General Milling v.
Torres The NLRC dismissed their appeal due to respondent's failure to post the required additional
FACTS: Earl Timothy Cone is a US citizen, who was hired by General Milling as a sports
consultant and assistant coach. He possessed an alien employment permit which was changed
to pre-arranged employee by the Board of Special Inquiry of the Commission on Immigration
and Deportation. GMC requested that Cone’s employment permit be changed to a full-fledged
coach, which was contested by The Basketball Coaches Association of the Philippines. Alleging
that GMC failed to show that there is no competent person in the Philippines to do the coaching
job. Secretary of Labor cancelled Cone’s employment permit.
ISSUE: Whether or not the Secretary of Labor act with grave abuse of discretion in revoking
Cone’s Alien Employment Permit?
HELD: The Secretary of Labor did not act with grave abuse of discretion in revoking Cone’s
Alien Employment Permit. GMC’s claim that hiring of a foreign coach is an employer’s
prerogative has no legal basis. Under Section 40 of the Labor Code, an employer seeking
employment of an alien must first obtain an employment permit from the Department of labor.
GMC’s right to choose whom to employ is limited by the statutory requirement of an
employment permit.
The Labor Code empowers the Labor Secretary to determine as to the availability of the services
of a “person in the Philippines who is competent, able and willing at the time of the application
to perform the services for which an alien is desired.”
McBurnie v. Ganzon
FACTS: On October 4, 2002, Andrew James McBurnie (McBurnie), an Australian national,
instituted a complaint for illegal dismissal and other monetary claims against Eulalio Ganzon,
EGI-Managers, Inc., and E. Ganzon, Inc., (respondents). McBurnie claimed that on May 11,
1999, he signed a 5-year employment agreement with the company EGI as an Executive Vice-
President who shall oversee the management of the company hotels and resorts within the
Philippines. He performed work for the company until sometime in November 1999, when he
figured in an accident that compelled him to go back to Australia while recuperating from his
injuries. While in Australia, he was informed by respondent Ganzon that his services were no
longer needed because their intended project would no longer push through.
The respondents contend that their agreement with McBurnie was to jointly invest in and
establish a company for the management of the hotels. They did not intend to create an
employer-employee relationship, and the execution of the employment contract that was being
invoked by McBurnie was solely for the purpose of allowing McBurnie to obtain an alien work
permit in the Philippines, and that McBurnie had not obtained a work permit.
On September 30, 2004, the Labor Arbiter (LA) declared McBurnie as having been illegally
dismissed from employment. The respondents filed their Memorandum of Appeal and Motion
to Reduce Bond, and posted an appeal bond in the amount of P100,000.00. They claimed that
an award of more than P60 Million Pesos to a single foreigner who had no work permit and who
left the country for good one month after the purported commencement of his employment was
a patent nullity.
On March 31, 2005, the NLRC denied the motion to reduce bond explaining that in cases
involving monetary award, an employer seeking to appeal the LA decision to the Commission
is unconditionally required by Art. 223, Labor Code to post bond equivalent to the monetary
award.
The motion for reconsideration was denied, the respondents appealed to the CA via a Petition
for Certiorari and Prohibition (with extremely urgent prayer for the issuance of a Preliminary
Injunction and/or Temporary Restraining Order) docketed as CA-G.R. SP No. 90845.
bond. The respondents motion for reconsideration was denied on June 30, 2006. This prompted
respondents to filed with the CA the Petition for Certiorari docketed as CA-G.R SP No. 95916,
which was later consolidated with CA-G.R. SP No. 90845
The CA granted the respondent's application for a writ of preliminary injunction on February
16, 2007. It directed the NLRC, McBurnie, and all persons acting for and under their authority
to refrain from causing the execution and enforcement of the LA decision in favor of McBurnie,
conditioned upon the respondents posting of a bond in the amount of P10,000,000.00. The
reconsideration of issuance of the writ of preliminary injunction sought by McBurnie was denied
by the CA.
McBurnie filed with the Supreme Court a Petition for Review on Certiorari (G.R. Nos. 178034
and 178117) assailing the CA resolutions that granted the respondent's; application for the
injunctive writ. On July 4, 2007, the Court denied the petition. A motion for reconsideration
was denied with a finality on October 7, 2007.
McBurnie filed a Motion for Leave (1) To File Supplemental Motion for Reconsideration and
(2) to Admit the Attached Supplemental Motion for Reconsideration, a prohibited pleading
under Section 2, Rule 56 of the Rules of Court. Thus, the motion for leave was denied by the
Court and the July 4, 2007 became final and executor on November 13, 2007.
On October 27, 2008, the CA ruled on the merits of CA-G.R. SP No. 90845 and CA-G.R. SP
No. 95916 and rendered a decision allowing the respondent's motion to reduce appeal bond and
directing the NLRC to give due course to their appeal. The CA also ruled that the NLRC
committed grave abuse of discretion in immediately denying the motion without fixing an
appeal bond in an amount that was reasonable, as it denied the respondents of their right to
appeal from the decision of the LA.
McBurnie filed a motion for reconsideration. The respondents moved that the appeal be resolved
on the merits by the CA. The CA denied both motions. McBurnie then filed with the Supreme
Court the Petition for Review on Certiorari (G.R. Nos. 186984-85)
The NLRC, acting on the CA order of remand, accepted the appeal from the LA decision and
reversed and set aside the decision of the LA, and entered a new on dismissing McBurnie
complaint.
On September 18, 2009, the third division of this court rendered its decision granting
respondents motion to reduce appeal bond. This Court also reinstated and affirmed the NLRC
decision dismissing respondent's appeal for failure to perfect an appeal and denying their motion
for reconsideration. The aforementioned decision became final and executor on March 14, 2012.
The respondents filed a Motion for Leave to File Attached Third Motion for Reconsideration,
with an attached Motion for Reconsideration with Motion to Refer These Cases to the Honorable
Court En Banc. The Court En Banc accepted the case from the third division and issued a
temporary restraining order (TRO) enjoining the implementation of the LA Decision. McBurnie
filed a Motion for Reconsideration where he invoked that the Court September 18, 2009 decision
had become final and executor.
ISSUE: Whether or not McBurnie was illegally dismissed?
HELD: There was no employer-employee relationship.
LABOR LAW: rule on appeal bonds
The crucial issue in this case concerns the sufficiency of the appeal bond that was posted by the
respondents. The present rule on the matter is Section 6, Rule VI of the 2011 NLRC Rules of
Procedure, which was substantially the same provision in effect at the time of the respondents
appeal to the NLRC, and which reads: No motion to reduce bond shall be entertained except on
meritorious grounds and upon the posting of a bond in a reasonable amount in relation to the
monetary award. The filing of the motion to reduce bond without compliance with the requisites
in the preceding paragraph shall not stop the running of the period to perfect an appeal.
While the CA, in this case, allowed an appeal bond in the reduced amount of P10,000,000.00
and then ordered the case remand to the NLRC, this Court Decision dated September 18, 2009
provides otherwise, as it reads in part: While the bond may be reduced upon motion by the
employer, this is subject to the conditions that (1) the motion to reduce the bond shall be based
on meritorious grounds; and (2) a reasonable amount in relation to the monetary award is posted
by the appellant, otherwise the filing of the motion to reduce bond shall not stop the running of
the period to perfect an appeal.The qualification effectively requires that unless the NLRC
grants the reduction of the cash bond within the 10-day reglementary period, the employer is
still expected to post the cash or surety bond securing the full amount within the said 10-day
period.If the NLRC does eventually grant the motion for reduction after the reglementary period
has elapsed, the correct relief would be to reduce the cash or surety bond already posted by the
employer within the 10-day period.
To begin with, the Court rectifies its prior pronouncement the unqualified statement that even
an appellant who seeks a reduction of an appeal bond before the NLRC is expected to post a
cash or surety bond securing the full amount of the judgment award within the 10-day
reglementary period to perfect the appeal.
LABOR LAW: suspension of the period to perfect the appeal upon the filing of a motion to
reduce bond
To clarify, the prevailing jurisprudence on the matter provides that the filing of a motion to
reduce bond, coupled with compliance with the two conditions emphasized in Garcia v. KJ
Commercial for the grant of such motion, namely, (1) a meritorious ground, and (2) posting of
a bond in a reasonable amount, shall suffice to suspend the running of the period to perfect an
appeal from the labor arbiter decision to the NLRC. To require the full amount of the bond
within the 10-day reglementary period would only render nugatory the legal provisions which
allow an appellant to seek a reduction of the bond.
The rule that the filing of a motion to reduce bond shall not stop the running of the period to
perfect an appeal is not absolute. The Court may relax the rule. In Intertranz Container Lines,
Inc. v. Bautista, the Court held: Jurisprudence tells us that in labor cases, an appeal from a
decision involving a monetary award may be perfected only upon the posting of cash or surety
bond.The Court, however, has relaxed this requirement under certain exceptional circumstances
in order to resolve controversies on their merits.These circumstances include: (1) fundamental
consideration of substantial justice; (2) prevention of miscarriage of justice or of unjust
enrichment; and (3) special circumstances of the case combined with its legal merits, and the
amount and the issue involved.
A serious error of the NLRC was its outright denial of the motion to reduce the bond, without
even considering the respondent's arguments and totally unmindful of the rules and
jurisprudence that allow the bond reduction.Instead of resolving the motion to reduce the bond
on its merits, the NLRC insisted on an amount that was equivalent to the monetary award.
When the respondents sought to reconsider, the NLRC still refused to fully decide on the
motion.It refused to at least make a preliminary determination of the merits of the appeal.
LABOR LAW: allowance of the reduction of appeal bonds
Time and again, the Court has cautioned the NLRC to give Article 223 of the Labor Code,
particularly the provisions requiring bonds in appeals involving monetary awards, a liberal
interpretation in line with the desired objective of resolving controversies on the merits.
Although the general rule provides that an appeal in labor cases from a decision involving a
monetary award may be perfected only upon the posting of a cash or surety bond, the Court has
relaxed this requirement under certain exceptional circumstances in order to resolve
controversies on their merits.These circumstances include: (1) the fundamental consideration of
substantial justice; (2) the prevention of miscarriage of justice or of unjust enrichment; and (3)
special circumstances of the case combined with its legal merits, and the amount and the issue
involved. Guidelines that are applicable in the reduction of appeal bonds were also explained in
Nicol v. Footjoy Industrial Corporation. The bond requirement in appeals involving monetary
awards has been and may be relaxed in meritorious cases, including instances in which (1) there
was substantial compliance with the Rules, (2) surrounding facts and circumstances constitute
meritorious grounds to reduce the bond, (3) a liberal interpretation of the requirement of an
appeal bond would serve the desired objective of resolving controversies on the merits, or (4)
the appellants, at the very least, exhibited their willingness and/or good faith by posting a partial
bond during the reglementary period.
It is in this light that the Court finds it necessary to set a parameter for the litigantsand the NLRC
guidance on the amount of bond that shall hereafter be filed with a motion for a bond
reduction.To ensure that the provisions of Section 6, Rule VI of the NLRC Rules of Procedure
that give parties the chance to seek a reduction of the appeal bond are effectively carried out,
without however defeating the benefits of the bond requirement in favor of a winning litigant,
all motions to reduce bond that are to be filed with the NLRC shall be accompanied by the
posting of a cash or surety bond equivalent to 10% of the monetary award that is subject of the
appeal, which shall provisionally be deemed the reasonable amount of the bond in the meantime
that an appellant motion is pending resolution by the Commission.In conformity with the NLRC
Rules, the monetary award, for the purpose of computing the necessary appeal bond, shall
exclude damages and attorney fees. Only after the posting of a bond in the required percentage
shall an appellant period to perfect an appeal under the NLRC Rules be deemed suspended.
The foregoing shall not be misconstrued to unduly hinder the NLRC exercise of its discretion,
given that the percentage of bond that is set by this guideline shall be merely provisional. The
NLRC retains its authority and duty to resolve the motion and determine the final amount of
bond that shall be posted by the appellant, still in accordance with the standards of meritorious
grounds and reasonable amount Should the NLRC, after considering the motion merit,
determine that a greater amount or the full amount of the bond needs to be posted by the
appellant, then the party shall comply accordingly.The appellant shall be given a period of 10
days from notice of the NLRC order within which to perfect the appeal by posting the required
appeal bond.
LABOR LAW: employment permit for non-resident aliens; illegal dismissal
Considering that McBurnie, an Australian, alleged illegal dismissal and sought to claim under
our labor laws, it was necessary for him to establish, first and foremost, that he was qualified
and duly authorized to obtain employment within our jurisdiction.A requirement for foreigners
who intend to work within the country is an employment permit, as provided under Article 40,
Title II of the Labor Code.
In WPP Marketing Communications, Inc. v. Galera, we held that a foreign national failure to
seek an employment permit prior to employment poses a serious problem in seeking relief from
the Court.
Clearly, this circumstance on the failure of McBurnie to obtain an employment permit, by itself,
necessitates the dismissal of his labor complaint.
McBurnie failed to present any employment permit which would have authorized him to obtain
employment in the Philippines.This circumstance negates McBurnie claim that he had been
performing work for the respondents by virtue of an employer-employee relationship.The
absence of the employment permit instead bolsters the claim that the supposed employment of
McBurnie was merely simulated, or did not ensue due to the non-fulfillment of the conditions
that were set forth in the letter of May 11, 1999.
McBurnie failed to present other competent evidence to prove his claim of an employer-
employee relationship. iven the partiesconflicting claims on their true intention in executing the
agreement, it was necessary to resort to the established criteria for the determination of an
employer-employee relationship, namely: (1) the selection and engagement of the employee;
(2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee
conduct. The rule of thumb remains: the onus probandi falls on the claimant to establish or
substantiate the claim by the requisite quantum of evidence.Whoever claims entitlement to the
benefits provided by law should establish his or her right thereto. McBurnie failed in this
regard.As previously observed by the NLRC, McBurnie even failed to show through any
document such as payslips or vouchers that his salaries during the time that he allegedly worked
for the respondents were paid by the company. In the absence of an employer-employee
relationship between McBurnie and the respondents, McBurnie could not successfully claim
that he was dismissed, much less illegally dismissed, by the latter.Even granting that there was
such an employer-employee relationship, the records are barren of any document showing that
its termination was by the respondentsdismissal of McBurnie.
The motion for reconsideration filed on September 26, 2012 by petitioner Andrew James
McBurnie is DENIED.
The motion for reconsideration filed on March 27, 2012 by respondents Eulalio Ganzon, EGI-
Managers, Inc. and E. Ganzon, Inc. is GRANTED.
The Entry of Judgment issued in G.R. Nos. 186984-85 is LIFTED.
The complaint for illegal dismissal is DISMISSED.
WPP Marketing Comm. Inc v. Galera
FACTS: Petitioner is Jocelyn Galera (GALERA), an American citizen who was recruited from
the United States of America by private respondent John Steedman, Chairman-WPP Worldwide
and Chief Executive Officer of Mindshare, Co., a corporation based in Hong Kong, China, to
work in the Philippines for private respondent WPP Marketing Communications, Inc. (WPP), a
corporation registered and operating under the laws of Philippines.
Employment of GALERA with private respondent WPP became effective on September 1, 1999
solely on the instruction of the CEO and upon signing of the contract, without any further action
from the Board of Directors of private respondent WPP.
Four months had passed when private respondent WPP filed before the Bureau of Immigration
an application for petitioner GALERA to receive a working visa, wherein she was designated
as Vice President of WPP. Petitioner alleged that she was constrained to sign the application in
order that she could remain in the Philippines and retain her employment.
On December 14, 2000, petitioner GALERA alleged she was verbally notified by private
respondent STEEDMAN that her services had been terminated from private respondent WPP.
A termination letter followed the next day. Thus, a complaint for illegal dismissal was filed
against WPP.
The LA held that WPP, Steedman, Webster, and Lansang liable for illegal dismissal and
damages. Arbiter Madriaga stated that Galera was not only illegally dismissed but was also not
accorded due process. The NLRC reversed the LA decision. The NLRC stressed that Galera
was WPPs Vice-President, and therefore, a corporate officer at the time she was removed by the
Board of Directors. Such being the case, the imperatives of law require that we hold that the
Arbiter below had no jurisdiction over Galeras case as, again, she was a corporate officer at the
time of her removal.
On appeal, the CA reversed the NLRC decision. It ruled that a person could be considered a
"corporate officer" only if appointed as such by a corporations Board of Directors, or if pursuant
to the power given them by either the Articles of Incorporation or the By-Laws.
ISSUE: Does the LA have jurisdiction over the case?
HELD: Under Section 25 of the Corporation Code, the corporate officers are the president,
secretary, treasurer and such other officers as may be provided in the by-laws.
An examination of WPPs by-laws resulted in a finding that Galeras appointment as a corporate
officer (Vice-President with the operational title of Managing Director of Mindshare) during a
special meeting of WPP's Board of Directors is an appointment to a non-existent corporate
office. WPPs by-laws provided for only one Vice-President. At the time of Galeras appointment
on 31 December 1999, WPP already had one Vice-President in the person of Webster. Galera
cannot be said to be a director of WPP also because all five directorship positions provided in
the by-laws are already occupied. Finally, WPP cannot rely on its Amended By-Laws to support
its argument that Galera is a corporate officer. The Amended By-Laws provided for more than
one Vice-President and for two additional directors. Even though WPPs stockholders voted for
the amendment on 31 May 2000, the SEC approved the amendments only on 16 February 2001.
Galera was dismissed on 14 December 2000. WPP, Steedman, Webster, and Lansang did not
present any evidence that Galeras dismissal took effect with the action of WPP's Board of
Directors.
Galera being an employee, then the Labor Arbiter and the NLRC have jurisdiction over the
present case.
***
WPPs dismissal of Galera lacked both substantive and procedural due process. Apart from
Steedman's letter dated 15 December 2000 to Galera, WPP failed to prove any just or authorized
cause for Galeras dismissal.
The law further requires that the employer must furnish the worker sought to be dismissed with
two written notices before termination of employment can be legally effected: (1) notice which
apprises the employee of the particular acts or omissions for which his dismissal is sought; and
(2) the subsequent notice which informs the employee of the employers decision to dismiss him.
Failure to comply with the requirements taints the dismissal with illegality. WPPs acts clearly
show that Galeras dismissal did not comply with the two-notice rule.
***
The employment permit must be acquired prior to employment.
The law and the rules are consistent in stating that the employment permit must be acquired
prior to employment. The Labor Code states: "Any alien seeking admission to the Philippines
for employment purposes and any domestic or foreign employer who desires to engage an alien
for employment in the Philippines shall obtain an employment permit from the Department of
Labor."
Galera cannot come to this Court with unclean hands. To grant Galeras prayer is to sanction the
violation of the Philippine labor laws requiring aliens to secure work permits before their
employment. We hold that the status quo must prevail in the present case and we leave the
parties where they are. Hence, Galera is not entitled to monetary awards. This ruling, however,
does not bar Galera from seeking relief from other jurisdictions.
Nitto Enterprises v. NLRC
Facts: Petitioner, a company engaged in the sale of glass and aluminum products, hired Roberto
Capili sometime in May 1990 as an apprentice machinist, molder and core maker, for a period
of six (6) months from May 28, 1990 to November 28, 1990 with a daily wage rate of P66.75
which was 75% of the applicable minimum wage.
On August 2, he accidentally hit and injured the leg of an office secretary who was treated at a
nearby hospital. In the afternoon of the same day he operated one of the power press machines
without authority and in the process injured his left thumb, prompting the petitioner to shoulder
the medical expenses.
The next day, Capili was made to sign a Quit Claim and Release in favor of the petitioner and
received P1, 912.79 as his salary for the five days that he was unable to work due to his injury.
But three days after, he filed an illegal dismissal complaint and demanded monetary
consideration thereof before the Arbitration Branch of the National Labor Relations
Commission in the National Capital Region.
But the Labor Arbiter dismissed his complaint citing two reasons: that private respondent who
was hired as an apprentice violated the terms of their agreement when he acted with gross
negligence resulting in the injury not only to himself but also to his fellow worker. And that
private respondent had shown that "he does not have the proper attitude in employment
particularly the handling of machines without authority and proper training.”
However, on July 26, 1993, the National Labor Relations Commission reversed the decision of
the Labor Arbiter and ordered for the reinstatement of Capili and that he must be given his back
wages which shall be computed from the time his wages were withheld up to the time he is
actually reinstated.
Thus, Nito Enterprises filed a certiorari against NLRC alleging that the Commission committed
grave abuse of discretion in reversing the Labor Arbiter’s decision and in holding that the
petitioner failed to prove a valid cause in the dismissal of Capili.
Issues: Whether or not there was employer-apprentice relationship between petitioner and
private respondent.
Whether or not NLRC committed grave abuse of discretion in reversing the decision of the labor
arbiter for failure to provide valid cause.
Held: Supreme Court ruled there was no employer-apprentice relationship between petitioner
and private respondent because the former failed to follow the guidelines set forth under Art 61
of the Labor Code to wit: Apprenticeship agreements, including the main rates of apprentices,
shall conform to the rules issued by the Minister of Labor and Employment. The period of
apprenticeship shall not exceed six months. Apprenticeship agreements providing for wage rates
below the legal minimum wage, which in no case shall start below 75% per cent of the applicable
minimum wage, may be entered into only in accordance with apprenticeship program duly
approved by the Minister of Labor and Employment. The Ministry shall develop standard model
programs of apprenticeship.
In the case at bar, the Court found out that the apprenticeship program was prepared by petitioner
and submitted to the Department of Labor and Employment on the day private respondent was
hired and this was filed on June 7, 1990. However, such program was not yet approved by the
Department of Labor and Employment, but it was enforced the day it was signed. The Court
said the apprenticeship program was null and void because prior approval is a condition sine
qua non or indispensable. The act of finding the apprenticeship program was only the first step
towards acquiring approval from the Department of Labor and Employment. Thus the Court
gave weight to the claim of private respondent that he was hired as a kargador, his employment
status thereof will fall under Art. 280 of the Labor Code regarding Regular and Casual
Employment. — The provisions of written agreement to the contrary notwithstanding and
regardless of the oral agreement of the parties, an employment shall be deemed to be regular
where the employee has been engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer, except where the employment has been
fixed for a specific project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the duration of the season.
On the petitioner’s claim that there was valid cause in the dismissal of private respondent, the
Court believed otherwise. It said that, the fact that private respondent filed a complaint only
three days after he was made to sign to a Quit Claim and Release meant that the dismissal was
deliberate and not voluntary. Such move by the petitioner the Court said was against the twin
requirements of notice and hearing constitute which are essential elements of due process. Such
requirements mean that employer shall afford the worker ample opportunity to be heard and to
defend himself with the assistance of his representative, if he so desires. Ample opportunity
connotes every kind of assistance that management must accord the employee to enable him to
prepare adequately for his defense including legal representation.
Thus, finding no abuse of discretion, the Court dismissed the petition and upheld the decision
of NLRC.
Century Canning Corp. v. CA
Facts: On 15 July 1997, Century Canning Corporation (petitioner) hired Gloria C. Palad (Palad)
as “fish cleaner” at petitioner’s tuna and sardines factory. Palad signed on 17 July 1997 an
apprenticeship agreement with petitioner. Palad received an apprentice allowance of P138.75
daily. On 25 July 1997, petitioner submitted its apprenticeship program for approval to the
Technical Education and Skills Development Authority (TESDA) of the Department of Labor
and Employment (DOLE). On 26 September 1997, the TESDA approved petitioner’s
apprenticeship program.
According to petitioner, a performance evaluation was conducted on 15 November 1997, where
petitioner gave Palad a rating of N.I. or “needs improvement” since she scored only 27.75%
based on a 100% performance indicator. Furthermore, according to the performance evaluation,
Palad incurred numerous tardiness and absences. As a consequence, petitioner issued a
termination notice5 dated 22 November 1997 to Palad, informing her of her termination
effective at the close of business hours of 28 November 1997.
Palad then filed a complaint for illegal dismissal, underpayment of wages, and non-payment of
pro-rated 13th month pay for the year 1997.
The Labor Arbiter dismissed the complaint for lack of merit but ordered petitioner to pay Palad
her last salary and her pro-rated 13th month pay.
On appeal, the National Labor Relations Commission (NLRC) affirmed with modification the
Labor Arbiter’s decision, thus:
WHEREFORE, premises considered, the decision of the Arbiter dated 25 February 1999 is
hereby MODIFIED in that, in addition, respondents are ordered to pay complainant’s
backwages for two (2) months in the amount of P7,176.00 (P138.75 x 26 x 2 mos.). All other
dispositions of the Arbiter as appearing in the dispositive portion of his decision are
AFFIRMED.
Upon denial of Palad’s motion for reconsideration, Palad filed a special civil action for certiorari
with the Court of Appeals. On 12 November 2001, the Court of Appeals rendered a decision,
the dispositive portion of which reads:
WHEREFORE, in view of the foregoing, the questioned decision of the NLRC is hereby SET
ASIDE and a new one entered, to wit:
(a) finding the dismissal of petitioner to be illegal;
(b) ordering private respondent to pay petitioner her underpayment in wages;
(c) ordering private respondent to reinstate petitioner to her former position without loss of
seniority rights and to pay her full backwages computed from the time compensation was
withheld from her up to the time of her reinstatement;
(d) ordering private respondent to pay petitioner attorney’s fees equivalent to ten (10%) per cent
of the monetary award herein; and
(e) ordering private respondent to pay the costs of the suit.
CA: CA held that the apprenticeship agreement which Palad signed was not valid and binding
because it was executed more than two months before the TESDA approved petitioner’s
apprenticeship program.
The CA also held that petitioner illegally dismissed Palad. The CA ruled that petitioner failed
to show that Palad was properly apprised of the required standard of performance. The Court of
Appeals likewise held that Palad was not afforded due process because petitioner did not comply
with the twin requirements of notice and hearing.
Issues: WHETHER OR NOT THE PRIVATE RESPONDENT WAS AN APPRENTICE; and
WHETHER THERE WAS A VALID CAUSE IN TERMINATING THE SERVICE OF
PRIVATE RESPONDENT.
Ruling: The petition is without merit.
Registration and Approval by the TESDA of Apprenticeship Program Required Before Hiring
of Apprentices
In the case at bench, the apprenticeship agreement between petitioner and private respondent
was executed on May 28, 1990 allegedly employing the latter as an apprentice in the trade of
“care maker/molder.” On the same date, an apprenticeship program was prepared by petitioner
and submitted to the Department of Labor and Employment. However, the apprenticeship
agreement was filed only on June 7, 1990. Notwithstanding the absence of approval by the
Department of Labor and Employment, the apprenticeship agreement was enforced the day it
was signed.
Prior approval by the Department of Labor and Employment of the proposed apprenticeship
program is, therefore, a condition sine qua non before an apprenticeship agreement can be
validly entered into.
The act of filing the proposed apprenticeship program with the Department of Labor and
Employment is a preliminary step towards its final approval and does not instantaneously give
rise to an employer-apprentice relationship.
Hence, since the apprenticeship agreement between petitioner and private respondent has no
force and effect in the absence of a valid apprenticeship program duly approved by the DOLE,
private respondent’s assertion that he was hired not as an apprentice but as a delivery boy
(“kargador” or “pahinante”) deserves credence. He should rightly be considered as a regular
employee of petitioner as defined by Article 280 of the Labor Code x x x.
Republic Act No. 779615 (RA 7796), which created the TESDA, has transferred the authority
over apprenticeship programs from the Bureau of Local Employment of the DOLE to the
TESDA. RA 7796 emphasizes TESDA’s approval of the apprenticeship program as a pre-
requisite for the hiring of apprentices.
Since Palad is not considered an apprentice because the apprenticeship agreement was enforced
before the TESDA’s approval of petitioner’s apprenticeship program, Palad is deemed a regular
employee performing the job of a “fish cleaner.” Clearly, the job of a “fish cleaner” is necessary
in petitioner’s business as a tuna and sardines factory. Under Article 28021 of the Labor Code,
an employment is deemed regular where the employee has been engaged to perform activities
which are usually necessary or desirable in the usual business or trade of the employer.
Illegal Termination of Palad
To constitute valid dismissal from employment, two requisites must concur: (1) the dismissal
must be for a just or authorized cause; and (2) the employee must be afforded an opportunity to
be heard and to defend himself.
When the alleged valid cause for the termination of employment is not clearly proven, as in this
case, the law considers the matter a case of illegal dismissal.
Furthermore, Palad was not accorded due process. Even if petitioner did conduct a performance
evaluation on Palad, petitioner failed to warn Palad of her alleged poor performance. In fact,
Palad denies any knowledge of the performance evaluation conducted and of the result thereof.
Petitioner likewise admits that Palad did not receive the notice of termination because Palad
allegedly stopped reporting for work. The records are bereft of evidence to show that petitioner
ever gave Palad the opportunity to explain and defend herself. Clearly, the two requisites for a
valid dismissal are lacking in this case.
WHEREFORE, we AFFIRM the Decision and the Resolution of the Court of Appeals.
Bernardo et al v. NLRC
Facts: Petitioners numbering 43 are deaf–mutes who were hired on various periods from 1988
to 1993 by respondent Far East Bank and Trust Co. as Money Sorters and Counters through a
uniformly worded agreement called ‘Employment Contract for Handicapped Workers.
Subsequently, they are dismissed.
Petitioners maintain that they should be considered regular employees, because their task as
money sorters and counters was necessary and desirable to the business of respondent bank.
They further allege that their contracts served merely to preclude the application of Article 280
and to bar them from becoming regular employees.
Private respondent, on the other hand, submits that petitioners were hired only as “special
workers and should not in any way be considered as part of the regular complement of the
Bank.” Rather, they were “special” workers under Article 80 of the Labor Code.
Issue: WON petitioners have become regular employees.
Held: The uniform employment contracts of the petitioners stipulated that they shall be trained
for a period of one month, after which the employer shall determine whether or not they should
be allowed to finish the 6-month term of the contract. Furthermore, the employer may terminate
the contract at any time for a just and reasonable cause. Unless renewed in writing by the
employer, the contract shall automatically expire at the end of the term.
Respondent bank entered into the aforesaid contract with a total of 56 handicapped workers and
renewed the contracts of 37 of them. In fact, two of them worked from 1988 to 1993. Verily,
the renewal of the contracts of the handicapped workers and the hiring of others lead to the
conclusion that their tasks were beneficial and necessary to the bank. More important, these
facts show that they were qualified to perform the responsibilities of their positions. In other
words, their disability did not render them unqualified or unfit for the tasks assigned to them.
In this light, the Magna Carta for Disabled Persons mandates that a qualified disabled employee
should be given the same terms and conditions of employment as a qualified able-bodied person.
Section 5 of the Magna Carta provides:
“Section 5. Equal Opportunity for Employment.—No disabled person shall be denied
access to opportunities for suitable employment. A qualified disabled employee shall be
subject to the same terms and conditions of employment and the same compensation,
privileges, benefits, fringe benefits, incentives or allowances as a qualified able bodied
person.”
The fact that the employees were qualified disabled persons necessarily removes the
employment contracts from the ambit of Article 80. Since the Magna Carta accords them the
rights of qualified able-bodied persons, they are thus covered by Article 280 of the Labor Code,
which provides:
“ART. 280. Regular and Casual Employment. — The provisions of written agreement to
the contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or trade of
the employer, x x x”
“The primary standard, therefore, of determining regular employment is the reasonable
connection between the particular activity performed by the employee in relation to the usual
trade or business of the employer. The test is whether the former is usually necessary or
desirable in the usual business or trade of the employer. The connection can be determined by
considering the nature of the work performed and its relation to the scheme of the particular
business or trade in its entirety. Also if the employee has been performing the job for at least
one year, even if the performance is not continuous and merely intermittent, the law deems
repeated and continuing need for its performance as sufficient evidence of the necessity if not
indispensability of that activity to the business. Hence, the employment is considered regular,
but only with respect to such activity, and while such activity exists.”
Respondent bank entered into the aforesaid contract with a total of 56 handicapped workers and
renewed the contracts of 37 of them. In fact, two of them worked from 1988 to 1993. Verily,
the renewal of the contracts of the handicapped workers and the hiring of others lead to the
conclusion that their tasks were beneficial and necessary to the bank. More important, these
facts show that they were qualified to perform the responsibilities of their positions. In other
words, their disability did not render them unqualified or unfit for the tasks assigned to them.
Without a doubt, the task of counting and sorting bills is necessary and desirable to the business
of respondent bank. With the exception of sixteen of them, petitioners performed these tasks
for more than six months.
Labor Congress of Ph v. NLRC
Facts: The 99 persons (Ana Marie Ocampo, Mary Intal, et al) as private petitioners in the
proceeding (represented by the Labor Congress of the Phils.) were rank-and-file employees of
private respondent Empire Food Products (a food and fruit processing company), hired on
various dates.
Ocampo et al filed against Empire an NLRC complaint for payment of money claims and for
violation of labor standards laws. Alongside this they also filed a petition for direct certification
for the Labor Congress to be their bargaining representative. On Oct. 23, 1990, petitioners
represented by LCP, and private respondents Gonzalo and Evelyn Kehyeng (Kehyeng spouses)
entered into a Memorandum of Agreement, recognizing the following:
• Status of LCP as sole and exclusive Bargaining Agent and Representative for all rank and file
employees of the Empire Food Products regarding "wages, hours of work, and other terms and
conditions of employment";
• With regard to the NLRC complaint, all parties agree to resolve the issues during the Collective
Bargaining Agreement;
• Proper adjustment of wages, withdrawal of case from the Calendar of NLRC, non-interference
or any ULP act, etc.
On Oct. 24, 1990, the Mediator Arbiter approved the memorandum and certified LCP as the
sole and exclusive bargaining agent for the rank-and-file employees of Empire.
On November 1990, LCP President Navarro submitted to Empire a proposal for collective
bargaining. However, on January 1991, the private petitioners Ana Marie et al filed a complaint
for:
• Unfair Labor Practices via Illegal Lockout and Dismissal;
• Union-Busting through harassment, threats and interference to the right for self-organization;
• Violation of the Oct. 23, 1990 memorandum
• Underpayment of wages
• Actual, moral and exemplary damages
Labor Arbiter (Part 1):
• Absolved Empire for ULP, union busting, violation of the memorandum of agreement,
underpayment of wages and denied petitioners' prayer for actual, moral and exemplary damages.
• Denied prayer for actual, moral and exemplary damages
• Directed reinstatement of complainants, due to the fact that Empire did not keep its payroll
records as per requirement of the DOLE. Admonition to Empire given as well re: further
harassment and intimidation.
NLRC (Part 1):
• Remanded case to Labor Arbiter for further proceedings due to overlooking “…the testimonies
of some of the individual complainants which are now on record”.
Labor Arbiter (Part 2):
• Complainants failed to present with definiteness and clarity the particular act or acts
constitutive of unfair labor practice.
• Declaration of ULP connotes a finding of prima facie evidence of probability that a criminal
offense may have been committed so as to warrant the filing of a criminal information before
the regular court.
• As regards the issue of harassment, threats and interference with the rights of employees to
self-organization which is actually an ingredient of unfair labor practice, complainants failed to
specify what type of threats or intimidation was committed and who committed the same.
NLRC (Part 2):
• Affirmed LA decision Part 2.
Petitioners:
• The fact that they are piece workers does not imply that they are not regular employees entitled
for reinstatement.
• LA and NLRC decisions were not supported by substantial evidence;
• Abandonment of work was not proved by substantial evidence;
• Much credit given to the Kehyeng spouses’ self-serving arguments.
Respondents:
• Ana Marie, et al were piece workers hence they are exempt from labor standards benefits
Issues:
1. WON the petitioners are entitled to labor standard benefits, considering their status as piece
rate workers.
2. WON the actions of Ana Marie, et al constituted abandonment of work.
Held:
1. YES, petitioners are entitled to labor standards benefits, namely, holiday pay, premium pay,
13th month pay and service incentive leave.
2. NO, failure to appear to work did not constitute abandonment
Ratio: Supreme Court decision cites that Ana Marie, et al, despite being “pakyao” or piece
workers does not imply that they are not regular employees entitled to reinstatement. Applying
the two-fold test from LC Article 286(n) [Art. 280 (old)], the SC found that the supposedly piece
workers had three factors in their favor:
a) The nature of the tasks of Ana Marie, et al of repacking snack food items was NECESSARY
and DESIRABLE in the usual business of Empire Foods, which is a food and fruit processing
company. According to Tabas vs California Manufacturing, merchandisers of processed food
who coordinates for sales of processed food was a necessity and was desirable for the day-to-
day operations of a food processing company. With more reason would the job of food packers
be necessary for the day-to-day operations of a food processing plant.
b) Ana Marie et al worked throughout the year, with their employment being independent from
a specific project or season.
c) The length of time that petitioners fulfilled the requirement of Article 286(n).
Therefore, the SC considered the employees as regular employees despite their status as piece
workers, according them benefits such as holiday pay, premium pay, 13th month pay and service
incentive leave.
The Rules Implementing the Labor Code exclude certain employees from receiving benefits
such as nighttime pay, holiday pay, service incentive leave and 13th month pay, inter alia, "field
personnel and other employees whose time and performance is unsupervised by the employer,
including those who are engaged on task or contract basis, purely commission basis, or those
who are paid a fixed amount for performing work irrespective of the time consumed in the
performance thereof." However, petitioners as piece-rate workers do not fall within this group.
Not only did the employees labor under the control of Empire, the employees also worked
throughout the year to fulfil their quota as “basis for compensation”.
Further, in Section 8 (b), Rule IV, Book III, piece workers are specifically mentioned as being
entitled to holiday pay.
Sec. 8. Holiday pay of certain employees.
(b) Where a covered employee is paid by results or output, such as payment on piece
work, his holiday pay shall not be less than his average daily earnings for the last seven (7)
actual working days preceding the regular holiday: Provided, however, that in no case shall
the holiday pay be less than the applicable statutory minimum wage rate.
In addition, the Revised Guidelines on the Implementation of the 13th Month Pay Law, in view
of the modifications to P.D. No. 851 19 by Memorandum Order No. 28, clearly exclude the
employer of piece rate workers from those exempted from paying 13th month pay, to wit:
2. EXEMPTED EMPLOYERS - The following employers are still not covered by P.D. No. 851:
d. Employers of those who are paid on purely commission, boundary or task basis, and those
who are paid a fixed amount for performing specific work, irrespective of the time consumed in
the performance thereof, except where the workers are paid on piece-rate basis in which case
the employer shall grant the required 13th month pay to such workers.
However, the Revised Guidelines as well as the Rules and Regulations identify those workers
who fall under the piece-rate category as those who are paid a standard amount for every piece
or unit of work produced that is more or less regularly replicated, without regard to the time
spent in producing the same.
They should also be paid for overtime pay, even though Sec. 2(e), Rule I, Book III of the
Implementing Rules states that:
“…workers who are paid by results including those who are paid on piece-work, takay, pakiao,
or task basis, if their output rates are in accordance with the standards prescribed under Sec. 8,
Rule VII, Book III, of these regulations, or where such rates have been fixed by the Secretary
of Labor in accordance with the aforesaid section, are not entitled to receive overtime pay.”
In this case, Empire Foods did not allege that they adhered
 to
 the
 standards
 set
forth
 in
 Sec. 8, Rule VII, Book III,
nor
 with
 the
 rates
 prescribed
 by
 the
 Secretary
 of
 Labor. Therefore, even though
they are piece workers, they are entitled to overtime pay
With regard to the issue of abandonment of work, the SC cited the Office of Solicitor General’s
observations:
In finding that petitioner employees abandoned their work, the Labor Arbiter and the NLRC
relied on the testimony of Security Guard Rolando Cairo that on January 21, 1991, petitioners
refused to work. As a result of their failure to work, the cheese curls ready for repacking on said
date were spoiled…
… The failure to work for one day, which resulted in the spoilage of cheese curls does not
amount to abandonment of work. In fact two (2) days after the reported abandonment of work
or on January 23, 1991, petitioners filed a complaint for, among others, unfair labor practice,
illegal lockout and/or illegal dismissal.
Furthermore, the SC stressed that the burden of proving the existence of just cause for dismissing
an employee, such as abandonment, rests on the employer. According to the SC, Empire Foods
failed to discharge this burden as basis for dismissing the employees.
Also, the SC considered that, in terminating the employees for abandonment of work, Empire
failed to serve to the employees a written notice of termination (as required by the Two-Notice
rule and Section 2, Rule XIV, Book V of the Omnibus Rules), violating the employees’ right to
security of tenure and the constitutional right to due process.
Lambo v. NLRC
Facts: Petitioners were employed as tailors by private respondents. They worked from 8AM to
7PM daily with a regular income of Php 64.00. Eventually, petitioners filed a complaint against
private respondents for illegal dismissal. Petitioners sought to recover overtime pay, holiday
pay, premium pay on holidays and rest days, service incentive leave pay, separation pay, 13th
month pay, and attorney’s fees. Adter hearing the case, the Labor Arbiter decided in favor of
the petitioners.
However, upon appeal with NLRC, it was found out that petitioners were not actually dismissed
but were threatened with a closure of the business if they insisted to demand their “straight
payment of minimum wage.” Afterwards, the petitioners walked-out from the meeting. Thus,
NLRC set aside the Labor Arbiter’s decision and instead held the petitioners guilty of
abandonment of work which resulted to the dismissal of the said monetary claims.
Issue: Are petitioners entitled to the monetary claims and benefits?
Ruling: Yes. The Court finds merit in the contentions of the petitioners that they were illegally
dismissed and, therefore, should be entitled to all the monetary benefits that they are claiming
for. Such decision is based on the following grounds: There is an existing employer-employee
relationship between the two parties because of the capacity of the private respondents to control
the employee’s work conduct. It is established that the petitioners were required to regularly
report for work within the premises on the private-respondent’s establishment at a specific
schedule for more than a year. Due to the establishment of the employer-employee relationship,
and that it was further seen that the employees were illegally dismissed, it is just right to award
them the said pays. Therefore, the Court decided in favor of the petitioners and affirmed the
Labor Arbiter’s decision with the exception of including the attorney’s fees in the computation.
McLeod v. NLRC
FACTS: On February 2, 1995, John F. McLeod filed a complaint for retirement benefits,
vacation and sick leave benefits and other benefits against Filipinas Synthetic Corporation
(Filsyn), Far Eastern Textile Mills, Inc., Sta. Rosa Textiles, Inc., Complainant was the former
VP and Plant Manager of Peggy Mills, Inc.; that he was hired in June 1980 and Peggy Mills
closed operations due to irreversible losses but its assets were acquired by Sta. Rosa Textile
Corporation complainant was hired by Sta. Rosa Textile but he resigned and that while
complainant was Vice President and Plant Manager of Peggy Mills, the union staged a strike up
to July 1992 resulting in closure of operations due to irreversible losses as per Notice .The
complainant was relied upon to settle the labor problem but due to his lack of attention and
absence the strike continued resulting in closure of the company. Mcleod contends that the
corporations are solidarily liable. On 3 April 1998, the Labor Arbiter rendered his decision in
favor of Mcleod The NLRC – Reversed decision CA- Modified the NLRC’s decision. Lim was
solidarily liable
Issues: whether there is merger/ consolidation;
w/n Patricio Lim must be solidarily liable with PMI
Held: There was also no merger or consolidation of PMI and SRTI. Consolidation is the union
of two or more existing corporations to form a new corporation called the consolidated
corporation. It is a combination by agreement between two or more corporations by which their
rights, franchises, and property are united and become those of a single, new corporation,
composed generally, although not necessarily, of the stockholders of the original corporations.
Merger, on the other hand, is a union whereby one corporation absorbs one or more existing
corporations, and the absorbing corporation survives and continues the combined business.
The parties to a merger or consolidation are called constituent corporations. In consolidation,
all the constituents are dissolved and absorbed by the new consolidated enterprise. In merger,
all constituents, except the surviving corporation, are dissolved. In both cases, however, there
is no liquidation of the assets of the dissolved corporations, and the surviving or consolidated
corporation acquires all their properties, rights and franchises and their stockholders usually
become its stockholders. The surviving or consolidated corporation assumes automatically the
liabilities of the dissolved corporations, regardless of whether the creditors have consented or
not to such merger or consolidation.27 In the present case, there is no showing that the subject
dation in payment involved any corporate merger or consolidation. Neither is there any showing
of those indicative factors that SRTI is a mere instrumentality of PMI.
Moreover, SRTI did not expressly or impliedly agree to assume any of PMI’s debts. 2. In the
present case, there is nothing substantial on record to show that Patricio acted in bad faith in
terminating McLeod’s services to warrant Patricio’s personal liability. PMI had no other choice
but to stop plant operations. The work stoppage therefore was by necessity. The company could
no longer continue with its plant operations because of the serious business losses that it had
suffered. The mere fact that Patricio was president and director of PMI is not a ground to
conclude that he should be held solidarily liable with PMI for McLeod’s money claims.
The ruling in A.C. Ransom Labor Union-CCLU v. NLRC,59 which the Court of Appeals cited,
does not apply to this case. We quote pertinent portions of the ruling, thus:
(a) Article 265 of the Labor Code, in part, expressly provides: "Any worker whose employment
has been terminated as a consequence of an unlawful lockout shall be entitled to reinstatement
with full backwages."
Article 273 of the Code provides that: "Any person violating any of the provisions of Article
265 of this Code shall be punished by a fine of not exceeding five hundred pesos and/or
imprisonment for not less than one (1) day nor more than six (6) months."
(b) How can the foregoing provisions be implemented when the employer is a corporation? The
answer is found in Article 212 (c) of the Labor Code which provides: "(c) ‘Employer’ includes
any person acting in the interest of an employer, directly or indirectly. The term shall not include
any labor organization or any of its officers or agents except when acting as employer.". The
foregoing was culled from Section 2 of RA 602, the Minimum Wage Law. Since RANSOM is
an artificial person, it must have an officer who can be presumed to be the employer, being the
"person acting in the interest of (the) employer" RANSOM. The corporation, only in the
technical sense, is the employer. The responsible officer of an employer corporation can be held
personally, not to say even criminally, liable for non-payment of back wages. That is the policy
of the law.