated in order that a right of the plaintiff, which has been
the respondent company, having rendered continuous services
violated or invaded by the defendant, may be vindicated or
in various capacities, ranging from leadman, tinsmith,
recognized, and not for the purpose of indemnifying the plaintiff
tradeshelper to general clerk.
for any loss suffered by him.
- The complainants have worked for a number of years, the
- Indemnity is not incompatible with the award of back wages.
minimum of which was 1.5 years and the maximum was 8 years
These two awards are based on different considerations. Back
under several supervisors.
wages are granted on grounds of equity to workers for earnings
- August 30, 1988: they were dismissed without prior notice and
lost due to their illegal dismissal from work. On the other hand,
investigation, and that their dismissals were effected for no
the award of indemnity is meant to vindicate or recognize the
other cause than their persistent demands for payment of
right of an employee to due process which has been violated by
money claims as mandated by law.
the employer. In this case, BENECO failed to comply with the
- Respondent company averred that the manufacturing aspect
provisions of Article 283 of the Labor Code which requires an
of its operation is handled by its regular employees, while the
employer to serve a notice of dismissal upon the employees
installation aspect, by reason of its intermittence, is carried out
and to the Department of Labor, at least one month before the
by its project or contract employees.
intended date of termination. As to the award of attorney’s
fees, the same is justified by the provisions of Article 111 of the
Labor Code.
Labor Law 1 A2010 - 97 - Disini
- The complainants herein were among the contract employees and duration of which has been determined and made known to
hired by the respondent to install the air-conditioning the employees at the time of employment, are properly treated
equipment at the ADB and Interbank projects. as "project employees," and their services may be lawfully
- With the completion of their task in their respective projects, terminated at completion of the project.
the employment of the complainants expired as they had no - The employment of seasonal employees, on the other hand,
more work to do. legally ends upon completion of the project or the season.
- Labor arbiter ordered petitioners to be reinstated and to be - The overwhelming fact of petitioners' continuous employment
paid backwages from the time of their dismissal/termination to as found by the labor arbiter ineludibly shows that the
their actual reinstatement. petitioners were regular employees. On the other hand, we find
- NLRC reversed decision and ordered respondent to pay the that substantial evidence, applicable laws and jurisprudence do
petitioners their separation pay. not support the ruling in the assailed Decision that petitioners
were project employees. The Court here reiterates the rule that
ISSUES all doubts, uncertainties, ambiguities and insufficiencies should
1. WON petitioners were regular workers under the be resolved in favor of labor. It is a well-entrenched doctrine
contemplation of A280 LC that in illegal dismissal cases, the employer has the burden of
2. WON petitioners' termination and/or cessation of their proof. This burden was not discharged in the present case.
employments on August 30, 1988 were justified under the 2. NO
contemplation of A279 of the LC as amended. Ratio For a dismissal of an employee to be valid, two requisites
must be met: (1) the employee is afforded due process,
HELD meaning, he is given notice of the cause of his dismissal and an
1. YES adequate opportunity to be heard and to defend himself; and
Ratio The services of project employees are co-terminous with (2) the dismissal is for a valid cause as indicated in Article 282
the project and may be terminated upon the end or completion of the Labor Code.
of the project for which they were hired. Regular employees, in Reasoning
contrast, are legally entitled to remain in the service of their - The services of petitioners were purportedly terminated at the
employer until that service is terminated by one or another of end of the ADB and Interbank projects, but this could not have
the recognized modes of termination of service under the Labor been a valid cause for, as discussed above, they were regular
Code. and not project employees.
Reasoning - As a consequence of their illegal termination, petitioners are
- A mere provision in the CBA recognizing contract employment entitled to reinstatement and backwages in accordance with the
does not sufficiently establish that petitioners were ipso facto Labor Code. The backwages however are to be computed only
contractual or project employees. In the same vein, the for three years fromthe date of their dismissal, without
invocation of Policy No. 20 governing the employment of project deduction or qualification.
employees in the construction industry does not, by itself, - Where the illegal dismissal transpired before the effectivity of
automatically classify private respondent as part of the RA 6715 (March 21, 1989), the award of backwages in favor of
construction industry and entitle it to dismiss petitioners at the the dismissed employees is limited to three years without
end of each project. These facts cannot be presumed; they deduction or qualification.
must be supported by substantial evidence Disposition The petition is GRANTED. The assailed Decision
- The record discloses that the complainants worked not only in and Resolution are REVERSED and SET ASIDE and the decision
one special project but also variably in other projects/jobsites of the labor arbiter is REINSTATED, with backwages to be
contracted by Koppel Incorporated. Some of them, after their computed as above discussed.
tour of duty on these different jobsites were reassigned to the
respondent's plant at Koppel Compound, Parañaque, Metro
PHILIPPINE TOBACCO V NLRC
Manila. A close examination of the record further reveals that
the "special projects" at the ADB and Interbank to which the 300 SCRA 37
complainants were last assigned by the respondent were still in PANGANIBAN; December 10, 1998
operation before their alleged termination from employment.
Under these factual milieu, we believe that they had been NATURE
engaged to work and perform activities which were necessary Petition for review on certiorari
and desirable in the air-conditioning and refrigeration
installation/repair business of the respondent employer, FACTS
especially where, as in this case, the very nature of such trade - This involves 2 groups of seasonal workers: Lubat group and
indicates that it can hardly fall under the exception of Policy Luris group. They claimed separation benefits after closure of
Instruction No. 20 which applies only to the construction processing plant and transfer of tobacco operations to Ilocos.
industry. For this reason, and considering the facts narrated in Petitioner refused to grant separation pay to Lubat group
the complainants' sworn statements were neither disputed nor because they had not been given work during preceding year.
refuted by contrary evidence by the respondent, it becomes It also refused to grant same to Luris group because of closure
apparent and increasingly clear that indeed they would and due to “serious business losses”.
ought to be classified as regular employees.
- Regular employees cannot at the same time be project ISSUES
employees. Article 280 of the Labor Code states that regular 1. WON the Luris group has been illegally dismissed
employees are those whose work is necessary or desirable to 2. WON the Lubat group has been illegally dismissed
the usual business of the employer. The two exceptions
following the general description of regular employees refer to HELD
either project or seasonal employees 1. YES
- In the realm of business and industry, we note that "project" - Serious business losses were not proven.
could refer to one or the other of at least two distinguishable - To justify retrenchment: (1) losses expected should be
types of activities. Firstly, a project could refer to particular job substantial and not merely de minimis. (2) substantial loss
or undertaking that is within the regular or usual business of the must be reasonably imminent. (3) retrenchment must be
employer company, but which is distinct and separate, and reasonably necessary. Employer should have taken other
identifiable as such, from the other undertakings of the measures. (4) alleged losses must be proven by sufficient and
company. Such job or undertaking begins and ends at convincing evidence.
determined or determinable times. Employees who are hired for - Here, we consider the fact that the petitioner did not actually
the carrying out of one of these separate projects, the scope close its operations but merely transferred its processing and
Labor Law 1 A2010 - 98 - Disini
redrying operations. - The nature of their relationship with the hotel is such that
- It was also engaged in corn and rental operations. during off season they are temporarily laid off but during
- Notice of termination, though issued, violated the one month summer season they are re-employed, or when their services
prior notice requisite. may be needed.
2. YES - They are not strictly speaking separated from the service but
- SEASONAL WORKERS WHO ARE CALLED FROM TIME TO TIME are merely considered as on leave of absence without pay until
AND ARE TEMPORARILY LAID OFF DURING OFF-SEASON ARE they are re-employed. Their employment relationship is never
NOT SEPARATED FROM SERVICE IN SAID PERIOD, BUT ARE severed but only suspended. As such, these employees can be
MERELY CONSIDERED ON LEAVE UNTIL REEMPLOYED. considered as in the regular employment of the hotel.
- The employer-employee relationship between petitioner and Disposition The order appealed from is affirmed.
Lubat group was not terminated at the end of 1993 season.
SAN MIGUEL CORPORATION V NLRC (GUZMAN) INDUSTRIAL-COMMERCIAL-AGRICULTURAL
[PAGE 75] WORKERS' ORGANIZATION V CIR
16 SCRA 562
MANILA HOTEL COMPANY V CIR REYES; March 31, 1966
9 SCRA 184
BAUTISTA ANGELO; September 30, 1963 NATURE
Appeal from decision of the Court of Industrial Relations
NATURE
Appeal from CIR’s judgment FACTS
- Petitioner, Industrial-Commercial- Agricultural Workers'
FACTS Organization (ICAWO), declared a strike against the respondent
- February 24, 1960 - The Pines Hotel Employees Central Azucarera de Pilar. The strike was amicably settled the
Association(PHEA) filed before the CIR a petition praying, following day, and among the provisions of the "Amicable
among other things, that its employees who were working at Settlement" reads:
the Pines Hotel be paid additional compensation for overtime "That the company shall not discriminate against any worker
service rendered due to the exigencies of the business, as well and the same treatment shall be accorded to workers (ICAWO
as additional compensation for Sunday, legal holiday and affiliates) who declared a strike or not. A petition for
nighttime work. Certification Election will be filed by the ICAWO in view of the
- The Manila Hotel filed its answer denying the material other labor union, CAPAWA, with whom the company has an
averments of the petition and alleging, among others, that if existing collective bargaining contract, a union which is
overtime service was rendered the same was not authorized considered by the ICAWO as a company union."
but was rendered voluntarily, for the employees were interested - The CAPAWA therein referred to is the herein respondent
in the "tips" offered by the patrons of the hotel. Central Azucarera de Pilar Allied Workers Association and the
- CIR- judged that the employees were entitled to the additional collective bargaining contract, likewise therein referred to,
compensation demanded, including that for overtime work, entered into in 1955, provided:
because an employee who renders overtime service is entitled "The EMPLOYER agrees that in hiring unskilled employees and
to compensation even if he rendered it without prior authority. laborers, the members of the WORKERS ASSOCIATION should
- MR was filed, but the same was denied by the industrial court be given preference and the management should notify
en banc.1awphîl.nèt accordingly to the WORKERS ASSOCIATION of any vacancy
- The Examining Division (CIR) submitted a report- stated that existing in all Departments. New employees and laborers
the amount due the employees as additional compensation for hired who are members of the WORKERS ASSOCIATION will
overtime and night services rendered from January to be on TEMPORARY STATUS and the EMPLOYER agrees that
December 31, 1958 was P32,950.69. before they will be considered regular employees and
- The management filed its objection to the report on the laborers they have to become members of the CENTRAL
ground that it included 22 names of employees who were not AZUCARERA DE PILAR ALLIED WORKERS' ASSOCIATION within
employees of the Pines Hotel at the time the petition was filed thirty (30) days from the date of employment and if they
so that insofar as said employees are concerned the petition refuse to affiliate with the said labor organization within this
merely involves a money claim which comes under the time they will be immediately dismissed by the EMPLOYER;"
jurisdiction of the regular courts. - Among the strikers were 101 seasonal workers, some of whom
- The trial judge, however, overruled this objection holding that, have worked as such for the company since pre-war years. On
while the 22 employees were actually not in the service at the the opening of the milling season for the year 1956-1957, the
time of the filing of the petition, they were however respondent company refused to re-admit those 101 seasonal
subsequently employed even during the pendency of the workers of the ICAWO on the ground that it was precluded by
incident, and so their claim comes within the jurisdiction of the the closed shop clause in its collective bargaining agreement
Court of Industrial Relations. with the CAPAWA. Thus, , the ICAWO filed an unfair labor
practice charge against the company. The Court of Industrial
ISSUE Relations in a decision ordered the reinstatement, with back
WON the 22 seasonal employees were correctly adjudged the wages, of these laborers; but on a motion for reconsideration,
additional compensation including that for OT the said court, en banc, reversed the said decision.
Not satisfied with the reversal, the ICAWO filed the present
HELD petition for certiorari to review the industrial court's resolution.
YES - The petitioner contends that they are regular and old
Ratio Seasonal employees called to work from time to time employees and, as such, they should have been re-hired at the
and temporarily laid off from during off season are REGULARS start, in the month of October, of each milling season, which
but are on LOA w/o pay. usually last 5 months. The respondents, on the other hand, urge
Reasoning that these laborers are new, their employment terminating at
- It appears that the questioned employees were never the end of each milling season and, therefore, could not be re-
separated from the service. admitted without the company violating the closed shop
- Their status is that of regular seasonal employees who are agreement with the CAPAWA.
called to work from time to time, mostly during summer season.
ISSUE
Labor Law 1 A2010 - 99 - Disini
WON seasonal workers are new workers thereof." Starke did not present any evidence that the
respondents were required to perform certain phases of
HELD agricultural work for a definite period of time. Although she
NO asserted that the respondents made their services available to
- Petitioners, even if seasonal workers, were not “new workers” the neighboring haciendas, the records do not, however,
within the scope of the closed shop contract between the sugar support such assertion.
central and the CAPAWA union; hence their discharge was - The primary standard for determining regular employment is
illegal. the reasonable connection between the particular activity
- The cessation of the Central's milling activities at the end of performed by the employee in relation to the usual trade or
the milling season is not permanent or definitive; it is a business of the employer. There is no doubt that the
foreseeable suspension of work, and both activities will be respondents were performing work necessary and desirable in
resumed, as they are in fact resumed, when sugar cane ripe for the usual trade or business of an employer. Hence, they can
milling is again available. There is merely a temporary cessation properly be classified as regular employees.
of the manufacturing process due to passing shortage of raw - For respondents to be excluded from those classified as
materials that by itself alone is not sufficient, in the absence of regular employees, it is not enough that they perform work or
other justified reasons, to sever the employment or labor services that are seasonal in nature. They must have been
relationship between the parties. The mere fact that the employed only for the duration of one season. While the records
laborers assent to their medical examination at the beginning of sufficiently show that the respondents' work in the hacienda
each milling season does not indicate that a new labor contract was seasonal in nature, there was, however, no proof that they
is being entered into, in the absence of a stipulation to such were hired for the duration of one season only. In fact, the
effect. Said examination is in the interest of both the Central payrolls, submitted in evidence by the petitioners, show that
and the labor force. they availed the services of the respondents since 1991. Absent
Disposition Resolution set aside any proof to the contrary, the general rule of regular
employment should, therefore, stand. It bears stressing that the
employer has the burden of proving the lawfulness of his
HACIENDA BINO V CUENCA
employee's dismissal.
456 SCRA 300 Disposition Petition denied. Reinstate workers without loss of
CALLEJO SR; April 15, 2005 seniority, pay backwages and wage differentials, and pay attys
fees.
FACTS
- Hacienda Bino (HB) is a 236-hectare sugar plantation in POSEIDON FISHING V NLRC (ESTOQUIA)
Negros Occ, owned and operated by Hortencia Starke. HB
consists of 220 workers performing various works, such as
482 SCRA 717
cultivation, planting of cane points, fertilization, watering, CHICO-NAZARIO; February 20, 2006
weeding, harvesting, and loading of harvested sugarcanes to
cargo trucks. On July 18 1996, Starke issued a notice that those FACTS
who signed in favor of CARP are expressing their desire to get - Estoquia was first hired by PF as a Chief Mate in 1988. He later
out of employment. 76 workers were affected: they regarded on became Boat Captain; but was demoted still later to Radio
the notice as a notice of their termination. They filed a Operator. In 2000, he failed to log a 7:25am call in one logbook,
complaint for illegal dismissal, wage differentials, 13th month but was able to record it in another one. When he realized his
pay, holiday pay and premium pay for holiday, service incentive mistake, he logged the 7:25 call after a 7:30 am call (same
leave pay, and moral and exemplary damages. day). The manager noticed this mistake and summoned
- Starke’s side: HB’s board of directors were petitioning for Estoquia to get his separation pay. Estoquia refused to accept
reclassification of the hacienda (except the portion earmarked the sep pay because he believed he had done nothing illegal to
for CARP) from agricultural to industrial, residential and warrant his immediate discharge from work.
commercial. She was merely giving priority to those who - PF argues that Estoquia was a casual/contractual employee
supported the reclassification. July 1996 was off-season, so not whose services could be terminated at the end of contract. PF
so many workers needed; the work was seasonal in nature. She contends that Estoquia was hired on a por viaje basis, based on
relies on the ruling in Mercado Sr. v. NLRC where sugar farm the Kasunduan which reads:
workers were classified as seasonal employees, and not regular “NA, kami ay sumasang-ayon na MAGLINGKOD at GUMAWA
employees. The workers were free to offer their services to ng mga gawaing magmula sa pag-alis ng lantsa sa pondohan
neighboring haciendas. sa Navotas patungo sa palakayahan; pabalik sa pondohan ng
- Respondents’ side: They are regular employees. The hacienda lantsa sa Navotas hanggang sa paghango ng mga kargang
was so big that they work there year-round and that they do not isda.”
offer their services to neighboring haciendas. The Mercado case - LA and NLRC found for Estoquia.
dealt with a 17.5-heactare hacienda, considerable smaller than
HB. ISSUE
WON Estoquia was a regular employee when he was discharged
ISSUE from work
WON the respondents are seasonal employees
HELD
HELD YES
NO - PF's intent to evade the application of Article 280 of the Labor
- The respondents are regular employees. Code is unmistakable. In a span of 12 years, Estoquia worked
- Starke’s reliance on Mercado is misplaced because in that for petitioner company first as a Chief Mate, then Boat Captain,
case, the workers were classified as seasonal employees and later as Radio Operator. His job was directly related to the
because they were employed for a definite period of time since deep-sea fishing business of petitioner Poseidon. His work was,
the hacienda was much smaller, and they offered their services therefore, necessary and important to the business of his
to and worked at the neighboring haciendas. employer. Such being the scenario involved, private respondent
- The Court reiterated the same observations in Hacienda is considered a regular employee of petitioner under Article 280
Fatima v. National Federation of Sugarcane Workers-Food and of the Labor Code.
General Trade and added that the petitioners in the Mercado - Moreover, unlike in the Brent case where the period of the
case were "not hired regularly and repeatedly for the same contract was fixed and clearly stated, the terms of employment
phase/s of agricultural work, but on and off for any single phase of private respondent as provided in the Kasunduan was not
Labor Law 1 A2010 - 100 - Disini
only vague, it also failed to provide an actual or specific FERNAN; January 30, 1989
date or period for the contract.
- Furthermore, as petitioners themselves admitted, private
NATURE
respondent was repeatedly hired as part of the boat's crew and
Petition to review the decision of the NLRC
he acted in various capacities onboard the vessel. In Integrated
Contractor and Plumbing Works, Inc. v. NLRC, it was held that
FACTS
the test to determine whether employment is regular or not is
- Petitioner International Catholic Migration Commission (ICMC),
the reasonable connection between the particular activity
a non-profit organization dedicated to refugee service at the
performed by the employee in relation to the usual business or
Philippine Refugee Processing Center in Morong, Bataan
trade of the employer. And, if the employee has been
engaged the services of private respondent Bernadette Galang
performing the job for at least one year, even if the
as a probationary cultural orientation teacher with a monthly
performance is not continuous or merely intermittent, the law
salary of P2,000.00.
deems the repeated and continuing need for its performance as
- Three (3) months thereafter, private respondent was informed,
sufficient evidence of the necessity, if not indispensability of
orally and in writing, that her services were being terminated
that activity to the business.
for her failure to meet the prescribed standards of petitioner as
- The act of hiring and re-hiring in various capacities is a mere
reflected in the performance evaluation of her supervisors
gambit employed by petitioner to thwart the tenurial protection
- Private respondent filed a complaint for illegal dismissal, unfair
of private respondent. Such pattern of re-hiring and the
labor practice and unpaid wages against petitioner with the
recurring need for his services are testament to the necessity
then Ministry of Labor and Employment, praying for
and indispensability of such services to petitioners' business or
reinstatement with backwages, exemplary and moral damages.
trade.
- Labor Arbiter Pelagio A. Carpio rendered his decision
ESTOQUIA IS NOT PROJECT/SEASONAL EMPLOYEE
dismissing the complaint for illegal dismissal as well as the
- The activity of catching fish is a continuous process and could
complaint for moral and exemplary damages but ordering the
hardly be considered as seasonal in nature. In Philex Mining
petitioner to pay private respondent the sum of P6,000.00 as
Corp. v. NLRC, project employees were defined as those
payment for the last three (3) months of the agreed
workers hired (1) for a specific project or undertaking, and (2)
employment period pursuant to her verbal contract of
the completion or termination of such project has been
employment.
determined at the time of the engagement of the employee.
- Both parties appealed the decision to the National Labor
The principal test for determining whether particular employees
Relations Commission.
are "project employees" as distinguished from "regular
- The NLRC, by a majority vote, sustained the decision of the
employees," is whether or not the "project employees" were
Labor Arbiter and thus dismissed both appeals for lack of merit.
assigned to carry out a "specific project or undertaking," the
- Dissatisfied, petitioner filed the instant petition.
duration and scope of which were specified at the time the
employees were engaged for that project. In this case,
ISSUE
petitioners have not shown that private respondent was
WON an employee who was terminated during the probationary
informed that he will be assigned to a "specific project or
period of her employment is entitled to her salary for the
undertaking." Neither has it been established that he was
unexpired portion of her six-month probationary employment
informed of the duration and scope of such project or
undertaking at the time of their engagement.
HELD
- More to the point, in Maraguinot, Jr. v. NLRC, the SC ruled that
NO
once a project or work pool employee has been:
- There is justifiable basis for the reversal of public respondent's
(1) continuously, as opposed to intermittently, re-hired by the
award of salary for the unexpired three-month portion of private
same employer for the same tasks or nature of tasks; and
respondent's six-month probationary employment in the light of
(2) these tasks are vital, necessary and indispensable to the
its express finding that there was no illegal dismissal
usual business or trade of the employer, then the employee
- There is no dispute that private respondent was terminated
must be deemed a regular employee.
during her probationary period of employment for failure to
- In fine, inasmuch as private respondent's functions as
qualify as a regular member of petitioner's teaching staff in
described above are no doubt "usually necessary or desirable in
accordance with its reasonable standards: private respondent
the usual business or trade" of petitioner fishing company and
was found by petitioner to be deficient in classroom
he was hired continuously for 12 years for the same nature of
management, teacher-student relationship and teaching
tasks, we are constrained to say that he belongs to the ilk of
techniques.
regular employee. Being one, private respondent's dismissal
- Failure to qualify as a regular employee in accordance with the
without valid cause was illegal. And, where illegal dismissal is
reasonable standards of the employer is a just cause for
proven, the worker is entitled to back wages and other similar
terminating a probationary employee specifically recognized
benefits without deductions or conditions.
under Article 282 (now Article 2813) of the Labor Code.
Disposition Petition denied.
- It must be noted that notwithstanding the finding of legality of
the termination of private respondent, public respondent
SECTION 8: PROBATIONARY justified the award of salary for the unexpired portion of the
probationary employment on the ground that a probationary
EMPLOYEES employment for six (6) months is an employment for a "definite
period" which requires the employer to exhaust the entire
probationary period to give the employee the opportunity to
meet the required standards.
8.01 PROBATIONARY - The legal basis of public respondent is erroneous. A
EMPLOYEES probationary employee, as understood under Article 282 (now

3
DEFINITION ART. 281. Probationary employment. — Probationary employment shall not exceed
six months from the date the employee started working, unless it is covered by an
apprenticeship agreement stipulating a longer period. The services of an employer
INTERNATIONAL CATHOLIC MIGRATION who has been engaged in a probationary basis may be terminated for a just cause or
when he fails to qualify as a regular employer in accordance with reasonable
COMMISSION V NLRC (GALANG) standard made known by the employer to the employer at the time of his
engagement. An employee who is allowed to work after a probationary period shall
169 SCRA 606 be considered a regular employee.
Labor Law 1 A2010 - 101 - Disini
Article 281) of the Labor Code, is one who is on trial by an deductions. She then paid Ms. Castro the P30T but was not
employer during which the employer determines whether or not issued any receipt.
he is qualified for permanent employment. A probationary - Thereafter, she executed a contract of employment as a
appointment is made to afford the employer an opportunity to domestic helper of one Chao Hung Ching of Taipei, Taiwan with
observe the fitness of a probationer while at work, and to a monthly salary of NT$14,010, plus free food and
ascertain whether he will become a proper and efficient accommodation for a period of 1 year.
employee. - On 13 Jan 1995, she was deployed to Taiwan. As such DH, she
- The word "probationary", as used to describe the period of worked from 5am until 10pm. Among her chores were to
employment, implies the purpose of the term or period, but not carwash the vehicle of her master, cook the meals,
its length. housecleaning and babysitting. On 24 Jan 1995, she had a talk
- Being in the nature of a "trial period" the essence of a with her master where she was told that she is being sent home
probationary period of employment fundamentally lies in the due to certain problems.
purpose or objective sought to be attained by both the - Complainant pleaded that she continue her employment,
employer and the employee during said period. The length of confronted as she was with the debts she had to pay. But she
time is immaterial in determining the correlative rights of both was sent home the following day. While at the airport, a certain
in dealing with each other during said period. Ms. Go forced her to sign an Affidavit where it stated that her
- A281 LC gives ample authority to the employer to terminate a leaving as a DH was voluntary and that she would assume all
probationary employee for a just cause or when he fails to the obligations for her travel back to the Philippines.
qualify as a regular employee in accordance with reasonable - She was only paid the sum of NT$1,931 (12 days work)
standards made known by the employer to the employee at the - Respondent alleged that it was stipulated and agreed upon in
time of his engagement. the contract, that she would undergo a 40-day probationary
- There is nothing under Article 281 of the Labor Code that period before she becomes a regular domestic helper. Also, she
would preclude the employer from extending a regular or a was charged of her placement fees as allowed by law and by
permanent appointment to an employee once the employer the POEA rules and regulations. During the first 10 days of her
finds that the employee is qualified for regular employment probationary period, she was observed to be inattentive and
even before the expiration of the probationary period. incompetent to perform her duties and responsibilities.
Conversely, Article 281 of the Labor Code does not likewise - Labor Arbiter ruled in favor of Rodriguez.
preclude the employer from terminating the probationary - NLRC deleted award of P155T for unearned wages since there
employment on justifiable causes as in the instant case. is no illegal dismissal that took place.
- There was no showing, as borne out by the records, that there - CA reversed NLRC decision and reinstated Labor Arbiter’s.
was circumvention of the rights of private respondent when she
was informed of her termination. Private respondent was duly ISSUES
notified, orally and in writing, that her services as cultural 1. WON Rodriguez was illegally dismissed
orientation teacher were terminated for failure to meet the 2. WON she was afforded due process
prescribed standards of petitioner.
- The dissatisfaction of petitioner over the performance of HELD
private respondent in this regard is a legitimate exercise of its 1. NO
prerogative to select whom to hire or refuse employment for Ratio Even if it were true that Anita’s foreign employer
the success of its program or undertaking. terminated her services after 10 days of her employment, there
- It was a grave abuse of discretion on the part of public could be no illegal dismissal as the termination was effected
respondent to order petitioner to pay private respondent her during the agreed probationary period.
salary for the unexpired three-month portion of her six-month - There is probationary employment4 where the employee, upon
probationary employment when she was validly terminated his engagement, is made to undergo a trial period during which
during her probationary employment. To sanction such action the employer determines his fitness to qualify for regular
would not only be unjust, but oppressive on the part of the employment, based on reasonable standards made known to
employer him at the time of engagement.
Disposition Petition granted. 2. NO
Ratio Although Anita’s employment was terminated because
she failed to meet the standards of her foreign employer, still it
PHIL. FEDERATION OF CREDIT COOPERATIVES INC
is necessary and obligatory to afford Anita her basic right to
(PFCCI) V NLRC (ABRIL) notice.
[PAGE 73] - Section 2, Rule 1, Book VI of the Omnibus Rules Implementing
the Labor Code provides:
“(d) In all cases of termination of employment, the following
PURPOSE standards of due process shall be substantially observed:
If the termination is brought about by the completion of a
PHILEMPLOY SERVICES V RODRIGUEZ contract or phase thereof, or by failure of an employee to meet
486 SCRA 302 the standards of the employer in the case of probationary
employment, it shall be sufficient that a written notice is served
CARPIO; March 31, 2006 the employee within a reasonable time from the effective date
of termination.
NATURE Reasoning
Petition for review to annul CA decision - Anita was repatriated to the Philippines on 25 January 1995.
On the night before her departure, her employer’s wife merely
FACTS told her that she was sending her home “on account of some
- Anita RODRIGUEZ applied with respondent PHILEMPLOY problem.” This information given to Anita cannot be considered
Services and Resources, Inc. for deployment abroad as a factory as equivalent to the written notice required by law to be served
worker. When she was asked to report for work, Ms. Brenda on the employee. The notice should inform the employee of the
Castro, an official of respondent, demanded from her the sum of ground or grounds for his termination and that his dismissal is
P60T as placement fee. being sought.
- Since she could not afford such amount, they agreed that she
would initially pay P30T as downpayment and the balance of
P30T, plus 7% interest every month thereafter through salary
4
Section 6, Rule 1, Book VI of the Omnibus Rules Implementing the Labor Code
Labor Law 1 A2010 - 102 - Disini
* Thus, absence of notice makes her termination DEFECTIVE for meant that he was terminable anytime, permanent employment
which petitioner must be sanctioned for its non-compliance with not having been attained in the mean time. The employer could
the requirements of or for failure to observe due process. well decide he no longer needed the probationary employee’s
- As held in the Agabon case: “Where the dismissal is for a just service or hi performance fell short of expectation. As long as
cause, as in the instant case, the lack of statutory due process the termination was made before the expiration of the 6-month
should not nullify the dismissal, or render it illegal, or probationary period, the employer was well within his rights to
ineffectual. However, the employer should indemnify the sever the employer-employee relationship. A contrary
employee for the violation of his statutory rights.” interpretation would defect the clear meaning of the term
Disposition Petition GRANTED. CA decision set aside. probationary. In this case, Shemberg had good reason to
However, petitioner Philemploy Services and Resources, Inc. terminate petitioner’s employment. Petitioner was holding a
shall pay respondent Rodriguez P30T as nominal damages. managerial position in which he was tasked to perform key
functions in accordance with an exacting work ethic. His
position required the full trust and confidence of his employer.
DELA CRUZ V NLRC
While petitioner could exercise some discretion, this obviously
418 SCRA 226 did not cover acts for his own personal benefit. He committed a
CORONA; December 11, 2003 transgression which betrayed the trust and confidence of his
employer – reimbursing his family’s personal travel expenses
NATURE out of company funds.
Petition for review on certiorari Disposition Petition is DISMISSED. The decision of the CA is
affirmed.
FACTS
- On May 27, 1996, petitioner Florencio de la Cruz, Jr. was hired GRAND MOTORS PARTS CORP V MINISTER OF
by private respondent Shemberg Marketing Corporation as
senior sales manager, a newly created position in line with the
LABOR
company’s objective of product positioning in the consumer GUERRERO; July 16, 1984
market. However, on Sept. 14, 1996, petitioner was informed
that his services were terminated. His request for a meeting NATURE
with Shemberg’s VP and to be furnished a 30-day written notice Petition for certiorari assailing the Order of the Minister of
was denied by management. Hence, petitioner filed a complaint Labor which affirmed the decision of the Regional Director of
for illegal dismissal., non-payment of salary, backwages, 13th Region VI
month pay and damages.
- Private respondent answered that petitioner’s dismissal was FACTS
premised, among others, on his unauthorized reimbursement of - Respondent Balicena was the Branch Manager of the
the plane tickets of his wife and child, resulting to loss of trust petitioner company’s Iloilo Branch. He was the Finance Officer
and confidence of the company. of Warner, Barnes, & Co. (no.2 of the company) when allegedly,
- Labor arbiter ruled that petitioner was illegally dismissed and Mr. Alfredo Cisneros (the then acting branch manager of the
granted his claim for separation pay, backwages and unpaid company in Iloilo) induced him to apply for the position of
wages. Upon appeal, NLRC modified the decision, deleting the Branch Manager, as their company (petitioner) was looking for a
award for separation pay and backwages. Hence, this petition. CPA. He applied for the job and was accepted. He started
working for the petitioner company on April 1 but resigned from
ISSUE his position in Warner, Barnes, & Co. only on April 28.
WON petitioner was legally dismissed, as he was a probationary - However, he was terminated only after working for the
employee company for 4 months (April to August). Petitioner company
alleged that (a) he failed to submit promptly the monthly
HELD Income and Loss Statement, Comparative Projections & Actual
YES Sales Report; (b) the Comparative Performance Report dated
- Petitioner was hired by Shemberg on May 27, 1996 and was July 8, 1980 on the operation of the Iloilo Branch for the month
terminated on Sept. 14, 1996. A281 LC provides: of June and May, 1980, the Cash Sales of the Iloilo Branch went
Probationary employment shall not exceed six (6) months down to P91,318.41 for June, 1980, as compared with the sales
from the date the employee started working , unless it is for the month of May, 1980 in the sum of P174,697.77; (c)
covered in apprenticeship[ agreement stipulating a longer Belicena in violation of company policy and without clearance
period. The services of an employee who has been engaged from the head office in Cebu, extended personal accounts in
on a probationary basis may be terminated for a just cause or favor of 15 persons which as of November, 1980 produced
when he fails to qualify as a regular employee in accordance delinquent accounts amounting to P18,435.80; and (d) Belicena
with reasonable standards, made known by the employer to claimed lack of knowledge of the vehicular accident caused by
the employee at the time of his engagement. An employee a subordinate and failed to provide prompt administrative
who is allowed to work after a probationary period shall be disciplinary action against the erring employee. They claimed
considered a regular employee. that Balicena is only a probationary employee, which would be
- The evidence on record clearly shows that petitioner was well observed by the company for 4-6 months and that Balicena
informed of the standards to be met before he could qualify as knew that there is a possibility that he would not get the job.
a regular employee. Attached to his appointment papers was a - Balicena on the other hand alleged that he is a regular
job description of sales manager. employee, although he was not able to present any contract
- A probationary employee is one who, for a given period of establishing his status as a regular employee; that the mishap
time, is under observation or evaluation to determine whether involving the company's vehicle which was used without his
or not he is qualified for permanent employment. During the permission and knowledge could not be blamed upon him; that
probationary period, the employer is given the opportunity to the alleged reports which he failed to send were not reminded
observe the skill, competence and attitude of the employee to him, verbally or in writing; that his sales for the period April
while the latter seeks to prove to the employer that he has the to August, 1980 is higher compared to that for the same period
qualifications to meet the reasonable standards for permanent in 1979; and that the alleged accounts remaining unpaid as of
employment. The length of time is immaterial in determining November 6, 1980 would have been collected in full if he were
the correlative rights of both the employer and the employee in still the Manager, among other things.
dealing with each other during this period. - Regional Director and Minister of Labor ruled in favor of
- There is no dispute that petitioner, as a probationary Balicena, ordering his reinstatement, payment of his
employee enjoyed only a temporary employment status. This backwages, and other privileges.
Labor Law 1 A2010 - 103 - Disini
not know) and for extending personal accounts to some
ISSUES individuals in violation of their company’s policy.
1. WON private respondent's employment as Branch Manager - Fourth, the sales target were not being reached, and because
was probationary, and not regular and permanent of this, the Vice President/GM notified him about this (“Can we
2. WON private respondent, if he’s a probationary Branch not improve that performance this July?”). Balicena was clearly
Manager, was terminated for just cause not discharging his duties to the satisfaction of the
management.
HELD - SO THEREFORE: “[The Court is] satisfied that petitioner has
1. YES valid grounds to charge its Branch Manager with loss of
Ratio Indeed, the employer has the right or is at liberty to confidence by reason of the overall performance he has
choose as to who will be hired and who will be declined. It is demonstrated within the probationary period which showed that
within the exercise of this right to select his employees that the he is not qualified to be the regular or permanent Branch
employer may set or fix a probationary period within which the Manager of petitioner corporation in Iloilo City. His dismissal
latter may test and observe the conduct of the former before does not appear to Us as arbitrary, fanciful or whimsical. In the
hiring him permanently. "The right of a laborer to sell his labor last and ultimate analysis, the prerogative and judgment to
to such persons as he may choose is, in its essence, the same hire employees under terms and conditions designed to
as the right of an employer to purchase labor from any person achieve success in its business activities belongs to
whom it chooses. The employer and the employee have thus an management which may not be unduly impaired, limited
equality of right guaranteed by the Constitution. 'If the or restricted.“
employer can compel the employee to work against the latter's Disposition the Order of the Deputy Minister of Labor dated
will, this is servitude. If the employee can compel the employer October 22, 1981 is hereby REVERSED and SET ASIDE.
to give him work against the employer's will, this is
oppression.'"
INTERNATIONAL CATHOLIC MIGRATION
Reasoning
- First, Balicena could not present any written proof of his COMMISSION V NLRC (GALANG)
appointment or employment as regular and permanent Branch [PAGE 98]
Manager of petitioner corporation. Then there was the fact that
he assumed his work as of April 1 but resigned from his PHIL. FEDERATION OF CREDIT COOPERATIVES INC
previous company only on April 28, meaning that if he was
really appointed as regular and permanent then he would have (PFCCI) V NLRC (ABRIL)
resigned immediately from his old company. But since he was [PAGE 73]
not yet sure of his status in the petitioner corporation, he
resigned late.
-Second, Balicena claims that there was no written contract
because the contracts were given only to those who will pass
the probationary period and the rank-and-file employees – not ESCORPIZO V UNIVERSITY OF BAGUIO
to those managerial ones. This practice is not supported and 306 SCRA 497
contrary to usual business practice. Also, being a CPA, Finance QUISUMBING; April 30, 1999
Officer, and No.2 man in his former company, he should have
insisted on a written contract for the security of his tenure in his
NATURE
new position! (in short, he already had a stable position in his
Special civil action for certiorari
former company and in not insisting on a written contract, he
took the risk of being jobless…for he may be terminated as
FACTS
Branch Manager!)
- Petitioner Esperanza Escorpizo was initially hired by
-Third, Balicena had never been hired as manager, and the
respondent university on June 13, 1989 as a high school
petitioner company and Balicena’s former company are
classroom teacher. Under the rules of the respondent
engaged in different kinds of business so it was necessary for
university, appointment to teach during the first two years at
Balicena to undergo a period of probation to test his
the university is probationary in nature. During the probation
qualifications, skills and experience since managing is a new
period, the teacher is observed and evaluated to determine his
experience for him.
competency. Attainment of a permanent status by a faculty
2. YES
member is conditioned upon compliance with certain
Ratio A probationary employee may be terminated after six
requirements, such as passing the professional board
months for a just cause or when he fails to qualify as a regular
examination for teachers (PBET).
employee. It is true that mere allegation of loss of confidence
- On March 18, 1991, respondent university informed Escorpizo
by employer on his employee is not sufficient cause for his
that her employment was being terminated at the end of the
dismissal. But loss of confidence is a valid ground for dismissing
school semester in view of her failure to pass the PBET. But
an employee, and proof beyond reasonable doubt of the
before the start of the school year 1991-1992, Escorpizo
employee's misconduct is not required to dismiss him of this
reapplied and pleaded that she be given another chance. She
charge. It is sufficient if there is some basis for such loss of
told the respondent school that she had just taken the PBET and
confidence.
hoped to pass it.
Reasoning
- As Escorpizo’s appeal was favorably considered, she was
- Balicena was proven and demonstrated to fail in submitting
allowed to teach during the school year 1991-1992. However,
monthly reports. A monthly report of operations is essential to
her continued employment was conditioned on her passing the
the business of the petitioner company, and this cannot be
PBET. Unfortunately, Escorpizo failed again. Undaunted,
ignored by a Branch Manager for the viability of its business life
Escorpizo took the examination a third time. At the end of the
may well depend on these reports.
school year, respondent university evaluated the teachers
- Second, it was proven that after being on the job as Branch
performance to determine who would be in the list for the next
Manager for nearly a month, Balicena wrote to the company to
school year. Escorpizo, not having passed the PBET yet, was
ask what his duties were. This manifests that Balicena had not
not included.
shown any effort or initiative to familiarize himself with his
- Much later, on June 8, 1992, the results of the PBET were
duties and obligations, although petitioner corporation provided
released and this time Escorpizo passed said examination.
him with a brochure containing what he was supposed to do.
Nevertheless, on June 15, 1992, respondent university no longer
- Third, he cannot escape responsibility for the acts of his
renewed Escorpizo’s contract of employment on the ground
subordinates (vehicular accident which he claims that he did
Labor Law 1 A2010 - 104 - Disini
that she failed to qualify as a regular teacher. This prompted ORIENT EXPRESS PLACEMENT PHILIPPINES V NLRC
Escorpizo to file on July 16, 1992 a complaint for illegal
(POEA, FLORES)
dismissal, payment of backwages and reinstatement against
private respondents. 273 SCRA 256
BELLOSILLO; June 11, 1997
ISSUE
WON the dismissal was illegal since Escorpizo had attained the FACTS
status of a regular employee having rendered very satisfactory - Antonio Flores was hired as crane operator with a monthly
performance as probationary teacher for two years, consistent salary of US$500 for 1year subject to a 3month probationary
with the collective bargaining agreement between the period. After 1month and 5days, he was repatriated to the
respondent university and petitioner union of which Escorpizo is Philippines. He filed a complaint to POEA fro having been
a member terminated for no valid reason. His employers Orient Express
and Nadrico (the foreign principal) claimed that he was
HELD terminated for poor job performance as shown in his
NO performance evaluation sheet.
- Escorpizo was not illegally dismissed. Her contract merely - POEA decided in favor of Flores held that when the ground
expired. invoked for dismissal of an employee was incompetence or poor
Ratio A probationary employee is one who, for a given period job performance, it must be shown that the reasonable
of time, is being observed and evaluated to determine whether standards of work prescribed by the employer were made
or not he is qualified for permanent employment. A known to the employee. The dismissal was unwarranted
probationary appointment affords the employer an opportunity because the employers failed to point out the reasonable
to observe the skill, competence and attitude of a probationer. standards of work required.
The word “probationary”, as used to describe the period of - NLRC affirmed POEA decision on appeal. It also ruled that the
employment, implies the purpose of the term or period. While designation of Flores as floorman instead of crane operator for
the employer observes the fitness, propriety and efficiency of a which he was hired violated his employment contract. Orient
probationer to ascertain whether he is qualified for permanent Express and Nadrico filed for MFR but it was denied.
employment, the probationer at the same time, seeks to prove
to the employer that he has the qualifications to meet the ISSUES
reasonable standards for permanent employment. 1. WON NLRC committed grave abuse of discretion in
Reasoning concluding that Flores was never assigned as crane operator
- the rules of the university clearly states that the first two (not important)
years at the University is probationary in nature and the 2. WON NLRC and POEA committed grave abuse of discretion
following conditions must concur in order that a probationary for ruling that poor job performance and uncooperative work
teacher may be extended a regular appointment; (1) the faculty attitude did not justify his dismissal
member must satisfactorily complete the probationary period of
four semesters or two years, within which his performance shall HELD
be observed and evaluated for the purpose of determining his 1. Factual determination. NLRC and POEA did overlook the fact
competency and fitness to be extended permanent status; and that the private respondent admitted that he was ale to work as
(2) the faculty member must pass the PBET or an equivalent crane operator (as shown in his affidavit)
civil service examination. Escorpizo failed to meet the 2nd 2. NO
requirement to be a regular employee which is to pass the - Flores was not validly dismissed. Petition is denied.
PBET. - A281 LC, the services of an employee hired on probationary
- Though the CBA does not mention that passing the PBET is a basis may be terminated when he fails to qualify as a regular
prerequisite for attaining permanent status as a teacher. employee in accordance with reasonable standards made
Nevertheless, the aforecited CBA provision must be read in known by the employer to the employee at the time of the
conjunction with statutory and administrative regulations engagement. The Court cannot sustain dismissal on this ground
governing faculty qualifications. It is settled that an existing because petitioner failed to specify the reasonable standards by
law enters into and forms part of a valid contract without the which Flores was alleged to have been evaluated to have poor
need for the parties expressly making reference to it.[16] performance.
Further, while contracting parties may establish such - Neither of the 2 original petitioners provided ever made
stipulations, clauses, terms and conditions as they may see fit, mention that he must first take and pass a Crane Operators’
such right to contract is subject to limitation that the agreement License Examination before he would be allowed to touch a
must not be contrary to law or public policy. crane. Neither did he know that he was to be assigned as
- DECS Order No. 38, series of 1990, a regulation implementing floorman pending the release of the exam results. He also did
Presidential Decree No. 1006[18] or the Decree not know that if he failed the exam, he would be subject to a
Professionalizing Teaching stipulates that no person shall be performance evaluation 1 month after his hiring to determine
allowed to engage in teaching and/or act as a teacher unless whether the company was amenable to continuing his
he has registered as professional teacher with the National employment. Flores could not be faulted for harboring the
Board for Teachers. impression that he was hired as crane operator for a definite
Disposition DISMISSED, and the assailed RESOLUTION of period of 1 year to commence upon his arrival at the work-site
public respondent is hereby AFFIRMED. and to terminate at the end of 1 year. No other condition was
laid out except that he was to be on probation for 3 months.
- Due process dictates that an employee be apprised
EMPLOYER RIGHT SET beforehand of the condition of his employment and of the terms
PERIOD/OBLIGATION of advancement therein. Even if unsatisfactory performance
was true, it is not 1 of the just causes for dismissal under the
LC. There was no standard by which such probationary period
GRAND MOTORS PARTS CORP V MINISTER OF was made known to him.
LABOR Disposition the assailed Decision and Resolution of NLRC,
[PAGE 100] declaring that private respondent Antonio F. Flores was illegally
dismissed is AFFIRMED.
Labor Law 1 A2010 - 105 - Disini
- RESPONDENT'S CLAIM:
> The MMPC, for its part, averred that under Article 13 of the
New Civil Code, Paras’ probationary employment which
commenced on May 27, 1996 would expire on November 27,
MITSUBISHI MOTORS CORP V CHRYSLER PHIL 1996. Since he received the notice of termination of his
LABOR UNION employment on November 25, 1996, the same should be
4333 SCRA 206 considered to have been served within the six-month
probationary period.
CALLEJO; June 29, 2004 - CA agreed with the petitioner's claim and held the dismissal of
Paras illegal.
NATURE
Petition for review on certiorari ISSUE
WON Paras was illegally dismissed, he being dismissed after the
FACTS maximum 6 month probation (MAY 27, 1996 - NOVEMBER 23,
- Mitsubishi Motors Philippines Corporation (MMPC) is a 1996)
domestic corporation engaged in the assembly and distribution
of Mitsubishi motor vehicles. Chrysler Philippines Labor Union HELD
(CPLU) is a legitimate labor organization and the duly certified YES
bargaining agent of the hourly-paid regular rank and file Ratio Indeed, an employer, in the exercise of its management
employees of MMPC. Nelson Paras was a member of CPLU while prerogative, may hire an employee on a probationary basis in
wife, Cecille Paras, was the President of the Chrysler Philippines order to determine his fitness to perform work. Under Article
Salaried Employees Union (CPSU). 281 of the Labor Code, the employer must inform the employee
- Nelson Paras was first employed by MMPC as a shuttle bus of the standards for which his employment may be considered
driver. He resigned and went to Saudi Arabia work. When he for regularization. Such probationary period, unless covered by
returned to the Philippines, he was re-hired as a welder- an apprenticeship agreement, shall not exceed six (6) months
fabricator at the MMPC. Sometime in May of 1996, Paras was from the date the employee started working. The employee’s
re-hired on a probationary basis as a manufacturing trainee at services may be terminated for just cause or for his failure to
the Plant Engineering Maintenance Department. As part of the qualify as a regular employee based on reasonable standards
MMPC’s policy, Paras was evaluated by his immediate made known to him. Respondent Paras was employed as a
supervisors after 6 months, and received an average rating. management trainee on a probationary basis. During the
They informed him that based on his performance rating, he orientation conducted on May 15, 1996, he was apprised of the
would be regularized. However, the Department and Division standards upon which his regularization would be based. He
Managers reviewed the performance evaluation made on reported for work on May 27, 1996. As per the company’s
Parasand unanimously agreed, along with Paras’ immediate policy, the probationary period was from 3 months to a
supervisors, that the performance of Paras was unsatisfactory. maximum of 6 months. As clearly provided for in the last
As a consequence, Paras was not considered for regularization. paragraph of Article 13, in computing a period, the first day
On November 26, 1996, he received a Notice of Termination shall be excluded and the last day included. Thus, the one
dated November 25, 1996, informing him that his services were hundred eighty (180) days commenced on May 27, 1996, and
terminated effective the said date since he failed to meet the ended on November 23, 1996. The termination letter dated
required company standards for regularization. November 25, 1996 was served on respondent Paras only at
- Utilizing the grievance machinery in the collective bargaining 3:00 a.m. of November 26, 1996. He was, by then, already a
agreement, the CPLU demanded the settlement of the dispute regular employee of the petitioner under A281 LC
which arose from Paras’ termination. They argued that Paras Reasoning
rd - The basis for which respondent Paras’ services were
was dismissed on his 183 day of employment, or 3 days after
the expiration of the probationary period of 6 months. It was terminated was his alleged unsatisfactory rating arising from
contended that Paras was already a regular employee on the poor performance. It is a settled doctrine that the employer has
date of the termination of his “probationary employment.” the burden of proving the lawfulness of his employee’s
According to CPLU and Paras, the latter’s dismissal was an dismissal. The validity of the charge must be clearly
offshoot of the heated argument during the CBA negotiations established in a manner consistent with due process.Under
between MMPC Labor Relations Manager, Atty. Carlos S. Cao, on Article 282 of the Labor Code, an unsatisfactory rating can be a
the one hand, and Cecille Paras, the President of the Chrysler just cause for dismissal only if it amounts to gross and habitual
Philippines Salaried Employees Union (CPSU) and Paras’ wife, neglect of duties. A careful perusal of the records of this case
on the other. does not show that respondent Paras was grossly negligent in
- PETITIONER'S CLAIM: the performance of his duties. Considering that respondent
> Paras and CPLU asserted that pursuant to Article 13 of the Paras was not dismissed for a just or authorized cause, his
New Civil Code, the period of May 27, 1996 to November 26, dismissal from employment was illegal. Furthermore, the
1996 consisted of one hundred eighty-three (183) days. They petitioner’s failure to inform him of any charges against him
asserted that the maximum of the probationary period is six (6) deprived him of due process. Clearly, the termination of his
months, which is equivalent to 180 days; as such, Paras, who employment based on his alleged unsatisfactory performance
th rating was effected merely to cover up and “deodorize” the
continued to be employed even after the 180 day, had illegality of his dismissal.
become a regular employee as provided for in Article 282 of the Disposition Petition is PARTIALLY GRANTED. The
Labor Code. They averred that as a regular employee, Paras’ September 13, 2000 Decision of the Court of Appeals in CA–GR
employment could be terminated only for just or authorized SP No. 46030 is hereby AFFIRMED WITH MODIFICATIONS.
causes as provided for under the Labor Code, and after due The petitioner is ORDERED to pay respondent Nelson Paras
notice. They posited that in the Letter of Termination dated separation pay equivalent to one (1) month, or to at least one-
November 25, 1996, the ground for Paras’ termination was not half (1/2) month pay for every year of service, whichever is
among those sanctioned by the Labor Code; hence, his higher, a fraction of at least six (6) months to be considered as
dismissal was illegal. Paras and CPLU also stressed that he had one year; and to pay full backwages, computed from the
already been in the employ of MMPC from October 3, 1994 to time of his dismissal up to March 25, 1998. That portion of
March 3, 1995 as a welder-fabricator. Such period, in addition the decision of the Court of Appeals directing the reinstatement
to the six-month probationary period, amounted to eleven (11) of the respondent Paras is DELETED.
months of service, which is sufficient for him to be considered
as a regular employee.
Labor Law 1 A2010 - 106 - Disini
DURATION/EXCEPTION after the sale has been made and only then win the company
be able to evaluate the efficiency, conduct, and selling ability of
its sales representatives, the evaluation being based on the
BUISER V LEOGARDO published ads. Moreover, an eighteen month probationary
131 SCRA 151 period is recognized by the Labor Union in the private
respondent company, which is Article V of the Collective
GUERRERO; July 31, 1984
Bargaining Agreement.
2. YES
FACTS - The practice of a company in laying off workers because they
- Petitioners were employed by the private respondent failed to make the work quota has been recognized in this
GENERAL TELEPHONE DIRECTORY COMPANY as sales jurisdiction. (Philippine American Embroideries vs. Embroidery
representatives and charged with the duty of soliciting and Garment Workers, 26 SCRA 634, 639).
advertisements for inclusion in a telephone directory. - In the case at bar, the petitioners' failure to meet the sales
- The records show that petitioners Iluminada Ver Buiser and quota assigned to each of them constitute a just cause of their
Ma. Mercedes P. Intengan entered into an "Employment dismissal, regardless of the permanent or probationary status of
Contract (on Probationary Status)" on May 26, 1980 with private their employment. Failure to observe prescribed standards of
respondent, a corporation engaged in the business of work, or to fulfill reasonable work assignments due to
publication and circulation of the directory of the Philippine inefficiency may constitute just cause for dismissal.
Long Distance Telephone Company. Petitioner Ma. Cecilia Rillo- - Such inefficiency is understood to mean failure to attain work
Acuna entered into the same employment contract on June 11, goals or work quotas, either by failing to complete the same
1980 with the private respondent. within the alloted reasonable period, or by producing
Among others, the "Employment Contract (On Probationary unsatisfactory results. This management prerogative of
Status)" included the following common provisions: requiring standards availed of so long as they are exercised in
The company hereby employs the employee as telephone good faith for the advancement of the employer's interest.
representative on a probationary status for a period of
eighteen (18) months, i.e. from May 1980 to October 1981,
inclusive. It is understood that daring the probationary period INTERNATIONAL CATHOLIC MIGRATION
of employment, the Employee may be terminated at the COMMISSION V NLRC (GALANG)
pleasure of the company without the necessity of giving [PAGE 98]
notice of termination or the payment of termination pay.
The Employee recognizes the fact that the nature of the
telephone sales representative's job is such that the company HOLIDAY INN MANILA V NLRC (HONASAN)
would be able to determine his true character, conduct and 226 SCRA 417
selling capabilities only after the publication of the directory, AUSTRIA-MARTINEZ; July 12, 2006
and that it takes about eighteen (18) months before his worth
as a telephone saw representative can be fully evaluated NATURE
inasmuch as the advertisement solicited by him for a Appeal from a decision of the CA
particular year are published in the directory only the
following year. FACTS
- Private respondent prescribed sales quotas to be - Private respondent Gervasio Rosaroso was employed as a
accomplished or met by the petitioners. Failing to meet their Third Engineer with Nicolakis Shipping, S.A., a foreign firm
respective sales quotas, the petitioners were dismissed from through its recruitment and manning agency, petitioner
the service by the private respondent. Skippers. The employment contract was for the period of one
year beginning July 10, 1997 with a salary of $800 per month
and other benefits. Rosaroso boarded M/V Naval Gent on July
15, 1997. He was however ordered to disembark in Bulgaria on
ISSUE August 7, 1997 and repatriated to the Philippines.
1. WON the probationary employment of petitioners herein is - Soon after arrival in Manila, respondent filed a complaint for
eighteen (18) months instead of the mandated six (6) months illegal dismissal and monetary claims. The Labor Arbiter found
under the Labor Code, and WON petitioners are entitled to the respondent was in fact illegally dismissed and issued an
security of tenure while under said probation for 18 months order directing petitioner, Skippers, to pay Rosaroso separation
2. WON petitioners were dismissed for a just and valid cause pay of $2,4000 or the equivalent of P100,000, representing
three months pay and unpaid salary for seven days of $186.69
HELD or the equivalent of P7,840.98. Atorney’s fees of P5,000 was
1. Generally, the probationary period of employment is limited also awarded. The NLRC and the CA affirmed en toto the ruling
to six (6) months. The exception to this general rule is when the of the Arbiter.
parties to an employment contract may agree otherwise, such - Hence this appeal to the SC.
as when the same is established by company policy or when the
same is required by the nature of work to be performed by the ISSUE
employee. WON private respondent Rosaroso was illegal dismissed
- In the latter case, there is recognition of the exercise of
managerial prerogatives in requiring a longer period of
probationary employment, such as in the present case where
the probationary period was set for eighteen (18) months, i.e. HELD
from May, 1980 to October, 1981 inclusive, especially where YES
the employee must learn a particular kind of work such as - The employer of Rosaroso did not provide the quantum of
selling, or when the job requires certain qualifications, skills, evidence needed to prove that dismissal was in fact for cause.
experience or training. The evidence presented was just a telefax coming from the
- In the case at bar, it is shown that private respondent alleged Chief Engineer of the vessel which the Arbiter up to the
Company needs at least eighteen (18) months to determine the CA considered as mere hearsay. While the Master of the vessel
character and selling capabilities of the petitioners as sales was grated under Paragraph D of Section 17 of the Philippine
representatives. The Company is engaged in advertisement and Overseas employment Administration (POEA) Standard
publication in the Yellow Pages of the PLDT Telephone Employment condition governing the employment of Filipino
Directories. Publication of solicited ads are only made a year Seafarers on Board Ocean Going Vessels the power to dismiss
Labor Law 1 A2010 - 107 - Disini
for just cause without furnishing the seafarer with a notice of 6. The EMPLOYEE shall likewise be entitled to the following
dismissal if doing so will prejudice the safety of the crew and benefits:
the vessel, the SC noted that the complete report on the i. Proportionate 13th month pay based on his basic daily
circumstances of the dismissal was not forwarded to the wage.
manning agency as called for under the same provision. ii. Five (5) days incentive leave.
Minor issues iii. SSS premium payment.
- The award of backwages and separation pay in lieu of 7. The EMPLOYEE binds himself/herself to abide [by] and
reinstatement as provided for in Article 279 of the Labor Code is comply with all the BANK Rules and Regulations and Policies,
not applicable in this case. The Seafarer is a contractual and to conduct himself/herself in a manner expected of all
employee whose rights and obligations are governed by the employees of the BANK.
POEA Employment Contract and by RA 8042 (1995). The 8. The EMPLOYEE acknowledges the fact that he/she had been
Employment contract does not provide for the award of employed under a special employment program of the BANK,
separation or termination pay. However, under Section 10 of RA for which reason the standard hiring requirements of the BANK
8042 the award of money claims in cases of illegal dismissal is were not applied in his/her case.
allowed. Under this provision, an illegal dismissed seafarer is 9. The Employment Contract shall be for a period of six (6)
entitled to indemnity equivalent to his salary for the unexpired months unless earlier terminated by the BANK for any just or
term of his employment contract or three months for every year reasonable cause.
of the unexpired term, whichever is less. - DEAF-MUTES HIRED
- The award by the Arbiter of the peso equivalent of the dollar > 1988 - 2
awards cannot be enforced as the same is contrary to law. The > 1989 – 2
peso equivalent must be computed at the exchange rate > 1990 – 19
computed at the time of payment as provided for by RA 8183. > 1991 – 6
Disposition The questioned decision is affirmed with the > 1992 – 6
modification that the dollar award should be payable in its peso > 1993 – 21
equivalent computed at the prevailing rate of exchange at the TOTAL: 56 (last: Thelma Malindoy who was employed in 1992
time of payment. and whose contract expired on July 1993)
- FAR EAST states:
> disclaimed that BERNARDO ET AL were regular employees
BERNARDO V NLRC (FAR EAST BANK AND TRUST
AND that they are a special class of workers — the hearing
COMPANY) impaired employees
310 SCRA 186 > BERNARDO ET AL were hired temporarily under a special
PANGANIBAN; July 12, 1999 employment arrangement which was a result of overtures made
by some civic and political personalities to the Bank
NATURE > BERNARDO ET AL were hired due to "pakiusap" which must
Petition for Certiorari of June 20, 1995 Decision of NLRC which be considered in the light of the context career and working
affirmed the August, 22 1994 ruling of Labor Arbiter Linsangan environment which is to maintain and strengthen a corps of
and August 4, 1995 Resolution of NLRC denying the MFR professionals trained and qualified officers and regular
employees who are baccalaureate degree holders from
FACTS excellent schools which is an unbending policy in the hiring of
- Complainants numbering 43 are deaf-mutes who were hired regular employees
on various periods from 1988 to 1993 by respondent Far East > training continues so that the regular employee grows in the
Bank and Trust Co. as Money Sorters and Counters through a corporate ladder; that the idea of hiring handicapped workers
uniformly worded agreement called "Employment Contract for was acceptable to them only on a special arrangement basis
Handicapped Workers". > counting and sorting of money are tellering works which were
In compliance with Article 80 of the Labor Code of the always logically and naturally part and parcel of the tellers'
Philippines as amended, the BANK and the EMPLOYEE have normal functions
entered into this Employment Contract as follows: > the tellers themselves already did the sorting and counting
1. The BANK agrees to employ and train the EMPLOYEE, and the chore as a regular feature and integral part of their duties >
EMPLOYEE agrees to diligently and faithfully work with the through the "pakiusap" of Arturo Borjal, the tellers were
BANK, as Money Sorter and Counter. relieved of this task of counting and sorting bills in favor of
2. The EMPLOYEE shall perform among others, the following deaf-mutes without creating new positions as there is no
duties and responsibilities: position either in FAR EAST or any other Bank in the Philippines
i. Sort out bills according to color; which deals with purely counting and sorting of bills in banking
ii. Count each denomination per hundred, either manually or operations.
with the aid of a counting machine; - NLRC: affirmed ruling of the labor arbiter that BERNARDO ET
iii. Wrap and label bills per hundred; AL could not be deemed regular employees under A280 LC;
iv. Put the wrapped bills into bundles; and gave credence to conclusion that BERNARDO ET AL were hired
v. Submit bundled bills to the bank teller for verification. as an accommodation to recommendation of civic oriented
3. The EMPLOYEE shall undergo a training period of one (1) personalities; the terms of the contract shall be the law
month, after which the BANK shall determine whether or not between the parties; AND Magna Carta for Disabled Persons is
he/she should be allowed to finish the remaining term of this not applicable, "considering the prevailing circumstances/milieu
Contract. of the case."
4. The EMPLOYEE shall be entitled to an initial compensation of
P118.00 per day, subject to adjustment in the sole judgment of ISSUES
the BANK, payable every 15th and end of the month WON NLRC is guilty of grave abuse of discretion in holding that
5. The regular work schedule of the EMPLOYEE shall be five (5) 1. money sorters and counters working in a bank are not
days per week, from Mondays thru Fridays, at eight (8) hours a regular employees
day. The EMPLOYEE may be required to perform overtime work 2. employment contracts signed and renewed by the
as circumstance may warrant, for which overtime work he/she petitioners, which provide for a period of 6 months, were valid
[shall] be paid an additional compensation of 125% of his daily 3. not applying the provisions of the Magna Carta for the
rate if performed during ordinary days and 130% if performed Disabled (RA 7277), on proscription against discrimination
during Saturday or [a] rest day. against disabled persons.

HELD
Labor Law 1 A2010 - 108 - Disini
Preliminary Matter between the particular activity performed by the employee in
- Propriety of Certiorari: the Court, as a rule, does not review relation to the usual trade or business of the employer. The test
the factual findings of public respondents in a certiorari is whether the former is usually necessary or desirable in the
proceeding. In resolving whether the petitioners have become usual business or trade of the employer. The connection can be
regular employees, SC shall not change the facts found by determined by considering the nature of the work performed
NLRC. SC’s task is merely to determine whether the NLRC and its relation to the scheme of the particular business or
committed grave abuse of discretion in applying the law to the trade in its entirety. Also if the employee has been performing
established facts the job for at least one year, even if the performance is not
1. YES. Only the employees, who worked for more than 6 continuous and merely intermittent, the law deems repeated
months and whose contracts were renewed are deemed and continuing need for its performance as sufficient evidence
regular. Hence, their dismissal from employment was illegal. of the necessity if not indispensibility of that activity to the
Reasoning business. Hence, the employment is considered regular, but
- According to FAR EAST, the employment contracts were only with respect to such activity, and while such activity exist.
prepared in accordance with A80 LC, which provides - The task of counting and sorting bills is necessary and
Art. 80. Employment agreement. — Any employer who desirable to the business of respondent bank. With the
employs handicapped workers shall enter into an exception of sixteen of them, BERNARDO ET AL performed
employment agreement with them, which agreement shall these tasks for more than six months.
include: - As held by the Court, "Articles 280 and 281 of the Labor Code
(a) The names and addresses of the handicapped workers to put an end to the pernicious practice of making permanent
be employed; casuals of our lowly employees by the simple expedient of
(b) The rate to be paid the handicapped workers which shall extending to them probationary appointments, ad infinitum."
be not less than seventy five (75%) per cent of the applicable The contract signed by petitioners is akin to a probationary
legal minimum wage; employment, during which the bank determined the employees'
(c) The duration of employment period; and fitness for the job. When the bank renewed the contract after
(d) The work to be performed by handicapped workers. the lapse of the six-month probationary period, the employees
The employment agreement shall be subject to inspection by thereby became regular employees. No employer is allowed to
the Secretary of Labor or his duly authorized representatives. determine indefinitely the fitness of its employees.
- However, succeeding events and the enactment of RA No. - As regular employees, the 27 petitioners are entitled to
7277 (the Magna Carta for Disabled Persons) justify the security of tenure; that is, their services may be terminated
application of A280 LC. only for a just or authorized cause. Therefore, when FAR EAST
- FAR EAST entered into contract with a total of 56 handicapped failed to show such cause, they are deemed illegally dismissed
workers and renewed the contracts of 37 of them. In fact, two of and entitled to back wages and reinstatement without loss of
them worked from 1988 to 1993. Verily, the renewal of the seniority rights and other privileges. Considering that the job of
contracts of the handicapped workers and the hiring of others money sorting is no longer available because it has been
lead to the conclusion that their tasks were beneficial and assigned back to the tellers to whom it originally belonged,
necessary to the bank. More important, these facts show that petitioners are hereby awarded separation pay in lieu of
they were qualified to perform the responsibilities of their reinstatement.
positions. In other words, their disability did not render them 2. YES
unqualified or unfit for the tasks assigned to them. - Brent Ruling, which upheld the validity of an employment
- Magna Carta for Disabled Persons mandates that a qualified contract with a fixed term, is not applicable. The term limit in
disabled employee should be given the same terms and the contract was premised on the fact that the petitioners were
conditions of employment as a qualified able-bodied person. disabled, and that the bank had to determine their fitness for
- Section 5 of the Magna Carta provides: the position. Its validity is based on A80 LC. Petitioners proved
Sec. 5. Equal Opportunity for Employment. — No disabled themselves to be qualified disabled persons who, under the
person shall be denied access to opportunities for suitable Magna Carta for Disabled Persons, are entitled to terms and
employment. A qualified disabled employee shall be subject conditions of employment enjoyed by qualified able-bodied
to the same terms and conditions of employment and the individuals; hence, A80 does not apply.
same compensation, privileges, benefits, fringe benefits, - Moreover, it must be emphasized that a contract of
incentives or allowances as a qualified able bodied person. employment is impressed with public interest. Provisions of
- Since the Magna Carta accords them the rights of qualified applicable statutes are deemed written into the contract, and
able-bodied persons, they are thus covered by Article 280 of the the "parties are not at liberty to insulate themselves and their
Labor Code, which provides: relationships from the impact of labor laws and regulations by
Art. 280. Regular and Casual Employment. — The provisions simply contracting with each other." 23 Clearly, the agreement
of written agreement to the contrary notwithstanding and of the parties regarding the period of employment cannot
regardless of the oral agreement of the parties, an prevail over the provisions of the Magna Carta for Disabled
employment shall be deemed to be regular where the Persons, which mandate that petitioners must be treated as
employee has been engaged to perform activities which are qualified able-bodied employees.
usually necessary or desirable in the usual business or trade - Because sorting is done in the nighttime, FAR EAST contended
of the employer, except where the employment has been that this task "could not be done by deaf mutes because of their
fixed for a specific project or undertaking the completion or physical limitations as it is very risky for them to travel at
termination of which has been determined at the time of the night." But the court found no basis in this because traveling at
engagement of the employee or where the work or services night involves risks to handicapped and able-bodied persons
to be performed is seasonal in nature and the employment is alike
for the duration of the season. - Datu v. NLRC: the determination of whether employment is
An employment shall be deemed to be casual if it is not casual or regular does not depend on the will or word of the
covered by the preceding paragraph: Provided, That, any employer, and the procedure of hiring . . . but on the nature of
employee who has rendered at least one year of service, the activities performed by the employee, and to some extent,
whether such service is continuous or broken, shall be the length of performance and its continued existence.
considered as regular employee with respect to the activity in - The well-settled rule is that the character of employment is
which he is employed and his employment shall continue determined not by stipulations in the contract, but by the
while such activity exists. nature of the work performed. Otherwise, no employee can
- The test of whether an employee is regular become regular by the simple expedient of incorporating this
> De Leon v. NLRC: The primary standard, therefore, of condition in the contract of employment.
determining regular employment is the reasonable connection
Labor Law 1 A2010 - 109 - Disini
> Romares v. NLRC: A280 was emplaced in our statute books to services of an employee who has been engaged on a
prevent the circumvention of the employee's right to be secure probationary basis may be terminated for a just cause or
in his tenure by indiscriminately and completely ruling out all when he fails to qualify as a regular employee in accordance
written and oral agreements inconsistent with the concept of with reasonable standards made known by the employer to
regular employment defined therein. Where an employee has the employee at the time of his engagement. An employee
been engaged to perform activities which are usually necessary who is allowed to work after a probationary period shall be
or desirable in the usual business of the employer, such considered a regular employee.
employee is deemed a regular employee and is entitled to
security of tenure notwithstanding the contrary provisions of his ISSUES
contract of employment. 1. WON petitioner was allowed to work beyond his probationary
3. YES period, and was therefore already a regular employee at the
- The noble objectives of Magna Carta for Disabled Persons are time of his dismissal
not based merely on charity or accommodation, but on justice 2. WON Middleby informed petitioner of standards for
and the equal treatment of qualified persons, disabled or not. regularization at the start of his employment
The Court believes, that, after showing their fitness for the work 3. WON Alcira was illegally dismissed when Middleby opted not
assigned to them, they should be treated and granted the same to renew his contract on the last day of the probationary period
rights like any other regular employees.
Disposition Petition is hereby GRANTED. The June 20, 1995 HELD
Decision and the August 4, 1995 Resolution of the NLRC are 1. NO
REVERSED and SET ASIDE. Respondent Far East Bank and Trust Ratio Computation of the 6-month probationary period is
Company is hereby ORDERED to pay back wages and reckoned from the date of appointment up to the same
separation pay to each of the following twenty-seven (27) calendar date of the 6th month following, thus dismissal on
petitioners November 20, 1996 was well within the probationary period.
Reasoning
- the computation of Alcira (using 30 days x 6 months = 180
days) is wrong. As held in CALS Poultry Supply Corp v Roco:
MITSUBISHI MOTORS CORP V CHRYSLER PHIL
(O)ur computation of the 6-month probationary period is
LABOR UNION reckoned from the date of appointment up to the same
[PAGE 102] calendar date of the 6th month following.
- In short, since the number of days in each particular month
ALCIRA V NLRC was irrelevant, Alcira was still a probationary employee when
Middleby opted not to "regularize" him on November 20, 1996.
(MIDDLEBY PHILS/THOMAS, PENA, MAMARADLO) 2. YES
431 SCRA 508 Ratio An employer is deemed to substantially comply with the
CORONA; June 9, 2004 rule on notification of standards if he apprises the employee
that he will be subjected to a performance evaluation on a
NATURE particular date after his hiring.
Appeal from decision of CA (dismissing complaint for illegal Reasoning
dismissal) - Middleby substantially notified the petitioner of the standards
of a regular employee when it apprised him, at the start of his
FACTS employment, that it would evaluate his supervisory skills after 5
- Alcira was hired by Middleby as an engineering support months.
services supervisor on a probationary basis for 6 months. - That the appointment paper contained the remark that Alcira
Apparently unhappy with Alcira’s performance, the company would be subjected to a performance evaluation is enough
terminated Alcira’s services. The issue arises on whether the notice that the probationary basis of his employment was
termination occurred before or after the 6-month probationary conditional (conditioned upon his meeting of performance
period. standards)
- Alcira: he was hired on May 20, 1996 3. NO
- Middleby: Alcira was hired May 27, 1996 Ratio Although probationary employees are also accorded
- The appointment paper indicated that the status was security of tenure, this protection ends upon expiration of the
“probationary (6mos)” and a remark that “after 5 mos, probationary period.
performance shall be evaluated and any adjustment shall Reasoning
depend on work performance” - It is settled that even if probationary employees do not enjoy
- On November 20, 1996, Alcira was not allowed to work permanent status, they are accorded the constitutional
(allegedly by withholding of his time card by a senior officer). protection of security of tenure. This means they may only be
- Alcira filed a complaint with the Labor Arbiter, contending that terminated for just cause or when they otherwise fail to qualify
he was already a regular employee as of the date he was as regular employees in accordance with reasonable standards
dismissed. (he computed the 6mos probationary period as made known to them by the employer at the time of their
30days x 6 mos = 180 days, thus coming to the conclusion that engagement.
the period ended on the 180th day after the day of - But we have also ruled in Manlimos, et. al. vs. National Labor
employment). Relations Commission that this constitutional protection ends
- The company (and its officers, herein private respondents) on the expiration of the probationary period. On that date, the
presented evidence that showed Alcira’s poor performance, parties are free to either renew or terminate their contract of
tardiness, absences, and violations of company rules on employment.
wearing of uniform during the probationary period, and said In this case, Middleby exercised its option not to renew the
that since he failed to meet the standards, Alcira’s application contract when it informed Alcira on the last day of his
to become a regular employee was denied. probationary employment that it did not intend to grant him a
LA, NLRC, and CA all ruled in favor of the company, upholding regular status.
the validity of the dismissal. Disposition Petition DENIED.
- Central to the matter at hand is art. 281 of Labor Code:
ART. 281. PROBATIONARY EMPLOYMENT. Probationary
employment shall not exceed six (6) months from the date
CRITERIA REGULARIZATION
the employee started working, unless it is covered by an
apprenticeship agreement stipulating a longer period. The
Labor Law 1 A2010 - 110 - Disini
ALCIRA V NLRC perform according to its work standards. The law, surely, was
never meant to produce such an inequitable result.
(MIDDLEBY PHILS/THOMAS, PENA, MAMARADLO)
- By voluntarily agreeing to an extension of the probationary
[PAGE105] period, Dequila in effect waived any benefit attaching to the
completion of said period if he still failed to make the grade
during the period of extension. The Court finds nothing in the
law which by any fair interpretation prohibits such a waiver. And
no public policy protecting the employee and the security of his
tenure is served by prescribing voluntary agreements which, by
EXTENSION OF CONTRACT reasonably extending the period of probation, actually improve
and further a probationary employee's prospects of
demonstrating his fitness for regular employment.
MARIWASA V LEOGARDO
169 SCRA 465
NARVASA; January 26, 1989
NATURE
Certiorari

FACTS
- Dequila was hired on probation by Mariwasa as a general
utility worker on Jan.10, 1979. After the probationary period of
six months, MAriwasa informed him that his work had proved
unsatisfactory and had failed to meet the required standards
and to give him a chance to improve his performance and ABSORBED EMPLOYEES
qualify for regular employment, instead of dispensing with his
service then and there, with his written consent Mariwasa
extended his probation period for another three months from CEBU STEVEDORING CO INC V REGIONAL
July 10 to October 9, 1979. His performance, however, did not DIRECTOR
improve and on that account Mariwasa terminated his 168 SCRA 315
employment at the end of the extended period. REGALADO; December 8, 1988
ISSUE
WON employer and employee may by agreement extend the FACTS
probationary period of employment beyond the six months - Complainants Gelig and Quijano (COMPLAINANTS) were former
prescribed in A282 LC employees of the Cebu Customs Arrastre Service (CCAS).
Pursuant to an Administrative Order by the Bureau of Customs,
HELD CCAS was abolished "for the reason that the objectives for
YES which it was created had already been attained". Consequently,
- An extension of the probationary period of employment may all the employees of CCAS, including COMPLAINANTS, were
lawfully be covenanted, notwithstanding the seemingly given their termination separation pay by the Bureau.
restrictive language of Article 282. - After the abolition, all the employees of CCAS, including
Reasoning COMPLAINANTS, were absorbed by CSCI with the same
- Buiser vs. Leogardo, Jr . recognized agreements stipulating positions that they held in the CCAS. Almost 6 months later,
longer probationary periods as constituting lawful exceptions to however, COMPLAINANTS were dismissed by CSCI without prior
the statutory prescription limiting such periods to six months, clearance. COMPLAINANTS consequently filed an action for
when it upheld as valid an employment contract between an reinstatement with backwages with the Labor Regional Office.
employer and two of its employees that provided for an The Regional Director ruled in COMPLAINANTS’ favor, which
eigthteen-month probation period. This Court there held: ruling was affirmed on appeal by the then Ministry of Labor and,
- Generally, the probationary period of employment is limited to subsequently, by the Office of the President.
six (6) months. The exception to this general rule is when the
parties to an employment contract may agree otherwise, such ISSUES
as when the same is established by company policy or when the 1. WON the CSCI was denied due process due to the lack of
same is required by the nature of work to be performed by the hearing before the Regional Director and COMPLAINANTS’
employee. In the latter case, there is recognition of the exercise failure to file their respective position papers
of managerial prerogatives in requiring a longer period of 2. WON the COMPLAINANTS were merely casuals and could,
probationary employment.xxxxxx especially where the therefore, be terminated even without prior clearance from the
employee must learn a particular kind of work such as selling, then Ministry of Labor and without entitlement to separation
or when the job requires certain qualifications, skills experience pay
or training. 3. WON the positions occupied by COMPLAINANTS with CCAS
- In this case the inability of the probationer to make the grade are identical with the positions already filled up and being
became apparent only at or about the end of the six-month discharged in the main office of CSCI, COMPLAINANTS may be
period, hence an extension could not have been pre-arranged terminated for redundancy
as was done in Buiser assumes no adverse significance, given
the lack, of any indication that the extension to which Dequila HELD
gave his agreement was a mere stratagem of petitioners to 1. NO
avoid the legal consequences of a probationary period - The right to be heard, as a preliminary step essential to the
satisfactorily completed. For the extension of Dequila's rendition of an enforceable judgment, constitutes a basic
probation was ex gratia, an act of liberality on the part of his element of the constitutional requirement of due process of law.
employer affording him a second chance to make good after However, while CSCI was not afforded an opportunity to be
having initially failed to prove his worth as an employee. Such heard by oral argument on its position paper due to its absence
an act cannot now unjustly be turned against said employer's at the scheduled hearing, it is likewise true that it was required
account to compel it to keep on its payroll one who could not to, as in fact it actually did, submit a position paper which,
together with the evidence presented during the hearing,
Labor Law 1 A2010 - 111 - Disini
became the basis of the questioned order of the Regional allegedly for withholding tax, and the salary he was receiving
Director. From this order, CSCI appealed to the Labor Minister, was only P2,187.00 a month, which was way below the
and then to the Office of the President. It is, therefore, apparent P2,410.17 stipulated in the PADPAO memorandum of
that CSCI was not denied adequate remedies from the alleged agreement.
procedural infirmities surrounding the Regional Director's order. - Petitioner alleged that the private respondent was hired on
The entire record of the case was reviewed and duly considered January 30, 1988, on a probationary basis, and he signed an
on appeal, which appellate proceeding remedied any authority to deduct from his salary any reimbursement for any
inadequacy in the procedural due process with which the trial loss or damage caused to properties of the client; that he was
proceedings are being faulted. given a copy of petitioner’s rules and regulations which provide
2. NO that sleeping on post is punishable by warning, suspension and
- We agree with the Regional Director that COMPLAINANTS dismissal and he was caught sleeping on post on March 17,
could not be considered probationary employees because they 1988, for which he was sent a memorandum giving him a last
were already well-trained in their respective functions. While warning; that on March 25, 1988, he figured in a quarrel with
COMPLAINANTS were still with the CCAS they were already another security guard, which resulted in a near shootout; that
clerks with 10 years of service, on the average. They were, at the end of his probationary employment, he was given a
therefore, experienced workers. Findings of quasi-judicial psychological test and on the basis of the foregoing, petitioner
agencies (like the Labor Regional Office) which have acquired told him that his probationary employment had come to an end
expertise because their jurisdiction is confined to specific as he did not pass the company standard and therefore, he
matters are generally accorded not only respect but, at times, could not be hired as a regular employee.
even finality where such findings are supported by substantial - LA Guanio handed down a decision in favor of complainant.
evidence. The respondent was ordered to reinstate the complainant to his
3. NO former position and accord to him the status of a regular
- Despite Art. 283’s provision on termination of employment employee, and to refund to the complainant the deduction it
due to redundancy and retrenchment, records fail to establish had made from his salary in the amount of P20.00 per month.
clearly that the positions occupied by COMPLAINANTS are The claim of the complainant for underpayment of wages is
identical with those presently existing in CSCI's office. CSCI also dismissed for lack of merit.
kept COMPLAINANTS in its employ for almost 6 months without - NLRC affirmed the decision with a slight modification: the
raising this issue. CSCI does not mention which positions are refund of the deductions made by respondent from
allegedly duplicated by the positions held by COMPLAINANTS. complainant’s salaries in the amount of P20.00 per month was
CSCI does not even explain why COMPLAINANTS should be the vacated and set aside.
ones to be terminated, without regard to the comparative
lengths of service, qualifications and performance of all ISSUES
employees concerned. 1. WON private respondent’s employment with A’ Prime
- CSCI’s claim of financial losses is untenable since it appears Security Services, Inc. was just a continuation of his
that it absorbed and employed for almost 6 months, without employment with Sugarland Security Services, Inc
any intimation of supposed financial distress, the majority of the 2. WON private respondent is a regular employee of petitioner
former employees of CCAS. It never advised COMPLAINANTS of 3. WON private respondent’s dismissal is illegal
a company retrenchment program; the first time this supposed
program was mentioned was when CSCI was trying to justify the HELD
dismissal of COMPLAINANTS before the labor arbiter. CSCI 1. YES
presented a Statement of Operations, which, however, remains Ratio The Court cannot sanction the practice of some
an uncorroborated and self-serving piece of evidence. companies which, shortly after a worker has become a regular
Disposition Petition DISMISSED. COMPLAINANTS ordered employee, effects the transfer of the same employee to another
reinstated with backwages. In the event reinstatement becomes entity whose owners are the same, or identical, in order to
impossible, COMPLAINANTS to be given 1-month-salary worth of deprive subject employee of the benefits and protection he is
separation pay. entitled to under the law.
Reasoning
- The allegations of the private respondent that Sugarland is a
DOUBLE PROBATION sister company of A’ Prime and that the latter absorbed the
security contracts and security guards of Sugarland with the
U.S. Embassy were neither denied nor controverted by the
A’ PRIME SECURITY SERVICES INC V NLRC petitioner before the Labor Arbiter.
(GUANIO, MORENO) - Petitioner’s failure to deny that Sugarland is its sister company
and that petitioner absorbed Sugarland’s security contract and
322 SCRA 283
security personnel assumes overriding significance over the
PURISIMA; January 19, 2000 resignation theorized upon, evincing petitioner’s design to
ignore or violate labor laws through the use of the veil of
NATURE corporate personality.
A special civil action for certiorari seeks to annul the decision of 2. YES
the NLRC Ratio The complainant became a regular employee upon
completion of his six-month period of probation. Private
FACTS respondent started working on January 30, 1988 and completed
- The complaint alleged, among others, that complainant the said period of probation on July 27, 1988. Thus, at the time
(Othello C. Moreno) had been working as a security guard for a private respondent was dismissed on August 1, 1988, he was
year with the Sugarland Security Services, Inc., a sister already a regular employee with a security of tenure. He could
company of petitioner; that he was rehired as a security guard only be dismissed for a just and authorized cause.
on January 30, 1988 by the petitioner and assigned to the same - There is no basis for subjecting private respondent to a new
post at the U.S. Embassy Building; that he was among those probationary or temporary employment on January 30, 1988,
absorbed by the petitioner when it took over the security considering that he was already a regular employee when he
contracts of its sister company with the U.S. Embassy; that he was absorbed by A’ Prime from Sugarland, its sister company.
was forced by petitioner to sign new probationary contracts of 3. YES
employment for 6 months; that on August 1, 1988, his Ratio The dismissal of complainant, a regular employee, was
employment was terminated; that during his employment, the sans any just, legal and valid basis. What is more, he was not
amount of P20.00 per month was deducted from his salary
Labor Law 1 A2010 - 112 - Disini
given a chance to contest his dismissal. He was deprived of an subject matter, content, concepts, skills activities & evaluation,
opportunity to be heard. de la Peña failed to comply.
Reasoning - 11 years later, or on Dec.2, 1991, respondent applied to the
- The dismissal of private respondent was presumably based on LCC again, for the positions of CAT Commander. He was
the results of his behavioral and neuropsychological tests and appointed instead as classroom teacher in P.E. and health. The
on his violation of a company rule on sleeping on post. written contract of employment between LCC & respondent
- With respect to the behavioral and neuropsychological tests, expressly provided that the employment was for 1 academic
the Court agrees with NLRC’s assessment: "Complainant’s year, from June 19992 - March 1993, & the same was accepted
result of his behavioral research and neuropsychological test to by respondent.
our mind, is of no moment, considering that the said test - July 1992: A reminder was sent to respondent by the academic
appeared to have been conveniently contrived to be conducted, evaluation team regarding the school’s standard procedures:
and the result produced on the very day of his dismissal, in timely submission of lesson plans, class records & attendance
question. at regular meetings which respondent defied & continued to
- So also, private respondent’s alleged violations of sleeping on ignore even after having been reminded. In an emergency
post, and quarrelling with a co-worker, may not be proper meeting of faculty members, respondent berated one
grounds for dismissal, as the same were first infractions. Bayoguing, a member of the academic evaluation team &
Circular No. I of A’ Prime, governing discipline, suspension and threatened him with bodily harm, although no untoward
separation from the service of security guards, provides: incident ensued.
"SECTION VIII - SLEEPING ON POST - As his contract was only for one academic school year, de la
1st Offense........- Warning Peña applied for reinstatement in Feb. 1993 but the same was
2nd Offense.......- 30 days suspension without pay denied by the academic team because of his unsatisfactory
3rd Offense........- Dismissal performance.
SECTION IX - CHALLENGING A POSTED SECURITY/LADY - Respondent then filed a complaint in the Regional Arbitration
GUARD AND SUPERIORS Bacolod Branch for illegal dismissal against LCC & members of
1st Offense - One (1) month suspension the academic team. The Labor Arbiter (LA) dismissed this
2nd Offense – Dismissal complaint. On appeal, the NLRC reversed the LA’s decision and
- As the infractions of Sections VIII and IX of Circular No. 1 by held that respondent attained regular status at the time he was
private respondent were first offenses, they were not dismissed & that LCC failed to prove just cause for his dismissal.
punishable by dismissal. They were not valid grounds for Petitioner LCC then filed a MFR to the NLRC which was denied,
terminating the employment of private respondent. hence this petition.
Disposition petition is DISMISSED
ISSUE
WON de la Peña was a permanent employee of LCC
TERMINATION AND SALARY
HELD
NO. He did not attain permanent status.
INTERNATIONAL CATHOLIC MIGRATION Ratio In resolving issues regarding security of tenure of private
COMMISSION V NLRC (GALANG) school teachers, it is the Manual of Regulations for Private
[PAGE 98] Schools, not the Labor Code, which is applicable.
Reasoning
- For a private school teacher to acquire permanent status in
ORIENT EXPRESS PLACEMENT PHILIPPINES V NLRC employment the following must concur: (1) The teacher is a full-
(POEA, FLORES) time teacher; (2) The teacher must have rendered 3
[PAGE 102] consecutive yrs. of service; (3) Such service must have been
satisfactory
- The written contract of respondent stated that he shall be
DELA CRUZ V NLRC employed by the LCC for the school year June 1992 - March
[PAGE 100] 1993, a fixed term of 10 mos. Clearly, the employment was not
permanent but for a specified duration of one school year.
Respondent was a new hire having previously resigned & never
RULE PRIVATE SCHOOL TEACHERS denied the fact that he failed to comply with the requirements
of the school.
Disposition Petition granted, NLRC decision reversed and set
CHIANG KAI SHEK COLLEGE V CA (NLRC, aside.
CALAYLAY, AQUINO, GACUTAN, BELO)
[PAGE 40]
PART TWO
LA CONSOLACION COLLEGE V NLRC LABOR STANDARDS LAW
366 SCRA 226
PARDO; September 28, 2001 PURPOSE
NATURE
Petition for certiorari with preliminary injunction or restraining MARIVELES SHIPYARD CORP V CA (REGONDOLA)
order 415 SCRA 573
QUISUMBING; November 11, 2003
FACTS
- Respondent Jose de la Peña was initially employed by La NATURE
Consolacion College (LCC) as a CAT Commandant for the school Petition for review on certiorari of the decision of the CA
year 1975-1976 & lasted until Sept. 1979, after which he
resigned. Prior to resignation & despite demands by LCC for him FACTS
to submit a syllabi in YDT and CAT containing course objectives,
Labor Law 1 A2010 - 113 - Disini
- In Oct 1993, Mariveles Shipyard Corp engaged the services of the ample protection consonant with labor and social justice
Longest Force Investigation and Security Agency, Inc. to render provisions of the 1987 Constitution.
security services at the former’s premises. - Labor standards are enacted by the legislature to alleviate the
- Petitioner religiously complied with the terms and conditions plight of workers whose wages barely meet the spiraling costs
of the security contract with Longest Force, promptly paying its of basic needs. Labor laws are considered written in every
bills and contract rates. However, it found the services being contract. Stipulations in violation thereof are considered null.
rendered by the assigned guards unsatisfactory and Similarly, legislated wage increases are deemed amendments
inadequate, causing Mariveles Shipyard Corp to terminate its to the contract. Thus, employers cannot hide behind their
contract with Longest Force on April 1995. Longest Force, in contracts in order to evade their (or their contractors’ or
turn, terminated the employment of the security guards it had subcontractors’) liability for noncompliance with the statutory
deployed at the shipyard. minimum wage.
- Private respondents filed a case with the Labor Arbiter. - However, the solidary liability of petitioner with that of Longest
Longest Force, in turn, filed a cross-claim against Mariveles Force does not preclude the application of the Civil Code
Shipyard. provisions on the right of reimbursement from his co-debtor by
- Longest force admitted the following: the one who paid.
> that it employed private respondents as security guards Disposition Decision of Appellate Court affirmed. Petitioner
and assigned them to work at petitioner’s shipyard, rendering and Longest Force are held liable jointly and severally for
12 hours duty per shift underpayment of wages and overtime pay of the security
> it is liable as to the non-payment of the alleged wage guards, without prejudice to petitioner’s right of reimbursement
differential, but passed liability to petitioner alleging that the from Longest Force Investigation and Security Agency, Inc.
service fee paid by Mariveles was way below the PNPSOSIA
and PADPAO rates
- Petitioner denied liability on account of alleged illegal
dismissal, stressing that no employer-employee relationship
SECTION 1: EMPLOYMENT
exists between it and security guards POLICY
- Labor Arbiter declared Mariveles and Longest Force jointly and
severally liable to pay the money claims of private respondents,
and ordered their reinstatement.
- NLRC affirmed in toto the decision of the Labor Arbiter. CA SECTION 2: RECRUITMENT AND
denied due course to petitioner’s appeal and dismissed the case PLACEMENT OF WORKERS
ISSUE
WON petitioner Mariveles should be held jointly and severally
liable with Longest Force for the payment of wage differentials 2.01 RECRUITMENT AND
and overtime pay owing to private respondents
PLACEMENT OF WORKERS –
HELD
YES, petitioner’s liability is joint and several that of Longest
DEFINITION
Force pursuant to Articles 106, 107 and 109 of the Labor Code.
Art 106. CONTRACTOR OR SUBCONTRACTOR –
Whenever an employer enters into a contract with
another person in the performance of the former’s work,
the employees of the contractor and of the latter’s DEFINITION – LAW STRUCTURE
subcontractor, if any, shall be paid in accordance with
the provisions of this Code. PEOPLE V PANIS
In the event that the contractor or subcontractor 142 SCRA 664
fails to pay the wages of his employees in accordance CRUZ; July 11, 1986
with this Code, the employer shall be jointly and
severally liable with this contractor or subcontractor to
such employees to the extent of the work performed NATURE
under the contract, in the same manner and extent that APPEAL by certiorari to review the orders of the CFI Zambales
he is liable to employee directly employed by him. and Olongapo, by Judge Panis
Art 107. INDIRECT EMPLOYER – The provisions of the
immediately preceding Article shall likewise apply to any FACTS
person, partnership, association or corporation which, not - Serapio Abug was charged w/ illegal recruitment for operating
being an employer, contracts with an independent a private fee-charging employment agency by charging fees
contractor for the performance of any work, task, job or and expenses and promising employment in Saudi Arabia to
project. four separate individuals w/o a license.
Art 109. SOLIDARY LIABILITY – The provisions of - Abug filed a motion to quash on the ground that the
existing laws to the contrary notwithstanding, every informations did not charge an offense because he was accused
employer or indirect employer shall be held responsible of illegally recruiting only one person in each of the four
with his contractor or subcontractor for any violation of informations. Under the proviso in Article 13(b), he claimed,
any provision of this Code. For purposes of determining there would be illegal recruitment only "whenever two or more
the extent of their civil liability under this Chapter, they persons are in any manner promised or offered any
shall be considered as direct employers. employment for a fee." The motion was granted by the trial
- When petitioner contracted for security services with Longest court.
Force, petitioner became an indirect employer of private - Private respondent: to constitute recruitment and
respondents. When the agency as contractor failed to pay the placement, all the acts mentioned in Article 13(b) should
guards, the corporation as principal becomes jointly and involve dealings with two or more persons as an indispensable
severally liable to the guards’ wages. The security agency is requirement.
held liable by virtue of its status as direct employer, while the - Petitioner: the requirement of two or more persons is
corporation is deemed the indirect employer of the guards for imposed only where the recruitment and placement consists of
the purpose of paying their wages in the event of failure of the an offer or promise of employment to such persons and always
agency to pay them. This statutory scheme gives the workers in consideration of a fee. The other acts mentioned in the body
Labor Law 1 A2010 - 114 - Disini
of the article may involve even only one person and are not > Saulo interposes for his defense a claim that he was also
necessarily for profit. applying for work abrad through Amelia de la Cruz which led
him to meet the three complainants. They were all there to
ISSUE follow-up their applications and that he was also deceived by
Which is the correct interpretation of Article 13(b) of P.D. 4425 Amelia.
> He denied being an overseas recruiter nor an agent for one.
HELD He also denies receiving the abovementioned amounts from
NEITHER complainants.
- The number of persons dealt with is not an essential > He could not have committed the crime because testimony
ingredient of the act of recruitment and placement of workers. from a POEA employee showed that licenses for recruitment are
Any of the acts mentioned in the basic rule in Article 13(b) will issued only to corporations and not to natural persons.
constitute recruitment and placement even if only one
prospective worker is involved. The proviso merely lays down a ISSUE
rule of evidence that where a fee is collected in consideration of WON the appeal of accused should be given merit
a promise or offer of employment to two or more prospective
workers, the individual or entity dealing with them shall be HELD
deemed to be engaged in the act of recruitment and placement. NO
- The proviso was intended neither to impose a condition on the Ratio Recruitment under the Labor Code refers to “any act of
basic rule nor to provide an exception thereto but merely to canvassing, enlisting, contracting, transporting, utilizing, hiring
create a presumption. The presumption is that the individual or or procuring workers and includes referrals, contract services,
entity is engaged in recruitment and placement whenever he or promising or advertising for employment locally or abroad,
it is dealing with two or more persons to whom, in consideration whether for profit or not; Provided, that any person or entity in
of a fee, an offer or promise of employment is made in the which, in any manner, offers or promises for a fee employment
course of the "canvassing, enlisting, contracting, transporting, to two or more persons shall be deemed engaged in
utilizing, hiring or procuring (of) workers." recruitment and placement.”
Reasoning
- The essential elements of illegal recruitment in large scale are
PEOPLE V SAULO
as follows:
344 SCRA 605 (a) the accused engages in the recruitment and placement of
GONZAGA-REYES; November 15, 2000 workers as defined under Art. 13(b) or in any of the
enumerated prohibitions in Art. 31 of the Labor Code
FACTS (b) the accused has not complied with the guidelines issued
- Romulo Saulo, together with Amelia and Clodualo de la Cruz, by the Secretary of Labor and Employment, particularly with
were charged with violation of A38 of the Labor Code for illegal respect to the securing of a license or an authority to recruit
recruitment in large scale. and deploy workers whether locally or overseas
- From April to May 1990, the three accused falsely represented (c) accused commits the same against three more persons
themelves to have the capacity to contract, enlist and recruit individually or as a group.
workers for employment abroad. They promised job - Saulo proferred inadequate evidence to prove his innocence.
placements to Maullon, Maligaya and Javier without first Even if Saulo did not sign all the receipts presented by the
securing the required license or authority from DOLE. In complainants, it does not weaken the case in any way. A
addition, the three were also charged with three counts of person charged with illegal recruitment may be convicted on
estafa. the strength of the testimonies of the complainants, if found to
- Maligaya had learned from a relative of Saulo that the latter be credible and convincing.
was recruiting workers for Taiwan. He, along with Maullon and - On the argument that licenses for recruitment are issued only
Javier, went to visit Saulo in Saulo’s San Francisco del Monte to corporations, the Labor Code states that “any person or
home. Saulo told Maligaya that she could leave for Taiwan as entity which, in any manner, offers or promises for a fee
soon as she paid the fees for the processing of documents. employment to two or more persons shall be deemed engaged
- Saulo pleaded not guilty to the charges against him. Amelia in recruitment and placement.” A nonlicensee or nonholder of
and Clodualdo still remain at large. Saulo was eventually found authority is a person, corporation or entity which has not been
guilty of three counts of estafa and illegal recruitment. issued a valid license or authority to engage in recruitment and
placement by the Secretary of Labor or whose license or
- Petitioners’ Claim: recovery has been suspended, revoked or cancelled by the
> Maligaya paid P35,000 evidenced by a receipt dated May 21, POEA. Agents or representatives appointed by a licensee or a
1990. Javier was also told to pay the same amount but she holder of authority but whose appointments were not previously
gave an initial amount of P20,000. She did not ask for a receipt recognized by the POEA fall within the definition stated above.
since she trusted Saulo. Maullo was told to pay P30,000 as Disposition Judgment affirmed.
processing fee for work in Taiwan. Maullon made an initial
payment of P7,900 to Saulo’s wife who issued him a receipt in
turn. Maullon then made an additional payment of P6,800 in 2.02 EMPLOYMENT AGENCY
the presence of Amelia de la Cruz and another payment of
P15,700 to Tumalig, a friend of Saulo, who also issued him
another receipt.
> In all three instances, Saulo failed to deliver what he 2.03 ALLOWED ENTITIES
promised. The prosecution also presented a certification dated
July 26, 1994 which stated that Saulo was not authorized by the
POEA to recruit workers for overseas employment. A. GENERAL RULE
- Respondents’ Comments:
B. ALLOWED ENTITIES
5
'Recruitment and placement' refers to any act of canvassing, enlisting, contracting, 2.04 PROHIBITED ENTITY
transporting, hiring, or procuring workers, and includes referrals, contract services,
promising or advertising for employment, locally or abroad, whether for profit or not:
Provided, That any person or entity which, in any manner, offers or promises for a fee
employment to two or more persons shall be deemed engaged in recruitment and
placement."
Labor Law 1 A2010 - 115 - Disini
overseas; and (3) the accused commits the unlawful acts
against three or more persons, individually or as a group. When
2.05 TECHNIQUES IN illegal recruitment is committed in large scale or when it is
committed by a syndicate, it is considered as an offense
REGULATION involving economic sabotage.
Reasoning
LICENSE - When complainants approached Buli-e, she gave the
impression that she had the ability to send workers abroad by
saying that although she did not have a license, her boss did.
PEOPLE V BULI-E - There is no showing that complainants ever set foot in the RSI
404 SCRA 105 office. They were always brought to the house of the spouses
AZCUNA; June 17, 2003 Alolino in Las Pinas.
- Josefina’s acts clearly show that she and Buli-e acted in
NATURE concert towards the accomplishment of a common felonious
Appeal by certiorari purpose which was to recruit workers for overseas employment
even though they had no license to do so.
FACTS - There is nothing on record to corroborate Josefina’s claim that
- Complainants (8 in number) went to the house of appellant as Marketing Director she was authorized to solicit applicants
Buli-e in Baguio City upon learning that she was recruiting for overseas placement through advertisements, referrals, walk-
workers for overseas employment. Buli-e confirmed that she ins, etc.
was recruiting workers for Taiwan and although she did not - Josefina, despite the suspension and expiration of the RSI
have a license of her own, her boss in Manila (Josefina Alolino) license, continued to engage in recruitment activities for
was a licensed recruiter. overseas employment.
- Buli-e told complaints to submit the requirements to her which - Licensed agencies are prohibited from conducting any
she in turn will submit to her boss who was in charge of provincial recruitment, job fairs or recruitment activities of any
processing the documents. Complainants complied with the form outside of the address stated in the license, acknowledged
requirements and paid the downpayment. branch or extension office, without securing prior authority from
- Buli-e brought the complainants to the spouses Alolino’s house the POEA.
in Las Pinas to follow up their applications where they were 2. YES
assured by the spouses that they were licensed to recruits Ratio It is settled that a person convicted of illegal recruitment
OCW’s and that they can deploy workers within two to three under the Labor Code can also be convicted of violation of the
months. Revised Penal Code provisions on estafa provided that the
- After months of waiting, complainants were not deployed elements of the crime are present.
abroad as promised by appellants. Hence they went to the Reasoning
POEA in Baguio to find out whether or not appellants are - The elements of estafa are: (1) the accused defrauded another
licensed recruiters. When they learned otherwise, they filed a by abuse of confidence or by means of deceit, and (2) that
complaint with the POEA-CAR and eight separate informations damage or prejudice capable of pecuniary estimation is caused
for estafa with the Baguio City Prosecutor. to the offended party or third person.
- During trial, Buli-e testified that she was tasked to find job - Appellants deceived complainants into believing that they had
applicants whom she can refer to RSI through Josefina. She the authority and capability to send them to Taiwan for
would be paid for each referral. When Buli-e asked Josefina had employment. On the strength of such assurance, complainants
a license, Josefina answered in the affirmative. Buli-e presented, parted with their money in payment of the placement fees.
Mrs. Nonette Villanueva, the unit coordinator of POEA-CAR to Disposition AFFIRMED
testify that RSI was a licensed employment agency and that
Josefina was a licensed recruiter at the time that Buli-e had
dealings with her co-appellant. 2.06 ILLEGAL RECRUITMENT
- Mrs. Villanueva clarified that licenses of permits to recruit
workers are territorial in nature so that an agency licensed in
Manila can only engage in recruitment activities within the
place specified in the license although the applicants may be
ELEMENTS OF CRIME
nonresidents of Metro Manila.
- Josefina however denied that Buli-e was an agent of Mrs. Fe PEOPLE V ORDONO
Go, another Marketing Director for RSI. Josefina said she
accepted referrals from Buli-e even though the latter was not
335 SCRA 331
her agent or connected with RSI because their agency accepts MENDOZA; July 10, 2000
referrals from everyone.
- The trial court found Buli-e and Josefina guilty of illegal NATURE
recruitment in a large scale and estafa. Hence this petition. Appeal from the decision of RTC

ISSUE FACTS
1. WON appellants are guilty of illegal recruitment in a large - Complainant Presenio Lorena is a resident of Libtong, Tagudin,
scale Ilocos Sur. He only finished grade school. He earns his living as
2. WON appellants are guilty of estafa a farmer. He was introduced to accused-appellant by her
relative, Zenaida Ordoño, when they went to his residence.
HELD Accused-appellant represented herself as one connected with a
1. YES recruitment agency and able to deploy workers abroad,
Ratio The essential elements of the crime of illegal particularly in Korea.
recruitment in large scale are (1) the accused engages in acts - Attracted by the alleged high salaries in Korea, he was
of recruitment and placement of workers defined under Article convinced to apply for an overseas job by the accused-
13(b) or in any prohibited activities under Article 34 of the appellant. He paid sums of money and in return accused-
Labor Code; (2) the accused has not complied with the appellant secured for Lorena a passport, a two-way plane ticket
guidelines issued by the Secretary of Labor and Employment, and some pocket money in U.S. currency from the money she
particularly with respect to the securing of a license or an received from him.
authority to recruit and deploy workers, either locally or
Labor Law 1 A2010 - 116 - Disini
- Accused-appellant informed Lorena that Kuala Lumpur is in - Accused-appellant is clearly guilty of illegal recruitment. But
Korea and that, upon arrival there, he would be fetched by a accused-appellant is correct that she cannot be sentenced to
certain Joy Mejia from the Metro Hotel, where he was told to suffer life imprisonment and pay a fine of P100,000.00 for each
check in. On January 23, 1993, Lorena took a Philippine Airlines count of illegal recruitment. This is the penalty for illegal
flight to Kuala Lumpur, Malaysia. As instructed, he stayed at the recruitment committed either by a syndicate or in large scale,
Metro Hotel for several days, but no one came to fetch him. but this has not been shown in this case. The informations do
Lorena went to the Philippine Embassy for assistance, but he not allege the offense of illegal recruitment committed in large
was asked to give U.S. $500.00 for the processing of his work scale or by a syndicate but only of illegal recruitment. Nor does
permit. As he did not have enough money, he came back to the the evidence show that the illegal recruitment was committed
Philippines on February 4, 1993. He went to see accused- in large scale or by a syndicate. Hence, the applicable penalty is
appellant to confront her, but she told him that if he wanted to that provided under Art. 39(c) of the Labor Code which states:
try his luck again in finding employment abroad, he must recruit Any person who is neither a licensee nor a holder of authority
two more persons so that the placement fees they would pay under this Title found violating any provision thereof or its
would be used for his second job application. implementing rules and regulations shall, upon conviction
- The other complainant, Jerry Lozano, is also a resident of thereof, suffer the penalty of imprisonment of not less than
Libtong, Tagudin, Ilocos Sur. Like Lorena, he is also a farmer. He four years nor more than eight years or a fine of not less than
never reached high school. Sometime in December 1993, he P20,000 nor more than P100,000 or both such imprisonment
was called to Lorena’s house upon accused-appellant’s request. and fine, at the discretion of the court.
There, Lorena introduced accused-appellant to him. Accused- Disposition Decision appealed from is affirmed with
appellant introduced herself to Lozano as a recruiter of modification as to sentence
overseas workers for Korea. Lozano was convinced to apply in
the hope of landing a good job in Korea. Lozano paid her the
PEOPLE V SAGAYAGA
total amount of P41,000.00 in two installments. His passport,
two-way ticket and pocket money in U.S. dollars were obtained 423 SCRA 468
from the money he had paid to accused-appellant. He arrived in CALLEJO SR; February 23, 2004
Kuala Lumpur, Malaysia, not in Korea as he was promised.
There, he was apprehended by the Malaysian police at the NATURE
airport after finding that he had no other travel documents with This is an appeal from the Decision of the Regional Trial Court of
him except his passport. He was kept in a flooded jail for one Manila, Branch 35, convicting the appellant Leticia Sagayaga of
night. The next day, he was deported to the Philippines. After large scale illegal recruitment as defined in Section 6, Republic
arriving home, he saw accused-appellant and confronted her. Act No. 8042 and sentencing her to suffer life imprisonment.
As in Lorena’s case, he was told to recruit two persons so that
the money they would pay for their placement fees would be FACTS
used by him for another overseas employment application. - The appellant was charged with large scale illegal recruitment
- Criminal cases were filed (illegal recruitment and estafa). The in an Information. Sometime in the last week of October 1997,
trial court found accused guilty beyond reasonable doubt and Elmer Janer went to the office of Alvis Placement Service
imposed the death penalty for the illegal recruitment cases. Corporation to apply for overseas employment as factory
worker in Taiwan. Appellant Leticia Sagayaga, after personally
ISSUE receiving Elmer’s application, required him to submit the
WON accused is guilty of illegal recruitment necessary documents. Appellant further asked Elmer to pay
HELD seventy-five thousand pesos (P75,000.00) as placement fee.
YES Elmer paid the said fee to appellant in three (3) installments,
- Illegal recruitment is committed when two elements concur, the first, on November 5, 1997, in the amount of twenty-five
namely: (1) the offender has no valid license or authority thousand pesos (P25,000.00); the second, on November 13,
required by law to enable one to lawfully engage in recruitment 1997, in the amount of five thousand pesos (P5,000.00); and
and placement of workers; and (2) he undertakes either any the third, on November 19, 1997, in the amount of forty-five
activity within the meaning of “recruitment and placement” thousand pesos (P45,000.00). All the payments were made
defined under Art. 13(b), or any of the prohibited practices inside Alvis Placement Agency.
enumerated under Art. 34 of the Labor Code. Art. 13(b) of the - As required, Elmer also had his medical examination at the
Labor Code defines “recruitment and placement” as “any act of Angeles Medical Clinic, the result of which confirmed that he
canvassing, enlisting, contracting, transporting, utilizing, hiring, was fit to work. Thereafter, he was told to wait for the arrival of
or procuring workers, and includes referrals, contract services, the employer. After seven (7) months, no employer arrived.
promising, or advertising for employment, locally or abroad, Tired of waiting, Elmer demanded that he be refunded of his
whether for profit or not; Provided that any person or entity money (Id.). Despite appellant’s promises to pay, Elmer was
which in, any manner, offers or promises for a fee employment not refunded of his money.
to two or more persons, is considered engaged in recruitment - Exasperated, Elmer asked appellant for a promissory note,
and placement.” which appellant executed, promising to pay Elmer seventy-five
- In these cases, these elements concur. The certification issued thousand (P75,000.00) on May 6, 1998 (pp. 10 and 11, TSN,
by the DOLE Regional Office in La Union that at the time September 7, 1999). In said promissory note, appellant
material to these cases the accused-appellant had no authority designated herself as the assistant general manager of
to engage in recruitment activities is unrebutted. The acts of the placement agency. When appellant failed to refund the
accused-appellant, consisting of her promise of employment to amount to Elmer on the date stated in the promissory note, the
the complainants and of transporting them abroad, fall squarely latter went to the Philippine Overseas Employment
within the ambit of recruitment and placement as defined by Administration (POEA) and filed a sworn complaint against
law. appellant. Elmer Ramos and Eric Farol filed their complaint
- Another indication that accused-appellant recruited based on basically similar facts.
complainants was the fact that Presenio Lorena’s “contact” in - Appellants Contention:
Kuala Lumpur was Joy Mejia, who is a close friend of accused- > The appellant avers that she is not criminally liable for the
appellant. Indeed, accused-appellant’s claim that she did not crime charged because the prosecution failed to prove that she
represent herself as a licensed recruiter but that she merely had a direct or actual control, management or direction of the
tried to help complainants secure “tourist visas” could not make business and recruitment activities of the Alvis Placement
her less guilty of illegal recruitment, it being enough that she Services Corporation (APSC). She asserts that she had no
gave the impression of having had the authority to recruit knowledge of the recruitment activities of APSC and had no
workers for deployment abroad. participation whatsoever in its operation. In dealing with the
Labor Law 1 A2010 - 117 - Disini
private complainants, she was merely performing routinary (m) Failure to reimburse expenses incurred by the worker in
office work as a mere employee. Her participation as an connection with his documentation and processing for
employee of APSC with respect to the employment application purposes of deployment, in cases where the deployment does
of Elmer Ramos for Taiwan was to receive his placement fee of not actually take place without the worker’s fault....
P20,000.00. Hence, the appellant avers, she cannot be held - Under the last paragraph of the said section, those criminally
criminally liable for illegal recruitment in large scale. If, at all, liable are the principals, accomplices and accessories. In case
she can be held liable only with respect to the employment of a juridical person, the officers having control, management or
applications of Janer and Farol. Thus, according to the direction of the business shall be criminally liable.
appellant, the trial court erred in sentencing her to life
imprisonment.

ISSUE
WON the accused-appellant was a top ranking officer of said PEOPLE V BAYTIC
corporation, with authority to participate directly in the control, 398 SCRA 18
management or direction of its business affairs CARPIO-MORALES; February 20, 2003
HELD
YES NATURE
Ratio Recruitment is “any act of canvassing, enlisting, Appeal from the decision of the Regional Trial Court of Quezon
contracting, transporting, utilizing, hiring or procuring workers, City ffinding the accused guilty of illegal recruitment in large
and includes referrals, contract services, promising or scale
advertising for employment, locally or abroad, whether for profit
or not: Provided, That any person or entity which, in any FACTS
manner, offers or promises for a fee employment to two or - On 24 September 1998 Kennedy Hapones accompanied by
more persons shall be deemed engaged in recruitment and accused Alex Baytic went to the house of his aunt Ofelia
placement. Bongbonga at 514 Tabigo Street, Manggahan, Quezon City.
Reasoning There they found Ofelia, Nolie and Zenaida, all surnamed
- The appellant, as shown by the records of the POEA, was both Bongbonga, together with Millie Passi, Yolanda Barrios and
the APSC Vice-President-Treasurer and the Assistant General Elvira Nacario. Accused Alex Baytic told the girls that he was
Manager. She was a high corporate officer who had direct looking for workers willing to work in Italy as utility personnel.
participation in the management, administration, direction and He explained that interested applicants should give him money
control of the business of the corporation. for processing of their medical certificate, certificate of
- Under Section 6 (m) of Rep. Act No. 8042, illegal recruitment employment and other travel documents. Since the offer
may be committed by any person, whether a non-licensee, non- appeared to be a good opportunity to work abroad, Ofelia
holder of authority, licensee or holder of authority, thus: Bongbonga on the same day gave the accused P3,500.00,
(m) Failure to reimburse expenses incurred by the worker in followed by Millie Passi with P4,000.00 the next day, and Nolie
connection with his documentation and processing for Bongbonga with P4,000.00 on 5 October as their placement
purposes of deployment, in cases where the deployment does fees. All these transactions were evidenced by receipts issued
not actually take place without the worker’s fault.... by accused Alex Baytic.
- Under the last paragraph of the said section, those criminally - According to private complainant Ofelia Bongbonga, accused
liable are the principals, accomplices and accessories. In case Baytic promised her and her two (2) co-applicants an interview
of a juridical person, the officers having control, management or by his cousin, a doctor from Italy, on 7 October 1998 at the
direction of the business shall be criminally liable. Corinthian Gardens. However, on the appointed date of their
- At any rate, the accused has expressly admitted in the course interview, the accused failed to appear. Ofelia, Millie and Nolie
of her testimony that she was at the time the Treasurer of their frantically searched for him but he was nowhere to be found.
recruitment agency. As such she was in charge of the Ofelia further testified that sometime in January 1999 they
management and control of the financial affairs and resources heard over the radio that accused Baytic was arrested in Pasig
of the corporation. She was in charge of collecting all its City for illegal recruitment activities. Upon inquiry from the
receivables, safely keeping them, and disbursing them. She radio station, she learned that the accused was already
testified that it was part of her duties to receive and collect the detained at the Pasig Provincial Jail, so she followed him there.
monies paid by applicants. Her disbursing authority has been Thereafter, she and her two (2) other companions, Millie and
clearly demonstrated by her co-signing the checks Exhibits D-2 Nolie, who were likewise victimized by the accused filed the
and G. instant case against him.
- The appellant is guilty of illegal recruitment as a principal by - Accused Alex Baytic, testifying in his defense, not only denied
direct participation, having dealt directly with the private the accusations against him but also insisted that it was
complainants. actually Kennedy Hapones, a new acquaintance, who was the
- The appellant’s bare denial of her involvement in the illegal recruiter. He recounted that sometime in November
management, administration, control and operation of APSC 1999, he went to the house of Hapones who was trying to
cannot prevail over her judicial admissions, the positive recruit him for deployment abroad. According to the accused,
testimonies of the private complainants and the documentary Hapones told him to prepare P250,000.00 although the former
evidence adduced by the prosecution. eventually accepted an initial advance payment of P4,500.00.
- Section 6 of Rep. Act No. 8042 provides that illegal He again met Hapones the following month when the latter told
recruitment shall be considered an offense involving economic him and a group of other applicants, including Ofelia
sabotage if committed in large scale, viz, committed against Bongbonga, that their requirements were ready. That was the
three (3) or more persons individually or as a group, the last time he saw Hapones who, he later learned, had already
imposable penalty for which is life imprisonment and a fine of left for abroad. He was suspected of being in cahoots with
not less than P500,000.00 nor more than P1,000,000.00. In this Hapones because whenever the latter and the applicants
case, there are three private complainants, namely, Elmer talked, Hapones would always point at him, although he never
Janer, Eric Farol and Elmer Ramos. The trial court, thus, had the opportunity to know what Hapones had actually said to
correctly convicted the appellant of large scale illegal them.
recruitment and sentenced her to suffer life imprisonment. - But the trial court sustained the complaining witnesses and
Under Section 6 (m) of Rep. Act No. 8042, illegal recruitment gave more credence to their straightforward and consistent
may be committed by any person, whether a non-licensee, non- testimonies. It opined that all the essential requisites of the
holder of authority, licensee or holder of authority, thus: crime of illegal recruitment in large scale as defined in Art. 13,
Labor Law 1 A2010 - 118 - Disini
par. (b), of the Labor Code were present - The accused made witnesses’ testimonies that he made promises of employment,
representations to each of the complainants that he could send solicited money from them and even signed receipts as proof of
them to Italy as janitor/utility aides through direct hiring, which payment.
constitutes a promise of employment which amounted to
recruitment as defined under Article 13(b) of the Labor Code.
The testimonies of the three prosecution witnesses that they LARGE SCALE
were actually recruited for overseas employment by the
accused and were induced by him to part with their money
retain undiminished probative worth and weight. The receipts PEOPLE V BULI-E
respectively issued to the complainants are sufficient proofs of [PAGE 110]
his guilt as against accused’s mere denial of the signatures
appearing therein. The modus operandi of the accused was well
PEOPLE V DUJUA
established by the corroborative testimonies of the witnesses.
- Accused-appellant now prays that the Court to take a second 422 SCRA 169
hard look at his conviction in view of the alleged failure of the TINGA; February 5, 2004
prosecution to prove his guilt beyond reasonable doubt. He
takes exception to the finding of the trial court that all the FACTS
elements of the crime of illegal recruitment in large scale are - Ramon Dujua, his mother Rose Dujua, his aunt Editha Singh,
present. He argues that the first element, i.e., the accused and his uncle were charged with Illegal Recruitment in Large
engages in the recruitment and placement of workers, defined Scale.
under Art. 13, or in any prohibited activities under Art. 34, of - The prosecution presented a Certification issued by
the Labor Code, is not present because he did not solicit any Hermogenes C. Mateo, Director II, Licensing Branch of the
money from the complainants nor did he promise them POEA, stating that Ramon Dujua is not licensed or authorized by
employment in Italy. The truth of the matter, according to him, the POEA to recruit workers abroad. Another Certification, of
is that he himself was victimized by Kennedy Hapones, the real even date shows that neither is the World Pack Travel and
illegal recruiter. He explained that when Hapones could not be Tours authorized to recruit workers abroad.
contacted, the complainants vented their anger towards him, - The RTC rendered its decision convicting Ramon Dujua of
being Hapones’ constant companion. illegal recruitment in large scale.
Such being the case, accused-appellant insists that the second
element, which is the absence of license or authority to recruit, ISSUE
could not have been present because there was in fact no need WON Ramon Dujua committed the crime of illegal recruitment
for him to apply for the license as he was not in the recruitment in large scale
business.
HELD
ISSUE YES
WON the accused is guilty of illegal recruitment - The essential elements of the crime of illegal recruitment in
large scale are:
HELD (1) the accused engages in acts of recruitment and
YES placement of workers defined under Article 13(b) or in any
- The appealed decision finding accused-appellant guilty of prohibited activities under Art. 34 of the Labor Code;
illegal recruitment in large scale is affirmed (2) the accused has not complied with the guidelines issued
Ratio Illegal recruitment is committed when two (2) elements by the Secretary of Labor and Employment, particularly
concur. First, the offender has no valid license or authority with respect to the securing of a license or an authority to
required by law to enable one to engage lawfully in recruitment recruit and deploy workers, either locally or overseas; and
and placement of workers. Second, he or she undertakes either (3) the accused commits the unlawful acts against three or
any activity within the meaning of "recruitment and placement" more persons, individually or as a group.
defined under Art. 13, par. (b), or any prohibited practices - All three elements have been established beyond reasonable
enumerated under Art. 34 of the Labor Code.1awphi1.nét In doubt.
case of illegal recruitment in large scale, a third element is - First, the testimonies of the complaining witnesses
added: that the accused commits the acts against three or satisfactorily prove that appellant promised them employment
more persons, individually or as a group. and assured them placement overseas. Complainants were
Reasoning firm and categorical. All of them positively identified appellant
- The first element is present. POEA representative Flordeliza as the person who recruited them for employment abroad.
Cabusao presented in evidence a certification from one There is no adequate showing that any of them was impelled by
Hermogenes Mateo, Director III, Licensing Branch, showing that any ill motive to testify against appellant. The absence of
accused-appellant was neither licensed nor authorized to recruit receipts in a case for illegal recruitment does not warrant the
workers for overseas employment. The second element is acquittal of the appellant and is not fatal to the prosecution’s
likewise present. Accused-appellant is deemed engaged in case. As long as the prosecution is able to establish through
recruitment and placement under Art. 13, par. (b), of the Labor credible testimonial evidence that the appellant has engaged in
Code when he made representations to each of the Illegal Recruitment, a conviction for the offense can very well be
complainants that he could send them to Italy for employment justified.
as utility personnel. Prosecution witness Ofelia Bongbonga - Second, appellant did not have any license or authority to
categorically stated that accused-appellant promised her recruit persons for overseas work, as shown by the Certification
employment for a fee, a testimony corroborated by both issued by the POEA. Neither did his employer, the World Pack
complaining witnesses Nolie Bongbonga and Millie Passi. His Travel and Tours, possess such license or authority.
promises and misrepresentations gave the complainants the - Third, it bears clarifying that although Romulo Portos was
distinct impression that he had the authority to engage in named as among those recruited by appellant the evidence
recruitment, thus enabling him to collect from them various reveals that Romulo withdrew his application in lieu of which his
amounts for recruitment and placement fees without license or wife Melodea Villanueva applied for placement with appellant.
authority to do so. Accused-appellant’s vain attempt at Villanueva, however, is not named as one of appellant’s victims.
exculpating himself by pinpointing Hapones as the culprit - Nevertheless, it has been alleged and proven that appellant
cannot mislead this Court from his transparent and obvious undertook the recruitment of not less than three persons,
machinations. His self-serving statement that he himself was a namely, Cabus, Caluten and Perlas.
victim of Hapones wilts in the face of the complaining- Disposition The decision was affirmed with modifications.
Labor Law 1 A2010 - 119 - Disini
2. YES
- Evidence shows that after receiving the amounts from
PEOPLE V REYES
complainants, Nick Reyes handed the money paid to the
242 SCRA 264 appellant and that Nick Reyes issued the receipts in question
MENDOZA; March 9, 1995 only after appellant Thelma Reyes had counted it. Mere claim is
not enough to overcome the evidence of the prosecution. If
NATURE there was anyone whose testimony needed corroboration it was
Appeal from decision of RTC Laguna finding accused Thelma appellant.
Reyes guilty beyond reasonable doubt of Illegal Recruitment - The fact that the purpose for which payment was made is not
defined and penalized under Article 38, P.D. No. 442 as stated in the receipts nor why the receipts purport to have been
amended, and sentencing her to suffer a penalty of Reclusion issued in "Manila" and not in Los Baños where they said they
Perpetua and to pay a fine of P100,000.00 and to indemnify had made all the payments is something to be explained not by
Rosalino Bitang and Fabian Baradas, Mr. de Castro, Lorenzo the complainants who have an elementary education only, but
Blanza and Ramon Mendoza the sum of P45,000 and to pay the by appellant and her husband because it was the latter who
costs. made the receipts. It is not far fetched that they made the
receipts this way precisely to create doubt as to their real
FACTS import.
- Appellant Thelma Reyes was charged together with her 3. NO
husband Nick Reyes, but the latter was at large and so has - Labor Code provisions:
remained up to now. The trial proceeded only with respect to Art. 38 (b): Illegal recruitment when committed by a
Thelma Reyes in view of her plea of not guilty. syndicate or in large scale shall be considered an offense
- Evidence show that sometime in 1985, the five victims involving economic sabotage and shall be penalized in
individually went to the house of appellant in Los Baños, accordance with Article 39 hereof.
Laguna, to apply for employment abroad. They were required to Art. 39(a): The penalty of life imprisonment and a fine of One
submit travel documents (passports, birth certificates, NBI Hundred Thousand Pesos (P100,000) shall be imposed of
clearances, etc). They paid various amounts of money to Nick illegal recruitment constitutes economic sabotage as defined
Reyes for recruitment fees, placement fees, etc. Nick Reyes herein.
handed the money to his wife Thelma Reyes, and afterward - The information against appellant mentioned only the two
issued a receipt. complainants Fabian Baradas and Rosalino Bitang as having
- Nick Reyes allegedly promised to notify them as soon as they been illegally recruited by appellant and her husband. The trial
were accepted for employment so that they could leave for court, however, held appellant guilty of illegal recruitment on a
abroad, but this promise was not fulfilled. When they later large scale because aside from Baradas and Bitang, appellant
checked with the Philippine Overseas Employment and her husband allegedly recruited others, namely, Lorenzo
Administration (POEA), they found out that the spouses were Blanza, Edgardo Garcia, Ramon Mendoza, and Dionisio de
not licensed recruiters. Castro.
- As soon as they obtained the POEA certification that appellant - When the Labor Code speaks of illegal recruitment "committed
and her husband were not licensed to recruit, they demanded against three (3) or more persons individually or as a group," it
from the spouses the return of their money and when the latter must be understood as referring to the number of complainants
did not give back their money, they filed the complaint in this in each case who are complainants therein, otherwise,
case. prosecutions for single crimes of illegal recruitment can be
- Thelma Reyes defense is that of denial. But on cross- cumulated to make out a case of large scale illegal recruitment.
examination she admitted that there were fourteen other cases In other words, a conviction for large scale illegal
of Illegal Recruitment filed and/or pending against her and her recruitment must be based on a finding in each case of
husband in different courts of Manila and claimed that some of illegal recruitment of three or more persons whether
the cases had been dismissed or settled after she had refunded individually or as a group.
the money of the complainants. - Even if Blanza and Garcia had been illegally recruited so as to
- The lower court found Thelam Reyes guilty and sentenced her make the number of persons illegally recruited four and make
as stated above. Hence this appeal. the crime that of illegal recruitment of a large scale, this can
not be the basis of conviction since this was not alleged in the
ISSUES information.
1. WON the evidence for the prosecution is sufficient to warrant - Appellant must be punished under Art. 39(c) of the Labor
conviction Code: “Any person who is neither a licensee nor a holder of
2. WON the verbal testimonies of private complainants should authority under this Title found violating any provision thereof
be given more credit than the documentary evidence for the or its implementing rules and regulations shall upon conviction
accused thereof, suffer the penalty of imprisonment of not less than four
3. WON two complainants will suffice for conviction of illegal years nor more than eight years or a fine of not less than
recruitment in large scale P20,000 nor more than P100,000 or both such imprisonment
and fine, at the discretion of the court.”
HELD Disposition RTC decision is SET ASIDE. Appellant Thelma
1. YES Reyes is declared guilty of illegal recruitment on two (2) counts
- An accused can be convicted on the strength of the testimony and is sentenced for each crime to suffer imprisonment of 6
of a single witness, if such testimony is credible and positive years and 1 day to 8 years and pay a fine of P50,000.00; and
and produces a conviction beyond reasonable doubt. That the ordered to indemnify Rosalino Bitang in the amount of
witness is also the complainant in a case makes little difference P13,500.00 and Fabian Baradas in the amount of P18,000.00
so long as the court is convinced beyond doubt that the witness and pay the costs.
is telling the truth.
-In determining the value and credibility of evidence, witnesses
are to be weighed, not counted (People v. Villalobos, 209 SCRA REFERRALS
304 [1992]).
- When the issue is the credibility of witnesses, appellate courts
will in general not disturb the findings of the trial court unless
PEOPLE V MERIS
certain facts or circumstances of weight have been overlooked, 329 SCRA 33
misunderstood or misapplied which, if considered, might affect KAPUNAN; March 28, 2000
the result of the case.
Labor Law 1 A2010 - 120 - Disini
to seek employment abroad. It was through her that they met
NATURE Julia Micua. This is clearly an act of referral.
This is an appeal from the Joint Decision of the Regional Trial - Illegal recruitment is conducted in a large scale if perpetrated
Court of Manila, Branch 1, convicting accused-appellant Leonida against three (3) or more persons individually or as a group.
Meris of illegal recruitment in large-scale and six counts of This crime requires proof that the accused: (1) engaged in the
estafa. recruitment and placement of workers defined under Article 13
or in any of the prohibited activities under Article 34 of the
FACTS Labor Code; (2) does not have a license or authority to lawfully
- During the period comprised between January 12, 1991 and engage in the recruitment and placement of workers; and (3)
February 17, 1991, accused conspiring and confederating with committed the infraction against three or more persons,
three others defrauded NAPOLEON RAMOS, by means of false individually or as a group. All these three essential elements are
manifestations and fraudulent representation which they made present in the case.
to Napoleon Ramos to the effect that they had the power and Disposition Decision in question is affirmed.
capacity to recruit and employ him as Factory Worker in
Hongkong and could facilitate the processing of the pertinent PEOPLE V FORTUNA
papers if given the necessary amount to meet the
395 SCRA 354
requirements.
- They succeeded in inducing said Ramos to give and deliver the VITUG; January 16, 2003
amount of P30,000.00 on the strength of said manifestations
and representations. The accused obtained P30K, with intent to NATURE
defraud, and unlawfully misappropriated the money for their Appeal from decision of RTC finding petitioner guilty of Illegal
personal use. Recruitment in Large Scale
- The seventh information in Criminal Case No. 91-94198
charged accused-appellant with illegal recruitment in large- FACTS
scale. Meris for a fee recruited and promised employment - Private complainants met Dominga Fortuna y Corrales in a
abroad to Leo D. delos Santos, Merlita L. Bombarda, Margarita seminar on "Tupperware" products being then promoted for
R. madae (sic), Purita A. Conceja, Cristina I. Nava and Napoleon sale in Cabanatuan City. Fortuna offered the complainants job
E. Ramos, without first securing the required license or placements in Taiwan. Convinced that Fortuna could actually
authority from the Dept. of Labor. provide them with jobs abroad, private complainants each gave
- Testifying in her own defense, accused-appellant denied the her the amount of P5,400.00 to take care of the processing fee
charges of engaging in recruitment activities and of receiving for medical examination and other expenses for securing their
money from complainants. She described herself as a public respective passports. Private complainants took the medical
school teacher living in Pangasinan with her four children and examination in Manila. Weeks went by but the promised
unemployed husband. Like the other complainants, she claimed departure had not materialized. Suspecting that something was
she was a victim of Julie Micua. When complainants learned that not right, they finally demanded that Fortuna return their
she had applied for overseas employment, they sought her help money. Fortuna, in the meanwhile, went "into hiding." After
in going to the agency where she applied. Hence, on January having later learned that Fortuna had neither a license nor an
12, 1991, accused-appellant accompanied the complainants to authority to undertake recruiting activities, Angelyn Magpayo
see Julie Micua who assured them that they would be leaving filed a complaint which, in due time, ultimately resulted in the
for Hongkong within two or three months. Accused-appellant indictment of Fortuna for illegal recruitment. During the
claims she never represented herself as having the capacity to preliminary investigation, as well as later at the trial, Fortuna
deploy workers abroad. She only told them that she could gave assurance to have the money she had received from
accompany them to the agency where she also applied. private complainants returned to them but Fortuna was unable
to make good her promise.
ISSUE
WON Meris is guilty of the charges of estafa and illegal ISSUE
recruitment WON the lower court erred in finding petitioner guilty of Illegal
Recruitment in Large Scale
HELD
YES, she is guilty of estafa and illegal-recruitment (wide-scale). HELD
Reasoning NO
- All the complainants are one in saying that accused-appellant Ratio The rule has been said that a person charged with illegal
made representations that she knew someone who could help recruitment may be convicted on the strength of the testimony
them secure employment in Hongkong. Relying on these of the complainants, if found to be credible and convincing, and
representations, they applied for placement for employment that the absence of receipts to evidence payment to the
abroad and paid various sums of money therefor. Unfortunately, recruiter would not warrant an acquittal.
accused-appellant failed to comply with her promise of Reasoning
employment or restitute the amounts she received from them. - The requisites constituting the offense of Illegal Recruitment
- The prosecution undoubtedly proved that accused-appellant, in Large Scale have sufficiently been proven by the prosecution.
without license or authority, engaged in recruitment and First, appellant, undeniably, has not been duly licensed to
placement activities. This was done in collaboration with Julie engage in recruitment activities; second, she has engaged in
Micua, when they promised complainants employment in illegal recruitment activities, offering private complainants
Hongkong. Art. 13, par. (b) of the Labor Code defines employment abroad for a fee; and third, she has committed the
recruitment and placement as "any act of canvassing enlisting, questioned illegal recruitment activities against three or more
contracting, transporting, utilizing, hiring or procuring workers, persons. The pertinent provisions of RA 8042 state:
and includes referrals, contract services, promising or “SEC. 6. Definition. – … illegal recruitment shall mean any act
advertising for employment, locally or abroad, whether for profit of canvassing, enlisting, contracting, transporting, utilizing,
or not; Provided that any person or entity which, in any manner, hiring, or procuring workers and includes referring, contract
offers or promises for a fee employment to two or more persons of services, promising or advertising for employment abroad
shall be deemed engaged in recruitment and placement." … when undertaken by a non-license or non-holder of
- Although accused-appellant was not an employee of the authority contemplated …
alleged illegal recruiter Julie Micua, the evidence show that she xxx xxx x x x.
was the one who approached complainants and prodded them
Labor Law 1 A2010 - 121 - Disini
Illegal recruitment … is deemed committed in large scale if may not be held criminally liable for an act done for and in
committed against three (3) or more persons individually or behalf of his employer.
as a group.” - In the case at bar, the prosecution failed to adduce sufficient
Disposition the appealed decision of the RTC is AFFIRMED evidence to prove appellant’s active participation in the illegal
recruitment activities of the agency. As already established,
appellant received the processing fees of the private
EMPLOYEES complainants for and in behalf of Mrs. Reyes who ordered her to
receive the same. She neither gave an impression that she had
the ability to deploy them abroad nor convinced them to part
PEOPLE V CORPUZ with their money. More importantly, she had no knowledge that
412 SCRA 479 the license was suspended the day before she received the
YNARES-SANTIAGO; October 1, 2003 money. Their failure to depart for Taiwan was due to the
suspension of the license, an event which appellant did not
have control of. Her failure to refund their money immediately
NATURE
upon their demand was because the money had been remitted
Appeal from the decision of the RTC of Manila
to Mrs. Reyes on the same day she received it from them.
Disposition Decision reversed
FACTS
- Private complainants Belinda Cabantog, Concepcion San
Diego, Erlinda Pascual and Restian Surio went to Alga-Moher PEOPLE V SAGAYAGA
International Placement Services Corporation to apply as [PAGE 111]
factory workers in Taiwan. There they met Mrs. Reyes, the
president of the said agency. They were asked to fill up
application forms and return to the office to pay P10,000 as PEOPLE V GUTIERREZ
processing fee 422 SCRA 32
- They returned after a month. Mrs. Reyes was not at the office TlNGA; February 5, 2004
at that time but she called appellant Corpuz to receive the fees.
- 2 months later, nothing happened to their applications. They NATURE
asked Corpuz to refund the money. She said it was already Appeal from the decision of the trial court
remitted to Mrs. Reyes. Complainants approached Mrs. Reyes
but she told them that the money she received from Corpuz FACTS
was in payment of the latter’s debt. - FLOR GUTIERREZ Y TIMOD with CECILIA BAUTISTA, ESTHER
- The complainants filed a complaint and Corpuz was arrested GAMILDE, LINDA RABAINO and MARILYN GARCIA mutually
and detained. While the case was on the RTC, the complainants helped one another in recruiting for overseas job placement and
received a refund of their money from complainant’s sister-in- actual contract EVELYN V. RAMOS, ROSEMARIE I. TUGADE,
law. They then executed affidavits of desistance. GENEROSA G. ASUNCION and ROSALYN B. SUMAYO as domestic
- Appelant contends she did not have a part with the illegal helpers in Dubai, United Arab Emirates, for a fee ranging from
recruitment as she merely received the money on behalf of Mrs. P10,000.00 to P15,000.00 each, without first obtaining the
Reyes, whome she was working as a secretary for about 3 required license and/or authority from the Philippine Overseas
months. Employment Administration (POEA).
- RTC found Corupuz guilty for violation of RA 8042. - In her defense, the accused claimed that as an “employee” of
a duly licensed agency who was tasked to recruit and offer job
ISSUE placements abroad, she could not be held liable for illegal
WON Corpuz can be held liable under RA 8042 recruitment. She admitted that she had no authority to recruit
in her personal capacity, but that her authority emanated from
HELD a Special Power of Attorney (SPA) and a Certification issued by
NO a licensed agency.
- Appellant contends that she is not liable for the foregoing - At the time complainants applied for overseas employment,
illegal recruitment activities considering that she was merely an the accused was “employed” as a Marketing Directress of
employee having no control over the recruitment business of Sarifudin Manpower and General Services, a duly licensed
the Alga-Moher International Placement Services Corporation agency. A Special Power of Attorney (SPA) from Sarifudin, dated
and that she did not actually recruit the private complainants. May 1, 1994. A Certification dated February 3, 1995, issued by
Moreover, she did not appropriate for her own use the the same agency, also states that: “MRS. FLOR T. GUTIERREZ
processing fees she received and she had no knowledge that was (sic) employed as OVERSEAS MARKETING DIRECTRESS of
the agency’s license was suspended by the POEA. RTC SARIFUDIN MANPOWER AND GENERAL SERVICES, effective May
convicted her because despite the suspension of the license 1994, up to the present”
since she was able to convince the complainants to give her - But Edwin Cristobal, POEA Labor Employment Officer, found
their money. that the said agency revoked the appointment of Ms. Flor
- From the foregoing testimony, it is clear that all appellant did Gutierrez as Overseas Mktg. Director/Manager in a letter dated
was receive the processing fees upon instruction of Mrs. Reyes. Dec. 15, 1995, although POEA has not received nor
She neither convinced the private complainants to give their acknowledged the representation of Ms. Gutierrez. Cristobal
money nor promised them employment abroad explained that the POEA, “Never had a letter from Sarifudin
- As stated in the last sentence of Section 6 of RA 8042, the registering or authorizing Flor Gutierrez... rather, [what] we
persons who may be held liable for illegal recruitment are the received [was a] revocation of her appointment.” He also
principals, accomplices and accessories. In case of juridical revealed that the name of the accused does not appear in the
persons, the officers having control, management or direction records of the POEA as being employed by the agency from the
of their business shall be liable. assumption of its license on June 11, 1993, up to its termination
- An employee of a company or corporation engaged in illegal on June 11, 1995.
recruitment may be held liable as principal, together with his - Defense likewise alleged that complainants Rosemarie Tugade
employer, if it is shown that he actively and consciously and Evelyn Ramos executed Affidavits of Desistance dated May
participated in illegal recruitment. However, where it is shown 12, 1995, stating that the accused had returned to them the
that the employee was merely acting under the direction of his amounts they paid her and that the complaint was a result of a
superiors and was unaware that his acts constituted a crime, he misunderstanding.
Labor Law 1 A2010 - 122 - Disini
- Trial court rendered its Decision finding the accused guilty Disposition Decision of the Regional Trial Court, finding
beyond reasonable doubt of Illegal Recruitment in Large Scale. appellant Flor Gutierrez y Timod guilty beyond reasonable
Accused Flor Gutierrez filed an appeal seeking the reversal of doubt of the crime of Illegal Recruitment in Large Scale and
her conviction. sentencing her to life imprisonment and to pay a fine of
P100,000.00 is AFFIRMED.
ISSUE
WON Gutierres as a representative of a duly licensed
recruitment agency, she cannot be held guilty of Illegal
Recruitment in Large Scale
2.07 ENFORCEMENT AND
SANCTIONS
HELD
NO
- Appellant cannot escape liability by claiming that she was not EXECUTIVE SECRETARY V CA
aware that before working for her employer in the recruitment
[PAGE 20]
agency, she should first be registered with the POEA. Illegal
recruitment in large scale is malum prohibitum, not malum in
se. Good faith is not a defense.
- That appellant engaged in recruitment and placement is
2.08 LIABILITY OF AGENCY
beyond dispute. The complaining witnesses categorically
testified that the accused promised them on several occasions G & M (PHIL) INC V BATOMALAQUE
that they would be leaving for work abroad. Appellant received 461 SCRA 111
complainants’ money and documents, a fact that the CARPIO MORALES; June 23, 2005
complainants themselves witnessed and which the accused
acknowledged when she returned the same to them after the NATURE
filing of the case against her. Appellant even brought Appeal from a decision of CA
complainant Rosalyn Sumayo to the airport three times, raising
her expectations, but leaving her hanging in mid-air. The FACTS
accused even had the audacity to demand cancellation fees - In Feb.‘92, Abdul Aziz Car Maintenance Association, a Saudi
from the complainants when they asked for a refund. Moreover, Arabian entity based in Riyadh, hired respondent, Willie
the Affidavits of Desistance executed by two of the Batomalaque, as a car painter at a monthly salary of US$370 for
complainants deserve little weight. The Court attaches no a 2-year period through its agent, petitioner G&M (Phil.), Inc. In
persuasive value to affidavits of desistance, especially when accordance with the employment contract, respondent started
executed as an afterthought. working for Abdul Aziz in Mar.’92 at a monthly salary of US$370
- Section 11, Rule II, Book II of the Rules and Regulations which according to him was equivalent to 1,200 Saudi riyals.
Governing Overseas Employment requires the prior approval of - In June ‘94 respondent was repatriated and later filed a
the POEA of the appointment of representatives or agents: complaint against petitioner, Abdul Aziz, and Country Empire
Section 11. Appointment of Representatives. Every Insurance Company with the POEA for non-payment and
appointment of representatives or agents of licensed agency underpayment of salaries and damages.
shall be subject to prior approval or authority of the - Batomalaque claimed that for the first 4 months of
Administration. employment, he received a monthly salary of 900 Saudi riyals,
The approval may be issued upon submission of or and for the fifth month (July ‘92) up to the end of the 12th
compliance with the following requirements: month (Feb ‘93), he received a monthly salary of 700 Saudi
a. Proposed appointment or Special Power of Attorney; riyals; that after a 1-year stint with Abdul Aziz, the workshop
b. Clearances of the proposed representative or agent where he was working was sold but the new owner did not hire
from NBI; him; that for 11 months he was jobless; that Abdul Aziz hired
c. A sworn or verified statement by the designating or him again and started working for it in Feb ‘94 for which he was
appointing person or company assuming full responsibility for paid 1,200 Saudi riyals; and that he resigned in May ‘94 since
all the acts of the agent or representative done in connection he was not paid his salary for the months of March and April
with the recruitment and placement of workers. ‘94, which 2-month salary, was, however, used to purchase his
Approval by the Administration of the appointment or airline ticket on his repatriation to the Philippines. LA, NLRC and
designation does not authorize the agent or representative to CA ruled in favor of respondent.
establish a branch or extension office of the licensed agency
represented. ISSUES
Any revocation or amendment in the appointment should be 1. WON CA erred in awarding respondent his underpayment of
communicated to the administration. Otherwise, the salaries and wages
designation or appointment shall be deemed as not revoked 2. WON petitioner, as the recruiter and agent of Abdul Aziz, is
or amended. thus solidarily liable with the latter for the unpaid wages of
Section 1, Rule X of the same Book, in turn, provides that respondent
“recruitment and placement activities of agents or
representatives appointed by a licensee, whose appointments HELD
were not authorized by the Administration shall likewise 1. NO
constitute illegal recruitment.” Ratio It is settled that as a general rule, a party who alleges
- The Certification from the POEA that it “has not received nor payment as a defense has the burden of proving it. Specifically
acknowledged the representation of Ms. Gutierrez” establishes with respect to labor cases, the burden of proving payment of
that the appointment of appellant by Serafudin as a monetary claims rests on the employer, the rationale being that
representative or agent was not authorized by the POEA. It may the pertinent personnel files, payrolls, records, remittances and
be true that the POEA received from Serafudin a revocation of other similar documents — which will show that overtime,
appellant’s appointment, but still is of no consequence since differentials, service incentive leave and other claims of
Serafudin in the first place did not submit her appointment to workers have been paid — are not in the possession of the
the POEA, and so the POEA has nothing to approve. worker but in the custody and absolute control of the employer.
- As found by the trial court the evidence on record, notably Reasoning
appellant’s own version, indicates that she was running her own - Aside from its bare allegation that its principal Abdul Aziz had
labor recruitment business. fully paid respondent’s salaries, petitioner did not present any
Labor Law 1 A2010 - 123 - Disini
evidence, e.g., payroll or payslips, to support its defense of - Paramio et al argued that under Section 10, Republic Act
payment. No. 8042, otherwise known as the Migrant Workers and
2. YES Overseas Filipinos Act of 1995, PSRI was solidarily liable
Ratio Contractual undertakings submitted to the Bureau of with Kuan Yuan for their claims. Since they were repatriated
Employment Services constitute the legal basis for holding prior to the expiration of their respective contracts for no valid
petitioner, and other private employment or recruitment reason, PSRI was liable to pay their salaries for the unexpired
agencies, liable jointly and severally with its principal, the portion of their contracts
foreign-based employer, for all claims filed by recruited workers - agency on the other hand contended that all of them were
which may arise in connection with the implementation of the validly dismissed
service agreements or employment contracts. - Labor Arbiter ruled that their dismissal was illegal and
Reasoning awarded damages. NLRC reversed. CA affirmed decision of
[1] Basis for liability: First, in applying for its license to operate Labor Arbiter.
a private employment agency for overseas recruitment and
placement, petitioner was required to submit, among others, a ISSUES
document or verified undertaking whereby it assumed all WON the respondents were illegally dismissed
responsibilities for the proper use of its license and the
implementation of the contracts of employment with the HELD
workers it recruited and deployed for overseas employment. NO
Second, it was also required to file with Bureau a formal - We rule that respondents’ dismissal was not based on just,
appointment or agency contract executed by the foreign-based valid and legal grounds.
employer in its favor to recruit and hire personnel for the - The rule lex loci contractus (the law of the place where the
former, which contained a provision empowering it to sue and contract is made) governs. Therefore, the Labor Code, its
be sued jointly and solidarily with the foreign principal for any of implementing rules and regulations, and other laws affecting
the violations of the recruitment agreement and the contracts labor, apply in this case
of employment. And third, it was required as well to post such - In order to effect a valid dismissal of an employee, the law
cash and surety bonds as determined by the Sec. of Labor to requires that there be just and valid cause as provided in Article
guarantee compliance with prescribed recruitment procedures, 282 and that the employee was afforded an opportunity to be
rules and regulations, and terms and conditions of employment heard and to defend himself
as appropriate. - regarding Paramio agency insists that his dismissal was valid
[2] The fact of underpayment does not shift the burden of based on paragraph 8.2, Nos. 5 and 6, Article VIII of the
evidence to the respondent Batomalaque because partial employment contract which states that if employer finds
payment does not extinguish the obligation. Only when the employee with a disease which cannot be cured within a month;
debtor introduces evidence that the obligation has been or being found losing ability to work, employer may rescind
extinguished does the burden of evidence shift to the creditor contract and repatriate employee with airfare costs against
who is then under a duty of producing evidence to show why employee.
payment does not extinguish the obligation. - However Art. 284 of Labor Code and Section 8, Rule 1, Book VI
Disposition CA decision is AFFIRMED with the MODIFICATION. of the Omnibus Rules Implementing the Labor Code state that
Batomalaque is only entitled to 5,200 Saudi riyals, instead of “…the employer shall not terminate his employment unless
5,500 Saudi riyals. there is a certification by competent public authority that the
disease is of such nature or at such a stage that it cannot be
cured within a period of six (6) months with proper medical
2.09 MIGRANT WORKERS ACT treatment”
- employer has the duty to prove that employee cannot
continue work due to the disease.
PHIL EMPLOY SERVICES AND RESOURCES INC V - this was not proven. In fact, despite the thumb injury
PARAMIO sustained by Paramio, he was even assigned to the most
physically taxing jobs. Only after he could no longer bear the
427 SCRA 732
pain did he ask for a little break.
CALLEJO SR; April 15, 2004 - thus his dismissal based on his injury was illegal.
Consequently, respondent Paramio is entitled to the full
FACTS reimbursement of his placement fee with interest at twelve
- petitioners are a local agency engaged in the business of percent (12%) per annum, plus his salaries for the unexpired
providing employment overseas. portion of his employment contract for three months for every
- Respondents are overseas workers sent by said agency to year of the unexpired term, whichever is less under paragraph
work for Kuan Yuan Fiber Co., Ltd. Hsei-Chang. They had 5, Section 10 of Rep. Act No. 8042: “Section 10. Money
separate contracts and each paid P19,000 as placement fee. Claims –…In case of termination of overseas employment
- They experienced and endured harsh conditions including without just, valid or authorized cause as defined by law or
eating just one meal a day, substandard living quarters, contract, the worker shall be entitled to the full reimbursement
excessive working hours, unexplained deductions in salaries of his placement fee with interest at twelve percent (12%) per
among others. annum, plus his salaries for the unexpired portion of his
- Paramio, in the course of his work and due to not being fed employment contract or three (3) months for every year of the
dinner and breakfast, injured his thumb while carrying a heavy unexpired term, whichever is less.”
load. Due to this he was sent home with significant deductions - also, Skippers Pacific, Inc. v. Mira, we ruled that an overseas
to his pay. Filipino worker who is illegally terminated shall be entitled to his
- Navarra allegedly had an altercation with his superior and due salary equivalent to the unexpired portion of his employment
to this was repatriated. contract if such contract is less than one year. However, if his
- other respondents opted to go home due to said inhumane contract is for a period of at least one year, he is entitled to
work conditions they were subjected to. They were made to receive his salaries equivalent to the unexpired portion of his
write quitclaims and pay for their own airfare. contract, or three months’ salary for every year of the
- Upon arriving in Manila, they instituted separate actions for unexpired term, whichever is lower
illegal dismissal, non-payment of overtime pay, refund of - Regarding Paramio, it was also not proven that he had an
placement fee, tax refund, refund of plane fares, attorney’s fees altercation with his superior. The agency never presented
and litigation expenses against the agency evidence to prove such claim. They weren’t even able to
provide a statement from his superior regarding the issue.
Labor Law 1 A2010 - 124 - Disini
Respondent Navarra asserted that he merely enforced his rights should have received the original contracted salary of
under the employment contract when he requested, time and US$370/month instead of the new rate given by SAAD. It was
again, that the provisions of his contract regarding the also noted that respondent did not refute petitioner’s allegation
accommodation be fulfilled regarding the non-payment of placement and other processing
- Navarra was deployed on November 6, 1996 He was fees prior to deployment. The labor arbiter also found that there
repatriated on May 10, 1997, approximately five months prior is no differential as far as respondent’s overtime pay is
to the expiration of his one-year contract. He shall be entitled to concerned considering that he was given overtime pay based
an amount equivalent to three months’ salary, or NT$46,080. on the new rate of SR 800.00. Since respondent rendered one
Similarly, having admitted that he paid a placement fee of hour of overtime work per day for only 18 months, and not the
P19,000 only, he is entitled to be fully reimbursed therefore, entire 24 months as claimed, the total overtime pay he
plus 12% interest per annum. received is more or less equivalent to the amount he ought to
- regarding the other respondents, their quitclaims were not have received if the original contracted rate of US$370.00 was
valid. The records reveal that the three respondents agreed to used. Finally, the labor arbiter awarded respondent attorney’s
execute the foregoing because they could no longer bear the fees equivalent to 10% of the total judgment award for being
working conditions in their place of employment. Despite compelled to hire a counsel to protect his rights and interests.
protestations to their employer and the attempt to seek help - NLRC set aside the decision. CA set aside NLRC’s decision and
from the OWWA in Taiwan. affirmed Labor Arbiter.
- they were constructively dismissed from their employment.
There is constructive dismissal if an act of clear discrimination, ISSUES
insensibility, or disdain by an employer becomes so unbearable WON respondent has a right to the money claims
on the part of the employee that it would foreclose any choice
by him except to forego his continued employment HELD
- Under Section 10, paragraph 5 of Rep. Act No. 8042, YES
respondents Sarmiento, Bautista, Curameng and Guillermo are Ratio R.A. No. 8042 explicitly prohibits the substitution or
entitled to the full reimbursement of their placement fees. alteration to the prejudice of the worker, of employment
Since each of the respondents remitted only P19,000 to the contracts already approved and verified by the Department of
petitioner, each of them is entitled to P19,000, plus 12% Labor and Employment (DOLE) from the time of actual signing
interest per annum. thereof by the parties up to and including the period of the
- Section 10, paragraph 2 of Rep. Act No. 8042, the agency expiration of the same without the approval of the DOLE.
which deployed the employees whose employment contract Reasoning
were adjudged illegally terminated, shall be jointly and - The unauthorized alteration in the employment contract of
solidarily liable with the principal for the money claims awarded respondent, particularly the diminution in his salary from
to the aforesaid employees. Consequently, the petitioner, as US$370.00 to SR 800.00 per month, is void for violating the
the agency of the respondents, is solidarily liable with its POEA-approved contract which set the minimum standards,
principal Kuan Yuan for the payment of the salaries due to the terms, and conditions of his employment.
respondents corresponding to the unexpired portion of their - Moreover, we find that there was no proper dismissal of
contract, as well as the reimbursement of their placement fees. respondent by SAAD; the "termination" of respondent was
clearly a ploy to pressure him to agree to a lower wage rate for
continued employment. Thus, the original POEA-approved
PLACEWELL INTERNATIONAL SERVICES V CAMOTE
employment contract of respondent subsists despite the so-
492 SCRA 761 called new agreement with SAAD. Consequently, the solidary
YNARES-SANTIAGO; June 26, 2006 liability of petitioner with SAAD for respondent’s money claims
continues in accordance with Section 10 of R.A. 8042.
NATURE - As to petitioner’s claim that respondent was barred by laches,
Petition for certiorari of the September 27, 2005 Decision of the respondent filed his claim within the three-year prescriptive
CA in CA-G.R. SP No. 77145, which set aside the November 20, period for the filing of money claims set forth in Article 291 of
2002 Resolution of the NLRC and reinstated with modifications the Labor Code from the time the cause of action accrued.
the May 31, 2002 Decision of Labor Arbiter Arturo L. Gamolo. Thus, we find that the doctrine of laches finds no application in
this case.
FACTS - The labor arbiter and the CA did not err in awarding attorney’s
- On August 15, 1999, petitioner deployed respondent to work fees to respondent. It is settled that in actions for recovery of
as building carpenter for SAAD Trading and Contracting Co. wages or where an employee was forced to litigate and incur
(SAAD) at the Kingdom of Saudi Arabia (KSA) for a 2 yr. contract expenses to protect his rights and interests, he is entitled to an
with a salary of US$370/month. award of attorney’s fees. However, with regard to Unauthorized
- At the job site, respondent was allegedly found incompetent Deductions amounting to P171,780.00; we note that the
by his foreign employer; thus the latter decided to terminate his appellate court did not state any basis for its award, thus, the
services. However, respondent pleaded for his retention and same is deleted for lack of factual and legal basis.
consented to accept a lower salary of SR 800.00 per month. Disposition Instant petition is PARTLY GRANTED. The Decision
Thus, SAAD retained respondent until his return to the of the Court of Appeals in CA-G.R. SP No. 77145 dated
Philippines two years after September 27, 2005 is AFFIRMED with MODIFICATION that the
- On November 27, 2001, respondent filed a complaint for amount of P171,780 representing Unauthorized Deductions is
money claims against petitioner alleging that when he arrived DELETED for lack of basis.
at the job site, he and his fellow Filipino workers were required
to sign another employment contract written in Arabic under
the constraints of losing their jobs if they refused; that for the SECTION 3: ALIEN EMPLOYMENT
entire duration of the new contract, he received only SR 590.00
per month; that he was not given his overtime pay despite
working 9hrs/day; that he and his co-workers sought assistance
from the Philippine Embassy but they did not succeed in 3.01 COVERAGE
pursuing their cause of action because of difficulties in
communication. NON-RESIDENT ALIEN
- On May 31, 2002, the labor arbiter rendered a decision
holding that the modification of respondent’s employment
contract is not allowed under Section 10 of R.A. 8042; thus, he ALMODIEL V NLRC (RAYTHEON PHILS INC)
Labor Law 1 A2010 - 125 - Disini
223 SCRA 341 - There simply wasn’t evidence showing that there was bad
faith or malice or irregularity at all.
NOCON; June 14, 1993
- The wisdom or soundness of such characterization or decision
was not subject to discretionary review on the part of the Labor
NATURE Arbiter nor of the NLRC so long, of course, as violation of law or
Petition for certiorari of an NLRC decision which set aside the merely arbitrary and malicious action is not shown.
Labor Arbiter’s decision and ordered instead the payment of - It is a well-settled rule that labor laws do not authorize
separation pay and financial assistance. interference with the employer's judgment in the conduct of his
business. The determination of the qualification and fitness of
FACTS workers for hiring and firing, promotion or reassignment are
- Petitioner Almodiel is a CPA, was a Cost Accounting Manager exclusive prerogatives of management. The Labor Code and its
of respondent Raytheon Philippines. His major duties were: (1) implementing Rules do not vest in the Labor Arbiters nor in the
plan, coordinate, carry out year and physical inventory; (2) different Divisions of the NLRC (nor in the courts) managerial
formulate and issue out hard copies of Standard Product authority. The employer is free to determine, using his own
costing and other cost/pricing analysis if needed and (3) set up discretion and business judgment, all elements of employment,
the written Cost Accounting System for the whole company. "from hiring to firing" except in cases of unlawful discrimination
- The standard cost accounting system was installed and used or those which may be provided by law. There is none in the
at the Raytheon plants and subsidiaries worldwide. As a instant case.
consequence, the services of a Cost Accounting Manager Disposition Finding no grave abuse of discretion on the part
allegedly entailed only the submission of periodic reports that of the National Labor Relations Commission in reversing and
would use computerized forms prescribed and designed by the annulling the decision of the Labor Arbiter and that on the
international head office in California contrary, the termination of petitioner's employment was
- Later, Almodiel was summoned told of the abolition of his anchored on a valid and authorized cause under Article 283 of
position on the ground of redundancy. the Labor Code, the instant petition for certiorari must fail.
- Almodiel thus filed the complaint for illegal dismissal before *** the only part relevant to this part of the outline:
the Arbitration Branch of NCR, NLRC. Likewise destitute of merit is petitioner's imputation of unlawful
- The court below found that the parties had no arrived at a discrimination when Raytheon caused corollary functions
definite understanding. appertaining to cost accounting to be absorbed by Danny Ang
Labor Arbiter rendered judgment in favor of Almodiel, finding Tan Chai, a resident alien without a working permit. Article 40
that the ground of redundancy was highly irregular and without of the Labor Code which requires employment permit refers to
legal and factual basis, ordering the respondents to reinstate non-resident aliens. The employment permit is required for
complainant, with full backwages, and moral and exemplary entry into the country for employment purposes and is issued
damages. after determination of the non-availability of a person in the
- NLRC reversed the decision, and instead merely ordered Philippines who is competent, able and willing at the time of
Raytheon to pay P100,000 separation pay/financial assistance application to perform the services for which the alien is
- Petitioner thus filed this petition: The public respondent desired. Since Ang Tan Chai is a resident alien, he does not fall
committed grave abuse of discretion amounting to (lack of) or within the ambit of the provision
in excess of jurisdiction in declaring as valid and justified the
termination of petitioner on the ground of redundancy in the
face of clearly established finding that petitioner's termination
was tainted with malice, bad faith and irregularity. 3.02 TECHNIQUE REGULATION –
- Termination of an employee’s services because of redundancy
is governed by Art. 283 of the Labor code:
EMPLOYMENT PERMIT
Art. 283. Closure of establishment and reduction of
personnel. — The employer may also terminate the
employment of any employee due to installation of labor- AUTHORITY EMPLOYMENT PERMIT –
saving devices, redundancy, retrenchment to prevent losses ISSUANCE
or the closing or cessation of operation of the establishment
or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a written GENERAL MILLING CORP V TORRES
notice on the worker and the Department of Labor and
Employment at least one (1) month before the intended date
thereof. In case of termination due to installation of labor-
saving devices or redundancy, the worker affected thereby SECTION 4: EMPLOYMENT OF
shall be entitled to a separation pay equivalent to at least one
(1) month pay for every year of service, whichever is higher. APPRENTICES, LEARNERS AND
In case of retrenchment to prevent losses and in cases of
closure or cessation of operations of establishment or
HANDICAPPED WORDERS
undertaking not due to serious business losses or financial
reverses, the separation pay shall be equivalent to at least
one (1) month pay or at least one-half (1/2) month pay for 4.01 POLICY OBJECTIVES
every year of service, whichever is higher. A fraction of at
least six (6) months shall be considered as one (1) whole
year. A. APPRENTICE
ISSUE
WON bad faith, malice, and irregularity crept in the abolition of 4.02 APPRENTICE
petitioner’s position of Cost Accounting Manager on the ground
of redundancy, thus making the dismissal illegal
REQUIREMENT PROGRAM APPROVAL
HELD
NO
Reasoning NITTO ENTERPRISES V NLRC (CAPILI)
248 SCRA 654
Labor Law 1 A2010 - 126 - Disini
KAPUNAN; September 29, 1995 Ratio The twin requirements of due process, substantive and
procedural, must be complied with, before valid dismissal
exists. Without which, the dismissal becomes void.
FACTS
Reasoning
- Nitto Enterprises, a company engaged in the sale of glass and
- This simply means that the employer shall afford the worker
aluminum products, hired Roberto Capili sometime in May 1990
ample opportunity to be heard and to defend himself with the
as an apprentice machinist, molder and core maker as
assistance of his representative, if he so desires. Ample
evidenced by an apprenticeship agreement for a period of 6
opportunity connotes every kind of assistance that
months from May 28, 1990 to November 28, 1990 with a daily
management must accord the employee to enable him to
wage rate of P66.75 which was 75% of the applicable minimum
prepare adequately for his defense including legal
wage.
representation.
- At around 1 pm of August 2, 1990, Capili who was handling a
- As held in the case of Pepsi-Cola Bottling Co., Inc. v. NLRC:
piece of glass which he was working on, accidentally hit and
The law requires that the employer must furnish the worker
injured the leg of an office secretary who was treated at a
sought to be dismissed with 2 written notices before
nearby hospital. Later that same day, after office hours, Capili
termination can be legally effected: (1) notice which apprises
entered a workshop within the office premises which was not
the employee of the particular acts or omissions for which his
his work station. There, he operated one of the power press
dismissal is sought; and (2) the subsequent notice which
machines without authority and in the process injured his left
informs the employee of the employer's decision to dismiss
thumb. Nitto Enterprises spent the amount of P1,023.04 to
him (Sec. 13, BP 130; Sec. 2-6, Rule XIV, Book V, Rules and
cover his medication.
Regulations Implementing the Labor Code as amended).
- The following day, Capili was asked to resign [letter was in
Failure to comply with the requirements taints the dismissal
Tagalog and quite long but basically narrates the events above
with illegality. This procedure is mandatory; in the absence of
as grounds for dismissal]. On August 3, 1990 he executed a
which, any judgment reached by management is void and
Quitclaim and Release in favor of Nitto Enterprises in
inexistent.
consideration of the sum of P1,912.79. Capili filed a complaint
- Capili filed a case of illegal dismissal with the Labor Arbiter
for illegal dismissal and payment of other monetary benefits.
only 3 days after he was made to sign a Quitclaim, a clear
- The Labor Arbiter found the termination valid and dismissed
indication that such resignation was not voluntary and
the money claim for lack of merit. Nitto, however was ordered
deliberate. He averred that he was actually employed by
to pay Capili the amount of P500 as financial assistance. The
petitioner as a delivery boy ("kargador" or "pahinante"). He
NLRC reversed and declared that Capili was a regular employee
further asserted that petitioner "strong-armed" him into signing
of Nitto Enterprises.
the resignation letter and quitclaim without explaining to him its
contents. Petitioner made it clear to him that anyway, he did
ISSUES
not have a choice.
1. WON the NLRC committed grave abuse of discretion in
- Nitto Enterprises cannot disguise the summary dismissal of
holding that Capili was not an apprentice
Capili by orchestrating the latter's alleged resignation and
2. WON the NLRC committed grave abuse of discretion in
subsequent execution of a Quitclaim and Release. A judicious
holding that Nitto Enterprises had not adequately proven the
examination of both events belies any spontaneity on Capili's
existence of a valid cause in terminating the service of Capili
part.
Disposition Decision of the NLRC is AFFIRMED.
HELD
1. NO
Ratio Prior approval by the DOLE of a proposed apprenticeship B. LEARNERS
program is a condition sine qua non before an apprenticeship
agreement can be validly entered into.
C. HANDICAPPED WORKERS
Reasoning
- The act of filing the proposed apprenticeship program with the REGULAR WORKER
Department of Labor and Employment is a preliminary step
towards its final approval and does not instantaneously give rise BERNARDO V NLRC (FAR EAST BANK AND TRUST
to an employer-apprentice relationship. Article 61 of the Labor
Code provides:
COMPANY)
Contents of apprenticeship agreement. - Apprenticeship [PAGE 104]
agreements, including the main rates of apprentices, shall
conform to the rules issued by the Minister of Labor and
Employment. The period of apprenticeship shall not exceed 6 SECTION 5: CONDITIONS OF
months. Apprenticeship agreements providing for wage rates
below the legal minimum wage, which in no case shall start
EMPLOYMENT – HOURS OF
below 75% per cent of the applicable minimum wage, may he WORK
entered into only in accordance with apprenficeship program
duly approved by the Minister of Labor and Employment. The
Ministry shall develop standard model programs of
apprenticeship. 5.01 HOURS REGULATION
- The apprenticeship agreement between Nitto Enterprises and
Capili was executed on May 28, 1990 allegedly employing the RATIONALE AND ENFORCEMENT
latter as an apprentice in the trade of "core maker/molder." On
the same date, an apprenticeship program was prepared by
petitioner and submitted to the DOLE. However, the
MANILA TERMINAL CO INC V CIR
apprenticeship agreement was filed only on June 7, 1990.
Notwithstanding the absence of approval by the DOLE the
apprenticeship agreement was enforced the day it was signed. 5.02 COVERAGE
Nitto Enterprises did not comply with the requirements of the
law.
2. NO RATIONALE EXEMPTION –
MANAGERIAL EMPLOYEES
Labor Law 1 A2010 - 127 - Disini
PEÑARANDA V BAGANGA PLYWOOD CORP
HELD
[PAGE 1]
YES
Reasoning
ASIA PACIFIC CHARTERING (PHILS) INC V FAROLAN - Requisites for a valid dismissal of an EMPLOYEE:
393 SCRA 454 (a) the employee must be afforded due process, i.e., he must
CARPIO-MORALES; December 4, 2002 be given opportunity to be heard and to defend himself; and
(b) dismissal must be for a valid cause as provided in Article
282 of the Labor Code or any of the authorized causes under
NATURE Article 283 and 284 of the same Code.
CERTIORARI under Rule 45 of the - AS REGARDS (A) THE LA FOUND THAT FAROLAN WAS
DEPRIVED OF DUE PROCESS (this was upheld by the CA):
FACTS *W/O any semblance of, or written authority whatsoever,
- Asia Pacific Chartering (Phils) Inc. [APC] was, until 1996, the Zozobrado took over the functions of complainant.
general sales agent (GSA) of the Scandinavian Airline System Complainant claims that she has been told it was upon the
(SAS), an off-line international airline company with license to will of respondent Marshall that she be replaced. Bondoc
do business in the Philippines. summoned Farolan and told her to tender her resignation or
- As GSA, APC sold passenger and cargo spaces for airlines face termination, which she refused to do. Thereafter, she
operated by SAS. was finally terminated, without being afforded the
- Maria Linda R. Farolan was hired as Sales Manager of APC for opportunity to be heard and to present evidence in her
its passenger and cargo GSA operations for SAS, following her defense. She was never given a written notice stating the
conformity to a letter-offer of employment from APC through its particular acts or omission constituting the grounds for her
Vice President/Comptroller Catalino Bondoc. dismissal as required by law.
- In a report by Farolan, she indicated that there was a drop in - AS REGARDS (B): the rule is settled that in termination cases,
SAS’ sales revenues which to her was attributable to market the employer bears the onus of proving that the dismissal is for
forces beyond her control. just cause failing which the dismissal is not justified and the
- Noting the marked decline in SAS’ sales revenues, APC employee is entitled to reinstatement.
directed its high ranking officer Roberto Zozobrado to conduct APC’S CLAIMS:
an investigation on the matter and identify the problem/s and - FAROLAN failed to live up to management’s expectation in
implement possible solutions. light of her failure to adopt sales and marketing strategies to
- Zozobrado thus informally took over some of FAROLAN’s increase sales revenues of SAS, which failure is reflective of her
marketing and sales responsibilities, albeit respondent retained incompetence and inefficiency, thus resulting to loss of
her title as Sales Manager and continued to receive her salary revenues in 1993 and 1994.
as such. - Had it not been through Zozobrado’s efforts, SAS sales
- APC claimed that: revenues could not have recovered.
> Zozobrado found out that FAROLAN did not adopt any sales - Jespersen was the one who initiated the termination of
strategy nor conduct any sales meeting or develop other respondent because of her "dismal performance" in handling its
sources of revenue for SAS, she having simply let her sales staff operations.
perform their functions all by themselves; - Reiterated the principle that the right to dismiss a managerial
> In 1994, Soren Jespersen, GM of SAS in Hongkong, Southern employee is a measure of self-preservation; Cited the cases of
China, Taipei and the Philippines, came to the Philippines to Grand Motor Parts Corp. v. Minister of Labor et al., and Buiser et
assess the statistics on SAS’ sales revenues and SAS was al. v. Legardo.
convinced that FAROLAN was not fit for the job of Sales THE NATURE OF FAROLAN’S JOB AS SALES MANAGER
Manager; and in view of the changes introduced by Zozobrado, - It is not disputed that her job description, and the terms and
SAS-GSA sales operations drew positive results. conditions of her employment, with the exception of her salary
- May 1994: Jespersen sent a message to Farolan and and allowances, were never reduced to writing.
Zozobrado congratulating them for the increase in sales results - Recent decisions of this Court distinguish the treatment of
and for exceeding the target set by 50% while June 1994: managerial employees from that of rank and file personnel
Jespersen sent a msg to Farolan saying that the sales report for insofar as the application of the doctrine of loss of trust and
June 1994 did unfortunately not reach target. confidence is concerned.
- On even date, APC sent respondent a letter of termination on "Thus with respect to rank and file personnel, loss of trust
the ground of "loss of confidence." and confidence as ground for valid dismissal requires proof of
- This spawned the filing by FAROLAN of a complaint for illegal involvement in the alleged events in question and that mere
dismissal against APC, Bondoc, Zozobrado and one Donald uncorroborated assertions and accusations by the employer
Marshall (the record indicates that he had ceased to be will not be sufficient. But as regards a managerial employee,
connected with petitioner when the case was pending before mere existence of a basis for believing that such employee
the Labor Arbiter), with prayer for damages and attorney’s fees. has breached the trust of his employer would suffice for his
- In her complaint petitioner alleged that Bondoc and Zozobrado dismissal."
had asked her to tender her resignation as she was not the - Samson v. NLRC: (RULE FOR THIS CASE!)
person whom SAS was looking for to handle the position of "Before one may be properly considered a managerial
Sales Manager but that she refused, hence, she was terminated employee, all the following conditions must be met:
by the letter of July 18, 1994 letter. (1) Their primary duty consists of the management of
- LA: found for FAROLAN that APC dismissed her without just the establishment in which they are employed or of a
cause, effected with malice, ill will and bad faith department or subdivision thereof;
- NLRC: reversed the LA’s decision; recognized the right of APC (2) They customarily and regularly direct the work of
as employer to terminate or dismiss employees based on loss of two or more employees therein;
trust and confidence, the right being a management (3) They have the authority to hire or fire other
prerogative. employees of lower rank; or their suggestions and
- Farolan’s MR denied; appealed to CA recommendations as to the hiring and firing and as to
- CA: reversed the NLRC decision; LA’s decision upheld with the promotion or any other change of status of other
modifications employees are given particular weight. (Section 2(b),
Rule I, Book III of the Omnibus Rules Implementing the
ISSUE Labor Code, emphasis supplied).
WON FAROLAN’s dismissal was legal
Labor Law 1 A2010 - 128 - Disini
- FAROLAN’S JOB: dealt mainly with servicing of existing NATIONAL WATERWORKS & SEWERAGE
clientele. Bondoc, however, described respondent’s functions
AUTHORITY V NWSA CONSOLIDATED UNIONS
and duties as critical.
- Paper Industries Corp. of the Philippines v. Laguesma: 11 SCRA 766
"Managerial employees are ranked as Top Managers, Middle BAUTISTA ANGELO; August 31, 1964
Managers and First Line Managers. The mere fact that an
employee is designated "manager" does not ipso facto make NATURE
him one-designation should be reconciled with the actual job Petition for review of a decision of the Court of Industrial
description of the employee for it is the job description that Relations
determines the nature of employment."
- Dismissal on the ground of "loss of confidence" should have a FACTS
basis and determination cannot be left entirely to the employer. - Petitioner National Waterworks & Sewerage Authority is a
-Loss of trust and confidence to be a valid ground for an government-owned and controlled corporation created under
employee’s dismissal must be based on a willful breach and Republic Act No. 1383, while respondent NWSA Consolidated
founded on clearly established facts. Unions are various labor organizations composed of laborers
- A breach is willful if it is done intentionally, knowingly and and employees of the NAWASA. The other respondents are
purposely, without justifiable excuse, as distinguished from an intervenors Centeno, et al., hereinafter referred to as
act done carelessly, thoughtlessly, heedlessly or inadvertently. intervenors.
- The two letters sent by SAS to respondent in 1994 in fact - Petitioner and respondent unions, conformably to a suggestion
negate willful breach of her duties by respondent. of the Court of Industrial Relations on the controversy between
- While APC attributed the improvement of sales in 1994 to them, submitted a joint stipulation of facts on the issues
Zozobrado, the fact remains that FAROLAN was still the Sales concerning the 40-Hour Week Law, “distress pay,” minimum
Manager up to July 1994, in charge of those "sales meetings" wage, filling of vacancies, night compensation, and salary
during which pertinent market strategies were developed and adjustments, reserving the right to present evidence on matters
utilized to increase sales. not covered herein. Respondent intervenors filed a petition in
- The Grand Motors case cited by APC, however, involved a intervention on the issue for additional compensation for
probationary employee-manager who failed to, among other nightwork. Later, however, they amended their petition by
things, submit required monthly reports and violated company including a new demand for overtime pay in favor of Centeno
policy, clearly mirroring his insubordination and disrespect to and other employees receiving P4200 per annum or more.
express instructions of management. - Petitioner filed a motion to dismiss the claim for overtime pay
- In the Buiser case: "[f]ailure to observe prescribed standards alleging that respondent Court of Industrial Relations was
of work, or to fulfill reasonable work assignments due to without jurisdiction to pass upon the same because, as mere
inefficiency" may be just cause for dismissal, petitioner has intervenors, the latter cannot raise new issues not litigated in
neither shown what standards of work or reasonable work the principal case, the same not being the lis mota therein
assignments were prescribed which respondent failed to involved. To this motion, the intervenors filed an opposition.
observe nor that if she did fail to observe any such, it was due Thereafter, respondent court issued an order allowing the issue
to inefficiency. to be litigated. Petitioners’s motion to reconsider having been
-It bears noting that there is no showing that respondent denied, it filed its answer to the petition for intervention.
represented herself as possessed of the highest degree of skill - Finally, respondent rendered its decision stating among others
and care known in the trade. that (1) the NAWASA is an agency not performing governmental
- FAROLAN was the one approached or offered the job; She thus functions and, therefore, is liable to pay additional
could not just be unceremoniously discharged for "loss of compensation for work on Sundays and legal holidays
confidence" arising from alleged incompetency conformably to Commonwealth Act No. 444, known as the
- "While an employee may be dismissed because of Eight-Hour Labor Law, even if said days should be within the
inefficiency, neglect or carelessness, the law implies a staggered five work-days authorized by the President and (2)
situation or undertaking by an employee in entering into the intervenors do not fall within the category of “managerial
a contract of employment that he is competent to employees” as contemplated in Republic Act 2377 and so are
perform the work undertaken and is possessed of the not exempt from the coverage of the Eight-Hour Labor Law;
requisite skill and knowledge to enable him to do so, even those intervenors attached to the General Auditing Office
and that he will do the work of the employer in a careful and the Bureau of Public Works come within the purview of
manner. If he is not qualified to do the work which he Commonwealth Act No. 444.
undertakes, if he is incompetent, unskillful or inefficient, - Its motion for reconsideration having been denied, NAWASA
or if he executes his work in a negligent manner or is filed the present petition for review.
otherwise guilty of neglect of duty, he may lawfully be
discharged before the expiration of his term of ISSUE
employment." WON the intervenors are “managerial employees” within the
DAMAGES: meaning of Republic Act 2377 and, therefore, not entitled to the
- AS FAROLAN was instructed to resign or be terminated, she benefits of Commonwealth Act No. 444, as amended
was deprived of due process and denied "basic precepts of
fairness" when she was terminated. Her resultant sufferings HELD
thus entitle her to an award of moral damages. NO
- Award of moral and exemplary damages for an illegally - One of the distinguishing characteristics by which a
dismissed employee is proper where the employee had been managerial employee may be known as expressed in the
harassed and arbitrarily terminated by the employer. explanatory note of Republic Act 2377 is that he is not subject
-In determining the amount of moral damages recoverable, to the rigid observance of regular office hours. The true worth of
however, the business, social and financial position of the his service does not depend so much on the time he spends in
offended party and the business or financial position of the office but more on the results he accomplishes. In fact, he is
offender are taken into account. free to go out of office anytime.
Disposition CA’S decision is AFFIRMED with the - Section 2 of Republic Act 2377 provides:
MODIFICATION that the amount of moral damages and “Sec. 2. This Act shall apply to all persons employed in any
exemplary damages awarded to Farolan is hereby reduced to industry or occupation whether public or private, with the
P500,000.00 Pesos and P250,000.00, respectively. exception of farm laborers, laborers who prefer to be paid on
piece work basis, managerial employees, outside sales
personnel, domestic servants, persons in the personal service
Labor Law 1 A2010 - 129 - Disini
of another and members of the family of the employer told him that if there were disagreements, they should be
working for him. handled in a professional manner.
“The term `managerial employee’ in this Act shall mean 2. NO
either (a) any person whose primary duty consists of the - Before one may be properly considered a managerial
management of the establishment in which he is employed or employee, all the following conditions must be met:
of a customarily recognized department or subdivision (1) Their primary duty consists of the management of the
thereof, or (b) any officer or member of the managerial staff.” establishment in which they are employed or of a department
- The philosophy behind the exemption of managerial or sub-division thereof;
employees from the 8-Hour Labor Law is that such workers are (2) They customarily and regularly direct the work of two
not usually employed for every hour of work but their or more employees therein;
compensation is determined considering their special training, (3) They have the authority to hire or fire other employees
experience, or knowledge which requires the exercise of of lower rank; or their suggestions and recommendations as
discretion and independent judgment, or perform work related to the hiring and firing and as to the promotion or any other
to management policies or general work related to change of status of other employees are given particular
management policies or general business operations along weight.
specialized or technical lines. For these workers it is not feasible - Although his position is a District Sales Manager, his job
to provide a fixed hourly rate of pay or maximum hours of labor. description do not meet the above conditions for him to be
- The intervenors herein are holding positions of responsibility. considered a managerial employee.
One of them is the Secretary of the Board of Directors. Another - Granting he was a managerial employee, loss of confidence as
is the private secretary of the general manager. Another is a a ground for termination is still without basis. Loss of trust and
public relations officer, and many other chiefs of divisions or confidence to be a valid ground for an employee's dismissal
sections and others are supervisors and overseers. Respondent must be clearly established. A breach is willful if it is done
court, however, after examining carefully their respective intentionally, knowingly and purposely, without justifiable
functions, duties, and responsibilities found that their primary excuse, as distinguished from an act done carelessly,
duties do not bear any direct relation with the management of thoughtlessly, heedlessly or inadvertently. It must rest on
the NAWASA, nor do they participate in the formulation of its substantial grounds and not on the employer's arbitrariness,
policies nor in the hiring and firing of its employees. The chiefs whims, caprices or suspicion, otherwise, the employee would
of divisions and sections are given ready policies to execute remain at the mercy of the employer. When petitioner made the
and standard policies to observe for their execution. Hence, it offensive utterances, it can be said that he merely acted
concludes, they have little freedom of action, as their main carelessly, thoughtlessly or heedlessly and not intentionally,
function is merely to carry out the company’s orders, plans, and knowingly, purposely, or without justifiable excuse.
policies. Disposition Petition granted. NLRC reversed and set aside.
- To the foregoing comment, the Court agrees. As a matter of Petitioner is thus entitled to reinstatement to his position as
fact, they are required to observe working hours and record District Sales Manager, unless such position no longer exists, in
their time work and are not free to come and go to their offices, which case he shall be given a substantially equivalent position
nor move about at their own discretion. They do not, therefore, without loss of seniority rights. He is likewise entitled to the
come within the category of “managerial employees” within the payment of his full backwages.
meaning of the law.
Disposition Decision affirmed with modification.
TESTS- FIELD PERSONNEL
SAMSON V NLRC (SCHERING-PLOUGH CORP)
330 SCRA 460 UNION OF FILIPRO EMPLOYEES V VIVAR
KAPUNAN; April 12, 2000 205 SCRA 200
GUTIERREZ JR; January 20, 1992
FACTS
- Samson was a District Sales Manager at SPC. During the 1993 FACTS
Christmas party, he said obscene, offensive and insulting words - Filipro, Inc. (now Nestle Philippines, Inc.) filed with the National
towards the management and the president infront of other Labor Relations Commission (NLRC) a petition for declaratory
employees. On Jan 25 1994, he was given a letter which relief seeking a ruling on its rights and obligations respecting
enumerated conduct inimical to SPC. He was given 2 days to claims of its monthly paid employees for holiday pay.
explain. He replied on the same day, saying that it was an - Filipro filed a motion for clarification seeking (1) the limitation
informal event and that he was tipsy and denying the of the award to three years, (2) the exclusion of salesmen, sales
accusations. He was preventively suspended that same day. He representatives, truck drivers, merchandisers and medical
was terminated on Feb 3 1994, for loss of confidence. He filed representatives (hereinafter referred to as sales personnel)
complaint for illegal dismissal. LA decided in his favor. NLRC from the award of the holiday pay; and (3) deduction from the
reversed because it found that his gross misconduct warranted holiday pay award of overpayment for overtime, night
termination. NLRC also said that in terminating the employment differential, vacation and sick leave benefits due to the use of
of managerial employees, the employer is allowed a wider 251 divisor.
latitude of discretion than in the case of ordinary rank-and-file. - The respondent arbitrator issued an order declaring that the
effectivity of the holiday pay award shall retroact to November
ISSUES 1, 1974, the date of effectivity of the Labor Code. He adjudged,
1. WON termination was warranted however, that the company's sales personnel are field
2. WON petitioner is managerial employee personnel and, as such, are not entitled to holiday pay. He
likewise ruled that with the grant of 10 days' holiday pay, the
HELD divisor should be changed from 251 to 261 and ordered the
1. NO reimbursement of overpayment for overtime, night differential,
- The termination was illegal. The company’s code of conduct vacation and sick leave pay due to the use of 251 days as
punishes such misconduct by a verbal warning for a first divisor.
offense. There was no demoralization among the ranks, or at
least the behavior of the company doesn’t show urgency --- he ISSUES
was given a letter weeks after the event occurred. Also, at a 1. WON Nestle's sales personnel are entitled to holiday pay
meeting on Jan 3 1994, the president himself civilly and calmly
Labor Law 1 A2010 - 130 - Disini
2. WON concomitant with the award of holiday pay, the divisor - On 16 April 1991, petitioner received a memorandum issued
should be changed from 251 to 261 days and WON the previous by private respondent’s project manager, Engr. Nestor A.
use of 251 as divisor resulted in overpayment for overtime, Delantar informing him of the termination of his services
night differential, vacation and sick leave pay effective on 30 April 1991.
- Petitioner filed a complaint against private respondent for
HELD illegal dismissal, unfair labor practice, illegal deduction, non-
1. NO payment of wages, overtime rendered, service incentive leave
- Under Article 82, field personnel are not entitled to holiday pay, commission, allowances, profit-sharing and separation pay
pay. Said article defines field personnel as "non-agricultural with the NLRC.
employees who regularly perform their duties away from the - Labor Arbiter Raul T. Aquino dismissed the complaint for lack
principal place of business or branch office of the employer and of merit.
whose actual hours of work in the field cannot be determined - NLRC affirmed, and also denied MFR
with reasonable certainty."
- The controversy centers on the interpretation of the clause ISSUE
"whose actual hours of work in the field cannot be determined WON petitioner is entitled to overtime pay, premium pay for
with reasonable certainty." The SC concurs with the following services rendered on rest days and holidays and service
disquisition by the respondent arbitrator:. incentive leave pay, pursuant to Articles 87, 93, 94 and 95 of
- "The requirement for the salesmen and other similarly situated the Labor Code
employees to report for work at the office at 8:00 a.m. and
return at 4:00 or 4:30 p.m. is not within the realm of work in the HELD
field as defined in the Code but an exercise of purely NO
management prerogative of providing administrative control - The NLRC concurred with the Labor Arbiter’s ruling that
over such personnel. This does not in any manner provide a petitioner was a managerial employee and, therefore, exempt
reasonable level of determination on the actual field work of the from payment of overtime pay, premium pay for holidays and
employees which can be reasonably ascertained. The rest days and service incentive leave pay under the law.
theoretical analysis that salesmen and other similarly-situated - Petitioner claims that since he performs his duties in
workers regularly report for work at 8:00 a.m. and return to the project site or away from the principal place of
their home station at 4:00 or 4:30 p.m., creating the business of his employer, he falls under the category of
assumption that their field work is supervised, is surface “field personnel.”
projection. Actual field work begins after 8:00 a.m. when the - However, petitioner accentuates that his case constitutes the
sales personnel follow their field itinerary, and ends exception to the exception because his actual working hours
immediately before 4:00 or 4:30 p.m. when they report back to can be determined as evidenced by the disbursement vouchers
their office. The period between 8:00 a.m. and 4:00 or 4:30 p.m. containing payments of petitioner’s salaries and overtime
comprises their hours of work in the field, the extent or scope services. Strangely, petitioner is of the view that field personnel
and result of which are subject to their individual capacity and may include managerial employees.
industry and which 'cannot be determined with reasonable - In his original complaint, petitioner stated that the nature of
certainty.' This is the reason why effective supervision over field his work is ”supervisory-engineering.” Similarly, in his own
work of salesmen and medical representatives, truck drivers petition and in other pleadings, petitioner confirmed that his job
and merchandisers is practically a physical impossibility. was to supervise the laborers in the construction project.
Consequently, they are excluded from the ten holidays with pay - Although petitioner cannot strictly be classified as a
award.' managerial employee under Art. 82 of the Labor Code,
2. NO and Sec. 2(b), Rule 1, Book III of the Omnibus Rules
- The divisor to be used is 251. The respondent arbitrator's Implementing the Labor Code, nonetheless he is still not
order to change the divisor from 251 to 261 days would result entitled to payment of the aforestated benefits because
in a lower daily rate which is violative of the prohibition on non- he falls squarely under another exempt category -
diminution of benefits found in Article 100 of the Labor Code. “officers or members of a managerial staff” as defined
The Court resolves that the grant of holiday pay be effective, under Sec. 2(c)6 of the abovementioned implementing rules:
not from the date of promulgation of the Chartered Bank case - A case in point is National Sugar Refineries Corporation v.
nor from the date of effectivity of the Labor Code, but from NLRC. On the issue of “whether supervisory employees, as
October 23, 1984, the date of promulgation of the IBAA case. defined in Article 212 (m), Book V of the Labor Code, should be
Disposition Decision of Labor Arbiter is MODIFIED. considered as officers or members of the managerial staff under
Article 82, Book III of the same Code and hence not entitled to
overtime, rest day and holiday pay,” this Court ruled: A cursory
SALAZAR V NLRC (H. L. CARLOS CONSTRUCTION,
perusal of the Job Value Contribution Statements of the union
CO INC) members will readily show that these supervisory employees
256 SCRA 273 are under the direct supervision of their respective
KAPUNAN; April 17, 1996 department superintendents and that generally they
assist the latter in planning, organizing, staffing,
NATURE directing, controlling, communicating and in making
Petition for certiorari to annul the decision of the National Labor decisions in attaining the company’s set goals and
Relations Commission
6
Sec. 2. Exemption. - The provisions of this Rule shall not apply to the
FACTS
following persons if they qualify for exemption under the condition set forth
- On 17 April 1990, private respondent, at a monthly salary of herein: (c) Officers or members of a managerial staff if they perform the
P4,500.00, employed petitioner as construction/project engineer following duties and responsibilities: (1) The primary duty consists of the
for the construction of the Monte de Piedad building in Cubao, performance of work directly related to management policies of their
employer; (2) Customarily and regularly exercise discretion and independent
Quezon City. judgment; (3) [i] Regularly and directly assist a proprietor or a managerial
- Allegedly, by virtue of an oral contract, petitioner would also employee whose primary duty consists of the management of the
receive a share in the profits after completion of the project and establishment in which he is employed or subdivision thereof; or [ii] execute
under general supervision work along specialized or technical lines requiring
that petitioner’s services in excess of eight (8) hours on regular special training, experience, or knowledge; or [iii] execute under general
days and services rendered on weekends and legal holidays supervision special assignments and tasks; and (4) who do not devote more
shall be compensable overtime at the rate of P27.85 per hour. than 20 percent of their hours worked in a work-week to activities which are
not directly and closely related to the performance of the work described in
paragraphs (1), (2), and (3) above.
Labor Law 1 A2010 - 131 - Disini
objectives. These supervisory employees are likewise and workers who are paid by results as determined by the
responsible for the effective and efficient operation of Secretary of Labor in appropriate regulations.
their respective departments. From the foregoing, it is “Field personnel” shall refer to non-agricultural employees who
apparent that the members of respondent union discharge regularly perform their duties away from the principal place of
duties and responsibilities which ineluctably qualify business or branch office of the employer and whose actual
them as officers or members of the managerial staff, as hours of work in the field cannot be determined with reasonable
defined in Section 2, Rule 1, Book III of the Rules to Implement certainty.
the Labor Code - In the case of Union of Filipro Employees (UFE) v. Vicar, SC
- The same applies to petitioner herein considering in explained that the requirement of “whose actual hours of work
the main his supervisory duties as private-respondent’s in the field cannot be determined with reasonable certainty”
project engineer, duties which, it is significant to note, must be read in conjunction with Rule IV, Book III7 of the
petitioner does not dispute. Implementing Rules.
- Petitioner, likewise, claims that the NLRC failed to give due - The clause “whose time and performance is unsupervised by
weight and consideration to the fact that private respondent the employer” did not amplify but merely interpreted and
compensated him for his overtime services as indicated in the expounded the clause “whose actual hours of work in the field
various disbursement vouchers he submitted as evidence. cannot be determined with reasonable certainty.” There is no
- Petitioner’s contention is unmeritorious. That petitioner was contradiction; the former clause is still within the scope and
paid overtime benefits does not automatically and necessarily purview of Art. 82 which defines field personnel. Hence, in
denote that petitioner is entitled to such benefits. Art. 82 of the deciding whether or not an employee’s actual working hours in
Labor Code specifically delineates who are entitled to the the field can be determined with reasonable certainty, query
overtime premiums and service incentive leave pay provided must be made as to whether or not such employee’s time and
under Art. 87, 93, 94 and 95 of the Labor Code and the performance is constantly supervised by the employer.
exemptions thereto. - During the entire course of their fishing voyage, fishermen
- As previously determined, petitioner falls under the employed by petitioner have no choice but to remain on board
exemptions and therefore has no legal claim to the said its vessel. Although they perform non-agricultural work away
benefits. It is well and good that petitioner was compensated for from petitioner’s business offices, the fact remains that
his overtime services. However, this does not translate into a throughout the duration of their work they are under the
right on the part of petitioner to demand additional payment effective control and supervision of petitioner through the
when, under the law, petitioner is clearly exempted therefrom. vessel’s patron or master as the NLRC correctly held.
Disposition Petition DISMISSED.
MERCIDAR FISHING CORP V NLRC (AGAO JR)
297 SCRA 440 AUTO BUS TRANSPORT SYSTEMS INC V BAUTISTA
MENDOZA; October 8, 1998 458 SCRA 578
CHICO-NAZARIO; May 16, 2005
NATURE
Petition for certiorari to set aside NLRC decision dismissing NATURE
Mercidar’s appeal from Labor Arbiter decision Petition for Review on Certiorari

FACTS FACTS
- Fermin AGAO Jr. had been employed as a “bodegero” or ship’s - Since 24 May 1995, respondent Antonio Bautista has been
quartermaster. He claimed to have been constructively employed by petitioner Auto Bus Transport Systems, Inc.
dismissed by petitioner when it refused him assignments (Autobus), as driver-conductor with travel routes Manila-
aboard its boats. He then filed a COMPLAINT against MERCIDAR Tuguegarao via Baguio, Baguio- Tuguegarao via Manila and
for ILLEGAL DISMISSAL, violation of P.D. No. 851, and non- Manila-Tabuk via Baguio. Respondent was paid on commission
payment of five days service incentive leave for 1990. basis, 7% of the total gross income per travel, on a twice a
- He had been sick and was allowed to go on leave without pay month basis.
for one month but when he reported to work with a health - On January 3, 2000, the bus that the respondent was driving
clearance, he was told to come back another time as he could accidentally bumped the rear portion of Autobus No. 124, as the
not be reinstated immediately. For this reason, he asked for a latter vehicle suddenly stopped at a sharp curve without giving
certificate of employment from petitioner but it refused to issue any warning. Respondent averred that the accident happened
the certificate unless he submitted his resignation. because he was compelled by the management to go back to
- MERCIDAR claimed that it was Agao who actually abandoned Roxas, Isabela, although he had not slept for almost 24 hours.
his work. Agao was absent without leave for three months. Agao Respondent further alleged that he was not allowed to work
should also be considered field personnel because: Agao’s work until he fully paid the amount of P75,551.50, representing 30%
is performed away from Mercidar’s principal place of business, of the cost of repair of the damaged buses and that despite
thus, it has no way of verifying his actual hours of work on the respondent’s pleas for reconsideration, the same was ignored
vessel. by management. After a month, management sent him a letter
- Labor Arbiter: ordered Mercidar to reinstate complainant with of termination.
backwages, pay his 13th month pay and incentive leave pay. - Respondent instituted a Complaint for Illegal Dismissal with
- NLRC: affirmed decision of LA. Money Claims for nonpayment of 13th month pay and service
incentive leave pay against Autobus.
ISSUE Petitioner, on the other hand, maintained that respondent’s
WON fishing crew members can be classified as field personnel employment was replete with offenses involving reckless
under A82 LC imprudence, gross negligence, and dishonesty. To support its
claim, petitioner presented copies of letters, memos,
HELD irregularity reports, and warrants of arrest pertaining to several
NO incidents wherein respondent was involved.
- Art. 82. Coverage. - The provisions of this Title [Working
Conditions and Rest Periods] shall apply to employees in all
establishments and undertakings whether for profit or not, but 7
Rule IV Holidays with Pay
not to government employees, field personnel, members of the Section 1. Coverage - This rule shall apply to all employees except:
family of the employer who are dependent on him for support, (e) Field personnel and other employees whose time and performance is
unsupervised by the employer xxx (Italics supplied)
domestic helpers, persons in the personal service of another,
Labor Law 1 A2010 - 132 - Disini
- Furthermore, petitioner avers that in the exercise of its at specific times, employees including drivers cannot be said
management prerogative, respondent’s employment was to be field personnel despite the fact that they are
terminated only after the latter was provided with an performing work away from the principal office of the
opportunity to explain his side regarding the accident. employee.
- Labor Arbiter Tabingan dismissed the complaint for illegal - the definition of a “field personnel” is not merely concerned
dismissal but ordered petitioner to pay respondent his 13th with the location where the employee regularly performs his
month pay from the date of his hiring to the date of his duties but also with the fact that the employee’s performance is
dismissal, and his service incentive leave pay for all the years unsupervised by the employer. As discussed above, field
he had been in service with the respondent. Upon appeal, the personnel are those who regularly perform their duties away
NLRC deleted the award for 13th month pay and maintained the from the principal place of business of the employer and whose
award for service incentive leave. The CA affirmed the decision actual hours of work in the field cannot be determined with
of NLRC. reasonable certainty. Thus, in order to conclude whether an
employee is a field employee, it is also necessary to ascertain if
ISSUES actual hours of work in the field can be determined with
WON respondent is entitled to service incentive leave reasonable certainty by the employer. In so doing, an inquiry
must be made as to whether or not the employee’s time and
HELD performance are constantly supervised by the employer.
- A95 LC provides: - It is of judicial notice that along the routes that are plied by
Art. 95. RIGHT TO SERVICE INCENTIVE LEAVE these bus companies, there are its inspectors assigned at
(a) Every employee who has rendered at least one year of strategic places who board the bus and inspect the passengers,
service shall be entitled to a yearly service incentive leave of the punched tickets, and the conductor’s reports. There is also
five days with pay. the mandatory once-a-week car barn or shop day, where the
Book III, Rule V: SERVICE INCENTIVE LEAVE bus is regularly checked as to its mechanical, electrical, and
SECTION 1. Coverage. – This rule shall apply to all hydraulic aspects, whether or not there are problems thereon
employees except: as reported by the driver and/or conductor. They too, must be
… at specific place and specified time, as they generally observe
(d) Field personnel and other employees whose performance prompt departure and arrival from their point of origin to their
is unsupervised by the employer including those who are point of destination. In each and every depot, there is always
engaged on task or contract basis, purely commission basis, the Dispatcher whose function is precisely to see to it that the
or those who are paid in a fixed amount for performing work bus and its crew leave the premises at specific times and arrive
irrespective of the time consumed in the performance at the estimated proper time. These, are present in the case at
thereof; . . . bar. The driver, the complainant herein, was therefore under
- The grant of service incentive leave has been delimited by the constant supervision while in the performance of this work. He
Implementing Rules and Regulations of the Labor Code to apply cannot be considered a field personnel.
only to those employees not explicitly excluded by Section 1 of - Respondent is not a field personnel but a regular employee
Rule V. According to the Implementing Rules, Service Incentive who performs tasks usually necessary and desirable to the
Leave shall not apply to employees classified as “field usual trade of petitioner’s business. Accordingly, respondent is
personnel.” The phrase “other employees whose performance entitled to the grant of service incentive leave.
is unsupervised by the employer” must not be understood as a
separate classification of employees to which service incentive
leave shall not be granted. Rather, it serves as an amplification RATIONALE – EXEMPTION
of the interpretation of the definition of field personnel under
the Labor Code as those “whose actual hours of work in the
field cannot be determined with reasonable certainty.” RED V COCONUT PRODUCTS LTD V CIR (TANGLAW
- The same is true with respect to the phrase “those who are NG PAGGAWA LABOR UNION)
engaged on task or contract basis, purely commission basis.” 17 SCRA 553
Said phrase should be related with “field personnel,” applying
BENGZON; June 30, 1966
the rule on ejusdem generis that general and unlimited terms
are restrained and limited by the particular terms that they
follow. Hence, employees engaged on task or contract basis or NATURE
paid on purely commission basis are not automatically Petition for review of CIR decision and MFR
exempted from the grant of service incentive leave, unless,
they fall under the classification of field personnel. FACTS
- Therefore, petitioner’s contention that respondent is not - Red V Coconut Products, Ltd has a desiccated coconut factory
entitled to the grant of service incentive leave just because he wherein 800 of its workers were members of members of
was paid on purely commission basis is misplaced. What must Tanglaw ng Paggawa labor union. The workers were classified
be ascertained in order to resolve the issue of propriety of the into 2 groups: the 3-shift group and the 2-shift group.
grant of service incentive leave to respondent is whether or not - In 1958 and 1961, the company and labor union entered into a
he is a field personnel. CBA wherein they agreed on payment for differentials to night
- According to A82 LC, “field personnel” shall refer to non- shift workers, as follows: 35c for 2nd shift, 55c for 3rd shift.
agricultural employees who regularly perform their duties away
from the principal place of business or branch office of the Gro Hrs of differen Paym
employer and whose actual hours of work in the field cannot be up work tials ent
determined with reasonable certainty. This definition is further 1st shift 4am-
elaborated in the Bureau of Working Conditions (BWC), Advisory 3- (8hrs) 12nn
None
Opinion to Philippine Technical-Clerical Commercial Employees shift 2nd shift 12nn-
35c
Association[10] which states that: grou (8hrs) 8pm
55c
As a general rule, field personnel are those whose p 3rd shift 8pm-
performance of their job/service is not supervised by the (8hrs) 4am
employer or his representative, the workplace being away 2- 1st shift 4am-
from the principal office and whose hours and days of work shift (12hrs) 4pm None
cannot be determined with reasonable certainty; hence, they grou 2nd shift 4pm- 55c
are paid specific amount for rendering specific service or p (12hrs) 4am
performing specific work. If required to be at specific places
Labor Law 1 A2010 - 133 - Disini
group. It follows that respondent court did not err in ordering
the company to pay the full and equivalent amount of said
differentials (P .90) corresponding, under the bargaining
agreements, to the workers who performed 12 hours of work,
from 4 P.M. to 4 A.M.
- The laborers are not strictly under the full concept of piece-
- In 1962, Tanglaw ng Paggawa and member-workers who workers because their hours of work are fixed by the
belong to the 2-shift group filed a petition with CIR arguing that employer. Piece workers were excluded from the Eight-Hour
they should receive what the 2nd and 3rd shifts of the 3-shif Labor Law because said workers are paid depending upon
group, combined, receive as differential pay (90c = 55c + 35c) the work they do "irrespective of the amount of time
since their nightwork is equivalent to the nightwork of the 2 nd employed" in doing said work. Such freedom as to hours of
and 3rd shift of 3-shift group combined. They were therefore work does not apply to the respondent workers since they are
asking for an additional 35c for work done by them from 4pm to assigned by the employer to work in two shifts for 12 hours
4am. On the other hand, Red V claims that CIR has no each shift. Thus it cannot be said that for all purposes these
jurisdiction over the case since the claim asserted by Tanglaw is workers fall outside the law requiring payment of compensation
a simple money claim and that an interpretation of a for work done in excess of eight hours. At least for the
contract (CBA) is involved (should have gone to CFI). purpose of recovering the full differential pay stipulated
- CIR: had jurisdiction since it involved unpaid overtime pay of in the bargaining agreement as due to laborers who
laborers still employed by the company. perform 12 hours of work under the night shift, said
- Tanglaw filed another petition alleging unfair labor practice laborers should be deemed pro tanto or to that extent
for refusing to grant 15 days leave with pay to members of the within the scope of the afore-stated law.
union in violation of CBA. Disposition decision and resolution of the Court of Industrial
- CIR: workers were engaged in pakiao (piece-work basis) and Relations under review are affirmed.
should not be entitled to overtime pay under the Eight-Hour
labor law (Sec. 2, CA444); that their petition for nigh shift
differentials based on CBA is meritorious because the
company having paid night differentials indiscriminately to the
5.03 NORMAL HOURS OF WORK
night shift workers of 3-shift group and 2-shift group alike, the
payments should be uniform and equal for the night shifts of
both groups(90c). –pay deficiency to workers of 2-shift group. 5.04 HOURS WORKED
ISSUES
1. WON the CIR has jurisdiction over the case IDLE TIME
2. WON the Eight-Hour Labor Law regarding payment of
overtime compensation to piece-workers is applicable in the
case NATIONAL DEVELOPMENT CO V CIR
6 SCRA 763
HELD
REGALA; November 30, 1962
1. YES
Ratio To determine the issue of the jurisdiction, resort is to be
made to the allegations in the petition or complaint. FACTS
Reasoning - At the National Development Co. (NDC), there were four Eight-
- Red V claims that the case involves mere money claim. The hour shifts of work, each one having a 1-hour mealtime period.
petition did not expressly mention the Eight-Hour Labor Law. Petitioner nevertheless credited the workers with and paid them
Still, (1) respondents are working for the company and (2) these for the full 8-hour shift. However, since 1953, whenever workers
workers work in 2 shifts, approximately 12 hours each shift. continued working through the next shift, petitioner only paid
Therefore, the petition is one for overtime pay by workers them for 6 hours, claiming the 2 hours for meals should not be
still employed by the company which falls within the compensated. The National Textile Workers Union (NTWU)
jurisdiction of the CIR. disagreed and asked for an order for overtime pay with the CIR
Obiter which was granted.
- petitioner presented evidence which does not appear from the - Petitioner appealed, contending that (1) the CIR had no
petition or complaint filed with CIR (proving that workers were jurisdiction over claims of overtime compensation and that (2)
engaged on a piece-work basis) so it cannot affect CIR’s the CIR did not make a correct appraisal of the facts in holding
jurisdiction over the case which was already acquired. that mealtime periods should be included in overtime work.
Jurisdiction, once acquired, continues until final adjudication of
the litigation. ISSUES
2. YES 1. WON the CIR had jurisdiction over claim of overtime
Ratio Although the Eight-Hour Labor Law provides that it does compensation
not cover those workers who prefer to be paid on piece-work 2. WON the mealtime periods should be considered working
basis (Sec. 2, CA 444), nothing in said law precludes an time
agreement for the payment of overtime precludes an
agreement for the payment of overtime compensation to piece- HELD
workers. And in agreeing to the provision for payment of shift 1. YES
differential to the petitioners-workers aforementioned, in the - It was recently held in Campos v. Manila Railroad Co. that the
bargaining agreement, as well as in actually paying to them ff are the requisites for jurisdiction: (1) there must exist an
said differentials, though not in full, the company in effect freely employer-employee relationship between the parties or the
adhered to an application and implementation of the Eight-Hour claimant must seek reinstatement; (2) the controversy must
Labor Law, or its objectives, to said workers. relate to a case certified by the President to the CIR as one
Reasoning involving national interest, or must have a bearing on an unfair
- It should be observed that while the provision in the labor practice charge, or must arise either under the Eight-Hour
bargaining agreements speaks of shift differentials for the Labor Law, or under the Minimum Wage Law. Absent either
"second shift" and the "third shift" and 2-shift group has no requisite renders the claim a mere money claim coming under
third shift, said 2-shift group has a second shift, which performs the jurisdiction of regular courts. Because there was clearly an
work equivalent to that of the corresponding shifts of 3-shift employer-employee relationship existing between the NDC and
Labor Law 1 A2010 - 134 - Disini
the union members and the claim was based on the Eight-Hour increased to P5 and P2.50, respectively, until the time of their
Labor Law, CIR had jurisdiction of over the case. separation or the strike; that when the tugboats underwent
2. YES repairs, their personnel worked only 8 hours a day excluding
- As stated in Sec 1 of Com. Act No. 444, “The legal working day Sundays and holidays; that although there was an effort on the
for any person employed by another shall be of not more than 8 part of claimants to show that some had worked beyond 6pm,
hours daily. When the work is not continuous, the time during the evidence was uncertain and indefinite and that demand was
which the laborer is not working and can leave his working denied; that Company, by the nature of its business and as
place and can rest completely shall not be counted.” It is clear defined by law is considered a public service operator by the
from the provision that idle time spent resting and during which Public Service Commission and, therefore, exempt from paying
an employee may leave the workplace is not counted as additional remuneration or compensation for work performed
working time only where the work is broken or not continuous. on Sundays and legal holidays. (Sec4 CA No.444)
In this case, the CIR's finding that work in the NDC was - For the reasons above, employees are only entitled to receive
continuous and did not permit employees and laborers to rest overtime pay for work rendered in excess of 8hrs on ordinary
completely is not without basis in evidence and following the days including Sundays and legal holidays. The company was
Court’s earlier rulings, these findings are not to be disturbed. able to prove that it has paid its employees for such overtime
- In addition, because petitioner failed to serve a copy of its wok as shown above. It was only a matter of computation
motion for reconsideration to NTWU as required by Sec. 15 of whether the OT services paid cover actual OT work performed
the rules of the CIR, there is no decision of the CIR en banc that equivalent to 25% (min rate fixed by law in the absence of other
petitioner can bring to the Court for review. proof to justify the granting of more beyond said min rate.
Disposition CIR order and resolution are AFFIRMED and the - Demands nos. 11 & 12 were denied and LSC was only ordered
appeal DISMISSED to pay separation pay and OT after finding that the suspensions
and dismissals were for valid legal grounds.
- LMDU filed MFR to declare that those who work from 6am-6pm
were entitled to 4hrs OT pay, that the time allotted for their
meals should not be deducted from the said 4hrs, that the
amounts set aside for the meals of should be considered as part
of their actual compensation, that the employees separated
without just cause be paid their unearned wages from the time
of decision became final, and for other relief.
- LSC filed MFR in so far as it interpreted that the period during
which a seaman aboard a tugboat should be considered as
LUZON STEVEDORING CO V LUZON MARINE “working time” for the purposes of the Eight-Hour-Labor Law
DEPARTMENT UNION - The Court made a resolution, in pursuance of CA 103 as
amended, modifying the previous judgment saying that the
101 Phil 257 4hrs of OT work included in the regular daily sked of ^am-6pm
FELIX; April 29 1957 should be paid independently of the so-called “coffee-money”
after finding that said extra amount were given to some
NATURE tugboat crew members for work performed beyond 6pm. LSC’s
Petition for certiorari filed by Luzon Stevedoring Co (LSC) to MFR was denied.
review a resolution by CIR. - LSC filed the present petition of certiorari when CIR ruled that
the 20mins rest given the claimants after mealtime should not
FACTS be deducted from the 4hrs of OT work performed.
- Luzon Marine Development Union (LMDU) filed a petition with - LMLU filed a MTD which SC considered as an answer, alleging
the CIR containing several demands against LSC, among which that the CIR decision (under consideration in the case) does not
were the petition for full recognition of the right of collective present any question of law, the issues being purely factual. CIR
bargaining, close shop and check off. judges also asserted that there is no question of law.
-While the case was still pending, the union conducted a strike
which was ruled down as illegal. Due to the ruling, the union ISSUES
filed a “constancia” with the CIR praying that the remaining 1. WON “hours of work” as applied to dryland laborers are
unresolved demands of the union be presented in their original equally applicable to seamen
petition, be granted. Other demands included the OT pay, 2. WON a person should be penalized for following an opinion
payment of the employees who have not received their pay of the Sec of Justice absent any pronouncement
corresponding to the second half of Dec 941, reinstatement of 3. WON compensation for 2 years agreed upon legally and
certain individuals suspended without justifiable cause. deemed retroactively is presumed to constitute full payment of
-The unresolved demands are the ff: performed work in excess all services rendered (including OT pay) provided employees
of 8 hrs be paid an OT pay of 50% of the regular rate and that with full knowledge of the law, voluntarily agreed to work in
work performed on Sundays and holidays be paid 2x the regular consideration of such wage and continued working without
rate (point no. 2); that all the officers, etc who haven’t received protest
their pay corresponding to the 2nd half of Dec be paid 4. WON members of Union having expressly manifested
accordingly (point no. 7); that Ciriaco, etc who have been acquiescence over a period of almost two years with reference
suspended without justifiable cause for union activities be to the sufficiency of their wages and having made no protest
reinstated (point no 11); that all officers, etc who have been whatsoever with reference to said compensation are estopped
discharged because of union activities be reinstated (point no. from claiming OT compensation
12). 5. Granting, without conceding, that any OT is due, what is the
- Due to these demands the case was set for hearing. The extent and rule of retroactivity as set forth and established by
original intervenor, moved for the withdrawal of said Union from the precedents and policies of the CIR as affirmed by the SC?
the case, which motion was granted by the Court. 6. WON the grant of sizeable amount of back OT wages by the
- TC found that the company gave employees 3 free meals CIR is in consonance with the dictates of public policy on
every day and about 20 minutes rest after each mealtime; that recovery and financial stability
they worked from 6am-6pm every day including Sundays and 7. WON a CIR resolution, unsupported in fact and in law, can be
holidays, and for work performed in excess of 8 hours, the declared illegal
officers, patrons and radio operators were given overtime pay in
the amount of P4 each and P2 each for the rest of the crew up HELD
to March, 1947, and after said date, these payments were 1. YES
Labor Law 1 A2010 - 135 - Disini
Ratio There is no need to set a different criterion to be The law also provides that after a judge of the CIR, duly
applied to the seamen. A laborer doesn’t need to leave the designated by the Presiding Judge therein to hear a particular
premises in order that his period of rest shall not be counted, case, had rendered a decision, any aggrieved party may
such that it is enough that he “ceases to work”, may rest request for reconsideration thereof and the judges of said Court
completely and leave his spot where he actually has stays while shall sit together, the concurrence of the 3 of them being
working.8 necessary for the pronouncement of a decision, order or award.
Reasoning In virtue of these rules and upon MFR presented by both
- LSC claims that the 12hr work is not continuous but parties, the resolution subject of the present petition was
interrupted or broken. It was found true however they could not issued, the Court en banc finding it necessary to modify a part
just leave due to the nature of their duty preventing them to of the decision, which is clearly within its power to do.
leave the tugboats Disposition on the strength of the foregoing consideration, the
2. The court cannot pass upon the issue because there was resolutions of CIR appealed from are hereby
nothing on the record saying that would support the petitioner’s affirmed
assertion that in dealing with its employees, it was guided by
such opinion.
3 & 4. Ratio NO. The right of the laborers to OT cannot be CONTINUOUS WORK
waived. CA444, Sec 69 applies
Reasoning
- Estoppel and laches cannot be invoked against employees or STATES MARINE CORP V CEBU SEAMEN'S ASSOC
laborers in an action for the recovery of compensation for past 7 SCRA 294
OT work. It would be contrary to the spirit of the Eight-Hour PAREDES; February 28, 1963
Labor Law such that the laborers cannot waive their right to
extra compensation. Secondly, the law principally obligates the
NATURE
employer to observe it that it punishes the employer for its
Writ for certiorari
violation and leaves the employee free and blameless. Thirdly,
the employee or laborer is in such a disadvantageous position
FACTS
as to be naturally reluctant or even apprehensive in asserting a
- States Marine Corporation and Royal Line, Inc. (SMC) were
claim which may cause the employer to devise a way for
engaged in the business of marine coastwise transportation,
exercising his right to terminate the employment.
employing steamships of Philippine registry. They had a
- Moreover, if the principle of estoppel and laches is to be
collective bargaining contract with Cebu Seamen's Association,
applied, it would bring about a situation whereby the employee
Inc. (CSA)
or laborer who can not expressly renounce the right to extra
- On September 12, 1952, the SMC filed with the CIR, a petition
compensation, may be compelled to accomplish the same
against SMC. The Union alleged that the officers and men
thing by mere silence or lapse of time, frustrating the purpose
working on board the petitioners' vessels have not been paid
of the law by indirection. (Manila Terminal Co. v CIR)
their sick leave, vacation leave and overtime pay; that CSA
- In the case at hand, the complaining laborers have even
threatened or coerced them to accept a reduction of salaries,
declared before the filing of the case that they informed the
observed by other shipowners; that after the Minimum Wage
overseer of the LSC that they have been working OT claiming
Law had taken effect, the petitioners required their employees
for their compensation. The records do not show that some
on board their vessels, to pay the sum of P.40 for every meal,
members of LMLU had received salaries les than the min wage.
while the masters and officers were not required to pay their
5. Ratio The employee in rendering extra services at the
meals.
request of his employer has the right to assume that the latter
- CSA answered by saying that they have suffered financial
has complied with the requirements of the law.
losses in the operation of their vessels and that there is no law
Reasoning
which provides for the payment of sick leave or vacation leave
- Fear of possible unemployment inhibits the employee from
to employees or workers of private firms; that as regards the
asserting his right under the law. To allow the workingman to
claim for overtime pay, the petitioners have always observed
be compensated only from the date of filing would be to
the provisions of Comm. Act No. 444, (Eight-Hour Labor Law),
penalize him for his silence. Although LSC claims that the
notwithstanding the fact that it does not apply to those who
computation of the OT in arrears should be based from the filing
provide means of transportation.
of the petition this case is not in point.
- A decision was rendered in favor of the union. In its decision, it
6. Ratio Separation of powers
also held that Pepito Severino, one of its boatsmen, rendered
Reasoning
overtime work and was not paid. The motion for
- The courts cannot go outside the field of interpretation so as
reconsideration, having been denied, the companies filed the
to inquire into the motives of Congress in enacting a piece of
present writ of certiorari, to resolve legal question involved.
legislation.
7. YES
ISSUES
- However, the issue under consideration is predicated on a
WON the CIR erred in holding that Severino Pepito, a boatsman,
situation not obtaining in the case at bar. It supposes that the
had rendered overtime work notwithstanding the provisions of
CIR resolution is unsupported, which does not seem to be the
section 1, of C.A. No. 444
case.
- The CIR is a court with well-defined powers vested by the law
HELD
creating it and with such other powers that pertain to a court of
NO
justice. The general rule that before judgment becomes final,
- The provisions of sec. 1, of Comm. Act No. 444, states that
the Court that rendered the same may alter or modify it so as to
"When the work is not continuous, the time during which the
conform with the law and the evidence, is applicable to the CIR.
laborer is not working and can leave his working place and can
rest completely shall not be counted." Severino Pepito
8
CA 444 (Eight-Hour-Labor Law) Sec 1 is applied to contemporary regulations issued categorically stated that he worked during the late hours of the
by administrative authorities. evening and during the early hours of the day when the boat
SEC. 1. The legal working day for any person employed by another shall be of not docks and unloads. Aside from the above, he did other jobs
more than eight hours daily. When the work is not continuous, the time during which
the laborer is not working AND CAN LEAVE HIS WORKING PLACE and can rest such as removing rusts and cleaning the vessel, which overtime
completely, shall not be counted. work totalled to 6 hours a day, and of which he has not been
9 paid as yet. Sec. 1, of Comm. Act No. 444 find no application in
SEC. 6. Any agreement or contract between the employer and the laborer or
employee contrary to the provisions of this Act shall be null and void ab initio. his case.
Labor Law 1 A2010 - 136 - Disini
Disposition petition is dismissed, with costs against the decision between the parties and remains to be the law of the
petitioners. case making this petition without merit.
- As a rule, the findings of facts of quasi-judicial agencies which
have acquired expertise because their jurisdiction is confined to
WAITING TIME specific matters are accorded not only respect but at times
even finality if such findings are supported by substantial
evidence. The records show that the Labor Arbiters' decision
ARICA V NLRC dated October 9, 1985 pointed out in detail the basis of his
170 SCRA 776 findings and conclusions, and no cogent reason can be found to
PARAS; February 28, 1989 disturb these findings nor of those of the National Labor
Relations Commission which affirmed the same.
FACTS
- This case stemmed from a complaint filed on April 9, 1984 SEPARATE OPINION
against private respondent Stanfilco for assembly time, moral
damages and attorney's fees.
SARMIENTO [dissent]
- After the submission by the parties of their respective position
- It is my opinion that res judicata is not a bar.
papers, Labor Arbiter Pedro C. Ramos rendered a decision dated
- The decision penned by then Minister Blas Ople in ALU v.
October 9, 1985 in favor of private respondent STANFILCO,
STANFILCO (NLRC Case No. 26-LS-XI-76) relied upon by the
holding that: the thirty-minute assembly time long practiced
respondents as basis for claims of res judicata, is not, to my
cannot be considered waiting time or work time and, therefore,
mind, a controlling precedent. In that case, it was held that the
not compensable, has become the law of the case which can no
thirty-minute "waiting time" complained of was a mere
longer be disturbed without doing violence to the time- honored
"assembly time" and not a waiting time as the term is known in
principle of res-judicata.
law, and hence, a compensable hour of work.
- NLRC upheld the Labor Arbiters' decision stating that the
- Precisely, it is the petitioners' contention that the assembly
customary functions referred to in the provision of the
time in question had since undergone dramatic changes.
agreement includes the long-standing practice and
- The petitioners have vehemently maintained that in view
institutionalized non-compensable assembly time. This, in
thereof, the instant case should be distinguished from the first
effect, estopped complainants from pursuing this case.
case. And I do not believe that the respondents have
- NLRC denied motion for reconsideration.
successfully rebutted these allegations. The Solicitor General
- Hence this petition for review on certiorari filed on May 7,
relies solely on the decision of then Minister Ople, the decision
1987.
the petitioners precisely reject in view of the changes in the
- Petitioners: the preliminary activities as workers of
conditions of the parties. The private respondent on the other
respondents STANFILCO in the assembly area is compensable
hand insists that these practices were the same practices taken
as working time (from 5:30 to 6:00 o'clock in the morning) since
into account in ALU v. STANFILCO. If this were so, the Ople
these preliminary activities are necessarily and primarily for
decision was silent thereon.
private respondent's benefit: roll call, getting individual work
assignments from the foreman; accomplishing the Laborer's
Daily Accomplishment Report; getting work materials; travel to
the field bringing with them their tools, equipment and
materials.
- Respondent: the instant complaint is not new, the very same
claim having been brought against herein respondent by the
TRAVEL TIME
same group of rank and file employees in the case of
Associated Labor Union and Standard Fruit Corporation when RADA V NLRC (PHILNOR)
ALU was the bargaining agent of respondent's rank and file
205 SCRA 69
workers.
REGALADO; 1992
ISSUE
WON NLRC committed a grave abuse of discretion in its
resolution of Dec 17, 1986 NATURE
Special civil Action for certiorari to review NLRC decision
HELD
- The decision of the Minister of Labor, on May 12, 1978 in the FACTS
aforecited case (Associated Labor Union vs. Standard (Phil.) - Hilario Rada was hired by private respondent Philnor as driver
Fruit Corporation made significant findings of facts and under a “Contract of Employment for a Definite Period” in
conclusions on the matter. The Minister of Labor held: The thirty connection with Philnor’s contract with the Manila North Express
(30)-minute assembly time long practiced and institutionalized Extension. The original contract was for a period of about 24
by mutual consent of the parties under Article IV, Section 3, of months effective July 1, 1977. Due to delays in the project, the
the Collective Bargaining Agreement cannot be considered as petitioner was rehired under a second contract for a period of
waiting time within the purview of Section 5, Rule I, Book III of ten months. Prior to the end of the second contract and as the
the Rules and Regulations Implementing the Labor Code. ... project remained uncompleted, petitioner was again offered
- It is clear that herein petitioners are merely reiterating the another contract for another period of 19 months. This third
very same claim which they filed through the ALU and which contract was extended for several times again due to delays in
records show had already long been considered terminated and the project. The last extension was for a period of three months
closed by this Court in G.R. No. L-48510. Therefore, the NLRC from October 1 1985 to December 31m 1985. As the project
can not be faulted for ruling that petitioners' claim is already was in fact completed at the end of the end of the final
barred by res-judicata. extension , petitioner sought “personnel Clearance from the
- Be that as it may, petitioners' claim that there was a change in company. At that time, he also received the cash equivalent of
the factual scenario which are "substantial changes in the facts" his unsed leaves and financial assistance. Also at that time, the
makes respondent firm now liable for the same claim they petitioner signed a Release, Waiver and Quitclaim.
earlier filed against respondent which was dismissed. It is thus - Rada, on May 20, 1987, filed before the NLRC a complaint
axiomatic that the non-compensability of the claim having been against private respondent for nonpayment of separation pay
earlier established, constitute the controlling legal rule or
Labor Law 1 A2010 - 137 - Disini
and overtime. This complaint was subsequently amended to - PRANGAN is now before us imputing GRAVE ABUSE OF
include allegation of illegal termination. DISCRETION on the part of NLRC (a) declaring that he rendered
- The labor arbiter found for the petitioner but this was reversed only four hours and not twelve hours of work, and (b) affirming
by the NLRC. Hence the appeal to the SC the monetary award.
- As proof of petitioner’s actual hours of work, MASAGANA
ISSUE submitted the DAILY TIME RECORDS allegedly signed by the
1. WON the petitioner was a permanent employee of the PRANGAN himself showing that he only worked four hours daily.
private respondent - PRANGAN argues that these daily time records were falsified
2. WON the petitioner is entitled to overtime pay for three for the simple reason that he was not required to submit one.
hours per work day He further stressed that, assuming such documents exist, its
authenticity and due execution are questionable and of doubtful
HELD source.
1. NO
- The Court ruled that the petitioner was a project employee ISSUE
and thus his period of employment was fixed for a specific WON NLRC erred in finding Prangan’s work hours to be four
project or undertaking. Once the specific project or undertaking hours instead of twelve
has been completed, the services of the employee not being
required, the employment is terminated, subject only to the HELD
obligation of the employer to render a report on the termination Ratio Matters concerning an employee’s actual hours of work
of the employment.. are within the ambit of management prerogative. However,
2. YES when an employer alleges that his employee works less than
- It was the job of Rada to pick up and drop off employees of the the normal hours of employment as provided for in the law, he
project at certain specified points along EDSA. Hence the time bears the burden of proving his allegation with clear and
he spent in doing this work should be included in determining satisfactory evidence.
the number of hours he had worked. Rada is hence entitled to Reasoning
the overtime pay claimed.(Note: Ordinarily, the travel time - Findings of fact of quasi-judicial bodies like the NLRC,
of employees from house to place of work and vice versa particularly when they coincide with those of the Labor Arbiter,
is not included as part of time worked. Time of work are accorded with respect even finality if supported by
starts when the employee reports at the place of substantial evidence. Substantial evidence is defined as such
workand ends when he leaves the same place.) amount of relevant evidence which a reasonable mind might
Disposition Subject to the modification wih regard the accept as adequate to justify a conclusion. Absent such
overtime pay, the decision of the NLRC is affirmed. quantum of evidence, the Court is not precluded from making
its own independent evaluation of facts.
- NLRC, in declaring that PRANGANonly worked for four hours,
ENTRY TIME CARDS relied solely on the supposed daily time records of the
petitioner submitted by MASAGANA. We, however, are of the
opinion that these documents cannot be considered substantial
PRANGAN V NLRC (MASAGANA SECURITY evidence as to conclude that petitioner only worked for four
SERVICES CORP, PADILLA) hours.
289 SCRA 142 - As PRANGAN’S employer, MASAGANA has unlimited access to
all relevant documents and records on the hours of work of the
ROMERO; April 15, 1998
petitioner. Yet, even as it insists that petitioner only worked for
four hours and not twelve, no employment contract, payroll,
FACTS notice of assignment or posting, cash voucher or any other
- November 4, 1980 - MASAGANA SECURITY SERVICES CORP convincing evidence which may attest to the actual hours of
hired PRANGAN as one of its security guards assigned to the Cat work of the petitioner were even presented. Instead, what the
House Bar and Restaurant with a monthly salary of P2,000.00 private respondent offered as evidence were only petitioner’s
until its closure on August 31, 1993. daily time record, which the latter categorically denied ever
- May 4, 1994 - PRANGAN filed a complaint against MASAGANA accomplishing, much less signing.
for underpayment of wages, non-payment of salary from August - daily time record showed that PRANGAN started work at 10PM
16-31, 1993, overtime pay, premium pay for holiday, rest day, and would leave his post at exactly 2AM. Obviously, such
night shift differential, uniform allowance, service incentive unvarying recording of a daily time record is improbable and
leave pay and 13th month pay from the year 1990 to 1993. contrary to human experience. It is impossible for an employee
- MASAGANA rejected PRANGAN’S claim alleging it merely acted to arrive at the workplace and leave at exactly the same time,
as an agent of the latter in securing his employment at the Cat day in day out. The very uniformity and regularity of the entries
House Bar and Restaurant. Thus, the liability for the claims of are “badges of untruthfulness and as such indices of dubiety.
the petitioner should be charged to Cat House Bar and its - Personnel data sheet of the PRANGAN, duly signed by the
owner, being his direct employer. former’s operation manager, it shows on its face that the
- Labor Arbiter > brushed aside MASAGANA’S contention that it latter’s hours of work are from 7PM to 7AM or twelve hours a
was merely an agent of the petitioner and ordered to pay within day. Hence, MASAGANA is estopped from assailing the
10 days P9,932.16 premium pay for holiday and rest days, night contents of its own documents.
shift differential, service incentive leave pay, 13th month pay, - attendance sheets of Cat House Bar and Restaurant showed
uniform allowance, and unpaid salary and dismissed other that PRANGAN worked from 7:00 p.m. to 7:00 a.m. daily,
claims either for the reason of prescription and/or lack of merit documents which were never repudiated by MASAGANA.
- PRANGAN was not satisfied with the LA’s decision and he - As is well-settled, if doubts exist between the evidence
appealed to NLRC contending that LA erred in concluding that presented by the employer and the employee, the scales of
he only worked for four hours and not twelve hours a day. But, justice must be tilted in favor of the employee. Since it is a
NLRC dismissed his appeal for failure to file the same within time-honored rule that in controversies between a laborer and
ten-day reglementary period. his master, doubts reasonably arising from the evidence, or in
- PRANGAN filed a MFR which, in the “interest of justice,” was the interpretation of agreements and writings should be
favorably granted by the NLRC resulting in the reinstatement of resolved in the former’s favor.
his appeal. But it was short-lived as the appeal was eventually Disposition instant petition is hereby GRANTED. NLRC
dismissed for lack of merit decision on July 31, 1996 is hereby VACATED. Whatever money
claims due to the petitioner shall be computed on the basis of a
Labor Law 1 A2010 - 138 - Disini
twelve-hour daily work schedule. For this purpose, the case is evaded the respondent's company financial obligation to the
hereby REMANDED to the Labor Arbiter for immediate petitioner.
recomputation of said claims in accordance with the foregoing Disposition Petition PARTLY GRANTED. Nicario awarded
findings. overtime pay, but manager held not to be solidarily liable with
corporation
NICARIO V NLRC (MANCAO)
193 SCRA 603 AKLAN ELECTRIC COOP INC V NLRC
ROMERO; September 17, 1998

NATURE
special civil action for certiorari to review decision of NLRC

FACTS
- Nicario was an employee of Mancao Supermarket (which was
managed by Antonio Mancao). She was terminated, and she
filed a complaint for illegal dismissal, with prayer for
backwages, overtime pay, and unpaid wages.
- She alleges that she reported to work everyday from 7:30am
till 7:30pm (12 hrs a day), thus rendering overtime work for
4hrs each day. 5.05 MEAL PERIOD
- The labor arbiter awarded her OT pay, by taking judicial notice
of the fact that all Mancao establishments operate from 8am til
8pm. On appeal by the supermarket to the NLRC, the MEAL TIME - FREE TIME
commission deleted the award for OT pay, giving credence to
the daily time records (DTRs) presented by the company, which PAN AMERICAN WORLD AIRWAYS SYSTEM (PHILS)
showed that Nicario worked for 8 hrs a day only, from 9am-
12nn and 2pm-7pm, each day. Also, the NLRC absolved the
V PAN AMERICAN EMPLOYEES ASSOCIATION
liability of the manager. Nicario appealed to the SC. 1 SCRA 527
REYES; February 23, 1961
ISSUES
1. WON Nicario must be given overtime pay NATURE
2. WON the manager must be held solidarily liable with the Appeal by certiorari from the decision of the Court of Industrial
corporation Relations

HELD FACTS
1. YES - After failing to reach a compromise with their company, PAN
Ratio The Daily Time Record with uniform entries day in and AM workers filed a case against PAN AM PHILIPPINES to seek
day out, cannot be given much credence. redress for their grievances at the workplace. They demanded
Reasoning payment of overtime compensation, inclusion in the
- While the supermarket submitted the daily time records of computation of overtime pay the one-hour meal period during
Nicario to show that she rendered work for only 8hrs a day, it overtime, adoption of straight eight hour shift inclusive of the
did not refute nor seek to disprove the judicial notice taken by meal period.
the Labor Arbiter that Mancao establishments, including the - It appears that most of their grievances were addressed by the
establishment where NIcario worked, opens 12 hrs a day, Court of Industrial Relations prompting the management to
opening at 8:00 a.m. and closing at 8:00 p.m. make this appeal.
In evaluating the evidentiary value of daily time records,
especially those which show uniform entries with regard to the ISSUES
hours of work rendered by an employee, the court has ruled 1. WON CIR had jurisdiction over claims of overtime pay
that “such unvarying recording of a daily time record is 2. WON the one-hour meal period should be considered as
improbable and contrary to human experience. It is impossible overtime work
for an employee to arrive at the workplace and leave at exactly
the same time, day in day out. The uniformity and regularity of HELD
the entries are 'badges of untruthfulness and as such indices of 1. YES
dubiety.” On the other hand, the supermarket failed to present Ratio The Industrial Court may properly take cognizance of
substantial evidence, other than the disputed DTRs, to prove overtime claims, if at the time of the petition, the complainants
that Nicario indeed worked for only 8 hrs a day. were still in the service of the employer, or, having been
2. NO separated from such service, should ask for reinstatement;
Ratio There appearing to be no evidence that Antonio Mancao otherwise, such claims should be brought before the regular
acted maliciously or deliberately in the non-payment of benefits courts.
to Nicarion, he cannot he held jointly and severally liable with Reasoning
Mancao supermarket. - overtime compensation were still in the service of the
Reasoning company when the case was filed, the jurisdiction of the Court
- The general rule is that officers of a corporation are not of Industrial Relations cannot be assailed. In fact, since it is not
personally liable for their official acts unless it is shown that pretended that, thereafter, the complainants were discharged
they have exceeded their authority. However, the legal fiction or otherwise terminated their relationship with the company for
that a corporation has a personality separate and distinct from any reason, all of said complainants could still be with the
stockholders and members may be disregarded if it is used as a company up to the present.
means to perpetuate fraud or an illegal act or as a vehicle for 2. NO
the evasion of an existing obligation, the circumvention of Ratio The one-hour meal period shall be considered as part of
statutes, or to confuse legitimate issues. overtime work if the evidence shows that during that period,
- In this case, there is no showing that Antonio Mancao, as the company may call resting employees to render some
manager of respondent company, deliberately and maliciously services.
Labor Law 1 A2010 - 139 - Disini
Reasoning evening upon being informed of the emergency. PAL decided to
- Petitioner herein claims that the one-hour meal period should suspend private respondent for three months.
not be considered as overtime work (after deducting 15 - Private respondent filed a complaint for illegal suspension
minutes), because the evidence showed that complainants against petitioner.
could rest completely and were not in any manner under the - Labor Arbiter Romulus A. Protasio rendered a decision
control of the company during that period. The court below declaring the suspension of private respondent illegal.
found, on the contrary, that during the so-called meal period, - Petitioner appealed to the NLRC. The NLRC, however,
the mechanics were required to stand by for emergency work; dismissed the appeal.
that if they happened not to be available when called, they
were reprimanded by the leadman; that as in fact it happened ISSUES
on many occasions, the mechanics had been called from their 1. WON the 3-month suspension of private respondent should
meals or told to hurry up eating to perform work during this be nullified despite the fact that the private respondent has
period. Far from being unsupported by substantial evidence, the committed an offense that warranted the imposition of
record clearly confirms the above factual findings of the disciplinary action
Industrial Court. 2. WON moral damages should be awarded
- The Industrial Court's order for permanent adoption of a
straight 8-hour shift including the meal period was but a HELD
consequence of its finding that the meal hour was not one of 1. YES
complete rest, but was actually a work hour, since, for its Ratio The eight-hour work period does not include the meal
duration, the laborers had to be on ready call. Of course, if the break. Nowhere in the law may it be inferred that employees
Company practices in this regard should be modified to afford must take their meals within the company premises. Employees
the mechanics a real rest during that hour (f. ex., by installing are not prohibited from going out of the premises as long as
an entirely different emergency crew, or any similar they return to their posts on time.
arrangement), then the modification of this part of the decision Reasoning
may be sought from the Court below. As things now stand, we - A83 and 85 LC read:
see no warrant for altering the decision. Art. 83. Normal hours of work. — The normal hours of work of
Disposition The judgment appealed from is affirmed. Costs any employee shall not exceed eight hours a day.
against appellant. Health personnel in cities and municipalities with a population
of at least one million or in hospitals and clinics with a bed
capacity of at least one hundred shall hold regular office
hours for eight hours a day, for five days a week, ...
Art. 85. Meal periods. — Subject to such regulations as the
Secretary of Labor may prescribe, it shall be the duty of every
employer to give his employees not less than sixty (60)
minutes time-off for their regular meals.
Sec. 7, Rule I, Book III of the Omnibus Rules Implementing the
PHILIPPINE AIRLINES INC V NLRC (PROTACIO, Labor Code further states:
FABROS) Sec. 7. Meal and Rest Periods. — Every employer shall give
302 SCRA 582 his employees...not less than one (1) hour time-off for regular
PUNO; February 2, 1999 meals...
- Private respondent left the clinic that night only to have his
dinner at his house, which was only a few minutes' drive away
NATURE from the clinic. His whereabouts were known to the nurse on
Appeal from the decision of the NLRC duty so that he could be easily reached in case of emergency.
Upon being informed of Mr. Acosta's condition, private
FACTS respondent immediately left his home and returned to the
- Private respondent was employed as flight surgeon at clinic. These facts belie petitioner's claim of abandonment.
petitioner company. He was assigned at the PAL Medical Clinic 2. NO
at Nichols and was on duty from 4:00 in the afternoon until Ratio Not every employee who is illegally dismissed or
12:00 midnight. suspended is entitled to damages. As a rule, moral damages are
- At around 7:00 pm, one night, private respondent left the recoverable only where the dismissal or suspension of the
clinic to have his dinner at his residence, which was about 5- employee was attended by bad faith or fraud, or constituted an
minute drive away. A few minutes later, the clinic received an act oppressive to labor, or was done in a manner contrary to
emergency call from the PAL Cargo Services. One of its morals, good customs or public policy.
employees, Mr. Manuel Acosta, had suffered a heart attack. The Reasoning
nurse on duty, Mr. Merlino Eusebio, called private respondent at - Bad faith does not simply mean negligence or bad judgment. It
home to inform him of the emergency. The patient arrived at involves a state of mind dominated by ill will or motive. It
the clinic at 7:50 pm and Mr. Eusebio immediately rushed him implies a conscious and intentional design to do a wrongful act
to the hospital. When private respondent reached the clinic at for a dishonest purpose or some moral obliquity.
around 7:51 pm, Mr. Eusebio had already left with the patient. - there is no showing that the management of petitioner
Mr. Acosta died the following day. PAL Medical Director ordered company was moved by some evil motive in suspending private
the Chief Flight Surgeon to conduct an investigation. The Chief respondent. It suspended private respondent on an honest,
Flight Surgeon, in turn, required private respondent to explain albeit erroneous, belief that private respondent's act of leaving
why no disciplinary sanction should be taken against him. the company premises to take his meal at home constituted
Private respondent asserted that he was entitled to a 30 min. abandonment of post which warrants the penalty of suspension
meal break; that he immediately left his residence upon being Disposition petition is PARTIALLY GRANTED. The portion of
informed by Mr. Eusebio about the emergency and he arrived at the assailed decision awarding moral damages to private
the clinic a few minutes later; that Mr. Eusebio panicked and respondent is DELETED. All other aspects of the decision are
brought the patient to the hospital without waiting for him. AFFIRMED.
- The management charged private respondent with
abandonment of post while on duty. In his answer, private
respondent reiterated that he only left the clinic to have his
dinner at home. In fact, he returned to the clinic at 7:51 in the 5.06 OVERTIME WORK AND
OFFSETTING PROHIBITION
Labor Law 1 A2010 - 140 - Disini
generally considered overtime in the Philippines is work in
excess of the regular 8 hours a day. It is understandably
DEFINITION AND RATIONALE – material to refer to precedents in the US for purposes of
computing weekly wages under a 40-hour week rule, since the
OVERTIME PAY particular issue involved in NAWASA is the conversion of prior
weekly regular earnings into daily rates without allowing
diminution or addition.
PNB V PNB EMPLOYEES ASSOCIATION - To apply the NAWASA computation would require a different
115 SCRA 507 formula for each and every employee. It would require
BARREDO; July 30, 1982 reference to and continued use of individual earnings in the
past, thus multiplying the administrative difficulties of the
NATURE Company. It would be cumbersome and tedious a process to
Appeal from decision of the Court of Industrial Relations (CIR) compute overtime pay and this may again cause delays in
payments, which in turn could lead to serious disputes. To apply
FACTS this mode of computation would retard and stifle the growth of
- PNB and PNB Employees Association (PEMA) had a dispute unions themselves as Companies would be irresistibly drawn
regarding the proper computation of overtime pay. PEMA into denying, new and additional fringe benefits, if not those
wanted the cost of living allowance (granted in 1958) and already existing, for fear of bloating their overhead expenses
longevity pay (granted in 1961) to be included in the through overtime which, by reason of being unfixed, becomes
computation. PNB disagreed and the 2 parties later went before instead a veritable source of irritant in labor relations.
the CIR to resolve the dispute. **Overtime Pay Rationale Why is a laborer or employee who
- CIR decided in favor of PEMA and held that PNB should works beyond the regular hours of work entitled to extra
compute the overtime pay of its employees on the basis of the compensation called, in this enlightened time, overtime pay?
sum total of the employee’s basic salary or wage plus cost of Verily, there can be no other reason than that he is made to
living allowance and longevity pay. The CIR relied on the ruling work longer than what is commensurate with his agreed
in NAWASA v NAWASA Consolidated Unions, which held that compensation for the statutorily fixed or voluntarily agreed
“for purposes of computing overtime compensation, regular hours of labor he is supposed to do. When he thus spends
wage includes all payments which the parties have agreed shall additional time to his work, the effect upon him is multi-
be received during the work week, including differentiated faceted; he puts in more effort, physical and/or mental; he is
payments for working at undesirable times, such as at night and delayed in going home to his family to enjoy the comforts
the board and lodging customarily furnished the employee.” thereof; he might have no time for relaxation, amusement or
This prompted PNB to appeal, hence this case. sports; he might miss important pre-arranged engagements;
etc. It is thus the additional work, labor or service employed
ISSUE and the adverse effects just mentioned of his longer stay in his
WON the cost of living allowance and longevity pay should be place of work that justify and are the real reasons for the extra
included in the computation of overtime pay as held by the CIR compensation that is called overtime pay.
**Overtime Pay Definition The additional pay for service or
HELD work rendered or performed in excess of 8 hours a day by
NO employees or laborers in employment covered by the 8 hour
Ratio Overtime pay is for extra effort beyond that Labor Law [C.A. 444, now Art. 87 Labor Code] and not exempt
contemplated in the employment contract; additional pay given from its requirements. It is computed by multiplying the
for any other purpose cannot be included in the basis for the overtime hourly rate by the number of hours worked in excess
computation of overtime pay. of eight.
- Absent a specific provision in the CBA, the bases for the Disposition decision appealed from is REVERSED
computation of overtime pay are 2 computations, namely:
1. WON the additional pay is for extra work done or service CALTEX REGULAR EMPLOYEES V CALTEX (PHILS)
rendered
2. WON the same is intended to be permanent and regular, not
INC
contingent nor temporary as a given only to remedy a situation 247 SCRA 398
which can change any time. FELICIANO; August 15, 1995
Reasoning
- Longevity pay cannot be included in the computation of NATURE
overtime pay for the very simple reason that the contrary is Petition for certiorari
expressly stipulated in the CBA, which constitutes the law
between the parties. FACTS
- As regards cost of living allowance, there is nothing in - On 12 December 1985, petitioner Union and Caltex
Commonwealth Act 444 [or “the 8-hour Labor Law,” now Art. 87 (Philippines), Inc. (Caltex) entered into a Collective Bargaining
Labor Code] that could justify PEMA’s posture that it should be Agreement ("1985 CBA") which was to be in effect until
added to the regular wage in computing overtime pay. C.A. 444 midnight of 31 December 1988. The CBA included, among
prescribes that overtime work shall be paid “at the same rate others, the following provision:
as their regular wages or salary, plus at least 25% additional.” "ARTICLE III
The law did not define what is a regular wage or salary. What HOURS OF WORK
the law emphasized is that in addition to “regular wage,” there In conformity with Presidential Decree 442, otherwise known
must be paid an additional 25% of that “regular wage” to as the Labor Code of the Philippines, as amended, the regular
constitute overtime rate of pay. Parties were thus allowed to work week shall consist of eight (8) hours per day, seven (7)
agree on what shall be mutually considered regular pay from or days, Monday through Sunday, during which regular rates of
upon which a 25% premium shall be based and added to pay shall be paid in accordance with Annex B and work on the
makeup overtime compensation. employee's one 'Day of Rest,' shall be considered a special
- No rule of universal application to other cases may be work day, during which 'Day of Rest' rates of pay shall be paid
justifiably extracted from the NAWASA case. CIR relies on the as provided in Annex B. Daily working schedules shall be
part of the NAWASA decision where the SC cited American established by management in accordance with the
decisions whose legislation on overtime is at variance with the requirements of efficient operations on the basis of eight (8)
law in this jurisdiction. The US legislation considers work in hours per day for any five (5) days. Provided, however,
excess of forty hours a week as overtime; whereas, what is
Labor Law 1 A2010 - 141 - Disini
employees required to work in excess of forty (40) hours in Petitioner Union had never suggested that more than 1 day of
any week shall be compensated in accordance with Annex B rest had been agreed upon, and Caltex had never treated
of this Agreement. Article III or any other portion of the CBAs as providing two (2)
- Sometime in August 1986, the Union called Caltex's attention days of rest.
to alleged violations by Caltex of Annex "B" of the 1985 CBA, - An annex expresses the idea of joining a smaller or
e.g. non-payment of night-shift differential, non-payment of subordinate thing with another, larger or of higher importance.
overtime pay and non-payment at "first day-off rates" for work An annex has a subordinate role, without any independent
performed on a Saturday. significance separate from that to which it is tacked on. Annex
- Caltex’s Industrial Relations manager informed Union that "B," in the case at bar, is one such document. It is not a
differential payments would be timely implemented. memorandum of amendments or a codicil containing additional
- In the implementation of the re-computed claims, however, no or new terms or stipulations. Annex "B" cannot be construed as
differential payment was made with respect to work performed modifying or altering the terms expressed in the body of the
on the first 2 1/2 hours on a Saturday. agreement contained in the 1985 CBA. It did not confer any
Union instituted a complaint for unfair labor practice against rights upon employees represented by petitioner Union; neither
Caltex alleging violation of the provisions of the 1985 CBA. did it impose any obligations upon private respondent Caltex. In
fact, the contents of Annex "B" have no intelligible significance
in and of themselves when considered separately from the 1985
CBA.
- Petitioners’ Claims: - Petitioner Union also contended that private respondent
> charged Caltex with shortchanging its employees when Caltex in the instant petition was violating the statutory
Caltex compensated work performed on the first 2 1/2 hours of prohibition against off-setting undertime for overtime work on
Saturday, an employees' day of rest, at regular rates, when it another day. 11 Union counsel attempted to establish this
should be paying at "day of rest" or "day off" rates. charge by asserting that the employees had been required to
> Caltex was violating the statutory prohibition against off- render "overtime work" on a Saturday but compensated only at
setting undertime for overtime work on another day. The regular rates of pay, because they had not completed the eight
employees had been required to render "overtime work" on a (8)-hour work period daily from Monday thru Friday.
Saturday but compensated only at regular rates of pay, - Overtime work consists of hours worked on a given day in
because they had not completed the eight (8)-hour work period excess of the applicable work period, which here is eight (8)
daily from Monday thru Friday. hours. It is not enough that the hours worked fall on
- Respondent’s Comments disagreeable or inconvenient hours. In order that work may be
> denied the accusations of the Union. It averred that Saturday considered as overtime work, the hours worked must be in
was never designated as a day of rest, much less a "day-off". excess of and in addition to the eight (8) hours worked during
> the 1985 CBA provided only 1 day of rest for employees at the prescribed daily work period, or the forty (40) hours worked
the Manila Office, as well as employees similarly situated at the during the regular work week Monday thru Friday.
Legazpi and Marinduque Bulk Depots. This day of rest, - In the present case, under the 1985 CBA, hours worked on a
according to Caltex was Sunday. Saturday do not, by that fact alone, necessarily constitute
- Ruling of Labor Arbiter overtime work compensable at premium rates of pay, contrary
> ruled in favor of petitioner Union, while finding at the same to petitioner's assertion. These are normal or regular work
time that Caltex was not guilty of any unfair labor practice. hours, compensable at regular rates of pay, as provided in the
- In interpreting Article III and Annex "B" of the 1985 CBA, Labor 1985 CBA; under that CBA, Saturday is not a rest day or a "day
Arbiter concluded that Caltex's employees had been given two off". It is only when an employee has been required on a
(2) days (instead of one day) of rest, with the result that work Saturday to render work in excess of the forty (40) hours which
performed on the employee's first day of rest, viz. Saturday, constitute the regular work week that such employee may be
should be compensated at "First day-off" rates. considered as performing overtime work on that Saturday.
- Ruling of NLRC Disposition Petition dismissed
> NLRC set aside the decision of Labor Arbiter; conclusions of
the Labor Arbiter were not supported by the evidence on
MANILA TERMINAL CO INC V CIR
record.
- In interpreting the provisions of the 1985 CBA, NLRC [ ]
concluded that CBA granted only one (1) day of rest, e.g.,
Sunday. NO COMPUTATION FORMULA BASIC
- The Union's motion for reconsideration was denied.
CONTRACT
ISSUE
WON Article III in relation to Annex B of the 1985 CBA should be MANILA TERMINAL CO INC V CIR
interpreted as giving the workers two days of rest (Saturday
and Sunday), thus entitling the workers to “day off” rates on
[ ]
work performed on a Saturday
BUILT-IN COMPENSATION
HELD
NO, the intention of the parties to the 1985 CBA was to provide
the employees with only one (1) day of rest. ENGINEERING EQUIPMENT INC V MINISTER OF
- the use of the word "one" describing the phrase "day of rest LABOR (ASPERA)
[of an employee]" emphasizes the fact that the parties had
138 SCRA 616
agreed that only a single day of rest shall be scheduled and
shall be provided to the employee. AQUINO; September 23, 1985
- contract clauses governing hours of work in previous CBAs
executed in 1973, 1976, 1979 and 1982 contained provisions NATURE
parallel if not identical to those set out in Article III of the 1985 Petition to review the resolution of the Minister of Labor
CBA. In all these CBAs (1973, 1976, 1979, 1982), Article III
provide that only "work on an employee's one day of rest" shall FACTS
be paid on the basis of "day of rest rates". - Miguel Aspera worked for Engineering Equipment, Inc. in Saudi
Arabia for nearly a year from April 26, 1977 to April 16, 1978.
Labor Law 1 A2010 - 142 - Disini
- He had a monthly salary of P750 (P860) with a six-day work days of September & October 1991. This notwithstanding,
week consisting of ten working hours. petitioner again failed to submit cold call reports for September
- According to his written contract of employment, he may be & October 1992. Petitioner was required to explain his inaction,
required to work overtime in excess of the ten-hour work each with a warning that further non-compliance would result in his
day and to work on rest days or on Saudi Arabian holidays. termination from the company. In a reply, petitioner claimed
- He was also promised overtime pay on top of his P750 salary that the same was an honest omission brought about by his
for work rendered in excess of what was required from him as a concentration on other aspects of his job. Cityland found said
minimum. excuse inadequate and suspended him for three days, with a
- Jonathan de la Cruz, the director of Employment Services and similar warning.
the NLRC sustained his claim and awarded him that amount as - Notwithstanding the aforesaid suspension and warning,
overtime pay. The 10 hour-a-week workload was declared void petitioner again failed to submit cold call reports for February
for going against the Eight Hour Labor Law and section 87 of 1993. He was verbally reminded to submit the same and was
the Code which states that any work beyond 8 hours a day even given up to February 17, 1993 to do so. Instead of
should be considered overtime work. complying with said directive, petitioner wrote a note, “TO HELL
- Petitioners’ Claim: WITH COLD CALLS! WHO CARES?” and exhibited the same to
> Aspera is a managerial employee and should thus not be his co-employees.
entitled to overtime pay in accordance with Section 82 of the - Petitioner received a memorandum requiring him to explain
Labor Code. why Cityland should not make good its previous warning for his
> Aspera also signed a written contract with a “built-in” failure to submit cold call reports, as well as for issuing the
overtime pay in the ten hour workday which meant that his written statement aforementioned. Petitioner sent a letter-reply
basic monthly pay was adjusted to reflect the higher amount alleging that his failure to submit cold call reports should not be
covering the guaranteed two-hour extra time whether worked deemed as gross insubordination. He denied any knowledge of
or unworked. the damaging statement, “TO HELL WITH COLD CALLS!”
> The contracts were submitted to respondent Jonathan de la - Finding petitioner guilty of gross insubordination, Cityland
Cruz who approved of the same. served a notice of dismissal upon him. Petitioner filed a
- Respondents’ Comments: complaint against Cityland for illegal dismissal, illegal
> Aspera worked 10 hours daily for 335 days and he claims that deduction, underpayment, overtime and rest day pay, damages
his monthly salary should correspond to eight hours of daily and attorney’s fees.
work and that for the additional two hours daily, he was entitled - The labor arbiter dismissed the petition for lack of merit. On
to overtime pay at $1.2162 per hour or to $814.85 for 670 appeal, the same was affirmed by the NLRC; hence the present
hours during 335 working days. recourse.

ISSUE ISSUE
WON the Minister of Labor erred in awarding the overtime pay 1. WON respondent NLRC gravely abused its discretion in not
to Aspera finding that petitioner was illegally dismissed
2. WON respondent NLRC gravely abused its discretion in ruling
HELD that petitioner is not entitled to salary differentials, backwages,
YES separation pay, overtime pay, rest day pay, unpaid
- De la Cruz acted with lack of discretion and in excess of his commissions, moral and exemplary damages and attorney’s
jurisdiction when he awarded the overtime pay to Aspera. fees
- He himself approved the contract even he knew of the Eight
Hour Labor Law. Because of that approval, petitioner HELD
Engineering Equipment Inc. acted in good faith in enforcing the 1. NO
contract. Ratio Except as provided for, or limited by, special laws, an
- Aspera also did not deny that he was a managerial employee. employer is free to regulate, according to his discretion and
Disposition The resolution of the MOLE is reversed and set judgment, all aspects of employment.” Employers may, thus,
aside. Aspera’s complaint is dismissed. No costs. make reasonable rules and regulations for the government of
their employees, and when employees, with knowledge of an
established rule, enter the service, the rule becomes a part of
the contract of employment. It is also generally recognized that
company policies and regulations, unless shown to be grossly
oppressive or contrary to law, are generally valid and binding
PROOF OF WORK on the parties and must be complied with.
Reasoning
- Said company policy of requiring cold calls and the
LAGATIC V NLRC concomitant reports thereon is clearly reasonable and lawful,
285 SCRA 251 sufficiently known to petitioner, and in connection with the
ROMERO; January 28, 1998 duties which he had been engaged to discharge. There is, thus,
just cause for his dismissal.
NATURE - Based on the foregoing, we find petitioner guilty of willful
Petition by certiorari disobedience. Willful disobedience requires the concurrence of
at least two requisites: the employee’s assailed conduct must
FACTS have been willful or intentional, the willfulness being
- Petitioner Romeo Lagatic was employed by Cityland as a characterized by a wrongful and perverse attitude; and the
marketing specialist. He was tasked with soliciting sales for the order violated must have been reasonable, lawful, made known
company, with the corresponding duties of accepting call-ins, to the employee and must pertain to the duties which he had
referrals, and making client calls and cold calls. Cold calls refer been engaged to discharge.
to the practice of prospecting for clients through the telephone - Well settled is the dictum that the twin requirements of notice
directory. and hearing constitute the elements of due process in the
- In order to assess cold calls made by the sales staff, as well as dismissal of employees. Thus, the employer must furnish the
to determine the results thereof, Cityland requires the employee with two written notices before the termination of
submission of daily progress reports on the same. employment can be effected. The first apprises the employee
- On October 22, 1991, Cityland issued a written reprimand to of the particular acts or omissions for which his dismissal is
petitioner for his failure to submit cold call reports for certain
Labor Law 1 A2010 - 143 - Disini
sought; the second informs him of the employer’s decision to organizing a labor union in the work premises as well as in filing
dismiss him. the petition for certification election before the Department of
- The chronology of events clearly shows that petitioner was Labor. They further averred that they were paid daily wages
served with the required written notices. ranging from P81.00 to P145.00 which were below the minimum
- The requirement of a hearing is complied with as long as there fixed by law and that they were required to work six (6) days a
was an opportunity to be heard, and not necessarily that an week from 8 o’clock in the morning to 7 o’clock in the evening
actual hearing be conducted. Petitioner had an opportunity to without being paid for the overtime. Neither were they paid
be heard as he submitted a letter-reply to the charge. He, their service incentive leave pay and 13th month pay.
however, adduced no other evidence on his behalf. In fact, he - The Labor Arbiter ruled for the petitioners. On appeal by HI-
admitted his failure to submit cold call reports, praying that the TECH, the NLRC in its Decision of 30 May 1997 vacated and set
same be not considered as gross insubordination. aside the Labor Arbiter’s Decision and ordered petitioners to
- Denials are weak forms of defenses, particularly when they report back to work, or if no longer feasible, directed HI-TECH to
are not substantiated by clear and convincing evidence. Given pay petitioners their separation benefits.
the foregoing, we hold that petitioner’s constitutional right to
due process has not been violated. ISSUE
2. NO WON petitioners are entitled to back wages and other monetary
- There is no law which requires employers to pay commissions, benefits
and when they do so, there is no law which prescribes a method
for computing commissions. The determination of the amount
of commissions is the result of collective bargaining
negotiations, individual employment contracts or established HELD
employer practice. Since the formula for the computation of Ratio The burden of proving payment of monetary claims rests
commissions was presented to and accepted by petitioner, such on the employer. In Jimenez v. National Labor Relations
prescribed formula is in order. Commission we held -
- Petitioner failed to show his entitlement to overtime and rest As a general rule, one who pleads payment has the burden of
day pay due, to the lack of sufficient evidence as to the number proving it. Even where the plaintiff must allege non-payment,
of days and hours when he rendered overtime and rest day the general rule is that the burden rests on the defendant to
work. Entitlement to overtime pay must first be established by prove payment, rather than on the plaintiff to prove non-
proof that said overtime work was actually performed, before payment. The debtor has the burden of showing with legal
an employee may avail of said benefit. certainty that the obligation has been discharged with
- Lastly, with the finding that petitioner’s dismissal was for a payment.
just and valid cause, his claims for moral and exemplary - The petitioners’ claims for underpayment of wages, 13th
damages, as well as attorney’s fees, must fail. month pay and service incentive leave pay should be upheld.
Disposition AFFIRMED. - Petitioners executed a JOINT AFFIDAVIT specifying their daily
wages, positions and periods of employment, which was made
SOCIAL SECURITY SYSTEM V CA the basis of the Labor Arbiter’s computation of the monetary
awards. All that the NLRC needed to do was to refer to the
prevailing minimum wage to ascertain the correctness of
VILLAR V NLRC (HI-TECH MANUFACTURING CORP) petitioners’ claims. And most importantly, the burden of
331 SCRA 686 proving payment of monetary claims rests on the
BELLOSILLO; May 11, 2000 employer.
- The reason for the rule is that the pertinent personnel files,
NATURE payrolls, records, remittances and other similar documents –
Petitioners, in this petition for certiorari, assail for having been which will show that overtime, differentials, service incentive
rendered with grave abuse of discretion the 30 May 1997 leave and other claims of workers have been paid – are not in
Decision of the National Labor Relations Commission (NLRC) the possession of the worker but in the custody and absolute
vacating and setting aside the Decision of the Labor Arbiter, as control of the employer. Thus, in choosing not to present
well as its 31 July 1997 Resolution denying reconsideration. evidence to prove that it had paid all the monetary claims of
petitioners, HI-TECH failed once again to discharge the onus
FACTS probandi. Consequently, we have no choice but to award those
- HI-TECH MANUFACTURING CORPORATION (HI-TECH), a claims to petitioners.
corporation duly organized and existing under Philippine laws, is
engaged in the business of manufacturing cartons for EMPLOYER OBLIGATION
commercial purposes. On different dates, HI-TECH hired
petitioners to perform various jobs for the company such as
slitter machine operator, inkman, silk screen printer, truck SOCIAL SECURITY SYSTEM V CA
helper, rubber dye setter, forklift operator and stitching [ ]
machine operator.
- Sometime in March 1994 petitioners, who were members of
the Federation of Free Workers Union, filed before the
Department of Labor a petition for certification election among
5.07 NIGHT WORK
the rank-and-file employees of HI-TECH. The petition was
granted and a certification election was conducted inside the
company premises on 31 July 1994. However, petitioners lost in RATIONALE PROHIBITION
the election as the HI-TECH employees voted for "No Union."
- On 1 August 1994 and the succeeding days thereafter,
petitioners failed to report for work. They alleged that they were
SHELL OIL CO. OF THE PHILS LTD V NATIONAL
barred from entering the premises of HI-TECH; hence, they LABOR UNION
immediately filed before the Labor Arbiter separate complaints 81 Phil 315
for illegal dismissal and labor standards claims against HI-TECH, BRIONES; July 26, 1948
Herman T. Go, owner, and Carmen Belano, general manager.
- Petitioners claimed that they were summarily dismissed from
NATURE
employment by the management of HI-TECH in retaliation for
Petition for review on certiorari
Labor Law 1 A2010 - 144 - Disini
Expressum facit cessare tacitum. The argumentation is
FACTS erronea. The Law Not. 444 is not applicable al present case,
- Acting on a petition of the company "National Work Union," being evident that the same one has an object I specify, to
the Court of Industrial Relations has dictated a decision in know: (A) to set in 8 hours the day maxima of work; (b) senalar
which, among others things, the petroleum firm is obliged to certain exceptional cases in which the work out of said day can
pay its laborers for work at night a compensation additional of be authorized; (c) to provide a bonus, that should not be less
50% on its regular salaries. It seems that the company has need than 25% of the salary to regulate, for the "overtime" or I work
of the nocturnal service of a determined number of laborers, over and above the 8 hours.
since some of the necessary tasks are done at night for the
supply of gasoline and lubricants, and for other needs. The ISSUE
company alleges and argues that there’s not any disposition WON the petroleum company is obligated to give additional pay
that authorizes the Court of Industrial Relations to order the for its night workers
payment of additional compensation to laborers that work at
night, but, on the contrary, the law of the Commonwealth Not. HELD
444 exempts all owners of similar obligation every time that in YES
said law the cases are provided in which the payment of Ratio The night work that the company Shell requires of its
"overtime" is compulsory, and among such cases of overtime laborers is not an "overtime", in the sense in which this word is
does not figure the work at night. In turn, the union maintains employed in Commonwealth Act 444, but is a complete day of
that the law Not. 444 of the Commonwealth that is invoked work, of 8 hours. In other words, the work at night is not only
does not have any application al present case, therefore the unexceso, prolongacion or "overtime" of the regular daywork ,
same one is of reach inevitably limited, being referred And but is another type of work, absolutely independent of the day.
exclusively to the day maxima of work contidiano permitted in Therefore there are two shifts: the shift of laborers that work
the industrial establishments — the day of 8 hours. Our during the day; and the shift of the ones that work at night. It is
conclusion is that the union has the reason on its part. not strange that the legislator have not included this type of
- Commonwealth No. 444 states: work among the cases of "overtime" in the above-mentioned
SECTION 1. The legal working day for any person employed law Not. 444.
by another shall be of not more than eight hours daily. When Reasoning
the work is not continuous, the time during which the laborer - And with respect with the apreciation that the work at night is
is not working and can leave his working place and can rest but heavy and burdensome than that of day and, therefore, he
completely shall not be counted. deserves greater remuneration, there is no reason to revoke it
SEC. 3. Work may be performed beyond eight hours a day in or to alter it. There is not possible argument against the
case of actual or impending emergencies caused by serious universal fact that the ordinary, normal, and regular work is that
accidents, fire, flood, typhoon, earthquake, epidemic, or other of day and that the work at night is very exceptional and
disaster or calamity in order to prevent loss to life and justified alone certainly imperatively inevitable motives.
property or imminent danger to public safety; or in case - Reasons of hygiene, of medicine, of morale, of culture, of
urgent work to be performed on the machines, equipment, or sociologia, they establish with one accord that the work at night
installations in order to avoid a serious loss which the has many objections, and when there is not but remedy that to
employer would otherwise suffer, or some other just cause of cause is alone just that I am paid better than usually to
a similar nature; but in all such cases the laborers and compensate hasa certain point al working of such objections. It
employees shall be entitled to receive compensation for the must be remembered that it is distinctly unphysiological to turn
overtime work performed at the same rate as their regular the night into day and deprive the body of the beneficial effects
wages or salary, plus at least twenty-five per centum of sunshine. The human organism revolts against this
additional. procedure. Added to artificial lighting are reversed and
In case of national emergency the government is empowered unnatural times of eating, resting, and sleeping. Much of the
to establish rules and regulations for the operation of the inferiority of nightwork can doubtless be traced to the failure of
plants and factories and to determine the wages to be paid the workers to secure proper rest and sleep, by day. Because of
the laborers. inability or the lack of opportunity to sleep, nightworkers often
SEC. 4. No person, firm, or corporation, business spend their days in performing domestic duties, joining the
establishment or place or center of labor shall compel an family in the midday meal, 'tinkering about the place', watching
employee or laborer to work during Sundays and legal the baseball game, attending the theater or taking a ride in the
holidays, unless he is paid an additional sum of at least car. It is not strange that nightworkers tend to be less efficient
twenty-five per centum of his regular remuneration: Provided than dayworkers and lose more time. . . (The Management of
however, That this prohibition shall not apply to public Labor Relations, by Watkins & Dodd, page 524.).
utilities performing some public service such as supplying > Nightwork. — Nightwork has gained a measure of
gas, electricity, power, water, or providing means of prominence in the modern industrial system in connection
transportation or communication. with continuous industries, that is, industries in which the
- The lawyers of the company argues that in these articules the nature of the processes makes it necessary to keep
cases are specified in which payment of extra of additional machinery and equipment in constant operation. Even in
compensation is authorized: (A) in case of "overtime" or work continuous industries the tendency is definitely in the
over and above the hours regulated by reasons dangers of direction of FOUR shifts of 6 hours each, with provision for an
urgency because of some disaster or accident, or to avoid lost automatic change of shift for all workers at stated intervals.
or to repair them; (b) in case of work by Sundays and festivals; Some discussion has taken place with regard to the lengths of
(c) in case of emergency, and nothing it is necessary refer at the period any workers should be allowed to remain on the
work at night; then the order that treats is illegal, therefore not night shift. A weekly change of shifts is common, specially
this authorized by the law. "In the absence of legislation where three or four shifts are in operation; in other cases the
authorizing the payment of extra compensation for work at change is made fortnightly or monthly; in still other instances,
night, the Court of Industrial Relations has not the power or no alternation is provided for, the workers remaining on day
authority to order the petitioner company to pay extra — or nightwork permanently, except where temporary
compensation for by its laborers at night. Expressio unius est changes are made for individual convenience.
exclusio alterius. Where, in the statute expressly specifies the There is sharp difference of opinion concerning the relative
cases where payment of extra compensation may be merits of these systems. Advocates of the weekly change of
demanded, extra compensation may be allowed in those cases shifts contend that the strain of nightwork and the difficulty of
only, and in not others. The provisions of the Commonwealth getting adequate sleep during the day make it unwise for
Act Not. 444 cannot be enlarged by implication or otherwise. workers to remain on the"graveyard" shift for more than a
Labor Law 1 A2010 - 145 - Disini
week at a time. Opponents urge that repeated changes make be necessary if the employer is to meet the demand for his
it more difficult to settle down to either kind of shift and that product, or if he is to maintain his market in the face of
after the first week nightwork becomes less trying while the increasing competition or mounting variable production costs.
ability to sleep by day increases. Workers themselves react in > Industrial experience has shown that the possession of
various ways to the different systems. This much, however, is extra-ordinary physical strength and self-control facilitates
certain: Few persons react favorably to nightwork, whether the reversal of the ordinary routine of day work and night
the shift be continuous or alternating. Outside of continuous rest, with the little or no unfavorable effect on health and
industries, nightwork can scarcely be justified, and, even in efficiency. Unusual vitality and self-control, however, are not
these, it presents serious disadvantages which must be common possessions. It has been found that the most serious
recognized in planing for industrial efficiency, stabilization of obstacle to a reversal of the routine is the lack of self-
the working force, the promotion of industrial good-will, and discipline. Many night workers enter into the numerous
the conservation of the health and vitality of the workers. activities of day life that preclude sleep, and continue to
> Nightwork cannot be regarded as desirable, either from the attempt to do their work at night. Evidence gathered by the
point of view of the employer or of the wage earner. It is British Health of Munition Workers' Committee places
uneconomical unless overhead costs are unusually heavy. permanent night workers, whether judged on the basis of
Frequently the scale of wages is higher as an inducement to output or loss of time, in a very unfavorable positions as
employees to accept employment on the night shift, and the compared with day workers.
rate of production is generally lower. > Systems of nightwork differ. There is the continuous
> The lack of sunlight tends to produce anemia and system, in which employees labor by night and do not attend
tuberculosis and to predispose to other ills. Nightwork brings the establishment at all by day, and the discontinuous
increased liability to eyestrain and accident. Serious moral system, in which the workers change to the day turn at
dangers also are likely to result from the necessity of regular intervals, usually every other week. There are, of
traveling the streets alone at night, and from the interference course, minor variations in these systems, depending upon
with normal home life. From an economic point of view, the nature of the industry and the wishes of management.
moreover, the investigations showed that nightwork was Such bodies as the British Health Munition Workers'
unprofitable, being inferior to day work both in quality and in Committee have given us valuable conclusions concerning
quantity. Wherever it had been abolished, in the long run the the effect of nightwork. Continuous nightwork is definitely
efficiency both of the management and of the workers was less productive than the discontinuous system. The output of
raised. Furthermore, it was found that nightwork laws are a the continuous day shift does not make up for this loss in
valuable aid in enforcing acts fixing the maximum period of production.
employment. (Principles of Labor Legislation, by Commons > There is, moreover, a marked difference between the rates
and Andrews, 4th Revised Edition, p. 142.) of output of night and day shifts on the discontinuous plan. In
Special regulation of nightwork for adult men is a each case investigated the inferiority of night labor was
comparatively recent development. Some European countries definitely established. This inferiority is evidently the result of
have adopted laws placing special limitations on hours of the night worker's failure to secure proper amounts of sleep
nightwork for men, and others prohibit such work except in and rest during the day. The system of continuous shifts,
continuous processes. (Principles of Labor legislation, 4th especially for women, is regarded by all investigators as
Revised Edition by Common & Andrews, p. 147.) undesirable. Women on continuous nightwork are likely to
> Nightwork has almost invariably been looked upon with perform domestic duties, and this added strain undoubtedly
disfavor by students of the problem because of the excessive accounts for the poorer results of their industrial activities.
strain involved, especially for women and young persons, the The tendency to devote to amusement and other things the
large amount of lost time consequent upon exhaustion of the time that should be spent in rest and sleep is certainly as
workers, the additional strain and responsibility upon the common among men as among women workers and accounts
executive staff, the tendency of excessively fatigued workers largely for the loss of efficiency and time on the part of both
to "keep going" on artificial stimulants, the general sexes in nightwork.
curtailment of time for rest, leisure, and cultural - The case against nightwork, then, may be said to rest upon
improvement, and the fact that night workers, although several grounds. In the first place, there are the remotely
precluded to an extent from the activities of day life, do injurious effects of permanent nightwork manifested in the later
attempt to enter into these activities, with resultant years of the worker's life. Of more immediate importance to the
impairment of physical well-being. It is not contended, of average worker is the disarrangement of his social life,
course, that nightwork could be abolished in the continuous- including the recreational activities of his leisure hours and the
process industries, but it is possible to put such industries ordinary associations of normal family relations. From an
upon a three- or four-shifts basis, and to prohibit nightwork economic point of view, nightwork is to be discouraged because
for women and children. (Labor's Progress and Problems, Vol. of its adverse effect upon efficiency and output. A moral
I, p. 464, by Professors Millis and Montgomery.) argument against nightwork in the case of women is that the
> Nightwork. — Civilized peoples are beginning to recognize night shift forces the workers to go to and from the factory in
the fact that except in cases of necessity or in periods of darkness. Recent experiences of industrial nations have added
great emergency, nightwork is socially undesirable. Under our much to the evidence against the continuation of nightwork,
modern industrial system, however, nightwork has greatly except in extraordinary circumstances and unavoidable
aided the production of commodities, and has offered a emergencies. The immediate prohibition of nightwork for all
significant method of cutting down the ever-increasing laborers is hardly practicable; its discontinuance in the case of
overhead costs of industry. This result has led employers to women employees is unquestionably desirable. 'The night was
believe that such work is necessary and profitable. Here made for rest and sleep and not for work' is a common saying
again one meets a conflict of economic and social interests. among wage-earning people, and many of them dream of an
Under these circumstances it is necessary to discover industrial order in which there will be no night shift.
whether nightwork has deleterious effects upon the health of Disposition Petition denied
laborers and tends to reduce the ultimate supply of efficient
labor. If it can proved that nightwork affects adversely both
the quality and quantity of productive labor, its
discontinuance will undoubtedly be sanctioned by employers.
SECTION 6: CONDITIONS OF
From a social point of view, even a relatively high degree of EMPLOYMENT – WEEKLY REST
efficiency in night operations must be forfeited if it is
purchased with rapid exhaustion of the health and energy of PERIODS
the workers. From an economic point of view, nightwork may
Labor Law 1 A2010 - 146 - Disini
- To construe section 4, Commonwealth Act No. 444, as
exempting public utilities, like the appellant, from the obligation
6.01 RATIONALE to pay the additional remuneration required by said section 4
should they compel their employees or laborers to work on
Sundays and legal holidays, would not make such exception a
RATIONALE class legislation, violative of the constitutional guaranty of
equal protection of the laws.
- And it is evident that the division made by section 4, of
MANILA ELECTRIC COMPANY V THE PUBLIC Commonwealth Act No. 444, of persons, firms, and corporations
into two classes: one composed of public utilities performing
UTILITIES EMPLOYEES' ASSOCIATION some public service such as supplying gas, electricity, power,
79 PHIL. 409 water or providing means of transportation; and another
FERIA; October 30, 1947 composed of persons, firms, and corporations which are not
public utilities and do not perform said public service, is not
FACTS arbitrary and is based indifferences which are apparent and
- This is an appeal interposed by the petitioner Manila Electric reasonable.
Company against the decision of the Court of Industrial - The division is not arbitrary, and the basis thereof is
Relations, which reads as follows: reasonable. Public utilities exempted from the prohibition set
Although the practice of the company, according to the forth in the enactment clause of section 4, Commonwealth Act
manifestations of counsel for said company, has been to No. 444, are required to perform a continuous service including
grant one day vacation with pay to every workingman who Sundays and legal holidays to the public, since the public good
had worked for seven consecutive days including Sundays, so demands, and are not allowed to collect an extra charge for
the Court considers justified the opposition presented by services performed on those days; while the others are not
the workingmen to the effect that they need Sundays and required to do so and are free to operate or not their shops,
holidays for the observance of their religion and for rest. business, or industries on Sundays and legal holidays.
The Court, therefore, orders the respondent company to - If they operate and compel their laborers to work on those
pay 50 per cent increase for overtime work done on days it is but just and natural that they should pay an extra
ordinary days and 50 per cent increase for work done compensation to them, because it is to be presumed that they
during Sundays and legal holidays irrespective of the can make money or business by operating on those days even if
number of days they work during the week. they have to pay such extra remuneration.
- The appellant contends that the said decision is against It would be unfair for the law to compel public utilities like the
Section 4, Commonwealth Act No. 444, which reads as appellant to pay an additional or extra compensation to
follows: laborers whom they have to compel to work during Sundays
No person, firm, or corporation, business establishment or and legal holidays, in order to perform a continuous service to
place or center of labor shall compel an employee or the public. To require public utilities performing service to do
laborer to work during Sundays and legal holidays, unless so, would be tantamount to penalize them for performing public
he is paid an additional sum of at least 25% of his regular service during said days in compliance with the requirement of
remuneration: Provided, however, That this prohibition the law and public interest.
shall not apply to public utilities performing some public Disposition The ruling of the Court of Industrial Relations was
service such as supplying gas, electricity, power, water, or set aside.
providing means of transportation or communication.
SEPARATE OPINION
ISSUE
WON the decision of the Court of Industrial Relations is
erroneous and contrary to Section 4, Commonwealth Act No. PERFECTO [dissent]
444 - It will be seen that section 4 of Commonwealth Act No.444
divides the employers into two classes: 1. Those not engaged in
HELD public utilities, and 2. those engaged in public utilities.
YES - The first class cannot compel their employees or laborers to
- Commonwealth Act No. 444 provides that public utilities work on Sundays and holidays without giving them an
supplying electricity, gas, power, water, or providing means of additional salary or renumeration equivalent to not less than
transportation or communication may compel their employees twenty-five per centum of the basic remuneration. There is no
or laborers to work during Sundays and legal holidays without limit as to the time or circumstances under which the additional
paying them an additional compensation of not less than 25 per compensation is to be paid. Employers engaged in public
cent of their regular remuneration on said days. utilities are excluded from the prohibition.
-The provisions of the above quoted section 4, are plain and - This means simply that employers engaged in public utilities
unambiguous and convey a clear and definite meaning. may or may not pay the additional compensation or any
- Said section 1 consists of two parts: the first, which is the additional compensation for compelling their laborers to work
enactment clause, prohibits a person, firm or corporation, on Sundays and holidays. The exception should not be
business establishment, or place or center of labor from interpreted as providing that employers engaged in public
compelling an employee or laborer to work during Sundays and utilities cannot be compelled to pay additional compensation to
legal holidays, unless the former pays the latter an additional workers required to work on Sundays and holidays. As to them,
sum of at least twenty five per centum of his regular section 4of Commonwealth Act No. 444 may be considered as
remuneration; and the second part, which is an exception, not having been enacted at all. Exception or exemption from a
exempts public utilities performing some public service, such as negative or prohibitory legal provision is not a positive or
supplying gas, electricity, power, water or providing means of affirmative provision commanding the excepted or exempted
transportation or communication, from the prohibition person to do what is enjoined in the general provision.
established in the enactment clause. - The right to collect an additional sum of at least twenty-five
- As the appellant is a public utility that supplies the electricity per centum of the basic remuneration is guaranteed to all
and provides means of transportation to the public, it is evident workers and employees not engaged in public utilities and that
that the appellant is exempt from the qualified prohibition right is enforceable not only in the Court of Industrial Relations
established in the enactment clause, and may compel its but in any other competent court of justice.
employees or laborers to work during Sundays and legal - It is a fact that Sundays and legal holidays are set aside by law
holidays without paying them said extra compensation. as days of rest. The life, existence, and happiness of a person
Labor Law 1 A2010 - 147 - Disini
do not depend only on the satisfaction of his physical needs. Ratio Wages and other emoluments granted by law to the
There are moral, intellectual and spiritual needs as imperative working man are determined on the basis of the criteria laid
as the physical ones. down by laws and certainly not on the basis of the worker’s
- Ordinarily, Sundays and legal holidays are dedicated to faith or religion.
reading and instruction so as to fill the mind with culture or Reasoning
some sort of advancement. On those days the laborer enjoys - Muslim holidays are provided under Articles 169 and 170, Title
longer hours in the company of his family. That gives him an I, Book V, of Presidential Decree No. 1083, otherwise known as
opportunity to satisfy his moral needs. During Sundays and the Code of Muslim Personal Laws. The aforementioned
holidays more time is dedicated to worship and other religious provisions should be read in conjunction with Art. 94 of the
services. That gives a laborer an opportunity to satisfy his Labor Code:
spiritual needs. The deprivation of that opportunity to satisfy Art. 94. Right to holiday pay:
mental, moral, and spiritual needs should not be ignored, and (a) Every worker shall be paid his regular daily wage during
should be properly compensated. regular holidays, except in retail and service establishments
Petition should be dismissed. regularly employing less than ten (10) workers;
(b) The employer may require an employee to work on any
holiday but such employee shall be paid a compensation
equivalent to twice his regular rate; x x x.
6.02 COVERAGE - There should be no distinction between Muslims and non-
Muslims as regards payment of benefits for Muslim holidays.
Petitioner asserts that Article 3(3) of Presidential Decree No.
6.03 SCHEDULING OF REST DAY 1083 provides that “(t)he provisions of this Code shall be
applicable only to Muslims x x x.” However, said article also
declares that “x x x nothing herein shall be construed to
operate to the prejudice of a non-Muslim.”
6.04 COMPULSORY WORK AND 1999 Handbook on Workers’ Statutory Benefits:
COMPENSATION “Considering that all private corporations, offices, agencies, and
entities or establishments operating within the designated
Muslim provinces and cities are required to observe Muslim
holidays, both Muslim and Christians working within the Muslim
SECTION 7: CONDITIONS OF areas may not report for work on the days designated by law as
Muslim holidays.”
EMPLOYMENT – HOLIDAYS - As regards the allegation that the issue on Muslim holiday pay
was already resolved in Napoleon E. Fernan vs. San Miguel
Corporation Beer Division and Leopoldo Zaldarriaga, the Court
7.01 COVERAGE notes that the case was primarily for illegal dismissal and the
claim for benefits was only incidental to the main case.
2. YES
COVERAGE AND PURPOSE - Regional Director Macaraya acted as the duly authorized
representative of the Secretary of Labor and Employment and it
was within his power to issue the compliance order to SMC.
MANTRADE/FMC DIVISION EMPLOYEES AND Reasoning
WORKERS UNION V BACUNGAN - Article 128. Visitorial and enforcement power.
(b) Notwithstanding the provisions of Article 129 and 217 of
this Code to the contrary, and in cases where the relationship
of employer-employee still exists, the Secretary of Labor and
SAN MIGUEL V CA (ESPAÑOL) Employment or his duly authorized representatives shall have
375 SCRA 311 (02) the power to issue compliance orders to give effect to the
KAPUNAN; January 30, 2002 labor standards provisions of this Code and other labor
legislation based on the findings of labor employment and
NATURE enforcement officers or industrial safety engineers made in
Petition for a review of the decision of the Court of Appeals the course of the inspection.
- Petitioner merely contends that its non-Muslim employees are
FACTS not entitled to Muslim holiday pay. The issue could be resolved
- 17 October 1992: the Department of Labor and Employment even without documentary proofs. In any case, there was no
(DOLE), Iligan District Office, conducted a routine inspection in indication that Regional Director Macaraya failed to consider
the premises of San Miguel Corporation (SMC) in Sta. Filomena, any documentary proof presented by SMC in the course of the
Iligan City. In the course of the inspection, it was discovered inspection.
that there was underpayment of regular Muslim holiday pay to Disposition The petition is dismissed.
its employees.
- SMC failed to submit proof that it was paying regular Muslim ASIAN TRANSMISSION CORP V CA (BISIG NG ASIAN
holiday pay to its employees. Alan M. Macaraya, Director IV of TRANSMISSION LABOR UNION)
DOLE Iligan District Office issued a compliance order directing
SMC to consider Muslim holidays as regular holidays and to pay
[PAGE 45]
both its Muslim and non-Muslim employees holiday pay within
thirty (30) days from the receipt of the order. 7.02 HOLIDAYS
ISSUES
1. WON CA erred in granting non-Muslim employees Muslim
holiday pay
2. WON Macaraya and Español have jurisdiction in issuing
compliance orders over said labor standard case

HELD
1. NO
Labor Law 1 A2010 - 148 - Disini
Relations considering that it is a non-profit institution and that
its hourly paid faculty members are paid on a "contract" basis
because they are required to hold classes for a particular
number of hours. In the programming of these student contract
hours, legal holidays are excluded and labelled in the schedule
as "no class day." On the other hand, if a regular week day is
7.03 HOLDAY PAY declared a holiday, the school calendar is extended to
compensate for that day. Thus petitioner argues that the
advent of any of the legal holidays within the semester will not
FACULTY PRIVATE SCHOOL affect the faculty's salary because this day is not included in
their schedule while the calendar is extended to compensate for
special holidays. Thus the programmed number of lecture hours
JOSE RIZAL COLLEGE V NLRC is not diminished.
156 SCRA 27 - The Solicitor General on the other hand, argues that under
Article 94 of the Labor Code, holiday pay applies to all
PARAS; 1987 employees except those in retail and service establishments. To
deprive therefore employees paid at an hourly rate of unworked
NATURE holiday pay is contrary to the policy considerations underlying
- Petition for certiorari with preliminary injunction to review the such presidential enactment, apart from the constitutional
decision of the National Labor Relations Commission mandate to grant greater rights to labor. And under Article 94
of the Labor Code, the petitioner, although a nonprofit
FACTS institution is under obligation to give pay even on unworked
- Petitioner is a non-stock, non-profit educational institution duly regular holidays to hourly paid faculty members subject to the
organized and existing under the laws of the Philippines. It has terms and conditions provided for therein.
three groups of employees categorized as follows: (a) personnel - The Court held that the aforementioned implementing rule is
on monthly basis, who receive their monthly salary uniformly not justified by the provisions of the law which after all is silent
throughout the year, irrespective of the actual number of with respect to faculty members paid by the hour who because
working days in a month without deduction for holidays; (b) of their teaching contracts are obliged to work and consent to
personnel on daily basis who are paid on actual days worked be paid only for work actually done.
and they receive unworked holiday pay and (c) collegiate - On the other hand, both the law and the Implementing Rules
faculty who are paid on the basis of student contract hour. governing holiday pay are silent as to payment on Special
Before the start of the semester they sign contracts with the Public Holidays.
college undertaking to meet their classes as per schedule. - It is readily apparent that the declared purpose of the holiday
- Unable to receive their corresponding holiday pay, as claimed, pay which is the prevention of diminution of the monthly
from 1975 to 1977, private respondent National Alliance of income of the employees on account of work interruptions is
Teachers and Office Workers (NATOW) in behalf of the faculty defeated when a regular class day is cancelled on account of a
and personnel of Jose Rizal College filed with the Ministry of special public holiday and class hours are held on another
Labor a complaint against the college for said alleged non- working day to make up for time lost in the school calendar.
payment of holiday pay Otherwise stated, the faculty member, although forced to take
- After the parties had submitted their respective position a rest, does not earn what he should earn on that day. Be it
papers, the Labor Arbiter rendered a decision on February 5, noted that when a special public holiday is declared, the faculty
1979: member paid by the hour is deprived of expected income, and it
1. The faculty and personnel of the respondent Jose Rizal does not matter that the school calendar is extended in view of
College who are paid their salary by the month uniformly in a the days or hours lost, for their income that could be earned
school year, irrespective of the number of working days in a from other sources is lost during the extended days. Similarly,
month, without deduction for holidays, are presumed to be when classes are called off or shortened on account of
already paid the 10 paid legal holidays and are no longer typhoons, floods, rallies, and the like, these faculty members
entitled to separate payment for the said regular holidays; must likewise be paid, whether or not extensions are ordered.
2. The personnel of the respondent Jose Rizal College who are Disposition Decisions set aside. New decision rendered:
paid their wages daily are entitled to be paid the 10 (a) exempting petitioner from paying hourly paid faculty
unworked regular holidays according to the pertinent members their pay for regular holidays, whether the same be
provisions of the Rules and Regulations Implementing the during the regular semesters of the school year or during
Labor Code; semestral, Christmas, or Holy Week vacations;
3. Collegiate faculty of the respondent Jose Rizal College who (b) but ordering petitioner to pay said faculty members their
by contract are paid compensation per student contract hour regular hourly rate on days declared as special holidays or for
are not entitled to unworked regular holiday pay considering some reason classes are called off or shortened for the hours
that these regular holidays have been excluded in the they are supposed to have taught, whether extensions of class
programming of the student contact hours. days be ordered or not; in case of extensions said faculty
- On appeal, respondent National Labor Relations Commission in members shall likewise be paid their hourly rates should they
a decision promulgated on June 2, 1982, modified the decision teach during said extensions.
appealed from, in the sense that teaching personnel paid by the
hour are declared to be entitled to holiday pay
DIVISOR AS FACTOR
ISSUE
WON the school faculty who according to their contracts are
paid per lecture hour are entitled to unworked holiday pay UNION OF FILIPRO EMPLOYEES V VIVAR
HELD
[PAGE 122]
NO (for regular holidays)/YES(for special holidays)
- Labor Arbiter sustains the view that said instructors and TRANSASIA PHILS EMPLOYER ASSN V NLRC
professors are not entitled to holiday pay, his decision was (TRANS ASIA, DE CASTRO)
modified by the National Labor Relations Commission holding 320 SCRA 547
the contrary. Petitioner maintains the position among others,
that it is not covered by Book V of the Labor Code on Labor KAPUNAN; December 13, 1999
Labor Law 1 A2010 - 149 - Disini
order to comply with Section 4, Rule IV, Book III of the Omnibus
NATURE Rules Implementing the Labor Code:
Petition for certiorari Sec. 4. Compensation for holiday work. - Any employee who
is permitted or suffered to work on any regular holiday, not
FACTS exceeding eight (8) hours, shall be paid at least two hundred
- On 7 July 1988, Trans-Asia Philippines Employees Association percent (200%) of his regular daily wage. If the holiday falls
(TAPEA), entered into a Collective Bargaining Agreement with on the scheduled rest day of the employee, he shall be
their employer. The CBA, provided for, the payment of holiday entitled to an additional premium pay of at least 30% of his
pay with a stipulation that if an employee is permitted to work regular holiday rate of 200% based on his regular wage rate.
on a legal holiday, the said employee will receive a salary - On the contention that Trans-Asia's acquiescence to the
equivalent to 200% of the regular daily wage plus a 60% inclusion of a holiday pay provision in the CBA is an admission
premium pay. of non-payment of the same in the past, Trans-Asia reiterated
- Despite the conclusion of the CBA, an issue was still left that it is simply a recognition of the mandate of the Labor Code
unresolved with regard to the claim of TAPEA for payment of that employees are entitled to holiday pay.
holiday pay covering the period from January of 1985 up to - With regard to the accusation of unfair labor practice, Trans-
December of 1987. Asia explained that what petitioners would like the company to
- The parties underwent preventive mediation meetings with a do is to give double holiday pay since, as previously stated, the
representative from the National Mediation and Conciliation company has already included its employees monthly salary
Board and, yet, petitioners want it to pay a second set of holiday pay.
- The parties were not able to arrive at an amicable settlement. - On 13 February 1989, the labor arbiter rendered a decision
- TAPEA filed a complaint before the labor arbiter for the dismissing the complaint
payment of their holiday pay in arrears. - Petitioners appealed to the National Labor Relations
- Petitioners amended their complaint to include the payment Commission. In its Resolution, dated 23 November 1993, the
of holiday pay for the duration of the recently concluded CBA NLRC dismissed the appeal and affirmed the decision of the
(from 1988 to 1991), unfair labor practice, damages and labor arbiter
attorney's fees. - Petitioners' motion for reconsideration was, likewise, denied
- Petitioners contend: by the NLRC in its Resolution, dated 13 September 1994.
> their claim for the holiday pay in arrears is based on the non-
inclusion of the same in their monthly pay. First, petitioners ISSUES
presented Trans-Asia's Employees' Manual which requires, that 1. WON NLRC erred in upholding the labor arbiter’s decision
the employee should have worked or was on authorized leave 2. WON NLRC violated the constitutional and legal mandate to
with pay on the day immediately preceding the legal holiday. resolve all doubts in social legislation in favor of labor
They argued that if the intention of Trans-Asia was not to pay
holiday pay in addition to the employee's monthly pay, then HELD
there would be no need to impose or specify the pre-condition 1. NO
for the payment. Second, petitioners proffered as evidence their - Trans-Asia's inclusion of holiday pay in petitioner's monthly
appointment papers which do not contain any stipulation on the salary is clearly established by its consistent use of the divisor
inclusion of holiday pay in their monthly salary. Third, of "286" days in the computation of its employees' benefits and
petitioners noted the inclusion of a provision in the CBA for the deductions. The use by Trans-Asia of the "286" days divisor was
payment of an amount equivalent to 200% of the regular daily never disputed by petitioners.
wage plus 60% premium pay to employees who are permitted - Nevertheless, petitioners' cause is not entirely lost. The Court
to work on a regular holiday. Finally, petitioners cited the notes that there is a need to adjust the divisor used by Trans-
current CBA provision which obligates Trans-Asia to give holiday Asia to 287 days, instead of only 286 days, in order to properly
pay. account for the entirety of regular holidays and special days in a
> Trans-Asia is guilty of bad faith in negotiating and executing year as prescribed by Executive Order No. 203 in relation to
the current CBA since, after it recognized the right of the Section 6 of the Rules Implementing Republic Act 6727. Section
employees to receive holiday pay, Trans-Asia allegedly refused 1 of Executive Order No. 203 provides:
to honor the CBA provision on the same. SECTION 1. Unless otherwise modified by law, order or
- Respondents claim: proclamation, the following regular holidays and special days
> Tans-Asia refuted the allegations. shall be observed in the country:
> Trans-Asia asserted that the above circumstances are not A.Regular Holidays
indicative of its non-payment of holiday pay since it has always New Year's Day Maundy Thursday Good Friday Araw ng
honored the labor law provisions on holiday pay by Kagitingan (Bataan & Corregidor Day) Labor Day
incorporating the same in the payment of the monthly salaries Independence Day National Heroes Day Bonifacio Day
of its employees. In support of this claim, Trans-Asia pointed out Christmas Day Rizal Day -January 1 -Movable Date
that it has long been the standing practice of the company to -Movable Date -April 9 -May 1 -June 12 -Last Sunday of August
use the divisor of "286" days in computing for its employees' -November 30 -December 25 -December 30
overtime pay and daily rate deductions for absences. B.Nationwide Special Days
> Trans-Asia further clarified that the "286" days divisor already All Saints Day Last Day of the Year -November 1
takes into account the ten (10) regular holidays in a year since -December 31
it only subtracts from the 365 calendar days the unworked and - On the other hand, Section 6 of the Implementing Rules and
unpaid 52 Sundays and 26 Saturdays Regulations of Republic Act No. 6727 provides that the total
> Trans-Asia claimed that if the ten (10) regular holidays were number of working days is 262 days (see original for the
not included in the computation of their employee's monthly formula and computation)
salary, the divisor which they would have used would only be - In the present case, since the employees of Trans-Asia are
277. required to work half-day on Saturdays, 26 days should be
> Furthermore, Trans-Asia explained that the "286" days added to the divisor of 262 days, thus, resulting to 288 days.
divisor is based on Republic Act No. 6640 wherein the divisor of However, due to the fact that the rest days of petitioners fall on
262 days is used in computing for the monthly rate of workers a Sunday, the number of unworked but paid legal holidays
who do not work and are not considered paid on Saturdays and should be reduced to nine (9), instead of ten (10), since one
Sundays or rest days. legal holiday under E.O. No. 203 always falls on the last Sunday
- On the second contention of the petitioners, Trans-Asia of August, National Heroes Day. Thus, the divisor that should be
explained that this holiday pay rate was included in the CBA in used in the present case should be 287 days.
Labor Law 1 A2010 - 150 - Disini
- However, the Court notes that if the divisor is increased to 287 - On November 27, 1995, the respondent NLRC promulgated
days, the resulting daily rate for the purposes of overtime pay, the Decision assailed herein, dismissing petitioners' appeal.
holiday pay and conversions of accumulated leaves would be - In an appeal dated February 26, 1993, the complainants
diminished. questioned the aforesaid decision.
- Clearly, this muddled situation would be violative of the - On January 17, 1996, petitioners filed a motion for
proscription on the non-diminution of benefits under Section reconsideration. In an Order 4 dated January 30, 1996, the
100 of the Labor Code. On the other hand, the use of the divisor respondent NLRC denied petitioners' motion.
of 287 days would be to the advantage of petitioners if it is ISSUES
used for purposes of computing for deductions due to the 1. WON respondent NLRC acted without or in excess of
employee's absences. In view of this situation, the Court rules jurisdiction or with grave abuse of discretion amounting to lack
that the adjusted divisor of 287 days should only be used by or excess jurisdiction in not declaring that the lumpsum mode
Trans-Asia for computations which would be advantageous to of payment of petitioners’ monthly salaries by private
petitioners and not for computations which would diminish the respondents is illegal
existing benefits of the employees. 2. WON respondent NLRC erred in not ordering private
2. NO respondents, jointly and severally, to pay the admitted
- As previously stated, the decision of the labor arbiter and the underpayment as shown by private respondents’ computation
resolutions of the NLRC were based on substantial evidence 3. WON respondent NLRC erred in not ordering the POEA to
and, as such, no ambiguity or doubt exists which could be comply with its mandated duty to set up standard employment
resolved in petitioner's favor. contract and guiding rates for oilrig workers
Disposition Affirmed with modification (on the divisor that 4. WON respondent NLRC erred in not declaring that private
Trans- Asia should use in computing the salaries of its respondents failed to comply with the legal requirement of
employees including holiday pay) mandatory personal insurance
5. WON respondent NLRC erred in not penalizing private
respondent
COMPUTATION 6. WON respondent NLRC erred in not awarding damages and
attorney’s fees to petitioners

AGGA V NLRC (SUPPLY OILFIELD SERVICES INC, HELD


UNDERSEAS DRILLING INC) 1. NO
298 SCRA 285 - Petitioners contend that the lumpsum mode of payment of
salaries is illegal, citing Articles 5 and 6 of the New Civil Code,
PUNO; November 16, 1998
Articles 86, 87, 90, 93 and 94 of PD 442 and Book V, Rule II,
Section 2(a) of the 1991 POEA Rules.
NATURE - As correctly observed by the respondents, none of the
Petition for Certiorari aforementioned laws and rules prohibit the subject payment
scheme. The cited articles of the New Civil Code merely provide
FACTS that agreements in violation of law or public policy cannot be
- Private respondent Supply Oilfield Services, Inc. hired entered into and have legal effect. The cited provisions of PD
petitioners to work on board a drillship owned and operated by 442 simply declare that night shift differential and additional
private respondent Underseas Drilling, Inc. remuneration for overtime, rest day, Sunday and holiday work
- The employment contracts ran for one year with petitioners shall be computed on the basis of the employee's regular wage.
enjoying two months off with pay for every two months' duty. In like fashion, the 1991 POEA Rules merely require employers
The contracts also provided that for service of 12 hours a day, 7 to guarantee payment of wages and overtime pay. Thus,
days a week in a two-shift 24-hour operation, petitioners would petitioners' stance is bereft of any legal support.
receive a fixed monthly compensation covering "basic rate, 2. NO
allowances, privileges, travel allowances and benefits granted - Petitioners allege that their fixed monthly salaries represented
by law during and after employment with the company." only their basic salaries and did not include overtime pay,
- Petitioners claim: holiday pay, 13th month pay and night shift differential.
> private respondents failed to pay them overtime pay, holiday - Decisions and/or awards of the Administration shall be final
pay, rest day pay, 13th month pay and night shift differential. and executory unless appealed to the National Labor Relations
They likewise alleged that private respondents did not comply Commission (NLRC) by any or both parties, it then follows that ,
with the mandatory insurance requirement. They further to the extent that the POEA has concluded that there is 'no case
averred that while private respondents made them use of underpayment at bar,' the same has to be bindingly observed
passports for overseas contract workers, they were also by us vis-a-vis complainants' submitted issue in their draft
instructed to use seaman's books upon reaching port for decision of whether or not there had been underpayments as
transfer to, and while aboard, the oilrig. Petitioners opined that claimed by appellants under the provisions of P.D. 442.
this practice entitled them to the benefits granted by law to 3. NO
both land-based workers and seamen. - The matter of ordering the NLRC to compel the POEA to set up
- Respondents contend: standard employment contract and guiding rates for oilrig
> denied liability. In addition, they alleged that petitioners were workers is beyond the jurisdiction of this Court.
insured with Blue Cross (Asia-Pacific) Insurance, Ltd. against 4. NO
death and permanent disability. Lastly, private respondents - The POEA and the NLRC have found that private respondents
contended that petitioners, as offshore oilriggers, had nothing insured petitioners with Blue Cross (Asia-Pacific) Insurance, Ltd.
to do with manning a vessel or sea navigation. Hence, under two policies which even provide for coverage superior to
petitioners were merely land-based workers, not seamen. that mandated by the rules. Before this Court, however,
- On July 2, 1992, the POEA dismissed petitioners' complaint for petitioners assail these insurance policies as they were
lack of merit. allegedly issued by a foreign insurance company not licensed to
- Petitioners appealed to the National Labor Relations do business in the Philippines. The contention is raised for the
Commission. first time and cannot be considered.
- Upon the other hand, private respondents informed the NLRC 5. NO
that the POEA had already dismissed the claims for - Evidence shows that petitioners are land-based workers and
underpayment of labor benefits and lack of insurance coverage hence, not entitled to benefits appertaining to sea-based
in the consolidated cases, and that the dismissal was affirmed workers. Petitioners have nothing to do with manning vessels or
on appeal. The decision has become final. with sea navigation. Their use of a seaman's book does not
Labor Law 1 A2010 - 151 - Disini
detract from the fact that they are truly land-based employees. ISSUE
Petitioners' plea that we suspend SOS' license for making them WON a monthly-paid employee, receiving a fixed monthly
use two (2) passports is off-line. Again, they never prayed for compensation, is entitled to an additional pay aside from his
this relief before the POEA and the NLRC. This Court is the usual holiday pay, whenever a regular holiday falls on a Sunday
improper venue for the belated plea.
6. NO HELD
- The claims for attorney's fees and damages of the petitioners NO
have no basis as private respondents did not act in bad faith or - Wellington simply deducts 51 Sundays from the 365 days
with malice. normally comprising a year and used the difference, 314, as
Disposition assailed decision of NLRC affirmed. basis for determining the monthly salary. The monthly salary
thus fixed actually covers payment for 314 days of the year,
including regular and special holidays, as well as days when no
work is done by reason of fortuitous cause, as above specified,
or causes not attributable to the employees.
- The monthly salary in Wellington for all 365 days of a year.
The respondents' theory would make each of the years in
question, a year of 368 days. Pursuant to this theory, no
employer opting to pay his employees by the month would have
any definite basis to determine the number of days in a year for
which compensation should be given to his work force.
- There is no provision of law requiring any employer to make
such adjustments in the monthly salary rate set by him to take
account of legal holidays falling on Sundays in a given year, or,
contrary to the legal provisions bearing on the point, otherwise
SUNDAY to reckon a year at more than 365 days. What the law requires
of employers opting to pay by the month is to assure that "the
monthly minimum wage shall not be less than the statutory
WELLINGTON INVESTMENT V TRAJANO minimum wage multiplied by 365 days divided by twelve," and
245 SCRA 561 to pay that salary "for all days in the month whether worked or
NARVASA; July 3, 1995 not," and "irrespective of the number of working days therein."
That salary is due and payable regardless of the declaration of
any special holiday in the entire country or a particular place
NATURE
therein, or any fortuitous cause precluding work on any
Special Civil Action for Certiorari
particular day or days (such as transportation strikes, riots, or
typhoons or other natural calamities), or cause not imputable to
FACTS
the worker. The legal provisions governing monthly
- A labor Enforcement Officer conducted a routine inspection of
compensation are evidently intended precisely to avoid re-
the Wellington Flour Mills, owned and operated by Wellington
computations and alterations in salary on account of the
Investment and Manufacturing Corporation, and reported the
contingencies just mentioned, which, by the way, are routinely
non-payment of regular holidays falling on a Sunday for
made between employer and employees when the wages are
monthly-paid employees. A copy of the report was explained to
paid on daily basis.
and received by Wellington’s personnel manager.
Disposition The orders complained of, namely: that of the
- Wellington sought reconsideration and argued that "the
respondent Undersecretary dated September 22, 1993, and
monthly salary of the company's monthly-salaried employees
that of the Regional Director dated July 30, 1992, are NULLIFIED
already includes holiday pay for all regular holidays and hence
AND SET ASIDE, and the proceeding against petitioner
there is no legal basis for the finding of alleged non-payment of
DISMISSED.
regular holidays falling on a Sunday." In a position paper
subsequently submitted to the Regional Director, it asserted
that it pays its monthly-paid employees a fixed monthly
compensation "using the 314 factor which undeniably covers
PROOF OF PAYMENT
and already includes payment for all the working days in a
month as well as all the 10 unworked regular holidays within a BUILDING CARE CORP V NLRC (RODIL)
year."
268 SCRA 666
- July 28, 1992: the Regional Director ruled that "when a regular
holiday falls on a Sunday, an extra or additional working day is PANGANIBAN; February 26, 1997
created and the employer has the obligation to pay the
employees for the extra day except the last Sunday of August NATURE
since the payment for the said holiday is already included in the Petition for certiorari under rule 56 of the ROC
314 factor," and accordingly directed Wellington to pay its
employees compensation corresponding 4 extra working days. FACTS
- September 22: the Undersecretary affirmed the challenged - Private respondent, Rodil, a janitor under Building Care Corp.
order, holding that "the divisor being used by Wellington does (BCC) and working at Far East Bank and Trust Co. (FEBTC)
not reliably reflect the actual working days in a year," and alleged that his wages, 13th month pay and service incentive
consequently commanded Wellington to pay its employees the leave pay were unpaid; that he was not paid for work rendered
"six additional working days resulting from regular holidays during legal holidays; that on Feb. 11, 1988 he was suspended
falling on Sundays in 1988, 1989 and 1990." He said that for a week without just cause or the requirements of due
whenever a regular holiday coincides with a Sunday, an process.
additional working day is created and left unpaid. In other - BCC on the other hand, alleged that Rodil had been given his
words, while the said divisor may be utilized as proof wages and holiday pay and that it was willing to pay his salary
evidencing payment of 302 working days, 2 special days and differentials from Dec. to Feb. FEBTC once complained that
the ten regular holidays in a calendar year, the same does not Rodil had improperly cleaned his area and twice failed to report
cover or include payment of additional working days created as to the night shift supervisor when instructed to do so. Also, the
a result of some regular holidays falling on Sundays. suspension on Feb. 11 was erroneously noted in the logbook but
private respondent was allowed to work the next day as shown
Labor Law 1 A2010 - 152 - Disini
by the time records. He came to work only a month later and, to 6:00 or 7:00 p.m. Mon to Sat, and during peak periods even
when prompted to explain his long absence, said he had been on Sundays and holidays.
suspended by his supervisor for no reason and was advised to - The Sandigan ng Manggagawang Pilipino filed a complaint for
report on April 4 to await the investigation on the alleged underpayment of the basic wage; underpayment of living
suspension. FEBTC later indicated it would no longer accept allowance; non-payment of overtime work; non-payment of
Rodil and he was advised that he was to be temporarily holiday pay; non-payment of service incentive pay; 13th month
assigned as reliever at BCC while no other posts were available. pay; and benefits provided for under Wage Orders Nos. 1, 2, 3,
When advised to report to BCC, he never appeared but instead 4 and 5.
filed the instant case. - During the pendency of case, private respondent Pelobello left
- Rodil maintained that he had been absent for that long period a package w/ a salesman of the Haberdashery, w/c contained a
because he had been sick, then later had to care for his wife barong tagalog. When confronted, Pelobello said that it was
who also got sick, and was again absent for the last week respondent Zapata’s. Zapata allegedly admitted that he copied
because he was illegally suspended. the design of Haberdashery. A memorandum was issued to
- Rodil filed with the NLRC a complaint for illegal dismissal, each of them to explain why no action should be taken against
underpayment and non-payment of legal holiday pay against them for accepting a job order which is prejudicial and in direct
petitioner. At the initial hearing, Rodil was offered competition with the business of the company. Both
reinstatement but he insisted on payment of backwages; respondents did not submit their explanation and did not report
petitioner did not agree, so both parties submitted their for work. They were dismissed by petitioner. They countered by
respective position papers. The Labor Arbiter issued a decision filing a complaint for illegal dismissal.
in favor of private respondent, hence this petition for certiorari. - Labor Arbiter found Haberdashery guilty of illegal dismissal
and ordered them to reinstate Pelobello and Zapata. The charge
ISSUE of unfair labor practice and claims for underpayment re
WON NLRC erred in awarding Rodil holiday pay and salary violation of the minimum wage law were dismissed for lack of
differentials merit. And found Haberdashery to have violated the decrees on
the cost of living allowance, service incentive leave pay and the
HELD 13th Month Pay. NLRC affirmed decision.
YES
- If BCC had really paid Rodil his holiday pay, it could easily ISSUES
have presented its payrolls, which constitute the best proof of 1. WON an employee-employer relationship existed between
payment. To prove payment of salary differentials, it could have Haberdashery and respondent workers
presented proofs of such monetary benefits—but it did not. It 2. WON the respondent workers were entitled to their
failed to comply with the mandate of the law; as NLRC ruled, monetary claims (COLA, service incentive, 13th month pay, etc)
the burden of proof in this regard lies with the employer, not 3. WON Pelobello and Zapata were illegally dismissed
the employee.
Disposition Petition is DISMISSED and the assailed Decision is HELD
AFFIRMED 1. YES
Ratio The facts at bar indubitably reveal that the most
important requisite of control is present. When a customer
SECTION 8: CONDITIONS OF enters into a contract with the haberdashery or its proprietor,
the latter directs an employee who may be a tailor, pattern
EMPLOYMENT – LEAVES maker, sewer or "plantsadora" to take the customer's
measurements, and to saw the pants, coat or shirt as specified
by the customer. Supervision is actively manifested in all these
A. SERVICE INCENTIVE LEAVE aspects -- the manner and quality of cutting, sewing and
ironing.
- The test of employee-employer relationship is four-fold: (1) the
selection and engagement of the employee; (2) the payment of
wages; (3) the power of dismissal; and (4) the power to control
the employee's conduct. It is the so-called "control test" that is
the most important element. This means the determination of
whether the employer controls or has reserved the right to
control the employee not only as to the result of the work but
also as to the means and method by which the same is to be
accomplished. - It is evident that petitioner has reserved the
right to control its employees not only as to the result but also
the means and methods by which the same are to be
accomplished. That private respondents are regular employees
8.01 COVERAGE is further proven by the fact that they have to report for work
regularly from 9:30 a.m. to 6:00 or 7:00 p.m. and are paid an
additional allowance of P3.00 daily if they report for work before
MAKATI HABERDASHERY INC V NLRC (SANDIGAN- 9:30 a.m.
TUCP AND MEMBERS GRACIANO, ET AL) - Private respondents did not exercise independence in their
own methods, but on the contrary were subject to the control of
179 SCRA 449 petitioners from the beginning of their tasks to their completion.
FERNAN; November, 15 1989 Unlike independent contractors who generally rely on their own
resources, the equipment, tools, accessories, and paraphernalia
FACTS used by private respondents are supplied and owned by
- Private respondents have been working for petitioner Makati petitioners. Private respondents are totally dependent on
Haberdashery, Inc. (Haberdashery) as tailors, seamstress, petitioners in all these aspects.
sewers, basters and "plantsadoras". They were paid on a piece- 2. Minimum Wage- YES; COLA – YES
rate basis (except two who are paid on a monthly basis). In - As a consequence of their status as regular employees of the
addition to their piece-rate, they were given a daily allowance petitioners, they can claim cost of living allowance. This is
of P3.00 pesos provided they report for work before 9:30 a.m. apparent from the provision defining the employees entitled to
everyday. They were required to work from or before 9:30 a.m. said allowance, thus: ". . . All workers in the private sector,
Labor Law 1 A2010 - 153 - Disini
regardless of their position, designation or status, and existence of said cause in accordance with the norms of due
irrespective of the method by which their wages are paid." process.
13th Month Pay – YES
- Section 3(e) of the Rules and Regulations Implementing P.D.
No. 851 provides: " The Decree shall apply to all employers
except to:
8.02 ENTITLEMENT AND
xxx xxx xxx ARBITRATION
(e) Employers of those who are paid on purely commission,
boundary, or task basis, and those who are paid a fixed
amount for performing a specific work, irrespective of the
time consumed in the performance thereof, except where 8.03 COMPUATION AND
the workers are paid on piece-rate basis in which case the
employer shall be covered by this issuance insofar as such
LIABILITY
workers are concerned."
SERVICE INCENTIVE LEAVE PAY – NO
- While private respondents are entitled to Minimum Wage,
SENTINEL SECURITY AGENCY INC V NLRC
COLA and 13th Month Pay, they are not entitled to service (CABANO)
incentive leave pay because as piece-rate workers being 295 SCRA 123
paid at a fixed amount for performing work irrespective PANGANIBAN; September 3, 1998
of time consumed in the performance thereof, they fall
under one of the exceptions stated in Section 1(d), Rule FACTS
V, Implementing Regulations, Book III, Labor Code. (pls - The complainants were employees of Sentinel Security
see provision) Agency, Inc. They were assigned to render guard duty at the
Holiday Pay- NO. premises of [Philippine American Life Insurance Company] at
- Private respondents cannot also claim holiday pay under Jones Avenue, Cebu City. On December 16, 1993 Philippine
Section 1(e), Rule IV, Implementing Regulations, Book III, Labor American Life Insurance Company [‘the Client,’ ], sent notice to
Code. all concerned that the [Agency] was again awarded the contract
3. NO of security services together with a request to replace all the
- Haberdashery had valid grounds to terminate the services of security guards in the company’s offices at the cities of Cebu,
private respondents. Bacolod, Cagayan de Oro, Dipolog and Ilagan. In compliance
- It does show that a violation of the employer's rules has been therewith, [the Agency] issued a Relief and Transfer Order
committed and the evidence of such transgression, the copied replacing the complainants as guards [of the Client] and for
barong tagalog, was in the possession of Pelobello who pointed then to be re-assigned to other clients. As ordered, the
to Zapata as the owner. When required by their employer to complainants reported but were never given new assignments
explain in a memorandum issued to each of them, they not only but instead they were told that ‘they were replaced because
failed to do so but instead went on AWOL, waited for the period they are already old.’ Precisely, the complainants lost no time
to explain to expire and for petitioner to dismiss them. but filed the subject illegal dismissal cases and prayed for
Assuming that such acts do not constitute abandonment of their payment of separation pay and other labor standard benefits.
jobs as insisted by private respondents, their blatant disregard - Defendant’s Comment
of their employer's memorandum is undoubtedly an open "[The Client and the Agency] maintained there was no dismissal
defiance to the lawful orders of the latter, a justifiable ground on the part of the complainants, constructive or otherwise, as
for termination of employment by the employer expressly they were protected by the contract of security services which
provided for in Article 283(a) of the Labor Code as well as a allows the recall of security guards from their assigned posts at
clear indication of guilt for the commission of acts inimical to the will of either party. It also advanced that the complainants
the interests of the employer, another justifiable ground for prematurely filed the subject cases without giving the [Agency]
dismissal under the same Article of the Labor Code, paragraph a chance to give them some assignments.
(c). Well established in our jurisprudence is the right of an - “On the part of [the Client], it averred further that there [was]
employer to dismiss an employee whose continuance in the no employer-employee relationship between it and the
service is inimical to the employer's interest. complainants as the latter were merely assigned to its Cebu
- We have ruled that: Branch under a job contract; that [the Agency] ha[d] its own
"No employer may rationally be expected to continue in separate corporate personality apart from that of [the Client].
employment a person whose lack of morals, respect and Besides, it pointed out that the functions of the complainants in
loyalty to his employer, regard for his employer's rules, and providing security services to [the Client’s] property [were] not
appreciation of the dignity and responsibility of his office, has necessary and desirable to the usual business or trade of [the
so plainly and completely been bared. Client], as it could still operate and engage in its life insurance
"That there should be concern, sympathy, and solicitude for business without the security guards. In fine, [the Client]
the rights and welfare of the working class, is meet and maintains that the complainants have no cause of action
proper. That in controversies between a laborer and his against it."
master, doubts reasonably arising from the evidence, or in
the interpretation of agreements and writings should be ISSUES
resolved in the former's favor, is not an unreasonable or 1. WON the complainants were illegally dismissed
unfair rule. But that disregard of the employer's own rights 2. WON the Client is jointly and severally liable for their
and interests can be justified by that concern and solicitude is thirteenth-month and service incentive leave pays
unjust and unacceptable." (Stanford Microsystems, Inc. v.
NLRC, 157 SCRA 414-415 [1988]). HELD
- The law is protecting the rights of the laborer authorizes 1. YES
neither oppression nor self-destruction of the employer. More Ratio The transfer of an employee involves a lateral movement
importantly, while the Constitution is committed to the policy of within the business or operation of the employer, without
social justice and the protection of the working class, it should demotion in rank, diminution of benefits or, worse, suspension
not be supposed that every labor dispute will automatically be of employment even if temporary. The recall and transfer of
decided in favor of labor. security guards require reassignment to another post and are
- The right to dismiss or otherwise impose disciplinary sanctions not equivalent to their placement on "floating status." Off-
upon an employee for just and valid cause, pertains in the first detailing security guards for a reasonable period of six months
place to the employer, as well as the authority to determine the
Labor Law 1 A2010 - 154 - Disini
is justified only in bona fide cases of suspension of operation,
business or undertaking.
Reasoning
a. The legally recognized concept of transfer was not
implemented. The agency hired new security guards to replace
the complainants, resulting in a lack of posts to which the
complainants could have been reassigned. Thus, it refused to
reassign Complainant Andoy when he reported for duty on
February 2, 4 and 7, 1994; and merely told the other
complainants on various dates from January 25 to 27, 1994 that
they were already too old to be posted anywhere.
b. A floating status requires the dire exigency of the employer’s
bona fide suspension of operation, business or undertaking. In
security services, this happens when the clients that do not
renew their contracts with a security agency are more than
those that do and the new ones that the agency gets. However,
in the case at bar, the Agency was awarded a new contract by
the Client. There was no surplus of security guards over
available assignments. If there were, it was because the Agency
hired new security guards. Thus, there was no suspension of
operation, business or undertaking, bona fide or not, that would
have justified placing the complainants off-detail and making
them wait for a period of six months. If indeed they were merely
transferred, there would have been no need to make them wait
for six months.
(2) The Client did not, as it could not, illegally dismiss the
complainants. Thus, it should not be held liable for separation
pay and back wages. But even if the Client is not responsible for
the illegal dismissal of the complainants, it is jointly and
severally liable with the Agency for the complainants’ service
incentive leave pay.
Disposition The petition is DISMISSED and the assailed
Decision and Resolution are hereby AFFIRMED, but the award of
the thirteenth-month pay is DELETED.

AUTO BUS TRANSPORT SYSTEMS INC V BAUTISTA


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