Serrano vs. NLRC / ISETANN - GR No.

117040 Case Digest

FACTS:

Serrano was a regular employee of Isetann Department Store as the head of Security Checker. In 1991, as a cost-cutting
measure, Isetann phased out its entire security section and engaged the services of an independent security agency.
Petitioner filed a complaint for illegal dismissal among others. Labor arbiter ruled in his favor as Isetann failed to establish
that it had retrenched its security section to prevent or minimize losses to its business; that private respondent failed to
accord due process to petitioner; that private respondent failed to use reasonable standards in selecting employees
whose employment would be terminated. NLRC reversed the decision and ordered petitioner to be given separation pay.

ISSUE:

Whether or not the hiring of an independent security agency by the private respondent to replace its current security
section a valid ground for the dismissal of the employees classed under the latter.

RULING:

An employer’s good faith in implementing a redundancy program is not necessarily put in doubt by the availment of the
services of an independent contractor to replace the services of the terminated employees to promote economy and
efficiency. Absent proof that management acted in a malicious or arbitrary manner, the Court will not interfere with the
exercise of judgment by an employer.

If termination of employment is not for any of the cause provided by law, it is illegal and the employee should be reinstated
and paid backwages. To contend that even if the termination is for a just cause, the employee concerned should be
reinstated and paid backwages would be to amend Art 279 by adding another ground for considering dismissal illegal.

If it is shown that the employee was dismissed for any of the causes mentioned in Art 282, the in accordance with that
article, he should not be reinstated but must be paid backwages from the time his employment was terminated until it is
determined that the termination of employment is for a just cause because the failure to hear him before he is dismissed
renders the termination without legal effect.
JENNY M. AGABON v. NLRC, GR No. 158693, 2004-11-17
Facts:
Private respondent Riviera Home Improvements, Inc. is engaged in the business of selling and installing ornamental and
construction materials. It employed petitioners Virgilio Agabon and Jenny Agabon as gypsum board and cornice installers
on January 2, 1992[2] until February 23, 1999 when they were dismissed for abandonment of work.
Petitioners then filed a complaint for illegal dismissal and payment of money claims[3] and on December 28, 1999, the
Labor Arbiter rendered a decision declaring the dismissals illegal and ordered private respondent to pay the monetary
claims.
On appeal, the NLRC reversed the Labor Arbiter because it found that the petitioners had abandoned their work, and
were not entitled to backwages and separation pay.
Upon denial of their motion for reconsideration, petitioners filed a petition for certiorari with the Court of Appeals.
The Court of Appeals in turn ruled that the dismissal of the petitioners was not illegal because they had abandoned their
employment but ordered the payment of money claims.
Petitioners also claim that private respondent did not comply with the twin requirements of notice and hearing.
Private respondent, on the other hand, maintained that petitioners were not dismissed but had abandoned their work.
Issues:
whether petitioners were illegally dismissed.
Ruling:
To dismiss an employee, the law requires not only the existence of a just and valid cause but also enjoins the employer to
give the employee the opportunity to be heard and to defend himself.
Abandonment is the deliberate and unjustified refusal of an employee to resume his employment.[14] It is a form of
neglect of duty, hence, a just cause for termination of employment by the employer.[15] For a valid finding... of
abandonment, these two factors should be present: (1) the failure to report for work or absence without valid or justifiable
reason; and (2) a clear intention to sever employer-employee relationship, with the second as the more determinative
factor which is manifested by... overt acts from which it may be deduced that the employees has no more intention to
work. The intent to discontinue the employment must be shown by clear proof that it was deliberate and unjustified.
an employee who deliberately absented from work without leave or permission from his employer, for the purpose of
looking for a job elsewhere, is considered to have abandoned his job.
The dismissal should be upheld because it was established that the petitioners abandoned their jobs to work for another
company. Private respondent, however, did not follow the notice requirements and instead... argued that sending notices
to the last known addresses would have been useless because they did not reside there anymore. Unfortunately for the
private respondent, this is not a valid excuse because the law mandates the twin notice requirements to the employee's
last... known address.[21] Thus, it should be held liable for non-compliance with the procedural requirements of due
process.
that in cases involving dismissals for cause but without observance of the twin requirements of notice and hearing, the
better rule is to abandon the
Serrano doctrine and to follow Wenphil by holding that the dismissal was for just cause but imposing sanctions on the
employer. Such sanctions, however, must be stiffer than that imposed in Wenphil.
Where the dismissal is for a just cause, as in the instant case, the lack of statutory due process should not nullify the
dismissal, or render it illegal, or ineffectual. However, the employer should indemnify the employee for the violation of his
statutory rights
Under the Civil Code, nominal damages is adjudicated in order that a right of the plaintiff, which has been violated or
invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any
loss suffered by him.
The violation of the petitioners' right to statutory due process by the private respondent warrants the payment of indemnity
in the form of nominal damages.
Considering the prevailing circumstances in the case at bar, we deem it proper to fix it at P30,000.00.
Riviera Home Improvements, Inc. is further ORDERED to pay each of the petitioners the amount of P30,000.00 as
nominal damages for non-compliance with statutory due process.
Principles:
Labor Law
Where the dismissal is for a just cause, as in the instant case, the lack of statutory due process should not nullify the
dismissal, or render it illegal, or ineffectual. However, the employer should indemnify the employee for the violation of his
statutory rights

ALEJANDRO MARAGUINOT v. NLRC, GR No. 120969, 1998-01-22

Facts:
Petitioner Alejandro Maraguinot, Jr.
Paulino Enero... sought the assistance of their supervisor, Mrs. Alejandria Cesario, to facilitate their request that private
respondents adjust their salary in accordance with the minimum wage law.
Mrs. Cesario informed petitioners that Mr. Vic del Rosario would agree to increase their salary only if they signed a blank
employment contract. As petitioners refused to sign, private respondents forced Enero to go on leave... then refused to
take him back when he reported for work
Meanwhile,... Maraguinot was... dropped from the company payroll... private respondents terminated his services...
found... the Labor Arbiter... that complainants were illegally dismissed.
The NLRC, in reversing the Labor Arbiter, then concluded that these circumstances, taken together, indicated that
complainant... s... were "project employees."... petitioners filed the instant petition, claiming that the NLRC committed
grave abuse of discretion amounting to lack or excess of jurisdiction in: (1)... finding that petitioners were project
employees; (2) ruling that petitioners were not illegally dismissed; and (3) reversing the decision of the Labor Arbiter.
To support their claim that they were regular (and not project) employees of private respondents, petitioners cited their
performance of activities that were necessary or desirable in the usual trade or business of private respondents and
added that their work was continuous,... i.e., after one project was completed they were assigned to another project.
The OSG likewise rejects petitioners' contention that since they were hired not for one project, but for a series of projects,
they should be deemed regular employees.
the OSG asserts that what matters is that there... was a time-frame for each movie project made known to petitioners at
the time of their hiring.
Issues:
whether an employer-employee relationship existed between petitioners and private respondents or any one of private
respondents... whether petitioners were illegally dismissed
Ruling:
The relationship between VIVA and its producers or associate producers seems to be that of agency,... as the latter make
movies on behalf of VIVA, whose business is to "make" movies. As such, the employment relationship between petitioners
and... producers is actually one between petitioners and VIVA, with the latter being the direct employer.
The employer-employee relationship between petitioners and VIVA can further be established by the "control test." While
four elements are usually considered in determining the existence of an employment relationship, namely: (a) the
selection and engagement of the employee; (b)... the payment of wages; (c) the power of dismissal; and (d) the
employer's power to control the employee's conduct, the most important element is the employer's control of the
employee's conduct, not only as to the result of the work to be done but also as to the means and methods... to
accomplish the same
These four elements are present here. In their position paper submitted to the Labor Arbiter, private respondents narrated
the following circumstances:
In the instant case, the evidence on record shows that petitioner Enero was employed for a total of two (2) years and
engaged in at least eighteen (18) projects, while petitioner Maraguinot was employed for some three (3) years and worked
on at least twenty-three (23)... projects.
Moreover, as petitioners' tasks involved, among other chores, the loading, unloading and arranging of movie equipment in
the shooting area as instructed by the cameramen, returning the equipment to the Viva Films' warehouse, and... assisting
in the "fixing" of the lighting system, it may not be gainsaid that these tasks were vital, necessary and indispensable to the
usual business or trade of the employer.
Lest it be misunderstood, this ruling does not mean that simply because an... employee is a project or work pool
employee even outside the construction industry, he is deemed, ipso jure, a regular employee. All that we hold today is
that once a project or work pool employee has been: (1) continuously, as opposed to intermittently, re-hired by the same...
employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and indispensable to the usual
business or trade of the employer, then the employee must be deemed a regular employee, pursuant to Article 280 of the
Labor Code and jurisprudence.
In closing then, as petitioners had already gained the status of regular employees, their dismissal was unwarranted... the
instant petition is GRANTED.
SAINT MARY’S UNIVERSITY vs CA Case Digest
G.R. No. 157788. March 08, 2005]

FACTS: Respondent Donelo started teaching on a contractual basis at St. Mary’s University in 1992. In 1995, he was
issued an appointment as an Assistant Professor I. Later on, he was promoted to Assistant Professor III. He taught until
the first semester of school year 1999-2000 when the school discontinued giving him teaching assignments. For this,
respondent filed a complaint for illegal dismissal against the university.

In its defense, petitioner St. Mary’s University showed that respondent was merely a part-time instructor and, except for
three semesters, carried a load of less than eighteen units. Petitioner argued that respondent never attained permanent or
regular status for he was not a full-time teacher. Further, petitioner showed that respondent was under investigation by the
university for giving grades to students who did not attend classes. Petitioner alleged that respondent did not respond to
inquiries relative to the investigation. Instead, respondent filed the instant case against the university.

ISSUE: Whether or not respondent Donelo is a full time teacher and thus qualified to become a permanent teacher of
petitioner.

HELD: The SC held that section 93 of the 1992 Manual of Regulations for Private Schools, provides that full-time
teachers who have satisfactorily completed their probationary period shall be considered regular or permanent.[6]
Furthermore, the probationary period shall not be more than six consecutive regular semesters of satisfactory service for
those in the tertiary level. Thus, the following requisites must concur before a private school teacher acquires permanent
status: (1) the teacher is a full-time teacher; (2) the teacher must have rendered three consecutive years of service; and
(3) such service must have been satisfactory.

In the present case, petitioner claims that private respondent lacked the requisite years of service with the university and
also the appropriate quality of his service, i.e., it is less than satisfactory. The basic question, however, is whether
respondent is a full-time teacher.
Section 45 of the same manual provides that full-time academic personnel are those meeting all the following
requirements:

a. Who possess at least the minimum academic qualifications prescribed by the Department under this Manual for all
academic personnel;

b. Who are paid monthly or hourly, based on the regular teaching loads as provided for in the policies, rules and standards
of the Department and the school;

c. Whose total working day of not more than eight hours a day is devoted to the school;

d. Who have no other remunerative occupation elsewhere requiring regular hours of work that will conflict with the working
hours in the school; and

e. Who are not teaching full-time in any other educational institution.

All teaching personnel who do not meet the foregoing qualifications are considered part-time.

A perusal of the various orders of the then Department of Education, Culture and Sports prescribing teaching loads shows
that the regular full-time load of a faculty member is in the range of 15 units to 24 units a semester or term, depending on
the courses taught. Part-time instructors carry a load of not more than 12 units.
The evidence on record reveals that, except for four non-consecutive terms, respondent generally carried a load of twelve
units or less from 1992 to 1999. There is also no evidence that he performed other functions for the school when not
teaching. These give the impression that he was merely a part-time teacher. Although this is not conclusive since there
are full-time teachers who are allowed by the university to take fewer load, in this case, respondent did not show that he
belonged to the latter group, even after the university presented his teaching record. With a teaching load of twelve units
or less, he could not claim he worked for the number of hours daily as prescribed by Section 45 of the Manual.
Furthermore, the records also indubitably show he was employed elsewhere from 1993 to 1996.

Since there is no showing that respondent worked on a full-time basis for at least three years, he could not have acquired
a permanent status. A part-time employee does not attain permanent status no matter how long he has served the school.
And as a part-timer, his services could be terminated by the school without being held liable for illegal dismissal.
Moreover, the requirement of twin-notice applicable only to regular or permanent employees could not be invoked by
respondent.

Yet, this is not to say that part-time teachers may not have security of tenure. The school could not lawfully terminate a
part-timer before the end of the agreed period without just cause. But once the period, semester, or term ends, there is no
obligation on the part of the school to renew the contract of employment for the next period, semester, or term.

VERDADERO V. BARNEY (G.R. NO. 195428; AUGUST 29, 2012)

FACTS: Jomar Verdadero (Verdadero) worked as a bus conductor of Barney Autolines Group of Companies Transport,

Inc. (BALGCO). Sometime in 2008, an altercation took place between Verdadero and Atty. Gerardo Gimenez (Gimenez),

BALGCO's Disciplinary Officer. Gimenez was on board BALGCO Bus. No. 55455, together with his wife and four other

companions, travelling from Mulanay to Macalelon, Quezon. Verdadero was then the assigned bus conductor. BALGCO

has a company policy of granting free rides to company employees and their wives. Verdadero allegedly berated

Gimenez's wife when the latter refused to pay the bus fare.

After the said incident, Verdadero did not report for work because of his fear of being harmed by Gimenez and his friends.

Thereafter, Verdadero filed a complaint for illegal dismissal claiming that he was constructively dismissed. The LA

dismissed the petition. The NLRC partially granted the appeal and ruled that Verdadero was illegally dismissed. On

appeal, the CA reversed the NLRC.

ISSUE:

Was Verdadero constructively dismissed?

HELD: Constructive dismissal exists where there is cessation of work, because continued employment is rendered

impossible, unreasonable or unlikely, as an offer involving a demotion in rank or a diminution in pay and other benefits.

Aptly called a dismissal in disguise or an act amounting to dismissal but made to appear as if it were not, constructive
dismissal may, likewise, exist if an act of clear discrimination, insensibility, or disdain by an employer becomes so

unbearable on the part of the employee that it could foreclose any choice by him except to forego his continued

employment.

In this case, Verdadero cannot be deemed constructively dismissed. Records do not show any demotion in rank or a

diminution in pay made against him. Neither was there any act of clear discrimination, insensibility or disdain committed

by BALGCO against Verdadero which would justify or force him to terminate his employment from the company. It is to be

emphasized that the abovementioned acts should have been committed by the employer against the employee. Unlawful

acts committed by a co-employee will not bring the matter within the ambit of constructive dismissal.

DENIED

SMART COMMUNICATIONS, INC. vs. ASTORGA G.R. No. 148132 January 28, 2008
FACTS:

Astorga was employed by Smart as District Sales Manager of the Corporate Sales Marketing Group/ Fixed Services
Division. SMART launched an organizational realignment to achieve more efficient operations. Part of the reorganization
was the outsourcing of the marketing and sales force. Thus, SMART formed SMART-NTT Multimedia, Incorporated
(SNMI). Since SNMI was formed to do the sales and marketing work, SMART abolished the CSMG/FSD, Astorga’s
division.
SNMI agreed to absorb the CSMG personnel who would be recommended by SMART. Astorga landed last in the
performance evaluation, thus, she was not recommended by SMART. SMART, nonetheless, offered her a supervisory
position in the Customer Care Department, but she refused the offer because the position carried lower salary rank and
rate.

Astorga continued reporting for work. SMART issued a memorandum advising Astorga of the termination of her
employment on ground of redundancy,

Astorga filed a Complaint for illegal dismissal, non-payment of salaries and other benefits with prayer for moral and
exemplary damages against SMART.

In the meantime, SMART sent a letter to Astorga demanding that she pay the current market value of the Honda Civic
Sedan which was given to her under the company’s car plan program, or to surrender the same to the company for proper
disposition.

Astorga, however, failed and refused to do either, thus prompting SMART to file a suit for replevin before the RTC which
was subsequently denied.

Astorga elevated the denial of her motion via certiorari to the CA, which, in its February 28, 2000 Decision,19 reversed the
RTC ruling. Granting the petition and, consequently, dismissing the replevin case, the CA held that the case is intertwined
with Astorga’s complaint for illegal dismissal; thus, it is the labor tribunal that has rightful jurisdiction over the complaint.
SMART’s motion for reconsideration having been denied.
On the other hand, the labor arbiter held that Astorga’s dismissal from employment illegal. While recognizing SMART’s
right to abolish any of its departments, the Labor Arbiter held that such right should be exercised in good faith and for
causes beyond its control. The Arbiter found the abolition of CSMG done neither in good faith nor for causes beyond the
control of SMART, but a ploy to terminate Astorga’s employment. The Arbiter also ruled that contracting out the functions
performed by Astorga to an in-house agency like SNMI was illegal.

SMART also appealed the unfavorable ruling of the Labor Arbiter in the illegal dismissal case to the NLRC which declared
the abolition of CSMG and the creation of SNMI to do the sales and marketing services for SMART a valid organizational
action.

ISSUE:

Whether or not Astorga’s dismissal was valid.

RULING:

Astorga was terminated due to redundancy, which is one of the authorized causes for the dismissal of an employee. The
nature of redundancy as an authorized cause for dismissal is explained in the leading case of Wiltshire File Co., Inc. v.
National Labor Relations Commission, viz:

x x x redundancy in an employer’s personnel force necessarily or even ordinarily refers to duplication of work. That no
other person was holding the same position that private respondent held prior to termination of his services does not show
that his position had not become redundant. Indeed, in any well organized business enterprise, it would be surprising to
find duplication of work and two (2) or more people doing the work of one person.

We believe that redundancy, for purposes of the Labor Code, exists where the services of an employee are in excess of
what is reasonably demanded by the actual requirements of the enterprise. Succinctly put, a position is redundant where it
is superfluous, and superfluity of a position or positions may be the outcome of a number of factors, such as overhiring of
workers, decreased volume of business, or dropping of a particular product line or service activity previously
manufactured or undertaken by the enterprise.

However, as aptly found by the CA, SMART failed to comply with the mandated one month notice prior to termination.

Article 283 of the Labor Code clearly provides:

Art. 283. Closure of establishment and reduction of personnel. — The employer may also terminate the employment of
any employee due to the installation of labor saving devices, redundancy, retrenchment to prevent losses or the closing or
cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at least one
(1) month before the intended date thereof x x x.

SMART’s assertion that Astorga cannot complain of lack of notice because the organizational realignment was made
known to all the employees as early as February 1998 fails to persuade.

Astorga’s actual knowledge of the reorganization cannot replace the formal and written notice required by the law. In the
written notice, the employees are informed of the specific date of the termination, at least a month prior to the effectivity of
such termination, to give them sufficient time to find other suitable employment or to make whatever arrangements are
needed to cushion the impact of termination.

Smart gave her a formal notice of termination barely two (2) weeks before the effective date of termination, a period very
much shorter than that required by law.

This procedural infirmity, however, would not render the termination of Astorga’s employment illegal. The validity of
termination can exist independently of the procedural infirmity of the dismissal.
In DAP Corporation v. CA, the dismissal of the employees therein valid and for authorized cause even if the employer
failed to comply with the notice requirement under Article 283 of the Labor Code.

The Court found the need to modify, by increasing, the indemnity awarded by the CA to Astorga, as a sanction on SMART
for non-compliance with the one-month mandatory notice requirement, in light of our ruling in Jaka Food Processing
Corporation v. Pacot, viz.:

[I]f the dismissal is based on a just cause under Article 282 but the employer failed to comply with the notice requirement,
the sanction to be imposed upon him should be tempered because the dismissal process was, in effect, initiated by an act
imputable to the employee, and (2) if the dismissal is based on an authorized cause under Article 283 but the employer
failed to comply with the notice requirement, the sanction should be stiffer because the dismissal process was initiated by
the employer’s exercise of his management prerogative.

The award of backwages to Astorga by the CA should be deleted for lack of basis. Backwages is a relief given to an
illegally dismissed employee. Thus, before backwages may be granted, there must be a finding of unjust or illegal
dismissal from work.The Labor Arbiter ruled that Astorga was illegally dismissed. But on appeal, the NLRC reversed the
Labor Arbiter’s ruling and categorically declared Astorga’s dismissal valid. This ruling was affirmed by the CA in its
assailed Decision. Since Astorga’s dismissal is for an authorized cause, she is not entitled to backwages.

JOHN HANCOCK LIFE INSURANCE CORPORATION and/or MICHAEL PLAXTON vs. JOANNA CANTRE
DAVIS, G.R. No. 169549, September 3, 2009
FACTS: Respondent Joanna Cantre Davis was agency administration officer of petitioner John Hancock Life Insurance
Corporation.
On October 18, 2000, Patricia Yuseco, petitioner’s corporate affairs manager, discovered that her wallet was missing. She
immediately reported the loss of her credit cards to AIG and BPI Express. To her surprise, she was informed that “Patricia
Yuseco” had just made substantial purchases using her credit cards in various stores in the City of Manila. She was also
told that a proposed transaction in Abenson’s-Robinsons Place was disapproved because “she” gave the wrong
information upon verification.
Because loss of personal property among its employees had become rampant in its office, petitioner sought the
assistance of the National Bureau of Investigation (NBI). The NBI, in the course of its investigation, obtained a security
video from Abenson’s showing the person who used Yuseco’s credit cards. Yuseco and other witnesses positively
identified the person in the video as respondent.
Consequently, the NBI and Yuseco filed a complaint for qualified theft against respondent in the office of the Manila city
prosecutor. But because the affidavits presented by the NBI (identifying respondent as the culprit) were not properly
verified, the city prosecutor dismissed the complaint due to insufficiency of evidence.
Meanwhile, petitioner placed respondent under preventive suspension and instructed her to cooperate with its ongoing
investigation. Instead of doing so, however, respondent filed a complaint for illegal dismissal alleging that petitioner
terminated her employment without cause.

ISSUE: Whether or not petitioner validly dismissed respondent for cause analogous to serious misconduct.

RULING: Article 282(e) of the Labor Code talks of other analogous causes or those which are susceptible of comparison
to another in general or in specific detail. For an employee to be validly dismissed for a cause analogous to those
enumerated in Article 282, the cause must involve a voluntary and/or willful act or omission of the employee.
A cause analogous to serious misconduct is a voluntary and/or willful act or omission attesting to an employee’s
moral depravity. Theft committed by an employee against a person other than his employer, if proven by
substantial evidence, is a cause analogous to serious misconduct.

The labor arbiter and the NLRC relied not only on the affidavits of the NBI’s witnesses but also on that of respondent.
They likewise considered petitioner’s own investigative findings.