ISSUE:

CONTINENTAL STEEL V. MONTAO

(G.R. No. 182836 October 13, 2009) 1
Whether or not any ambiguity in CBA provisions shall be settled in favor of the
employee.

RULING:

Time and again, the Labor Code is specific in enunciating that in case of doubt in the
interpretation of any law or provision affecting labor, such should be interpreted in favor of
labor. In the same way, the CBA and CBA provisions should be interpreted in favor of labor.
As decided by this Court, any doubt concerning the rights of labor should be resolved in its
favor pursuant to the social justice policy.
Bereavement leave and other death benefits are granted to an employee to give aid to,
and if possible, lessen the grief of, the said employee and his family who suffered the loss of a
loved one. It cannot be said that the parents grief and sense of loss arising from the death of
their unborn child, who, in this case, had a gestational life of 38-39 weeks but died during
delivery, is any less than that of parents whose child was born alive but died subsequently.
Being for the benefit of the employee, CBA provisions on bereavement leave and other
death benefits should be interpreted liberally to give life to the intentions thereof.

RENE M. GOMEZ I BLOCK 2A LAW ON LABOR RELATIONS S/Y 2017-2018

ISSUE:
STAR PAPER CORP. VS SIMBOL
(G.R. No. 164774, April 12, 2006) 2
Is the policy of the employer banning spouses from working in the same company
violates the rights of the employee under the Constitution and the Labor Code? Is it a valid
exercise of management prerogative?

RULING:

No. The Court ruled in favor of the respondents. The requirement that a company policy
must be reasonable under the circumstances to qualify as a valid exercise of management
prerogative.
A requirement that a woman employee must remain unmarried could be justified as a
"bona fide occupational qualification," or BFOQ, where the particular requirements of the job
would justify the same, but not on the ground of a general principle, such as the desirability of
spreading work in the workplace. A requirement of that nature would be valid provided it
reflects an inherent quality reasonably necessary for satisfactory job performance.
The cases of Duncan and PT&T instruct us that the requirement of reasonableness must
be clearly established to uphold the questioned employment policy. The employer has the
burden to prove the existence of a reasonable business necessity.
In the case at bar, the Court did not find a reasonable business necessity. Petitioners
sole contention that "the company did not just want to have two (2) or more of its employees
related between the third degree by affinity and/or consanguinity" is lame. That the second
paragraph was meant to give teeth to the first paragraph of the questioned rule is evidently not
the valid reasonable business necessity required by the law.
It is significant to note that in the case at bar, respondents were hired after they were
found fit for the job, but were asked to resign when they married a co-employee. Petitioners
failed to show how the marriage of Simbol, then a Sheeting Machine Operator, to Alma Dayrit,
then an employee of the Repacking Section, could be detrimental to its business operations.
Neither did petitioners explain how this detriment will happen in the case of Wilfreda Comia,
then a Production Helper in the Selecting Department, who married Howard Comia, then a
helper in the cutter-machine. The policy is premised on the mere fear that employees married
to each other will be less efficient. If we uphold the questioned rule without valid justification,
the employer can create policies based on an unproven presumption of a perceived danger at
the expense of an employees right to security of tenure.

RENE M. GOMEZ I BLOCK 2A LAW ON LABOR RELATIONS S/Y 2017-2018

ISSUE:
ROLANDO REVIDAD, ET. AL. VS. NLRC
(G.R. No. 111105, June 27, 1995) 3
May AG & P's in the exercise of management prerogative justifiably and validly lay-
off the petitioners.

RULING:

Yes. The Court found that the temporary lay-off of petitioners is valid and justified. It
has been sufficiently and convincingly established by AG & P before the voluntary arbitrator
that it was suffering financial reverses. Even the rank and file union at AG & P did not contest
the fact that management had been undergoing financial difficulties for the past several years.
Hence, the voluntary arbitrator considered this as an admission that indeed AG & P was
actually experiencing adverse business conditions which would justify the exercise of its
management prerogative to retrench in order to avoid the not so remote possibility of the
closure of the entire business which, in the opinion of the voluntary arbitrator, would in the last
analysis be adverse to both the management and the union.
Second, the voluntary arbitrator's conclusions were premised upon and substantiated by
the audited financial statements and the auditor's reports of AG & P for the years 1987 to 1991.
These, financial statements audited by independent external auditors constitute the normal and
reliable method of proof of the profit and loss performance of a company.
Third, contrary to petitioners' asseverations, proof of actual financial losses incurred by
the company is not a condition sine qua non, for retrenchment. Retrenchment is one of the
economic grounds to dismiss employees, which is resorted to by an employer primarily to avoid
or minimize business losses. The law recognizes this under Article 283 of the Labor Code.
It follows that the employer bears the burden to prove his allegation of economic or
business reverses with clear and satisfactory evidence, it being in the nature of an affirmative
defense. As earlier discussed, we are fully persuaded that the private respondent has been and
is besieged by a continuing downtrend in both its business operations and financial resources,
thus amply justifying its resort to drastic cuts in personnel and costs.
The law in protecting the rights of the laborer authorizes neither oppression nor self-
destruction of the employer. While the Constitution is committed to the policy of social justice
and the protection of the working class, it should not be supposed that every labor dispute will
be automatically decided in favor of labor. Management also has its own rights, which as such
are entitled to respect and enforcement in the interest of simple fair play. Out of its concern for
those with less privileges in life, the Supreme Court has inclined more often than not toward
the worker and upheld his cause with his conflicts with the employer. Such favoritism,
however, has not blinded the Court to rule that justice is in every case for the deserving, to be
dispensed in the light of the established facts and applicable law and doctrine.

RENE M. GOMEZ I BLOCK 2A LAW ON LABOR RELATIONS S/Y 2017-2018

ISSUE:
MERCURY DRUG CORP. VS. NLRC
(G.R. No. 75662, September 15, 1989) 4
May the petitioner validly exercise its right to fire an employee on the grounds of
dishonesty and breach of trust?

RULING:

Yes. The Court finds justification in the termination of private respondent Cesar E.
Ladisla's employment by petitioner Mercury Drug Corporation. Dismissal of a dishonest
employee is to the best interest not only of management but also of labor. As a measure of self-
protection against acts inimical to its interest, a company has the right to dismiss its erring
employees. An employer cannot be compelled to continue in employment an employee guilty
of acts inimical to its interest, justifying loss of confidence in him. The law does not impose
unjust situations on either labor or management.
Under Article 282(c) of the Labor Code, an employer may terminate an employment
for "fraud or willful breach by the employee of the trust reposed in him by his employer or his
duly authorized representative." Loss of confidence is established as a valid ground for the
dismissal of an employee. The law does not require proof beyond reasonable doubt of the
employee's misconduct to invoke such a justification. It is sufficient that there is some basis
for the loss of trust or that the employer has reasonable grounds to believe that the employee is
responsible for the misconduct and his participation therein renders him unworthy of the trust
and confidence demanded of his position.
The law in protecting the rights of the laborer, authorizes neither oppression nor self-
destruction of the employer. While the Constitution is committed to the policy of social justice
and the protection of the working class, it should not be supposed that every labor dispute will
be automatically decided in favor of labor. Management also has its own rights, which, as such,
are entitled to respect and enforcement in the interest of simple fair play. Out of its concern for
those with less privileges in life, the Supreme Court has inclined more often than not toward
the worker and upheld his cause in his conflicts with the employer. Such favoritism, however,
has not blinded the Court to the rule that justice is in every case for the deserving, to be
dispensed in the light of the established facts and applicable law and doctrine.

RENE M. GOMEZ I BLOCK 2A LAW ON LABOR RELATIONS S/Y 2017-2018