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A CADEMICUS REVIEW CENTER

Dean Ferdinand A. Tan

LABOR LAW CASES (2012-2016)

J. BERSAMIN
Philippine Journalists Inc. vs. Journal Employees Union
G.R. No. 192601, June 3, 2013
BERSAMIN, J.:
The coverage of the term legal dependent as used in a stipulation in a collective bargaining agreement (CBA)
granting funeral or bereavement benefit to a regular employee for the death of a legal dependent, if the CBA is
silent about it, is to be construed as similar to the meaning that contemporaneous social legislations have set.
This is because the terms of such social legislations are deemed incorporated in or adopted by the CBA.
FACTS:
Complainant Judith Pulido alleged that she was hired by respondent as proof-reader on 10 January 1991; that
she was receiving a monthly basic salary of P-15,493.66 plus P-155.00 longevity pay plus other benefits
provided by law and their Collective Bargaining Agreement; that on 21 February 2003, as union president, she
sent two letters to President Gloria Arroyo, regarding their complaint of mismanagement being committed by
PIJ executive; that sometime in May 2003, the union was fumished with a letter by Secretary Silvestre Afable,
Jr. head of Presidential Management Staff (PMS), endorsing their letter-complaint to Ombudsman Simeon V.
Marcelo; that respondents took offense and started harassments to complainant union president; that on 30 May
2003, complainant received a letter from respondent Fundador Soriano, International Edition managing editor,
regarding complainants attendance record; that complainant submitted her reply to said memo on 02 June
2003; that on 06 June 2003, complainant received a memorandum of reprimand; that on 04 July 2003,
complainant received another memo from Mr. Soriano, for not wearing her company ID, which she replied the
next day 05 July 2003; that on 04 August 2003, complainant again received a memo regarding complainants
tardiness; that on 05 August 2003, complainant received another memorandum asking her to explain why she
should not be accused of fraud, which she replied to on 07 August 2003; and that on the same day between 3:00
to 4:00 P.M., Mr. Ernesto Estong San Agustin, a staff of HRD handed her termination paper. Complainant
added that in her thirteen (13) years with the company and after so many changes in its management and
executives, she had never done anything that will cause them to issue a memorandum against her or her work
attitude, more so, reasons to terminate her services; that she got dismissed because she was the Union President
who was very active in defending and pursuing the rights of her union members, and in fighting against the
abuses of respondent Corporate Officers; and that she got the ire of respondents when the employees filed a
complaint against the Corporate Officers before Malacaang and which was later indorsed to the Office of the
Ombudsman.
The second complainant Michael L. Alfante alleged that he started to work with respondents as computer
technician at Management Information System under manager Neri Torrecampo on 16 May 2000; that on 15
July 2001, he was regularized receiving a monthly salary of P9,070.00 plus other monetary benefits; that
sometime in 2001, Rico Pagkalinawan replaced Torrecampo, which was opposed by complainant and three
other co-employees; that Pagkalinawan took offense of their objection; that on 22 October 2002, complainant
Alfante received a memorandum from Pagkalinawan regarding his excessive tardiness; that on 10 June 2003,
complainant Alfante received a memorandum from Executive Vice-President Arnold Banares, requiring him to
explain his side on the evaluation of his performance submitted by manager Pagkalinawan; that one week after
complainant submitted his explanation, he was handed his notice of dismissal on the ground of poor
performance; and that complainant was dismissed effective 28 July 2003. Complainant Alfante submitted that
he was dismissed without just cause.

ISSUE: whether or not petitioners denial of respondents claims for funeral and bereavement aid granted
under Section 4, Article XIII of their CBA constituted a diminution of benefits in violation of Article 100 of the
Labor Code.

RULING:
Accordingly, the stipulations, clauses, terms and conditions of the CBA, being the law between the parties,
must be complied with by them. The literal meaning of the stipulations of the CBA, as with every other
contract, control if they are clear and leave no doubt upon the intention of the contracting parties. Here, a
conflict has arisen regarding the interpretation of the term legal dependent in connection with the grant of
funeral and bereavement aid to a regular employee under Section 4, Article XIII of the CBA which stipulates as
follows:
SECTION 4. Funeral/Bereavement Aid. The COMPANY agrees to grant a funeral/bereavement aid in the
following instances:
c. Death of legal dependent of a regular employee P15,000.
It is clear from these statutory definitions of dependent that the civil status of the employee as either married or
single is not the controlling consideration in order that a person may qualify as the employees legal dependent.
What is rather decidedly controlling is the fact that the spouse, child, or parent is actually dependent for support
upon the employee. Considering that existing laws always form part of any contract, and are deemed
incorporated in each and every contract, the definition of legal dependents under the aforecited social
legislations applies herein in the absence of a contrary or different definition mutually intended and adopted by
the parties in the CBA. Accordingly, the concurrence of a legitimate spouse does not disqualify a child or a
parent of the employee from being a legal dependent provided substantial evidence is adduced to prove the
actual dependency of the child or parent on the support of the employee.
In this regard, the differentiation among the legal dependents is significant only in the event the CBA has
prescribed a hierarchy among them for the granting of a benefit; hence, the use of the terms primary
beneficiaries and secondary beneficiaries for that purpose. But considering that Section 4, Article XIII of the
CBA has not included that differentiation, petitioner had no basis to deny the claim for funeral and
bereavement aid of Alfante for the death of his parent whose death and fact of legal dependency on him could
be substantially proved.
Pursuant to Article 100 of the Labor Code, petitioner as the employer could not reduce, diminish, discontinue
or eliminate any benefit and supplement being enjoyed by or granted to its employees. This prohibition against
the diminution of benefits is founded on the constitutional mandate to protect the rights of workers and to
promote their welfare and to afford labor full protection. The application of the prohibition against the
diminution of benefits presupposes that a company practice, policy or tradition favorable to the employees has
been clearly established; and that the payments made by the employer pursuant to the practice, policy, or
tradition have ripened into benefits enjoyed by them. To be considered as a practice, policy or tradition,
however, the giving of the benefits should have been done over a long period of time, and must be shown to
have been consistent and deliberate. It is relevant to mention that we have not yet settled on the specific
minimum number of years as the length of time sufficient to ripen the practice, policy or tradition into a benefit
that the employer cannot unilaterally withdraw.

Nathaniel Dongon vs. Rapid Movers and Forwarders Co. Inc.


G.R. No. 163431, August 28, 2013
BERSAMIN, J.:
The prerogative of the employer to dismiss an employee on the ground or willful disobedience to company
policies must be exercised in good faith and with due regard to the rights of labor.
FACTS:
Petitioner Rapid is engaged in the hauling and trucking business while private respondent Nathaniel T. Dongon
is a former truck helper leadman. Private respondents area of assignment is the Tanduay Otis Warehouse
where he has a job of facilitating the loading and unloading [of the] petitioners trucks. On 23 April 2001,
private respondent and his driver, Vicente Villaruz, were in the vicinity of Tanduay as they tried to get some
goods to be distributed to their clients. Tanduays security guard called the attention of private respondent as to

the fact that Mr. Villaruz was not wearing an Identification Card (I.D. Card). Private respondent, then, assured
the guard that he will secure a special permission from the management to warrant the orderly release of goods.
Instead of complying with his compromise, private respondent lent his I.D. Card to Villaruz; and by reason of
such misrepresentation , private respondent and Mr. Villaruz got a clearance from Tanduay for the release of
the goods. However, the security guard, who saw the misrepresentation committed by private respondent and
Mr. Villaruz, accosted them and reported the matter to the management of Tanduay. On 23 May 2001, after
conducting an administrative investigation, private respondent was dismissed from the petitioning Company.
On 01 June 2001, private respondent filed a Complaint for Illegal Dismissal.

ISSUE: Was the petition improper and dismissible? (2) If the petition could prosper, was the dismissal of
petitioner on the ground of willful disobedience to the company regulation lawful?

RULING:
Petitioner was not guilty of willful disobedience; hence, his dismissal was illegal
Willful disobedience to the lawful orders of an employer is one of the valid grounds to terminate an employee
under Article 296 (formerly Article 282) of the Labor Code.19 For willful disobedience to be a ground, it is
required that: (a) the conduct of the employee must be willful or intentional; and (b) the order the employee
violated must have been reasonable, lawful, made known to the employee, and must pertain to the duties that he
had been engaged to discharge. Willfulness must be attended by a wrongful and perverse mental attitude
rendering the employees act inconsistent with proper subordination. In any case, the conduct of the employee
that is a valid ground for dismissal under the Labor Code constitutes harmful behavior against the business
interest or person of his employer. It is implied that in every act of willful disobedience, the erring employee
obtains undue advantage detrimental to the business interest of the employer. Under the foregoing standards,
the disobedience attributed to petitioner could not be justly characterized as willful within the contemplation of
Article 296 of the Labor Code. He neither benefitted from it, nor thereby prejudiced the business interest of
Rapid Movers. His explanation that his deed had been intended to benefit Rapid Movers was credible. There
could be no wrong or perversity on his part that warranted the termination of his employment based on willful
disobedience.
It is true that an employer is given a wide latitude of discretion in managing its own affairs. The broad
discretion includes the implementation of company rules and regulations and the imposition of disciplinary
measures on its employees. But the exercise of a management prerogative like this is not limitless, but hemmed
in by good faith and a due consideration of the rights of the worker. In this light, the management prerogative
will be upheld for as long as it is not wielded as an implement to circumvent the laws and oppress labor.
Although we recognize the inherent right of the employer to discipline its employees, we should still ensure
that the employer exercises the prerogative to discipline humanely and considerately, and that the sanction
imposed is commensurate to the offense involved and to the degree of the infraction. The discipline exacted by
the employer should further consider the employees length of service and the number of infractions during his
employment. The employer should never forget that always at stake in disciplining its employee are not only
his position but also his livelihood, and that he may also have a family entirely dependent on his earnings.
Considering that petitioners motive in lending his company ID to Villaruz was to benefit Rapid Movers as
their employer by facilitating the loading of goods at the Tanduay Otis Warehouse for distribution to Rapid
Movers clients, and considering also that petitioner had rendered seven long unblemished years of service to
Rapid Movers, his dismissal was plainly unwarranted. The NLRCs reversal of the decision of the Labor
Arbiter by holding that penalty too harsh and disproportionate to the wrong attributed to him was legally and
factually justified, not arbitrary or whimsical.

Samar-Med Distribution vs. NLRC


G.R. No. 162385, July 15, 2013
BERSAMIN, J.:
Although an employer may legally dismiss an employee for a just cause, the non-observance of the
requirements of due process before effecting the dismissal leaves the employer liable for nominal damages.
FACTS:

Samar-Med Distribution, a sole proprietorship registered in the name of Danilo V. Roleda, engaged in the sale
and distribution of intravenous fluids (IVs) in Region VIII (comprised by the several Samar and Leyte
provinces). Gutang was hired for a basic salary of P7,000.00/month and an allowance of P2,000.00/month, and
had the task of supervising the companys sales personnel and sales agents, and of representing Samar-Med in
transactions with the government in Region VIII. Gutang filed a complaint for money claims against
Roleda/Samar-Med in the NLRC. He refiled the complaint on March 4, 1999 because the records were
misplaced. He claimed that Samar-Med had difficulty paying his compensation during his employment,
resulting in his not being paid salaries since November 1995, allowances since June 1994, and commissions
from sales and 13th month pay in 1996; that Samar-Med made illegal deductions in June 1994 and February
1995; that he had no knowledge of any infraction that had caused his dismissal; that he did not receive any
notice informing him of the cessation of Samar-Meds business operations; and that he had been compelled to
look for other sources of income beginning on March 26, 1996 in order to survive. Roleda/Samar-Med denied
liability for Gutangs monetary claims, contending that Gutang was not his employee but an employee of the
City Council of Manila; that Gutang had approached and asked him if he could assist in the operation of the
business of Samar-Med in order to have extra income; that Gutang was thus permitted to sell Samar-Meds
products in his own hometown in Region VIII; that Gutang stopped selling and no longer returned to Manila
after he was tasked to conduct an investigation of the shortage in sales collections;6 that there was no dismissal
of Gutang, to speak of, but abandonment on his part; and that the complaint was a harassment suit to retaliate
for the criminal case he (Roleda) had meanwhile filed against Gutang for misappropriating Samar-Meds funds
totaling P3,302,000.71, as reflected in the demand letter dated May 15, 1996.

ISSUE: Whether or not Gutangs dismissal was a proper issue even if he had not raised it in his complaint; and
on whether or not Gutangs dismissal had been justified on the ground of the latters abandonment and/or
breach of trust and confidence

RULING:
In view of this, Gutangs cause of action should be ascertained not from a reading of his complaint alone but
also from a consideration and evaluation of both his complaint and position paper. With Gutangs position
paper having alleged not only the bases for his money claims, but also that he had been compelled to look for
other sources of income in order to survive and that his employment had not been formally terminated,
thereby entitling him to full backwages aside from his other claims for unpaid monies, the consideration and
ruling on the propriety of Gutangs dismissal by the Labor Arbiter and the NLRC were proper.
The onus of proving that an employee was not dismissed or, if dismissed, his dismissal was not illegal fully
rests on the employer, and the failure to discharge the onus would mean that the dismissal was not justified and
was illegal.15 In Gutangs case, Roleda tendered no showing outside of his mere allegations to substantiate his
averment of abandonment by Gutang. Moreover, although Gutang had undoubtedly stopped working for Samar
Med, his doing so had been for a justifiable reason, consisting in the nonpayment of his salary since November
1995 and his being forced to stop working for Samar Med to enable him to seek employment elsewhere, albeit
temporarily, in order to survive.
Under Article 282(c) of the Labor Code, an employer may terminate an employees employment on the ground
of the latters fraud or wilful breach of the trust and confidence reposed in him. For loss of trust and confidence
to constitute a sufficient ground for termination, the employer must have a reasonable ground to believe, if not
to entertain the moral conviction, that the employee was responsible for the misconduct, and that the nature of
his participation therein rendered him absolutely unworthy of the trust and confidence demanded by his
position. Those requirements were undeniably met in Gutangs case. The finding of a just cause to dismiss
Gutang notwithstanding, we also find that he was not accorded due process. Roleda as the employer had the
obligation to send to him two written notices before finally dismissing him. Article 277 of the Labor Code, as
amended, enunciated this requirement of two written notices.
The first written notice would inform Gutang of the particular acts or omissions for which his dismissal was
being sought. The second written notice would notify him of the employers decision to dismiss him. But the
second written notice must not be made until after he was given a reasonable period after receiving the first
written notice within which to answer the charge, and after he was given the ample opportunity to be heard and
to defend himself with the assistance of his representative, if he so desired. The requirement was mandatory.
Gutangs receipt of the demand letter from Samar-Med to return the amount of P3,302,000.71 was certainly not

even a substantial compliance with the twin-notice requirement, because the purpose of the demand letter was
different from those defined for the sending of the required notices. Nor was he thereby allowed a meaningful
opportunity to be heard or to be notified of his impending termination. The lack of statutory due process would
not nullify the dismissal or render it illegal or ineffectual when the dismissal was for just cause. But the
violation of Gutangs right to statutory due process clearly warranted the payment of indemnity in the form of
nominal damages

D.M. Consunji Corp. vs. Rogelio Bello


G.R. No. 159371, July 29, 2013
BERSAMIN, J.:
For the resignation of an employee to be a viable defense in an action for illegal dismissal, an employer must
prove that the resignation was voluntary, and its evidence thereon must be clear, positive and convincing. The
employer cannot rely on the weakness of the employee's evidence.
FACTS:
Bello brought a complaint for illegal dismissal and damages against DMCI and/or Rachel Consunji. In his
position paper, he claimed that DMCI had employed him as a mason without any interruption from February 1,
1990 until October 10, 1997 at an hourly rate of P25.081; that he had been a very diligent and devoted worker
and had served DMCI as best as he could and without any complaints; that he had never violated any company
rules; that his job as a mason had been necessary and desirable in the usual business or trade of DMCI; that he
had been diagnosed to be suffering from pulmonary tuberculosis, thereby necessitating his leave of absence;
that upon his recovery, he had reported back to work, but DMCI had refused to accept him and had instead
handed to him a termination paper; that he had been terminated due to RSD effective November 5, 1997; that
he did not know the meaning of RSD as the cause of his termination; that the cause had not been explained to
him; that he had not been given prior notice of his termination; that he had not been paid separation pay as
mandated by law; that at that time of his dismissal, DMCIs projects had not yet been completed; and that even
if he had been terminated due to an authorized cause, he should have been given at least one month pay or at
least one-half month pay for every year of service he had rendered, whichever was higher. DMCI contended
that Bello had only been a project employee, as borne out by his contract of employment and appointment
papers.

ISSUE: Whether or not respondent was a regular employee and whether he resigned or was dismissed

RULING:
A project employee is one who is hired for a specific project or undertaking, and the completion or termination
of such project or undertaking has been determined at the time of engagement of the employee. In the context
of the law, Bello was a project employee of DMCI at the beginning of their employer-employee relationship.
The project employment contract they then entered into clearly gave notice to him at the time of his
engagement about his employment being for a specific project or phase of work. He was also thereby notified
of the duration of the project, and the determinable completion date of the project. However, the history of
Bellos appointment and employment showed that he performed his tasks as a mason in DMCIs various
constructions projects. Based on the foregoing, we affirm the CAs conclusion that Bello acquired in time the
status of a regular employee by virtue of his continuous work as a mason of DMCI. The work of a mason like
him a skilled workman working with stone or similar material16 was really related to building or
constructing, and was undoubtedly a function necessary and desirable to the business or trade of one engaged in
the construction industry like DMCI. His being hired as a mason by DMCI in not one, but several of its projects
revealed his necessity and desirability to its construction business. It is settled that the extension of the
employment of a project employee long after the supposed project has been completed removes the employee
from the scope of a project employee and makes him a regular employee.

Lastly, DMCI claims that Bello voluntarily resigned from work. If we were now to outrightly discount her
competence to make that observation, we would disturb the time-honored practice of according respect to the

findings of the first-line trier of facts in order to prefer the speculative and whimsical statement of an appellate
forum like the NLRC. Yet, even had the letter been actually signed by him, the voluntariness of the resignation
could not be assumed from such fact alone. His claim that he had been led to believe that the letter would serve
only as the means of extending his sick leave from work should have alerted DMCI to the task of proving the
voluntariness of the resignation. It was obvious that, if his claim was true, then he did not fully comprehend the
import of the letter, rendering the resignation farcical. The doubt would then be justifiably raised against the
letter being at all intended to end his employment. Under the circumstances, DMCI became burdened with the
obligation to prove the due execution and genuineness of the document as a letter of resignation. We reiterate
that it is axiomatic in labor law that the employer who interposes the defense of voluntary resignation of the
employee in an illegal dismissal case must prove by clear, positive and convincing evidence that the resignation
was voluntary; and that the employer cannot rely on the weakness of the defense of the employee. The
requirement rests on the need to resolve any doubt in favor of the working man.

Manila Jocket Club Inc. vs. Aimee Trajano


G.R. No. 160982, June 26, 2013
BERSAMIN, J.:
An illegally dismissed employee is entitled to her reinstatement without loss of seniority rights and other
privileges, and to full backwages, inclusive of allowances and other benefits or their monetary equivalent.
Should the reinstatement be no longer feasible, an award of separation pay in lieu of reinstatement will be
justified, and the backwages shall be reckoned from the time her wages were withheld until the finality of the
decision.
FACTS:
MJCI had employed Trajano as a selling teller of betting tickets since November 1989. On April 25, 1998, she
reported for work. At around 7:15 p.m., two regular bettors gave her their respective lists of bets (rota) and
money for the bets for Race 14. Although the bettors suddenly left her, she entered their bets in the selling
machine and segregated the tickets for pick up by the two bettors upon their return. Before closing time, one of
the bettors (requesting bettor) returned and asked her to cancel one of his bets worth P2,000.00. Since she was
also operating the negative machine on that day, she obliged and immediately cancelled the bet as requested.
She gave the remaining tickets and the P2,000.00 to the requesting bettor, the money pertaining to the canceled
bet. When Race 14 was completed, she counted the bets received and the sold tickets. She found that the bets
and the tickets balanced. But then she saw in her drawer the receipt for the canceled ticket, but the canceled
ticket was not inside the drawer. Thinking she could have given the canceled ticket to the requesting bettor, she
immediately looked for him but could not find him. It was only then that she remembered that there were two
bettors who had earlier left their bets with her. Thus, she went to look for the other bettor (second bettor) to ask
if the canceled ticket was with him. When she located the second bettor, she showed him the receipt of the
canceled ticket to counter-check the serial number with his tickets. Thereafter, the second bettor returned to
Trajano and told her that it was one of his bets that had been canceled, instead of that of the requesting bettor.
To complicate things, it was also the same bet that had won Race 14. Considering that the bet was for a daily
double, the second bettor only needed to win Race 15 in order to claim dividends. At that point, she realized her
mistake, and explained to the second bettor that the cancellation of his ticket had not been intentional, but the
result of an honest mistake on her part. She offered to personally pay the dividends should the second bettor
win Race 15, which the latter accepted. When Race 15 was completed, the second bettor lost. She was thus
relieved of the obligation to pay any winnings to the second bettor. She was being placed under preventive
suspension effective April 28, 1998, for an unstated period of time. Trajano instituted a complaint for illegal
dismissal.

ISSUE: Whether or not Petitioner MJCI complied with the due process requirement when it effected the
dismissal of Respondent Trajano

RULING:
Loss of the employers trust and confidence is a just cause under Article 282 (c), a provision that ideally applies
only to cases involving an employee occupying a position of trust and confidence, or to a situation where the

employee has been routinely charged with the care and custody of the employers money or property.28 But the
loss of trust and confidence, to be a valid ground for dismissal, must be based on a willful breach of trust and
confidence founded on clearly established facts. Moreover, the loss of trust and confidence must be related to
the employees performance of duties.
As a selling teller, Trajano held a position of trust and confidence. The nature of her employment required her
to handle and keep in custody the tickets issued and the bets made in her assigned selling station. The bets were
funds belonging to her employer. Although the act complained of the unauthorized cancellation of the ticket
(i.e., unauthorized because it was done without the consent of the bettor) was related to her work as a selling
teller, MJCI did not establish that the cancellation of the ticket was intentional, knowing and purposeful on her
part in order for her to have breached the trust and confidence reposed in her by MJCI, instead of being only
out of an honest mistake.

A review of the records warrants a finding that MJCI did not comply with the prescribed procedure. As for the
last procedural requirement of giving the second notice, the posting of the notice of termination at MJCIs
selling stations did not satisfy it, and the fact that Trajano was eventually notified of her dismissal did not cure
the infirmity.

Ma. Lourdes De Jesus vs. Hon. Raul Aquino, Presiding Commissioner of NLRC and Supersonic Services
Inc
G.R. No. 164662, February 18, 2013
BERSAMIN, J.:
The dismissal of an employee for a just or authorized cause is valid despite the employer's non-observance of
the due process of law the Labor Code has guaranteed to the employee. The dismissal is effective against the
employee subject to the payment by the employer of an indemnity.
FACTS:
De Jesus alleged that: she held the position of reservation staff until her illegal dismissal on March 15, 2001,
she held the position of Sales Promotion Officer where she solicited clients for Supersonic and sold plane
tickets to various travel agencies on credit. She had an emergency hysterectomy operation preceded by
continuous bleeding and applied for a sixty-(60) day leave in the meantime. On June 1, 2001, she went to
Supersonic and found the drawers of her desk opened and her personal belongings packed, without her
knowledge and consent; while there, Divina Abad Santos, the companys general manager, asked her to sign a
promissory note and she was also forced to indorse to Supersonic her SSS check in the amount of P25,000.00
which represents her benefits from the hysterectomy operation. There was no notice and hearing nor any
opportunity given her to explain her side prior to the termination of her employment. Supersonic even filed a
case for Estafa against her for her alleged failure to remit collections despite the fact that she had completely
remitted all her collections; and the termination was done in bad faith and in violation of due process.
Petitioner filed with the Labor Arbiter a complaint for illegal dismissal against private respondents Supersonic
Services Inc., Pakistan Airlines, Gil Puyat, Jr. and Divina Abad Santos praying for the payment of separation
pay, full backwages, moral and exemplary damages, etc. Labor Arbiter ruled against De Jesus, declaring her
dismissal to be for just cause and finding that she had been accorded due process of law. NLRC rendered its
Resolution, affirming the Labor Arbiters Decision.

ISSUE: (1) Whether or not Supersonic was justified in terminating De Jesus employment; (2) Whether or not
Supersonic complied with the two-written notice rule; and (3) Whether or not De Jesus was entitled to full
backwages and damages.

RULING: (1) Yes (2) No (3) Yes


Supersonic substantially proved that De Jesus had failed to remit and had misappropriated the amounts she had
collected in behalf of Supersonic. In that regard, the factual findings of the Labor Arbiter and NLRC on the
presence of the just cause for terminating her employment, being already affirmed by the CA, are binding if not
conclusive upon this Court. There being no cogent reason to disturb such findings, the dismissal of De Jesus
was valid. The CA observed that De Jesus had not disputed her failure to remit and account for some of her

collections, for, in fact, she herself had expressly admitted her failure to do so through her letters sent to
Supersonics general manager. Thereby, the CA concluded, she defrauded her employer or willfully violated
the trust reposed in her by Supersonic. In that regard, the CA rightly observed that proof beyond reasonable
doubt of her violation of the trust was not required, for it was sufficient that the employer had reasonable
grounds to believe that the employee concerned is responsible for the misconduct as to be unworthy of the trust
and confidence demanded by [her] position.

Supersonic had not complied with the two-written notice rule. The first written notice would inform her of the
particular acts or omissions for which her dismissal was being sought. The second written notice would notify
her of the employers decision to dismiss her. But the second written notice must not be made until after she
was given a reasonable period after receiving the first written notice within which to answer the charge, and
after she was given the ample opportunity to be heard and to defend herself with the assistance of her
representative, if she so desired. The requirement was mandatory. The memorandum sent by Supersonic did not
specify the grounds for which her dismissal would be sought, and for that reason was at best a mere reminder to
De Jesus to submit her report on the status of her accounts. The second memo did not provide the notice of
dismissal under the law because it only directed her to explain why she should not be dismissed for cause. The
latter memorandum was apparently only the first written notice under the requirement.

The violation by Supersonic of the two-written notice requirement rendered ineffectual the dismissal of De
Jesus for just cause under Article 282 of the Labor Code, and entitled her to be paid full backwages from the
time of her dismissal until the finality of its decision.

Lepanto Consolidated Mining Company vs. The Lepanto Capataz Union


G.R. No. 157086, February 18, 2013
BERSAMIN, J:
Capatazes are not rank-and-file employees because they perform supervisory functions for the management;
hence, they may form their own union that is separate and distinct from the labor organization of rank-and-file
employees.
FACTS:
Respondent Lepanto Capataz Union, a labor organization duly registered with DOLE, filed a petition for
consent election with the Industrial Relations Division of the Cordillera Regional Office (CAR) of DOLE,
thereby proposing to represent 139 capatazes of Lepanto. Lepanto opposed the petition, contending that the
Union was in reality seeking a certification election, not a consent election, and would be thereby competing
with the Lepanto Employees Union (LEU), the current collective bargaining agent. Lepanto pointed out that the
capatazes were already members of LEU, the exclusive representative of all rank-and-file employees of its
Mine Division. Med-Arbiter Michaela A. Lontoc of DOLE-CAR issued a ruling to the effect that the capatazes
could form a separate bargaining unit due to their not being rank-and-file employees. DOLE Undersecretary
Rosalinda DimapilisBaldoz (Baldoz), acting by authority of the DOLE Secretary, affirmed the ruling of Med-
Arbiter Lontoc. In the ensuing certification election, the Union garnered 109 of the 111 total valid votes cast.
On the day of the certification election, however, Lepanto presented an opposition/protest. Med-Arbiter
Florence Marie A. Gacad-Ulep of DOLE-CAR rendered a decision certifying the Union as the sole and
exclusive bargaining agent of all capatazes of Lepanto.

ISSUE: Whether the capatazes could form their own union independently of the rank-and-file employees.

RULING: Yes
We cannot undo the affirmance by the DOLE Secretary of the correct findings of her subordinates in the
DOLE, an office that was undeniably possessed of the requisite expertise on the matter in issue. In dealing with
the matter, her subordinates in the DOLE fairly and objectively resolved whether the Union could lawfully seek
to be the exclusive representative of the bargaining unit of capatazes in the company. Their factual findings,
being supported by substantial evidence, are hereby accorded great respect and finality. In any event, we affirm

that capatazes or foremen are not rank-and-file employees because they are an extension of the management,
and as such they may influence the rank-and-file workers under them to engage in slowdowns or similar
activities detrimental to the policies, interests or business objectives of the employers.

Lolita Concepcion vs. Minex Import Corp.


G.R. No. 153569, January 24, 2012

BERSAMIN, J.:

The employer may validly dismiss for loss of trust and confidence an employee who commits an act of fraud
prejudicial to the interest of the employer. Neither a criminal prosecution nor a conviction beyond reasonable
doubt for the crime is a requisite for the validity of the dismissal. Nonetheless, the dismissal for a just or lawful
cause must still be made upon compliance with the requirements of due process under the Labor Code;
otherwise, the employer is liable to pay nominal damages as indemnity to the dismissed employee.

FACTS:
Respondent Minex Import-Export Corporation (Minex) engaged in the retail of semi-precious stones, selling
them in kiosks or stalls installed in various shopping centers within Metro Manila. It employed the petitioner
initially as a salesgirl, rotating her assignment among nearly all its outlets. It made her a supervisor in July
1997, but did not grant her any salary increase. On October 23, 1997, respondent Vina Mariano, an Assistant
Manager of Minex, assigned the petitioner to the SM Harrison Plaza kiosk with the instruction to hold the keys
of the kiosk. Working under her supervision there were salesgirls Cristina Calung and Lida Baquilar. Petitioner
and her salesgirls had sales of crystal items totaling P39,194.50. At the close of business that day, they
conducted a cash-count of their sales proceeds, including those from the preceding Friday and Saturday, and
determined their total for the three days to be P50,912.00. The petitioner wrapped the amount in a plastic bag
and deposited it in the drawer of the locked wooden cabinet of the kiosk. Petitioner phoned Vina Mariano to
report that the P50,912.00 was missing, explaining how she and her salesgirls had placed the wrapped amount
at the bottom of the cabinet the night before, and how she had found upon reporting to work that morning that
the contents of the cabinet were in disarray and the money already missing.

Petitioner complained against the respondents for illegal dismissal in the Department of Labor and
Employment. Minex, through Vina, filed a complaint for qualified theft against the petitioner in the Office of
the City Prosecutor in Manila. Assistant Prosecutor rendered a resolution finding probable cause for qualified
theft and recommending the filing of an information against the petitioner. Thus, she was charged with
qualified theft in the Regional Trial Court (RTC) in Manila. As to the petitioners complaint for illegal
dismissal, Labor Arbiter Jose G. de Vera rendered his decision in favor of the complainant. The National Labor
Relations Commission (NLRC) reversed the decision of the Labor Arbiter, declaring that the petitioner had not
been dismissed, but had abandoned her job after being found to have stolen the proceeds of the sales

ISSUE: Whether or not the petitioner was terminated for a just and valid cause.

RULING: Yes
To dismiss an employee, the law requires the existence of a just and valid cause. Article 282 of the Labor
Code enumerates the just causes for termination by the employer: (a) serious misconduct or willful
disobedience by the employee of the lawful orders of his employer or the latters representative in connection
with the employees work; (b) gross and habitual neglect by the employee of his duties; (c) fraud or willful
breach by the employee of the trust reposed in him by his employer or his duly authorized representative; (d)
commission of a crime or offense by the employee against the person of his employer or any immediate
member of his family or his duly authorized representative; and (e) other causes analogous to the foregoing.
The NLRC held that the termination of the petitioner was due to loss of trust and confidence. It has been raised
and rejected many times before on the basis that neither conviction beyond reasonable doubt for a crime against

the employer nor acquittal after criminal prosecution was indispensable. Nor was a formal charge in court for
the acts prejudicial to the interest of the employer a pre-requisite for a valid dismissal.
Indeed, the employer is not expected to be as strict and rigorous as a judge in a criminal trial in
weighing all the probabilities of guilt before terminating the employee. The quantum of proof required for
convicting an accused is thus higher proof of guilt beyond reasonable doubt than the quantum prescribed
for dismissing an employee substantial evidence. It is also unfair to require an employer to first be morally
certain of the guilt of the employee by awaiting a conviction before terminating him when there is already
sufficient showing of the wrongdoing. Requiring that certainty may prove too late for the employer, whose loss
may potentially be beyond repair. Here, no less than the DOJ Secretary found probable cause for qualified theft
against the petitioner. That finding was enough to justify her termination for loss of confidence.
The petitioner plainly demonstrated how quickly and summarily her dismissal was carried out without
first requiring her to explain anything in her defense as demanded under Section 2 (d) of Rule I of
the Implementing Rules of Book VI of the Labor Code. Instead, the respondents forthwith had her arrested and
investigated by the police authorities for qualified theft. This, we think, was a denial of her right to due process
of law, consisting in the opportunity to be heard and to defend herself. In view of the foregoing, we impose on
the respondents the obligation to pay to the petitioner an indemnity in the form of nominal damages
of P30,000.00.

Charlie Jao vs. BCC Products Sales Inc. and Terrance Ty


G.R. No. 163700, April 18, 2012
BERSAMIN, J.:
In determining the presence or absence of an employer-employee relationship, the Court has consistently
looked for the following incidents, to wit: (a) the selection and engagement of the employee; (b) the payment of
wages; (c) the power of dismissal; and (d) the employers power to control the employee on the means and
methods by which the work is accomplished. The last element, the so-called control test, is the most important
element.
FACTS:
Petitioner maintained that respondent BCC Product Sales Inc. and its President, respondent Terrance Ty,
employed him as comptroller starting from September 1995 with a monthly salary of P20,000.00 to handle the
financial aspect of BCCs business; that on October 19,1995, the security guards of BCC, acting upon the
instruction of Ty, barred him from entering the premises of BCC where he then worked; that his attempts to
report to work in November and December 12, 1995 were frustrated because he continued to be barred from
entering the premises of BCC; and that he filed a complaint dated December 28, 1995 for illegal dismissal,
reinstatement with full backwages, non-payment of wages, damages and attorneys fees. Respondents countered
that petitioner was not their employee but the employee of Sobien Food, the major creditor and supplier of
BCC; and that SFC had posted him as its comptroller in BCC to oversee BCCs finances and business
operations and to look after SFCs interests or investments in BCC

ISSUE: Whether petitioner was respondents employee or not

RULING: No
The statements of So really supported respondents position in that petitioners association with SFC
prior to his supposed employment by BCC went beyond mere acquaintance with So. That So, who had earlier
merely retained petitioner as his accountant, thereafter employed petitioner as a retained accountant after his
supposed illegal dismissal by BCC raised a doubt as to his employment by BCC, and rather confirmed
respondents assertion of petitioner being an employee of SFC while he worked at BCC.
Moreover, in determining the presence or absence of an employer-employee relationship, the Court has
consistently looked for the following incidents, to wit: (a) the selection and engagement of the employee; (b)
the payment of wages; (c) the power of dismissal; and (d) the employers power to control the employee on the
means and methods by which the work is accomplished. The last element, the so-called control test, is the most
important element.

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It can be deduced from the March 1996 affidavit of petitioner that respondents challenged his authority to
deliver some 158 checks to SFC. Considering that he contested respondents challenge by pointing to the
existing arrangements between BCC and SFC, it should be clear that respondents did not exercise the power of
control over him, because he thereby acted for the benefit and in the interest of SFC more than of BCC.

In addition, petitioner presented no document setting forth the terms of his employment by BCC. The failure to
present such agreement on terms of employment may be understandable and expected if he was a common or
ordinary laborer who would not jeopardize his employment by demanding such document from the employer,
but may not square well with his actual status as a highly educated professional. Also, his name did not appear
in the payroll of BCC despite him having approved the payroll as comptroller.
Lastly, the confusion about the date of his alleged illegal dismissal provides another indicium of the insincerity
of petitioners assertion of employment by BCC. In the petition for review on certiorari, he averred that he had
been barred from entering the premises of BCC on October 19, 1995, and thus was illegally dismissed. Yet, his
complaint for illegal dismissal stated that he had been illegally dismissed on December 12, 1995 when
respondents security guards barred him from entering the premises of BCC, causing him to bring his complaint
only on December 29, 1995, and after BCC had already filed the criminal complaint against him. The wide gap
between October 19, 1995 and December 12, 1995 cannot be dismissed as a trivial inconsistency considering
that the several incidents affecting the veracity of his assertion of employment by BCC earlier noted herein
transpired in that interval.

Crisanto Castro, Jr. vs. Ateneo de Naga University, Fr. Joel Tabora et al
G.R. No. 175293, July 23, 2014
BERSAMIN, J.:
All doubts in the interpretation and implementation of labor laws should be resolved in favor of labor. In ruling
that an order or award for reinstatement does not require a writ of execution, the Court is simply adhering and
giving meaning to this rule.
FACTS:
The petitioner started his employment with respondent Ateneo de Naga University (University) in the first
semester of school year 1960-1961. At the time of his dismissal, he was a regular and full-time faculty member
of the Universitys Accountancy Department in the College of Commerce. Allegedly, he received a letter from
the University President, informing him that his contract (which was set to expire on May 31, 2000) would no
longer be renewed. After several attempts to discuss the matter with Fr. Tabora in person, and not having been
given any teaching load or other assignments , he brought his complaint for illegal dismissal.
Labor Arbiter Quiones ruled in favor of the petitioner. Aggrieved, the respondents appealed to the NLRC. In
his order dated October 10, 2002, LA Quiones directed respondents to exercise their option of whether
complainant is to be actually reinstated, or be reinstated in the payroll within ten (10) days from receipt of this
order. Failure to exercise such option within the period provided shall render complainants motion for accrued
salaries appropriate.
Dissatisfied, the petitioner filed a notice of partial appeal, but the notice was denied due course on June 30,
2003. The petitioner elevated the matter to the CA by petition for certiorari. In the interim, on June 26, 2004,
the petitioner executed a receipt and quitclaim in favor of the University respecting his claim for the benefits
under the Plan.
Meanwhile, the NLRC rendered its decision affirming with modification the ruling of the LA on the
petitioners illegal dismissal case. On motion for reconsideration, the NLRC reversed its ruling on August 31,
2005 holding that the execution of the receipt and quitclaim respecting his benefits under the Plan estopped the
petitioner from pursuing other claims. The CA dismissed the petitioners petition for certiorari on the ground
of its having been rendered moot and academic by the aforecited August 31, 2005 decision of the NLRC.Upon
denial of his motion for reconsideration, the petitioner appeals.

ISSUES:
Whether or not the petitioners claim for the payment of accrued salaries and benefits for the period that he was

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not reinstated was rendered moot and academic by: his receipt of the retirement benefits and execution of the
corresponding receipt and quitclaim in favor of the respondents; and the dismissal of his complaint for illegal
dismissal by the NLRC.
Whether or not the petitioners claim for accrued salaries from the time of the issuance of the order of
reinstatement by LA Quinones until his actual reinstatement in November 2002 was rendered moot and
academic by the reversal of the decision of the LA.

RULING:
Execution of the receipt and quitclaim was not a settlement of the petitioners claim for accrued salaries

The text of the receipt and quitclaim was clear and straightforward, and it was to the effect that the sum
received by the petitioner represented full payment of benefits pursuant to the Employees retirement plan.
As such, both the NLRC and the CA should have easily seen that the quitclaim related only to the settlement of
the retirement benefits, which benefits could not be confused with the reliefs related to the complaint for illegal
dismissal.
Worthy to stress is that retirement is of a different species from the reliefs awarded to an illegally dismissed
employee. Retirement is a form of reward for an employees loyalty and service to the employer, and is
intended to help the employee enjoy the remaining years of his life, and to lessen the burden of worrying about
his financial support or upkeep. In contrast, the reliefs awarded to an illegally dismissed employee are in
recognition of the continuing employer-employee relationship that has been severed by the employer without
just or authorized cause, or without compliance with due process.

Claim for accrued benefits should be sustained despite dismissal of the petitioners complaint

Article 279 of the Labor Code, as amended, entitles an illegally dismissed employee to reinstatement. Article
223 of the Labor Code requires the reinstatement to be immediately executory even pending appeal. In Pioneer
Texturizing Corporation v. National Labor Relations Commission, the Court has further observed: The
provision of Article 223 is clear that an award for reinstatement shall be immediately executory even pending
appeal and the posting of a bond by the employer shall not stay the execution for reinstatement. The legislative
intent is quite obvious, i.e., to make an award of reinstatement immediately enforceable, even pending appeal.
To require the application for and issuance of a wit of execution as prerequisites for the execution of a
reinstatement award would certainly betray and run counter to the very object and intent of Article 223, i.e., the
immediate execution of a reinstatement order. The reason is simple. An application for a writ of execution and
its issuance could be delayed for numerous reasons.
Furthermore, the rule is that all doubts in the interpretation and implementation of labor laws should be
resolved in favor of labor. In ruling that an order or award for reinstatement does not require a writ of
execution, the Court is simply adhering and giving meaning to this rule. Henceforth, we rule that an award or
order for reinstatement is self-executory.

The Court holds that the order of reinstatement of the petitioner was not rendered moot and academic. He
remained entitled to accrued salaries from notice of the LAs order of reinstatement until reversal thereof.
Considering that the respondents reinstated the petitioner only in November 2002, and that their inability to
reinstate him was without valid ground, they were liable to pay his salaries accruing from the time of the
decision of the LA (i.e., September 3, 2001) until his reinstatement in November 2002. It did not matter that the
respondents had yet to exercise their option to choose between actual or payroll reinstatement at that point
because the order of reinstatement was immediately executory.

National Wages and Productivity Commission and the Regional Tripartite Wages and Productivity
Board vs. Alliance of Progressive Labor and the Tunay na Nagkakaisang Manggagawa sa Royal
G.R. No. 150326, March 12, 2014

12

BERSAMIN, J.:
NWPC had the authority to prescribe the rules and guidelines for the determination of the minimum wage and
productivity measures, and the RTWPBNCR had the power to issue wage orders.
FACTS:
In order to rationalize wages throughout the Philippines, Republic Act No. 6727 created the NWPC and the
RTWPBs of the different regions. Consequently, the RTWPBNCR issued Wage Order No. NCR07 on
October 14, 1999 imposing an increase of P25.50/day on the wages of all private sector workers and employees
in the NCR and pegging the minimum wage rate in the NCR at P223.50/day. However, Section 2 and Section 9
of Wage Order No. NCR07 exempted certain sectors and industries from its coverage.
Feeling aggrieved by their noncoverage by the wage adjustment, the Alliance of Progressive Labor and the
Tunay na Nagkakaisang Manggagawa sa Royal filed an appeal with the NWPC assailing Section 2(A) and
Section 9(2) of Wage Order No. NCR07. The NWPC upheld the validity of Section 2(A) and Section 9(2) of
Wage Order No. NCR07. It observed that the RTWPBs power to determine exemptible categories was
adjunct to its wage fixing function conferred by Article 122(e) of the Labor Code, as amended by Republic Act
No. 6727; that such authority of the RTWPB was also recognized in NWPC Guidelines No. 01, Series of 1996.
With regard to the excluded sectors provided for in Section 2(A) of Wage Order No. NCR07, the NWPC took
cognizance of the precarious situation in the Philippines in 1997 because of the Asian economic turmoil that
had prompted the RTWPBNCR to issue Wage Order No. NCR06.
Accordingly, the NWPC denied the appeal of APL and TNMR for its lack of merit.The APL and TNMR
assailed the decisions of the NWPC on certiorari in the CA which was granted by the latter, holding that the
powers and functions of the NWPC and RTWPBNCR as set forth in Republic Act No. 6727 did not include
the power to grant additional exemptions from the adjusted minimum wage.

ISSUES:
Whether or not the RTWPBNCR had the authority to provide additional exemptions from the minimum wage
adjustments embodied in Wage Order No. NCR07;
Whether or not Wage Order No. NCR07 complied with the requirements set by NWPC Guidelines No. 01,
Series of 1996.

RULING: YES
Indisputably, the NWPC had the authority to prescribe the rules and guidelines for the determination of the
minimum wage and productivity measures, and the RTWPBNCR had the power to issue wage orders.
Pursuant to its statutorily defined functions, the NWPC promulgated NWPC Guidelines No. 00195 (Revised
Rules of Procedure on Minimum Wage Fixing) to govern the proceedings in the NWPC and the RTWPBs in the
fixing of minimum wage rates by region, province and industry. Section 1 of Rule VIII of NWPC Guidelines
No. 00195 recognized the power of the RTWPBs to issue exemptions from the application of the wage orders
subject to the guidelines issued by the NWPC.
Pursuant to the above, the following categories of establishments may be exempted upon application with and
as determined by the Board, in accordance with applicable criteria on exemption as provided in this
Guidelines; provided further that such categories are expressly specified in the Order: 1. Distressed
establishments;2. New business enterprises (NBEs);3. Retail/Service establishments employing not more than
ten (10) workers;4. Establishments adversely affected by natural calamities. Exemptible categories outside of
the abovementioned list may be allowed only if they are in accord with the rationale for exemption. The
concerned Regional Board shall submit strong and justifiable reason/s for the inclusion of such categories
which shall be subject to review/approval by the Commission.
Under the guidelines, the RTWPBs could issue exemptions from the application of the wage orders as long as
the exemptions complied with the rules of the NWPC. In its rules, the NWPC enumerated four exemptible
establishments, but the list was not exclusive. The RTWPBs had the authority to include in the wage orders
establishments that belonged to, or to exclude from the four enumerated exemptible categories. If the exempted
category was one of the listed ones, the RTWPB issuing the wage order must see to it that the requisites stated
in Section 3 and Section 4 of the NWPC Guidelines No. 01, Series of 1996 were complied with before granting
fully or partially the application of an establishment seeking to avail of the exemption.
On the other hand, if the exemption was outside of the four exemptible categories, like here, the exemptible
category should be: (1) in accord with the rationale for exemption; (2) reviewed/approved by the NWPC; and

13

(3) upon review, the RTWPB issuing the wage order must submit a strong and justifiable reason or reasons for
the inclusion of such category. It is the compliance with the second requisite that is at issue here. The very fact
that the validity of the assailed sections of Wage Order No. NCR07 had been already passed upon and upheld
by the NWPC meant that the NWPC had already given the wage order its necessary legal imprimatur.
Accordingly, the requisite approval or review was complied with.
In creating the RTWPBs, Congress intended to rationalize wages, firstly, by establishing full time boards to
police wages roundtheclock, and secondly, by giving the boards enough powers to achieve this objective. In
the nature of their functions, the RTWPBs investigate and study all the pertinent facts to ascertain the
conditions in their respective regions. Hence, they are logically vested with the competence to determine the
applicable minimum wages to be imposed as well as the industries and sectors to exempt from the coverage of
their wage orders.
Lastly, Wage Order No. NCR07 is presumed to be regularly issued in the absence of any strong showing of
grave abuse of discretion on the part of RTWPBNCR. The presumption of validity is made stronger by the
fact that its validity was upheld by the NWPC upon review.

Mega Magazine Inc. Jerry Tiu and Sarita Yap vs. Margaret Defensor
G.R. No. 162021, June 16, 2014
BERSAMIN, J.:
The grant of a bonus or special incentive, being a management prerogative, is not a demandable and
enforceable obligation, except when the bonus or special incentive is made part of the wage, salary or
compensation of the employee, or is promised by the employer and expressly agreed upon by the parties. If the
desired goal of production or actual work is not accomplished, the bonus does not accrue.
FACTS:
Petitioner Mega Magazine Publications, Inc. first employed the respondent as an Associate Publisher, and later
promoted her as a Group Publisher. In a memorandum dated February 25, 1999, the respondent proposed to
MMPIs Executive Vice-President Yap year-end commissions for herself and a special incentive plan for the
Sales Department. Yap made marginal notes of her counter-proposals on her copy of the respondents
memorandum crossing out proposed items 1 and 2(1. MMPI Total revenue at P28-P29 P5,000 each by year
end;2. MMPI Total revenue at P30-P37 P7,000 each by year end), from the schedule of the respondents
commissions, and proposing instead that outright commissions be at 0.1% of P35-P38 million. The respondent
sent another memorandum setting out the 1999 advertisement sales, target and commissions, and proposing that
the schedule of her outright commissions should start at .05% of P34.5 million total revenue, or P175,000.00;
and further proposing that the special incentives be given when total revenues reached P35-P38 million. On
August 31, 1999, the respondent sent Yap a report on sales and sales targets.
On October 1999, the respondent tendered her letter of resignation. Yap accepted the resignation.
Before leaving MMPI, the respondent sent Yap another report on the sales and advertising targets for 1999.
Yap responded with a formalization of her approval of the 1999 special incentive scheme proposed by the
respondent through her memorandum dated February 25, 1999, revising anew the schedule by starting
commissions at .05% of P35-P38 million gross advertising revenue (including barter), and the proposed special
incentives at P35-P38 million with P8,500.00 bonus.
The respondent replied to Yap, pointing out that her memorandum dated April 5, 1999 had been the
result of Yaps own comments on the special incentive scheme she had proposed, and that she had assumed that
Yap had been amenable to the proposal when she did not receive any further reaction from the latter. On May
2000, the respondent filed a complaint for payment of bonus and incentive compensation with damages. The
Labor Arbiter (LA) dismissed the respondents complaint, ruling that the respondent had not presented any
evidence showing that MMPI had agreed or committed to the terms proposed in her memorandum of April 5,
1999. The respondent appealed, but the NLRC denied the appeal for its lack of merit.The respondent brought a
special civil action for certiorari in the CA. the CA dismissed the respondents petition for certiorari and
upheld the resolutions of the NLRC. On motion for reconsideration, however, the CA promulgated its assailed
amended decision granting the motion for reconsideration and giving due course to the respondents petition

14

for certiorari; annulling the challenged resolutions of the NLRC; and remanding the case to the NLRC for the
reception of additional evidence. Hence, this appeal by petition for review on certiorari.

ISSUES:
Whether or not the respondent was entitled to the commissions and the incentive bonus being claimed.
Whether or not a remand of the case to the NLRC for further reception of evidence is justified.

RULING:
The appeal is partly meritorious.
The grant of a bonus or special incentive, being a management prerogative, is not a demandable and
enforceable obligation, except when the bonus or special incentive is made part of the wage, salary or
compensation of the employee, or is promised by the employer and expressly agreed upon by the parties. If the
desired goal of production or actual work is not accomplished, the bonus does not accrue. Due to the nature of
the bonus or special incentive being a gratuity or act of liberality on the part of the giver, the respondent could
not validly insist on the schedule proposed in her memorandum of April 5, 1999 considering that the grant of
the bonus or special incentive remained a management prerogative. However, the Court agrees with the CAs
ruling that the petitioners had already exercised the management prerogative to grant the bonus or special
incentive. At no instance did Yap flatly refuse or reject the respondents request for commissions and the bonus
or incentive. This is plain from the fact that Yap even bargained with the respondent on the schedule of the
rates and the revenues on which the bonus or incentive would be pegged.

Concerning the remand of the case to the NLRC for reception of additional evidence at the instance of the
respondent, we hold that the CA committed a reversible error. Although, as a rule, the submission to the NLRC
of additional evidence like documents and affidavits is not prohibited, so that the NLRC may properly consider
such evidence for the first time on appeal, the circumstances of the case did not justify the application of the
rule herein. The additional evidence the respondent has sought to be admitted (i.e., Tabingos affidavit executed
on October 14, 2002) was already attached to the pleadings filed in the NLRC.
Confronted with the conflicting claims on MMPIs gross revenue realized in 1999, the question is which
evidence must be given more weight? The resolution of the question requires the re-examination and
calibration of evidence. Such re-examination and calibration, being of a factual nature, ordinarily lies beyond
the purview of the Courts authority in this appeal. Yet, because the documents are already before the Court, we
hereby treat the situation as an exception in order to resolve the question promptly and finally instead of still
remanding the case to the CA for the re- evaluation and calibration. We start by observing that the degree of
proof required in labor cases is not as stringent as in other types of cases. This liberal approach affords to the
employee every opportunity to level the playing field in which her employer is pitted against her.
In labor cases, the rules on the degree of proof are enforced not as stringently as in other cases in order to
better serve the higher ends of justice. This lenity is intended to afford to the employee every opportunity to
level the playing field. Moreover, whenever the evidence presented by the employer and that by the employee
are in equipoise, the scales of justice must tilt in favor of the latter. Accordingly, the Court concludes that the
respondent was entitled to her 0.05% outright commissions and to the special incentive bonus of P8, 500.00
based on MMPI having reached the minimum target of P35 million in gross revenues as provided in Yaps
memorandum of December 8, 1999.

Netlink Computer Incorporated vs. Eric Delmo


G.R. No. 160827, June 18, 2014
BERSAMIN, J.:
FACTS:
Netlink Computer, Inc. Products and Services hired Eric S. Delmo as account manager. He was able to generate
sales from which he earned commissions amounting to P993,558.89 and US$7,588.30. He then requested
payment of his commissions, but Netlink refused and only gave him partial cash advances chargeable to his
commissions. Later on, Netlink began to nitpick and fault find, like stressing his supposed absences and

15

tardiness. In order to force him to resign, Netlink issued several memoranda detailing his supposed infractions
of the companys attendance policy. Despite the memoranda, Delmo continued to generate huge sales for
Netlink.
On November 28, 1996, Delmo was shocked when he was refused entry into the company premises by
the security guard pursuant to a memorandum to that effect. This incident prompted Delmo to file a complaint
for illegal dismissal. The Labor Arbiter ruled against Netlink and in favor of Delmo. On appeal, the National
Labor Relations Commission modified the decision of the Labor Arbiter by setting aside the backwages and
reinstatement decreed by the Labor Arbiter due to the existence of valid and just causes for the termination of
Delmos employment. On May 9, 2003, the CA promulgated its assailed decision upholding the NLRCs
ruling subject to modifications. Hence, this appeal. Netlink submits that the CA committed a palpable and
reversible error of law in not holding that the applicable exchange rate for computing the US dollar
commissions of Delmo should be the rates prevailing at the time when the sales were actually generated, not
the rates prevailing at the time of the payment; and in awarding attorneys fees.

ISSUES:
Whether or not the payment of the commissions should be in US dollars. Whether or not the award of
attorneys fees was warranted.

RULING:
In the absence of a written agreement between the employer and the employee that sales commissions
shall be paid in a foreign currency, the latter has the right to be paid in such foreign currency once the same
has become an established practice of the former. The rate of exchange at the time of payment, not the rate
of exchange at the time of the sales, controls.
As a general rule, all obligations shall be paid in Philippine currency. However, the contracting parties may
stipulate that foreign currencies may be used for settling obligations. This is pursuant to Republic Act No. 8183
which provides as follows: Section 1. All monetary obligations shall be settled in the Philippine currency which
is legal tender in the Philippines. However, the parties may agree that the obligation or transaction shall be
settled in any other currency at the time of payment.
There was no written contract between Netlink and Delmo stipulating that the latters commissions would be
paid in US dollars. The absence of the contractual stipulation notwithstanding, Netlink was still liable to pay
Delmo in US dollars because the practice of paying its sales agents in US dollars for their US dollar-
denominated sales had become a company policy. This was impliedly admitted by Netlink when it did not
refute the allegation that the commissions earned by Delmo and its other sales agents had been paid in US
dollars. Instead of denying the allegation, Netlink only sought a declaration that the US dollar commissions be
paid using the exchange rate at the time of sale. The principle of non-diminution of benefits, which has been
incorporated in Article 100 of the Labor Code, forbade Netlink from unilaterally reducing, diminishing,
discontinuing or eliminating the practice. Verily, the phrase supplements, or other employee benefits in
Article 100 is construed to mean the compensation and privileges received by an employee aside from regular
salaries or wages.
With regard to the length of time the company practice should have been observed to constitute a voluntary
employer practice that cannot be unilaterally reduced, diminished, discontinued or eliminated by the employer,
we find that jurisprudence has not laid down any rule requiring a specific minimum number of years. With the
payment of US dollar commissions having ripened into a company practice, there is no way that the
commissions due to Delma were to be paid in US dollars or their equivalent in Philippine currency determined
at the time of the sales. To rule otherwise would be to cause an unjust diminution of the commissions due and
owing to Delma.

Finally, we affirm the following justification of the CA in granting attorney's fees to Delma. In line of the
decision of the Supreme Court in the case of Consolidated Rural Bank vs. National Labor Relations
Commission where it was held that "in actions for recovery of wages or where an employee was forced to
litigate and thus incur expenses to protect her rights and interests, even if not so claimed, an award of attorney's
fees equivalent to ten percent (10%) of the total award is legally and morally justifiable. There is no doubt that
in the present case, the private respondent has incurred expenses for the protection and enforcement of his right
to his commissions.

16

Rosalie Gargoles vs. Reylita Del Rosario


G.R. No. 158583, September 10, 2014
BERSAMIN, J.:
The just and valid causes for the dismissal of an employee, as enumerated in Article 282 of the Labor Code,
include: (a) serious misconduct or willful disobedience by the employee of the lawful orders of his employer or
representative in connection with her work; (b) gross and habitual neglect by the employee of her duties;
(c) fraud or willful breach by the employee of the trust reposed in her by her employer or duly authorized
representative; (d) commission of a crime or offense by the employee against the person of her employer or any
immediate member of her family or her duly authorized representative; and (e) other causes analogous to the
foregoing.
FACTS:
On February 20, 1992, the petitioner started working as an all-around employee acting as cashier,
sales clerk, xerox operator, janitress, photo printer, and messenger/delivery person at Jay-Annes One Hour
Photo Shop. On March 28, 1998, the petitioner received a letter terminating her employment for dishonesty.
As a result, she lodged a complaint for illegal dismissal, seeking her reinstatement and backwages. In his
decision, Labor Arbiter Ramos, Jr. dismissed the petitioners complaint for lack of merit. On August 31, 2000,
the National Labor Relations Commission promulgated its resolution affirming the decision of the Labor
Arbiter. On July 23, 2001, the petitioner commenced her special civil action for certiorari in the Court of
Appeals (CA). The CA promulgated its decision, disposing: the judgment appealed from is
hereby AFFIRMED, insofar as its declaration that petitioner was dismissed from employment with a just cause.
However, private respondent, having violated petitioners right to due process, it is ordered to pay the petitioner
the sum of P5, 000.00, as indemnity.

ISSUES:
Whether or not the CA erred in finding her dismissal from employment to have been upon just cause. Whether
or not petitioners right to due process was violated.

RULING:
The just and valid causes for the dismissal of an employee, as enumerated in Article 282 of the Labor Code,
include: (a) serious misconduct or willful disobedience by the employee of the lawful orders of his employer or
representative in connection with her work; (b) gross and habitual neglect by the employee of her duties;
(c) fraud or willful breach by the employee of the trust reposed in her by her employer or duly authorized
representative; (d) commission of a crime or offense by the employee against the person of her employer or any
immediate member of her family or her duly authorized representative; and (e) other causes analogous to the
foregoing.
The dishonesty imputed to the petitioner included the making of double entries in the production reports and
thereby enriching herself by pocketing the extra cash generated from the double entries. Contrary to her
assertion that there was no substantial evidence to justify her dismissal, the production reports containing the
double entries were presented as evidence; and her double entries were confirmed in the affidavit executed by
Redelito Caranay, Jr., her co-employee. As such, the finding of the just cause for her dismissal did not emanate
from mere speculation, suspicion or assumption.
The petitioner argues that she did not need to dispute the charge of dishonesty or theft of her employers funds
because she had the presumption of innocence in her favor. The argument is untenable. It is true that every
person is entitled to be presumed innocent of wrongdoing. The objective of the presumption has been to lay the
burden of proof on the shoulders of the alleger of wrongdoing. The presumption extends to the petitioner and to
every other employee charged with any wrongdoing that may cause them to be sanctioned, including being
dismissed from employment. But the presumption, which is disputable, by no means excuses the employee
charged with wrongdoing from answering and defending herself once the presumption has been overcome by a
showing to the contrary. The failure of the employee to rebut or disprove the proof of wrongdoing then
establishes the charge against her. This is especially true in a case for dismissal grounded on loss of confidence

17

or breach of trust. Based on the record, the petitioner did not sufficiently contradict or rebut the charge of
dishonesty.

Records reveal that private respondent gave the petitioner 72 hours from receipt of the letter dated March
25, 1998 within which to give her explanation why she should not be dismissed from service because of the
earlier discussed acts alluded against her. Yet, private respondent did not present in evidence such letter which
petitioner allegedly refused to acknowledge receipt. Under our Labor laws, two (2) written notices are required
before termination of employment can be legally effected which are: (1) notice which apprises the employee of
the particular acts or omissions for which his dismissal is sought; and, (2) the subsequent notice to which
informs the employee of the employer's decision to dismiss him; not to mention the opportunity to answer and
rebut the charges against him, in between such notices.
In our view, the CA thereby erred. It overlooked the fact that the respondent had presented to the Labor
Arbiter as Annex 2 of her position paper the respondents letter dated March 25, 1998 requiring the petitioner
to submit her explanation. The bottom of the letter contained the handwritten annotation refused to sign, an
indication of the refusal to receive and sign for the letter on the part of the petitioner. Such refusal to receive the
letter containing the notice for her to explain, coupled with her failure to submit her explanation within the time
given in the letter, implied that she waived her right to contest the contents of the letter, thereby forfeiting her
right to respond to the charge against her and to rebut the evidence thereon. It further appears that on March 28,
1998 the respondent sent another letter to the petitioner informing her of the termination of her services but the
latter again refused to sign in acknowledgment of the letter. Under the circumstances, the two-notice rule was
evidently complied with by the respondent, thereby negating any denial of due process to the petitioner.
Lastly, the petitioner posits that the CA should have applied the pronouncement in Serrano v. National Labor
Relations Commission instead of that in Wenphil Corporation v. National Labor Relations Commission. To
recall, the Court held in Wenphil Corporation that the employer should still be sanctioned with an order to
indemnify the dismissed employee despite the termination being for cause provided the employer did not
observe due process.
The position of the petitioner is untenable for two reasons. Firstly, Serrano has been abandoned in Agabon v.
National Labor Relations Commission, in which the Court ruled that if the termination was valid but due
process was not followed, the employee remains dismissed but the employer must pay an indemnity heavier
than that imposed in Wenphil Corporation but lighter than full backwages. In effect, Agabon partly restored the
doctrine in Wenphil Corporation. And, secondly, both Wenphil Corporation and Serrano should apply only
when there is a finding that the termination was valid but the requirement of due process was not followed.
Obviously, neither would be applicable to the petitioner whose dismissal was valid and legal, and the
respondent as her employer complied with the demands of due process.

Northwest Airlines Inc. Ma. Concepcion Del Rosario


G.R. No. 157633, September 10, 2014
BERSAMIN, J.:

FACTS:
Northwest Airlines, Inc. employed respondent Del Rosario on as one of its Manila-based flight
attendants. During the boarding preparations, Gamboa, another flight attendant assigned at the First Class
Section of Flight NW 26, needed to borrow a wine bottle opener from her fellow attendants, Vivien Francisco,
Gamboas runner, went to the Business Class Section to borrow a wine bottle opener from Del Rosario, but the
latter remarked that any flight attendant who could not bring a wine bottle opener had no business working in
the First Class Section. Apparently, Gamboa overheard Del Rosarios remarks, and later on verbally confronted
her. Their confrontation escalated into a heated argument. Escao intervened but the two ignored her,
prompting her to rush outside the aircraft to get Maria Rosario D. Morales, the Assistant Base Manager, to
pacify them.
The parties differed on what happened thereafter. Del Rosario claimed that only an animated discussion
had transpired between her and Gamboa, but Morales insisted that it was more than an animated discussion,

18

recalling that Del Rosario had even challenged Gamboa to a brawl (sabunutan). Morales asserted that she had
tried to pacify Del Rosario and Gamboa, but the two did not stop; that because the two were still arguing
although the Business Class passengers were already boarding, she ordered them out of the plane and transfer
to another nearby Northwest aircraft. On June 19, 1998, Del Rosario was informed of her termination from the
service. Northwest stated that based on the results of the investigation, Del Rosario and Gamboa had engaged
in a fight on board the aircraft, even if there had been no actual physical contact between them; and that
because fighting was strictly prohibited by Northwest to the point that fighting could entail dismissal from the
service even if committed for the first time, Northwest considered her dismissal from the service justified and
in accordance with the Rules of Conduct for Employees.
Labor Arbiter Teresita D. Castillon-Lora ruled in favor of Northwest, holding that the dismissal of Del Rosario
had been justified and valid. Upon appeal, the NLRC reversed the decision of the Labor Arbiter, and ruled in
favor of Del Rosario. Aggrieved, Northwest elevated the adverse decision of the NLRC to the CA
on certiorari. The CA sustained the NLRC through its decision promulgated on June 21, 2002. Likewise, it
ruled that in lieu of reinstatement, petitioner is ordered to pay private respondent separation pay equivalent to
one month's salary for every year of service plus full backwages. Petitioner is likewise ordered to pay
respondent Del Rosario attorneys fees consisting of five (5%) per cent of the adjudged relief.

ISSUE:
Whether or not Del Rosarios dismissal from the service valid.

RULING:
Northwest argues that Del Rosario was dismissed on the grounds of serious misconduct and willful
disobedience. But misconduct or improper behavior, to be a just cause for termination of employment, must:
(a) be serious; (b) relate to the performance of the employees duties; and (c) show that the employee has
become unfit to continue working for the employer. There is no doubt that the last two elements of misconduct
were present in the case of Del Rosario. The cause of her dismissal related to the performance of her duties as a
flight attendant, and she became unfit to continue working for Northwest. Remaining to be determined is,
therefore, whether the misconduct was serious as to merit Del Rosarios dismissal. In that respect,
the fight between her and Gamboa should be so serious that it entailed the termination of her employment even
if it was her first offense. Northwest insists that what transpired between her and Gamboa was obviously a form
of fight that it strictly prohibited, but Del Rosario disputes this by contending that it was only an animated
discussion between her and Gamboa. In several rulings where the meaning of fight was decisive, the Court has
observed that the term fight was considered to be different from the term argument. In People v. Asto, for
instance, the Court characterized fight as not just a merely verbal tussle but a physical combat between two
opposing parties.
Based on the foregoing, the incident involving Del Rosario and Gamboa could not be justly considered as
akin to the fight contemplated by Northwest. In the eyes of the NLRC, Del Rosario and Gamboa were arguing
but not fighting. Moreover, the claim of Morales that Del Rosario challenged Gamboa to a brawl (sabunutan)
could not be given credence by virtue of its being self-serving in favor of Northwest, and of its being an
apparent afterthought on the part of Morales during the investigation of the incident, without Del Rosario
having the opportunity to contest Morales statement. Moreover, even assuming arguendo that the incident was
the kind of fight prohibited by Northwests Rules of Conduct, the same could not be considered as of such
seriousness as to warrant Del Rosarios dismissal from the service. The gravity of the fight, which was not
more than a verbal argument between them, was not enough to tarnish or diminish Northwests public image.
The CA properly ruled that the NLRC did not gravely abuse its discretion amounting to lack or excess of
jurisdiction by declaring Del Rosarios dismissal unjustified. Northwest as the petitioner for certiorari must
demonstrate grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the NLRC.
Alas, Northwest did not show how the NLRC could have abused its discretion, let alone gravely, in ruling
adversely against it.

Pentagon International Shipping Services, Inc. vs. Court of Appeals


G.R. No. 169158, July 1, 2015

19

BERSAMIN, J.:
A local manning agency seeking accreditation of its foreign principal is mandated to submit the requirements
listed under Section 2 of Rule I, Book III of the Rules and Regulations Governing Overseas Employment.
FACTS:
Pentagon International Shipping Services, Inc. was a private manning agency licensed by the Philippine
Overseas Employment Administration (POEA) to engage in the recruitment of seafarers to service the crewing
and personnel management needs of shipping companies accredited to it. Respondent JDA Inter-Phil was
similarly engaged in the recruitment of seafarers. Pentagon hired respondents Madrio and Rubiano as chief
officer and second engineer, respectively, in behalf of its foreign principal, Baleen Marine, a corporation based
in Singapore. When their 10-month contract expired, they were repatriated to the Philippines. Alleging non-
payment and underpayment of wages, and claiming damages and attorneys fees, they separately brought
claims against Pentagon and the owners and managers of Baleen Marine on January 13, 2000 and January 31,
2000, stating that Pentagon and Baleen Marine had reduced their monthly gross salary by 20% without the
prior approval by the POEA; and that Pentagon and Baleen Marine had not paid their salaries from November
1, 1998 until their repatriation on March 24, 1999. Pentagon denied liability, countering that it had ceased to be
the manning agency of Baleen Marine effective October 1, 1998; that on June 25, 1998, its Executive Vice-
President, Meynardo Bugia, Jr., had met with Baleen Marine in Singapore to notify the latter that it had been
meanwhile appointed by Neptank Bunkering Services Pte., Ltd. as its exclusive local manning agency; that as
one of the conditions of its appointment, it was to immediately sever its manning contract with Baleen Marine;
and that on October 9, 1998, Baleen Marine had appointed JDA Inter-Phil as its new local agent for Baleen
Marines vessels NP Trader No. 3 and NP Prima. On its part, JDA Inter-Phil insisted that although it had
applied with the POEA for the transfer and accreditation of Baleen Marines vessels in its favor, it withdrew the
application and did not execute an affidavit of assumption and responsibility as required; that, consequently,
Pentagon continued to be jointly and severally liable with Baleen Marine for the money claims of Madrio and
Rubiano. The Labor Arbiter ruled in favor of Pentagon, declaring JDA InterPhil jointly and solidarily liable
with Baleen Marine.

ISSUE: Whether there is a valid substitution of the manning agent from Pentagon to IDA Inter-Phil.?

RULING:
No. Rule I, Book III of the Rules and Regulations Governing Overseas Employment states the
following:
Section 2. Requirements for Accreditation. An agency applying for the accreditation of its
principals or projects shall submit the following:
xxxx
b. For a Manning Agency for its Principals
(1) Authenticated special power of attorney and manning agreement;
(2) Crew complement and wages;
(3) List of vessels and their particulars; and
(4) Other documents which the Administration may find necessary.
A local manning agency seeking accreditation of its foreign principal is mandated to submit the
requirements listed under Section 2. While the list is not exhaustive, the POEA identified the foremost
requisite to be the authenticated special power of attorney and manning agreement. The law clearly mandates
that the special power of attorney and manning agreement should be authenticated, save only when the
authorized officials of both the principal or hiring company and its local agent signed the document in the
presence of any member of the POEA Directorate or duly designated officers of the POEA. The accreditation
of a principal may be transferred to another agency provided that transfer shall not involve any diminution of
wages and benefits of workers. The transferee agency in these instances shall comply with the requirements for
accreditation and shall assume full and complete responsibility to all contractual obligations of the principals to
its workers originally recruited and processed by the former agency.

Prior to the transfer of accreditation, the Administration shall notify the previous agency and principal
of such application. The foregoing rules are clear to the effect that before a transfer of accreditation can be
effected, the transferee agency should likewise have to comply with the requirements for accreditation

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contained in Section 2. The POEA can act on the transfer of accreditation only after all the requirements shall
have been submitted. In light of the foregoing, there was no effective transfer of agency from Pentagon to JDA
Inter-Phil. Even assuming arguendo that JDA Inter-Phil did not withdraw its application for accreditation with
the POEA, there was still no valid transfer of agency to speak of in the first place because JDA Inter-Phil did
not submit the required authenticated special power of attorney and manning agreement. The minutes of the
October 9, 1998 meeting could not, by any stretch of the imagination, supplant this mandatory requirement.

Verily, the minutes of any meeting are simply the notes or written record of the meeting, which usually
describe what transpire during the meeting, identify the attendees, and present the statements and related
responses or resolutions of the issues discussed. Considering that the minutes of the meeting neither contained
in an unequivocal manner the important and distinct elements of a special power of attorney and manning
agreement, nor were the minutes duly authenticated as required under the law, Pentagon's insistence upon an
effective substitution must fail. To reiterate, the special power of attorney and manning agreement were
necessary for the validity or enforceability of the transfer of accreditation. Although the Court does not
preclude the possibility that, as Pentagon posits, JDA Inter-Phil had really agreed to the transfer of
accreditation, it remains that the agreement to do so did not ultimately come to fruition. It cannot but hold that
the agreement reached during the meeting was only a preliminary step in the transfer of accreditation, and
would not have standing in the POEA for the purpose intended.

It is relevant to observe that Pentagon cannot feign ignorance of Section 10, paragraph 2, of the Migrant
Workers' Act of 1995 to the effect that its liabilities would continue during the entire period or duration of the
employment contract, and would not be affected by any substitution, amendment or modification of the
contract made either locally or in a foreign country. The provisions of the POEA Rules and Regulations to the
effect that the manning agreement extends up to and until the expiration of the employment contracts of the
employees recruited and employed pursuant to the recruitment agreement are also clear enough. As such,
Pentagon is not exempt from its liabilities and responsibilities towards Madrio and Rubiano.

Hongkong & Shanghai Banking Corporation et al vs. NLRC


G.R.No. 156635, January 11, 2016
BERSAMIN, J.:
A strike staged without compliance with the requirements of Article 263 1 of the Labor Code is illegal, and may
cause the termination of the employment of the participating union officers and members. However, the liability
for the illegal strike is individual, not collective. To warrant the termination of an officer of the labor
organization on that basis, the employer must show that the officer knowingly participated in the illegal strike.
An ordinary striking employee cannot be terminated based solely on his participation in the illegal strike, for
the employer must further show that the employee committed illegal acts during the strike.
FACTS:
Petitioner Hongkong & Shanghai Banking Corporation Employees Union (Union) was the duly recognized
collective bargaining agent of the rank-and-file employees of respondent Hongkong & Shanghai Banking
Corporation (HSBC). A collective bargaining agreement (CBA) governed the relations between the Union and
its members, on one hand, and HSBC effective April 1, 1990 until March 31, 1993 for the non-representational
(economic) aspect, and effective April 1, 1990 until March 31, 1995 for the representational aspect. The CBA
included a salary structure of the employees comprising of grade levels, entry level pay rates and the individual
pays depending on the length of service. On January 18, 1993, HSBC announced its implementation of a job
evaluation program (JEP) retroactive to January 1, 1993. The JEP consisted of a job designation per grade level
with the accompanying salary scale providing for the minimum and maximum pay the employee could receive
per salary level. By letter dated January 20, 1993,8 the Union demanded the suspension of the JEP, which it
labeled as an unfair labor practice (ULP). Union informed HSBC that it would exercise its right to concerted
action. Union members started picketing during breaktime while wearing black hats and black bands on their
arms and other appendages. Due to the sustained concerted actions, HSBC filed a complaint for ULP in the
Arbitration Branch of the National Labor Relations Commission. The Union conducted a strike vote on

21

December 19, 1993 after HSBC accorded regular status to Patrick King, the first person hired under the JEP.
The majority of the members of the Union voted in favor of a strike. Union's officers and members walked out
and gathered outside the premises of HSBC's offices. Union members blocked the entry and exit points of the
bank premises, preventing the bank officers. HSBC filed its complaint to declare the strike illegal. HSBC
issued return-to-work notices to the striking employees. Only 25 employees complied and returned to work.
Due to the continuing concerted actions, HSBC terminated the individual petitioners.

ISSUE: Whether the strike was lawfully conducted and whether the petitioners were illegally dismissed

RULING:
Non-compliance with Article 263 of the Labor Code renders a labor strike illegal
The right to strike is a constitutional and legal right of all workers because the strike, which seeks to advance
their right to improve the terms and conditions of their employment, is recognized as an effective weapon of
labor in their struggle for a decent existence. However, the right to strike as a means for the attainment of social
justice is never meant to oppress or destroy the employers. Thus, the law prescribes limits on the exercise of the
right to strike. Article 263 of the Labor Code specifies the limitations on the exercise of the right to strike. The
procedural requirements for a valid strike are, therefore, the following, to wit: ( 1) a notice of strike filed with
the DOLE at least 30 days before the intended date thereof, or 15 days in case of ULP; (2) a strike vote
approved by the majority of the total union membership in the bargaining unit concerned, obtained by secret
ballot in a meeting called for that purpose; and (3) a notice of the results of the voting at least seven days before
the intended strike given to the DOLE. These requirements are mandatory, such that non-compliance therewith
by the union will render the strike illegal.
According to the CA, the petitioners neither filed the notice of strike with the DOLE, nor observed the cooling-
off period, nor submitted the result of the strike vote. Moreover, although the strike vote was conducted, the
same was done by open, not secret, balloting, in blatant violation of Article 263 and Section 7, Rule XIII of the
Omnibus Rules Implementing the Labor Code. It is not amiss to observe that the evident intention of the
requirements for the strike-notice and the strike-vote report is to reasonably regulate the right to strike for the
attainment of the legitimate policy objectives embodied in the law. As such, the petitioners committed a
prohibited activity under Article 264(a) of the Labor Code, and rendered their strike illegal.

Commission of unlawful acts during the strike further rendered the same illegal
The strike was far from orderly and peaceful. HSBC's claim that from the time when the strike was commenced
on December 22, 1993 the petitioners had on several instances obstructed the ingress into and egress from its
offices in Makati and in Pasig was not competently disputed, and should thus be accorded credence in the light
of the records. We agree with HSBC, for all the affidavits and testimonies of its witnesses, as well as the
photographs and the video recordings reviewed by LA Pati depicted the acts of obstruction, violence and
intimidation committed by the petitioners during their picketing. It was undeniable that such acts of the strikers
forced HSBC's officers to resort to unusual means of gaining access into its premises at one point. The situation
during the strike actually went out of hand because of the petitioners' illegal conduct, compelling HSBC to
secure an injunction from the NLRC as well as to file its petition for habeas corpus in the proper court in the
interest of its trapped officers and employees; and at one point to lease an helicopter to extract its employees
and officers from its premises on the eve of Christmas Day of 1993.

Good faith did not avail because of the patent violation of Article 263 of the Labor Code
The petitioners' disregard of the procedural requirements for conducting a valid strike negated their claim of
good faith. For their claim to be upheld, it was not enough for them to believe that their employer was guilty of
ULP, for they must also sufficiently show that the strike was undertaken with a modicum of obeisance to the
restrictions on their exercise of the right to strike prior to and during its execution as prescribed by the law.
They did not establish their compliance with the requirements specifically for the holding of the strike vote and
the giving of the strike notice.

The finding on the illegal strike did not justify the wholesale termination of the strikers from
employment

22

As a general rule, the mere finding of the illegality of the strike does not justify the wholesale termination of
the strikers from their employment. To avoid rendering the recognition of the workers' right to strike illusory,
the responsibility for the illegal strike is individual instead of collective. The last paragraph of Article 264(a) of
the Labor Code defines the norm for terminating the workers participating in an illegal strike. The officers may
be deemed terminated from their employment upon a finding of their knowing participation in the illegal strike,
but the members of the union shall suffer the same fate only if they are shown to have knowingly participated
in the commission of illegal acts during the strike. In the case of Fermin, HSBC did not satisfactorily prove his
presence during the strike, much less identify him as among the strikers. In contrast, Union president Ma.
Dalisay dela Chica testified that Fermin was not around when the Union's Board met after the strike vote to
agree on the date of the strike. In that regard, Corazon Fermin, his widow, confirmed the Union president's
testimony by attesting that her husband had been on leave from work prior to and during the strike because of
his heart condition. Although Corazon also attested that her husband had fully supported the strike, his
extending moral support for the strikers did not constitute sufficient proof of his participation in the strike in the
absence of a showing of any overt participation by him in the illegal strike. The burden of proving the overt
participation in the illegal strike by Fermin solely belonged to HSBC, which did not discharge its burden.
However, the dismissal of Rivera and of the rest of the Union's officers, namely: Ma. Dalisay dela Chica,
Marvilon Militante and David Atanacio, is upheld.
Unlike the Union's officers, the ordinary striking members could not be terminated for merely taking part in the
illegal strike. Regardless of whether the strike was illegal or not, the dismissal of the members could be upheld
only upon proof that they had committed illegal acts during the strike. They must be specifically identified
because the liability for the prohibited acts was determined on an individual basis. For that purpose, substantial
evidence available under the attendant circumstances justifying the penalty of dismissal sufficed.

Jennifer Lagahit vs. Pacific Concord Container Lines/ Monette Cuenca


G.R.No. 177680, January 13, 2016
BERSAMIN, J.:
In cases of unlawful dismissal, the employer bears the burden of proving that the termination was for a valid or
authorized cause, but before the employer is expected to discharge its burden of proving that the dismissal was
legal, the employee must first establish by substantial evidence the fact of her dismissal from employment.
FACTS:
Respondent Pacific Concord Container Lines, a domestic corporation engaged in cargo forwarding, hired the
petitioner as an Account Executive/Marketing Assistant. In January 2002, Pacific Concord promoted her as a
sales manager with the monthly salary rate of P25,000.00, and provided her with a brand new Toyota Altis plus
gasoline allowance. On November 8, 2002, she reported for work at 9:00 a.m. and left the company premises at
around 10:30 a.m. to make client calls. At 1:14 p.m. of that day, she received the text message from respondent
Monette Cuenca saying she is no longer connected with them. Pacific Concord also caused the publication of
the notice to the public in the Sunstar Daily. Petitioner filed her complaint for constructive dismissal. In their
position paper, the respondents denied having terminated the petitioner despite the fact that there were valid
grounds to do so. They insisted that the petitioner had betrayed the trust and confidence reposed in her when
she: (a) used the company-issued vehicle for her own personal interest; (b) failed to achieve her sales quota,
and to enhance and develop the Sales Department; (c) enticed her marketing assistant, Jo Ann Otrera, to resign
and join her in transferring to another forwarding company; (d) applied for other employment during office
hours and using company resources; (e) solicited and offered the services of Seajet International, Inc. during
her employment with Pacific Concord; (f) received a personal commission from Wesport Line, Inc. for
container shipments; and ( g) illegally manipulated and diverted several containers to Seajet International.

ISSUE: Did the petitioner resign as sales manager of Pacific Concord? Did Pacific Concord have sufficient
grounds to terminate her for breach of trust and confidence under Article 282 of the Labor Code?

RULING:
Lagahit did not resign from her employment

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In cases of unlawful dismissal, the employer bears the burden of proving that the termination was for a valid or
authorized cause, but before the employer is expected to discharge its burden of proving that the dismissal was
legal, the employee must first establish by substantial evidence the fact of her dismissal from employment. In
this case, the petitioner proved the overt acts committed by the respondents in abruptly terminating her
employment through the text messages sent by Cuenca to the petitioner and her husband, as well as the notices
distributed to the clients and published in the Sun Star. It is notable that the respondents did not deny or
controvert her evidence on the matter. Thereby, she showed Pacific Concords resolve to terminate her
employment effective November 8, 2002.
As a rule, the employer who interposes the resignation of the employee as a defense should prove that the
employee voluntarily resigned.40 A valid resignation is the voluntary act of an employee who finds herself in a
situation where she believes that personal reasons cannot be sacrificed in favor of the exigency of the service
and that she has no other choice but to disassociate herself from employment. The resignation must be
unconditional and with a clear intention to relinquish the position. Consequently, the circumstances
surrounding the alleged resignation must be consistent with the employees intent to give up the employment.
In this connection, the acts of the employee before and after the resignation are considered to determine
whether or not she intended, in fact, to relinquish the employment.
The facts and circumstances before and after the petitioners severance from her employmentdid not show her
resolute intention to relinquish her job. Indeed, it would be unfounded to infer the intention to relinquish from
her letter, which, to us, was not a resignation letter due to the absence therefrom of anything evincing her desire
to sever the employer-employee relationship. The letter instead presented her as a defenseless employee
unjustly terminated for unknown reasons who had been made the subject of notices and flyers informing the
public of her unexpected termination. It also depicted her as an employee meekly accepting her unexpected fate
and requesting the payment of her backwages and accrued benefits just to be done with the employer.

Lagahit did not breach her employers trust; her dismissal was, therefore, illegal
To justify the dismissal of an employee, the employer must, as a rule, prove that the dismissal was for a just
cause, and that the employee was afforded due process prior to dismissal. As a complementary principle, the
employer has the onus of proving the validity of the dismissal with clear, accurate, consistent, and convincing
evidence. The employers case succeeds or fails on the strength of its evidence, not on the weakness of that
adduced by the employee, in keeping with the principle that the scales of justice should be tilted in favor of the
latter in case of doubt in the evidence presented by them.
Article 282(c) of the Labor Code authorizes an employer to dismiss an employee for committing fraud, or for
willful breach of the trust reposed by the employer. However, loss of confidence is never intended to provide
the employer with a blank check for terminating its employee. For this to be a valid ground for the termination
of the employee, the employer must establish that: (1) the employee must be holding a position of trust and
confidence; and (2) the act complained against would justify the loss of trust and confidence. There are two
classes of employees vested with trust and confidence. To the first class belong the managerial employees or
those vested with the powers or prerogatives to lay down management policies and to hire, transfer, suspend,
lay-off, recall, discharge, assign or discipline employees or effectively recommend such managerial actions.
The second class includes those who in the normal and routine exercise of their functions regularly handle
significant amounts of money or property. Cashiers, auditors, and property custodians are some of the
employees in the second class. The petitioner discharged the following duties and responsibilities as sales
manager. Her position as sales manager did not immediately make the petitioner a managerial employee. The
actual work that she performed, not her job title, determined whether she was a managerial employee vested
with trust and confidence. Her employment as sales manager was directly related with the sales of cargo
forwarding services of Pacific Concord, and had nothing to do with the implementation of the managements
rules and policies. As such, the position of sales manager came under the second class of employees vested
with trust and confidence.
At any rate, the employer must present clear and convincing proof of an actual breach of duty committed by the
employee by establishing the facts and incidents upon which the loss of confidence in the employee may fairly
be made to rest. The required amount of evidence for doing so is substantial proof. With these guidelines in
mind, we cannot hold that the evidence submitted by the respondents (consisting of the three affidavits)
sufficiently established the disloyalty of the petitioner. The affidavits did not show how she had betrayed her
employers trust. Considering that the petitioners duties related to the sales of forwarding services offered by

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Pacific Concord, her calling other forwarding companies to inquire for vacant positions did not breach the trust
reposed in her as sales manager. Such act, being at worst a simple act of indiscretion, did not constitute the
betrayal of trust that merited the extreme penalty of dismissal from employment.

Alumamay Jamias et al vs. NLRC


G.R. NO. 159350, March 9, 2016
BERSAMIN, J.:
A fixed term agreement, to be valid, must strictly conform with the requirements and conditions provided in
Article 280 of the Labor Code. The test to determine whether a particular employee is engaged as a project or
regular employee is whether or not the employee is assigned to carry out a specific project or undertaking, the
duration or scope of which was specified at the time of his engagement. There must be a determination of, or a
clear agreement on, the completion or termination of the project at the time the employee is engaged.
Otherwise put, the fixed period of employment must be knowingly and voluntarily agreed upon by the parties,
without any force, duress or improper pressure being brought to bear upon the employee and absent any other
circumstances vitiating his consent, or it must satisfactorily appear that the employer and employee dealt with
each other on more or less equal terms with no moral dominance whatsoever being exercised by the former on
the latter.
FACTS:
Respondent Innodata Philippines, Inc. (Innodata), a domestic corporation engaged in the business of data
processing and conversion for foreign clients. After the respective contracts of the employees expired, they
filed a complaint for illegal dismissal claiming that Innodata had made it appear that they had been hired as
project employees in order to prevent them from becoming regular employees.

ISSUE: Were the petitioners regular or project employees of Innodata?

RULING:
A fixed period in a contract of employment does not by itself signify an intention to circumvent Article
280 of the Labor Code
The provision contemplates three kinds of employees, namely: (a) regular employees; (b) project employees;
and (c) casuals who are neither regular nor project employees. The nature of employment of a worker is
determined by the factors provided in Article 280 of the Labor Code, regardless of any stipulation in the
contract to the contrary. Thus, in Brent School, Inc. v. Zamora, we explained that the clause referring to written
contracts should be construed to refer to agreements entered into for the purpose of circumventing the security
of tenure. Obviously, Article 280 does not preclude an agreement providing for a fixed term of employment
knowingly and voluntarily executed by the parties.
A fixed term agreement, to be valid, must strictly conform with the requirements and conditions provided in
Article 280 of the Labor Code. The test to determine whether a particular employee is engaged as a project or
regular employee is whether or not the employee is assigned to carry out a specific project or undertaking, the
duration or scope of which was specified at the time of his engagement. There must be a determination of, or a
clear agreement on, the completion or termination of the project at the time the employee is engaged. Otherwise
put, the fixed period of employment must be knowingly and voluntarily agreed upon by the parties, without any
force, duress or improper pressure being brought to bear upon the employee and absent any other circumstances
vitiating his consent, or it must satisfactorily appear that the employer and employee dealt with each other on
more or less equal terms with no moral dominance whatsoever being exercised by the former on the latter.
For one, it would be unusual for a company like Innodata to undertake a project that had no relationship to its
usual business. Also, the necessity and desirability of the work performed by the employees are not the
determinants in term employment, but rather the day certain voluntarily agreed upon by the parties. In fine,
the employment of the petitioners who were engaged as project employees for a fixed term legally ended upon
the expiration of their contract. Their complaint for illegal dismissal was plainly lacking in merit.

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Robina Farms Cebu vs. Elizabeth Villa


G.R. No. 175869, April 18, 2016
BERSAMIN, J.:
Section 4(a), Rule VI of the Amended NLRC Rules of Procedure requires an appeal to be verified by the
appellant herself. The verification is a mere formal requirement intended to secure and to give assurance that
the matters alleged in the pleading are true and correct. The requirement is complied with when one who has
the ample knowledge to swear to the truth of the allegations in the complaint or petition signs the verification,
or when the matters contained in the petition have been alleged in good faith or are true and correct. Being a
mere formal requirement, the courts may even simply order the correction of improperly verified pleadings, or
act on the same upon waiving the strict compliance with the rules of procedure.
FACTS:
Respondent Elizabeth Villa brought against the petitioner her complaint for illegal suspension, illegal dismissal,
nonpayment of overtime pay, and nonpayment of service incentive leave pay in the Regional Arbitration
Branch No. VII of the NLRC in Cebu City. Villa averred that she had been employed by petitioner Robina
Farms as sales clerk since August 1981; that in the later part of 2001, the petitioner had enticed her to avail
herself of the company's special retirement program; that on March 2, 2002, she had received a memorandum
from Lily Ngochua requiring her to explain her failure to issue invoices for unhatched eggs in the months of
January to February 2002; that she had explained that the invoices were not delivered on time because the
delivery receipts were delayed and overlooked; that despite her explanation, she had been suspended for 10
days from March 8, 2002 until March 19, 2002; that upon reporting back to work, she had been advised to
cease working because her application for retirement had already been approved; that she had been
subsequently informed that her application had been disapproved, and had then been advised to tender her
resignation with a request for financial assistance; that she had manifested her intention to return to work but
the petitioner had confiscated her gate pass; and that she had since then been prevented from entering the
company premises and had been replaced by another employee.
Labor Arbiter Violeta Ortiz-Bantug rendered her decision finding that Villa had not been dismissed from
employment. NLRC rendered its judgment dismissing the appeal by the petitioner but granting that of Villa.
The CA treated the petitioner's appeal as an unsigned pleading because the petitioner did not present proof
showing that Florabeth P. Zanoria, its Administrative Officer and Chief Accountant who had signed the
verification, had been authorized to sign and file the appeal.

ISSUE: Whether or not Villa's appeal should be treated as an unsigned pleading because she had accompanied
her appeal with the same verification attached to her position paper
Whether or not petitioner did not admit Villa back to work

RULING: No
Section 4(a), Rule VI of the Amended NLRC Rules of Procedure requires an appeal to be verified by the
appellant herself. The verification is a mere formal requirement intended to secure and to give assurance that
the matters alleged in the pleading are true and correct. The requirement is complied with when one who has
the ample knowledge to swear to the truth of the allegations in the complaint or petition signs the verification,
or when the matters contained in the petition have been alleged in good faith or are true and correct. Being a
mere formal requirement, the courts may even simply order the correction of improperly verified pleadings, or
act on the same upon waiving the strict compliance with the rules of procedure. It is the essence of the NLRC
Rules of Procedure to extend to every party-litigant the amplest opportunity for the proper and just
determination of his cause, free from the constraints of technicalities. Accordingly, the substantial compliance
with the procedural rules is appreciated in favor of Villa. For one, it belatedly submitted proof of Zanoria' s
authority to verify the pleading for the petitioner. Also, it did not submit the certification of non-forum
shopping at the time of the filing of the appeal. The non-submission of the certification, being a ground for
dismissal, was fatal to the petition. There is no question that the non-compliance with the requirement for the
certification, or a defect in the certification, would not be cured by the subsequent submission or the correction
of the certification, except in cases of substantial compliance or upon compelling reasons. Accordingly, the
dismissal of the petitioner's appeal cannot be reversed or undone.

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We note that the CA and the NLRC agreed on their finding that the petitioner did not admit Villa back to work
after the completion of her 10-day suspension. Neither did Villa's application for early retirement manifest her
intention to sever the employer-employee relationship. Although she applied for early retirement, she did so
upon the belief that she would receive a higher benefit based on the petitioner's offer. As such, her consent to
be retired could not be fairly deemed to have been knowingly and freely given. Retirement is the result of a
bilateral act of both the employer and the employee based on their voluntary agreement that upon reaching a
certain age, the employee agrees to sever his employment. The difficulty in the case of Villa arises from
determining whether the retirement was voluntary or involuntary. On one hand, voluntary retirement cuts the
employment ties leaving no residual employer liability; on the other, involuntary retirement amounts to a
discharge, rendering the employer liable for termination without cause.
In case of early retirement programs, the offer of benefits must be certain while the acceptance to be retired
should be absolute. The acceptance by the employees contemplated herein must be explicit, voluntary, free and
uncompelled. Under the circumstances, the CA did not err in declaring the petitioner guilty of illegal dismissal
for violating Article 282 of the Labor Code and the twin notice rule.

Sugarsteel Industrial Inc. and Mr. Ben Yapjoco vs. Victor Albina, Vicente Uy and Alex Velasquez
G.R. No. 168749, June 6, 2016
BERSAMIN, J.:
The policy of practicing comity towards the factual findings of the labor tribunals does not preclude the CA
from reviewing the findings, and from disregarding the findings upon a clear showing of the NLRC's
capricious, whimsical or arbitrary disregard of the evidence or of circumstances of considerable importance
crucial or decisive of the controversy. In such eventuality, the writ of certiorari should issue, and the CA, being
also a court of equity, then enjoys the leeway to make its own independent evaluation of the evidence of the
parties as well as to ascertain whether or not substantial evidence supported the NLRC's ruling.
FACTS:
A clog-up occurred at the kettle sheet guide. At that time, the petitioners were on duty working in their assigned
areas. As a consequence, twenty (20) GI sheets were clogged-up inside the kettle, causing damage to the private
respondent. On the same day, a memorandum was issued by Mr. Ben S. Yapjoco, manager of the private
respondent, requiring all the petitioners to submit written explanation on the aforesaid incident and why no
action shall be taken against them for gross negligence. Individual notices of suspension were sent to the
petitioners pending final decision relative to the incident. On August 29, 1996, Mr. Yapjoco again sent
individual notices of termination of employment to all petitioners, stating that after the management conducted
an investigation on the circumstances surrounding the incident, the petitioners were found guilty of gross
neglect of duty and by reason thereof they were terminated from their employment. Respondents Victor Albina,
Vicente Uy and Alex Velasquez charged the petitioners in the Regional Arbitration Branch of the National
Labor Relations Commission (NLRC) in Cebu City with having illegally dismissed them as kettleman, assistant
kettleman, and inspector, respectively. Labor Arbiter (LA) ruled that although the dismissal of the respondents
was justified because of their being guilty of gross negligence, the petitioners should pay them their separation
pay at the rate of 1/2 month per year of service. NLRC denied the respondents' motion for reconsideration. CA
granted the petition for certiorari.

ISSUE: Did the CA depart from well-settled rules on what findings the CA could review on certiorari?

RULING: No
The policy of practicing comity towards the factual findings of the labor tribunals does not preclude the CA
from reviewing the findings, and from disregarding the findings upon a clear showing of the NLRC's
capricious, whimsical or arbitrary disregard of the evidence or of circumstances of considerable importance
crucial or decisive of the controversy. In such eventuality, the writ of certiorari should issue, and the CA, being
also a court of equity, then enjoys the leeway to make its own independent evaluation of the evidence of the
parties as well as to ascertain whether or not substantial evidence supported the NLRC's ruling.
NLRC affirmed the decision of the LA based on its observation that the alleged ground for the respondents'
appeal -that "the decision with all due respect, is not supported by evidence and is contrary to the facts
obtaining" -was not one of those expressly enumerated under Article 223 of the Labor Code. CA acted

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judiciously in undoing the too literal interpretation of Article 223 of the Labor Code by the NLRC. The
enumeration in the provision of the grounds for an appeal actually encompassed the ground relied upon by the
respondents in their appeal. Their phrasing of the ground, albeit not hewing closely (or literally) to that of
Article 223, related to the first and the last grounds under the provision. In dismissing the appeal on that basis,
the NLRC seemed to prefer form and technicality to substance and justice. Thereby, the NLRC acted
arbitrarily, for its dismissal of the appeal became entirely inconsistent with the constitutional mandate for the
protection to labor.
CA's overturning of the NLRC's ruling was based on its finding that the petitioners did not sufficiently establish
the just and valid cause to dismiss the respondents from their employment. As the assailed judgment indicates,
the CA's review was thorough and its ruling judicious. The CA thereby enforced against the petitioners the
respected proposition that it was the employer who bore the burden to show that the dismissal was for just and
valid cause. The failure of the petitioners to discharge their burden of proof as the employers necessarily meant
that the dismissal was illegal. The outcome could not be any other way.
In order to warrant the dismissal of the employee for just cause, Article 282 (b) of the Labor Code requires the
negligence to be gross and habitual. Gross negligence is the want of even slight care, acting or omitting to act
in a situation where there is duty to act, not inadvertently but willfully and intentionally, with a conscious
indifference to consequences insofar as other persons may be affected. Habitual neglect connotes repeated
failure to perform one's duties for a period of time, depending upon the circumstances. Obviously, a single or
isolated act of negligence does not constitute a just cause for the dismissal of the employee. Considering,
however, that the petitioners did not refute the respondents' claim that the incident was their first offense, and
that the petitioners did not present any evidence to establish the supposed habitual neglect on the part of the
respondents, like employment or other records indicative of the service and personnel histories of the
respondents during the period of their employment, the CA reasonably found and concluded that the just cause
to dismiss them was not established by substantial evidence.

The Heritage Hotel Manila vs. Secretary of Labor and Employment et al


G.R. No. 172132, July 23, 2014
BERSAMIN, J.:

FACTS:
Respondent National Union of Workers in Hotel Restaurant and Allied Industries-Heritage Hotel
Manila Supervisors Chapter (NUWHRAIN-HHMSC) filed a petition for certification election, seeking to
represent all the supervisory employees of Heritage Hotel Manila. The petitioner filed its opposition, but the
opposition was deemed denied when Med-Arbiter Napoleon V. Fernando issued his order for the conduct of the
certification election. The petitioner appealed the order of Med-Arbiter Fernando, but the appeal was also
denied. A pre-election conference was then scheduled. On February 20, 1998, however, the pre-election
conference was suspended until further notice because of the repeated non-appearance of NUWHRAIN-
HHMSC. On January 29, 2000, NUWHRAIN-HHMSC moved for the conduct of the pre-election conference.
The petitioner filed a motion to dismiss on April 17, 2000, raising the prolonged lack of interest of
NUWHRAIN-HHMSC to pursue its petition for certification election.
On May 12, 2000, the petitioner filed a petition for the cancellation of NUWHRAIN-HHMSCs registration as
a labor union for failing to submit its annual financial reports and an updated list of members as required by
Article 238 and Article 239 of the Labor Code. The following day, however, the Department of Labor and
Employment (DOLE) issued a notice scheduling the certification elections on June 23, 2000. Dissatisfied, the
petitioner commenced in the CA on June 14, 2000 a special civil action for certiorari, alleging that the DOLE
gravely abused its discretion in not suspending the certification election proceedings but the CA dismissed the
petition for certiorari. The certification election proceeded as scheduled, and NUWHRAIN-HHMSC obtained
the majority vote of the bargaining unit. On January 26, 2001, Med-Arbiter Tomas F. Falconitin issued an
order, ruling that the petition for the cancellation of union registration was not a bar to the holding of the
certification election; hence, respondent employer/protestants protest with motion to defer certification of

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results and winner is hereby dismissed for lack of merit. The petitioner timely appealed to the DOLE Secretary.
On August 21, 2002, then DOLE Secretary Sto. Tomas issued a resolution denying the appeal. Upon denial of
its motion for reconsideration, the petitioner elevated the matter to the CA by petition for certiorari, but the
petition was dismissed.

ISSUE:
Whether or not the CA seriously erred when it disregard PROGRESSIVE DEVELOPMENT CORPORATION
PIZZA HUT V. LAGUESMA which held that it would be more prudent to suspend the certification case until
the issue of the illegality of registration of the union is finally resolved.

RULING: NO
Basic in the realm of labor union rights is that the certification election is the sole concern of the
workers, and the employer is deemed an intruder as far as the certification election is concerned. Thus, the
petitioner lacked the legal personality to assail the proceedings for the certification election, and should stand
aside as a mere bystander who could not oppose the petition, or even appeal the Med-Arbiters orders relative
to the conduct of the certification election.
The petitioners meddling in the conduct of the certification election among its employees unduly gave
rise to the suspicion that it intended to establish a company union. For that reason, the challenges it posed
against the certification election proceedings were rightly denied.
Under the long established rule, too, the filing of the petition for the cancellation of NUWHRAIN-
HHMSCs registration should not bar the conduct of the certification election.35 In that respect, only a final
order for the cancellation of the registration would have prevented NUWHRAIN-HHMSC from continuing to
enjoy all the rights conferred on it as a legitimate labor union, including the right to the petition for the
certification election. This rule is now enshrined in Article 238-A of the Labor Code, as amended by Republic
Act No. 9481.
Still, the petitioner assails the failure of NUWHRAIN-HHMSC to submit its periodic financial reports
and updated list of its members pursuant to Article 238 and Article 239 of the Labor Code.
We cannot ascribe abuse of discretion to the Regional Director and the DOLE Secretary in denying the
petition for cancellation of respondent's registration. The union members and, in fact, all the employees
belonging to the appropriate bargaining unit should not be deprived of a bargaining agent, merely because of
the negligence of the union officers who were responsible for the submission of the documents to the BLR.
Labor authorities should, indeed, act with circumspection in treating petitions for cancellation of union
registration, lest they be accused of interfering with union activities.
In resolving the petition, consideration must be taken of the fundamental rights guaranteed by Article
XIII, Section 3 of the Constitution, i.e., the rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities. Thus, the cancellation of a certificate of registration is the
equivalent of snuffing out the life of a labor organization. For without such registration, it loses - as a rule - its
rights under the Labor Code.
The Labor Code's provisions on cancellation of union registration and on reportorial requirements have
been recently amended by Republic Act (R.A.) No. 9481, which lapsed into law on May 25, 2007 and became
effective on June 14, 2007. The amendment sought to strengthen the workers right to self-organization and
enhance the Philippines' compliance with its international obligations as embodied in the International Labor
Organization (ILO) Convention No. 87, pertaining to the non-dissolution of workers organizations by
administrative authority. Failure to comply with the above requirements shall not be a ground for cancellation
of union registration but shall subject the erring officers or members to suspension, expulsion from
membership, or any appropriate penalty. The ruling thereby wrote finis to the challenge being posed by the
petitioner against the illegitimacy of NUWHRAIN-HHMSC.

The remaining issue to be resolved is which among Toyota Motor, Dunlop Slazenger and Tagaytay
Highlands applied in resolving the dispute arising from the mixed membership in NUWHRAIN-HHMSC.

We note that NUWHRAIN-HHMSC filed its petition for the certification election on October 11, 1995.
Conformably with Kawashima, the applicable law was the 1989 Amended Omnibus Rules, and the prevailing
rule was the pronouncement in Toyota Motor and Dunlop Slazenger to the effect that a labor union of mixed

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membership was not possessed with the requisite personality to file a petition for the certification election.
Nonetheless, we still rule in favor of NUWHRAIN-HHMSC. Court was convinced that the concerned labor
unions were comprised by mixed rank-and-file and supervisory employees. In Toyota Motor, the employer
submitted the job descriptions of the concerned employees to prove that there were supervisors in the
petitioning union for rank-and-file employees. In Dunlop Slazenger, the Court observed that the labor union of
supervisors included employees occupying positions that apparently belonged to the rank-and-file. In
both Toyota Motor and Dunlop Slazenger, the employers were able to adduce substantial evidence to prove the
existence of the mixed membership. Based on the records herein, however, the petitioner failed in that respect.
To recall, it raised the issue of the mixed membership in its comment on the list of members submitted by
NUWHRAIN-HHMSC, and in its protest. In the comment, it merely identified the positions that were either
confidential or managerial, but did not present any supporting evidence to prove or explain the identification. In
the protest, it only enumerated the positions that were allegedly confidential and managerial, and identified two
employees that belonged to the rank-and-file, but did not offer any description to show that the positions
belonged to different employee groups.
Worth reiterating is that the actual functions of an employee, not his job designation, determined whether the
employee occupied a managerial, supervisory or rank-and-file position. As to confidential employees who were
excluded from the right to self-organization, they must (1) assist or act in a confidential capacity, in regard (2)
to persons who formulated, determined, and effectuated management policies in the field of labor relations.43 In
that regard, mere allegations sans substance would not be enough, most especially because the constitutional
right of workers to self-organization would be compromised.
At any rate, the members of NUWHRAIN-HHSMC had already spoken, and elected it as the bargaining agent.
As between the rigid application of Toyota Motors and Dunlop Slazenger, and the right of the workers to self-
organization, we prefer the latter. For us, the choice is clear and settled. What is important is that there is an
unmistakeable intent of the members of [the] union to exercise their right to organize. We cannot impose
rigorous restraints on such right if we are to give meaning to the protection to labor and social justice clauses of
the Constitution.

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