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while the Constitution mandates a bias in favor of
Filipino goods, services, labor and enterprises, at
the same time, it recognizes the need for business
exchange with the rest of the world on the bases
of equality and reciprocity and limits protection of
Filipino enterprises only against foreign
competition and trade practices that are unfair.
overtime pay does not fall within the definition of
benefits under Article 100 of the Labor Code on
prohibition against elimination or diminution of
benefits.
the basic principle in termination cases is that the
burden of proof rests upon the employer to show
that the dismissal is for just and valid cause
Management has exclusive prerogatives to
determine the qualifications and fitness of workers
management is free to regulate, according to its
own discretion and judgment, all aspects of
employment, including hiring, work assignments,
working methods, time, place and manner of work,
processes to be followed, supervision of workers,
working regulations, transfer of employees, work
supervision, layoff of workers and discipline,
dismissal, and recall of workers.
labor relations system in the Philippines has extra-
territorial jurisdiction
NLRC shall have the original and exclusive
jurisdiction to hear and decide all claims arising out
of employer-employee relationship or by virtue of any
law or contract involving Filipino workers for
overseas deployment
. The provisions of the Constitution as well as the
Labor Code which afford protection to labor apply to
Filipino employees whether working within the
Philippines or abroad.
the employer should strictly comply with the twin
requirements of notice and hearing without regard
to the nature and situs of employment or the
nationality of the employer.
Execution of a judgment can only be issued
against one who is a party to the action, and not
against one who, not being a party to the action,
has not yet had his day in court.
respondents were never mentioned in the illegal
dismissal proceedings
LA never acquired jurisdiction over them as to
order the piercing of the veil of corporate fiction, and
to make them jointly and severally liable
The only limitation provided by law is that the
closure must be "bona fide in character and not
impelled by a motive to defeat or circumvent the
tenurial rights of employees."Thus, when an
employer complies with the foregoing conditions, the
Court cannot prohibit closure "just because the
business is not suffering from any loss or because of
the desire to provide the workers continued
employment."
quitclaims are frowned upon for beingcontrary to
public policy, the Court has, likewise, recognized
legitimate waivers thatrepresent a voluntary and
reasonable settlement of a worker's claim which
should berespected as the law between the parties
the employer's exercise of management
prerogatives, with or without reason, does not per se
constitute unjust discrimination, unless there is a
showing of grave abuse of discretion.It is only in
instances of unlawful discrimination, limitations
imposed by law and collective bargaining agreement
can the prerogative of management be reviewed.
Whether employed locally or overseas, all Filipino
workers enjoy the protective mantle of Philippine
labor and social legislation, contract stipulations to
the contrary notwithstanding
Moreover, the principle of lex loci contractus
governs in this jurisdiction.
the Contract of Employment between petitioners
and private respondent was executed here in the
Philippines with the approval of POEA. Hence, Labor
Code and other laws affecting labor apply in this
case.
automatic disqualification of officers and directors
of herein petitioner by POEA, without specifically
impleading the parties concerned
essence of due process in administrative
proceedings is the opportunity to explain one's side
or a chance to seek reconsideration of the action or
ruling complained of
employer-employee relationship in the public
sector is primarily determined by special laws, civil
service laws, rules and regulations. While the four-
fold test and other standards set forth in the labor
code may aid in ascertaining the relationship
between the government and its purported
employees, they cannot be overriding factors over
the conditions and requirements for public
employment as provided for by civil service laws,
rules and regulations.
Where the person making the waiver has done
sovoluntarily, with a full understanding thereof, and
the consideration for the quitclaim iscredible and
reasonable, the transaction must be recognized as
being a valid and bindingundertaking.
the employer’s exercise of its management
prerogative is subject to the caveat that it should not
performed in violation of any law and that it is not
tainted by any arbitrary or malicious motive on the
part of the employer.
set the required fair and reasonable criteria in the
termination of the petitioners’ employment
The first level, based on Asian Alcohol case, is to
recognized distinctions on a per position basis.
The second level, derived from Golden Thread
case, is where the distinction narrows down to
particular employees occupying the same positions
which were declared to be redundant.
Indispensable to the DOLE' s exercise of such
power is theexistence of an actual employer-
employee relationship between the parties.
One of the roles of the POEA is the regulation and
adjudication of private sector participation in the
recruitment and placement of overseas workers.
The law and rules implementing the same
unequivocally state that once a recruitment license of
an entity is cancelled, its officers and directors are
automatically prohibited from engaging in such
activity.
In labor cases, it has been held that due process is simply
an opportunity to be heard and not that an actual hearing
However, when such a formal hearing is allowed but a
party is not informed thereof, as a consequence of which he
is unable to attend, such will not be taken against him
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It is a basic fundamental rule in the interpretation of a

contract that if the terms thereof are clear and leave no
doubt upon the intention of the contracting parties the literal
meaning of the stipulation shall control, but when the
words appear to be contrary to the evident intention of the
parties, the latter shall prevail over the former
when the words and language of documents are The real nature of a contract may be determined
clear and plain or readily understandable by an from the express terms of the written agreement and
ordinary reader thereof, there is absolutely no room from the contemporaneous and subsequent acts of
for interpretation or construction the contracting parties

Art. 106 of the Labor Code provides that there is

"labor-only" contracting where (1) the person
supplying workers to an employer does not have
As a general rule, a contractor is presumed to be a
substantial capital or investment in the form of tools,
labor-only contractor, unless such contractor
equipment, machineries, work premises, among
overcomes the burden of proving that it has the
others, and (2) the workers recruited and placed by
substantial capital, investment, tools and the like
such person are performing activities which are
directly related to the principal business of such
employer.
Thus, a finding that a contractor is a labor-only
contractor is equivalent to a declaration that there is
In labor-only contracting, it is the law which
an employer-employee relationship between the
creates an employer-employee relationship between
principal, and the workers of the labor-only
the principal and the workers of the labor-only
contractor; the labor-only contractor is deemed only
contractor
as the agent of the principal.

nature of complainants' work is one where

services are needed only when scrap metals are
provision classifies employees into regular, project, delivered
seasonal, and casual. It further classifies regular
employees into two kinds: (I) those "engaged to As regular employees, respondents were entitled
perform activities which are usually necessary or to security of tenure and could be dismissed only for The irregular nature of work, stoppage of work and
desirable in the usual business or trade of the just or authorized causes and after the observance then work again depending on the supply
employer"; and (2) casual employees who have of due process.
"rendered at least one year of service, whether such
service is continuous or broken."
the fact that petitioner had registered the
respondents with SSS is proof that they were indeed
A regular employment, whether it is one or not, his employees.
is aptly gauged from the concurrence, or the non-
concurrence, of the following factors (a) the The application of the four-fold test in this case
manner of selection and engagement of the proves that an employer-employee relationship did
putative employee; (b) the mode of payment of exist
wages; (c) the presence or absence of the power
of dismissal; and (d) the presence or absence of
the power to control the conduct of the putative
employee or the power to control the employee
with respect to the means or methods by which
his work is to be accomplished.

The "control test" assumes primacy in the overall

consideration. Under this test, an employment the control test merely calls for the existence of the
right to control, and not necessarily the exercise the control test, an employer-employee
relation obtains where work is performed or
thereof. It is not essential that the employer actually relationship exists where the person for whom the
services are rendered under the control and
supervises the performance of duties by the services are performed reserves the right to control
supervision of the party contracting for the service,
employee. It is enough that the former has a right to not only the end achieved, but also the manner and
not only as to the result of the work but also as to the
wield the power means to be used in reaching that end
manner and details of the performance desired.

determine the existence of employer-employee

relationship is to adopt a two-tiered test involving: (1)
the putative employer's power to control the
employee with respect to the means and methods
by which the work is to be accomplished; and (2) the
underlying economic realities of the activity or
relationship
Under the broader economic reality test,
apparent that petitioner is economically
dependent on respondent corporation for
her continued employment in the latter's
line of business.
This is especially appropriate in this case where
there is no written agreement or terms of reference
to base the relationship on; and due to the
complexity of the relationship based on the various
positions and responsibilities given to the worker
over the period of the latter's employment.
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State policy is to afford full protection to labor.

mandates the policy of social justice so as to
When conflictinginterests of labor and capital are The law, in protecting the rights of the employee,
strike a balance between an avowed predilection for
weighed on the scales of social justice, the heavier authorizes neither oppression nor self-destruction of
labor, on the one hand, and the maintenance of the
influenceof capital should be counterbalanced by the employer.
legal rights of capital, the proverbial hen that lays the
the compassion that the law accords the less,
golden egg, on the other.
privileged workingman.

Security of tenure is indeed constitutionally

Constructive dismissal has often been defined as a
"dismissal in disguise" or "an act amounting to
dismissal but made to appear as if it were not."
We stressthat the circumstances contemplated in
constructive dismissal cases are clear acts of
discrimination, insensibility or disdain which
necessarily precedes the apparent "voluntary"
separation from work. can be found.
guaranteed. However, this should not
beindiscriminately invoked to deprive an employer
of its management prerogatives and right toshield
itself from incompetence, inefficiency and
disobedience displayed by its employees.

In this case, petitioners were neither demoted nor

did they receive a diminution in pay and benefits.
Petitioners also failed to show that employment is
rendered impossible, unreasonable or unlikely.

two theories of employment discrimination: the Under the disparate treatment analysis, the
disparate treatment and the disparate impact. plaintiff must prove that an employment policy is
discriminatory on its face.

On the other hand, to establish disparate impact, For example, an employment policy prohibiting the
the complainants must prove that a facially neutral No- spouse employment policies requiring an employer from hiring wives of male employees, but
policy has a disproportionate effect on a particular employee of a particular sex to either quit, not husbands of female employees, is discriminatory
class. on its face

For example, although most employment policies

do not expressly indicate which spouse will be
required to transfer or leave the company, the policy
often disproportionately affects one sex.

These courts also find the no-spouse employment

policy invalid for failure of the employer to present absence of such a bona fide occupational
any evidence of business necessity other than the qualification invalidates a rule denying employment provides for “disgraceful or immoral conduct” as a
general perception that spouses in the same to one spouse due to the current employment of the ground for dismissal in addition to the just causes
workplace might adversely affect the business. other spous for termination of employment

whether a conduct is disgraceful or immoral

unless the employer can prove that the a bona fide occupational qualification justifies involves a two-step process: first, a consideration
reasonable demands of the business require a an employer's no-spouse rule, the exception is of the totality of the circumstances surrounding the
distinction based on marital status and there is no interpreted strictly and narrowly by these state conduct; and second, an assessment of the said
better available or acceptable policy which would courts. There must be a compelling business circumstances vis-à-visthe prevailing norms of
better accomplish the business purpose. This is necessity for which no alternative exists other conduct
known as the bona fide occupational than the discriminatory practice.
qualification exception
pregnancy out of wedlock cannot be considered
as disgraceful or immoral
To justify a bona fide occupational qualification,
the employer must prove two factors: (1) that the
employment qualification is reasonably related to the
essential operation of the job involved; and, (2) that
there is a factual basis for believing that all or
substantially all persons meeting the qualification
would be unable to properly perform the duties of
the job.
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disclose to management any existing or future
relationship by consanguinity or affinity with co-
employees or employees of competing drug
companies and should management find that such
relationship poses a possible conflict of interest, to
resign from the company
prohibition against personal or marital relationships
with employees of competitor companies upon
Glaxo’s employees is reasonable under the
circumstances
Glaxo possesses the right to protect its
economic interests
Constitution recognizes the right of enterprises to
adopt and enforce such a policy to protect its right to
reasonable returns on investments and to expansion
and growth
reminded about the company’s policy of not
accepting married women
employer discriminates against married women,
but not against married men, the variable is sex and
the discrimination is unlawfu
in derogation of the provisions of Article 136 of the
Labor Code on the right of a woman to be free from
any kind of stipulation against marriage in
connection with her employment
likewise assaults good morals and public policy,
tending as it does to deprive a woman of the
freedom to choose her status, a privilege that by all
accounts inheres in the individual as an intangible
and inalienable right
Tecson’s superiors informed him that his marriage
to Bettsy gave rise to a conflict of interest. Tecson’s from the wordings of the contractual provision and
superiors reminded him that he and Bettsy should the policy
decide which one of them would resign
company merely seeks to avoid is a conflict of
interest between the employee and the company
that may arise out of such relationships.
because relationships of that nature might
compromise the interests of the company
An employee of the company remains free to
marry anyone of his or her choosing. The policy is
not aimed at restricting a personal prerogative that
aims to protect its interests against the possibility
belongs only to the individual. However, an
that a competitor company will gain access to its
employee’s personal decision does not detract the
secrets and procedures.
employer from exercising management prerogatives
to ensure maximum profit and business success.
Indeed, while our laws endeavor to give life to the
constitutional policy on social justice and the
protection of labor, it does not mean that every labor
dispute will be decided in favor of the workers. The
law also recognizes that management has rights
which are also entitled to respect and enforcement
in the interest of fair play.
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.
no-marriage rule applicable to both male and
A requirement of that nature would be valid female flight attendants, was regarded as unlawful
provided it reflects an inherent quality reasonably since the restriction was not related to the job
necessary for satisfactory job performance performance of the flight attendants
parties to a contract may establish any
agreements, terms, and conditions that they may
deem convenient, the same should not be contrary
to law, morals, good customs, public order, or
public policy.