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8atong 8uhay Go|dm|nes Inc vs De |a Serna 312 SCkA 22 (1999)

IAC1S
O 3 lebruary 1987 Llsle 8osallnda 8 1y AnLonla L Mendelebar Ma Concepclon C
8eyes and 1247 oLhers flled a complalnL agalnsL 8aLong 8uhay Cold Mlnes lnc for
1 nonpaymenL of Lhelr baslc pay and allowances for Lhe perlod of 6 !uly 1983 Lo 3
!uly 1984 lncluslve under Wage Crder no 2
2 nonpaymenL of Lhelr baslc pay and allowances for Lhe perlod 16 !une 1984 Lo 3
CcLober 1986 lncluslve under Wage Crder no 3
3 nonpaymenL of Lhelr salarles for Lhe perlod 16 March 1986 Lo Lhe presenL
4 nonpaymenL of Lhelr 13Lh monLh pay for 1983 1986 and 1987
3 nonpaymenL of Lhelr vacaLlon and slck leave and Lhe compensaLory leaves of
mlne slLe employees
6 nonpaymenL of Lhe salarles of employees who were placed on forced leaves
slnce november 1983 Lo Lhe presenL lf Lhls ls noL feaslble Lhe affecLed
employees be awarded correspondlng separaLlon pay
O Cn 27 lebruary 1987 Lhe complalnanLs flled a MoLlon for Lhe lssuance of an lnspecLlon
auLhorlLy
O Cn 13 !uly 1987 Lhe Labor SLandards and Welfare Cfflcers submlLLed Lhelr reporL
recommendlng LhaL an Crder of Compllance be lssued dlrecLlng respondenL 8aLong
8uhay Cold Mlnes lnc Lo pay complalnanLs Llsle 8osallna 1y et ol (481874640) by
way of unpald salarles of workers from March 16 1987 Lo presenL unpald and LCCLA
dlfferenLlals under Wage Crder nos 2 and 3 unpald 13Lh monLhs pay for 1983 and
1986 and unpald (slc) vacaLlon/slck/compensaLory leave beneflLs And on 31 !uly 1987
Lhe 8eglonal ulrecLor
1
adopLed Lhe recommendaLlon of Lhe LSWCs and lssued an order
dlrecLlng Lhe respondenL Lo pay Lhe complalnanLs of Lhe sald amounL
O Cn 31 !uly 1987 Lhe 8eglonal ulrecLor
1
adopLed Lhe recommendaLlon of Lhe LSWCs and
lssued an order dlrecLlng Lhe respondenL Lo pay Lhe complalnanLs
O When Lhe respondenL falled Lo posL a cash/sureLy bond and upon moLlon for Lhe
lssuance of a wrlL of execuLlon by Lhe complalnanLs Lhe 8eglonal ulrecLor on 14
SepLember 1987 lssued a wrlL of execuLlon appolnLlng Mr !ohn Lsplrldlon C 8amos as
Speclal Sherlff and dlrecLlng hlm Lo collecL Lhe amounL oLherwlse he has Lo execuLe Lhls
wrlL by aLLachlng Lhe goods and chaLLels of 88CMl and noL exempL from execuLlon or ln
case of lnsufflclency Lhereof agalnsL Lhe real or lmmovable properLy of Lhe respondenL
O 1he Speclal Sherlff proceeded Lo execuLe Lhe appealed Crder on 17 SepLember 1987
and selzed Lhree (3) unlLs of eLerbullL Lrucks and Lhen sold Lhe same by publlc aucLlon
varlous maLerlals and moLor vehlcles were also selzed on dlfferenL daLes and sold aL
publlc aucLlon by sald sherlff
O 88CMl appealed Lhe Crder daLed !uly 31 1987 of 8eglonal ulrecLor Luna C lezas Lo
respondenL undersecreLary ulonlslo de la Serna conLendlng LhaL Lhe 8eglonal ulrecLor
had no [urlsdlcLlon over Lhe case
ISSUL WheLher 8eglonal ulrecLor has [urlsdlcLlon over Lhe complalnL flled by Lhe employees of
88CMl
nLLD
1he 8eglonal ulrecLor has [urlsdlcLlon over Lhe 88CMl employees who are Lhe complalnanLs
1he sub[ecL labor sLandards case of Lhe peLlLlon arose from Lhe vlslLorlal and enforcemenL
powers by Lhe 8eglonal ulrecLor of ueparLmenL of Labor and LmploymenL (uCLL) Labor
sLandards refers Lo Lhe mlnlmum requlremenLs prescrlbed by exlsLlng laws rules and
regulaLlons relaLlng Lo wages hours of work cosL of llvlng allowance and oLher moneLary and
welfare beneflLs lncludlng occupaLlonal safeLy and healLh sLandards
4
Labor sLandards cases
are governed by ArLlcle 128(b) of Lhe Labor Code
ArL 128 (b) Ilsltotlol ooJ eofotcemeot powets
(b) 1he MlnlsLer of Labor or hls duly auLhorlzed represenLaLlve shall have Lhe
power Lo order and admlnlsLer afLer due noLlce and hearlng compllance wlLh
Lhe labor sLandards provlslons of Lhls Code based on Lhe flndlngs of labor
regulaLlon offlcers or lndusLrlal safeLy englneers made ln Lhe course of
lnspecLlon and Lo lssue wrlLs of execuLlon Lo Lhe approprlaLe auLhorlLy for Lhe
enforcemenL of Lhelr order excepL ln cases where Lhe employer conLesLs Lhe
flndlngs of Lhe labor regulaLlons offlcers and ralses lssues whlch cannoL be
resolved wlLhouL conslderlng evldenLlary maLLers LhaL are noL verlflable ln Lhe
ordlnary course of lnspecLlon
8espondenL undersecreLary ulonlslo C uela Serna on Lhe oLher hand upheld Lhe [urlsdlcLlon
of 8eglonal ulrecLor Luna C lezas by relylng on LC 111 Lo quoLe
Conslderlng Lherefore LhaL Lhere sLlll exlsLs an employeremployee relaLlonshlp beLween
Lhe parLles LhaL Lhe case lnvolves vlolaLlons of Lhe labor sLandard provlslons of Lhe
labor code LhaL Lhe lssues Lhereln could be resolved wlLhouL conslderlng evldenLlary
maLLers LhaL are noL verlflable ln Lhe normal course of lnspecLlon and lf only Lo glve
meanlng and noL render nugaLory and meanlngless Lhe vlslLorlal and enforcemenL
powers of Lhe SecreLary of Labor and LmploymenL as provlded by ArLlcle 128(b) of Lhe
Labor Code as amended by SecLlon 2 of LxecuLlve Crder no 111 whlch sLaLes
1he provlslons of arLlcle 217 of Lhls code Lo Lhe conLrary noLwlLhsLandlng and ln
cases where Lhe relaLlonshlp of employeremployee sLlll exlsLs Lhe MlnlsLer of
Labor and LmploymenL or hls duly auLhorlzed represenLaLlve shall have Lhe
power Lo order and admlnlsLer afLer due noLlce and hearlng compllance wlLh
Lhe labor sLandards provlslon of Lhls Code based on Lhe flndlngs of Lhe flndlngs
of labor regulaLlon offlcers or lndusLrlal safeLy englneers made ln Lhe course of
lnspecLlon and Lo lssue wrlLs of execuLlon Lo Lhe approprlaLe auLhorlLy for Lhe
enforcemenL of Lhelr order excepL ln cases where Lhe employer conLesLs Lhe
flndlngs of Lhe labor regulaLlons offlcers and ralses lssues whlch cannoL be
resolved wlLhouL conslderlng evldenLlary maLLers LhaL are noL verlflable ln Lhe
ordlnary course of lnspecLlon
We agree wlLh Lhe complalnanLs LhaL Lhe reglonal offlce o poo has [urlsdlcLlon Lo hear and
declde Lhe lnsLanL labor sLandard case
1he CourL ln relnforclng lLs concluslon LhaL 8eglonal ulrecLor has [urlsdlcLlon over labor
sLandards cases LreaLed LC 111 as a curaLlve sLaLuLe rullng as follows
LC no 111 was lssued on uecember 24 1986 or Lhree (3) monLhs afLer Lhe promulgaLlon of
Lhe SecreLary of Labors declslon upholdlng prlvaLe respondenLs salary dlfferenLlals and LCCLAs
on SepLember 24 1986 1he amendmenL of Lhe vlslLorlal and enforcemenL powers of Lhe
8eglonal ulrecLor (ArLlcle 128(b)) by sald LC 111 reflecLs Lhe lnLenLlon enunclaLed ln ollcy
lnsLrucLlons nos 6 and 37 Lo empower Lhe 8eglonal ulrecLors Lo resolve unconLesLed money
clalms ln cases where an employeremployee relaLlonshlp sLlll exlsLs 1hls lnLenLlon musL be
glven welghL and enLlLled Lo greaL respecL
8epubllc AcL 7730 Lhe law governlng Lhe vlslLorlal and enforcemenL powers of Lhe Labor
SecreLary and hls represenLaLlves reads
ArL 128 (b) noLwlLhsLandlng Lhe provlslons of ArLlcles 129 and 217 of Lhls Code Lo Lhe
conLrary and ln cases where Lhe relaLlonshlp of employeremployee sLlll exlsLs Lhe
SecreLary of Labor and LmploymenL or hls duly auLhorlzed represenLaLlves shall have
Lhe power Lo lssue compllance orders Lo glve effecL Lo Lhe labor sLandards provlslons of
Lhls Code and oLher labor leglslaLlon based on Lhe flndlngs of labor employmenL and
enforcemenL offlcers or lndusLrlal safeLy englneers made ln Lhe course of lnspecLlon
1he SecreLary or hls duly auLhorlzed represenLaLlve shall lssue wrlLs of execuLlon Lo Lhe
approprlaLe auLhorlLy for Lhe enforcemenL of Lhelr orders excepL ln cases where Lhe
employer conLesLs Lhe flndlngs of Lhe labor employmenL and enforcemenL offlcer and
ralses lssues supporLed by documenLary proofs whlch were noL consldered ln Lhe course
of lnspecLlon
1he presenL law 8A 7730 can be consldered a curaLlve sLaLuLe Lo relnforce Lhe concluslon LhaL
Lhe 8eglonal ulrecLor has [urlsdlcLlon over Lhe presenL labor sLandards case WellseLLled ls Lhe
rule LhaL [urlsdlcLlon over Lhe sub[ecL maLLer ls deLermlned by Lhe law ln force when Lhe acLlon
was commenced unless a subsequenL sLaLuLe provldes for lLs reLroacLlve appllcaLlon as when
lL ls a curaLlve leglslaLlon

9LAkANDA vs 8AGANGA 9LWCCD

IAC1S
enaranda alleges LhaL he was employed by respondenL as loreman/8oller Pead/ShlfL
Lnglneer LhaL he was lllegally dlsmlssed And hls overLlme pay premlum pay for
worklng durlng holldays/resL days nlghL shlfL dlfferenLlals were noL pald
8espondenL allege LhaL complalnanL's separaLlon from servlce was done pursuanL Lo
ArL 283 of Lhe Labor Code
8espondenL 8C was on Lemporary closure due Lo repalr and had Lo dlsmlss employees
enaranda also goL hls separaLlon beneflLs
ConsequenLly when respondenL parLlally reopened ln !anuary 2001 enaranda falled
Lo reapply Pence he was noL LermlnaLed from employmenL lllegally
1he labor arblLer found LhaL peLlLloner ls enLlLled Lo overLlme pay premlum pay for
worklng on resL days

ISSUL WCn enaranda ls enLlLled Lo overLlme pay and premlum pay for worklng on resL days?

kULING Managerlal employees and members of Lhe managerlal sLaff are exempLed from Lhe
provlslons of Lhe Labor Code on labor sLandards

Slnce peLlLloner belongs Lo managerlal sLaff he ls noL enLlLled Lo overLlme pay and premlum
pay for worklng on resL days

enaranda duLles and responslblllLles conform Lo Lhe deflnlLlon of a member of a managerlal
sLaff under Lhe lmplemenLlng 8ules

eLlLloner supervlsed Lhe englneerlng secLlon of Lhe sLeam planL boller Pls work lnvolved
overseelng Lhe operaLlon of Lhe machlnes and Lhe performance of Lhe workers ln Lhe
englneerlng secLlon

1hls work necessarlly requlred Lhe use of dlscreLlon and lndependenL [udgmenL Lo ensure Lhe
proper funcLlonlng of Lhe sLeam planL boller

As supervlsor peLlLloner ls deemed a member of Lhe managerlal sLaff

noLeworLhy even peLlLloner admlLLed LhaL he was a supervlsor ln hls oslLlon aper he sLaLed
LhaL he was Lhe foreman responslble for Lhe operaLlon of Lhe boller

1he Lerm foreman lmplles LhaL he was Lhe represenLaLlve of managemenL over Lhe workers and
Lhe operaLlon of Lhe deparLmenL

eLlLloner's evldence also showed LhaL he was Lhe supervlsor of Lhe sLeam planL

Pls classlflcaLlon as supervlsor ls furLher evldenL from Lhe manner hls salary was pald Pe
belonged Lo Lhe 10 of respondenL's 334 employees who were pald on a monLhly basls Lhe
oLhers were pald only on a dally basls

Cn Lhe basls of Lhe foregolng Lhe CourL flnds no [usLlflcaLlon Lo award overLlme pay and
premlum pay for resL days Lo peLlLloner






































CMS LS1A1L INC VS SSS 132 SCkA 106 (1984)

tt ll 5ec 18 (1987 coostltotloo) 1be 5tote offltms lobot os o ptlmoty soclol ecooomlc fotce lt
sboll ptotect tbe tlqbts of wotkets ooJ ptomote tbelt welfote
tt \lll 5ec 1 1be cooqtess sboll qlve blqbest ptlotlty to tbe eooctmeot of meosotes tbot
ptotect ooJ eobooce tbe tlqbt of oll tbe people to bomoo Jlqolty teJoce soclol ecooomlc ooJ
polltlcol loepoolltles ooJ temove coltotol loepoolltles by epoltobly Jlffosloq weoltb ooJ polltlcol
powet fot tbe commoo qooJ
1o tbls eoJ tbe 5tote sboll teqolote tbe ocpolsltloo owoetsblp ose ooJ Jlsposltloo of ptopetty
ooJ lts loctemeots

IAC1S eLlLloner CMS LsLaLe lnc ls a domesLlc corporaLlon engaged ln Lhe real esLaLe buslness
ln uecember 1932 lL began wlLh only 6 employees ln 1936 lL also engaged ln Lhe logglng
buslness and obLalned an ordlnary llcense from Lhe 8ureau of loresLry Lo operaLe foresL
concesslon (13000 hecLares) ln 8aganga uavao

ln !anuary 1937 CMS LsLaLe enLered lnLo a conLracL of managemenL wlLh Lufraclo 8o[as for Lhe
operaLlon of Lhe logglng concesslon whlch began ln Aprll 1937 wlLh four employees earnlng
monLhly salarles 8y SepLember 1937 CMS LsLaLe had 89 employees ln Lhe logglng operaLlon
8uL on uecember 1937 CMS LsLaLe revoked lLs conLracL wlLh 8o[as

8y AugusL 1938 CMS Lstate became a member of SSS w|th respect to |ts rea| estate buslness
and remlLLed Lo Lhe SSS 20313 represenLlng Lhe lnlLlal premlum of Lhe salarles of Lhe
employees ln Lhe logglng buslness 8ut on Cctober 19S8 pet|t|oner demanded the refund of
the amount a||eg|ng that |t |s not yet sub[ect to compu|sory coverage |n |ts |ogg|ng bus|ness
kespondent SSS den|ed the pet|t|on on the ground that the |ogg|ng bus|ness |s on|y an
expans|on of the company's ex|st|ng act|v|t|es and that |t shou|d be cons|dered a member
s|nce December 19S2 when |t opened |ts bus|ness

CMS LsLaLe conLends LhaL Lhe SSS conLrlbuLlons requlred of employees and employers under
Lhe SSS AcL of 1934 are noL ln Lhe naLure of exclse Laxes and Lherefore noL compulsory of
employers

ISSUL W/n eLlLloner's logglng buslness ls sub[ecL Lo compulsory coverage ln Lhe SSS

nLLD 1he Soclal SecurlLy Law was enacLed pursuanL Lo Lhe pollcy Lo develop esLabllsh
gradually and perfecL a soclal securlLy sysLem whlch shall be sulLable Lo Lhe needs of Lhe people
LhroughouL Lhe hlllpplnes and provlde proLecLlon agalnsL Lhe hazards of dlsablllLy slckness
old age and deaLh" lL ls clear Lhen LhaL Lhe |mp|ementat|on of the SSS Law |s |n ||ne w|th the
genera| we|fare mandate of the Const|tut|on and as such |s a |eg|t|mate exerc|se of the po||ce
power As held ln hlllpplne 8loomlng Mllls Co vs SSS membershlp ln Lhe SSS ls noL a
bllaLeral consensual agreemenL where obllgaLlons and rlghLs of Lhe parLles are sub[ecL Lo Lhelr
wlll 8A 1161 requlres compulsory coverage of employees and employers under Lhe sysLem As
such Lhe prlnclple of nonlmpalrmenL of obllgaLlon of conLracL cannoL be ralsed as a defense
Mar|ve|es Sh|pyard Corp v CA 41S SCkA S73 (2003)
IAC1S
O Cn CcLober 1993 peLlLloner Marlveles Shlpyard CorporaLlon engaged Lhe servlces of
LongesL lorce lnvesLlgaLlon and SecurlLy Agency lnc (herelnafLer LongesL lorce") Lo
render securlLy servlces aL lLs premlses LongesL lorce deployed lLs securlLy guards Lhe
prlvaLe respondenLs hereln aL Lhe peLlLloner's shlpyard ln Marlveles 8aLaan
O Marlveles Shlpyard Corp complled wlLh Lhe Lerms of Lhe securlLy conLracL wlLh LongesL
lorce prompLly paylng lLs bllls and Lhe conLracL raLes of Lhe laLLer Powever lL found
Lhe servlces belng rendered by Lhe asslgned guards unsaLlsfacLory and lnadequaLe
causlng lL Lo LermlnaLe lLs conLracL wlLh LongesL lorce on Aprll 1993 LongesL lorce ln
Lurn LermlnaLed Lhe employmenL of Lhe securlLy guards lL had deployed aL peLlLloner's
shlpyard
O Cn SepLember 2 1996 prlvaLe respondenLs flled a case for lllegal dlsmlssal
underpaymenL of wages pursuanL Lo Lhe nSCSlAAuAC raLes nonpaymenL of
overLlme pay premlum pay for hollday and resL day servlce lncenLlve leave pay 13
Lh

monLh pay and aLLorney's fees agalnsL boLh LongesL lorce and peLlLloner before Lhe
Labor ArblLer Lhe case soughL Lhe guards' relnsLaLemenL wlLh full backwages and
wlLhouL loss of senlorlLy rlghLs
O LongesL lorce flled a crossclalm agalnsL Lhe peLlLloner LongesL lorce admlLLed LhaL lL
employed prlvaLe respondenLs and asslgned Lhem as securlLy guards aL Lhe premlses of
peLlLloner from CcLober 16 1993 Lo Aprll 30 1993 renderlng a 12 hours duLy per shlfL
for Lhe sald perlod lL llkewlse admlLLed lLs llablllLy as Lo Lhe nonpaymenL of Lhe alleged
wage dlfferenLlal ln Lhe LoLal amounL of 2618023 buL passed on Lhe llablllLy Lo
peLlLloner alleglng LhaL Lhe servlce fee pald by Lhe laLLer Lo lL was way below Lhe
nSCSlA and AuAC raLe Lhus conLrary Lo Lhe mandaLory and prohlblLlve laws
because Lhe rlghL Lo proper compensaLlon and beneflLs provlded under Lhe exlsLlng
labor laws cannoL be walved nor compromlsed"
O 1he peLlLloner denled any llablllLy on accounL of Lhe alleged lllegal dlsmlssal sLresslng
LhaL no employeremployee relaLlonshlp exlsLed beLween lL and Lhe securlLy guards lL
furLher polnLed ouL LhaL lL would be Lhe helghL of ln[usLlce Lo make lL llable agaln for
moneLary clalms whlch lL had already pald LongesL lorce flled a crossclalm agalnsL Lhe
peLlLloner
O Labor ArblLer declded LhaL Lhe respondenLs LongesL lorce lnvesLlgaLlon SecurlLy
Agency lnc and Marlveles Shlpyard CorporaLlon [olnLly and severally llable Lo pay Lhe
money clalms of complalnanLs represenLlng underpaymenL of wages and overLlme pay
ln Lhe LoLal amounL
ISSUL WheLher or noL Marlveles Shlpyard Corp and LongesL lorce lnvesLlgaLlon SecurlLy
Agency lnc ls [olnLly and severally llable Lo pay money clalms of Lhe prlvaLe respondenLs
nLLD
eLlLloner's llablllLy ls [olnL and several wlLh LhaL of LongesL lorce pursuanL Lo ArLlcles 106 107
and 109 of Lhe Labor Code whlch provlde as follows
4k1 10 cON1k4c1Ok Ok 5u8cON1k4c1Ok Whenever an employer enLers lnLo a conLracL
wlLh anoLher person for Lhe performance of Lhe former's work Lhe employees of Lhe
conLracLor and of Lhe laLLer's subconLracLor lf any shall be pald ln accordance wlLh Lhe
provlslons of Lhls Code
ln Lhe evenL LhaL Lhe conLracLor or subconLracLor falls Lo pay Lhe wages of hls employees ln
accordance wlLh Lhls Code Lhe employer shall be [olnLly and severally llable wlLh hls conLracLor
or subconLracLor Lo such employees Lo Lhe exLenL of Lhe work performed under Lhe conLracL ln
Lhe same manner and exLenL LhaL he ls llable Lo employees dlrecLly employed by hlm
4k1 107 lNulkc1 MPLOYk 1he provlslons of Lhe lmmedlaLely precedlng ArLlcle shall
llkewlse apply Lo any person parLnershlp assoclaLlon or corporaLlon whlch noL belng an
employer conLracLs wlLh an lndependenL conLracLor for Lhe performance of any work Lask [ob
or pro[ecL
4k1 109 5OLlu4kY Ll48lLl1Y 1he provlslons of exlsLlng laws Lo Lhe conLrary
noLwlLhsLandlng every employer or lndlrecL employer shall be held responslble wlLh hls
conLracLor or subconLracLor for any vlolaLlon of any provlslon of Lhls Code lor purposes of
deLermlnlng Lhe exLenL of Lhelr clvll llablllLy under Lhls ChapLer Lhey shall be consldered as
dlrecL employers
ln Lhls case when peLlLloner conLracLed for securlLy servlces wlLh LongesL lorce as Lhe securlLy
agency LhaL hlred prlvaLe respondenLs Lo work as guards for Lhe shlpyard corporaLlon
peLlLloner became an lndlrecL employer of prlvaLe respondenLs pursuanL Lo ArLlcle 107
aboveclLed lollowlng ArLlcle 106 when Lhe agency as conLracLor falled Lo pay Lhe guards Lhe
corporaLlon as prlnclpal becomes [olnLly and severally llable for Lhe guards' wages 1hls ls
mandaLed by Lhe Labor Code Lo ensure compllance wlLh lLs provlslons lncludlng paymenL of
sLaLuLory mlnlmum wage 1he securlLy agency ls held llable by vlrLue of lLs sLaLus as dlrecL
employer whlle Lhe corporaLlon ls deemed Lhe lndlrecL employer of Lhe guards for Lhe purpose
of paylng Lhelr wages ln Lhe evenL of fallure of Lhe agency Lo pay Lhem 1hls sLaLuLory scheme
glves Lhe workers Lhe ample proLecLlon consonanL wlLh labor and soclal [usLlce provlslons of Lhe
1987 ConsLlLuLlon
eLlLloner cannoL evade lLs llablllLy by clalmlng LhaL lL had rellglously pald Lhe compensaLlon of
guards as sLlpulaLed under Lhe conLracL wlLh Lhe securlLy agency Labor sLandards are enacLed
by Lhe leglslaLure Lo allevlaLe Lhe pllghL of workers whose wages barely meeL Lhe splrallng cosLs
of Lhelr baslc needs Labor laws are consldered wrlLLen ln every conLracL SLlpulaLlons ln
vlolaLlon Lhereof are consldered null Slmllarly leglslaLed wage lncreases are deemed
amendmenLs Lo Lhe conLracL 1hus employers cannoL hlde behlnd Lhelr conLracLs ln order Lo
evade Lhelr (or Lhelr conLracLors' or subconLracLors') llablllLy for noncompllance wlLh Lhe
sLaLuLory mlnlmum wage


ASA9IAN NG MALAANG MANGGAGAWA SA CCCACCLA vs CA and CCCACCLA 8C11LLkS' 9nILS

IAC1S

!une 1998 Lhe ConLracL 8argalnlng AgreemenL for Lhe years 19931998 execuLed beLween
peLlLloner unlon and prlvaLe respondenL company explred
eLlLloner Lhen submlLLed lLs demands Lo Lhe company for anoLher round of collecLlve
bargalnlng negoLlaLlons
AfLer havlng some labor dlspuLes on 26 uecember 1998 boLh parLles execuLed and slgned a
MCA provldlng for salary lncreases and oLher economlc and noneconomlc beneflLs
lL llkewlse conLalned a provlslon for Lhe regularlzaLlon of conLracLual casual and/or agency
workers who have been worklng wlLh prlvaLe respondenL for more Lhan one year
ursuanL Lo Lhe provlslons of Lhe MCA boLh parLles ldenLlfled 64 vacanL regular poslLlons LhaL
may be occupled by Lhe exlsLlng casual conLracLual or agency employees who have been ln Lhe
company for more Lhan one year
1hen 61 employees passed Lhe screenlng and exLended regular employmenL sLaLus
ConsequenLly peLlLloners demanded Lhe paymenL of salary and oLher beneflLs Lo Lhe newly
regularlzed employees reLroacLlve Lo 1 uecember 1998 ln accord wlLh Lhe MCA
Powever Lhe prlvaLe respondenL refused Lo yleld Lhe sald demands conLendlng LhaL Lhe daLe of
effecLlvlLy of Lhe regularlzaLlon of sald employees were 1 May 1999 and 1 CcLober 1999
1hus peLlLloner flled a complalnL before Lhe nL8C for Lhe alleged vlolaLlons of Lhe sub[ecL MCA
by Lhe prlvaLe respondenL
Cn 9 uecember 1999 prlvaLe respondenL closed lLs Manlla and AnLlpolo planLs
nL8C dlsmlssed Lhe complalnL lL sLaLed LhaL under MCA Lhe 61 regularlzed employees are noL
enLlLled Lo Lhelr clalms only Lhe employees who were regular ln !uly 1998 and conLlnued belng
such upon Lhe slgnlng of Lhe MCA on uecember 26 1998 deserve reLroacLlve paymenL Slnce
Lhe 61 regularlzed employees were regularlzed only on May 1 1999 and CcLober 1 1999 Lhey
have no rlghL Lo clalm enLlLlemenL Lo Lhe MCA beneflLs

ISSUL
WCn CC8 vlolaLed Lhe Lerms and condlLlons conLalned ln Lhe MCA daLed 26 uecember 1998 when lL
dld noL recognlze Lhe regularlzaLlon of Lhe 61 employees as effecLlve on 1 uecember 1998?

kULING
rlvaLe respondenL vlolaLed Lhe provlslon of Lhe MCA when lL dld noL conslder Lhe regularlzaLlon of Lhe
61 employees effecLlve 1 uecember 1998 and accorded Lo Lhem Lhe full beneflLs of Lhe MCA

Accordlng Lo Lhe perLlnenL provlslon of Lhe MCA
1 nonregular employee (casual conLracLual or agency worker) who has already served Lhe company
and ls presenLly occupylng or has occupled Lhe poslLlon Lo be fllledup for aL leasL one (1) year shall be
glven prlorlLy ln fllllngup Lhe poslLlon by converLlng hls nonregular employmenL sLaLus Lo regular
employmenL sLaLus effecLlve 01 uecember 1998 wlLhouL need of undergolng Lhrough Lhe company's
regular recrulLmenL procedures such as lnLervlew and quallfylng examlnaLlon

lL ls erroneous for Lhe nL8C Lo conclude LhaL Lhe regularlzaLlon of Lhe 61 employees does noL reLroacL Lo
uecember 1 1998

We hold LhaL Lhe effecLlvlLy daLe of Lhe regularlzaLlon of Lhe 61 employees was on uecember 1 1998

As sLaLed ln Lhe MCA only Lhose who have worked wlLh Lhe company for one year as of 1 uecember
1998 and are sLlll worklng for Lhe company as of Lhe slgnlng of Lhe MCA wlll be consldered for
regularlzaLlon

LvldenLly lL ls erroneous for Lhe nL8C Lo conclude LhaL exLendlng Lo Lhem Lhe beneflLs of Lhe MCA
would vlolaLe Lhe prlnclple of noworknopay as Lhey are acLually renderlng servlce Lo Lhe company
even before uecember 1 1998 and conLlnued Lo do so 1hey were accorded Lhe sLaLus of regular
employees because Lhey were renderlng servlce Lo Lhe company for Lhe requlred perlod

Pence even wlLhouL Lhe sub[ecL MCA provlslon Lhe 61 employees musL be exLended regular
employmenL sLaLus afLer Lhe lapse of one year All Lhose who have been wlLh Lhe company for one year
by sald daLe musL auLomaLlcally be consldered regular employees by operaLlon of law



































DCLL 9nILI99INLS VS 9AWISANG MAA8AANG C8kLkC 39S SCkA 112 (2003)
ook llve kole l 5ec 1(jj) collectlve botqololoq oqteemeot tefets to tbe oeqotloteJ coottoct
betweeo o leqltlmote lobot otqoolzotloo ooJ tbe employet coocetoloq woqes boots of wotk
ooJ oll otbet tetms ooJ cooJltloos of employmeot lo o botqololoq oolt locloJloq mooJototy
ptovlsloos fot qtlevooces ooJ otblttotloo mocbloetles

IAC1S Cn lebruary 22 1996 a new flveyear collecLlve bargalnlng agreemenL (C8A) was
execuLed by peLlLloner uole hlllpplnes and awls ng Makabayang Cbrero (AMAC) coverlng
lebruary 1996 Lo lebruary 2001 Cne of Lhe provlslons ln Lhe new C8A reads (SecLlon 3 of ArL
xvlll) Do|e agrees to grant a mea| a||owance of 9hp 1000 to a|| emp|oyees who render at
|east 2 hours or more of actua| overt|me work on a workday and free mea|s as present|y
pract|ce not exceed|ng 9hp 2S00 after 3 hours of actua| overt|me work

ursuanL Lo Lhe provlslons of Lhe C8A some deparLmenLs reverLed Lo Lhe prevlous pracLlce of
granLlng free meals afLer exacLly 3 hours C1 buL oLher deparLmenLs granLed free meals only
after more than 3 hours C1 AMAC Lhen flled a complalnL alleglng uole's noncompllance Lo
Lhe C8A

ISSUL PCW MAn? PCu8S Cl CvL81lML WC8k MuS1 A uCLL LMLC?LL 8LnuL8 1C 8L
Ln1l1LLu 1C 1PL l8LL MLAL unuL8 SLC 3 Cl A81 xvlll Cl 1PL 19962001 C8A?

nLLD lL ls clear from Lhe lnLenL of Lhe provlslon based on Lhe facL LhaL Lhe same provlslon
appeared ln earller C8As LhaL a Do|e emp|oyee |s ent|t|ed to a free mea| after render|ng
exact|y or no |ess than 3 hours of C1 and not more than 3 hours of C1

1he peLlLloner also cannoL lnvoke Lhe prlnclple of managemenL prerogaLlve LhaL Lhe employer
has Lhe power Lo granL beneflLs over and beyond Lhe mlnlmum sLandards of law or Lhe Labor
Code 1he exerclse of Lhls prlnclple ls noL unllmlLed It |s sub[ect to the ||m|tat|ons found |n
|aw a co||ect|ve barga|n|ng agreement or the genera| pr|nc|p|es of fa|r p|ay and [ust|ce 1nL
C8A IS 1nL NCkM CI CCNDUC1 8L1WLLN 1nL 9L1I1ICNLk AND 9kIVA1L kLS9CNDLN1 AND
CCM9LIANCL 1nLkLWI1n IS MANDA1LD 8 Lk9kLSS 9CLIC CI 1nL LAW













Arco Meta| 9roducts Co vs Samahan SS4 SCkA 111 (2008)
IAC1S
O uecember 2003 peLlLloner pald Lhe 13
Lh
monLh pay bonus and leave encashmenL of
Lhree unlon members ln amounLs proporLlonal Lo Lhe servlce Lhey acLually rendered ln
a year whlch ls less Lhan a full Lwelve (12) monLhs
O 8espondenL proLesLed Lhe proraLed scheme clalmlng LhaL on several occaslons
peLlLloner dld noL proraLe Lhe paymenL of Lhe same beneflLs Lo seven (7) employees
who had noL served for Lhe full 12 monLhs 1he paymenLs were made ln 1992 1993
1994 1996 1999 2003 and 2004 Accordlng Lo respondenL Lhe proraLed paymenL
vlolaLes Lhe rule agalnsL dlmlnuLlon of beneflLs under ArLlcle 100 of Lhe Labor Code
1hus Lhey flled a complalnL before Lhe naLlonal ConclllaLlon and MedlaLlon 8oard
(nCM8)
O eLlLloner clalms LhaL lLs full paymenL of beneflLs regardless of Lhe lengLh of servlce Lo
Lhe company does noL consLlLuLe volunLary employer pracLlce lL polnLs ouL LhaL Lhe
paymenLs had been erroneously made and Lhey occurred ln lsolaLed cases ln Lhe years
1992 1993 1994 1999 2002 and 2003 Accordlng Lo peLlLloner lL was only ln 2003
LhaL Lhe accounLlng deparLmenL dlscovered Lhe error when Lhere were already Lhree
(3) employees lnvolved wlLh prolonged absences and Lhe error was correcLed by
lmplemenLlng Lhe proraLa paymenL of beneflLs pursuanL Lo law and Lhelr exlsLlng C8A"
lL adds LhaL Lhe seven earller cases of full paymenL of beneflLs wenL unnoLlced
conslderlng Lhe proporLlon of one employee concerned (per year) vls vls Lhe 170
employees of Lhe company eLlLloner descrlbes Lhe slLuaLlon as a clear overslghL"
whlch should noL be Laken agalnsL lL
O 1he appellaLe courL found LhaL peLlLloner however had an exlsLlng volunLary pracLlce of
paylng Lhe aforesald beneflLs ln full Lo lLs employees Lhereby re[ecLlng Lhe clalm LhaL
peLlLloner erred ln paylng full beneflLs Lo lLs seven employees 1he appellaLe courL
noLed LhaL aslde from Lhe affldavlL of peLlLloner's offlcer lL has noL presenLed any
evldence ln supporL of lLs poslLlon LhaL lL has no volunLary pracLlce of granLlng Lhe
conLesLed beneflLs ln full and wlLhouL regard Lo Lhe servlce acLually rendered wlLhln Lhe
year lL also quesLloned why lL Look peLlLloner eleven (11) years before lL was able Lo
dlscover Lhe alleged error
ISSUL WheLher or noL Lhe full paymenL of beneflLs regardless of Lhe lengLh of servlce Lo Lhe
company does consLlLuLe volunLary employer pracLlce

nLLD It was he|d that the fu|| payment of benef|ts regard|ess of the |ength of serv|ce to
the company const|tuted vo|untary emp|oyer pract|ce
Any beneflL and supplemenL belng en[oyed by employees cannoL be reduced dlmlnlshed
dlsconLlnued or ellmlnaLed by Lhe employer 1he prlnclple of nondlmlnuLlon of beneflLs ls
founded on Lhe ConsLlLuLlonal mandaLe Lo proLecL Lhe rlghLs of workers and promoLe Lhelr
welfare" and Lo afford labor full proLecLlon" Sald mandaLe ln Lurn ls Lhe basls of ArLlcle 4
of Lhe Labor Code whlch sLaLes LhaL all doubLs ln Lhe lmplemenLaLlon and lnLerpreLaLlon of
Lhls Code lncludlng lLs lmplemenLlng rules and regulaLlons shall be rendered ln favor of
labor"
ln Lhe years 1992 1993 1994 1999 2002 and 2003 peLlLloner had adopLed a pollcy of
freely volunLarlly and conslsLenLly granLlng full beneflLs Lo lLs employees regardless of Lhe
lengLh of servlce rendered 1rue Lhere were only a LoLal of seven employees who beneflLed
from such a pracLlce buL lL was an esLabllshed pracLlce noneLheless !urlsprudence has noL
lald down any rule speclfylng a mlnlmum number of years wlLhln whlch a company pracLlce
musL be exerclsed ln order Lo consLlLuLe volunLary company pracLlce 1hus lL can be slx (6)
years Lhree (3) years or even as shorL as Lwo (2) years eLlLloner cannoL shlrk away from
lLs responslblllLy by merely clalmlng LhaL lL was a mlsLake or an error supporLed only by an
affldavlL of lLs manufacLurlng group
lf peLlLloner wanLs Lo prove LhaL lL merely erred ln glvlng full beneflLs lL could have easlly
presenLed oLher proofs such as Lhe names of oLher employees who dld noL fully serve for
one year and Lhus were glven proraLed beneflLs 1hls could have easlly bolsLered
peLlLloner's Lheory of mlsLake/error buL sadly no evldence Lo LhaL effecL was presenLed
























Mc|eod v NLkC

IAC1S
Mcleod was Lhe acLlng vlcepresldenL and general manager of eggy Mllls lnc (Ml)
from !un 1980 uec1992 (12 years)
When Ml's employees sLaged a sLrlke Ml sLopped lLs operaLlons permanenLly sLarLlng
!uly 1992
Ml lnformed lLs employees lncludlng Mcleod of lLs closure and pald lLs employees
lncludlng managerlal employees Lhelr unpald wages slck and vacaLlon leave proraLed
13
Lh
monLh pay and separaLlon pay excepL Mcleod
Ml and Mcleod ended Lhelr employeremployee relaLlonshlp ln uec 1992
Ml asseLs Lransferred all lLs rlghLs LlLle and lnLeresLs ln Lhe AsseLs by way of daLlon ln
paymenL Lo SLa 8osa 1exLlles lnc (S18l)
1he S81l hlred Mcleod as consulLanL and noL as employee unLll uec 1993
ln leb 1993 Mcleod flled a complalnL for reLlremenL beneflLs vacaLlon and slck leave
beneflLs nonpaymenL of unused alrllne LlckeLs hollday pay underpaymenL of salary
and 13
Lh
monLh pay agalnsL Ml and S81l along wlLh Lhe oLher Lwo companles (llLS?n
lL1Ml) whlch use Lhe same address as Ml and S81l and aLrlclo Llm (presldenL of Ml)

ISSUL WCn Mcleod ls enLlLled for Lhe paymenL of vacaLlon and slck leave hollday pay
underpaymenL of salary and hls 13
Lh
monLh pay nonpaymenL of unused alrllne LlckeLs?

kULING
Slnce Mcleod can'L presenL evldence llke appolnLmenL leLLers or employmenL conLracLs
payrolls organlzaLlon charLs SSS reglsLraLlon personnel llsL or even LesLlmony of hls co
employees Lo supporL hls allegaLlon of employeremployee relaLlonshlp beLween hlm
and any of llLS?n S81l Anu lL1Ml Lherefore he can'L have cause of acLlon agalnsL
Lhese corporaLlons
Mcleod cause of acLlon ls only agalnsL hls former employer Ml
Cn aLrlclo's personal llablllLy Lhere ls no evldence LhaL he acLed wlLh mallce or bad
falLh ln LermlnaLlng Mcleod's servlces Lo warranL hls personal llablllLy Ml had no oLher
cholce buL Lo sLop planL operaLlons because of Lhe serlous buslness losses LhaL lL had
suffered 1he mere facL aLrlclo was Lhe presldenL Ml ls noL a ground Lo conclude LhaL
he ls solldarlly llable wlLh Ml for Mcleod's money clalm
Mcleod ls noL enLlLled Lo paymenL of vacaLlon leave and slck leave as well as Lo hollday
pay As presldenL/planL manager Mcleod ls a managerlal employee who ls excluded
from Lhe coverage of 1lLle l 8ook lll of Lhe labor code Mc|eod |s ent|t|ed to payment
of vacat|on and s|ck |eave on|y |f he and 9MI had agreed on |t In th|s case there |s no
show|ng that Mc|eod and 9MI had an agreement concern|ng payment of these
benef|ts
Mcleod's underpaymenL of hls 13
Lh
monLh pay ln uec 1993 ls unavalllng Mcleod and
Ml employeremployee relaLlonshlp ended ln 1992 Slnce Mcleod was no longer an
employee he was noL enLlLled Lo Lhe 13
Lh
monLh pay
Also unavalllng ls Mcleod's clalm LhaL he was enLlLled Lo Lhe nonpaymenL of unused
alrllne LlckeLs for Lhe perlod coverlng 19891992 Ml has no company pollcy granLlng
lLs offlcers and employees expenses for Lrlps abroad Ml never promlsed Mcleod LhaL lL
would conLlnue Lo granL hlm Lhls beneflL
8egardlng Lhe underpaymenL of salary Mcleod can'L preLend LhaL hls monLhly salary of
60000 was reduced wlLhouL hls consenL lL was explalned Lo hlm LhaL Ml was shorL ln
flnances LhaL hls salary would have reduced Slnce Lhe lasL salary LhaL Mcleod recelved
form Ml was 30493 Lhls ls now Lhe basls ln compuLlng hls reLlremenL beneflLs
Slnce Ml has no reLlremenL plan Sec 3 8ule ll of Lhe 8ules lmplemenLlng Lhe new
8eLlremenL Law would apply WlLh Mcleod havlng worked wlLh Ml for 12 years he ls
enLlLled Lo a reLlremenL pay equlvalenL Lo Z monLh salary for every year of servlce





















DAVAC IkUI1S CCk9 VS ASSCCIA1LD 22S SCkA S62 (1993)

IAC1S Cn uecember 28 1982 AssoclaLed Labor unlons (ALu) for and ln behalf of all Lhe rank
and flle workers and employees of peLlLloner uavao lrulLs Corp flled a complalnL agalnsL Lhe
company for nonpaymenL of Lhe 13
Lh
monLh pay dlfferenLlals ALu soughL Lo recover from
uavao lrulLs Corp Lhe 13
Lh
monLh pay dlfferenL for 1982 of lLs rank and flle employees
equlvalenL Lo Lhelr slck vacaLlon and maLernlLy leaves premlum for work done on resL days
and speclal holldays and pay for regular holldays whlch Lhe peLlLloner allegedly ln dlsregard of
company pracLlce slnce 1973 excluded from Lhe compuLaLlon of Lhe 13
Lh
monLh pay for 1982

uavao lrulLs Corp clalmed LhaL lL erroneously lncluded lLems sub[ecL of Lhe complalnL ln Lhe
compuLaLlon of Lhe 13
Lh
monLh pay for Lhe years prlor Lo 1982 upon a doubLful and dlfflculL
quesLlon of law 1he mlsLake was only dlscovered ln 1982 afLer Lhe promulgaLlon of Lhe SC ln
San Mlguel Corp vs lnclong

ISSUL W/n ln 1PL CCMu1A1lCn Cl 1PL 13
1P
MCn1P A? ClvLn 8? LMLC?L8S 1C 1PLl8
LMLC?LLS unuL8 u nC 831 A?MLn1S lC8 SlCk vACA1lCn Anu MA1L8nl1? LLAvLS
8LMluMS lC8 WC8k uCnL CnL 8LS1 uA?S Anu SLClAL PCLluA?S Anu A? lC8 8LCuLA8
PCLluA?S MA? 8L LxCLuuLu ln 1PL CCMu1A1lCn Anu A?MLn1 1PL8LCl 8LCA8uLLSS Cl
LCnC S1AnulnC CCMAn? 8AC1lCL

nLLD 1he SupplemenLary 8ules and 8egulaLlons lmplemenLlng u no 83 Lo resolve Lhe lssue
on Lhe compuLaLlon of Lhe 13
Lh
monLh pay expressly sLaLed LhaL Lhe 13
Lh
monLh pay lncludes
only Lhe baslc salary lL does noL lnclude frlnge beneflLs" 1he same was lssued on !anuary 16
1976 barely a monLh afLer Lhe effecLlvlLy of u no 831 uesplLe Lhls Lhe peLlLloner conLlnued
lLs pracLlce ln uecember 1981 afLer promulgaLlon of Lhe San Mlguel declslon on lebruary 24
1981 when lL purporLedly dlscovered" lLs mlsLake

lrom 1973 Lo 1981 the pet|t|oner had free|y vo|untar||y and cont|nuous|y |nc|uded |n the
computat|on of |ts emp|oyees' 13
th
month pay Lhe paymenLs for slck vacaLlon and maLernlLy
leaves premlums for work done on resL days and speclal holldays and pay for regular holldays
1h|s seems to negate |ts c|a|m of m|stake

A company pract|ce favorab|e to the emp|oyees had |ndeed been estab||shed and the
payments made pursuant thereto r|pened |nto benef|ts en[oyed by them Any benef|t and
supp|ement be|ng en[oyed by the emp|oyees cannot be reduced d|m|n|shed d|scont|nued or
e||m|nated by the emp|oyer pursuant to Sec 10 of the ku|es and kegu|at|ons Imp|ement|ng
9D no 8S1 and Art 100 Labor Code wh|ch proh|b|t the d|m|nut|on or e||m|nat|on by the
emp|oyer of the emp|oyees' ex|st|ng benef|ts





Samahang Mangagawa etc vs NLkC 29S SCkA 171 (1998)

IAC1S
O eLlLloner Samahang Manggagawa sa 1op lorm ManufacLurlng unlLed Workers of Lhe
hlllpplnes (SM1lM) was Lhe cerLlfled collecLlve bargalnlng represenLaLlve of all regular
rank and flle employees of prlvaLe respondenL 1op lorm ManufacLurlng hlllpplnes lnc
Cn lebruary 27 1990 Lhe parLles agreed Lo dlscuss unresolved economlc lssues Cn Lhe
mlnuLes of Lhe meeLlng Lhe unlon proposed LhaL any fuLure wage lncrease glven by Lhe
governmenL should be lmplemenLed by Lhe company acrossLheboard or non
condlLlonal ManagemenL requesLed Lhe unlon Lo reLaln Lhls provlslon slnce Lhelr
slncerlLy was already proven when Lhe 2300 wage lncrease was granLed acrossLhe
board 1he unlon declded Lo defer Lhls provlslon relylng on Lhe underLaklngs made by
Lhe offlclals of Lhe company who negoLlaLed wlLh Lhem and slnce Lhe company has
granLed Lo us governmenL mandaLed wage lncreases on acrossLheboard basls

O Cn CcLober 13 1990 Lhe 81W8nC8 lssued Wage Crder lncreaslng Lhe salary of Lhe
workers 1he unlon requesLed Lhe lmplemenLaLlon of sald wage orders Powever Lhey
demanded LhaL Lhe lncrease be on an acrossLheboard basls rlvaLe respondenL
refused Lo accede Lo LhaL demand lnsLead lL lmplemenLed a scheme of lncreases
purporLedly Lo avold wage dlsLorLlon

O 1he unlon demanded LhaL lL should fulflll lLs pledge of slncerlLy Lo Lhe unlon by granLlng
an acrossLheboard wage lncreases (slc) Lo all employees under Lhe wage orders 1he
unlon relLeraLed LhaL lL had agreed Lo reLaln Lhe old provlslon of C8A on Lhe sLrengLh of
prlvaLe respondenLs promlse and assurance of an acrossLheboard salary lncrease
should Lhe governmenL mandaLe salary lncreases

O 1he unlon flled a complalnL wlLh Lhe nC8 nL8C alleglng LhaL prlvaLe respondenLs acL of
reneglng on lLs underLaklng/promlse clearly consLlLuLes an acL of unfalr labor pracLlce
Lhrough bargalnlng ln bad falLh lL charged prlvaLe respondenL wlLh acLs of unfalr labor
pracLlces or vlolaLlon of ArLlcle 247 of Lhe Labor Code as amended speclflcally
bargalnlng ln bad falLh and prayed LhaL lL be awarded acLual moral and exemplary
damages 1he unlon added LhaL lL was charglng prlvaLe respondenL wlLh vlolaLlon of
ArLlcle 100 of Lhe Labor Code

O rlvaLe respondenL conLends LhaL Lhere was no agreemenL Lo Lhe effecL LhaL fuLure
wage lncreases mandaLed by Lhe governmenL should be lmplemenLed on an acrossLhe
board basls CLherwlse LhaL agreemenL would have been lncorporaLed and expressly
sLlpulaLed ln Lhe C8A

ISSUL WheLher or noL prlvaLe respondenL commlLLed an unfalr labor pracLlce ln lLs refusal Lo
granL acrossLheboard wage lncrease


nLLD
No 1he pr|vate respondent d|d not comm|t an unfa|r |abor pract|ce |n |ts refusa| to grant
acrosstheboard wage |ncrease

1he alleged vlolaLlon of ArLlcle 100 of Lhe Labor Code as amended as well as ArLlcle xvll
SecLlon 7 of Lhe exlsLlng C8A as hereln earller quoLed ls llkewlse found by Lhls 8ranch Lo have
no basls ln facL and ln law no beneflLs or prlvlleges prevlously en[oyed by Lhe employees were
wlLhdrawn as a resulL of Lhe lmplemenLaLlon of Lhe sub[ecL orders Llkewlse Lhe alleged
company pracLlce of lmplemenLlng wage lncreases declared by Lhe governmenL on an across
Lheboard basls has noL been duly esLabllshed by Lhe complalnanLs evldence 1he complalnanLs
asserLed LhaL Lhe company lmplemenLed 8epubllc AcL no 6727 whlch granLed a wage lncrease
of 2300 effecLlve !uly 1 1989 on an acrossLheboard basls CranLlng LhaL Lhe same ls Lrue
such lsolaLed slngle acL LhaL respondenLs adopLed would deflnlLely noL rlpen lnLo a company
pracLlce

eLlLloner unlon does noL deny LhaL dlscusslon on lLs proposal LhaL all governmenLmandaLed
salary lncreases should be on an acrossLheboard basls was deferred purporLedly because lL
relled upon Lhe underLaklng of Lhe negoLlaLlng panel of prlvaLe respondenL

nelLher does
peLlLloner unlon deny Lhe facL LhaL Lhere ls no provlslon of Lhe 1990 C8A conLalnlng a
sLlpulaLlon LhaL Lhe company wlll granL acrossLheboard Lo lLs employees Lhe mandaLed wage
lncrease 1hey slmply asserL LhaL prlvaLe respondenL commlLLed acLs of unfalr labor pracLlces by
vlrLue of lLs coottoctool commltmeot moJe Jotloq tbe collectlve botqololoq ptocess 1he mere
facL however LhaL Lhe proposal ln quesLlon was noL lncluded ln Lhe C8A lndlcaLes LhaL no
coottoctool commltmeot Lhereon was ever made by prlvaLe respondenL as no agreemenL had
been arrlved aL by Lhe parLles

Cbvlously Lhe purpose of collecLlve bargalnlng ls Lhe reachlng of an agreemenL resulLlng ln a
conLracL blndlng on Lhe parLles buL Lhe fallure Lo reach an agreemenL afLer negoLlaLlons
conLlnued for a reasonable perlod does noL esLabllsh a lack of good falLh 1he sLaLuLes lnvlLe
and conLemplaLe a collecLlve bargalnlng conLracL buL Lhey do noL compel one 1he duLy Lo
bargaln does noL lnclude Lhe obllgaLlon Lo reach an agreemenL









Amer|can W|re and Cab|e Da||y kated Lmp|oyees Un|on v Amer|can W|re and Cab|e Co Inc

IAC1S
Amerlcan Wlre and Cable Co lnc ls a corporaLlon ln Lhe manufacLure of wlres and
cables 1here are Lwo unlon ln Lhls company Lhe MonLhly 8aLed unlon and Lhe ually
8aLed unlon

ln leb 2001 Lhe Lwo unlons flled an acLlon for volunLary arblLraLlon 1hey alleged LhaL
Lhe prlvaLe respondenL wlLhdrew and denled cerLaln beneflLs and enLlLlemenLs whlch
Lhey long have en[oyed wlLhouL valld cause 1hese are Lhe Servlce Award 33 premlum
pay of an employee's baslc pay for Lhe work rendered durlng holy Monday Poly
1uesday Poly Wednesday uec 23 26 27 28 29 ChrlsLmas parLy and promoLlonal
lncrease

A promoLlonal lncrease was asked by Lhe peLlLloner for 13 of lLs members who were
glven new [ob classlflcaLlon Accordlng Lo Lhe peLlLloner Lhe new [ob classlflcaLlon were
ln Lhe naLure of a promoLlon

1he volunLary ArblLraLor declared LhaL Lhe company ls noL gullLy for wlLhdrawlng Lhe
servlce award xmas parLy and 33 premlum for work rendered durlng Poly week and
xmas season and for noL granLlng promoLlonal lncrease

1he CA afflrmed Lhe declslon of Lhe volunLary ArblLraLor Pence Lhls peLlLlon


ISSUL
WCn prlvaLe respondenL ls gullLy of vlolaLlon ArL 100 of Lhe Labor Code as amended when Lhe
beneflLs/enLlLlemenLs glven Lo Lhe members of peLlLloners unlon were wlLhdrawn?

kULING
1he beneflLs/enLlLlemenLs ln Lhls case are all bonuses whlch were glven by Lhe prlvaLe
respondenL ouL of lLs generoslLy 1he same was a managemenL prerogaLlve whlch
whenever managemenL sees necessary may be wlLhdrawn unless Lhey have made a
parL of Lhe wage or salary or compensaLlon of Lhe employees

lor a bonus Lo be enforceable lL musL have been promlsed by Lhe employer and
expressly agreed upon by Lhe parLles or lL musL have had a flxed amounL and had been a
long and regular pracLlce on Lhe parL of Lhe employer

1he beneflLs/enLlLlemenLs ln quesLlon were never sub[ecLs of any express agreemenL
beLween Lhe parLles 1hey were never lncorporaLed ln Lhe CollecLlve 8argalnlng
AgreemenL

1he xmas parLles and lLs lncldenLal beneflLs and Lhe glvlng of case lncenLlve LogeLher
wlLh Lhe servlce award cannoL be sald Lo have flxed amounLs

lL was clear LhaL over Lhe years Lhere had been a downLrend ln Lhe amounL glven as
servlce award 1here was also downLrend wlLh respecL Lo Lhe holdlng of Lhe xmas
parLles ln Lhe sense LhaL lLs locaLlon changed fro pald venues Lo Lone whlch was free of
charge Lo cuL cosL 1he downLrend ln Lhe granL of Lhese Lwo bonuses over Lhe years
demonsLraLed LhaL Lhere ls noLhlng conslsLenL abouL lL

1he addlLlonal 33 premlum pay for work rendered durlng Lhe holy week and xmas
season Lhe holdlng of xmas parLles wlLh lLs lncldenLal beneflLs and Lhe granL of cash
lncenLlve LogeLher wlLh Lhe lncenLlve award are all bonuses whlch are nelLher
demandable nor enforceable obllgaLlons of Lhe respondenL

LasLly slnce Lhe unlon cannoL presenL any proof LhaL a promoLlon occur wlLh Lhe 13
employees promoLlonal lncrease cannoL be ralsed

















9AGASA S1LLL WCkS INC VS CA 486 SCkA 47S (2006)

IAC1S Cn SepLember 23 1999 peLlLloner agasa SLeelworks and Lhe unlon enLered lnLo a
collecLlve bargalnlng agreemenL (C8A) effecLlve !uly 1 1999 unLll !uly 1 2004 Sec 1 ArL vl of
Lhe sald C8A provldes LhaL Lhe company agrees Lo granL all Lhe workers who are already
regular and covered by Lhls agreemenL aL Lhe effecLlvlLy of Lhls agreemenL a general wage
lncrease as follows
!uly 1 1999 1300 per day per employee
!uly 1 2000 2300 per day per employee
!uly 1 2001 3000 per day per employee

1he dlfference of Lhe flrsL year ad[usLmenL Lo reLroacL Lo !uly 1 1999 1he across Lhe board
wage lncrease for Lhe 4
Lh
and 3
Lh
year of Lhe C8A shall be sub[ecL for a reopenlng or re
negoLlaLlon as provlded for by 8A no 6713

Cn CcLober 14 1999 Wage Crder no nC807 was lssued and on CcLober 26 1999 lLs
lmplemenLlng rules and regulaLlons lL provlded for a 2330 per day lncrease ln Lhe salary of
employees recelvlng mlnlmum wage and lncreased Lhe mlnlmum wage Lo 22330 eLlLloner
pald 2330 per day lncrease Lo all of lLs rank and flle employees

Cn !uly 1 2000 Lhe rank and flle employees were granLed Lhe second year lncrease provlded ln
Lhe C8A (2300 per day)

Cn november 1 2000 Wage Crder no nC808 Look effecL Sec 1 provldes LhaL Lhe prlvaLe
workers and employees ln nC8 recelvlng Lhe prescrlbed dally mlnlmum wage of 22330 shall
recelve an lncrease (2630 per day) seLLlng Lhe mlnlmum wage Lo 23000 per day

1he unlon presldenL requesLed agasa SLeelworks Lo lmplemenL Lhe lncrease under Wage
Crder no nC808 ln favor of lLs employees eLlLloner refused clalmlng LhaL lL was noL obllged
Lo granL Lhe wage lncrease slnce none of Lhe employees were recelvlng mlnlmum wage and
Lhere was no wage dlsLorLlon

1he unlon argued LhaL lL had been Lhe company's pracLlce Lo granL a wage lncrease under a
governmenLlssued wage order aslde from Lhe yearly wage lncrease ln Lhe C8A eLlLloner
alleged LhaL Lhere ls no such company pracLlce and LhaL lL complled wlLh Lhe prevlous wage
orders (Wage Crder nos nC80103) because some of lLs employees were recelvlng wages
below Lhe mlnlmum prescrlbed sald orders As for Wage Crder no nC807 peLlLloner alleged
LhaL lLs compllance was ln accordance wlLh lLs verbal commlLmenL Lo Lhe unlon durlng Lhe C8A
negoLlaLlons LhaL lL would lmplemenL any wage order lssued ln 1999

ISSUL W/n 1PL L1l1lCnL8 lS C8LlCLu 1C C8An1 WACL lnC8LASL unuL8 WACL C8uL8
nC nC808 AS A MA11L8 Cl 8AC1lCL

nLLD PablLs cusLoms usage or paLLern or of conducL musL be proven ln courL by esLabllshlng
Lhe degree of speclflclLy and frequency Mere slmllarlLy of conLracLs does noL presenL Lhe klnd
of sufflclenLly slmllar clrcumsLances Lo ouLwelgh Lhe danger of pre[udlce and confuslon
1he only lnsLance when peLlLloner admlLLedly lmplemenLed a wage order desplLe Lhe facL LhaL
Lhe employees were noL recelvlng salarles below Lhe mlnlmum wage was under Wage Crder
no nC807 eLlLloner however explalns LhaL lL dld so because lL was agreed upon ln Lhe C8A
LhaL should a wage lncreased be ordered wlLhln 6 monLhs from lLs slgnlng peLlLloner would
glve Lhe lncrease Lo Lhe employees ln addlLlon Lo Lhe C8AmandaLed lncreases 8espondenL's
lsolaLed acL could hardly be classlfled as a company pracLlce" or company usage LhaL may be
consldered an enforceable obllgaLlon

1o rlpen lnLo a company pracLlce LhaL ls demandable as a maLLer of rlghL Lhe glvlng of Lhe
lncrease should noL be by reason of a sLrlcL legal or conLracLual obllgaLlon buL by reason of an
acL of llberallLy on Lhe parL of Lhe employer Pence lf Lhe company conLlnuously granLs a wage
lncrease as mandaLed by wage order or pursuanL Lo a C8A Lhe same would noL auLomaLlcally
rlpen lnLo a company pracLlce ln Lhls case agasa SLeelworks granLed Lhe lncrease under
Wage Crder no nC807 on lLs bellef LhaL lL was obllged Lo do so under Lhe C8A



























Su|co vs NLkC S13 SCkA 37S (2007)
IAC1S
O Culver 8 Sulco 1eresa u Cenlza 8onald 8 uacuL (complalnanLs were regular
employees of hlllpplne Long ulsLance 1elephone Company (Lu1) Cebu !ones Lxchange
and members of ,ooqqoqowo oq komoolkosyoo oq llllploos (Mk)
O SepLember 1997 Mk launched a sLrlke agalnsL Lu1 ComplalnanLs parLlclpaLed ln Lhe
sLrlke by plckeLlng Lhe Lu1
O Lu1 senL 2 noLlce Lo explanaLlon Lo Sulco eLal for Lhe acLs of vlolaLlon LhaL happen
durlng Lhe sLrlke 8uL Lhe complalnanL falled Lo provlde Lhe requlred wrlLLen explanaLlon
Lhe acLs charged Lo Lhem 1hey replled lnformlng LhaL Lhey opL Lo exerclse Lhelr rlghLs
Lo due process and requesL Lo furnlsh a copy of Lhe formal wrlLLen complalnL complalnL
flled Lhem sLaLemenL of wlLness/es and prellmlnary lnvesLlgaLlons and/or reporL/s
conducLed on Lhe aforesald lncldenL lf any
O Lu1 flndlngs based on Lhe avallable evldence found Lhe complalnanLs gullLy and were
subsequenLly LermlnaLed
O Sulco eLal flled a complalnL for lllegal dlsmlssal and damages
O lL ls Lhe vlew of Lu1 LhaL ln Lhe dlsmlssal of employees for sLrlkerelaLed vlolence lL ls
sufflclenL Lo merely declare Lhe laLLer Lo have losL Lhelr employmenL wlLhouL havlng Lo
comply wlLh any procedure for Lhelr LermlnaLlon Lu1 refused Lo lmplemenL sald
pollcy conLendlng LhaL lL applles Lo admlnlsLraLlve cases only and noL Lo sLrlkerelaLed
cases such as Lhe ones lnvolvlng Sulco eL al
ISSUL WheLher Lu1 vlolaLed Lhe requlremenLs of due process under Lhe Labor Code when lL
dlsmlssed sald employees wlLhouL heedlng Lhelr requesL for Lhe conducL of a formal hearlng as
provlded for under Lu1 SysLems racLlce no 94016 and prlor Lo submlsslon of Lhelr
respecLlve answers Lo Lhe charges agalnsL Lhem
nLLD 1he procedure adopLed by Lu1 ln dlsmlsslng Sulco eL al fell shorL of Lhe requlremenLs
of due process
1he requlremenLs of due process by whlch Lo LesL Lhe valldlLy of Lhe procedure adopLed by
Lu1 ln dlsmlsslng Sulco eL al are Lhose embodled ln ArL 277 (b) of Lhe Labor Code 8ule xxll
of Lhe lmplemenLlng 8ules of 8ook v and SysLems racLlce no 94016
Lu1 complled wlLh Lhe LwonoLlce requlremenL of due process 1he flrsL noLlces senL Lo Sulco
eL al seL ouL ln deLall Lhe naLure and clrcumsLances of Lhe vlolaLlons lmpuLed Lo Lhem requlred
Lhem Lo explaln Lhelr slde and expressly warned Lhem of Lhe posslblllLy of Lhelr dlsmlssal should
Lhelr explanaLlon be found wanLlng 1he lasL noLlces lnformed Sulco eL al of Lhe declslon Lo
LermlnaLe Lhelr employmenL and clLed Lhe evldence upon whlch Lhe declslon was based
68

1hese Lwo noLlces would have sufflced had lL noL been for Lhe exlsLence of SysLems racLlce no
94016 under SysLems racLlce no 94016 Lu1 granLed lLs employee Lhe alLernaLlve of elLher
flllng a wrlLLen answer Lo Lhe charges or requesLlng for opporLunlLy Lo be heard and defend
hlmself wlLh Lhe asslsLance of hls counsel or unlon represenLaLlve lf he so deslres
Sulco eL al exerclsed Lhelr opLlon under SysLems racLlce no 94016 by requesLlng LhaL a
formal hearlng be conducLed and LhaL Lhey be glven coples of sworn sLaLemenLs and oLher
perLlnenL documenLs Lo enable Lhem Lo prepare for Lhe hearlng
69
1hls opLlon ls parL of Lhelr
rlghL Lo due process Lu1 ls bound Lo comply wlLh Lhe SysLems racLlce
Company pollcles or pracLlces are blndlng on Lhe parLles
60
Some can rlpen lnLo an obllgaLlon on
Lhe parL of Lhe employer
61
such as Lhose whlch confer beneflLs on employees
62
or regulaLe Lhe
procedures and requlremenLs for Lhelr LermlnaLlon
ArL 277 (b) ln relaLlon Lo ArL 264 (a)
33
and (e)
36
recognlzes Lhe rlghL Lo due process of all
workers wlLhouL dlsLlncLlon as Lo Lhe cause of Lhelr LermlnaLlon
37
Where no dlsLlncLlon ls
glven none ls consLrued
38
Pence Lhe foregolng sLandards of due process apply Lo Lhe
LermlnaLlon of employmenL of Sulco eL al even lf Lhe cause Lherefor was Lhelr supposed
lnvolvemenL ln sLrlkerelaLed vlolence prohlblLed under ArL 264 (a) and (e)
Moreover Lhe procedure for LermlnaLlon prescrlbed under ArL 277(b) and 8ule xxll of Lhe
lmplemenLlng 8ules of 8ook v ls supplemenLed by exlsLlng company pollcy ArL 277(b) provldes
LhaL Lhe procedure for LermlnaLlon prescrlbed Lhereln ls wlLhouL pre[udlce Lo Lhe adopLlon by
Lhe employer of company pollcy on Lhe maLLer provlded Lhls conforms wlLh Lhe guldellnes seL
by Lhe uCLL such as 8ule xxll of Lhe lmplemenLlng 8ules of 8ook v 1hls ls conslsLenL wlLh Lhe
esLabllshed prlnclple LhaL employers are allowed under Lhe broad concepL of managemenL
prerogaLlve Lo adopL company pollcles LhaL regulaLe all aspecLs of personnel admlnlsLraLlon
lncludlng Lhe dlsmlssal and recall of workers




















CnINA 8ANING CCk9CkA1ICN vs 8CkkCMLC

IAC1S
8orromeo sLarLed [olnlng C8C ln 1989 as Manager
lrom 19921993 he was promoLed fro Lhree Llmes and recelved a hlghly saLlsfacLorlly
performance raLlng
llnally ln 1996 Lhe respondenL was promoLed Lo Lhe poslLlon of AsslsLanL vlce
resldenL ln Mlndanao area
Powever prlor Lo hls lasL promoLlon Lhe respondenL wlLhouL auLhorlLy from Lhe
LxecuLlve CommlLLee or 8oard of ulrecLors approved several uAuu/8
accommodaLlons amounLlng Lo 2441373 ln favor of Manlwan uAuu/8 ls Lhe
acronym for checks urawn AgalnsL uncollecLed ueposlLs/8llls urchased
under Lhe peLlLloner 8ank's sLandard operaLlng procedures uAuu/8 accommodaLlons
may be granLed only by a bank offlcer upon express auLhorlLy from lLs LxecuLlve
CommlLLee or 8oard of ulrecLors and amounL ls ln excess of Lhe credlL llmlL
When peLlLloner 8ank came Lo know of Lhe uAuu/8 accommodaLlons ln favor of
Manlwan 8ank's llrsL vlce resldenL and Peadvlsayas Mlndanao ulvlslon senL a
Memorandum Lo seek clarlflcaLlon wlLh Lhe respondenL
8orromeo ln hls leLLer accepLs full responslblllLy for commlLLlng an error ln [udgmenL
lapses ln conLrol and abuse of dlscreLlon by relylng solely on Lhe word assurance sureLy
and 8LM of Mr Ldmund 8amos a frlend and a cobank offlcer
ln anoLher Memorandum addressed Lo Lhe respondenL he was lnformed LhaL he had
vlolaLed Lhe peLlLloner 8ank's Code of LLhlcs As such he was dlrecLed Lo resLlLuLe Lhe
amounL of 130773679 represenLlng 90 of Lhe LoLal loss of 167326310 lncurred
by Lhe peLlLloner 8ank
Powever ln vlew of hls reslgnaLlon and conslderlng Lhe years of servlce ln Lhe peLlLloner
8ank Lhe managemenL earmarked only 83663708 from Lhe respondenL's LoLal
separaLlon beneflLs or pay
ln Lhe anoLher LeLLer addressed Lo Lhe respondenL he was agaln lnformed LhaL Lhe
managemenL would wlLhhold Lhe sum of 83663708 from hls separaLlon pay mldyear
bonus and proflL sharlng 1he amounL wlLhheld represenLed hls proporLlonaLe share ln
Lhe accounLablllLy vlsvls Lhe uAuu/8 accommodaLlons ln favor of Manlwan
ConsequenLly Lhe respondenL made a demand on Lhe peLlLloner 8ank for Lhe paymenL
of hls separaLlon pay and oLher beneflLs 1he peLlLloner 8ank malnLalned lLs poslLlon Lo
wlLhhold Lhe sum of 83663708
Pence Lhls peLlLlon

ISSUL WheLher Lhe respondenL pledged hls beneflLs as guaranLee for Lhe losses Lhe bank
lncurred resulLlng from Lhe unauLhorlzed uAuu/8 accommodaLlons ln favor of Manlwan?

kULING
1he respondenL ls enLlLled Lo Lhe beneflLs he clalmed ln pursuance Lo Lhe CollecLlve 8argalnlng
AgreemenL buL ln Lhe meanLlme such beneflLs shall be deposlLed wlLh Lhe bank by way of
pledge

1he peLlLloner 8ank was lefL wlLh no oLher recourse buL Lo lmpose Lhe penalLy of resLlLuLlon lL
was cerLalnly wlLhln Lhe peLlLloner 8ank's prerogaLlve Lo lmpose on Lhe respondenL whaL lL
consldered Lhe approprlaLe penalLy under Lhe clrcumsLances pursuanL Lo lLs company rules and
regulaLlons

lndeed lL had been shown LhaL Lhe respondent adm|tted that he v|o|ated the pet|t|oner
8ank's standard operat|ng procedures |n grant|ng the DAUD]89 accommodat|ons |n favor of
Man|wan w|thout h|gher management approva|

8ank's Code of LLhlcs provlde LhaL
8esLlLuLlon/lorfelLure of 8eneflLs
8esLlLuLlon may be lmposed lndependenLly or LogeLher wlLh any oLher penalLy ln case of loss or
damage Lo Lhe properLy of Lhe 8ank lLs employees cllenLs or oLher parLles dolng buslness wlLh
Lhe 8ank 1he 8ank may recover Lhe amounL lnvolved by means of salary deducLlon or
whaLever legal means LhaL wlll prompL offenders Lo pay Lhe amounL lnvolved 8uL resLlLuLlon
shall ln no way mlLlgaLe Lhe penalLles aLLached Lo Lhe vlolaLlon or lnfracLlon

lorfelLure of beneflLs/prlvlleges may also be effecLed ln cases where lnfracLlons or vlolaLlons
were lncurred ln connecLlon wlLh or arlslng from Lhe appllcaLlon/avallmenL Lhereof

ManagemenL has Lhe prerogaLlve Lo dlsclpllne lLs employees and Lo lmpose approprlaLe
penalLles on errlng workers pursuanL Lo company rules and regulaLlons

rlor Lo Lhe respondenL's reslgnaLlon he was furnlshed wlLh Lhe Memorandum ln whlch several
clarlflcaLory quesLlons were asked Lo hlm regardlng Lhe uAuu/8 accommodaLlons ln favor of
Manlwan lL could be sald Lhls memorandum consLlLuLed noLlce of Lhe charge agalnsL Lhe
respondenL

ConLrary Lo hls proLesLaLlons Lhe respondenL was glven Lhe opporLunlLy Lo be heard and
conslderlng hls admlsslons lL became unnecessary Lo hold any formal lnvesLlgaLlon













MANLIA VS NLkC 290 SCkA 603 (1998)

IAC1S eLlLloner 8osarlo Mane[a worked wlLh prlvaLe respondenL Manlla MldLown PoLel
beglnnlng !anuary 1983 as a Lelephone operaLor She was a member of Lhe naLlonal unlon of
Workers ln PoLels 8esLauranLs and Allled lndusLrles (nuWP8Aln) wlLh an exlsLlng C8A wlLh Lhe
prlvaLe respondenL

ln lebruary 13 1990 a fellow Lelephone operaLor 8owena Loleng recelved a requesL for long
dlsLance call (8LuC) form and a deposlL for 30000 from a !apanese guesL buL Lhe call was
unanswered 1he deposlL was Lhen forwarded Lo Lhe cashler 1he same evenlng Lhe !apanese
guesL agaln made an 8LuC and deposlLed anoLher 30000 buL Lhe call was also unanswered
Loleng passed Lhe 8LuC Lo Mane[a for follow up

Cn lebruary 13 Lhe cashler lnqulred abouL Lhe 1000 deposlL made AfLer a search Lhe flrsL
one was found ln Lhe guesL follo whlle Lhe oLher ln Lhe folder for cancelled calls eLlLloner
Mane[a saw LhaL Lhe 2
nd
8LuC form was noL Llme sLamped so she placed lL ln Lhe machlne Lo
sLamp lL wlLh Lhe daLe lebruary 13 8uL afLer reallzlng LhaL Lhe call was made 2 days before
she changed Lhe daLe Lo lebruary 13

Cn March 7 Lhe chlef Lelephone operaLor asked Lhe peLlLloner and Loleng Lo explaln Lhe leb 13
lncldenL 8oLh submlLLed Lhelr wrlLLen explanaLlon Cn March 20 a wrlLLen reporL was
submlLLed sLaLlng LhaL Lhelr acLlons were covered vlolaLlons of Lhe Cffenses Sub[ecL Lo
ulsclpllnary AcLlon (CSuA) as
1 lorglng falslfylng offlclal documenLs and
2 Culpable carelessnessnegllgence or fallure Lo follow speclflc lnsLrucLlon/s or
esLabllshed procedure/s
Cn March 23 peLlLloner was Lhen served noLlce of dlsmlssal effecLlve on Aprll 1 She refused Lo
slgn and wroLe under proLesL"

Cn CcLober 2 1990 Mane[a flled a complalnL for lllegal dlsmlssal agalnsL prlvaLe respondenL
before Lhe labor arblLer (LA) LA found LhaL Lhe peLlLloner was lllegally dlsmlssed sLaLlng LhaL
even Lhough Lhe case revolves on Lhe maLLer of lmplemenLaLlon and lnLerpreLaLlon of company
pollcles and ls Lhus wlLhln Lhe [urlsdlcLlon of Lhe grlevance procedure under Lhe C8A ArL 217
Labor Code confers orlglnal and excluslve [urlsdlcLlon of all LermlnaLlon cases Lo LA nL8C
dlsmlssed Lhe case for lack of [urlsdlcLlon of LA because Lhe case was sub[ecL Lo volunLary
arblLraLlon

eLlLloner lnslsLs LhaL her LermlnaLlon ls noL an unresolved grlevance as Lhere had been no
grlevance meeLlng beLween Lhe unlon and Lhe managemenL eLlLloner alleged LhaL lL has been
a company pollcy LhaL LermlnaLlon cases are noL referred Lo Lhe grlevance machlnery buL
dlrecLly Lo LA

ISSUL W/n 1PL LA8C8 A88l1L8 PAu !u8lSulC1lCn 1C uLCluL 1PL CASL

nLLD nL8C's lnLerpreLaLlon of ArL 216c Labor Code ls erroneous Lven Lhough such provlslon
provldes LhaL LA have no [urlsdlcLlon over cases arlslng from lnLerpreLaLlon and lmplemenLaLlon
of C8As (musL be submlLLed Lo Lhe grlevance machlne or volunLary arblLraLlon) lL musL be read
ln con[uncLlon wlLh ArL 261 whlch granLs volunLary arblLraLors orlglnal and excluslve [urlsdlcLlon
Lo hear and declde all unresolved grlevances arlslng from Lhe lnLerpreLaLlon or lmplemenLaLlon
of Lhe C8A and Lhose arlslng from Lhe lnLerpreLaLlon or enforcemenL of company personnel
pollcles whlch ls noL Lhe case here

Accordlng Lo Lhe Sanyo case Lhere ls dlsmlssal whlch does noL lnvolve an lnLerpreLaLlon or
lmplemenLaLlon of a C8A or lnLerpreLaLlon or enforcemenL of company personnel pollcles buL
lnvolves LermlnaLlon Where the d|spute |s [ust |n the |nterpretat|on |mp|ementat|on or
enforcement stage |t may be referred to the gr|evance mach|nery set up |n the C8A or by
vo|untary arb|trat|on Where the was a|ready actua| term|nat|on |e v|o|at|on of r|ghts |t |s
a|ready cogn|zab|e by LA

Moreover ArL 260 also sLlpulaLes LhaL only dlspuLes lnvolvlng Lhe unlon and Lhe company shall
be referred Lo Lhe grlevance machlnery or volunLary arblLraLors ln Lhe case aL bar Lhe unlon
does noL evenL come lnLo Lhe plcLure as Lhe pracLlce ln sald PoLel ln cases of LermlnaLlon ls LhaL
Lhey are noL referred anymore Lo Lhe grlevance comlLLe and LhaL Lhe LermlnaLed employee who
wlshes Lo quesLlon Lhe legallLy of hls LermlnaLlon usually goes Lo LA for arblLraLlon wheLher
Lhe LermlnaLlon arose from Lhe lnLerpreLaLlon or enforcemenL of Lhe company personnel
pollcles or oLherwlse

eLlLloner was lllegally dlsmlssed as Lhere are Lwo requlslLes ln a valld dlsmlssal 1 1haL Lhe
dlsmlssal musL be for any causes expressed ln ArL 282 Labor Code and 2 1he employee musL
be glven an opporLunlLy Lo be heard and Lo defend hlmself
1 1here ls no cause for dlsmlssal as Lhe peLlLloner's acLlons were noL conLrary Lo company
pracLlce and Lhere ls also no basls for personal approprlaLlon based on Lhe facLs
2 An examlnaLlon of Lhe record reveals LhaL no hearlng whaLsoever was ever conducLed
by Lhe PoLel before Mane[a was dlsmlssed Whlle lL may be Lrue LhaL Lhe peLlLloner
submlLLed a wrlLLen explanaLlon no hearlng was acLually conducLed before she was
LermlnaLed She was noL accorded Lhe opporLunlLy Lo fully defend herself whlch ls
clearly a vlolaLlon of her rlghL Lo due process











Amkor 1echno|ogy vs Iuangco S12 SCkA 32S (2007)
IAC1S
O uue Lo buslness losses peLlLlonercompany company saw Lhe need Lo reduce lLs exlsLlng
manpower complemenL Several meeLlngs were held among lLs offlcers and deparLmenL
heads Lo dlscuss acLlons Lo be Laken Lo lmplemenL Lhe same
O SomeLlme ln CcLober 2001 peLlLlonercompany convened lLs key offlcers and
deparLmenL heads lncludlng respondenL Lo flnally declde wheLher Lo lmplemenL a
volunLary reLlremenL/volunLary separaLlon program or a reLrenchmenL program uurlng
Lhe meeLlng respondenL expressed her lnLeresL and volunLeered Lo personally
parLlclpaLe ln Lhe downslzlng program of Lhe company's personnel 1o formallze her
declslon Lo reLlre from Lhe company respondenL submlLLed an undaLed leLLer slgnlfylng
her lnLenLlon Lo avall of Lhe volunLary 8eLlremenL rogram of Lhe company effecLlve 13
november 2001
O A week LhereafLer or on november 22 2001 pursuanL Lo her proposlLlon respondenL
recelved her volunLary reLlremenL package ln Lhe amounL of 1hree Mllllon Seven
Pundred lour 1housand llve Pundred SevenLeen esos and 98/100 (370431798)
lncluslve of an addlLlonal Lwo (2) monLhs pay 8espondenL slgned a 8ecelpL and 8elease
Walver and CulLclalm on Lhe same daLe
O She flled her complalnL for lllegal dlsmlssal on Aprll 23 2002 or afLer almosL slx (6)
monLhs from her separaLlon from peLlLlonercompany 8espondenL denled Lhe due
execuLlon of her 8elease CulLclalm and Walver alleglng LhaL she slgned Lhe same under
duress and lnLlmldaLlon She clalmed LhaL she was LhreaLened LhaL she wlll recelve
noLhlng lf she wlll noL slgn lL
O eLlLloners malnLaln LhaL respondenL's reslgnaLlon was volunLary perforce Lhere could
be no lllegal dlsmlssal
ISSUL WheLher or noL respondenL volunLarlly reLlred from her poslLlon as LxecuLlve ulrecLor ln
peLlLlonercompany
nLLD 8espondenL was noL coerced or lnLlmldaLed lnLo slgnlng her reLlremenL leLLer 1he
volunLarlness of her reLlremenL ls aLLesLed and conflrmed by Lop ranklng offlclals of peLlLloner
company Lhen presenL durlng Lhe meeLlng ln CcLober 2001 She falled Lo presenL evldence Lo
conLradlcL Lhelr sLaLemenLs
8espondenL recelved her reLrenchmenL backwage a week afLer she submlLLed her reslgnaLlon
paper She had ample Llme Lo mull over whaL courses of acLlon Lo Lake lf lndeed she was
lllegally dlsmlssed lnsLead she reLurned Lo Lhe company Lo slgn Lhe 8ecelpL and 8elease
Walver and CulL Clalm and Lo recelve her reLlremenL package 1hereafLer she looked for
employmenL ln oLher companles lL ls Lhus clear LhaL Lhe flllng of Lhe complalnL was merely an
afLerLhoughL when she falled Lo flnd anoLher employmenL
Whlle Lhe ConsLlLuLlon ls commlLLed Lo Lhe pollcy of soclal [usLlce and Lhe proLecLlon of Lhe
worklng class lL should noL be expecLed LhaL every labor dlspuLe wlll be auLomaLlcally declded
ln favor of labor ManagemenL also has lLs own rlghLs whlch as such are enLlLled Lo respecL and
enforcemenL ln Lhe lnLeresL of slmple falr play
Cebu koya| 9|ant vs Deputy M|n|ster of |abor

IAC1S
8amon llones was employed on probaLlon leb 16 1978
1he slxmonLh perlod of probaLlon sLarLed on leb 16 and ended on AugusL 17
AfLer Lhls perlod he conLlnued worklng ln Lhe sald planL
llones underwenL medlcal examlnaLlon for quallflcaLlon as regular employee buL Lhe resulLs
showed LhaL he ls sufferlng from ulmonary 1uberculosls (18) mlnlmal
1hen he was lnformed of Lhe LermlnaLlon of hls employmenL by Cebu 8oyal

ISSUL
WCn llones dlsmlssal by Cebu 8oyal lanL was lllegal?

kULING
llones dlsmlssal was lllegal
under ArL 282 of Lhe labor Code an employee who ls allowed Lo work afLer probaLlonary
perlod shall be consldered a regular employee"
Pence llones was already on permanenL sLaLus when he was dlsmlssed on AugusL 21 1978 or
four days afLer he ceased Lo be a probaLloner Also Lhe 1977 wlLhholdlng Lax of llones ls a
proof LhaL he was hlred earller Lhan leb 16 1978
Cebu 8oyal clalms LhaL lL could noL have dlsmlssed llones earller because Lhe xray examlnaLlon
was made only on AugusL 17 1978 and Lhe resulLs were noL lmmedlaLely avallable 1hls ls
unLenable
Cebu 8oyal had 6 monLhs Lo conducL such examlnaLlon buL lL chose Lo walL unLll exacLly Lhe lasL
day of Lhe probaLlon perlod
Slnce llones was already a regular employee when he was dlsmlssed he could valldly clalm Lhe
securlLy of Lenure guaranLeed Lo hlm by Lhe consLlLuLlon and Lhe Labor Code
under Sec 8 8ule l 8ook lv of Lhe rules and 8egulaLlons lmplemenLlng Lhe labor code Lhe
medlcal cerLlflcaLe should be lssued by a compeLenL publlc healLh auLhorlLy
1he medlcal cerLlflcaLe offered by Cebu 8oyal came from lLs own physlclan who was noL a
compeLenL publlc healLh auLhorlLy 1he courL concluded LhaL Lhe requlred cerLlflcaLe was noL
presenLed because Lhe dlsease was noL so serlous LhaL lL can be cured wlLhln 6 monLhs lf so
dlsmlssal was severe and unlawful sancLlon
AddlLlonally Cebu royal's appllcaLlon for clearance Lo LermlnaLe Lhe employmenL of Lhe prlvaLe
respondenL was flled wlLh Lhe MlnlsLry of labor seven days afLer hls dlsmlssal nL8C requlred
noL [usL Lhe mere flllng of a peLlLlon or Lhe mere aLLempL Lo procure a clearance buL haL Lhe sald
clearance be obLalned prlor Lo Lhe operaLlve acL of LermlnaLlon
1hls courL agree LhaL Lhere was an aLLempL Lo clrcumvenL Lhe law by separaLlng Lhe employee
afLer flve monLhs' servlce Lo prevenL hlm from becomlng a regular employee and Lhen rehlrlng
hlm on probaLlon agaln wlLhouL securlLy of Lenure
Wherefore llones shall be relnsLaLed upon a cerLlflcaLlon by a compeLenL publlc healLh
auLhorlLy LhaL he ls flL Lo reLurn Lo work




LNkIUL2 VS 89I S44 SCkA S90 (2008)

IAC1S eLlLloners Lnrlquez and Sla were senlor managers ln 8l 8acolod havlng served 34 years and
29 years respecLlvely Cne day uescarLln a bank Leller had a shorLage of 36000 and she reporLed Lo
her managers LhaL lL was an honesL overslghL as she forgoL Lo have her moLherlnlaw slgn a wlLhdrawal
sllp when Lhe laLLer wlLhdrew Lhe same amounL earller LhaL day 1he managers allowed uescarLln Lo go
Lo her moLherlnlaw and slgn Lhe wlLhdrawal sllp 1he managers dld noL reporL Lhe shorLage as lL was
regularlzed Lhe same day Meanwhlle anoLher Leller lregll who lnlLlally consenLed Lo Lhe slLuaLlon
laLer dlvulged LhaL uescarLln acLually borrowed Lhe 36000 and Lhe enLlre lncldenL was covered up by
Lhe managers (36000 was beyond Lhe floor llmlL for cashlers) ln Lhelr defense Lhe managers sald Lhe
8l offlcer who lnvesLlgaLed Lhem was noL properly depuLlzed by Lhe board (noncompllance wlLh Lhe
nL8C prodecure 8ule 6 Sec 4) Also Lhey assalled Lhelr LermlnaLlon argulng LhaL Lhe lssue has been
regularlzed on Lhe same day and LhaL Lhere was really no need Lo reporL lL because of Lhe regularlzaLlon
of Lhe lssue and LhaL Lhelr long sLay wlLh Lhe company should be appreclaLed wlLh Lhelr resLaLemenL

ISSUL W/n 1PL L1l1lCnL8S WL8L lLLLCALL? ulSMlSSLu Anu AS SuCP SPCuLu 8L 8LlnS1A1Lu

nLLD 1he SC held LhaL Lhe procedural lssue of Lhe case (LhaL Lhere was no wrlLLen manlfesLaLlon of Lhe
lnvesLlgaLlng offlcer) cannoL ouLwelgh subsLanLlve rlghL of Lhe company Lo lnvesLlgaLe lLs employees lL
has been ruled LhaL Lhe board belng Lhe represenLaLlve of Lhe company can delegaLe lLs duLles Lo a
person and sald person's acL shall be blndlng Lo Lhe company as ln Lhe case aL bar

1he baslc requlslLe for dlsmlssal on Lhe ground of loss of confldence ls LhaL Lhe employee concerned
holds a poslLlon of LrusL and confldence or ls rouLlnely charged wlLh Lhe care or cusLody of Lhe
employer's money or properLy and LhaL Lhe breach musL be relaLed Lo Lhe performance of Lhe
employee's funcLlon 1he fallure of Lhe peLlLloners Lo reporL Lhe cash shorLage even lf done ln good
falLh resulLed ln abeLLlng Lhe dlshonesLy commlLLed by Lhe Leller under Lhe personnel pollcles of Lhe
bank such acL [usLlfles Lhelr dlsmlssal even on Lhe flrsL offense Lven lf we were Lo assume Lnrlquez'
verslon was Lrue Lhe facL remalns LhaL Lhey wlllfully declded agalnsL reporLlng Lhe shorLage LhaL
occurred 1helr parLlclpaLlon ln Lhe coverup of uescarLln's mlsconducL makes Lhem unworLhy of Lhe
LrusL and confldence demanded by Lhelr poslLlons

It |s a we||sett|ed that the power to d|sm|ss an emp|oyee |s a recogn|zed prerogat|ve that |s |nherent
|n the emp|oyer's r|ght to free|y manage and regu|ate |ts bus|ness An emp|oyer cannot be expected to
reta|n an emp|oyee whose |ack of mora|s respect and |oya|ty to h|s emp|oyer or regard for h|s
emp|oyer's ru|es has so p|a|n|y and comp|ete|y been bared 1hus to compe| 89I to keep pet|t|oners |n
|ts emp|oy after the |atter betrayed the trust g|ven to thenm wou|d be un[ust 1he expecLaLlon of LrusL
ls more so magnlfled ln Lhe presenL case ln llghL of Lhe naLure of Lhe respondenL bank's buslness 1he
banklng lndusLry ls lmbued wlLh publlc lnLeresL and ls mandaLed by law Lo serve lLs cllenLs wlLh
exLraordlnary care and dlllgence 1o do Lhls lL musL rely on Lhe honesLy and loyalLy of lLs employees








Smart Commun|cat|ons vs Astorga S42 scra 1S3 (2007)
IAC1S
O 8eglna M AsLorga (AsLorga) was employed by respondenL SmarL CommunlcaLlons
lncorporaLed (SMA81) on May 8 1997 as ulsLrlcL Sales Manager of Lhe CorporaLe Sales
MarkeLlng Croup/ llxed Servlces ulvlslon (CSMC/lSu)
O As ulsLrlcL Sales Manager AsLorga en[oyed addlLlonal beneflLs namely annual
performance lncenLlve equlvalenL Lo 30 of her annual gross salary a group llfe and
hosplLallzaLlon lnsurance coverage and a car plan ln Lhe amounL of 43300000
3

O Cn May 18 1998 SMA81 senL a leLLer Lo AsLorga demandlng LhaL she pay Lhe currenL
markeL value of Lhe Ponda Clvlc Sedan whlch was glven Lo her under Lhe company's car
plan program or Lo surrender Lhe same Lo Lhe company for proper dlsposlLlon
11

AsLorga however falled and refused Lo do elLher Lhus prompLlng SMA81 Lo flle a sulL
for replevln wlLh Lhe 8eglonal 1rlal CourL of MakaLl (81C) on AugusL 10 1998
O ln lebruary 1998 SMA81 launched an organlzaLlonal reallgnmenL Lo achleve more
efflclenL operaLlons 1hls was made known Lo Lhe employees on lebruary 27 1998
6

arL of Lhe reorganlzaLlon was Lhe ouLsourclng of Lhe markeLlng and sales force 1hus
SMA81 enLered lnLo a [olnL venLure agreemenL wlLh n11 of !apan and formed SMA81
n11 MulLlmedla lncorporaLed (SnMl) Slnce SnMl was formed Lo do Lhe sales and
markeLlng work SMA81 abollshed Lhe CSMC/lSu AsLorga's dlvlslon
O SnMl agreed Lo absorb Lhe CSMC personnel who would be recommended by SMA81
SMA81 Lhen conducLed a performance evaluaLlon of CSMC personnel and Lhose who
garnered Lhe hlghesL raLlngs were favorably recommended Lo SnMl AsLorga landed lasL
ln Lhe performance evaluaLlon Lhus she was noL recommended by SMA81 SMA81
offered her a supervlsory poslLlon ln Lhe CusLomer Care uepL buL she refused Lhe offer
O Cn March 3 1998 SMA81 lssued a memorandum advlslng AsLorga of Lhe LermlnaLlon of
her employmenL on ground of redundancy effecLlve Aprll 3 1998 AsLorga recelved lL
on March 16 1998
O 1he LermlnaLlon of her employmenL prompLed AsLorga Lo flle a ComplalnL
8
for lllegal
dlsmlssal nonpaymenL of salarles and oLher beneflLs wlLh prayer for moral and
exemplary damages agalnsL SMA81 She clalmed LhaL abollshlng CSMC and
consequenLly LermlnaLlng her employmenL was lllegal for lL vlolaLed her rlghL Lo
securlLy of Lenure
ISSUL
WheLher Lhe dlsmlssal of AsLorga be valld or lllegal
WheLher or noL Lhe 81C has no [urlsdlcLlon over Lhe complalnL for recovery of a car whlch
AsLorga acqulred as parL of her employee beneflL

nLLD AsLorga ls declared valldly dlsmlssed
AsLorga was LermlnaLed due Lo redundancy whlch ls one of Lhe auLhorlzed causes for Lhe
dlsmlssal of an employee 8edundancy ln an employer's personnel force necessarlly or even
ordlnarlly refers Lo dupllcaLlon of work 1he characLerlzaLlon of an employee's servlces as
superfluous or no longer necessary and Lherefore properly Lermlnable ls an exerclse of
buslness [udgmenL on Lhe parL of Lhe employer An employer ls noL precluded from
adopLlng a new pollcy conduclve Lo a more economlcal and effecLlve managemenL even lf lL
ls noL experlenclng economlc reverses nelLher does Lhe law requlre LhaL Lhe employer
should suffer flnanclal losses before he can LermlnaLe Lhe servlces of Lhe employee on Lhe
ground of redundancy
8uL whlle LllLlng Lhe scales of [usLlce ln favor of workers Lhe fundamenLal law also
guaranLees Lhe rlghL of Lhe employer Lo reasonable reLurns for hls lnvesLmenL
38
ln Lhls
llghL we musL acknowledge Lhe prerogaLlve of Lhe employer Lo adopL such measures as wlll
promoLe greaLer efflclency reduce overhead cosLs and enhance prospecLs of economlc
galns albelL always wlLhln Lhe framework of exlsLlng laws
Powever SMA81 falled Lo comply wlLh Lhe mandaLed one (1) monLh noLlce prlor Lo
LermlnaLlon 1he record ls clear LhaL AsLorga recelved Lhe noLlce of LermlnaLlon only on
March 16 1998
39
or less Lhan a monLh prlor Lo lLs effecLlvlLy on Aprll 3 1998 Llkewlse Lhe
ueparLmenL of Labor and LmploymenL was noLlfled of Lhe redundancy program only on
March 6 1998
ArLlcle 283 of Lhe Labor Code clearly provldes
ArL 283 Closure of esLabllshmenL and reducLlon of personnel 1he employer may
also LermlnaLe Lhe employmenL of any employee due Lo Lhe lnsLallaLlon of labor savlng
devlces redundancy reLrenchmenL Lo prevenL losses or Lhe closlng or cessaLlon of
operaLlon of Lhe esLabllshmenL or underLaklng unless Lhe closlng ls for Lhe purpose of
clrcumvenLlng Lhe provlslons of Lhls 1lLle by servlng a wrlLLen noLlce on Lhe workers and
Lhe MlnlsLry of Labor and LmploymenL aL leasL one (1) monLh before Lhe lnLended daLe
Lhereof x x x
1he 81C rlghLfully assumed [urlsdlcLlon over Lhe sulL and acLed well wlLhln lLs dlscreLlon ln
denylng AsLorga's moLlon Lo dlsmlsss SMA81's demand for paymenL of Lhe markeL value of Lhe
car or ln Lhe alLernaLlve Lhe surrender of Lhe car ls noL a labor buL a clvll dlspuLe lL lnvolves
Lhe relaLlonshlp of debLor and credlLor raLher Lhan employeeemployer relaLlons
33
As such Lhe
dlspuLe falls wlLhln Lhe [urlsdlcLlon of Lhe regular courLs
8eplevln ls a possessory acLlon Lhe glsL of whlch ls Lhe rlghL of possesslon ln Lhe
plalnLlff 1he prlmary rellef soughL Lhereln ls Lhe reLurn of Lhe properLy ln specle
wrongfully deLalned by anoLher person lL ls an ordlnary sLaLuLory proceedlng Lo
ad[udlcaLe rlghLs Lo Lhe LlLle or possesslon of personal properLy 1he quesLlon of
wheLher or noL a parLy has Lhe rlghL of possesslon over Lhe properLy lnvolved and lf so
wheLher or noL Lhe adverse parLy has wrongfully Laken and deLalned sald properLy as Lo
requlre lLs reLurn Lo plalnLlff ls ouLslde Lhe pale of compeLence of a labor Lrlbunal and
beyond Lhe fleld of speclallzaLlon of Labor ArblLers
9|oneer Concrete 9h|||pp|nes Inc vs 1odaro

IAC1S

1odaro alleged LhaL loneer lnLernaLlonal LlmlLed (9IL) ls engaged ln Lhe readymlx
concreLe and concreLe aggregaLes buslness

Whlle loneer hlls Poldlngs lnc (99nI) ls esLabllshed by lL Lo own and hold Lhe
sLocks of lLs operaLlng company ln Lhe hlllpplnes

loneer ConcreLe hlls lnc (9C9I) ls also esLabllshed by lL Lo underLake lLs buslness of
readymlx concreLe concreLe aggregaLes and quarrylng operaLlons ln Lhe hlllpplnes

McDona|d ls Lhe LxecuLlve of Lhe Pongkong offlce of lL And |epz|g ls Lhe resldenL
and Lhe Managlng dlrecLor of Pl and Cl

1odaro has been Lhe managlng dlrecLor of a company engaged ln premlxed concreLe
and concreLe aggregaLe producLlon

When he reslgned ln leb 1996 lL conLacLed 1odaro ln May 1996 and asked hlm lf he
was avallable Lo [oln Lhem ln Lhelr operaLlons ln Lhe hlllpplnes

lL and 1odaro came Lo an agreemenL whereln lL consenLed 1odaro's servlce as a
consulLanL for 2 0r 3 monLhs afLer whlch he would be employed as Lhe manager of
lL's readymlx concreLe operaLlons when Lhe company declde Lo lnvesL ln Lhe
hlllpplnes

lL sLarLed lLs operaLlons ln Lhe hlllpplnes however lL refused Lo comply wlLh lLs
underLaklng Lo employ 1odaro on a permanenL basls

1odaro flled wlLh 81C a complalnL for a breach of conLracLual obllgaLlon agalnsL Cl
Pl lL Mcuonald and klepzlg

eLlLloners moved Lo dlsmlss Lhe complalnL LhaL Lhe complalnL sLaLes no cause of acLlon
and Lhe 81C has no [urlsdlcLlon over Lhe case

81C denled Lhe peLllLlLon eLlLloners flled a peLlLlon for cerLlorarl wlLh Lhe CA buL lL
was llkewlse denled

ISSUL]s

1) WCn Lhe reneged of peLlLloners conLracLual obllgaLlon ls sufflclenL Lo consLlLuLe a cause of
acLlon for damages?

2) WCn 81C has Lhe [urlsdlcLlon over Lhe case?

kULING
8ecords showed LhaL klepzlg conducLed negoLlaLlons wlLh 1odaro regardlng 1odaro's
posslble employmenL lL was also klepzlg who lnformed respondenL LhaL hls company
was no longer lnLeresLed ln employlng respondenL Pence 1odaro has a cause of
acLlon

Also 81C has Lhe [urlsdlcLlon over Lhe case ln Lhls case no employeremployee
relaLlonshlp exlsLs beLween peLlLloners and 1odaro

1h|s court he|d that where no emp|oyeremp|oyee re|at|onsh|p ex|sts between the
part|es and no |ssue |s |nvo|ved wh|ch may be reso|ved by reference to the Labor
Code other |abor statutes or any co||ect|ve barga|n|ng agreement |t |s the k1C that
has [ur|sd|ct|on

















VILLAMAkIA VS CA 487 SCkA S71 (2006)

IAC1S eLlLloner Cscar vlllamarla !r was Lhe owner of vlllamarla MoLors a sole proprleLorshlp
engaged ln assembllng passenger [eepneys wlLh a publlc uLlllLy franchlse Lo operaLe along Lhe
8aclaranSucaL rouLe 8y 1993 vlllamarla sLopped assembllng [eepneys and reLalned only nlne
four of whlch operaLed by employlng drlvers on a boundary basls Cne of Lhose drlvers was
respondenL 8usLamanLe 8usLamanLe remlLLed 430/day Lo vlllamarla as boundary and kepL
resldue of hls dally earnlngs as compensaLlon ln AugusL 1997 vlllamarla verbally agreed Lo sell
Lhe [eepneys Lo 8usLamanLe under Lhe boundaryhulog scheme" where 8usLamanLe ls Lo
remlL 330/day Lo peLlLloner for a perlod of 4 years and LhereafLer ownershlp wlll Lransfer Lo
8usLamanLe and conLlnue Lo drlve Lhe same under vlllamarla's franchlse lL was also agreed
LhaL 8usLamanLe wlll make a down paymenL of 10000

Cn AugusL 7 1997 vlllamarla execuLed a conLracL (kasunduan ng 8lllhan ng Sasakyan sa
amamaglLan ng 8oundaryPulog) over Lhe sub[ecL [eepneys wlLh Lhe followlng sLlpulaLlons
1 lf 8usLamanLe falled Lo pay Lhe boundaryhulog for 3 days vlllamarla wlll hold on Lo Lhe
vehlcle unLll he pays Lhe arrears wlLh penalLy of 30/day
2 lf he falls Lo remlL Lhe dally boundaryhuloy for one week Lhe agreemenL wlll cease Lo
have legal effecL and 8usLamanLe wlll have Lo reLurn Lhe vehlcle Lo vlllamarla moLors

8usLamanLe conLlnued drlvlng Lhe [eepneys under Lhe conLrol and supervlslon of vlllamarla As
agreed upon he made dally remlLLances of 330/day ln paymenL of Lhe purchase prlce of Lhe
vehlcle When 8usLamanLe falled Lo pay Lhe annual reglsLraLlon fees of Lhe vehlcle vlllamarla
sLlll allowed hlm Lo conLlnue drlvlng Lhe [eepneys

ln 1999 8usLamanLe and oLher drlvers who had Lhe same arrangemenL wlLh vlllamarla MoLors
falled Lo pay Lhelr respecLlve boundary hulog As a resulL vlllamarla senL a noLlce remlndlng
Lhe drlvers LhaL lf Lhey fall Lo remlL Lhe boundaryhulog wlLhln a week Lhelr respecLlve [eepneys
would be reLurned Lo hlm wlLhouL any complalnLs Cn !uly 24 2000 vlllamarla Look back
8usLamanLe's [eepneys and barred Lhe laLLer from drlvlng Lhe vehlcle

8usLamanLe Lhen flled a complalnL for lllegal dlsmlssal agalnsL spouses vlllamarla Pe alleged
LhaL ln !uly 2000 he lnformed vlllamarla LhaL Lhe surplus englne of Lhe [eep needed Lo be
replaced and was assured LhaL lL would be done Powever he was laLer arresLed and had hls
drlver's llcense conflscaLed because apparenLly Lhe replacemenL englne lnsLalled was Laken
from sLolen vehlcle Pe was no longer allowed Lo drlve Lhe vehlcle unless he pald Lhem
70000

vlllamarla's defense 8usLamanLe was noL hls employee slnce Lhelr relaLlonshlp was more of a
vendorvendee glven Lhe boundaryhulog scheme

ISSUL W/n 1PL LxlS1LnCL Cl A 8CunuA8?PuLCC SCPLML nLCA1LS 1PL LMLC?LL
LMLC?L8 8LLA1lCnSPl 8L1WLLn 1PL vLnuC8 Anu vLnuLL

nLLD under Lhe boundaryhulog scheme a dual [urldlcal relaLlonshlp ls creaLed LhaL of
employeremployee and vendorvendee 1he agreemenL dld noL exLlngulsh Lhe employer
employee relaLlonshlp slnce Lhe boundary sysLem ls a scheme whereby an owner/operaLor
engaged ln LransporLlng passengers as a common carrler Lo prlmarlly govern Lhe compensaLlon
of Lhe drlver le Lhe laLLer's dally earnlngs are remlLLed Lo Lhe owner/operaLor less Lhe excess
of Lhe boundary whlch represenLs Lhe drlver's compensaLlon Under th|s system the
owner]operator exerc|ses contro| and superv|s|on over the dr|ver 1he management of the
bus|ness |s st||| |n the hands of the owner]operator who be|ng the ho|der of the cert|f|cate
of pub||c conven|ence must see to |t that the dr|ver fo||ows the route prescr|bed by L1kI8
1he fact that the dr|ver does not rece|ve f|xed wages |s not suff|c|ent to change the
re|at|onsh|p between them

1he ex|stence of an emp|oyment re|at|on |s not dependent on how the worker |s pa|d but on
the presence or absence of contro| over the means and method of the work 1he emp|oyer
then has the burden of prov|ng the respondent's term|nat|on from emp|oyment was for a
|awfu| or [ust cause wh|ch he fa||ed to do |n th|s case

1he [urlsdlcLlon of LA and nL8C under ArL 217 Labor Code ls llmlLed Lo dlspuLes arlslng from an
employeremployee relaLlonshlp whlch can only be resolved by reference Lo Lhe Labor Code
oLher labor sLaLuLes or Lhelr C8A
























Lapanday Agr|cu|tura| Deve|optment Corp vs CA 324 SCkA 77 (2001)
IAC1S
O ln !une 1986 plalnLlff Commando SecurlLy Servlce Agency lnc and defendanL Lapanday
AgrlculLural uevelopmenL CorporaLlon enLered lnLo a Cuard Servlce ConLracL
Commando SecurlLy Servlce Agency lnc provlded securlLy guards Lo Lapanday
AgrlculLural uevelopmenL Corp's banana planLaLlon
O Cn !une 16 1984 Wage Crder no 3 was promulgaLed dlrecLlng an lncrease of 300 per
day on Lhe mlnlmum wage of workers ln Lhe prlvaLe secLor and a 300 lncrease on Lhe
LCCLA 1hls was followed on november 1 1984 by Wage Crder no 6 whlch furLher
lncreased sald mlnlmum wage by 300 on Lhe LCCLA
O 1he SecurlLy Agency demanded LhaL lLs Cuard Servlce ConLracL wlLh LAuC be upgraded
ln compllance wlLh Wage Crder nos 3 and 6 uefendanL refused 1helr ConLracL explred
on !une 6 1986 wlLhouL Lhe raLe ad[usLmenL called for Wage Crder nos 3 and 6 belng
lmplemenLed
O eLlLloner asserLs LhaL prlvaLe respondenL has no facLual and legal basls Lo collecL Lhe
beneflLs under sub[ecL Wage Crder nos 3 and 6 lnLended for Lhe securlLy guards
wlLhouL Lhe auLhorlzaLlon of Lhe securlLy guards concerned lnasmuch as Lhe servlces of
Lhe forLyLwo (42) securlLy guards were already LermlnaLed aL Lhe Llme Lhe complalnL
was flled on AugusL 13 1988 prlvaLe respondenLs complalnL parLakes of Lhe naLure of
an acLlon for recovery of whaL was supposedly due Lhe guards under sald Wage Crders
amounLs LhaL Lhey clalm were never pald by prlvaLe respondenL and Lherefore noL
collecLlble by Lhe laLLer from Lhe peLlLloner
O rlvaLe respondenL conLends LhaL Lhe basls of lLs acLlon agalnsL peLlLlonerappellanL ls
Lhe enforcemenL of Lhe Cuard Servlce ConLracL enLered lnLo by Lhem whlch ls deemed
amended by SecLlon 6 of Wage Crder no 3 and SecLlon 9 of Wage Crder no 6 LhaL
pursuanL Lo Lhelr amended Cuard Servlce ConLracL Lhe lncreases/ad[usLmenLs ln wages
and LCCLA are due Lo prlvaLe respondenL and noL Lo Lhe securlLy guards who are noL
parLles Lo Lhe sald conLracL lL ls Lherefore lmmaLerlal wheLher or noL prlvaLe
respondenL pald lLs securlLy guards Lhelr wages as ad[usLed by sald Wage Crders and
LhaL slnce Lhe forLyLwo (42) securlLy guards are noL parLles Lo Lhe Cuard Servlce
ConLracL Lhere ls no need for Lhem Lo auLhorlze Lhe flllng of or be [olned ln
ISSUL
WheLher or noL Lhere exlsL an Lmployeremployee relaLlon beLween Lhe parLles
WheLher or noL Lhe nL8C has [urlsdlcLlon over Lhe sald case
WheLher or noL peLlLloner ls llable Lo Lhe prlvaLe respondenL for Lhe wage ad[usLmenLs
provlded under Wage Crder nos 3 and 6

nLLD
1here's no exlsLlng employeremployee relaLlonshlp beLween Lhe parLles slnce Lhe prlvaLe
respondenL ls an lndependenL/[ob conLracLor

who asslgned securlLy guards aL Lhe peLlLloners
premlses for a sLlpulaLed amounL per guard per monLh 1he ConLracL of SecurlLy Servlces
expressly sLlpulaLed LhaL Lhe securlLy guards are employees of Lhe Agency and noL of Lhe
peLlLloner
lL ls seen from ArLlcle 106 and 107 LhaL Lhe prlnclpal (peLlLloner) and conLracLor (prlvaLe
respondenL) are [olnLly and severally llable Lo Lhe employees for Lhelr wages 1he [olnL and
several llablllLy of Lhe conLracLor and Lhe prlnclpal ls mandaLed by Lhe Labor Code Lo assure
compllance wlLh Lhe provlslons Lhereln lncludlng Lhe mlnlmum wage 1he conLracLor ls made
llable by vlrLue of hls sLaLus as dlrecL employer 1he prlnclpal on Lhe oLher hand ls made Lhe
lndlrecL employer of Lhe conLracLors employees Lo secure paymenL of Lhelr wages should Lhe
conLracLor be unable Lo pay Lhem Lven ln Lhe absence of an employeremployee relaLlonshlp
Lhe law lLself esLabllshes one beLween Lhe prlnclpal and Lhe employees of Lhe agency for a
llmlLed purpose le ln order Lo ensure LhaL Lhe employees are pald Lhe wages due Lhem
lL ls clear also LhaL lL ls only when conLracLor pays Lhe lncreases mandaLed LhaL lL can clalm an
ad[usLmenL from Lhe prlnclpal Lo cover Lhe lncreases payable Lo Lhe securlLy guards 1he
concluslon LhaL Lhe rlghL of Lhe conLracLor (as prlnclpal debLor) Lo recover from Lhe prlnclpal as
solldary codebLor) arlses only lf he has pald Lhe amounLs for whlch boLh of Lhem are [olnLly and
severally llable ls ln llne wlLh ArLlcle 1217 of Lhe Clvll Code
aymenL made by one of Lhe solldary debLors exLlngulshes Lhe obllgaLlon lf Lwo
or more solldary debLors offer Lo pay Lhe credlLor may choose whlch offer Lo
accepL
Pe who made paymenL may clalm from hls codebLors only Lhe share whlch
corresponds Lo each wlLh lnLeresL for Lhe paymenL already made lf Lhe paymenL
ls made before Lhe debL ls due no lnLeresL for Lhe lnLervenlng perlod may be
demanded xxx
lL wlll be seen LhaL Lhe llablllLy of Lhe peLlLloner Lo relmburse Lhe respondenL only arlses lf and
when respondenL acLually pays lLs employees Lhe lncreases granLed by Wage Crder nos 3 and
6
lL ls well seLLled ln law and [urlsprudence LhaL where no employeremployee relaLlonshlp exlsLs
beLween Lhe parLles and no lssue ls lnvolved whlch may be resolved by reference Lo Lhe Labor
Code oLher labor sLaLuLes or any collecLlve bargalnlng agreemenL lL ls Lhe 8eglonal 1rlal CourL
LhaL has [urlsdlcLlon ln lLs complalnL prlvaLe respondenL ls noL seeklng any rellef under Lhe
Labor Code buL seeks paymenL of a sum of money and damages on accounL of peLlLloners
alleged breach of lLs obllgaLlon under Lhelr Cuard Servlce ConLracL 1he acLlon ls wlLhln Lhe
realm of clvll law hence [urlsdlcLlon over Lhe case belongs Lo Lhe regular courLs Whlle Lhe
resoluLlon of Lhe lssue lnvolves Lhe appllcaLlon of labor laws reference Lo Lhe labor code was
only for Lhe deLermlnaLlon of Lhe solldary llablllLy of Lhe peLlLloner Lo Lhe respondenL where no
employeremployee relaLlon exlsLs ArLlcle 217 of Lhe Labor Code as amended vesLs upon Lhe
labor arblLers excluslve orlglnal [urlsdlcLlon only over Lhe followlng
1 unfalr labor pracLlces
2 1ermlnaLlon dlspuLes
3 lf accompanled wlLh a clalm for relnsLaLemenL Lhose cases LhaL workers may
flle lnvolvlng wages raLes of pay hours of work and oLher Lerms and condlLlons
of employmenL
4 Clalms for acLual moral exemplary and oLher forms of damages arlslng from
employeremployee relaLlons
3 Cases arlslng from any vlolaLlon of ArLlcle 264 of Lhls Code lncludlng quesLlons
lnvolvlng legallLy of sLrlkes and lockouLs and
6 LxcepL clalms for Lmployees CompensaLlon Soclal SecurlLy Medlcare and
maLernlLy beneflLs all oLher clalms arlslng from employeremployee relaLlons
lncludlng Lhose of persons ln domesLlc or household servlce lnvolvlng an
amounL exceedlng flve Lhousand pesos (300000) regardless of wheLher
accompanled wlLh a clalm for relnsLaLemenL
ln all Lhese cases an employeremployee relaLlonshlp ls an lndlspensable [urlsdlcLlonal
requlslLe and Lhere ls none ln Lhls case







9h||mare Inc]Mar|ow Nav|gat|on Co Ltd Vs Suganob

IAC1S

8espondenL Suganob was employed as Chlef Cook for peLlLloners for almosL 10 years on
board wlLh varlous vessels of peLlLloners

Pls lasL employmenL was where he was hlred for a perlod of 10 monLhs sLarLlng SepL 2
2001

6 days afLer he had boarded sald shlp he experlenced palns on hls rlghL shoulder AfLer
undergolng consulLaLlon ln vleLnam he was medlcally repaLrlaLed

upon arrlval ln Lhe hlls Suganob was lmmedlaLely referred by Lhe peLlLloners Lo Lhe
eople's dlagnosLlc CenLer lnc where a serles of examlnaLlons and dlagnosls were
performed on hlm

1he medlcal reporL showed LhaL Suganob was unflL Lo work unLll CcLober 11 2001 and
on CcLober 29 2011 Suganob was declared flL Lo work by Lhe eople's ulagnosLlc
CenLer provlded he malnLalns hls medlcaLlons

Aprll 3 2002 Suganob's physlclan declared LhaL he cannoL be cleared and ls noL flL Lo
work because of hls age and Lhe recurrence of sympLoms of lllness

Suganob soughL hls permanenL dlsablllLy compensaLlon and oLher beneflLs from
peLlLloners buL hls requesL was refused

Suganob flled a complalnL Lo recover slckness and permanenL dlsablllLy beneflLs

ISSUL

ls Suganob enLlLled Lo dlsablllLy beneflLs and slckness allowance/wages?
kULING

1he courLs flnd LhaL Suganob ls enLlLled Lo Crade l dlsablllLy beneflLs and slckness whlch
corresponds Lo LoLal and permanenL dlsablllLy

1he medlcal cerLlflcaLe lssued on CcLober 29 2001 by peLlLloner's company physlclan sLaLed
LhaL Suganob was flL Lo reLurn work was condlLlonal because Suganob sLlll has Lo malnLaln
medlcaLlons

And Lhe medlcal cerLlflcaLe lssued by Lhe hyslclan chosen by Suganob on Aprll 3 2002
lndlcaLed LhaL Suganob's lllness recurred and conLlnued whlch rendered hlm unflL Lo
conLlnue hls work

ln boLh medlcal cerLlflcaLes Suganob was noL consldered Lo be flL Lo reLurn work Pence lL
ls clear Lhe Suganob ls enLlLled Lo dlsablllLy beneflLs

1o be enLlLlled Lo Crade 1 dlsablllLy beneflLs Lhe employees dlsablllLy musL noL only be LoLal
buL also permanenL

ermanenL dlsablllLy ls Lhe lnablllLy of a worker Lo perform hls [ob for more Lhan 120 days
regardless of wheLher or noL he loses Lhe use of any parL of hls body

Clearly Suganob's dlsablllLy ls permanenL slnce he was unable Lo work from Lhe Llme he was
medlcally repaLrlaLed for more Lhan seven monLhs Also lf suganob ls flL Lo work he would
have Laken back by peLlLloners In d|sab|||ty compensat|on |t |s not the |n[ury wh|ch |s
compensated but rather the |ncapac|ty to work resu|t|ng |n the |mpa|rment of one's
earn|ng capac|ty

Wherefore Suganob ls Lo be awarded 120day slckness benflLs and permanenL dlsablllLy
beneflLs


















LDI S1AII 8UILDLkS IN1LkNA1ICNAL INC VS MAGSINC 3S9 SCkA 212 (2001)

IAC1S Lul ls a recrulLmenL agency wlLh uomlnguez as lLs presldenL whlle Magslno was unLll
dlsmlssal lLs supervlsor of rocesslng and uocumenLaLlon Croup

1he manager of Lhe rocesslng and uocumenLaLlon Croup senL a memo Lo Magslno saylng LhaL
managemenL recelved reporLs LhaL Magslno wlLhheld collecLed premlum paymenLs for workers'
mandaLory repaLrlaLlon bond Magslno Lhen was requlred Lo explaln Lhe alleged lncldenL
lnsLead of complylng wlLh Lhe memo respondenL Lendered her reslgnaLlon buL was held ln
abeyance pendlng resulL of Lhe lnvesLlgaLlon Cn May 20 1993 respondenL was glven a noLlce
of LermlnaLlon

ISSUL W/n nL8C CC88LC1L? ulS8LCA8uLu 1PL LvluLnCL 8LSLn1Lu Cn ALAL W/n
8LSCnuLn1 WAS ulSMlSSLu lC8 CAuSL

nLLD lL has been seLLled LhaL no undue sympaLhy ls Lo be accorded Lo any clalm of a
procedural mlssLep ln labor cases Such cases musL be declded accordlng Lo [usLlce and equlLy
and subsLanLlal merlLs of Lhe conLroversy ln Lhe 8rlsLol case Lhe SC held LhaL Lhe nL8C dld noL
commlL grave abuse ln conslderlng addlLlonal documenLary evldence submlLLed by Lhe
employer on appeal Lo prove breach of LrusL and loss of confldence as basls for dlsmlssal

lL should be sLressed LhaL ln an unlawful dlsmlssal case Lhe employer has Lhe burden of provlng
Lhe lawful cause for Lhe employee's dlsmlssal WlLhouL sufflclenL proof an employee cannoL be
dlsmlssed on Lhls ground As such lL was an error for nL8C and CA Lo dlsallow evldence
presenLed on appeal

Moreover Lhere ls no sufflclenL proof Lo esLabllsh Magslno was dlsmlssed for loss of LrusL and
confldence eLlLloners slmply alleged LhaL Lhe respondenL falled Lo accounL for 201600
wlLhouL showlng how Lhls flgure was arrlved aL

CA was correcL Lo order separaLlon pay lnsLead of relnsLaLemenL because of Lhe sLraln Lhe
relaLlonshlp of Lhe employer and employee and back wages followlng Lhe rullng ln 8usLamanLe
vs nL8C should be compuLed from Lhe Llme of respondenL's dlsmlssal up Lo Lhe Llme of flnallLy
of Lhe declslon










An|no vs NLkC 290 SCkA 489 (1998)
IAC1S
O ComplalnanLs allege LhaL Lhey are employees of respondenL PlnaLuan Mlnlng
CorporaLlon (PMC) holdlng supervlsory poslLlons SomeLlme ln SepLember 1993
complalnanLs planned Lhe formaLlon of a supervlsors unlon wlLh PMC 1he plan was
recelved enLhuslasLlcally by pracLlcally all employees wlLh supervlsory rank and shorLly
LhereafLer Lhe PlnA1uAn MlnlnC SuL8vlSC8? unlCn (PlMSu) was formally
organlzed and reglsLered wlLh Lhe uCLL ComplalnanLs were elecLed offlclal and acLlve
members of PlMSu
O Cn or abouL 03 november 1993 PlMSu formally noLlfled Lhe company of lLs legal
exlsLence Lhrough a leLLer addressed Lo Lhe resldenL of PMC lL formally lnformed Lhe
company of lLs deslre for a collecLlve bargalnlng agreemenL and submlLLed lLs proposals
Lherefore under leLLer daLed 16 november 1993 1he complalnanL clalms LhaL LhaL Lhe
company compleLely lgnored Lhe unlon's proposal and dld noL answer Lhe PlMSu abouL
lL whlch consLralnL Lhe unlon Lo flle an unfalr labor pracLlce case agalnsL PMC on May
13 1994
O ln order Lo weaken and lf posslble desLroy Lhe unlon respondenLs ln Lhe gulse of
reLrenchmenL dlsmlssed Lhe complalnanLs who are Lhe acLlve leaders of Lhe unlon
under leLLer daLed 16 !une 1994 ComplalnanLs aver LhaL Lhelr dlsmlssal was done wlLh
mallclous lnLenL Lo cause Lhem and Lhe unlon damage for Lhelr leglLlmaLe exerclse of Lhe
rlghL Lo selforganlzaLlon ln open deflance of ArL 248 of Lhe Labor Code
O 8ecause of Lhelr dlsmlssal complalnanLs sLaLe LhaL Lhey were deprlved of Lhelr salarles
and suffered moral damages for menLal angulsh serlous anxleLy soclal humlllaLlon
besmlrched repuLaLlon and oLher slmllar hurL ComplalnanLs Lhen pray LhaL
respondenLs (a) be declared gullLy of unfalr labor pracLlces (b) be ordered Lo relnsLaLe
complalnanLs Lo Lhelr former poslLlons wlLh backwages

ISSUL WheLher or noL Lhere was a valld reLrenchmenL of Lhe complalnanLs
nLLD !urlsprudence prescrlbes Lhe mlnlmum sLandards necessary Lo prove Lhe valldlLy of a
reLrenchmenL
8eLrenchmenL ls resorLed Lo by an employer because of losses ln Lhe operaLlon of a buslness
occasloned by lack of work and conslderable reducLlon ln Lhe volume of buslness lL ls a
managemenL prerogaLlve conslsLenLly recognlzed and afflrmed by Lhls CourL sub[ecL only Lo
falLhful compllance wlLh Lhe subsLanLlve and procedural requlremenLs lald down by law (arLlcle
283) and [urlsprudence
1o [usLlfy reLrenchmenL Lhe followlng requlslLes musL be complled wlLh (a) Lhe losses
expecLed should be subsLanLlal and noL merely Je mlolmls ln exLenL (b) Lhe subsLanLlal losses
apprehended musL be reasonably lmmlnenL (c) Lhe reLrenchmenL musL be reasonably
necessary and llkely Lo effecLlvely prevenL Lhe expecLed losses and (d) Lhe alleged losses lf
already lncurred and Lhe expecLed lmmlnenL losses soughL Lo be foresLalled musL be proved by
sufflclenL and convlnclng evldence
ln LermlnaLlon cases Lhe burden of provlng LhaL Lhe dlsmlssal was for a valld or auLhorlzed
cause resLs upon Lhe employer ln Lhe case aL bar respondenL corporaLlon dld noL submlL an
loLa of evldence Lo show losses ln lLs buslness operaLlons and Lhe economlc havoc lL would
susLaln lmmlnenLly lL merely clalmed LhaL reLrenchmenL was underLaken as a measure of self
preservaLlon Lo prevenL losses broughL abouL by Lhe conLlnulng decllne of nlckel prlces and
exporL volume ln Lhe mlnlng lndusLry






























San M|gue| Corporat|on vs NLkC

IAC1S
LrnesLo lblas was employed by San Mlguel corporaLlon (SMC) on uec 24 1978 as a C8C
operaLor
Accordlng Lo SMC's ollcy absences wlLhouL permlsslon or AWCs whlch are absences
noL covered elLher by a cerLlflcaLlon of Lhe planL docLor LhaL Lhe employee was absenL
due Lo slckness or by duly approved appllcaLlon for leave of absence flled aL leasL 6 days
prlor Lo Lhe lnLended leave are sub[ecL Lo dlsclpllnary acLlon
Cn Lhe same ollcy lL also punlshes falslflcaLlon of company records or documenLs wlLh
dlscharge or LermlnaLlon for Lhe flrsL offense lf Lhe offender hlmself beneflLs from Lhe
falslflcaLlon
lor respondenL's absences ln !anuary and Aprll he was glven a wrlLLen warnlng on May
9 1997 LhaL he had already lncurred 3 AWCs and LhaL furLher absences would be
sub[ecL Lo dlsclpllnary acLlon
lor hls absences ln Aprll and May LrnesLo was alleged Lo have falslfled hls medlcal
consulLaLlon card by sLaLlng LhaL he was granLed slck leave by Lhe planL cllnlc on sald
daLes
1wo noLlce Lo Lxplaln leLLers were senL Lo LrnesLo requlrlng hlm Lo sLaLe ln wrlLlng why
he should noL be sub[ecL Lo dlsclpllnary acLlon for falslfylng hls medlcal consulLaLlon card
and for noL reporLlng for work ln Lhe monLh of May buL LrnesLo dld noL comply wlLh
Lhese noLlces
!une 3 1997 LrnesLo submlLLed a handwrlLLen explanaLlon Lo Lhe charges denylng Lhe
alleged falslflcaLlon of medlcal consulLaLlon card
SMC conducLed an admlnlsLraLlve lnvesLlgaLlon uurlng Lhe lnvesLlgaLlon respondenL
never admlLLed LhaL he had soughL slck leave permlsslon and also denled falslfylng hls
medlcal consulLaLlon card
Accordlng Lo Lhe LesLlmonles of Lhe Lwo employees (Slwa and Marable) of SMC LrnesLo
falslfled hls medlcal consulLaLlon card Lo cover up hls excesslve AWCs
SMC concluded LhaL LrnesLo commlLLed Lhe offenses of excesslve AWCs and
falslflcaLlon of company records or documenLs and dlsmlssed hlm
LrnesLo flled a complalnL for lllegal dlsmlssal agalnsL SMC
1he labor arblLer found LhaL respondenL was never suspended for hls prevlous AWCs
lL furLher ruled LhaL Lhe managemenL has Lo be blamed fro Lhe nonlmplemenLaLlon
wlLh Lhe company pollcy
1he CA afflrmed Lhe declslon of Lhe labor arblLer

ISSUL
WCn SMC lllegally dlsmlssed LrnesLo?

kULING
1he courL agrees LhaL SMC was unable Lo prove Lhe falslflcaLlon charge agalnsL respondenL
8espondenL cannoL be legally dlsmlssed on Lhe basls of Lhe LesLlmonles of SMC's employees
SMC was unable Lo prove by subsLanLlal evldence LhaL lL was respondenL who made Lhe
unauLhorlzed enLrles

8ut respondent's d|sm|ssa| was we|| w|th|n the purv|ew of SMC's management prerogat|ve

SMC gave respondenL a warnlng LhaL he had already 6 AWCs from Lhe monLh of !anuary and
Aprll Pe Lhen agaln absenL on May 7 and 8 1997 Pe was also glven noLlces Lo explaln hls
AWCs on May 26 and !une 2 1997 As early as !une 1997 he had more Lhan 9 AWCs

ln Lhe lmplemenLaLlon of company rules and pollcles Lhe employer has Lhe cholce Lo do so
sLrlcLly or noL slnce Lhls ls lnherenL lLs rlghL Lo conLrol and manage lLs buslness effecLlvely

WL flnd SMC has acLed well wlLhln lLs rlghLs when lL dlsmlssed respondenL for hls numerous
absences 8espondenL was afforded due process and valldly dlsmlssed for cause





























NCkIS 1kADING CC INC VS GNILC S44 SCkA 278 (2008)

IAC1S Cnllo was Lhe credlL and collecLlon manager of norkls 1radlng and ls lncharge of Lhe
Albay and CaLanduanes branches of Lhe company ln 2000 Cnllo was found Lo be submlLLlng
oversLaLed reporLs abouL hls area of managemenL whlch mlsled Lhe managemenL lnLo bellevlng
LhaL Cnllo was dolng a good [ob norkls P8 lssued a memo LhaL he wlll be suspended for 13
days wlLhouL pay and beneflLs Pe was subsequenLly Lransferred from hls poslLlon Lo belng Lhe
markeLlng asslsLanL of Lhe company's senlor v Albos Cnllo accepLed Lhe poslLlon under
proLesL Pe sued for lllegal suspenslon and consLrucLlve dlsmlssal

nL8C held LhaL Lhe peLlLloners valldly exerclse Lhelr managemenL prerogaLlve Lo lmpose
dlsclpllne on an errlng employee for negllgence buL Lhe Lransfer of poslLlon from manager Lo
markeLlng asslsLanL consLlLuLes consLrucLlve dlsmlssal

eLlLloner's argumenL eLlLloners clalm LhaL Lhey were merely exerclslng Lhelr lnherenL
prerogaLlve as an employer when Lhey appolnLed respondenL as MarkeLlng AsslsLanL Lo Lhe
Senlor vlceresldenL for MarkeLlng

ISSUL W/n 1PL 18AnSlL8 Cl CnlLC l8CM A CCLLLC1lCnS MAnACL8 1C MA8kL1lnC
ASSlS1An1 CCnS1l1u1LS CCnS18uC1lvL ulSMlSSAL

nLLD 1he employer has Lo prove LhaL Lhe Lransfer ls noL unreasonable lnconvenlenL or
pre[udlclal Lo Lhe employee and does noL lnvolve a demoLlon ln rank or dlmlnuLlon of hls
salarles prlvlleges and oLher beneflLs oLherwlse lL would consLlLuLe consLrucLlve dlsmlssal

ConsLrucLlve dlsmlssal ls deflned as a qulLLlng because conLlnued employmenL ls rendered
lmposslble unreasonable or unllkely when Lhere ls demoLlon ln rank or dlmlnuLlon of pay
ConsLrucLlve dlsmlssal also exlsLs when an acL of clear dlscrlmlnaLlon lnsenslblllLy or dlsdaln by
an employer becomes unbrearable Lo Lhe employee leavlng hlm no cholce buL Lo leave hls
employmenL

Whlle Lhe Lransfer of respondenL from CredlL and CollecLlon Manager Lo MarkeLlng AsslsLanL
dld noL resulL ln Lhe reducLlon of hls salary Lhere was a reducLlon ln hls duLles and
responslblllLles whlch amounLed Lo a demoLlon LanLamounL Lo a consLrucLlve dlsmlssal










9unza| vs L1SI 1echno|og|es Inc S18 SCkA 66 (2007)
IAC1S
O eLlLloner Lorna ulslng unzal had been worklng for L1Sl 1echnologles lnc as a
ueparLmenL SecreLary for 12 years prlor Lo Lhe LermlnaLlon of her servlces
O eLlLloner senL an emall Lo her offlcemaLes announclng Lhe holdlng of Palloween parLy
LhaL was supposed Lo be held aL Lhe offlce Lhe followlng day upon recelvlng Lhe emall
peLlLloner's supervlsor Carmelo 8emudaro advlsed her flrsL secure an approval from Lhe
Senlor v Werner CelserL for Lhe holdlng of Lhe parLy ln Lhe offlce CelserL dld noL
approve of Lhe plan of conducLlng a parLy ln Lhe offlce
O eLlLloner senL a second emall Lo her offlcemaLes lnformlng Lhem of Lhe cancelled
Palloween parLy and lncludlng some remarks agalnsL Lhe Senlor v ( Pe was so
unfalrpara bang palagl slyang lnllsahan sa LrabahobaklL mosL of Lhe parenLs na mag
[olned ang anak ay nakavL naman Anyway solohln na lang nlya bukas ang offlce) and
lnvlLlng her offlcemaLes Lo aLLend Lhe 1rlck or 1reaL ln Megamall durlng offlce hours
(10am)
O CelserL goL a copy of her emall Lhus requlrlng her Lo explaln ln wrlLlng wlLhln 48hrs why
she should noL be glven a dlsclpllnary acLlon for commlLLlng Art|c|e IV No S 8
Improper conduct or acts of d|scourtesy or d|srespect and Mak|ng ma||c|ous
statements concern|ng Company Cff|cer whereby such offenses may be sub[ecL Lo
suspenslon Lo LermlnaLlon dependlng upon Lhe gravlLy of Lhe offense/s as speclfled ln
our 15ls Code of ConducL and ulsclpllne
O eLlLloner replled Lhru a leLLer explalnlng LhaL she had no mallclous lnLenLlon ln sendlng
Lhe second emall and LhaL she never expecLed LhaL such klnd of words can be called as
acLs of dlscourLesy and dlsrespecL
O CelserL and 8emudaro subsequenLly conferred wlLh peLlLloner Lo glve her a chance Lo
explaln her slde SubsequenLly Lhey senL her a leLLer flndlng her explanaLlon
unaccepLable and LermlnaLlng her servlces effecLlve lmmedlaLely
O eLlLloner flled before nL8C a complalnL for lllegal dlsmlssal agalnsL L1Sl CelserL and
8emudaro
ISSUL WheLher or noL Lhe lmmedlaLe dlsmlssal of Lhe peLlLloner was reasonable and proper
conslderlng Lhe vlolaLlon she commlLLed
nLLD
1he lmposlLlon of Lhe penalLy of dlsmlssal ls proper
(1) unzal's sLaLemenLs were dlscourLeous and dlsrespecLful noL only Lo a mere co
employee buL Lo a hlgh ranklng execuLlve offlclal of Lhe company
(2) unzal's sLaLemenLs Lended Lo rldlcule and undermlne Lhe credlblllLy and auLhorlLy
of Sv CelserL and even encouraged dlsobedlence Lo Lhe sald offlcer
(3) unzal's message was senL Lo a greaL number of employees of L1Sl whlch Lended Lo
sow dlssenL and dlsrespecL Lo managemenL among a greaL number of employees of
L1Sl
(4) unzal's message could noL have been made ln good falLh because Lhe message
lLself used language LhaL placed Sv CelserL ln rldlcule and porLrayed hlm as an ob[ecL of
scorn beLraylng Lhe sender's bad falLh
Clven Lhese clrcumsLances Lhe facL LhaL unzal's lnfracLlon occurred only once should be
largely lnslgnlflcanL 1he gravlLy and publlclLy of Lhe offense as well as lLs adverse lmpacL ln Lhe
workplace ls more Lhan sufflclenL Lo place Lhe same ln Lhe level of a serlous mlsconducL
lL ls Lhe prerogaLlve of managemenL Lo regulaLe accordlng Lo lLs dlscreLlon and [udgmenL all
aspecLs of employmenL 1hls flows from Lhe esLabllshed rule LhaL labor law does noL auLhorlze
Lhe subsLlLuLlon of Lhe [udgmenL of Lhe employer ln Lhe conducL of lLs buslness Such
managemenL prerogaLlve may be avalled of wlLhouL fear of any llablllLy so long as lL ls exerclsed
ln good falLh for Lhe advancemenL of Lhe employers' lnLeresL and noL for Lhe purpose of
defeaLlng or clrcumvenLlng Lhe rlghLs of employees under speclal laws or valld agreemenL and
are noL exerclsed ln a mallclous harsh oppresslve vlndlcLlve or wanLon manner or ouL of
mallce or splLe


















1orreda vs 1osh|ba Informat|on Lqu|pment (9h||s) Inc

IAC1S
1orreda was employed aL 1oshlba as flnance accounLanL under Lhe llnance and
AccounLlng ueparLmenL headed by kobayashl vlceresldenL and Sepulveda llnance
Manager
lrom SepLember 13 1998 Sepulveda recelved some complalnLs from separaLed
employees and from lncumbenL employees on maLernlLy and oLher beneflLs
ln order Lo reLrleve Lhe clalmanLs' payroll and SSS flles whlch 1orreda kepL ln hls
drawer Sepulveda wlLh prlor approval from kobayashl had Lhe drawer forclbly opened
by a sLaff member of Lhe Ceneral AdmlnlsLraLlon SecLlon 1he drawer was opened ln
Lhe presence of Cscar Luseblo noralyn llorenclo and llor 8erdln of Lhe llnance
ueparLmenL
Cn SepL 7 1998 Sepulveda requesLed 1orreda Lo submlL hls key for dupllcaLlon L
1orreda refused
Sepulveda senL a formal requesL Lhrough emall dlrecLlng hlm Lo Lurn over hls drawer
key Lo Lhe Ceneral AdmlnlsLraLor of Lhe company for Lhe dupllcaLlon and Lo explaln ln
wrlLlng why he refused Lo surrender hls key
1orreda replled Lhrough emall accuslng Sepulveda of robbery 1orreda furnlshed coples
of Lhls emall Lo several employees
Cn Lhe same day Sepulveda senL Lo Lhe P8u a complalnL/requesL for lnvesLlgaLlon vla e
mall regardlng 1orreda's accusaLlon and hls abuslve and rude behavlor
1he sLaff of Lhe Ceneral AdmlnlsLraLlon (CA) SecLlon conducLed an lnvesLlgaLlon of Lhe
complalnL agalnsL Sepulveda and submlLLed hls reporL declarlng LhaL Lhere was no
facLual basls for 1orreda's robbery charge agalnsL Sepulveda
1he CA recommended LhaL 1orreda be dlsmlssed conformably wlLh lLs flndlngs LhaL he
commlLLed grave slander under Lhe company's Lmployee Pandbook
1orreda was dlsmlssed
1orreda flled a complalnL for lllegal dlsmlssal

ISSUL WCn Lhe dlsmlssal of Lhe peLlLloner was legal

kULING 1he dlsmlssal of 1orreda was legal

8espondenL 1oshlba proved LhaL peLlLloner was dlsmlssed for [usL cause

1he false aLLrlbuLlon by 1orreda of robbery agalnsL Sepulveda was made ln wrlLlng 1orreda
commlLLed llbel and noL grave slander agalnsL Sepulveda

An employee may be dlsmlssed from employmenL for acLs punlshable under arL 282 (a) of Lhe
Labor Code LhaL ls by serlous mlsconducL

1here ls abundanL evldence on record showlng LhaL 1orreda commlLLed llbel agalnsL hls
lmmedlaLe superlor Sepulveda an acL consLlLuLlng serlous mlsconducL whlch warranLs Lhe
dlsmlssal from employmenL

1orreda knew LhaL lL was noL Sepulveda who opened hls drawer
eLlLloner admlLLed LhaL hls charge of robbery agalnsL Sepulveda was baseless buL clalmed LhaL
he fabrlcaLed Lhe charge because of hls anger aL Sepulveda's repeaLed acLs of openlng hls
drawer wlLhouL prlor permlsslon

An employer has a free relgns and en[oys wlde laLlLude of dlscreLlon Lo regulaLe all aspecLs of
employmenL lncludlng Lhe prerogaLlve Lo lnsLlll dlsclpllne ln lLs employees and Lo lmpose
penalLles lncludlng dlsmlssal upon errlng employees

1hls ls a managemenL prerogaLlve where Lhe free wlll of managemenL Lo conducL lLs own
affalrs Lo achleve lLs purpose Lakes form


















UNICN CI IILI9kC VS NLS1LL 9nILS 449 SCkA S21 (2007)
IAC1S ln anLlclpaLlon of Lhe explraLlon of Lhe exlsLlng C8A beLween nesLle and ulL Lhe
presldenLs of Lhe Alabang andf Cabuyao dlvlslons lnformed Lhe company of Lhelr lnLenL Lo open
negoLlaLlons for Lhe upcomlng C8A coverlng 20012004 nesLle acknowledged Lhe leLLer and
lnformed Lhe unlon LhaL lL was preparlng lLs own counLerproposal and proposed ground rules
LhaL shall govern Lhe conducL of Lhe C8A negoLlaLlons

ln May 2001 nesLle senL anoLher leLLer underscorlng sub[ecLs whlch shall be excluded from Lhe
C8A negoLlaLlons also clarlfled LhaL slnce Lhe closure of Lhe Alabang planL Lhe C8A negoLlaLlons
wlll only be appllcable Lo Lhe Cabuyao planL lncldenLally boLh parLles falled Lo reach an
agreemenL on Lhe proposed C8A Cn november 2001 a noLlce of sLrlke was flled by Lhe unlon
alleglng among oLhers nesLle's unfalr labor pracLlces (le bargalnlng ln bad falLh by seLLlng
precondlLlons ln Lhe ground rules) ln vlew of Lhe lmpendlng sLrlke nesLle flled wlLh uCLL a
peLlLlon praylng LhaL uCLL sec SLo 1omas assume [urlsdlcLlon over Lhe labor dlspuLe Lhereby
en[olnlng any lmpendlng sLrlke aL Lhe Cabuyao planL Powever desplLe Lhe ln[uncLlon conLalned
ln Lhe assumpLlon of [urlsdlcLlon order and conclllaLlon efforLs on !anuary 13 2002 Lhe
employees of Lhe unlon aL Lhe Cabuyao planL wenL on sLrlke ln llghL of Lhe sLrlke uCLL
secreLary lssued anoLher order
1 Crderlng members of Lhe unlon Lo reLurn Lo work wlLhln 24 hours
2 nesLle Lo accepL back all reLurnlng employees under Lhe same Lerms and condlLlons
exlsLlng prlor Lo Lhe sLrlke
3 1o cease and deslsL from commlLLlng acLs lnlmlcal Lo Lhe ongolng conclllaLlon meeLlngs
4 8oLh parLles Lo submlL poslLlon papers wlLhln 10 days
uesplLe Lhls Lhe members of Lhe unlon conLlnued wlLh Lhelr sLrlke and refused Lo go back Lo
work as lnsLrucLed

ISSUL W]N kLS9CNDLN1 NLS1LL IS GUIL1 CI UNIAIk LA8Ck 9kAC1ICL IN kLIUSING
1C 9kCCLLD WI1n 1nL C8A NLGC1I A1ICNS UNLLSS 9L1I1ICNLk II kS1 ADMI1S
1nA1 1nL kL1I kLMLN1 9LAN IN 1nL CCM9AN IS A NCN C8A MA11Lk
nLLD ln an earller case lnvolvlng Lhe same parLles Lhe SC held LhaL Lhe lncluslon of Lhe
reLlremenL plan ln Lhe C8A as parL of Lhe package of economlc beneflLs exLended by Lhe
company Lo lLs employees has a consensual characLer Lo Lhe plan so LhaL lL may noL be
LermlnaLed or modlfled aL wlll by elLher parLy 1he facL LhaL Lhe reLlremenL planL ls non
conLrlbuLory does noL make lL a nonlssue ln Lhe C8A negoLlaLlons Slnce Lhe reLlremenL plan
has been an lnLegral parL of Lhe C8A slnce 1972 Lhe unlon's demand Lo lncrease Lhe beneflLs
due Lhe employees under sald plan ls a valld C8A lssue ursuanL Lo ArL 100 Labor Code
employees do have a vesLed and demandable rlghL over exlsLlng beneflLs volunLarlly granLed Lo
Lhem by Lhelr employer As such Lhe laLLer may noL unllaLerally wlLhdraw ellmlnaLe or
dlmlnlsh such beneflLs
Lmp| oyers are accorded r| ghts and pr| v| | eges to assure the| r se| f
determ| nat| on and | ndependence and reasonab| e return of cap| ta| 1h| s mass
of pr| v| | eges compr| ses the soca| | ed management prerogat| ves In th| s
connect| on the ru| e | s that good fa| th | s a| ways presumed As | ong as the
company' s exerc| se of the same | s | n good fa| th to advance | ts | nterest and
not for purpose of defeat| ng or c| rcumvent| ng the r| ghts of emp| oyees under
the | aw or a va| | d agreement such exerc| se w| | | be uphe| d
lrom Lhe facLs and evl dence exLanL l n Lhe records of Lhese consol l daLed
peLl L l ons Lhl s CourL fl nds LhaL 1) L he 8eLl remenL l an l s sLl l l a val l d l ssue f or
herel n parLl es col l ecLl ve bargal nl ng negoLl aLl ons 2) L he CourL of Appeal s
comml LLed reversl bl e error l n l l ml L l ng Lo Lhe l ssue of Lhe ground rul es Lhe
scope of L he power of Lhe SecreLary of Labor Lo assume [ url sdl cLl on over L he
sub[ ecL l abor dl spuLe and 3) nesLl e l s noL gul l Ly of unfal r l abor pracLl ce




























Star 9aper Corp vs S|mbo| 487 SCkA 228 (2006)
IAC1S
O eLlLloner SLar aper CorporaLlon (Lhe company) ls a corporaLlon engaged ln Lradlng
prlnclpally of paper producLs !osephlne CngslLco ls lLs Manager of Lhe ersonnel and
AdmlnlsLraLlon ueparLmenL whlle SebasLlan Chua ls lLs Managlng ulrecLor
O 8espondenLs (Slmbol Comla and LsLrella) were all regular employees of Lhe company
O 1he company has a company pollcy promulgaLed ln 1993 vlz
1 new appllcanLs wlll noL be allowed Lo be hlred lf ln case he/she has a
relaLlve up Lo Lhe 3rd degree of relaLlonshlp already employed by Lhe company
2 ln case of Lwo of our employees (boLh slngles slc one male and anoLher
female) developed a frlendly relaLlonshlp durlng Lhe course of Lhelr employmenL and
Lhen declded Lo geL marrled one of Lhem should reslgn Lo preserve Lhe pollcy sLaLed
above
O Slmbol and Comla havlng marrled one of Lhelr coemployees were advlsed LhaL one of
each couples should reslgn pursuanL Lo Lhe company pollcy
O eLlLoner sLaLed LhaL LsLrella who also meL one coworker Zunlga a marrled man goL
LsLrella pregnanL eLlLloner alleged LhaL Lhey could have LermlnlnaLed her servlces due
Lo lmmorallLy buL lnsLead she opLed Lo reslgn
O 1he respondenLs Slmbol and Comla had a dlfferenL verslon clalmlng LhaL Lhey dld noL
reslgn volunLarlly Lhey were compelled Lo reslgn ln vlew of an lllegal company pollcy As
Lo LsLrella afLer geLLlng pregnanL and dlscoverlng LhaL Zunlga was noL separaLed
severed her relaLlonshlp Lo hlm Lo avold dlsmlssal due Lo company pollcy She meL an
accldenL Lhus was advlsed Lo recuperaLe and upon reLurnlng Lo work she was denled
enLry and was glven a Memo sLaLlng LhaL she was belng dlsmlssed for lmmoral
mlsconducL
O 8espondenLs flled a complalnL for unfalr labor pracLlce 1hey averred LhaL Lhe company
pollcy was lllegal and conLravenes ArLlcle 136 of Lhe Labor Code
ISSUL
WheLher Lhe pollcy of Lhe employer bannlng spouses from worklng ln Lhe same company
vlolaLes Lhe rlghLs of Lhe employee under Lhe ConsLlLuLlon and Lhe Labor Code or ls a valld
exerclse of managemenL prerogaLlve
nLLD
1he 1987 ConsLlLuLlon sLaLes our pollcy Lowards Lhe proLecLlon of labor under Lhe followlng
provlslons ArLlcle ll SecLlon 18 ArLlcle xlll Sec 3
1he Clvll Code llkewlse proLecLs labor wlLh Lhe followlng provlslon ArL 1700 and 1702
1he case aL bar also lnvolves ArLlcle 136 of Lhe Labor Code
1he nospouse employmenL pollcy vlolaLe Lhe marlLal sLaLus provlslon because lL arblLrarlly
dlscrlmlnaLes agalnsL all spouses of presenL employees wlLhouL regard Lo Lhe acLual effecL on
Lhe lndlvlduals quallflcaLlons or work performance
1hese courLs also flnd Lhe nospouse employmenL pollcy lnvalld for fallure of Lhe employer Lo
presenL any evldence of bus|ness necess|ty oLher Lhan Lhe general percepLlon LhaL spouses ln
Lhe same workplace mlghL adversely affecL Lhe buslness 1hey hold LhaL Lhe absence of such a
bona f|de occupat|ona| qua||f|cat|on lnvalldaLes a rule denylng employmenL Lo one spouse due
Lo Lhe currenL employmenL of Lhe oLher spouse ln Lhe same offlce 1hus Lhey rule LhaL unless
Lhe employer can prove LhaL Lhe reasonable demands of Lhe buslness requlre a dlsLlncLlon
based on marlLal sLaLus and Lhere ls no beLLer avallable or accepLable pollcy whlch would beLLer
accompllsh Lhe buslness purpose an employer may noL dlscrlmlnaLe agalnsL an employee
based on Lhe ldenLlLy of Lhe employee's spouse 1hls ls known as Lhe bona f|de occupat|ona|
qua||f|cat|on except|on
1here musL be a compelllng buslness necesslLy for whlch no alLernaLlve exlsL oLher Lhan Lhe
dlscrlmlnaLory pracLlce 1o [usLlfy a bona flde occupaLlonal quallflcaLlon Lhe employer musL
prove Lwo facLors (1) LhaL Lhe employmenL quallflcaLlon ls reasonably relaLed Lo Lhe essenLlal
operaLlon of Lhe [ob lnvolved and (2) LhaL Lhere ls a facLual basls for bellevlng LhaL all or
subsLanLlally all persons meeLlng Lhe quallflcaLlon would be unable Lo properly perform Lhe
duLles of Lhe [ob
We do noL flnd a reasonable buslness necesslLy ln Lhe case aL bar
eLlLloners' sole conLenLlon LhaL Lhe company dld noL [usL wanL Lo have Lwo (2) or more of lLs
employees relaLed beLween Lhe Lhlrd degree by afflnlLy and/or consangulnlLy ls lame 1haL Lhe
second paragraph was meanL Lo glve LeeLh Lo Lhe flrsL paragraph of Lhe quesLloned rule ls
evldenLly noL Lhe valld reasonable buslness necesslLy requlred by Lhe law







Mar|va| 1rad|ng Inc vs NLkC

IAC1S
Abella worked as ch1emlsL/quallLy conLroller aL Marlval for almosL 8 years
Cn !uly 14 2000 Manuel vlceresldenL and Ceneral Manager of Marlval conducLed a
sLaff meeLlng and afLer Lhe meeLlng he asked Lhe packaglng supervlsor and lmporLaLlon
manager Lo sLay behlnd Lo dlscuss oLher maLLers
Manuel Lhen requesLed Lwo male employees Lo move some Lables and placed Abella's
belonglngs on one of Lhese Lables wlLhouL Abella's presence
Abella came ln when Manuel and Lhe packaglng supervlsor and lmporLaLlon manager
were already havlng Lhelr own meeLlng
Whlle Abella was aLLendlng her Lhlngs her shoulder bag fell loudly on Lhe floor
dlsrupLlng Lhe offlcer's meeLlng
Manuel approached Abella Lo ask whaL Lhe problem was and Abella expressed her anger
over Lhe facL LhaL Lhe employees were noL lnformed flrsL before Lhelr Lables were
moved
Manuel asked Abella Lo leave Lhe room buL she refused Lo do so
1hree days laLer Abella recelved a memo from Manuel dlrecLlng her Lo explaln wlLhln
24 hours why no dlsclpllnary acLlon should be lmposed for her dlsrespecLful
lnsubordlnaLlon and unprofesslonal conducL
Abella denled Lhe accusaLlon agalnsL her She clarlfled LhaL her bag accldenLally fell Lo
Lhe floor LhaL she alred her slde regardlng Lhe Lable rearrangemenL ln a LacLful and
courLeous manner and LhaL Lhe order Lo geL her ouL of Lhe room was un[usLlfled
unconvlnced by Lhe explanaLlon and flndlng no [usLlflable reason for Lhe employee's
ouLbursL Marlval flred Abella on !uly 21 2000
Abella flled a complalnL for lllegal dlsmlssal wlLh Lhe labor ArblLer alleglng LhaL she was
dlsmlssed from work wlLhouL [usL cause and wlLhouL due process

ISSUL]s
1 WheLher a valld cause exlsLed Lo [usLlfy Abella's dlsmlssal?
2 WheLher Lhe cause of Abella's dlsmlssal amounLs Lo serlous mlsconducL?


kULING
ln order Lo conslder lL a serlous mlsconducL LhaL would [usLlfy dlsmlssal under Lhe law lL musL
have been done ln relaLlon Lo Lhe performance of her duLles as would show her unflL Lo
conLlnue worklng for her employer

1he acLs of Abella LhaL was complalned of dld noL perLaln Lo her duLles as chemlsL/quallLy
conLroller

Abella dld noL make any false and mallclous sLaLemenLs agalnsL her superlors Abella's acL do
noL consLlLuLe serlous mlsconducL as Lo [usLlfy her dlsmlssal

AfflanLs falled Lo clLe parLlcular acLs or clrcumsLances whlch would show LhaL Abella was
exLremely dlsrespecLful Lo her superlor 1hey [usL alleged LhaL respondenL Lhrew her bag and
oLher Lhlngs nolslly and uLLered unpleasanL remarks aL her employer

Abella merely uLLered Sana naman nexL Llme na uurungln yung gamlL namln eh sasablhln
muna sa amln" We do noL flnd Lhe remarks unpleasanL 1he words SAnA nAMAn" SuCCLS1
1PA1 SPL WAS MAklnC A 8LCuLS1 1C PL8 SuL8lC8 lC8 A Ll11LL MC8L CCnSluL8A1lCn

1he courL relLeraLes Lhe seLLled rule LhaL ln LermlnaLlon of employmenL dlspuLes Lhe burden of
proof ls always on Lhe employer Lo prove LhaL Lhe dlsmlssal was for a [usL and valld cause
whlch Marlval falled Lo dlscharge

1hls courL agrees LhaL Lhe dlsmlssal on Abella for mlsconducL appears Lo be Loo harsh a penalLy
lL musL be noLed LhaL Abella ls belng held llable for a flrsL Llme offense desplLe 8 years of
unblemlshed servlce ConslderaLlon musL sLlll be glven Lo her lengLh of servlce and Lhe number
of vlolaLlons commlLLed durlng her employmenL














1INIC VS CA S24 SCkA S33 (2007)

IAC1S SmarL CommunlcaLlons employed peLlLloner 1lnlo as lLs general manager for vlSMln on
uecember 2002 ln May 2003 Caeg Lhe group head of sales and dlsLrlbuLlon lnformed
peLlLloner of hls new asslgnmenL as sales manager ln Lhe MakaLl head offlce 1hereafLer Lhe
peLlLloner dld noL reporL for work Pe Lhen flled a complalnL for consLrucLlve dlsmlssal Caeg
requlred peLlLloner Lo explaln hls conLlnulng refusal Lo Lransfer Lo hls new asslgnmenL buL
lnsLead peLlLloner referred Caeg Lo hls complalnL for consLrucLlve dlsmlssal Caeg also
scheduled a hearlng on !une 23 2003 buL peLlLloner falled Lo aLLend 1hus prlvaLe respondenLs
LermlnaLed Caeg LermlnaLed peLlLloner's employmenL effecLlve !une 23 2003 for
lnsubordlnaLlon

ISSUL W/n 8lvA1L 8LSCnuLn1'S (CALC) AC1 Cl 18AnSlL88lnC L1l1lCnL8 1C l1S
MAkA1l PLAu ClllCL lS A vALlu LxL8ClSL Cl MAnACLMLn1 8L8CCA1lvL

nLLD As a rule Lhe courL wlll noL lnLerfere wlLh an employer's prerogaLlve Lo regulaLe all
aspecLs of employmenL whlch lncludes work asslgnmenL worklng meLhods and place and
manner of work 1hls prerogaLlve ls based on lLs assessmenL and percepLlon of lLs employees'
quallflcaLlons apLlLudes eLc Lo move Lhem around ln Lhe varlous areas of lLs buslness
operaLlons 1hls prlvllege lnherlLed ln Lhe employer's rlghL Lo conLrol and manage hls
enLerprlse effecLlvely

L|m|ts
It cannot be used as a subterfuge by the emp|oyer to r|d h|mse|f of an undes|rab|e
worker
1ransfer |s not unreasonab|e |nconven|ent or pre[ud|c|a| to the emp|oyee
It does not |nvo|ve a demot|on |n rank or d|m|nut|on of h|s sa|ar|es and other benef|ts

















I||ght Attendant and Stewards Assoc of the 9h|| vs 9AL SS9 SCk 2S2 (2008)
IAC1S
O eLlLloner lASA ls Lhe duly cerLlfled collecLlve bargalnlng represenLaLlve of AL fllghL
aLLendanLs and sLewards or collecLlvely known as AL cabln crew personnel
8espondenL AL ls a domesLlc corporaLlon organlzed and exlsLlng under Lhe laws of Lhe
8epubllc of Lhe hlllpplnes operaLlng as a common carrler LransporLlng passengers and
cargo Lhrough alrcrafL
O Cn !une 13 1998 AL reLrenched 3000 of lLs employees lncludlng more Lhan 1400 of
lLs cabln crew personnel Lo Lake effecL on !uly 13 1998 AL adopLed Lhe reLrenchmenL
scheme allegedly Lo cuL cosLs and mlLlgaLe huge flnanclal losses as a resulL of a
downLurn ln Lhe alrllne lndusLry broughL abouL by Lhe Aslan flnanclal crlsls
O lASA and AL conducLed a serles of consulLaLlons and meeLlngs and explored all
posslblllLles of cushlonlng Lhe lmpacL of Lhe lmpendlng reducLlon ln cabln crew
personnel Powever Lhe parLles falled Lo agree on how Lhe scheme would be
lmplemenLed 1hus AL unllaLerally resolved Lo uLlllze Lhe crlLerla seL forLh ln SecLlon
112 of Lhe ALlASA CollecLlve 8argalnlng AgreemenL
8
(C8A) ln reLrenchlng cabln
crew personnel LhaL ls LhaL reLrenchmenL shall be based on Lhe lndlvldual employees
eff|c|ency rat|ng and sen|or|ty
O Cn !uly 13 1998 however AL carrled ouL Lhe reLrenchmenL of lLs more Lhan 1400
cabln crew personnel
ISSUL WheLher or noL AL ls gullLy of lllegal dlsmlssal of lLs employees
nLLD
ALs reLrenchmenL program ls lllegal because lL was based on wrongful premlse (lan 14
whlch ln reallLy Lurned ouL Lo be lan 22 resulLlng ln reLrenchmenL of more cabln
aLLendanLs Lhan was necessary) and ln a seL of crlLerla or raLlng varlables LhaL ls unfalr and
unreasonable when lmplemenLed lL falled Lo Lake lnLo accounL each cabln aLLendanLs
respecLlve servlce record Lhereby dlsregardlng senlorlLy and loyalLy ln Lhe evaluaLlon of
overall employee performance

CulLclalms execuLed as a resulL of ALs lllegal reLrenchmenL program are llkewlse annulled
and seL aslde because Lhey were noL volunLarlly enLered lnLo by Lhe reLrenched employees
Lhelr consenL was obLalned by fraud or mlsLake as vollLlon was clouded by a reLrenchmenL
program LhaL was aL lLs lncepLlon made wlLhouL basls 1he law looks wlLh dlsfavor upon
qulLclalms and releases by employees pressured lnLo slgnlng by unscrupulous employers
mlnded Lo evade legal responslblllLles As a rule deeds of release or qulLclalm cannoL bar
employees from demandlng beneflLs Lo whlch Lhey are legally enLlLled or from conLesLlng
Lhe legallLy of Lhelr dlsmlssal 1he accepLance of Lhose beneflLs would noL amounL Lo
esLoppel 1he amounLs already recelved by Lhe reLrenched employees as conslderaLlon for
slgnlng Lhe qulLclalms should however be deducLed from Lhelr respecLlve moneLary
awards
nan[|n neavy Industr|es and |Construct|on Co Ltd Vs Ibanez

IAC1S
Pan[ln ls a forelgn company engages ln Lhe consLrucLlon buslness ln Lhe hlllpplnes
8espondenL lbanez Carollno Cacula uagoLodoL Calda and four oLher coworkers
employees of Pan[ln
Aprll 13 2002 Pan[ln dlsmlssed respondenLs from employmenL
eLlLloner on Lhe oLher hand malnLalned LhaL respondenLs were hlred as pro[ecL
employees for Lhe consLrucLlon of Lhe L81/M81 Llne 2 ackage 2 and 3 ro[ecL
eLlLloner also lnslsLs a compleLlon bonus was pald Lo Lhe respondenLs
9et|t|oner's a|so attached cop|es of the qu|tc|a|m executed by respondents wh|ch
stated that the |atter rece|ved a|| wages and benef|ts that were due them and
re|eased nan[|n and |ts representat|ves from any c|a|ms |n connect|on w|th the|r
emp|oyment
CA declared respondenLs LhaL Lhey were regular employees who had been dlsmlssed
wlLhouL [usL and valld causes wlLhouL due process

ISSUL WCn respondenLs are regular employees?

kULING
8espondenLs are Lo be consldered regular employees of Pan[ln

A wrlLLen conLracL wlll be Lhe evldence LhaL respondenLs were lnformed of Lhe duraLlon and
scope of Lhelr work and Lhelr sLaLus as pro[ecL employees

ln Lhls case no conLracL was produced ln Lhe absenL of proof LhaL Lhe pro[ecL employees were
lnformed of Lhelr sLaLus lL ls presume LhaL Lhey are regular employees

Pan[ln argues LhaL Lhe 1ermlnaLlon 8eporL flled before Lhe uCLL slgnlfles LhaL respondenLs'
servlces were engaged only for Lhe L81/M81 Llne 2 8uL Pan[ln was noL able Lo offer evldence
Lo conLroverL Lhe respondenLs' clalm LhaL Lhey were asslgned Lo varlous consLrucLlon pro[ecLs

eLlLloner dld noL presenL oLher 1ermlnaLlon 8eporLs 1he fallure of an employer Lo flle a
1ermlnaLlon 8eporL wlLh Lhe uole every Llme a pro[ecL ls compleLed lndlcaLes LhaL respondenLs
were noL pro[ecL employees

eLlLloner lnslsLs LhaL Lhe paymenL Lo Lhe respondenLs of a compleLlon bonus lndlcaLes LhaL
respondenLs were pro[ecL employees 8uL peLlLloner falled Lo presenL evldence showlng LhaL
Lhey underLook Lo pay respondenLs such bonus upon Lhe compleLlon of Lhe pro[ecL

I|na||y the qu|tc|a|ms wh|ch the respondents s|gned cannot bar them from demand|ng what
|s |ega||y due them as regu|ar emp|oyee

u|tc|a|ms and wa|vers are |neffect|ve to bar c|a|ms for the fu|| measure of a worker's |ega|
r|ghts part|cu|ar|y when the fo||ow|ng cond|t|ons are app||cab|e 1) where there |s a c|ear
proof that the wa|ver was wang|ed fro an unsuspect|ng or gu|||b|e person 2) where the terms
of sett|ement are unconsc|onab|e on the|r face

1o determ|ne whether the qu|tc|a|ms s|gned by respondent are va||d one |mportant factor
that must be taken |nto account |s the cons|derat|on accepted by respondents the amount
must const|tute a reasonab|e sett|ement equ|va|ent to the fu|| measure of the|r |ega| r|ghts

In th|s case the qu|tc|a|ms s|gned by the respondents do not appear to have been made for
va|uab|e cons|derat|on kespondents who are regu|ar emp|oyees are ent|t|ed to backwages
and separat|on pay and the qu|tc|a|ms wh|ch they s|gned cannot prevent them from seek|ng
c|a|ms to wh|ch they are ent|t|ed



















k8 MICnALL 9kLSS VS GALI1 S4S SCkA 23 (2008)

-cc tt 2028 comptomlse ls o coottoct wbeteby tbe pottles by mokloq teclptocol
coocessloos ovolJ o lltlqotloo ot pot oo eoJ to ooe olteoJy commeoceJ
-cc tt 20J6 comptomlse comptlses ooly tbose objects wblcb ote Jefloltely stoteJ tbetelo ot wblcb
by oecessoty lmpllcotloo ftom lts tetms sboolJ be JeemeJ to bove beeo locloJeJ lo tbe some
qeoetol teoooclotloo of tlqbts ls ooJetstooJ to tefet ooly to tbose tbot ote coooecteJ wltb tbe Jlspote
wblcb wos tbe sobject of tbe comptomlse

IAC1S ln May 1997 respondenL CallL was employed by 88 Mlchael ress as an offseL
machlne operaLor (230/day Monday Lo SaLurday) uurlng hls employmenL CallL was Lardy for
a LoLal of 190 Llmes and was absenL wlLhouL leave for 9 Z days SomeLlme ln lebruary 1999
respondenL was asked Lo render C1 buL refused Lo 1he followlng day (leb 23) peLlLloner
Lscobla Lold hlm noL Lo work and Lo reLurn laLer ln Lhe afLernoon for a hearlng A memo
(warnlng for dlsmlssal and noLlce of hearlng) was senL Lo hlm sLaLlng LhaL he commlLLed Lhe
followlng offenses
1 PablLual and excesslve Lardlness
2 AcLs of dlscourLesy and dlsrespecL ln addresslng superlors
3 lallure Lo work C1 afLer havlng been lnsLrucLed Lo dos so
4 lnsubordlnaLlon

CallL dld noL show up for Lhe hearlng leb 24 respondenL was LermlnaLed from employmenL
and recelved a LermlnaLlon leLLer SubsequenLly CallL flled a complalnL for lllegal dlsmlssal

ISSUL W]N 1nLkL WAS IUS1 CAUSL 1C 1LkMINA1L 1nL LM9LCMLN1 CI kLS9CNDLN1
GALI1 AND W]N DUL 9kCCLSS WAS C8SLkVLD IN 1nL DISMISSAL 9kCCLSS

nLLD nL8C and CA were lncorrecL ln holdlng LhaL peLlLloner condoned CallL's hablLual
Lardlness evldenced by Lhe facL LhaL he was noL glven any noLlce/warnlng 1he mere facL LhaL
Lhe numerous lnfracLlons of respondenL have noL been lmmedlaLely sub[ecLed Lo sancLlons
cannoL be lnLerpreLed as condonaLlon of Lhe offenses or walver of Lhe company Lo enforce
company rules A walver ls a volunLary and lnLenLlonal rellnqulshmenL or abandonmenL of a
known rlghL or prlvllege 1o const|tute a va||d wa|ver |t must be couched |n c|ear and
unequ|voca| terms wh|ch |eave no doubt as to the |ntent|on of a party to g|ve up a r|ght or
benef|t wh|ch |ega||y perta|ns to h|m nence the management prerogat|ve to d|sc|p||ne
emp|oyees |s a |ega| r|ght that cannot as a genera| r|ght be |mp||ed|y wa|ved ln Lhe case aL
bar CallL dld noL adduce any evldence Lo show walver or condonaLlon on Lhe parL of Lhe
peLlLloners

lor wlllful dlsobedlence Lo be a valld cause for dlsmlssal Lwo elemenLs musL be presenL
1 1he employee's assalled conducL musL have been wlllful le characLerlzed by wrongful
and perverse aLLlLude
2 1he order vlolaLed musL have been reasonable lawful made known Lo Lhe employee
and musL perLaln Lo Lhe duLles whlch he had been engaged Lo dlscharge
ln Lhe presenL case lL ls clear LhaL peLlLloner's order for respondenL Lo render C1 Lo meeL a
producLlon deadllne complles wlLh Lhe second requlslLe ArL 89 Labor Code empowers Lhe
employer Lo legally compel hls employees Lo perform C1 agalnsL Lhelr wlll Lo prevenL serlous
loss or damage 1he flrsL requlslLe ls also presenL due Lo Lhe facL LhaL respondenL refused Lo do
C1 desplLe hls knowledge LhaL Lhere ls a producLlon deadllne and wlLhouL hlm no furLher
prlnLlng can be made shows hls wrongful and perverse aLLlLude

1he Lwln noLlce requlremenL musL be glven Lo an employee before hls employmenL could be
LermlnaLed
1 A flrsL noLlce Lo apprlse Lhe employees of Lhelr faulL
2 A second noLlce Lo communlcaLe Lo Lhe employees Lhelr employmenL ls belng
LermlnaLed
1he undue hasLe ln effecLlng respondenL's LermlnaLlon shows LhaL Lhe LermlnaLlon process was
a mere slmulaLlonLhe requlred noLlces were glven a hearlng was even scheduled and held
buL respondenL was noL really glven a real opporLunlLy Lo defend hlmself and lL seems LhaL
peLlLloners had already declded Lo dlsmlss respondenL from servlce even before Lhe flrsL noLlce
had been glven

















Are||ano vs 9owertech Corp S42 SCkA 182 (2008)
IAC1S
O A complalnL was flled by Lhe -oqkokolsooq ,ooqqoqowo -q lowettecb cotpototloo ln
behalf of lLs 32 lndlvldual members and nonunlon members agalnsL Lhelr employer
owerLech for lllegal dlsmlssal and oLher money clalms
O 1he case proceeded wlLh respecL Lo Lhe remalnlng LwenLyflve (23) employees
peLlLloners ln Lhls case
O Cn !une 23 1999 Labor ArblLer 8enell !oseph 8 uela Cruz rendered a ueclslon
3

declarlng lllegal Lhe LermlnaLlon of LwenLy (20) of peLlLloners and granLlng Lhelr
moneLary clalms ln Lhe LoLal amounL of 233872884
O uurlng lLs pendency Carlos CesLlada for hlmself and on behalf of oLher peLlLloners
execuLed a qulLclalm release and walver
4
ln favor of owerLech ln conslderaLlon of Lhe
amounL of 13000000 CesLlada was appolnLed by hls copeLlLloners as Lhelr aLLorney
lnfacL 1he appolnLmenL was evldenced by a speclal power of aLLorney
O Cn March 13 2000 CesLlada LermlnaLed Lhe servlces of Lhelr counsel ALLy LvangellsLa
and lnsLead reLalned ALLy Manuel Luls lellpe of Lhe ubllc ALLorneyt`s Cfflce
O owerLech pald 13000000 Lo CesLlada purporLedly as compromlse amounL for all of
peLlLloners CesLlada Lhrough ALLy lellpe and owerLech flled a [olnL moLlon Lo
dlsmlss
10
wlLh Lhe nL8C based on Lhe compromlse agreemenL
O ALLy LvangellsLa opposed
11
Lhe moLlon alleglng LhaL Lhe compromlse agreemenL ls
unconsclonable LhaL he was lllegally LermlnaLed as counsel for Lhe oLher peLlLloners
wlLhouL Lhelr consenL and LhaL Lhe 13000000 was recelved by CesLlada as paymenL
solely for hls backwages and oLher moneLary clalms Cn Lhe !olnL MoLlon Lo ulsmlss ln
Lhelr opposlLlon Lhe oLher complalnanLs represenLed by ALLy LvangellsLa argued LhaL
CesLlada recelved Lhe h13000000 referred Lo ln Lhe CulLclalm and 8elease as
paymenL and for hls backwages lL ls furLher argued LhaL CesLlada had never lnLervened
ln Lhe paymenL of awards due Lhe oLher complalnanLs ln Lhls case as evldenced by Lhe
leLLer of CesLlada Lo ALLy LvangellsLa
ISSUL 1he valldlLy of a qulLclalm based on a broad speclal power of aLLorney affecLlng Lhe
rlghLs of LwenLyLwo (22) employees
nLLD
1be l150000 wos polJ to CestloJo solely os poymeot fot bls bockwoqes
oot tbose of petltlooets tbete ls evlJeot collosloo betweeo lowettecb ooJ CestloJo beoce tbe
comptomlse oqteemeot ls volJ
CesLladat`s admlsslon LhaL he recelved Lhe amounL of h13000000 only as paymenL for hls
backwages and LhaL Lhe same has no reference Lo Lhe clalm of Lhe oLher complalnanLs ln Lhls
case ls bolsLered furLher by Lhe facL LhaL Lhe CulLclalm and 8elease aLLached Lo Lhe lnsLanL !olnL
MoLlon Lo ulsmlss was slgned only by CesLlada and LhaL Lhe oLher complalnanLs never Look parL
ln Lhe execuLlon Lhereof A walver of money clalms musL be regarded as a personal rlghL
hence Lhe proLecLlve rule LhaL for a compromlse deallng wlLh Lhelr [udgmenL Lo be valldly
enLered lnLo Lhere musL be personal and speclflc lndlvldual consenL glven by Lhe workers
1he CourL gave credence Lo Lhe admlsslon of CesLlada LhaL he recelved Lhe 13000000 as
paymenL for hls own backwages ln hls leLLer Lo ALLy LvangellsLa CesLlada sald LhaL he was
pressured by owerLech Lo slgn Lhe walver and qulLclalm for peLlLloners ln order Lo recelve hls
share ln Lhe 23 mllllon [udgmenL Pavlng no sLable [ob afLer hls dlsmlssal CesLlada had no
oLher cholce buL Lo breach hls flduclary obllgaLlon Lo peLlLloners Pe succumbed Lo Lhe
pressure of owerLech ln slgnlng Lhe walver release and qulLclalm ln exchange for Lhe
13000000 ln shorL he colluded wlLh owerLech Lo Lhe deLrlmenL of peLlLloners
1o Cur mlnd whaL prompLed owerLech Lo agree Lo pay Lhe 13000000 was Lhe nL8C order
voldlng Lhe compromlse agreemenL and relnsLaLlng Lhe Labor ArblLer 23 mllllon [udgmenL 8y
Lhen owerLech was faced wlLh Lhe posslblllLy of paylng 23 mllllon Lo peLlLloners lL was also
requlred by law Lo posL a sureLy bond for Lhe same amounL ln order Lo perfecL lLs appeal wlLh
Lhe nL8C
Armed wlLh Lhe nL8C order peLlLloners were benL on pursulng Lhelr appeal owerLech
panlcked lL negoLlaLed wlLh CesLlada offerlng hlm 13000000 ln exchange for a walver and
qulLclalm for hlmself and for peLlLloners owerLech knew LhaL CesLlada was auLhorlzed by
peLlLloners Lo negoLlaLe for toany sum he may deem [usL and reasonablet and Lo slgn
qulLclalms and walvers for Lhem !obless and havlng no regular lncome CesLlada succumbed Lo
Lhe pressure Pe connlved wlLh owerLech and agreed Lo recelve Lhe 13000000 for hlmself
ln exchange for slgnlng a qulLclalm and walver ln Lhe name of peLlLloners
1o glve effecL Lo Lhe colluslon CesLlada had Lo geL rld of ALLy LvangellsLa who had prevlously
succeeded ln nulllfylng Lhe compromlse agreemenL Pe flred ALLy LvangellsLa wlLhouL cause
baslng hls dlsmlssal on hls plenary auLhorlLy as agenL of peLlLloners
ln hls leLLer CesLlada admlLLed LhaL Lhe dlsmlssal of ALLy LvangellsLa was upon Lhe proddlng of
vlrLue SarmlenLo personnel manager of owerLech owerLech lmposed Lhe dlsmlssal of ALLy
LvangellsLa as a condlLlon before CesLlada may recelve Lhe amounL A day afLer flrlng ALLy
LvangellsLa CesLlada recelved Lhe 13000000 1haL same day CesLlada represenLed by ALLy
lellpe and owerLech flled a [olnL moLlon Lo dlsmlss wlLh Lhe nL8C
Colluslon ls a specles of fraud ArLlcle 227 of Lhe Labor Code empowers Lhe nL8C Lo vold a
compromlse agreemenL for fraud Lhus
Any compromlse seLLlemenL lncludlng Lhose lnvolvlng labor sLandard laws volunLarlly agreed
upon by Lhe parLles wlLh Lhe asslsLance of Lhe 8ureau or Lhe reglonal offlce of Lhe ueparLmenL
of Labor shall be flnal and blndlng upon Lhe parLles 1he naLlonal Labor 8elaLlons Commlsslon
or any courL shall noL assume [urlsdlcLlon over lssues lnvolved Lhereln excepL ln case of non
compllance Lhereof or lf Lhere ls prlma facle evldence LhaL Lhe seLLlemenL was obLalned
Lhrough fraud mlsrepresenLaLlon or coerclon



AN1AMCC GCLDIILLDS MINING CCM9AN V CIk

IAC1S
1he Nat|ona| Labor Un|on represenLlng Lhe workers of AnLamok Coldfleld Mlnlng
Company sent a |etter to management demand|ng h|gher pay and better work|ng cond|t|ons

Management accepted some of the|r demands and re[ected the others

ConsequenLly Lhe workers wenL on sLrlke

1he ueparLmenL of Labor lnLervened and an amlcable seLLlemenL beLween Lhe parLles
was enLered lnLo

uesplLe Lhls anoLher sLrlke was subsequenLly held

1hen one of Lhe laborers was sLoned from behlnd whlch resulLed ln Lhe dlsmlssal of Lhe
forLyflve workers

1he maLLer was heard ln Lhe CourL of lndusLrlal 8elaLlons (Cl8) where wlLnesses for boLh
peLlLloners and respondenLs LesLlfled

1he Cl8 ordered one of lLs speclal agenLs Lo proceed Lo Lhe premlses of Lhe mlnes and Lo
conducL furLher lnvesLlgaLlon

1he lnvesLlgaLlon dlsclosed LhaL Lhe unwarranLed dlsmlssal of Lhe forLyflve men afLer
Lhe lncldenL seems Lo have been spurred by an anxlous deslre of Lhe company Lo geL rld of
Lhese men

Among Lhese 43 men are found leaders of Lhe movemenL of Lhe laborers for hlgher pay
and beLLer worklng condlLlons whlch culmlnaLed ln Lhe sLrlke called on !anuary 3 1939

lL was also found ouL LhaL more Lhan 400 workers of dlfferenL classes among Lhem
mockers mlners Llmbermen Lrammers and capaLaces comlng from dlfferenL mlnes ln Lhe
reglon have been employed by AnLamok as fresh laborers and LhaL almosL all of Lhese men are
noL members of Lhe naLlonal Labor unlon lnc

ln Lhe order of !anuary 23 1939 of Cl8 Lhe respondenL was en[olned Lo refraln from
dlscharglng any laborer lnvolved ln Lhe dlspuLe wlLhouL [usL cause and wlLhouL prevlous
auLhorlLy of Lhe CourL

And ln dlsmlsslng Lhe 43 workers lL vlolaLed Lhe sald order

AnLamok lnslsLs lLs rlghL of selecLlng Lhe men Lo be employed and LhaL ln Lhe exerclse of
Lhls rlghL lL should noL be resLralned or lnLerfered wlLh by Lhe Cl8 ConsequenLly Lhey assall Lhe
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valldlLy of CommonwealLh AcL no103 whlch creaLed Lhe Cl8 on Lhe ground LhaL lL deprlves
Lhem of llberLy and properLy wlLhouL due process of law

ISSUL WCn CommonwealLh AcL no 103 ls unconsLlLuLlonal


nLLD NC
In Commonwea|th Act No 103 our Government no |onger performs the ro|e of a mere
med|ator or |ntervenor but that of the supreme arb|ter

1he pollcy of |a|ssez fa|re (a docLrlne whlch prescrlbes freedom from governmenL
lnLerference ln economlc or lndusLrlal affalrs) has g|ven way to the assumpt|on by the
government of the r|ght of |ntervent|on even |n contractua| re|at|ons affected w|th pub||c
|nterests
!usLlce Laurel ln Ang 1lbay and naLlonal Workers 8roLherhood v Cl8 and naLlonal Labor
unlon lnc sLaLes LhaL our ConsLlLuLlon was adopLed ln Lhe mldsL of surglng unresL and
dlssaLlsfacLlon resulLlng from economlc and soclal dlsLress whlch was LhreaLenlng Lhe sLablllLy
of governmenLs Lhe world over

Lmbodylng Lhe splrlL of Lhe presenL Llme general provlslons were lnserLed ln Lhe
ConsLlLuLlon whlch are lnLended Lo brlng abouL Lhe needed soclal and economlc equlllbrlum
beLween componenL elemenLs of socleLy Lhrough Lhe appllcaLlon of whaL may be Lermed as Lhe
common [usLlce advocaLed by CroLlus and LelbnlLs many years ago Lo be secured Lhrough Lhe
counLerbalanclng of economlc and soclal forces and opporLunlLles whlch should be regulaLed lf
noL conLrolled by Lhe SLaLe or placed as lL were ln cusLodla socleLaLls

1he promoLlon of soclal [usLlce Lo lnsure Lhe wellbelng and economlc securlLy of all Lhe
people was Lhus lnserLed as vlLal prlnclple ln our ConsLlLuLlon (Sec 3 ArL ll ConsLlLuLlon) 1he
ConsLlLuLlon ln varlous secLlons has provlded Lhe means Lowards lLs reallzaLlon lor lnsLance
secLlon 6 of ArLlcle xlll declares LhaL Lhe SLaLe shall afford proLecLlon Lo labor especlally Lo
worklng women and mlnors and shall regulaLe Lhe relaLlons beLween landowner and LenanL
and beLween labor and caplLal ln lndusLry and ln agrlculLure

1he same secLlon also sLaLes LhaL Lhe SLaLe may provlde for compulsory arblLraLlon ln
exLraordlnary cases menLloned ln secLlon 16 ArLlcle vl of Lhe ConsLlLuLlon Lhe resldenL of Lhe
hlllpplnes may be auLhorlzed by law for a llmlLed perlod and sub[ecL Lo such resLrlcLlons as Lhe
naLlonal Assembly may prescrlbe Lo promulgaLe rules and regulaLlons Lo carry ouL a declared
naLlonal pollcy AlbelL almosL aL Lhe same Llme Lhe Congress of Lhe unlLed SLaLes approved Lhe
naLlonal Labor 8egulaLlons AcL (49 SLaL 449) on !uly 3 1933 commonly known as Lhe Wagner
AcL we were ln Lhe hlllpplnes headway Lowards Lhe adopLlon of our fundamenLal law
pursuanL Lo congresslonal auLhorlLy glven ln Lhe 1ydlngsMcuuffle lndependence AcL approved
March 24 1934 ln our 8lll of 8lghLs we now flnd Lhe followlng provlslon 1he rlghL Lo form
assoclaLlons or socleLles for purposes noL conLrary Lo law shall noL be abrldged (ar 6 secLlon
1 arL lll ConsLlLuLlon) WhaL was an aglLaLlon ln Lhe unlLed SLaLes whlch broughL abouL Lhe
recommendaLlon by Lhe Commlsslon on lndusLrlal 8elaLlons creaLed by an AcL of Congress ln
1912 for Lhe adopLlon of a Labor 8lll of 8lghLs as an amendmenL Lo Lhe unlLed SLaLes
ConsLlLuLlon ls ln our case vlrLually an accepLed prlnclple whlch may be expanded and
vlLallzed by leglslaLlon Lo keep pace wlLh Lhe developmenL of Llme and clrcumsLances

8y and large these prov|s|ons |n our Const|tut|on show and express the need of
sh|ft|ng emphas|s to commun|ty |nterest w|th a v|ew to aff|rmat|ve enhancement of human
va|ues

ln conformlLy wlLh Lhe consLlLuLlonal ob[ecLlve and cognlzanL of the historico/ foct thot
industrio/ ond oqricu/turo/ disputes hod qiven rise to disquietude b/oodshed ond revo/ution in
our country the Nat|ona| Assemb|y enacted Commonwea|th Act No 103 ent|t|ed An Act to
afford protect|on of |abor by creat|ng a Court of Industr|a| ke|at|ons empowered Lo flx
mlnlmum wages for laborers and maxlmum renLal Lo be pald by LenanLs and to enforce
compu|sory arb|trat|on between emp|oyers or |and|ords and emp|oyees or tenants
respect|ve|y and by prescrlblng penalLles for Lhe vlolaLlon of Lhe orders and laLer
CommonwealLh AcL no 213 enLlLled An AcL Lo deflne and regulaLe leglLlmaLe labor
organlzaLlons

Commonwea|th Act No 213 was enacted |n pursuance of what appears to be the
de||berate embod|ment of a new soc|a| po||cy founded on the concept|on of a soc|ety
|ntegrated noL by lndependenL lndlvlduals aL deallng aL arms' lengLh buL by |nterdependent
members of a conso||dated who|e whose |nterests must be protected aga|nst mutua|
aggress|on and warfare among and beLween dlvers and dlverse unlLs whlch are lmpelled by
counLervalllng and opposlLe lndlvldual and group lnLeresLs and Lhls ls parLlcularly Lrue ln Lhe
relaLlonshlp between |abor and cap|ta| Soclal and lndusLrlal dlsLurbances whlch flfLy years ago
were feudalllke and of lsolaLed lmporLance may now well resulL ln a serlous sLraln upon Lhe
enLlre economlc organlsm of Lhe naLlon Several aLLempLs aL meeLlng and solvlng our pecullar
soclal and economlc problems have already been made

1he system of vo|untary arb|trat|on dev|sed by Act No 40SS of the defunct 9h|||pp|ne
Leg|s|ature has apparent|y been abandoned by the enactment of the aforement|oned
Commonwea|th Acts Nos 103 and 213








PCL SHIPPING PHILS INC VS NLRC 511 SCRA 44 (2007)

FACTS: n November 1993, respondent Felicisimo Carilla was hired by
petitioner, a manning agent, on behalf of its principal, Anglo-Eastern
Shipmanagement to work as master on board MV Handy-Cam Azobe for one
year. The contract provided that respondent would receive a monthly basic
pay of $1,700, fixed T $765, masters allowance $170 and leave with pay
of 6 days per month or $340 (total $2,975).

However, while the vessel where respondent was on board was docked in
Bombay, India, Carilla was dismissed and repatriated to the Philippines. He
then filed a case with PEA for illegal dismissal with claims for salaries and
other benefits for the unexpired portion of his contract as well as unremitted
allotment and damages. Carilla alleged that he was dismissed without
notice and notice, and without any valid reason. As such, petitioner deprived
him of his expected monthly benefits for the unexpired portion of his
contract totaling $16,660 ($2,975 x 5 months and 18 days), petitioner
withheld his allotment for the entire May 1994 as well as his accrued leave
pay.

Petitioner PCL Shipping, on the other hand, contended that Carillas
termination as lawful as he had failed to take the necessary steps to ensure
the safety of the vessel and its cargo while in South Korea and Keelung port
causing petitioner to incur huge amount of damages on cargo claims and
vessel repairs. Despite the fact that he was warmed of his lapses, Carilla had
not shown any improvement which forced the company to dismiss the
respondent.

LA held in favor of respondent Carilla and declared his termination illegal,
citing that the recommendations of his previous employers contradicted the
allegations against Carilla of being incompetent and that the petitioners
evidence were unauthenticated, unreliable and self-serving.

ISSUE: N PRIVATE RESPDENT CARILLA AS ILLEGALLY DISMISSED



HELD: In termination cases, the burden of proof rests upon the
employer to show that the dismissal of the employee is for just
cause and failure to do so would mean that the dismissal was not
justified. A dismissed employee is not required to prove his
innocence of the charges leveled against him by his employer. The
determination of the existence and sufficiency of a just cause must be
exercised with fairness and in good faith and after observing due process.

It is well settled in this jurisdiction that confidential and managerial
employees cannot be arbitrarily dismissed at any time, without cause as
reasonably established in an appropriate investigation. Such employees,
too, are entitled to the security of tenure, fair standards of employment and
the protection of labor laws. Managerial employees, no less than rank and
file laborers, are entitled to due process. The captain of a vessel is a
confidential and managerial employee within the meaning of this doctrine.
Thus, the respondent was illegally dismissed as he was not accorded fair
investigation required by law and the ground invoked for his dismissal was
not proven.

In cases regarding contract workers who were dismissed without
just cause which arose before the effectivity of RA 8042, it is settled
that if the contract is for a fixed term and the employee is dismissed
without just cause, he is entitled to the payment of his salaries
corresponding to the unexpired portion of his contract. In the case at
bar, Carillas contract was until November 18, 1994 but he was dismissed
and repatriated to the Philippines on June 6, 1994; thus he is entitled to be
paid his salary corresponding to the unexpired portion of his contract.















9h|| A|r||nes Inc vs Santos 218 SCkA 41S (1993)
IAC1S
O lndlvldual respondenLs are all orL SLewards and CaLerlng SubdeparLmenL assenger
Servlces ueparLmenL of AL responslble for preparlng meal orders and checkllsLs seLLlng up
sLandard equlpmenL ln accordance wlLh Lhe requlremenLs of Lhe Lype of servlce for each
fllghL skllng blnnlng and lnvenLorylng of Commlssary supplles and equlpmenL
O Several deducLlons were made from Lhelr salary Lhe deducLlons represenLed losses of
lnvenLorled lLems charged Lo Lhem for mlshandllng of company properLles
O Cn AugusL 21 1984 respondenL made a formal noLlce regardlng Lhe deducLlons Lo
peLlLloner Lhru Mr 8eynaldo Abad (Manager for CaLerlng) Slnce no acLlon was Laken Lhey
flled a formal grlevance on nov 4 1984 pursuanL Lo Lhe grlevance machlnery SLep 1 of Lhe
C8A 1he unlon wanLed Lo dlscuss Lhe lllegal/quesLlonable salary deducLlons and lnvenLory
of bonded goods and merchandlse belng done by caLerlng servlce personnel whlch Lhey
belleve should noL be Lhelr duLy
O 1he grlevance was submlLLed on nov 21 1984 Lo Lhe offlce of Mr 8eynaldo Abad who was
on vacaLlon leave aL LhaL Llme
O Mr Abad falled Lo acL wlLhln Lhe 3day deadllne sLaLed ln Lhe C8A as such Lhe respondenL
bellevlng ln good falLh LhaL sald grlevance was resolved ln Lhelr favor
O upon Mr Abad's reLurn on uec 7 1984 he lmmedlaLely lnformed Lhe grlevanL and
scheduled a meeLlng on uec 12 1984 1he respondenL refused Lo conducL lnvenLory works
ln uec 7 10 and 12
O ln Lhe meeLlng Mr Abad denled Lhe peLlLlon of Lhe respondenLs and adopLed Lhe poslLlon
LhaL Lhe lnvenLory of bonded goods ls parL of Lhelr duLy as caLerlng servlce personnel and
raLlonallzed Lhe salary deducLlon for losses due Lo mlshandllng of company properLy
O Mr Abad wroLe a Memorandum addressed Lo Lhe lndlvldual respondenL for Lhem Lo explaln
why no dlsclpllnary acLlon should be Laken agalnsL Lhem for noL conducLlng lnvenLory 1he
respondenL complled wlLh Lhe dlrecLlves explalnlng Slnce Lhe grlevance sLep 1 was noL
declded and no acLlon was done by your offlce wlLhln 3 days from november 21 1984 per
provlslon of Lhe ALALLA C8A ArL lv Sec 2 Lhe grlevance ls deemed resolved ln ALLAs
favor"
O Mr Abad found Lhe explanaLlon unsaLlsfacLory Lhus a penalLy of suspenslon ranglng from
7days Lo 30 days was lmposed dependlng on Lhe number of lnfracLlons commlLLed
O 8espondenL flled a complalnL before Lhe Labor ArblLer for lllegal suspenslon Labor ArblLer
dlsmlssed Lhe complalnL Lhus respondenL appealed Lhe declslon before Lhe nL8C whlch seL
aslde Lhe Labor ArblLers' order of dlsmlssal

ISSUL WheLher or noL Lhe lllegal dlsmlssal was valld

nLLD
lL ls a facL LhaL Lhe sympaLhy of Lhe CourL ls on Lhe slde of Lhe laborlng classes noL only because
Lhe ConsLlLuLlon lmposes such sympaLhy buL because of Lhe oneslded relaLlon beLween labor
and caplLal

1he consLlLuLlonal mandaLe for Lhe promoLlon of labor ls as expllclL as lL ls
demandlng 1he purpose ls Lo place Lhe worklngman on an equal plane wlLh managemenL
wlLh all lLs power and lnfluence ln negoLlaLlng for Lhe advancemenL of hls lnLeresLs and Lhe
defense of hls rlghLs

under Lhe pollcy of soclal [usLlce Lhe law bends over backward Lo
accommodaLe Lhe lnLeresLs of Lhe worklng class on Lhe humane [usLlflcaLlon LhaL Lhose wlLh
less prlvllege ln llfe should have more prlvlleges ln law

1he respondenL knew LhaL Lhe dlvlslon head 8eynaldo Abad was Lhen on leave" when Lhey
flled Lhelr grlevance buL Lhls knowledge should noL prevenL Lhe appllcaLlon of Lhe C8A
1he grlevance of employees ls noL a maLLer whlch requlres Lhe personal acL of Mr Abad and
Lhus could noL be delegaLed eLlLloner could aL leasL have asslgned an offlcerlncharge Lo look
lnLo Lhe grlevance and posslbly make hls recommendaLlon Lo Mr Abad lL ls of no momenL LhaL
Mr Abad lmmedlaLely looked lnLo Lhe grlevance upon reLurnlng Lo work for lL musL be
remembered LhaL Lhe grlevanL are worklngmen who suffered salary deducLlons and who rely so
much on Lhelr meager lncome for Lhelr dally subslsLence and survlval 8esldes lL ls noLeworLhy
LhaL when Lhese employees flrsL presenLed Lhelr complalnL on AugusL 21 1984 peLlLloner
falled Lo acL on lL lL was only afLer a formal grlevance was flled and afLer Mr Abad reLurned Lo
work on uecember 7 1984 LhaL peLlLloner declded Lo Lurn an ear Lo Lhelr plalnLs
Abads fallure Lo acL on Lhe maLLer may have been due Lo peLlLloners lnadverLence buL lL ls
clearly Loo much of an ln[usLlce lf Lhe employees be made Lo bear Lhe dlre effecLs Lhereof
Much as Lhe laLLer were wllllng Lo dlscuss Lhelr grlevance wlLh Lhelr employer Lhe laLLer closed
Lhe door Lo Lhls posslblllLy by noL asslgnlng someone else Lo look lnLo Lhe maLLer durlng Abads
absence 1hus prlvaLe respondenLs should noL be faulLed for bellevlng LhaL Lhe effecLs of Lhe
C8A ln Lhelr favor had already sLepped lnLo Lhe conLroversy






LOPEZ V. MWSS 462 SCRA 428 (2005)

FACTS:
By virtue of an Agreement petitioners were engaged by the MWSS as collectors-
contractors wherein the former agreed to collect from the concessionaires of
MWSS charges fees assessments of rents for water sewer and/or plumbing
services which the MWSS bills from time to time.

n 1997 MWSS entered into a Concession Agreement with Manila Water Service
wherein the collection of bills was transferred to said private concessionaires
effectively terminating the contracts of service between petitioners and MWSS.

Regular employees of the MWSS were paid their retirement benefits but not
petitioners.

MWSS relied on a resolution of the Civil Service Commission (CSC) that contract-
collectors of the MWSS are not its employees and therefore not entitled to the
benefits due regular government employees.

Petitioners filed a complaint with the CSC. CSC denied their claims stating that
petitioners were engaged by MWSS through a contract of service which explicitly
provides that a bill collector-contractor is not an MWSS employee.

Relying on Part V of CSC Memorandum Circular No. 38 Series of 1993 the CSC
stated that contract services/job orders are not considered government services
which do not have to be submitted to the CSC for approval unlike contractual and
5,nti, appointments.

Petitioners invoke the rule of liberal construction in favor of labor and the
constitutional policy of protection to labor.

To further strengthen their case petitioners refer to CSC Resolution 92-2008 dated
8 December 1992 which states in part:
. . . . The fact that they were being hired directly and paid on commission basis by
MWSS itself is indicative that they are government employees and should be entitled
to the incentive awards.

SSUE: WON petitioners were employees of the MWSS and entitled to the benefits
they claim?

HELD: We find for the petitioners.

The Court has invariably affirmed that it will not hesitate to tilt the scales of justice to the
labor class for no less than the Constitution dictates that "the State . . . shall protect the
rights of workers and promote their welfare." t is committed to this policy and has
always been quick to rise to defense in the rights of labor as in this case.

Protection to Iabor, it has been said, extends to aII of IaborIocaI and overseas,
organized and unorganized, in the pubIic and private sectors. Besides, there is no
reason not to appIy this principIe in favor of workers in the government. The
government, incIuding government-owned and controIIed corporations, as
empIoyers, shouId set the exampIe in uphoIding the rights and interests of the
working cIass.
The MWSS is a government owned and controlled corporation with its own charter
Republic Act No. 6234. As such it is covered by the civil service and falls under the
jurisdiction of the Civil Service Commission.

CSC Memorandum CircuIar No. 38, Series of 1993, categoricaIIy made the
distinction between contract of services/job orders and contractuaI and 5,39,
appointment, declaring that services rendered under contracts of services and job
orders are non-government services which do not have to be submitted to the
CSC for approvaI.

This was foIIowed by CSC Memorandum CircuIar No. 4 Series of 1994 which
aIIowed the crediting of services for purposes of retirement onIy for such
services supported by duIy approved appointments.

Subsequently the CSC issued other resoIutions applying the above-mentioned
circulars stating that while some functions may have been contracted out by a
government agency the persons contracted are not entitIed to the benefits due to
reguIar government empIoyees.

The case reveaIs that petitioners are empIoyees of MWSS.

MWSS wielded its power of selection when it contracted with the individual petitioners
undertaking separate contracts or agreements.

Under the Agreement MWSS may terminate it if the "Collector-Contractor"
1. Obviously failure to collect the payments of customers or remit the collections
constitutes neglect of duty.
2. Making erasures alterations or changing of figures in the fees or collection receipts
amounts to fraud.
3. Lack of courtesy dishonesty and arrogance are practically the same as misconduct.

SignificantIy, MWSS granted petitioners benefits usuaIIy given to empIoyees to
wit: COLA meal emergency and traveling allowances hazard pay cash gift and other
bonuses.

Petitioners rendered services to MWSS for which they were paid and given similar
benefits due the other employees of MWSS.

While petitioners were contract-collectors of MWSS they were under the Iatter's
direction as to where and how to perform their coIIection and were even subject
to discipIinary measures.

Trainings were in fact conducted to ensure that petitioners are conversant of the
procedures of the MWSS.

Contrary to MWSS' assertion that petitioners were "free to adopt (their) own
method/strategy in the matter of collection" the Agreement clearly provided that the
procedure and/or manner of the collection of bills to be followed shall be in accordance
with the provisions of the M,nu,41!r4.edures.

The power to transfer or reassign employees is a management prerogative exclusively
enjoyed by employers. n this case MWSS had free reign over the transfer of biII
coIIectors from one branch to another. MWSS also monitored the performance of
the petitioners and determined their efficiency ratings.

nterestingly in that regard under the 7002039 petitioners were "aIIowed" to
render overtime work, and were given additionaI "incentive commission" for work
so rendered as long as the same was authorized.

MWSS provides them with company stationeries, office space and equipment.
Likewise MWSS comported itself as the employer of petitioners providing them with
.D.s. and certifications which declared them as employees of MWSS. t also deducted
and remitted petitioners' withholding taxes and Medicare contributions.

The CSC, as weII as the Court of AppeaIs, makes much of CSC Memorandum
CircuIar No. 38, Series of 1993, which distinguishes between contract of
services/job services and contractuaI appointment.

The Circular provides:

Contract of Services and Job Orders are different from Contractual appointment and
Plantilla appointment of casual employees respectively which are required to be
submitted to CSC for approval.

Contracts of Services and Job Orders refer to empIoyment described as follows:
1. The contract covers lump sum work or services such as janitoriaI, security or
consuItancy services where no employer-employee relationship exist;
2. The job order covers piece of work or intermittent job of short duration not
exceeding six months on a daily basis;
3. The contract of services and job orders are not covered by Civil Service Law Rules
and Regulations; [sic] but covered by COA rules;
4. The empIoyees invoIved in the contracts or job orders do not enjoy the benefits
enjoined by government empIoyees, such as PERA, COLA and RATA.
. As the services rendered under contracts of services and job orders are not
considered government services they do not have to be submitted to the Civil Service
Commission for approval.

A careful review of the above-quoted circular shows that the relationship defined by the
Agreement cannot fall within the purview of contract of services or job orders.

Viewed in that context the work rendered by the petitioners is essentiaI to the
company's survivaI and growth. MWSS relies for the most part on the bill collections
in order to sustain its operations. t is not intermittent and seasonaI but rather
continuous and increasing by reason of its indisputable essentiality.

As clearly indicated in the circular employees involved in the contracts or job orders do
not enjoy the benefits enjoyed by the petitioners which are the same benefits given to
government employees.

Some of the petitioners had rendered more than two decades of service to the
MWSS. The continuous and repeated rehiring of these biII coIIectors indicate the
necessity and desirabiIity of their services, as weII as the importance of the roIe
of biII coIIectors in the MWSS.

We agree with the CSC when it stated that the authority of government agencies to
contract services is an authority recognized under civil service rules.

However said authority cannot be used to circumvent the laws and deprive employees
of such agencies from receiving what is due them.










ENRIQUEZ VS BPI 544 SCRA 590 (2008)

FACTS: Petitioners Enriquez and Sia were senior managers in BPI Bacolod,
having served 34 years and 29 years respectively. ne day, Descartin, a
bank teller, had a shortage of P36,000 and she reported to her managers
that it was an honest oversight as she forgot to have her mother-in-law sign
a withdrawal slip when the latter withdrew the same amount earlier that
day. The managers allowed Descartin to go to her mother-in-law and sign
the withdrawal slip. The managers did not report the shortage as it was
regularized the same day. Meanwhile, another teller, Fregil, who initially
consented to the situation, later divulged that Descartin actually borrowed
the P36,000 and the entire incident was covered up by the managers
(P36,000 was beyond the floor limit for cashiers). In their defense, the
managers said the BPI officer who investigated them was not properly
deputized by the board (non-compliance with the NLRC prodecure, Rule 6
Sec 4). Also they assailed their termination arguing that the issue has been
regularized on the same day and that there was really no need to report it
because of the regularization of the issue and that their long stay with the
company should be appreciated with their restatement.

ISSUE: N THE PETITINERS ERE ILLEGALLY DISMISSED AND AS
SUCH, SHULD BE REINSTATED

HELD: The SC held that the procedural issue of the case (that there was no
written manifestation of the investigating officer) cannot outweigh
substantive right of the company to investigate its employees. It has been
ruled that the board, being the representative of the company, can delegate
its duties to a person and said persons act shall be binding to the company
as in the case at bar.

Technicalities should never be used to defeat the substantive rights of the
other party. Every party-litigant must be afforded the amplest opportunity
for the proper and just determination of his cause, free from the constraints
of technicalities. Considering that there was substantial compliance, a liberal
interpretation of procedural rules in this labor case is more in keeping with
the constitutional mandate to secure social justice.

The basic requisite for dismissal on the ground of loss of confidence is that
the employee concerned holds a position of trust and confidence or is
routinely charged with the care or custody of the employers money or
property, and that the breach must be related to the performance of the
employees function. The failure of the petitioners to report the cash
shortage even if done in good faith, resulted in abetting the dishonesty
committed by the teller. Under the personnel policies of the bank, such act
justifies their dismissal even on the first offense. Even if we were to assume
Enriquez version was true, the fact remains that they willfully decided
against reporting the shortage that occurred. Their participation in the
cover-up of Descartins misconduct makes them unworthy of the trust and
confidence demanded by their positions.

It is a well-settled that the power to dismiss an employee is a
recognized prerogative that is inherent in the employer's right to
freely manage and regulate its business. An employer cannot be
expected to retain an employee whose lack of morals, respect and
loyalty to his employer or regard for his employer's rules has so
plainly and completely been bared. Thus, to compel BPI to keep
petitioners in its employ after the latter betrayed the trust given to
thenm would be unjust. The expectation of trust is more so magnified in
the present case in light of the nature of the respondent banks business.
The banking industry is imbued with public interest and is mandated by law
to serve its clients with extraordinary care and diligence. To do this, it must
rely on the honesty and loyalty of its employees.

Definition of Social Justice: While the Constitution is committed to the
policy of social justice and the protection of the working class, it
should not be supposed that every labor dispute will be
automatically decided in favor of labor. Management also has its
own rights which, as such, are entitled to respect and enforcement
in the interest of simple fair play. Out its concern for those with less
privileges in life, this Court has inclined more often than not toward
the worker and upheld his cause in his conflicts with the employer.
Such favoritism however, has not blinded us to the rule that justice
is in every case of the deserving, to be dispensed in the light of the
established facts and the applicable law and doctrine.











9LD1 vs 8o|so S30 SCkA SS0 (2007)
IAC1S
O 8olso was an lnsLaller/8epalrman ll of Lu1 slnce lebruary 1982 unLll Lu1 dlsmlssed
hlm on 20 !uly 1997
O Cn 3 lebruary 1996 Samuel Mabunga (Mabunga) a Lu1 subscrlber sold Lhe rlghLs Lo
hls Lelephone llne Lo lsmael Salazar (Salazar) for 20 000 Mabunga recelved 13000 for
Lhe Lransfer lor Lhe lnsLallaLlon of Lhls Lelephone llne Salazar pald 2300 Lo a Lu1
lnsLaller who lnLroduced hlmself as oy -eqto and Lhe remalnlng 2300 Lo oy -eqtos
Lwo companlons
O Cn 20 May 1996 Salazar wroLe Lu1 complalnlng abouL Mabunga's conLlnued usage of
Lhe Lelephone llne Lhrough exLenslon desplLe Lhe Lransfer
O Cn 28 !une 1996 Salazar wenL Lo Lu1's CuallLy ConLrol and lnspecLlon ulvlslon (CClu)
offlce where he afflrmed paylng 2300 Lo 8oy negro and anoLher 2300 Lo 8oy negro's
companlon for Lhe lnsLallaLlon of Lhe Lelephone llne uurlng Lhe lnvesLlgaLlon Salazar
poslLlvely ldenLlfled a phoLograph of 8olso as LhaL of 8oy negro
O Cn 29 !une 1996 Lhe CClu personnel lnspecLed Lhe Lelephone llne lnsLallaLlon aL
Salazar's resldence and conflrmed LhaL Mabunga was uslng Lhe Lelephone llne uslng an
ouLslde exLenslon lnsLalled aL Salazar's house Lu1 lnformed Salazar and Mabunga LhaL
lL was an unofflclal lnsLallaLlon
O Cn 23 !uly 1996 Lu1 lssued an lnLerofflce Memo requesLlng Lhe appearance of 8olso
LogeLher wlLh hls lmmedlaLe Supervlsoror or unlon 8epresenLaLlve for Lhe lnvesLlgaLlon
of hls alleged parLlclpaLlon ln Lhe lllegal lnsLallaLlon
O Cn 26 !uly 1996 Salazar and 8olso appeared aL Lhe CClu lnvesLlgaLlon Salazar
reafflrmed hls sLaLemenL and poslLlvely plcked ouL and ldenLlfled 8olso as Lhe lnsLaller
of Lhe unofflclal Lelephone llne 8olso denled Lhe allegaLlons agalnsL hlm
O 8olso submlLLed Lo Lu1 a recanLaLlon of Salazar's prevlous sLaLemenLs alleglng LhaL he
dld noL personally know 8olso and LhaL 8olso was noL 8oy negro
O Cn 10 !uly 1997 8olso's counsel demanded Lhe lmmedlaLe dlsmlssal of Lhe
admlnlsLraLlve case agalnsL 8olso's based on Salazar's reLracLlon and Lhe release of
8olso's beneflLs under Lu1's early reLlremenL program
O Clvlng no credence Lo Lhe recanLaLlon leLLer and flndlng LhaL Salazar's prevlous
sLaLemenLs esLabllsh 8olso's culpablllLy Lu1 LermlnaLed 8olso effecLlve !une 20 1997
for serlous mlsconducL
O 8olso flled a wlLh Lhe Labor ArblLer a complalnL agalnsL Lu1 for lllegal dlsmlssal
backwages and damage
O Labor ArblLer dlsmlssed Lhe case for lack of merlL 1hus 8olso appealed Lo nL8C and
ruled ln favor of 8olso
ISSUL WheLher or noL 8olso's dlsmlssal for serlous mlsconducL was lawful

nLLD
1he Labor Code provldes LhaL an employer may LermlnaLe Lhe servlces of an employee for a [usL
cause Among Lhe [usL causes ln Lhe Labor Code ls ArLlcle 282 of LC provldes serlous
mlsconducL MlsconducL ls lmproper or wrong conducL lL ls Lhe Lransgresslon of some
esLabllshed and deflnlLe rule of acLlon a forbldden acL a derellcLlon of duLy wlllful ln characLer
and lmplles wrongful lnLenL and noL mere error ln [udgmenL
An employee's dlsmlssal due Lo serlous mlsconducL musL be supporLed by subsLanLlal evldence
SubsLanLlal evldence ls LhaL amounL of relevanL evldence as a reasonable mlnd mlghL accepL as
adequaLe Lo supporL a concluslon even lf oLher mlnds equally reasonable mlghL concelvably
oplne oLherwlse
ln Lhls case Lhere ls no quesLlon LhaL Lu1 lnsLallers such as 8olso repalrmen and llnemen
provlde servlces buL cannoL collecL or recelve any personal fees for such servlces vlolaLlng Lhls
company rule consLlLuLes serlous mlsconducL
A reLracLlon does noL necessarlly negaLe an earller declaraLlon lor Lhls reason courLs look wlLh
dlsfavor upon reLracLlons Pence when confronLed wlLh a recanLlng wlLness ln Lhls case Lhe
complalnanL courLs musL noL auLomaLlcally exclude Lhe orlglnal sLaLemenL based solely on Lhe
recanLaLlon CourLs should deLermlne whlch sLaLemenL should be glven credence Lhrough a
comparlson of Lhe orlglnal and Lhe new sLaLemenLs applylng Lhe general rules of evldence
Salazar dld noL expressly repudlaLe hls earller sLaLemenL LhaL he pald 8olso 2300 for Lhe
lnsLallaLlon of Lhe lllegal Lelephone llne WhaL Salazar sLaLed ln hls recanLaLlon leLLer was LhaL
8olso was noL oy -eqto 1herefore only 8olso's ldenLlLy as oy -eqto was reLracLed
Salazar's orlglnal sLaLemenL LhaL 8olso recelved 2300 for Lhe lnsLallaLlon of Lhe ouLslde
exLenslon llne remalns undlspuLed
1he CourL has held LhaL Lhe longer an employee sLays ln Lhe servlce of Lhe company Lhe greaLer
ls hls responslblllLy for knowledge and compllance wlLh Lhe norms of conducL and Lhe code of
dlsclpllne ln Lhe company An employee's lengLh of servlce wlLh Lhe company even aggravaLes
hls offense 8olso should have been more loyal Lo Lu1 from whlch he had derlved hls lncome
for 13 years
upholdlng Lhe employee's lnLeresL ln dlsregard of Lhe employer's rlghL Lo dlsmlss and dlsclpllne
does noL serve Lhe cause of soclal [usLlce Soclal [usLlce ceases Lo be an effecLlve lnsLrumenL for
Lhe equallzaLlon of Lhe soclal and economlc forces" by Lhe SLaLe when lL ls used Lo shleld
wrongdolng



CALALANG V WILLIAMS

IAC1S
1he SecreLary of ubllc Works and CommunlcaLlons (WC) approved wlLh modlflcaLlon
Lhe recommendaLlon LhaL orlglnaLed from Lhe naLlonal 1rafflc Commlsslon (n1C) whlch was
favorably lndorsed by Lhe ulrecLor of ubllc Works (W)

O LhaL 8osarlo SLreeL and 8lzal Avenue be closed Lo Lrafflc of anlmaldrawn vehlcles
beLween Lhe polnLs and durlng Lhe hours from 7 am Lo 11 pm for a perlod of one year from
Lhe daLe of Lhe openlng of Lhe ColganLe 8rldge Lo Lrafflc

O LhaL Lhe Mayor of Manlla and Lhe AcLlng Chlef of ollce of Manlla have enforced and
caused Lo be enforced Lhe rules and regulaLlons Lhus adopLed

O LhaL as a consequence of such enforcemenL all anlmal drawn vehlcles are noL allowed
Lo pass and plck up passengers ln Lhe places abovemenLloned Lo Lhe deLrlmenL noL only of Lhelr
owners buL of Lhe rldlng publlc as well

CommonwealLh AcL no 348 glves Lhe ulrecLor of ubllc Works Lhe auLhorlLy Lo
promulgaLe rules and regulaLlons Lo regulaLe and conLrol Lhe use of and Lrafflc on naLlonal
roads

Maxlmo Calang ln hls capaclLy as prlvaLe clLlzen and as a Laxpayer of Manlla flled a
peLlLlon for a wrlL of prohlblLlon agalnsL Lhe Chalrman of n1C ulrecLor of W AcLlng SecreLary
of WC Mayor of Manlla and AcLlng Chlelf of ollce of Manlla


ISSUL
WCn Lhe rules and regulaLlons complalned of lnfrlnge Lhe consLlLuLlonal precepL regardlng Lhe
promoLlon of soclal [usLlce Lo lnsure Lhe wellbelng of all Lhe people?

nLLD no
Soclal [usLlce ls promoLed lf Lhe greaLesL good ls broughL abouL Lo Lhe greaLesL number

Soc|a| [ust|ce must be founded on the recogn|t|on of the necess|ty of |nterdependence among
d|vers and d|verse un|ts of a soc|ety and of the protect|on that shou|d be equa||y and even|y
extended to a|| groups as a comb|ned force |n our soc|a| and econom|c ||fe cons|stent w|th
the fundamenta| and paramount ob[ect|ve of the state of promot|ng the hea|th comfort and
qu|et of a|| persons and of br|ng|ng about "the greatest good to the greatest number"

CommonwealLh AcL no 348 was passed by Lhe naLlonal Assembly ln Lhe exerclse of Lhe
paramounL pollce power of Lhe sLaLe
Sa|d Act by vlrLue of whlch Lhe rules and regulaLlons complalned of were promulgaLed a|ms to
promote safe trans|t upon and avo|d obstruct|ons on nat|ona| roads |n the |nterest and
conven|ence of the pub||c ln enacLlng sald law Lherefore the Nat|ona| Assemb|y was
prompted by cons|derat|ons of pub||c conven|ence and we|fare

ersons and properLy may be sub[ecLed Lo all klnds of resLralnLs and burdens ln order Lo secure
Lhe general comforL healLh and prosperlLy of Lhe sLaLe
























HEIRS OF JUGALBOT VS CA 518 SCRA 202 (2007)

FACTS: In September 1997, an emancipation patent (EP) was issued to
Nicolas Jugalbot based on his claim that he was the tenant of the subject
property located in Cagayan De ro. The subject property was in the name
of Virginia Roa but it was originally registered in the name of Marcelino Cabili
from whom Roa purchased the same in 1966.

Jugalbot alleged that he was a tenant of the property continuously since
1950s. but based on the certification of the Department of Agriculture
(DAR), the subject property was declared to be tenanted as of ctober
1972. n March 1, 1988, the EP was registered with the RD and Jugalbot
was issued TCT E-103.

In August 1998, the heirs of Virginia Roa filed a complaint for the
cancellation of title, recovery of possession and damages against Jugalbot.
Department of Agriculture Adjudication Board (DARAB) dismissed the case
and upheld the EP issued to Jugalbot.

ISSUE: N A TENANCY RELATINSHIP EXISTS BETEEN PETITINERS
HEIRS F JUGALBT AND HEIRS F RA UNDER PD 27. (ARE PETITINERS
DE JURE TENANTS F PRIVATE RESPNDENTS?)

HELD: To determine if a tenancy relationship exists, the following must be
present:
a. The parties are the landowner and the tenant
b. The subject matter is agricultural land
c. There is consent
d. The purpose is agricultural production
e. There is personal cultivation by the tenant
f. There is sharing of harvests between the parties

In an earlier case, it was affirmed that tenancy relationship cannot be
presumed. The elements of tenancy must be first proved in order to entitle
the claimant to security of tenure. The principal factor in determining
whether a tenancy relationship exists is intent. The intent of the parties, the
understanding when the farmer is installed, and their written agreements,
provided they are not contrary to law are more important.

The SC held that the petitioners are not de jure tenants of the Roa under PD
27 due to the absence of the essential requisites that establish a tenancy
relationship between them.
1. Virginia Roa was denied of due process because DAR failed to send
notice of the impending land reform coverage, as the notice was
addressed to her husband, Pedro Roa. There is no evidence that the
subject property was acquired during their marriage, thus the property
belonged to her exclusively.
2. There is no concrete evidence on record sufficient to establish that
Jugalbot or his heirs personally cultivated the land in question or that
there was sharing of harvests.

The fact alone of working on anothers landholding does not raise a
presumption of the existence of agricultural tenancy. ther factors must be
taken into consideration like compensation in the form of lease rentals or a
share in the produce of the landholding involved. ithout the essential
elements of consent and sharing, no tenancy relationship can exist between
the petitioner and private respondents.

It may not be amiss to stress that laws which have for their object
the preservation and maintenance of social justice are not only
meant to favor the poor and underprivileged. They apply with equal
force to those who, notwithstanding their more comfortable position
in life, are equally deserving of protection from the courts. Social
justice is not a license to trample on the rights of the rich in the
guise of defending the poor, where no act of injustice or abuse is
being committed against them.














Agabon vs NLkC 442 SCkA S73 (2004)
IAC1S
rlvaLe respondenL 8lvlera Pome lmprovemenLs lnc ls engaged ln Lhe buslness of selllng and lnsLalllng
ornamenLal and consLrucLlon maLerlals lL employed peLlLloners vlrglllo Agabon and !enny Agabon as
gypsum board and cornlce lnsLallers on !anuary 2 1992 unLll lebruary 23 1999 when Lhey were
dlsmlssed for abandonmenL of work eLlLloners Lhen flled a complalnL for lllegal dlsmlssal and paymenL
of money clalms and on uecember 28 1999 Lhe Labor ArblLer rendered a declslon declarlng Lhe
dlsmlssals lllegal and ordered prlvaLe respondenL Lo pay Lhe moneLary clalms

ISSUL WheLher or noL respondenL's dlsmlssal ls lllegal

nLLD
1he CourL ruled LhaL Lhe dlsmlssal ls legal and enLlLles Lhem of paymenL of beneflLs ulsmlssals based on
[usL causes conLemplaLe acLs or omlsslons aLLrlbuLable Lo Lhe employee whlle dlsmlssals based on
auLhorlzed causes lnvolve grounds under Lhe Labor Code whlch allow Lhe employer Lo LermlnaLe
employees A LermlnaLlon for an auLhorlzed cause requlres paymenL of separaLlon pay

When Lhe dlsmlssal ls for [usL or auLhorlzed cause buL due process was noL observed Lhe dlsmlssal
should be upheld Whlle Lhe procedural lnflrmlLy cannoL be cured lL should noL lnvalldaLe Lhe dlsmlssal
Powever Lhe employer should be held llable for noncompllance wlLh Lhe procedural requlremenLs of
due process 1he dlsmlssal should be upheld because lL was esLabllshed LhaL Lhe peLlLloners abandoned
Lhelr [obs Lo work for anoLher company rlvaLe respondenL however dld noL follow Lhe noLlce
requlremenLs and lnsLead argued LhaL sendlng noLlces Lo Lhe lasL known addresses would have been
useless because Lhey dld noL reslde Lhere anymore unforLunaLely for Lhe prlvaLe respondenL Lhls ls noL
a valld excuse because Lhe law mandaLes Lhe Lwln noLlce requlremenLs Lo Lhe employee's lasL known
address 1hus lL should be held llable for noncompllance wlLh Lhe procedural requlremenLs of due
process
Where Lhe dlsmlssal ls for a [usL cause as ln Lhe lnsLanL case Lhe lack of sLaLuLory due process should
noL nulllfy Lhe dlsmlssal or render lL lllegal or lneffecLual Powever Lhe employer should lndemnlfy Lhe
employee for Lhe vlolaLlon of hls sLaLuLory rlghLs 1he lndemnlLy Lo be lmposed should be sLlffer Lo
dlscourage Lhe abhorrenL pracLlce of dlsmlss now pay laLer whlch we soughL Lo deLer 1he sancLlon
should be ln Lhe naLure of lndemnlflcaLlon or penalLy and should depend on Lhe facLs of each case
Laklng lnLo speclal conslderaLlon Lhe gravlLy of Lhe due process vlolaLlon of Lhe employer
lL musL be sLressed LhaL ln Lhe presenL case Lhe peLlLloners commlLLed a grave offense le
abandonmenL whlch lf Lhe requlremenLs of due process were complled wlLh would undoubLedly resulL
ln a valld dlsmlssal
An employee who ls clearly gullLy of conducL vlolaLlve of ArLlcle 282 should noL be proLecLed by Lhe
Soclal !usLlce Clause of Lhe ConsLlLuLlon Soclal [usLlce as Lhe Lerm suggesLs should be used only Lo
correcL an ln[usLlce As Lhe emlnenL !usLlce !ose Laurel observed soclal [usLlce musL be founded on
Lhe recognlLlon of Lhe necesslLy of lnLerdependence among dlverse unlLs of a socleLy and of Lhe
proLecLlon LhaL should be equally and evenly exLended Lo all groups as a comblned force ln our soclal
and economlc llfe conslsLenL wlLh Lhe fundamenLal and paramounL ob[ecLlve of Lhe sLaLe of promoLlng
Lhe healLh comforL and quleL of all persons and of brlnglng abouL Lhe greaLesL good Lo Lhe greaLesL
number
!usLlce ln every case should only be for Lhe deservlng parLy lL should noL be presumed LhaL every case of
lllegal dlsmlssal would auLomaLlcally be declded ln favor of labor as managemenL has rlghLs LhaL should
be fully respecLed and enforced by Lhls CourL As lnLerdependenL and lndlspensable parLners ln naLlon
bulldlng labor and managemenL need each oLher Lo fosLer producLlvlLy and economlc growLh hence
Lhe need Lo welgh and balance Lhe rlghLs and welfare of boLh Lhe employee and employer



















9LD1 V NLkC (A8UCA)

IAC1S

rlvaLe respondenL Marllyn Abucay a Lrafflc operaLor for Lu1 was accused by 2 complalnanLs
of havlng demanded and recelved from Lhem 3800 pesos ln conslderaLlon of her promlse Lo
faclllLaLe Lhe approval of Lhelr appllcaLlons for phone lnsLallaLlons

lnvesLlgaLed and heard she was found gullLy and dlsmlssed from servlce

8espondenL flled a complalnL for lllegal removal wlLh Lhe MlnlsLry of Labor and LmploymenL

1he complalnL was dlsmlssed buL Lhe Labor ArblLer granLed her separaLlon pay of one monLh
pay for every year of servlce

Pence Lhls peLlLlon clalmlng Lhe granLlng of flnanclal asslsLance was made wlLh grave abuse of
dlscreLlon

eLlLloner conLends LhaL alLhough ArL 279 of Lhe Labor Code enLlLles an employee Lo
relnsLaLemenL and backwages lf dlsmlssed wlLhouL [usL cause one dlsmlssed ln accordance wlLh
law ls noL allowed any rellef aL all as Lhls would be LanLamounL Lo rewardlng Lhe dlssoluLe
worker

8espondenL nL8C clalms LhaL dlsmlssal was sufflclenL punlshmenL and LhaL Lhe granL of
flnanclal asslsLance was lnLended Lo help her for Lhe loss of employmenL afLer worklng falLhfully
for 10 years

Slmllarly ln Lhe cases of llresLone Co v Larlosa and llllplno lnc v nL8C employees who were
valldly dlsmlssed on grounds of vlolaLlon of company pollcles were sLlll awarded flnanclal
asslsLance on Lhe ground of soclal and compasslonaLe [usLlce

eLlLloner conLends LhaL Lhese cases osLenslbly consLlLuLe Lhe excepLlon Lo ArL 279 based on
conslderaLlons of equlLy

ISSUL

WCN |t |s |ega| to award f|nanc|a| ass|stance to an emp|oyee who had been d|sm|ssed w|th
[ust cause


nLLD NC

Separat|on pay sha|| on|y be a||owed as a measure of soc|a| [ust|ce when the emp|oyee |s
va||d|y d|sm|ssed for causes other than ser|ous m|sconduct and not |nvo|v|ng mora| turp|tude

1here ls no doubL lL ls compasslonaLe Lo glve separaLlon pay when Lhe cause ls noL lnlqulLous as
when a salesman ls dlsmlssed for hls lnablllLy Lo flll hls quoLa

Pls company cannoL be compelled Lo malnLaln hlm aL Lhe expense of Lhe efflclency of Lhelr
operaLlons buL Lhe awardlng of flnanclal asslsLance would be susLalnable under Lhe pollcy of
soclal [usLlce

Powever Lhe same salesman surely does noL deserve such generoslLy lf hls offense ls
mlsapproprlaLlon of Lhe recelpLs of hls sales

Such conducL ls noL slmply lnepL buL raLher depraved and lmmoral Lhus maklng hlm
undeservlng of such asslsLance

Cur ConsLlLuLlon ls repleLe wlLh poslLlve commands for Lhe promoLlon of soclal [usLlce and
parLlcularly Lhe proLecLlon of Lhe rlghLs of Lhe workers Powever soc|a| [ust|ce |s not |ntended
to countenance wrongdo|ng s|mp|y because |t |s comm|tted by the underpr|v||eged

Compasslon for Lhe poor ls an lmperaLlve ln every humane socleLy buL only when Lhe reclplenL
ls noL a rascal clalmlng an undeserved prlvllege

Pence |t may on|y be |nvoked by those whose hands are c|ean and whose mot|ves are
b|ame|ess

App|y|ng these cons|derat|ons the award|ng of f|nanc|a| ass|stance |s un[ust|f|ed

eLlLlon ls C8An1Lu

SLA8A1L ClnlCn
AulLLA concur

l concur Powever ln cases were separaLlon pay ls awarded Lhe amounL Lo be granLed should
be lefL Lo Lhe [udgmenL of Lhe nL8C (raLher Lhan Lhe 1 monLh of pay for each year of servlce
rule) and should noL be dlsLurbed by Lhe CourL ln absence of evldence of grave abuse of
dlscreLlon on Lhe parL of Lhe nL8C

lL8nAn dlssenL
rovldlng a rlgld maLhemaLlcal formula for compuLlng Lhe amounLs of separaLlon pay defles Lhe
splrlL of Lhe consLlLuLlonal mandaLe LhaL Lhose who have less ln llfe should have more ln law"

1hese flxed raLes would noL favor Lhe lowsalarled employee as he would encounLer dlfflculLy ln
flndlng anoLher [ob
C8lnCACulnC dlssenL
We should noL raLlonallze compasslon

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