101000751 Labor Standards Casse Digest Compiled 1 01-2-03

7/25/2019 101000751 Labor Standards Casse Digest Compiled 1 01-2-03

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Batong Buhay Goldmines Inc vs De la Serna 312 SCRA 22 (1999)

FACTS:

5 February 1987 - Elsie Rosalinda B. Ty, Antonia L. Mendelebar, Ma. Concepcion O.

Reyes and 1,247 others filed a complaint against Batong Buhay Gold Mines, Inc. for:

1.

Non-payment of their basic pay and allowances for the period of 6 July 1983 to 5July 1984, inclusive, under Wage Order No. 2

2. Non-payment of their basic pay and allowances for the period 16 June 1984 to 5

October 1986, inclusive under Wage Order No. 5

3. Non-payment of their salaries for the period 16 March 1986 to the present

4. Non-payment of their 13th month pay for 1985, 1986 and 1987

5. Non-payment of their vacation and sick leave, and the compensatory leaves of

mine site employees

6. Non-payment of the salaries of employees who were placed on forced leaves

since November, 1985 to the present, if this is not feasible, the affected

employees be awarded corresponding separation pay.

On 27 February 1987, the complainants filed a Motion for the issuance of an inspection

authority.

On 13 July 1987, the Labor Standards and Welfare Officers submitted their report

recommending that an Order of Compliance be issued directing respondent Batong

Buhay Gold Mines Inc. to pay complainants' Elsie Rosalina Ty, et al. (P4,818,746.40) by

way of unpaid salaries of workers from March 16, 1987 to present, unpaid and ECOLA

differentials under Wage Order Nos. 2 and 5 unpaid 13th months pay for 1985 and

1986, and unpaid (sic) vacation/sick/compensatory leave benefits. And on 31 July 1987,

the Regional Director1adopted the recommendation of the LSWOs and issued an order

directing the respondent to pay the complainants of the said amount

On 31 July 1987, the Regional Director1adopted the recommendation of the LSWOs andissued an order directing the respondent to pay the complainants

When the respondent failed to post a cash/surety bond, and upon motion for the

issuance of a writ of execution by the complainants, the Regional Director, on 14

September 1987 issued a writ of execution appointing Mr. John Espiridion C. Ramos as

Special Sheriff and directing him to collect the amount, otherwise he has to execute this

writ by attaching the goods and chattels of BBGMI and not exempt from execution or in

case of insufficiency thereof against the real or immovable property of the respondent.

The Special Sheriff proceeded to execute the appealed Order on 17 September 1987

and seized three (3) units of Peterbuilt trucks and then sold the same by public auction.

Various materials and motor vehicles were also seized on different dates and sold atpublic auction by said sheriff.

BBGMI appealed the Order dated July 31, 1987 of Regional Director Luna C. Piezas to

respondent Undersecretary Dionisio de la Serna, contending that the Regional Director

had no jurisdiction over the case.


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ISSUE: Whether Regional Director has jurisdiction over the complaint filed by the employees of

BBGMI.

HELD:

The Regional Director has jurisdiction over the BBGMI employees who are the complainants.

The subject labor standards case of the petition arose from the visitorial and enforcement

powers by the Regional Director of Department of Labor and Employment (DOLE). Labor

standards refers to the minimum requirements prescribed by existing laws, rules and

regulations relating to wages, hours of work, cost of living allowance and other monetary and

welfare benefits, including occupational, safety and health standards.4 Labor standards cases

are governed by Article 128(b) of the Labor Code.

Art. 128 (b) Visitorial and enforcement powers

(b) The Minister of Labor or his duly authorized representative shall have the

power to order and administer, after due notice and hearing, compliance withthe labor standards provisions of this Code based on the findings of labor

regulation officers or industrial safety engineers made in the course of

inspection, and to issue writs of execution to the appropriate authority for the

enforcement of their order, except in cases where the employer contests the

findings of the labor regulations officers and raises issues which cannot be

resolved without considering evidentiary matters that are not verifiable in the

ordinary course of inspection.

Respondent Undersecretary Dionisio C. Dela Serna, on the other hand, upheld the jurisdiction

of Regional Director Luna C. Piezas by relying on E.O. 111, to quote:

Considering therefore that there still exists an employer-employee relationship between

the parties; that the case involves violations of the labor standard provisions of the

labor code; that the issues therein could be resolved without considering evidentiary

matters that are not verifiable in the normal course of inspection; and, if only to give

meaning and not render nugatory and meaningless the visitorial and enforcement

powers of the Secretary of Labor and Employment as provided by Article 128(b) of the

Labor Code, as amended by Section 2 of Executive Order No. 111 which states:

The provisions of article 217 of this code to the contrary notwithstanding and in

cases where the relationship of employer-employee still exists, the Minister of

Labor and Employment or his duly authorized representative shall have the

power to order and administer, after due notice and hearing, compliance with

the labor standards provision of this Code based on the findings of the findings


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of labor regulation officers or industrial safety engineers made in the course of

inspection, and to issue writs of execution to the appropriate authority for the

enforcement of their order, except in cases where the employer contests the

findings of the labor regulations officers and raises issues which cannot be

resolved without considering evidentiary matters that are not verifiable in theordinary course of inspection.

We agree with the complainants that the regional office a quo has jurisdiction to hear and

decide the instant labor standard case.

The Court in reinforcing its conclusion that Regional Director has jurisdiction over labor

standards cases, treated E.O. 111 as a curative statute, ruling as follows:

E.O. No. 111 was issued on December 24, 1986 or three (3) months after the promulgation of

the Secretary of Labor's decision upholding private respondents' salary differentials and ECOLAson September 24, 1986. The amendment of the visitorial and enforcement powers of the

Regional Director (Article 128(b)) by said E.O. 111 reflects the intention enunciated in Policy

Instructions Nos. 6 and 37 to empower the Regional Directors to resolve uncontested money

claims in cases where an employer-employee relationship still exists. This intention must be

given weight and entitled to great respect

Republic Act 7730, the law governing the visitorial and enforcement powers of the Labor

Secretary and his representatives reads:

Art. 128 (b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the

contrary, and in cases where the relationship of employer-employee still exists, the

Secretary of Labor and Employment or his duly authorized representatives shall have

the power to issue compliance orders to give effect to the labor standards provisions of

this Code and other labor legislation based on the findings of labor employment and

enforcement officers or industrial safety engineers made in the course of inspection.

The Secretary or his duly authorized representative shall issue writs of execution to the

appropriate authority for the enforcement of their orders, except in cases where the

employer contests the findings of the labor employment and enforcement officer and

raises issues supported by documentary proofs which were not considered in the course

of inspection.

The present law, RA 7730, can be considered a curative statute to reinforce the conclusion that

the Regional Director has jurisdiction over the present labor standards case. Well-settled is the

rule that jurisdiction over the subject matter is determined by the law in force when the action

was commenced, unless a subsequent statute provides for its retroactive application, as when

it is a curative legislation.


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PEARANDA vs. BAGANGA PLYWOOD

FACTS: Pearanda alleges that he was employed by respondent as Foreman/Boiler Head/Shift

Engineer; that he was illegally dismissed; And, his overtime pay, premium pay for

working during holidays/rest days, night shift differentials were not paid. Respondent allege that complainants separation from service was done pursuant to

Art. 283 of the Labor Code.

Respondent BPC was on temporary closure due to repair and had to dismiss employees.

Penaranda also got his separation benefits.

Consequently, when respondent partially reopened in January 2001, Pearanda failed

to reapply. Hence, he was not terminated from employment illegally.

The labor arbiter found that petitioner is entitled to overtime pay, premium pay for

working on rest days

ISSUE: WON Penaranda is entitled to overtime pay and premium pay for working on rest days?

RULING: Managerial employees and members of the managerial staff are exempted from theprovisions of the Labor Code on labor standards.

Since petitioner belongs to managerial staff, he is not entitled to overtime pay and premium

pay for working on rest days.

Penaranda duties and responsibilities conform to the definition of a member of a managerial

staff under the Implementing Rules.

Petitioner supervised the engineering section of the steam plant boiler. His work involvedoverseeing the operation of the machines and the performance of the workers in the

engineering section.

This work necessarily required the use of discretion and independent judgment to ensure the

proper functioning of the steam plant boiler.

As supervisor, petitioner is deemed a member of the managerial staff.

Noteworthy, even petitioner admitted that he was a supervisor. In his Position Paper, he stated

that he was the foreman responsible for the operation of the boiler.

The term foreman implies that he was the representative of management over the workers and

the operation of the department.

Petitioners evidence also showed that he was the supervisor of the steam plant.


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His classification as supervisor is further evident from the manner his salary was paid. He

belonged to the 10% of respondents 354 employees who were paid on a monthly basis; the

others were paid only on a daily basis.

On the basis of the foregoing, the Court finds no justification to award overtime pay and

premium pay for rest days to petitioner.


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CMS ESTATE INC VS SSS 132 SCRA 106 (1984)

Art. II Sec 18 (1987 Constitution): The State affirms labor as a primary social economic force. It

shall protect the rights of workers and promote their welfare

Art. XIII Sec 1: The Congress shall give highest priority to the enactment of measures that

protect and enhance the right of all the people to human dignity, reduce social, economic andpolitical inequalities, and remove cultural inequalities by equitably diffusing wealth and political

power for the common good.

To this end, the State shall regulate the acquisition, ownership, use and disposition of property

and its increments.

FACTS: Petitioner CMS Estate Inc is a domestic corporation engaged in the real estate business.In December 1952, it began with only 6 employees. In 1956, it also engaged in the logging

business and obtained an ordinary license from the Bureau of Forestry to operate forest

concession (13,000 hectares) in Baganga, Davao.

In January 1957, CMS Estate entered into a contract of management with Eufracio Rojas for the

operation of the logging concession which began in April 1957 with four employees earning

monthly salaries. By September 1957, CMS Estate had 89 employees in the logging operation.

But on December 1957, CMS Estate revoked its contract with Rojas.

By August 1958, CMS Estate became a member of SSS with respect to its real estatebusinessand remitted to the SSS P203.13 representing the initial premium of the salaries of the

employees in the logging business. But on October 1958, petitioner demanded the refund ofthe amount, alleging that it is not yet subject to compulsory coverage in its logging business.Respondent SSS denied the petition on the ground that the logging business is only an

expansion of the companys existing activities and that it should be considered a membersince December 1952 when it opened its business.

CMS Estate contends that the SSS contributions required of employees and employers under

the SSS Act of 1954 are not in the nature of excise taxes and therefore, not compulsory of

employers.

ISSUE: W/N Petitioners logging business is subject to compulsory coverage in the SSS

HELD: The Social Security Law was enacted pursuant to the policy to develop, establish

gradually and perfect a social security system which shall be suitable to the needs of the peoplethroughout the Philippines and provide protection against the hazards of disability, sickness,

old age and death. It is clear then that the implementation of the SSS Law is in line with thegeneral welfare mandate of the Constitution and as such, is a legitimate exercise of the policepower. As held in Philippine Blooming Mills Co. vs. SSS: membership in the SSS is not abilateral, consensual agreement where obligations and rights of the parties are subject to their

will. RA 1161 requires compulsory coverage of employees and employers under the system. As

such, the principle of non-impairment of obligation of contract cannot be raised as a defense.


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Mariveles Shipyard Corp. v CA 415 SCRA 573 (2003)

FACTS:

On October 1993, petitioner Mariveles Shipyard Corporation engaged the services of

Longest Force Investigation and Security Agency, Inc. (hereinafter, Longest Force) to

render security services at its premises. Longest Force deployed its security guards, theprivate respondents herein, at the petitioners shipyard in Mariveles, Bataan.

Mariveles Shipyard Corp complied with the terms of the security contract with Longest

Force, promptly paying its bills and the contract rates of the latter. However, it found

the services being rendered by the assigned guards unsatisfactory and inadequate,

causing it to terminate its contract with Longest Force on April 1995. Longest Force, in

turn, terminated the employment of the security guards it had deployed at petitioners

shipyard.

On September 2, 1996, private respondents filed a case for illegal dismissal,

underpayment of wages pursuant to the PNPSOSIA-PADPAO rates, non-payment of

overtime pay, premium pay for holiday and rest day, service incentive leave pay, 13th

month pay and attorneys fees, against both Longest Force and petitioner, before the

Labor Arbiter, the case sought the guards reinstatement with full backwages and

without loss of seniority rights.

Longest Force filed a cross-claim against the petitioner. Longest Force admitted that it

employed private respondents and assigned them as security guards at the premises of

petitioner from October 16, 1993 to April 30, 1995, rendering a 12 hours duty per shift

for the said period. It likewise admitted its liability as to the non-payment of the alleged

wage differential in the total amount of P2,618,025 but passed on the liability to

petitioner alleging that the service fee paid by the latter to it was way below the

PNPSOSIA and PADPAO rate, thus, contrary to the mandatory and prohibitive laws

because the right to proper compensation and benefits provided under the existinglabor laws cannot be waived nor compromised.

The petitioner denied any liability on account of the alleged illegal dismissal, stressing

that no employer-employee relationship existed between it and the security guards. It

further pointed out that it would be the height of injustice to make it liable again for

monetary claims which it had already paid. Longest Force filed a cross-claim against the

petitioner.

Labor Arbiter decided that the respondents Longest Force Investigation & Security

Agency, Inc. and Mariveles Shipyard Corporation jointly and severally liable to pay the

money claims of complainants representing underpayment of wages and overtime pay

in the total amount.

ISSUE: Whether or not Mariveles Shipyard Corp and Longest Force Investigation & SecurityAgency, Inc. is jointly and severally liable to pay money claims of the private respondents.

HELD:Petitioners liability is joint and several with that of Longest Force, pursuant to Articles 106, 107

and 109 of the Labor Code which provide as follows:


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ART. 106. CONTRACTOR OR SUBCONTRACTORWhenever an employer enters into a contract

with another person for the performance of the formers work, the employees of the

contractor and of the latters subcontractor, if any, shall be paid in accordance with the

provisions of this Code.

In the event that the contractor or subcontractor fails to pay the wages of his employees inaccordance with this Code, the employer shall be jointly and severally liable with his contractor

or subcontractor to such employees to the extent of the work performed under the contract, in

the same manner and extent that he is liable to employees directly employed by him.

ART. 107. INDIRECT EMPLOYER. The provisions of the immediately preceding Article shall

likewise apply to any person, partnership, association or corporation which, not being an

employer, contracts with an independent contractor for the performance of any work, task, job

or project.

ART. 109. SOLIDARY LIABILITY. The provisions of existing laws to the contrary

notwithstanding, every employer or indirect employer shall be held responsible with his

contractor or subcontractor for any violation of any provision of this Code. For purposes of

determining the extent of their civil liability under this Chapter, they shall be considered as

direct employers.

In this case, when petitioner contracted for security services with Longest Force as the security

agency that hired private respondents to work as guards for the shipyard corporation,

petitioner became an indirect employer of private respondents pursuant to Article 107

abovecited. Following Article 106, when the agency as contractor failed to pay the guards, the

corporation as principal becomes jointly and severally liable for the guards wages. This is

mandated by the Labor Code to ensure compliance with its provisions, including payment ofstatutory minimum wage. The security agency is held liable by virtue of its status as direct

employer, while the corporation is deemed the indirect employer of the guards for the purpose

of paying their wages in the event of failure of the agency to pay them. This statutory scheme

gives the workers the ample protection consonant with labor and social justice provisions of the

1987 Constitution.

Petitioner cannot evade its liability by claiming that it had religiously paid the compensation of

guards as stipulated under the contract with the security agency. Labor standards are enacted

by the legislature to alleviate the plight of workers whose wages barely meet the spiraling costs

of their basic needs. Labor laws are considered written in every contract. Stipulations in

violation thereof are considered null. Similarly, legislated wage increases are deemed

amendments to the contract. Thus, employers cannot hide behind their contracts in order to

evade their (or their contractors or subcontractors) liability for noncompliance with the

statutory minimum wage.


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KASAPIAN NG MALAYANG MANGGAGAWA SA COCA-COLA vs. CA and COCA-COLA BOTTLERS PHILS.,

FACTS:

June 1998, the Contract Bargaining Agreement for the years 1995-1998 executed between

petitioner union and private respondent company expired.

Petitioner then submitted its demands to the company for another round of collective

bargaining negotiations.

After having some labor disputes, on 26 December 1998, both parties executed and signed a

MOA providing for salary increases and other economic and non-economic benefits.

It likewise contained a provision for the regularization of contractual, casual and/or agency

workers who have been working with private respondent for more than one year.

Pursuant to the provisions of the MOA, both parties identified 64 vacant regular positions that

may be occupied by the existing casual, contractual or agency employees who have been in the

company for more than one year.

Then, 61 employees passed the screening and extended regular employment status.

Consequently, petitioners demanded the payment of salary and other benefits to the newly

regularized employees retroactive to 1 December 1998, in accord with the MOA. However, the private respondent refused to yield the said demands contending that the date of

effectivity of the regularization of said employees were 1 May 1999 and 1 October 1999.

Thus, petitioner filed a complaint before the NLRC for the alleged violations of the subject MOA

by the private respondent.

On 9 December 1999, private respondent closed its Manila and Antipolo plants.

NLRC dismissed the complaint. It stated that: Under MOA, the 61 regularized employees are not

entitled to their claims only the employees who were regular in July 1998 and continued being

such upon the signing of the MOA on December 26, 1998 deserve retroactive payment. Since

the 61 regularized employees were regularized only on May 1, 1999 and October 1, 1999, they

have no right to claim entitlement to the MOA benefits.

ISSUE:WON CCBP violated the terms and conditions contained in the MOA dated 26 December 1998 when it

did not recognize the regularization of the 61 employees as effective on 1 December 1998?

RULING:Private respondent violated the provision of the MOA when it did not consider the regularization of the

61 employees effective 1 December 1998, and accorded to them the full benefits of the MOA.

According to the pertinent provision of the MOA:

1. Non-regular employee (casual, contractual or agency worker) who has already served the company

and is presently occupying or has occupied the position to be filled-up for at least one (1) year shall be

given priority in filling-up the position by converting his non-regular employment status to regular

employment status, effective 01 December 1998 without need of undergoing through the companys

regular recruitment procedures such as interview and qualifying examination.

It is erroneous for the NLRC to conclude that the regularization of the 61 employees does not retroact to

December 1, 1998.

We hold that the effectivity date of the regularization of the 61 employees was on December 1, 1998.


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As stated in the MOA, only those who have worked with the company for one year as of 1 December

1998 and are still working for the company as of the signing of the MOA, will be considered for

regularization.

Evidently, it is erroneous for the NLRC to conclude that extending to them the benefits of the MOA

would violate the principle of "no-work-no-pay" as they are actually rendering service to the company

even before December 1, 1998, and continued to do so. They were accorded the status of regular

employees because they were rendering service to the company for the required period.

Hence, even without the subject MOA provision, the 61 employees must be extended regular

employment status after the lapse of one year. All those who have been with the company for one year

by said date must automatically be considered regular employees by operation of law.


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DOLE PHILIPPINES VS PAWISANG MAKABAYANG OBRERO 395 SCRA 112 (2003)Book Five, Rule I, Sec. 1(jj): Collective bargaining agreement refers to the negotiated contract

between a legitimate labor organization and the employer concerning wages, hours of work,

and all other terms and conditions of employment in a bargaining unit, including mandatory

provisions for grievances and arbitration machineries.

FACTS: On February 22, 1996, a new five-year collective bargaining agreement (CBA) wasexecuted by petitioner Dole Philippines and Pawis ng Makabayang Obrero (PAMAO), covering

February 1996 to February 2001. One of the provisions in the new CBA reads: (Section 3 of Art.

XVIII) Dole agrees to grant a meal allowance of Php 10.00 to all employees who render atleast 2 hours or more of actual overtime work on a workday, and free meals, as presentlypractice, not exceeding Php 25.00 after 3 hours of actual overtime work.

Pursuant to the provisions of the CBA, some departments reverted to the previous practice of

granting free meals after exactly 3 hours OT but other departments granted free meals only

after more than3 hours OT. PAMAO then filed a complaint alleging Doles non-compliance tothe CBA.

ISSUE: HOW MANY HOURS OF OVERTIME WORK MUST A DOLE EMPLOYEE RENDER TO BEENTITLED TO THE FREE MEAL UNDER SEC. 3 OF ART. XVIII OF THE 1996-2001 CBA?

HELD: It is clear from the intent of the provision, based on the fact that the same provisionappeared in earlier CBAs that a Dole employee is entitled to a free meal after renderingexactly or no less than, 3 hours of OT and not more than 3 hours of OT.

The petitioner also cannot invoke the principle of management prerogative, that the employer

has the power to grant benefits over and beyond the minimum standards of law or the LaborCode. The exercise of this principle is not unlimited. It is subject to the limitations found inlaw, a collective bargaining agreement or the general principles of fair play and justice. THECBA IS THE NORM OF CONDUCT BETWEEN THE PETITIONER AND PRIVATE RESPONDENT ANDCOMPLIANCE THEREWITH IS MANDATED BY EXPRESS POLICY OF THE LAW.


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Arco Metal Products Co. vs Samahan 554 SCRA 111 (2008)

FACTS:

December 2003, petitioner paid the 13

thmonth pay, bonus, and leave encashment of

three union members in amounts proportional to the service they actually rendered in

a year, which is less than a full twelve (12) months.

Respondent protested the prorated scheme, claiming that on several occasions

petitioner did not prorate the payment of the same benefits to seven (7) employees

who had not served for the full 12 months. The payments were made in 1992, 1993,

1994, 1996, 1999, 2003, and 2004. According to respondent, the prorated payment

violates the rule against diminution of benefits under Article 100 of the Labor Code.

Thus, they filed a complaint before the National Conciliation and Mediation Board

(NCMB).

Petitioner claims that its full payment of benefits regardless of the length of service to

the company does not constitute voluntary employer practice. It points out that the

payments had been erroneously made and they occurred in isolated cases in the years1992, 1993, 1994, 1999, 2002 and 2003. According to petitioner, it was only in 2003

that the accounting department discovered the error when there were already three

(3) employees involved with prolonged absences and the error was corrected by

implementing the pro-rata payment of benefits pursuant to law and their existing CBA.

It adds that the seven earlier cases of full payment of benefits went unnoticed

considering the proportion of one employee concerned (per year) vis vis the 170

employees of the company. Petitioner describes the situation as a clear oversight

which should not be taken against it.

The appellate court found that petitioner, however, had an existing voluntary practice of

paying the aforesaid benefits in full to its employees, thereby rejecting the claim thatpetitioner erred in paying full benefits to its seven employees. The appellate court

noted that aside from the affidavit of petitioners officer, it has not presented any

evidence in support of its position that it has no voluntary practice of granting the

contested benefits in full and without regard to the service actually rendered within the

year. It also questioned why it took petitioner eleven (11) years before it was able to

discover the alleged error.

ISSUE: Whether or not the full payment of benefits regardless of the length of service to thecompany does constitute voluntary employer practice.

HELD: It was held that the full payment of benefits regardless of the length of service tothe company constituted voluntary employer practice.

Any benefit and supplement being enjoyed by employees cannot be reduced, diminished,

discontinued or eliminated by the employer. The principle of non-diminution of benefits is

founded on the Constitutional mandate to "protect the rights of workers and promote their


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welfare, and to afford labor full protection. Said mandate in turn is the basis of Article 4

of the Labor Code which states that all doubts in the implementation and interpretation of

this Code, including its implementing rules and regulations shall be rendered in favor of

labor.

In the years 1992, 1993, 1994, 1999, 2002 and 2003, petitioner had adopted a policy offreely, voluntarily and consistently granting full benefits to its employees regardless of the

length of service rendered. True, there were only a total of seven employees who benefited

from such a practice, but it was an established practice nonetheless. Jurisprudence has not

laid down any rule specifying a minimum number of years within which a company practice

must be exercised in order to constitute voluntary company practice. Thus, it can be six (6)

years, three (3) years, or even as short as two (2) years. Petitioner cannot shirk away from

its responsibility by merely claiming that it was a mistake or an error, supported only by an

affidavit of its manufacturing group.

If petitioner wants to prove that it merely erred in giving full benefits, it could have easily

presented other proofs, such as the names of other employees who did not fully serve forone year and thus were given prorated benefits. This could have easily bolstered

petitioners theory of mistake/error, but sadly, no evidence to that effect was presented.


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Mcleod v. NLRC

FACTS: Mcleod was the acting vice-president and general manager of Peggy Mills Inc. (PMI)

from Jun 1980- Dec.1992 (12 years).

When PMIs employees staged a strike, PMI stopped its operations permanently startingJuly 1992.

PMI informed its employees including Mcleod of its closure and paid its employees,

including managerial employees, their unpaid wages, sick and vacation leave, prorated

13th

month pay and separation pay except Mcleod.

PMI and Mcleod ended their employer-employee relationship in Dec. 1992.

PMI assets transferred all its rights, title and interests in the Assets by way of dation in

payment to Sta. Rosa Textiles Inc (STRI).

The, SRTI hired Mcleod as consultant and not as employee until Dec. 1993.

In Feb. 1995, Mcleod filed a complaint for retirement benefits, vacation and sick leave

benefits, non-payment of unused airline tickets, holiday pay, underpayment of salary

and 13th

month pay against PMI and SRTI along with the other two companies (FILSYN,

FETMI) which use the same address as PMI and SRTI and Patricio Lim (president of PMI).

ISSUE: WON Mcleod is entitled for the payment of vacation and sick leave, holiday pay,underpayment of salary and his 13

thmonth pay, non-payment of unused airline tickets?

RULING: Since Mcleod cant present evidence like appointment letters or employment contracts,

payrolls, organization charts, SSS registration, personnel list or even testimony of his co-

employees to support his allegation of employer-employee relationship between him

and any of FILSYN, SRTI, AND FETMI therefore, he cant have cause of action againstthese corporations.

Mcleod cause of action is only against his former employer, PMI.

On Patricios personal liability, there is no evidence that he acted with malice or bad

faith in terminating Mcleods services to warrant his personal liability. PMI had no other

choice but to stop plant operations because of the serious business losses that it had

suffered. The mere fact Patricio was the president PMI is not a ground to conclude that

he is solidarily liable with PMI for Mcleods money claim.

Mcleod is not entitled to payment of vacation leave and sick leave as well as to holiday

pay. As president/plant manager, Mcleod is a managerial employee who is excluded

from the coverage of Title I, Book III of the labor code. Mcleod is entitled to paymentof vacation and sick leave only if he and PMI had agreed on it. In this case, there is noshowing that Mcleod and PMI had an agreement concerning payment of thesebenefits.

Mcleods underpayment of his 13th

month pay in Dec. 1993 is unavailing. Mcleod and

PMI employer-employee relationship ended in 1992. Since Mcleod was no longer an

employee, he was not entitled to the 13th

month pay.


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Also unavailing is Mcleods claim that he was entitled to the non-payment of unused

airline tickets for the period covering 1989-1992. PMI has no company policy granting

its officers and employees expenses for trips abroad. PMI never promised Mcleod that it

would continue to grant him this benefit.

Regarding the underpayment of salary, Mcleod cant pretend that his monthly salary of

P60,000 was reduced without his consent. It was explained to him that PMI was short infinances that his salary would have reduced. Since the last salary that Mcleod received

form PMI was P50,495, this is now the basis in computing his retirement benefits.

Since PMI has no retirement plan, Sec. 5 Rule II of the Rules Implementing the New

Retirement Law would apply. With Mcleod having worked with PMI for 12 years, he is

entitled to a retirement pay equivalent to month salary for every year of service.


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DAVAO FRUITS CORP VS ASSOCIATED 225 SCRA 562 (1993)

FACTS: On December 28, 1982, Associated Labor Unions (ALU), for and in behalf of all the rankand file workers and employees of petitioner Davao Fruits Corp, filed a complaint against the

company for non-payment of the 13th

month pay differentials. ALU sought to recover from

Davao Fruits Corp the 13th

month pay different for 1982 of its rank and file employees,equivalent to their sick, vacation and maternity leaves, premium for work done on rest days

and special holidays and pay for regular holidays which the petitioner, allegedly in disregard of

company practice since 1975, excluded from the computation of the 13th

month pay for 1982.

Davao Fruits Corp claimed that it erroneously included items subject of the complaint in the

computation of the 13th

month pay for the years prior to 1982 upon a doubtful and difficult

question of law. The mistake was only discovered in 1982 after the promulgation of the SC in

San Miguel Corp vs Inciong.

ISSUE: W/N IN THE COMPUTATION OF THE 13THMONTH PAY GIVEN BY EMPLOYERS TO THEIREMPLOYEES UNDER PD NO. 851, PAYMENTS FOR SICK, VACATION AND MATERNITY LEAVES,

PREMIUMS FOR WORK DONE ONE REST DAYS AND SPECIAL HOLIDAYS, AND PAY FOR REGULAR

HOLIDAYS MAY BE EXCLUDED IN THE COMPUTATION AND PAYMENT THEREOF, REGARDLESS OF

LONG STANDING COMPANY PRACTICE

HELD: The Supplementary Rules and Regulations Implementing PD no. 85, to resolve the issueon the computation of the 13

thmonth pay, expressly stated that the 13

thmonth pay includes

only the basic salary. It does not include fringe benefits. The same was issued on January 16,

1976, barely a month after the effectivity of PD no. 851. Despite this the petitioner continued

its practice in December 1981, after promulgation of the San Miguel decision on February 24,

1981, when it purportedly discovered its mistake.

From 1975 to 1981, the petitioner had freely, voluntarily, and continuously included in thecomputation of its employees 13

thmonth pay,the payments for sick, vacation, and maternityleaves, premiums for work done on rest days and special holidays and pay for regular holidays. This seems to negate its claim of mistake.

A company practice favorable to the employees had indeed been established and thepayments made pursuant thereto, ripened into benefits enjoyed by them. Any benefit andsupplement being enjoyed by the employees cannot be reduced, diminished, discontinued or

eliminated by the employer pursuant to Sec. 10 of the Rules and Regulations ImplementingPD no. 851 and Art. 100 Labor Code, which prohibit the diminution or elimination by theemployer of the employees existing benefits.


17/91

Samahang Mangagawa etc. vs NLRC 295 SCRA 171 (1998)

FACTS:

Petitioner Samahang Manggagawa sa Top Form Manufacturing United Workers of the

Philippines (SMTFM) was the certified collective bargaining representative of all regular

rank and file employees of private respondent Top Form Manufacturing Philippines, Inc.On February 27, 1990, the parties agreed to discuss unresolved economic issues. On the

minutes of the meeting, the Union proposed that any future wage increase given by the

government should be implemented by the company across-the-board or non-

conditional. Management requested the union to retain this provision since their

sincerity was already proven when the P25.00 wage increase was granted across-the-

board. The union decided to defer this provision, relying on the undertakings made by

the officials of the company who negotiated with them and since the company has

granted to us government mandated wage increases on across-the-board basis

On October 15, 1990, the RTWPB-NCR issued Wage Order increasing the salary of theworkers. The union requested the implementation of said wage orders. However, they

demanded that the increase be on an across-the-board basis. Private respondent

refused to accede to that demand. Instead, it implemented a scheme of increases

purportedly to avoid wage distortion.

The union demanded that it should fulfill its pledge of sincerity to the union by granting

an across-the-board wage increases (sic) to all employees under the wage orders. The

union reiterated that it had agreed to retain the old provision of CBA on the strength of

private respondents promise and assurance of an across-the-board salary increase

should the government mandate salary increases.

The union filed a complaint with the NCR NLRC alleging that private respondents act of

reneging on its undertaking/promise clearly constitutes an act of unfair labor practice

through bargaining in bad faith. It charged private respondent with acts of unfair labor

practices or violation of Article 247 of the Labor Code, as amended, specifically

bargaining in bad faith, and prayed that it be awarded actual, moral and exemplary

damages. The union added that it was charging private respondent with violation of

Article 100 of the Labor Code.

Private respondent contends that there was no agreement to the effect that future

wage increases mandated by the government should be implemented on an across-the-board basis. Otherwise, that agreement would have been incorporated and expressly

stipulated in the CBA.

ISSUE: Whether or not private respondent committed an unfair labor practice in its refusal togrant across-the-board wage increase.


18/91

HELD:No. The private respondent did not commit an unfair labor practice in its refusal to grantacross-the-board wage increase.

The alleged violation of Article 100 of the Labor Code, as amended, as well as Article XVII,

Section 7 of the existing CBA as herein earlier quoted is likewise found by this Branch to haveno basis in fact and in law. No benefits or privileges previously enjoyed by the employees were

withdrawn as a result of the implementation of the subject orders. Likewise, the alleged

company practice of implementing wage increases declared by the government on an across-

the-board basis has not been duly established by the complainants evidence. The complainants

asserted that the company implemented Republic Act No. 6727 which granted a wage increase

of P25.00 effective July 1, 1989 on an across-the-board basis. Granting that the same is true,

such isolated single act that respondents adopted would definitely not ripen into a company

practice.

Petitioner union does not deny that discussion on its proposal that all government-mandated

salary increases should be on an across-the-board basis was deferred, purportedly because it

relied upon the undertaking of the negotiating panel of private respondent.

Neither does

petitioner union deny the fact that there is no provision of the 1990 CBA containing a

stipulation that the company will grant across-the-board to its employees the mandated wage

increase. They simply assert that private respondent committed acts of unfair labor practices by

virtue of its contractual commitmentmade during the collective bargaining process.The mere

fact, however, that the proposal in question was not included in the CBA indicates that no

contractual commitmentthereon was ever made by private respondent as no agreement had

been arrived at by the parties.

Obviously the purpose of collective bargaining is the reaching of an agreement resulting in acontract binding on the parties; but the failure to reach an agreement after negotiations

continued for a reasonable period does not establish a lack of good faith. The statutes invite

and contemplate a collective bargaining contract, but they do not compel one. The duty to

bargain does not include the obligation to reach an agreement


19/91

American Wire and Cable Daily Rated Employees Union v. American Wire and Cable Co. Inc.

FACTS: American Wire and Cable Co., Inc. is a corporation in the manufacture of wires and

cables. There are two union in this company, the Monthly Rated Union and the Daily

Rated Union.

In Feb 2001, the two unions filed an action for voluntary arbitration. They alleged that

the private respondent withdrew and denied certain benefits and entitlements which

they long have enjoyed without valid cause. These are the Service Award; 35% premium

pay of an employees basic pay for the work rendered during holy Monday, Holy

Tuesday, Holy Wednesday, Dec 23, 26, 27, 28, 29; Christmas party; and promotional

Increase.

A promotional increase was asked by the petitioner for 15 of its members who were

given new job classification. According to the petitioner, the new job classification were

in the nature of a promotion.

The voluntary Arbitrator declared that the company is not guilty for withdrawing the

service award, X-mas party and 35% premium for work rendered during Holy week and

X-mas season and for not granting promotional increase.

The CA affirmed the decision of the voluntary Arbitrator. Hence this petition.

ISSUE:

WON private respondent is guilty of violation Art 100 of the Labor Code, as amended, when thebenefits/entitlements given to the members of petitioners Union were withdrawn?

RULING:

The benefits/entitlements in this case are all bonuses which were given by the private

respondent out of its generosity. The same was a management prerogative, which,

whenever management sees necessary, may be withdrawn, unless they have made a

part of the wage or salary or compensation of the employees.

For a bonus to be enforceable it must have been promised by the employer and

expressly agreed upon by the parties or it must have had a fixed amount and had been along and regular practice on the part of the employer.

The benefits/entitlements in question were never subjects of any express agreement

between the parties. They were never incorporated in the Collective Bargaining

Agreement.


20/91

The X-mas parties and its incidental benefits, and the giving of case incentive together

with the service award cannot be said to have fixed amounts.

It was clear that over the years, there had been a downtrend in the amount given as

service award. There was also downtrend with respect to the holding of the X-mas

parties in the sense that its location changed fro paid venues to tone which was free ofcharge, to cut cost. The downtrend in the grant of these two bonuses over the years

demonstrated that there is nothing consistent about it.

The additional 35% premium pay for work rendered during the holy week and X-mas

season, the holding of X-mas parties with its incidental benefits, and the grant of cash

incentive together with the incentive award are all bonuses which are neither

demandable nor enforceable obligations of the respondent.

Lastly, since the Union cannot present any proof that a promotion occur with the 15

employees promotional increase cannot be raised.


21/91

PAG-ASA STEEL WORKS INC VS CA 486 SCRA 475 (2006)

FACTS: On September 23, 1999, petitioner Pag-asa Steelworks and the Union entered into acollective bargaining agreement (CBA), effective July 1, 1999 until July, 1, 2004. Sec. 1, Art. VI of

the said CBA provides that the company agrees to grant all the workers, who are already

regular and covered by this agreement at the effectivity of this agreement, a general wageincrease as follows:

July 1, 1999 - P15.00 per day per employee



The difference of the first year adjustment to retroact to July 1, 1999. The across the board

wage increase for the 4th

and 5th

year of the CBA shall be subject for a re-opening or re-

negotiation as provided for by RA no. 6715.

On October 14, 1999, Wage Order no. NCR-07 was issued and on October 26, 1999, its

implementing rules and regulations. It provided for a P25.50 per day increase in the salary of

employees receiving minimum wage and increased the minimum wage to P223.50. Petitioner

paid P25.50 per day increase to all of its rank and file employees.

On July 1, 2000, the rank and file employees were granted the second year increase provided in

the CBA (P25.00 per day).

On November 1, 2000, Wage Order no. NCR-08 took effect. Sec 1 provides that the private

workers and employees in NCR receiving the prescribed daily minimum wage of P223.50 shall

receive an increase (P26.50 per day), setting the minimum wage to P250.00 per day.

The Union president requested Pag-asa Steelworks to implement the increase under Wage

Order no. NCR-08 in favor of its employees. Petitioner refused, claiming that it was not obliged

to grant the wage increase since none of the employees were receiving minimum wage and

there was no wage distortion.

The union argued that it had been the companys practice to grant a wage increase under a

government-issued wage order, aside from the yearly wage increase in the CBA. Petitioner

alleged that there is no such company practice and that it complied with the previous wage

orders (Wage Order nos. NCR-01-05) because some of its employees were receiving wages

below the minimum prescribed said orders. As for Wage Order no. NCR-07, petitioner allegedthat its compliance was in accordance with its verbal commitment to the Union during the CBA

negotiations that it would implement any wage order issued in 1999.

ISSUE: W/N THE PETITIONER IS OBLIGED TO GRANT WAGE INCREASE UNDER WAGE ORDERNO. NCR-08 AS A MATTER OF PRACTICE


22/91

HELD: Habits, customs, usage or pattern or of conduct must be proven in court by establishingthe degree of specificity and frequency. Mere similarity of contracts does not present the kind

of sufficiently similar circumstances to outweigh the danger of prejudice and confusion.

The only instance when petitioner admittedly implemented a wage order despite the fact that

the employees were not receiving salaries below the minimum wage was under Wage Order

no. NCR-07. Petitioner, however, explains that it did so because it was agreed upon in the CBAthat should a wage increased be ordered within 6 months from its signing, petitioner would

give the increase to the employees in addition to the CBA-mandated increases. Respondents

isolated act could hardly be classified as a company practice or company usage that may be

considered an enforceable obligation.

To ripen into a company practice that is demandable as a matter of right, the giving of the

increase should not be by reason of a strict legal or contractual obligation but by reason of an

act of liberality on the part of the employer. Hence, if the company continuously grants a wage

increase as mandated by wage order or pursuant to a CBA, the same would not automatically

ripen into a company practice. In this case, Pag-asa Steelworks granted the increase under

Wage Order no. NCR-07 on its belief that it was obliged to do so under the CBA.


23/91

Suico vs NLRC 513 SCRA 375 (2007)

FACTS:

Culver B. Suico, Teresa D. Ceniza, Ronald R. Dacut (complainants were regular

employees of Philippine Long Distance Telephone Company (PLDT) Cebu Jones Exchange

and members of Manggagawa ng Komunikasyon ng Pilipinas(MKP). September 1997, MKP launched a strike against PLDT. Complainants participated in the

strike by picketing the PLDT.

PLDT sent 2 notice to explanation to Suico et.al, for the acts of violation that happen

during the strike. But the complainant failed to provide the required written explanation

the acts charged to them. They replied informing, that they opt to exercise their rights

to due process and request to furnish a copy of the formal written complaint complaint

filed them, statement of witness/es and preliminary investigations and/or report/s

conducted on the aforesaid incident, if any.

PLDT findings based on the available evidence found the complainants guilty and were

subsequently terminated

Suico et.al filed a complaint for illegal dismissal and damages.

It is the view of PLDT that in the dismissal of employees for strike-related violence, it is

sufficient to merely declare the latter to have lost their employment without having to

comply with any procedure for their termination. PLDT, refused to implement said

policy, contending that it applies to administrative cases only and not to strike-related

cases such as the ones involving Suico, et al.

ISSUE: Whether PLDT violated the requirements of due process under the Labor Code when itdismissed said employees without heeding their request for the conduct of a formal hearing as

provided for under PLDT Systems Practice No. 94-016 and prior to submission of their

respective answers to the charges against them.

HELD: The procedure adopted by PLDT in dismissing Suico, et al. fell short of the requirementsof due process.

The requirements of due process by which to test the validity of the procedure adopted by

PLDT in dismissing Suico, et al. are those embodied in Art. 277 (b) of the Labor Code, Rule XXII

of the Implementing Rules of Book V and Systems Practice No. 94-016.

PLDT complied with the two-notice requirement of due process. The first notices sent to Suico,

et al. set out in detail the nature and circumstances of the violations imputed to them, required

them to explain their side and expressly warned them of the possibility of their dismissal should

their explanation be found wanting. The last notices informed Suico, et al. of the decision to

terminate their employment and cited the evidence upon which the decision was based .68

These two notices would have sufficed had it not been for the existence of Systems Practice No.

94-016. Under Systems Practice No. 94-016, PLDT granted its employee the alternative of either

filing a written answer to the charges or requesting for opportunity to be heard and defend

himself with the assistance of his counsel or union representative, if he so desires.
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24/91

Suico, et al. exercised their option under Systems Practice No. 94-016 by requesting that a

formal hearing be conducted and that they be given copies of sworn statements and other

pertinent documents to enable them to prepare for the hearing.69

This option is part of their

right to due process. PLDT is bound to comply with the Systems Practice.

Company policies or practices are binding on the parties.60

Some can ripen into an obligation onthe part of the employer,

61such as those which confer benefits on employees

62or regulate the

procedures and requirements for their termination

Art. 277 (b) in relation to Art. 264 (a)55

and (e)56

recognizes the right to due process of all

workers, without distinction as to the cause of their termination.57

Where no distinction is

given, none is construed.58

Hence, the foregoing standards of due process apply to the

termination of employment of Suico, et al. even if the cause therefor was their supposed

involvement in strike-related violence prohibited under Art. 264 (a) and (e).

Moreover, the procedure for termination prescribed under Art. 277(b) and Rule XXII of the

Implementing Rules of Book V is supplemented by existing company policy. Art. 277(b) provides

that the procedure for termination prescribed therein is without prejudice to the adoption by

the employer of company policy on the matter, provided this conforms with the guidelines set

by the DOLE such as Rule XXII of the Implementing Rules of Book V. This is consistent with the

established principle that employers are allowed, under the broad concept of management

prerogative, to adopt company policies that regulate all aspects of personnel administration

including the dismissal and recall of workers.
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25/91

CHINA BANKING CORPORATION vs. BORROMEO.

FACTS: Borromeo started joining CBC in 1989 as Manager.

From 1992-1995 he was promoted fro three times and received a highly satisfactorily

performance rating. Finally, in 1996, the respondent was promoted to the position of Assistant Vice-

President in Mindanao area

However, prior to his last promotion, the respondent, without authority from the

Executive Committee or Board of Directors, approved several DAUD/BP

accommodations amounting to P2,441,375 in favor of Maniwan. DAUD/BP is the

acronym for checks "Drawn Against Uncollected Deposits/Bills Purchased."

Under the petitioner Banks standard operating procedures, DAUD/BP accommodations

may be granted only by a bank officer upon express authority from its Executive

Committee or Board of Directors and amount is in excess of the credit limit.

When petitioner Bank came to know of the DAUD/BP accommodations in favor of

Maniwan, Banks First Vice- President and Head-Visayas Mindanao Division, sent a

Memorandum to seek clarification with the respondent.

Borromeo, in his letter, accepts full responsibility for committing an error in judgment,

lapses in control and abuse of discretion by relying solely on the word, assurance, surety

and REM of Mr. Edmund Ramos, a friend and a co-bank officer.

In another Memorandum addressed to the respondent, he was informed that he had

violated the petitioner Banks Code of Ethics. As such, he was directed to restitute the

amount of P1,507,736.79 representing 90% of the total loss of P1,675,263.10 incurred

by the petitioner Bank.

However, in view of his resignation and considering the years of service in the petitioner

Bank, the management earmarked only P836,637.08 from the respondents totalseparation benefits or pay.

In the another Letter addressed to the respondent, he was again informed that the

management would withhold the sum of P836,637.08 from his separation pay, mid-year

bonus and profit sharing. The amount withheld represented his proportionate share in

the accountability vis--vis the DAUD/BP accommodations in favor of Maniwan.

Consequently, the respondent made a demand on the petitioner Bank for the payment

of his separation pay and other benefits. The petitioner Bank maintained its position to

withhold the sum of P836,637.08.

Hence, this petition.

ISSUE: Whether the respondent pledged his benefits as guarantee for the losses the bankincurred resulting from the unauthorized DAUD/BP accommodations in favor of Maniwan?

RULING:The respondent "is entitled to the benefits he claimed in pursuance to the Collective Bargaining

Agreement but, in the meantime, such benefits shall be deposited with the bank by way of

pledge.


26/91

The petitioner Bank was left with no other recourse but to impose the penalty of restitution. It

was certainly within the petitioner Banks prerogative to impose on the respondent what it

considered the appropriate penalty under the circumstances pursuant to its company rules and

regulations.

Indeed, it had been shown that the respondent admitted that he violated the petitionerBanks standard operating procedures in granting the DAUD/BP accommodations in favor ofManiwan without higher management approval.

Banks Code of Ethics provide that:

Restitution/Forfeiture of Benefits

Restitution may be imposed independently or together with any other penalty in case of loss or

damage to the property of the Bank, its employees, clients or other parties doing business with

the Bank. The Bank may recover the amount involved by means of salary deduction or

whatever legal means that will prompt offenders to pay the amount involved. But restitution

shall in no way mitigate the penalties attached to the violation or infraction.

Forfeiture of benefits/privileges may also be effected in cases where infractions or violations

were incurred in connection with or arising from the application/availment thereof.

Management has the prerogative to discipline its employees and to impose appropriate

penalties on erring workers pursuant to company rules and regulations.

Prior to the respondents resignation, he was furnished with the Memorandum in which several

clarificatory questions were asked to him regarding the DAUD/BP accommodations in favor of

Maniwan. It could be said this memorandum constituted notice of the charge against therespondent.

Contrary to his protestations, the respondent was given the opportunity to be heard and

considering his admissions, it became unnecessary to hold any formal investigation.


27/91

MANEJA VS NLRC 290 SCRA 603 (1998)

FACTS: Petitioner Rosario Maneja worked with private respondent Manila Midtown Hotelbeginning January 1985, as a telephone operator. She was a member of the National Union of

Workers in Hotels, Restaurants and Allied Industries (NUWHRAIN) with an existing CBA with the

private respondent.

In February 13, 1990, a fellow telephone operator, Rowena Loleng, received a request for long

distance call (RLDC) form and a deposit for P500.00 from a Japanese guest but the call was

unanswered. The deposit was then forwarded to the cashier. The same evening, the Japanese

guest again made an RLDC and deposited another P500.00 but the call was also unanswered.

Loleng passed the RLDC to Maneja for follow up.

ON February 15, the cashier inquired about the P1000 deposit made. After a search, the first

one was found in the guest folio while the other in the folder for cancelled calls. Petitioner

Maneja saw that the 2nd

RLDC form was not time stamped so she placed it in the machine to

stamp it with the date February 15. But after realizing that the call was made 2 days before,

she changed the date to February 13.

On March 7, the chief telephone operator asked the petitioner and Loleng to explain the Feb 15

incident. Both submitted their written explanation. On March 20, a written report was

submitted, stating that their actions were covered violations of the Offenses Subject to

Disciplinary Action (OSDA) as

1. Forging, falsifying official documents and;

2. Culpable carelessnessnegligence or failure to follow specific instruction/s or

established procedure/s

On March 23, petitioner was then served notice of dismissal effective on April 1. She refused tosign and wrote under protest.

On October 2, 1990, Maneja filed a complaint for illegal dismissal against private respondent

before the labor arbiter (LA). LA found that the petitioner was illegally dismissed, stating that

even though the case revolves on the matter of implementation and interpretation of company

policies and is thus within the jurisdiction of the grievance procedure under the CBA, Art. 217

Labor Code confers original and exclusive jurisdiction of all termination cases to LA. NLRC

dismissed the case for lack of jurisdiction of LA because the case was subject to voluntary

arbitration.

Petitioner insists that her termination is not an unresolved grievance as there had been no

grievance meeting between the union and the management. Petitioner alleged that it has been

a company policy that termination cases are not referred to the grievance machinery but

directly to LA.

ISSUE: W/N THE LABOR ARBITER HAD JURISDICTION TO DECIDE THE CASE


28/91

HELD: NLRCs interpretation of Art 216c Labor Code is erroneous. Even though such provisionprovides that LA have no jurisdiction over cases arising from interpretation and implementation

of CBAs (must be submitted to the grievance machine or voluntary arbitration), it must be read

in conjunction with Art 261 which grants voluntary arbitrators original and exclusive jurisdiction

to hear and decide all unresolved grievances arising from the interpretation or implementation

of the CBA and those arising from the interpretation or enforcement of company personnelpolicies which is not the case here.

According to the Sanyo case, there is dismissal which does not involve an interpretation or

implementation of a CBA or interpretation or enforcement of company personnel policies but

involves termination. Where the dispute is just in the interpretation, implementation orenforcement stage, it may be referred to the grievance machinery set up in the CBA or byvoluntary arbitration. Where the was already actual termination, i.e. violation of rights, it isalready cognizable by LA.

Moreover, Art 260 also stipulates that only disputes involving the union and the company shall

be referred to the grievance machinery or voluntary arbitrators. In the case at bar, the union

does not event come into the picture as the practice in said Hotel in cases of termination is that

they are not referred anymore to the grievance comitte and that the terminated employee who

wishes to question the legality of his termination usually goes to LA for arbitration, whether

the termination arose from the interpretation or enforcement of the company personnel

policies or otherwise.

Petitioner was illegally dismissed as there are two requisites in a valid dismissal: 1. That the

dismissal must be for any causes expressed in Art 282 Labor Code and; 2. The employee must

be given an opportunity to be heard and to defend himself.

1.

There is no cause for dismissal as the petitioners actions were not contrary to companypractice and there is also no basis for personal appropriation based on the facts

2. An examination of the record reveals that no hearing whatsoever was ever conducted

by the Hotel before Maneja was dismissed. While it may be true that the petitioner

submitted a written explanation, no hearing was actually conducted before she was

terminated. She was not accorded the opportunity to fully defend herself which is

clearly a violation of her right to due process.


29/91

Amkor Technology vs Juangco 512 SCRA 325 (2007)FACTS:

Due to business losses, petitioner-company company saw the need to reduce its existing

manpower complement. Several meetings were held among its officers and department

heads to discuss actions to be taken to implement the same.

Sometime in October, 2001, petitioner-company convened its key officers anddepartment heads, including respondent, to finally decide whether to implement a

voluntary retirement/voluntary separation program or a retrenchment program. During

the meeting, respondent expressed her interest and volunteered to personally

participate in the downsizing program of the companys personnel. To formalize her

decision to retire from the company, respondent submitted an undated letter signifying

her intention to avail of the Voluntary Retirement Program of the company, effective 15

November 2001.

A week thereafter, or on November 22, 2001, pursuant to her proposition, respondent

received her voluntary retirement package in the amount of Three Million Seven

Hundred Four Thousand Five Hundred Seventeen Pesos and 98/100 (P3,704,517.98)inclusive of an additional two (2) months pay. Respondent signed a Receipt and Release

Waiver and Quitclaim on the same date.

She filed her complaint for illegal dismissal on April 25, 2002, or after almost six (6)

months from her separation from petitioner-company. Respondent denied the due

execution of her Release Quitclaim and Waiver, alleging that she signed the same under

duress and intimidation. She claimed that she was threatened that she will receive

nothing if she will not sign it.

Petitioners maintain that respondents resignation was voluntary, perforce, there could

be no illegal dismissal.

ISSUE: Whether or not respondent voluntarily retired from her position as Executive Director inpetitioner-company.

HELD: Respondent was not coerced or intimidated into signing her retirement letter. Thevoluntariness of her retirement is attested and confirmed by top ranking officials of petitioner-

company then present during the meeting in October 2001. She failed to present evidence to

contradict their statements.

Respondent received her retrenchment backwage a week after she submitted her resignation

paper. She had ample time to mull over what courses of action to take if indeed she was

illegally dismissed. Instead, she returned to the company to sign the Receipt and Release

Waiver and Quit Claim and to receive her retirement package. Thereafter, she looked foremployment in other companies It is thus clear that the filing of the complaint was merely an

afterthought when she failed to find another employment

While the Constitution is committed to the policy of social justice and the protection of the

working class, it should not be expected 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


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Cebu Royal Plant vs. Deputy Minister of labor

FACTS: Ramon Pilones was employed on probation Feb 16, 1978.

The six-month period of probation started on Feb 16 and ended on August 17.

After this period, he continued working in the said plant.

Pilones underwent medical examination for qualification as regular employee but the results

showed that he is suffering from Pulmonary Tuberculosis (PTB) minimal.

Then, he was informed of the termination of his employment by Cebu Royal.

ISSUE:WON Pilones dismissal by Cebu Royal Plant was illegal?

RULING:

Pilones dismissal was illegal.

Under Art. 282 of the labor Code, an employee who is allowed to work after probationary

period shall be considered a regular employee.

Hence, Pilones was already on permanent status when he was dismissed on August 21, 1978 orfour days after he ceased to be a probationer. Also the 1977 withholding tax of Pilones is a

proof that he was hired earlier than Feb 16, 1978.

Cebu Royal claims that it could not have dismissed Pilones earlier because the x-ray examination

was made only on August 17, 1978, and the results were not immediately available. This is

untenable.

Cebu Royal had 6 months to conduct such examination but it chose to wait until exactly the last

day of the probation period.

Since Pilones was already a regular employee when he was dismissed, he could validly claim the

security of tenure guaranteed to him by the constitution and the Labor Code.

Under Sec. 8 Rule I, Book IV, of the rules and Regulations Implementing the labor code the

medical certificate should be issued by a competent public health authority.

The medical certificate offered by Cebu Royal came from its own physician, who was not a

competent public health authority. The court concluded that the required certificate was not

presented because the disease was not so serious that it can be cured within 6 months. If so,

dismissal was severe and unlawful sanction.

Additionally, Cebu royals application for clearance to terminate the employment of the private

respondent was filed with the Ministry of labor seven days after his dismissal. NLRC required

not just the mere filing of a petition or the mere attempt to procure a clearance but hat the said

clearance be obtained prior to the operative act of termination.

This court agree that there was an attempt to circumvent the law by separating the employee

after five months service to prevent him from becoming a regular employee, and then rehiring

him on probation, again without security of tenure.

Wherefore, Pilones shall be reinstated upon a certification by a competent public health

authority that he is fit to return to work.


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ENRIQUEZ VS BPI 544 SCRA 590 (2008)

FACTS: Petitioners Enriquez and Sia were senior managers in BPI Bacolod, having served 34 years and29 years respectively. One 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: W/N THE PETITIONERS WERE ILLEGALLY DISMISSED AND AS SUCH, SHOULD BE REINSTATED

HELD:The SC held that the procedural issue of the case (that there was no written manifestation of theinvestigating 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.

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 thatoccurred. 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 inherentin the employers 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 hisemployers 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 trustis more so magnified in the present case in light of the nature of the respondent banks business. Thebanking 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.


32/91

Smart Communications vs Astorga 542 scra 153 (2007)

FACTS:

Regina M. Astorga (Astorga) was employed by respondent Smart Communications,

Incorporated (SMART) on May 8, 1997 as District Sales Manager of the Corporate Sales

Marketing Group/ Fixed Services Division (CSMG/FSD). As District Sales Manager, Astorga enjoyed additional benefits, namely, annual

performance incentive equivalent to 30% of her annual gross salary, a group life and

hospitalization insurance coverage, and a car plan in the amount of P455,000.00.5

On May 18, 1998, SMART sent a letter to Astorga demanding that she pay the current

market value of the Honda Civic Sedan which was given to her under the companys car

plan program, or to surrender the same to the company for proper disposition.11

Astorga, however, failed and refused to do either, thus prompting SMART to file a suit

for replevin with the Regional Trial Court of Makati (RTC) on August 10, 1998.

In February 1998, SMART launched an organizational realignment to achieve more

efficient operations. This was made known to the employees on February 27, 1998.6

Part of the reorganization was the outsourcing of the marketing and sales force. Thus,

SMART entered into a joint venture agreement with NTT of Japan, and formed SMART-

NTT Multimedia, Incorporated (SNMI). Since SNMI was formed to do the sales and

marketing work, SMART abolished the CSMG/FSD, Astorgas division.

SNMI agreed to absorb the CSMG personnel who would be recommended by SMART.

SMART then conducted a performance evaluation of CSMG personnel and those who

garnered the highest ratings were favorably recommended to SNMI. Astorga landed last

in the performance evaluation, thus, she was not recommended by SMART. SMART

offered her a supervisory position in the Customer Care Dept but she refused the offer.

On March 3, 1998, SMART issued a memorandum advising Astorga of the termination of

her employment on ground of redundancy, effective April 3, 1998. Astorga received iton March 16, 1998.

The termination of her employment prompted Astorga to file a Complaint8 for illegal

dismissal, non-payment of salaries and other benefits with prayer for moral and

exemplary damages against SMART. She claimed that abolishing CSMG and,

consequently, terminating her employment was illegal for it violated her right to

security of tenure.

ISSUE:

Whether the dismissal of Astorga be valid or illegal.

Whether or not the RTC has no jurisdiction over the complaint for recovery of a car which

Astorga acquired as part of her employee benefit.

HELD: Astorga is declared validly dismissed.
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33/91

Astorga was terminated due to redundancy, which is one of the authorized causes for the

dismissal of an employee. Redundancy in an employers personnel force necessarily or even

ordinarily refers to duplication of work. The characterization of an employees services as

superfluous or no longer necessary and, therefore, properly terminable, is an exercise of

business judgment on the part of the employer. An employer is not precluded from

adopting a new policy conducive to a more economical and effective management even if itis not experiencing economic reverses. Neither does the law require that the employer

should suffer financial losses before he can terminate the services of the employee on the

ground of redundancy.

But while tilting the scales of justice in favor of workers, the fundamental law also

guarantees the right of the employer to reasonable returns for his investment.38

In this

light, we must acknowledge the prerogative of the employer to adopt such measures as will

promote greater efficiency, reduce overhead costs and enhance prospects of economic

gains, albeit always within the framework of existing laws.

However, SMART failed to comply with the mandated one (1) month notice prior totermination. The record is clear that Astorga received the notice of termination only on

March 16, 199839

or less than a month prior to its effectivity on April 3, 1998. Likewise, the

Department of Labor and Employment was notified of the redundancy program only on

March 6, 1998.

Article 283 of the Labor Code clearly provides:

Art. 283. Closure of establishment and reduction of personnel. The employer may

also terminate the employment of any employee due to the installation of labor saving

devices, redundancy, retrenchment to prevent losses or the closing or cessation of

operation of the establishment or undertaking unless the closing is for the purpose of

circumventing the provisions of this Title, by serving a written notice on the workers andthe Ministry of Labor and Employment at least one (1) month before the intended date

thereof x x x.

The RTC rightfully assumed jurisdiction over the suit and acted well within its discretion in

denying Astorgas motion to dismisss. SMARTs demand for payment of the market value of the

car or, in the alternative, the surrender of the car, is not a labor, but a civil, dispute. It involves

the relationship of debtor and creditor rather than employee-employer relations.33

As such, the

dispute falls within the jurisdiction of the regular courts.

Replevin is a possessory action, the gist of which is the right of possession in theplaintiff. The primary relief sought therein is the return of the property in specie

wrongfully detained by another person. It is an ordinary statutory proceeding to

adjudicate rights to the title or possession of personal property. The question of

whether or not a party has the right of possession over the property involved and if so,

whether or not the adverse party has wrongfully taken and detained said property as to

require its return to plaintiff, is outside the pale of competence of a labor tribunal and

beyond the field of specialization of Labor Arbiters.
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101000751 Labor Standards Casse Digest Compiled 1 01-2-03