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SURVEY OF 2000-2001 LABOR CASES

ATENEO CENTRAL BAR OPERATIONS 2002

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2001 Cases

A Prime Security Services, Inc. v. NLRC G.R. 107320 January 19, 2000

FACTS: PR had been working for a year as a security guard with the Sugarland Security Services, Inc., a sister company of petitioner. He was hired on January 1, 1988 as he was among those absorbed by petitioner when it took over the security contracts of its sister company, Sugarland, with the U.S. Embassy. He was forced by petitioner to sign a new probationary contract for 6 mos; and on August 1, 1988, his employment was terminated. Labor Arbiter found for the petitioner. ISSUES: 1. Whether PR‟s employment with A‟ Prime Securities was just a continuation of his

employment with Sugarland. 2. Whether PR is a regular employee and thereby illegally dismissed. HELD: 1. Yes. The allegations of respondent that Sugarland and A‟ Prime were sister companies

were never denied nor controverted by petitioner before the Labor Arbiter. It belatedly contended that they were distinct juridical entities, but such fact lacks any legal basis. The Court cannot sanction the practice of companies that effects the transfer of its employees to another entity whose owners are the same, in order to deprive subject employees of the benefits he is entitled to under the law.

2. Yes. PR became a regular employee upon completion of his six-month period of probation. He started working on January 30, 1988; and the end of the period of probation was on July 27, 1988. When he was dismissed on August 1, he was already a regular employee with a security of tenure. PR‟s alleged violations of sleeping on post and quarrelling with a worker were first infractions and do not amount to valid grounds for terminating employment.

Golden Donuts, Inc. v. NLRC G.R. Nos. 113666-68. January 19, 2000.

FACTS: Private respondents were the complainants in three consolidated cases submitted with the Labor Arbiter. Complainants were members of the KMDD-CFW whose CBA with the corporation expired. During the negotiations, the management panel arrived late causing the union panel to walk out. The management addressed a letter of apology to the union and requested for negotiations to resume. The union panel did not show up despite letters from management advising the former of the CBA meetings. The union struck. A complaint was filed by Golden Donuts to declare the strike illegal. Counsel for the union and strikers pleaded for a compromise whereupon both parties would desist from continuing their cases against each other. The Labor Arbiter rendered a decision upholding the dismissal of private respondents and ruling that they were bound by the compromise agreement entered into by the union with petitioners. Private respondents appealed to the NLRC, claiming that the union had no authority to waive or compromise their individual rights and they were not bound by the compromise agreement entered into by the union with petitioners. ISSUE: Whether or not a union may compromise or waive the rights to security of tenure and money claims of its minority members, without the latter‟s consent. HELD: No. Absent a showing of the union‟s special authority to compromise the individual claims of private respondents for reinstatement and backwages, there is no valid waiver of the aforesaid rights. The judgment of the Labor Arbiter based on the compromise agreement does not have the effect of res judicata upon private respondents who did not agree thereto since the requirement of identity of parties is not satisfied. A judgment upon a compromise agreement has all the force and effect of any other judgment and is conclusive only upon parties thereto and their privies. Private respondents have not waived their right to security of tenure nor can they be barred from entitlement of their individual claims. Since there was no evidence that private respondents committed any illegal act, petitioner‟s failure to reinstate them after the settlement of the strike amounts to illegal dismissal.



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Alemar’s Sibal & Sons, Inc. v. NLRC G.R. No. 114761. January 19, 2000.

FACTS: Private Respondent NLM Katipunan filed with the DOLE a notice of strike raising charges of ULP and illegal dismissal against petitioner. The charges were elevated to NLRC for compulsory arbitration. The Labor Arbiter ordered petitioner to pay private respondent separation pay of ½ month pay for every year of service. Private respondent filed a motion for execution of the decision of the Labor Arbiter. The Rehabilitation Receiver of petitioner submitted a Manifestation with Motion, alleging that petitioner was not yet in a position to comply with the directive of the Labor Arbiter as it was still under Rehabilitation Receivership by virtue of the order of the SEC. The Labor Arbiter granted the motion for execution. Petitioner contends that public respondent should have denied the order of the LA for the immediate payment of separation pay because of the order of the SEC suspending all claims against petitioner pending before any court, tribunal or body. However, the NLRC emphasized that the order of execution made by the LA had reached finality and that petitioner‟s succeeding motions had been filed out of time. At the time this petition had been filed on May 4, 1994, petitioner had been placed under rehabilitation receivership. ISSUE: Whether or not the order of the SEC can stay the execution of judgment against petitioner. HELD: No. A stay of execution may be warranted by the fact that a petitioner corporation has been placed under rehabilitation receivership. However, the SEC issued an order approving the rehabilitation plan of petitioner and placing it under liquidation pursuant to PD 902-A. Since receivership proceedings have ceased and petitioner‟s rehabilitation receiver and liquidator, Ledesma, Saludo and Associates has been given the imprimatur to proceed with corporate liquidation, the cited order of the SEC has been rendered functus oficio. Petitioner‟s monetary obligation to private respondent is long overdue and thus cannot delay the satisfaction of private respondent‟s claim. However, due to events subsequent to the f iling of this petition, private respondent must present its claim with the rehabilitation receiver and liquidator in the SEC, subject to the rules on preference of credits. VH Manufacturing, Inc. v. NLRC G.R. No. 130957 January 19, 2000.

FACTS: Private respondent was employed as a quality control inspector with the duty of inspecting LPB cylinders for any possible defects. He was dismissed when he was allegedly caught by petitioner‟s company President for sleeping on the job, thereby violating Company Rule 15-b. He was asked to explain why no disciplinary action should be taken against him, to which he promptly replied. Notwithstanding his reply, he was terminated. The Labor Arbiter found for the company. The NLRC reversed the decision ordering petitioner to reinstate petitioner with full backwages. ISSUE: Whether or not private respondent was illegally dismissed. HELD: Yes. In termination disputes, the burden of proof is always on the employer to show that dismissal was for a just and valid cause. Petitioner‟s claim that private respondent slept on the job was not substantiated by any evidence. In other cases, sleeping on the job was found as a valid ground for dismissal because such cases involved security guards whose duty necessitates that they be awake and watchful at all times. While an employer is allowed a wide discretion in the promulgation of company policies, such should always be fair and reasonable. In this case, the dismissal meted out on private respondent for sleeping on the job appears to be too harsh a penalty. Association of Trade Unions, v. Abella G.R. No. 100518 January 24, 2000.



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FACTS: Respondent company is a domestic corporation engaged in road construction projects of the government. It engaged the services of certain workers to work on various projects on different dates. The workers joined petitioner union as members. Petitioner union filed a motion for certification election with the regional office. Respondent company opposed stating that the workers were project employees and not qualified to form part of the rank and file collective bargaining unit. The Med-Arbiter dismissed the PCE. On appeal, the Secretary of Labor reversed the Med-Arbiter‟s decision and ordered the immediate holding of a certification election. Later, respondent company terminated the employment of the workers due to the completion of its projects or the expiration of worker‟s contracts. The affected workers claimed they were dismissed because of their union activities; and thus staged a strike. The strike was declared illegal and certain strikers were dismissed. The NLRC modified the decision by awarding monetary benefits to qualified workers. Complainants herein were found to be validly dismissed. ISSUE: W/N Petitioners were validly dismissed. HELD: Yes. Petitioners neither assail the jurisdiction of public respondent nor attribute any grave abuse of discretion on the part of the labor tribunal. The petition must fail for lack of substantial requirements under Rule 65. Also, as petitioners are project employees, their employment was coterminous with the completion of the project for which they had been hired. They were informed in advance that said project or undertaking for which they were hired would end on a stated or determinable date. Nueve Ecija I Electric Cooperative, Inc. (NEECO I) Employees Association, v. NLRC G.R. No. 116066 January 24, 2000.

FACTS: Petitioners were permanent employees of respondent NEECO I. They were members of the NEECO I Employees Association. The Board of Directors adopted Policy No. 3-33, which set the guidelines for NEECO I‟s retirement benefits. All regular employee‟s were ordered to accomplish Form 87, which were applications for either reinstatement, resignation, or separation from service. Also, certain union officers were promoted to supervisory rank. These events caused apprehension in the labor organization and deemed as harassment threatening union members and circumventing employees‟ security of tenure. The union held a snap elect ion of officers. Petitioner union passed a resolution withdrawing the applications for retirement of all its members. Petitioners Marin, Fajardo and Carillo were compulsary retired and received their separation pay under protest. Javate was terminated for allegedly misappropriating funds and dishonesty. Petitioners and Javate filed a complaint for illegal dismissal. The Labor Arbiter rendered a decision on December 21, 1992 declaring NEECO I guilty of illegal dismissal. Private respondents elevated the case to the NLRC. They filed their appeal on December 28 and posted a surety bond on January 5, 1993. Petitioners were reinstated by NEECO I pending appeal. Javate withdrew his complaint and opted to receive his retirement benefits. ISSUE: 1. Whether or Not the appeal was perfected within the 10 day reglementary period. 2. Whether or not NLRC should have deleted en toto moral and exemplary damages. HELD: 1. Yes. Petitioners contend that the appeal should have been completed with the filing of the

supersedeas bond by January 4, 1993. However, in a number of cases, the Court has relaxed the rule to resolve controversies on the merits when there are special circumstances, such as when there was a substantial compliance with the rule, so that on balance, technical considerations could give way to equity and justice. Private respondent filed their appeal within the reglementary period. The bonding company issued the bond on January 4, but it was forwarded to the NLRC only on the following day, January 5. Since it was the holiday season, the Court found it equitable to ease the rules and consider there was substantial compliance. Although as to the amount of the bond, respondent in its resolution of November 7, 1991deleted the phrase “exclusive of moral and exemplary damages as well as attorneys fees” in determining the amount of the bond, it provided a safeguard against the imposition of excessive bonds as the Commission was given the



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power to reduce the amount of the bond in meritorious cases and upon motion of the appellant.

2. No. To warrant an award of moral damages, it must be shown that the dismissal of the employee was attended to by bad faith, or constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs or public policy. As there was ULP, it was proper to impose moral and exemplary damages; however the damages awarded by the labor arbiter were excessive.

Permex Inc. vs. National Labor Relations Commission 323 SCRA 121 January 24, 2000

FACTS: Emmanuel Filoteo, an employee of Permex, was dismissed by the latter for allegedly falsifying his daily time record. The case arose from the company-tolerated practice of employees indicating on their time records the time they left work at the same time as when they logged in for work. The company tolerated this because by the time the workers' shifts ended, they were usually tired and in a hurry to go home; hence, the practice saved them the trouble of queuing and logging out. On a particular day, Filoteo did this, but left early, upon permission granted by management, since there was no work to be done for that day. He was subsequently dismissed from his employment. He then filed an illegal dismissal case against Permex. ISSUE: Was Filoteo illegally dismissed? HELD: Yes. Given that management knew of and tolerated the practice of logging out in advance, it cannot hold the same against Filoteo. The rule is that where a violation of company policy or breach of company rules and regulations was found to have been tolerated by management, then such violation cannot serve as the basis for termination. Aklan Electric Cooperative Incorporated (AKELCO) v. NLRC G.R. 121439 January 25, 2000.

FACTS: On January 22, the Board of AKELCO allowed the temporary transfer holding of office at Kalibo, Aklan. Nevertheless, majority of the employees continued to work at Lezo Aklan and were paid of their salaries. An unnumbered resolution was passed by AKELCO withdrawing the temporary designation of office at Kalibo, Aklan and that daily operation be held again at the main office of Lezo, Aklan. From June 1992 to March 1993, complainants who reported at Lezo were not paid their salaries. From March up to the present, complainants were allowed to draw their salareis, with the exception of a few who were not paid their salaries for April and May 1993. The respondents allege that the complainants voluntarily abandoned their work assignments and that they defied the lawful orders by the General manager and thus the Board of Directors passed a resolution resisting and denying the claims of these complainants under the principle of “no work, no pay.” NLRC held that private respondents are entitled to unpaid wages from June 1992 up to March 1993. ISSUE: Whether or not private respondents are covered by the “no work, no pay” principle and thus not entitled to the claim for unpaid wages from June 1992 to March 1993 HELD: Yes. Petitioner was able to show that private respondents did not render services during the stated period. Also, private respondents in their position paper admitted that they did not report at the Kalibo office, as Lezo remained to be their office where they continuously reported. Their excuse that the transfer to Kalibo was illegal; however it was not for private respondents to declare the management‟s act of transferring the AKELCO office to Kalibo as an illegal act as there was no allegation of proof that such was made in bad faith or with malice. The unnumbered resolution returning the office from Kalibo to Lezo was not a va lid act of petitioner‟s legitimate board and was never implemented. Private respondents were dismissed by petitioner effective January 1992 and were accepted back, subject to the condition of “no work, no pay” effective March 1993 which is why they were allowed to draw their salaries again. Since the burden of evidence lies with the party who asserts the affirmative allegation, the plaintiff or complainant has to prove his allegations in the complaint.



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Abbot Laboratories Philippines Inc. vs. Abbott Laboratories Employees Union 323 SCRA 392 January 26, 2000

FACTS: Abbott Laboratories Employees Union (ALEU) filed an application for union registration with DOLE. The Bureau of Labor Relations approved the petition and issued the corresponding certificate of registration, thereby transforming ALEU into a legitimate labor organization. Abbott Laboratories Philippines Inc., the company in which ALEU sought to operate, sought to cancel ALEU's certificate of registration, on the grounds that the latter's application was not signed by at least 20% of the rank and file employees of Abbot, and that it failed to submit copies of its books of account. Subsequently, the Regional Director of the BLR upheld the said petition and cancelled ALEU's certificate of registration. On appeal, the BLR reversed the judgement of the Regional Director, and upheld ALEU's legitimacy. Abbot appealed the BLR's decision to the Secretary of Labor. The latter refused to act on Abbott's appeal, citing the fact that the SOLE has no jurisdiction to review the decision of the BLR on appeals in cancellation cases emanating from the BLR Regional Office. The decision of the BLR in such cases is final and executory, and any appeal on the same must be filed with the BLR as a motion for reconsideration. ISSUE: Does the Secretary of Labor have jurisdiction to review the decision of the Bureau of Labor Relations in such a case? HELD: No. The appellate jurisdiction of the Secretary of Labor is limited to a review of cancellation proceedings decided by the BLR in the exercise of its (BLR) exclusive and original jurisdiction. In this case, the BLR exercised its appellate power to review the decision of the Regional Director in a petition to cancel a union's certificate of registration. The Secretary of Labor has no jurisdiction over such a case, since the BLR's decision in the same is final and not appealable. Serrano v. NLRC G.R. No. 117040 January 27, 2000

FACTS: Petitioner was hired by Respondent Isetann Department Store as a security checker to apprehend shoplifters. As a cost-cutting measure, private respondent decided to phase out its security section and engage the services of an independent security agency. Petitioner was then terminated prompting him to file a complaint for illegal dismissal. NLRC ordered petitioner to be given separation pay holding that the phase-out of the security section was a legitimate business decision. However, respondent was denied the right to be given written notice before termination of his employment. ISSUE: What is the effect of violation of the notice requirement when termination is based on an authorized cause? HELD: The Wenphil doctrine stated that it was unjust to require an employer to reinstate an employee if, although termination is made with cause, if due process was not satisfied. The remedy was to order the payment to the employee of full backwages from the time of his dismissal until the court finds that the dismissal was for a just cause. But his dismissal must be upheld and he should not be reinstated. This is because the dismissal is ineffectual. In termination of employment under Art. 283, the violation of notice requirement is not a denial of due process as the purpose is not to afford the employee an opportunity to be heard on any charge against him, for there is none. The purpose is to give him time to prepare for the eventual loss of his job and the DOLE to determine whether economic causes do exist justifying the termination of his employment. With respect to Art. 283, the employer‟s failure to comply with the notice requirement does not constitute a denial of due process but a mere failure to observe a procedure for the termination of employment which makes the termination of employment merely ineffectual. If the employee‟s separation is without cause, instead of being given separation pay, he should be reinstated. In either case, whether he is reinstated or given separation pay, he should be paid full backwages if he has been laid off without written notice at least 30 days in advance. With respect to dismissals under 282, if he was dismissed for any of the just causes in 282, he should not be reinstated. However, he must be paid backwages from the time his employment



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was terminated until it is determined that the termination is for a just cause because the failure to hear him renders the termination of his employment without legal effect. Condo Suite Club Travel, Inc. v. NLRC G.R. No. 125671. January 28, 2000. FACTS: Private respondent was employed as “housekeeper” with monthly compensation of P8,000. After two months, he signed a new employment contract with petitioner Condo Suite Club Travel, Inc. under the same terms of employment. Both firms belong to the ARCON group of companies. His salary was reduced. He also owned a car-for-hire which he rented to Joselito Landrigan who operated the car as a taxi with himself as driver. Landrigan approached the front desk clerk at petitioner‟s hotel requesting a collectible of P2000 be added to a certain Korean guests, Mr. Hu‟s bill. Mr. Hu later complained that he was overbilled. Private respondent explained his side being the front desk supervisor and owner of the car. Eventually, petitioner‟s staff confirmed the error and refunded the amount to the Korean. Petitioner terminated the services of private respondent on the ground of loss of confidence for the latter‟s malicious intent to defraud a guest of the hotel. ISSUE: W/N private respondent was illegally dismissed. HELD: Yes. Petitioner failed to prove by ample evidence that private respondent intended to defraud Mr. Hu. The front desk clerk admitted being the one responsible for entering the P2000 in Mr. Hu‟s statement of account. Also, Landrigan admitted approaching the front desk cler to demand payment of the transportation fee as he was hired by Mr. Hu‟s group for two days believing in good faith that Mr. Hu owed him P2000. Also, there is no indication that petitioner was afforded due process as, in fact, it was only upon service of termination that private respondent realized that the complaint of Mr. Hu was directed at him. As there is no valid and just cause, he is entitled to reinstatement without loss of seniority rights plus full backwages and other benefits withheld from him up to the time of his actual reinstatement. Lapanday Agricultural Development Corporation vs. Court of Appeals 324 SCRA 39 January 31, 2000

FACTS: Commando Security Service Agency provided security guards to Lapanday Agricultural Development Corporation under a contract of service. Subsequently, a wage order was issued, with the stipulation that the increase in wages for security services would be borne by the client/principal, in this case Lapanday. The latter refused to amend the contract to conform to the wage order, and the said contract ran through its natural life and expired, without the required adjustments having been made. The security agency then filed a case for the collection of a sum of money with the Regional Trial Court that had jurisdiction over the case. Lapanday opposed, stating the NLRC was the proper forum for the case. ISSUE: Where is the proper venue of the case, the RTC or the NLRC? HELD: The RTC. There was no employer-employee relationship in this case, since Commando simply sought to collect a sum of money and damages for breach of contract. The service contract had long since expired. Hence, reference must be made to the Civil, not Labor Code. Elizabeth Sublay v. NLRC G.R. No. 139194. January 31, 2000. FACTS: Elizabeth Sublay was employed as Chief Accountant for Euro-Swiss Food Inc. until her termination on December 31, 1994. In filing a case for illegal dismissal, she claimed that she was unjustly dismissed as there was not just and valid cause for her dismissal. The Labor Arbiter ordered private respondent to pay petitioner her separation pay. She appealed the decision to the NLRC; however petitioner filed her appeal seven days late. The NLRC dismissed her appeal.



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ISSUE: W/N NLRC committed grave abuse of discretion in denying the appeal on a mere technicality. HELD: No. The perfection of appeal within the statutory or reglementary period is not only mandatory but also jurisdictional and failure to do so renders the questioned decision final and executory, and deprives the appellate court the legal authority to alter the final judgment to entertain the appeal. Samahan ng Manggagawa sa Moldex Products, Inc. v. NLRC G.R. No. 119467 February 1, 2000. FACTS: Petitioners and private respondents were faced with a bargaining deadlock. Petitioners then filed a notice of strike with the NCMB. Later, the union conducted a strike vote among its members and the results were submitted to the Alliance of Nationalist and Genuine labor Organization for submission to the NCMB, but which was not made. Petitioners went on strike without the report of the strike vote submitted to the NCMB. Private respondents filed a petition to declare the strike illegal alleging that petitioners barricaded gates of private respondent and committed acts of violence, threats and coercion. Trial on th merits was conducted wherein Private respondent presented witnesses and evidence, Petitioners did not present any witness but instead relied on their Memorandum contending that respondent‟s evidence are inadmissible. The NLRC remanded the case to the Labor Arbiter. ISSUE: W/N the case was properly remanded and whether petitioner‟s strike was illegal. HELD: The Court is of the opinion that the NLRC committed grave abuse of discretion in remanding the case as the facts are already clear and complete. The records of the case and the proceedings before the Labor Arbiter confirm that the strike was illegal for failure to submit the strike vote to the NCMB and due to the acts of violence, threats and coercion committed during the strike. The requirements of procedural due process were complied with as both parties were allowed to present their witnesses and evidence, although petitioner opted instead to file a memorandum. Sugbuanon Rural Bank, Inc. vs. Laguesma 324 SCRA 425 February 2, 2000 FACTS: Sugbuanon Rural Bank employed some 5 supervisory employees. APSOTEU-TUCP, a legitimate labor organization, then filed a petition for certification election of the said supervisory employees. The bank opposed the petition on the ground that the supervisory employees were actually managerial/confidential employees. In addition, the union was represented in the petition by ALU-TUCP, and since according to the Bank the latter also sought to represent the rank and file members, granting the petition would violate the principle of separation of unions. ISSUE: Should the petition for certification election be granted, or denied? HELD: It should be granted. For one, the supervisory employees cannot be considered managerial or confidential employees. While the nature of the employees' work (evaluating borrowers' capacity to pay, approving loans, scheduling terms of repayment of the latter, and endorsing delinquent accounts to legal counsel for collection) indeed constituted the core of the bank's business, their functions did not fall within the definition of either a managerial employee (lay down and execute management policies related to labor relations) or a confidential employee (they did not act in a confidential capacity to persons who formulate and execute management policies related to labor relations). Secondly, granting the petition would not be violative of the separation of union doctrine. The petition for certification election was filed by APSOTEU-TUCP, a legitimate labor organization. True, it was assisted to some extent by ALU and the national federation TUCP. However, APSOTEU-TUCP had a separate legal personality from ALU and TUCP, under the principle that a local union maintains its separate legal personality despite affiliation with a national federation. Laureano vs. Court of Appeals 324 SCRA 414



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February 2, 2000

FACTS: Petitioner, a Filipino citizen, was a Singapore Airlines pilot, hired by the latter as an expatriate pilot with a fixed term contract through its Manila Area Manager. Due to a recession that hit the airline industry, Singapore Airlines retrenched several pilots, including petitioner, giving him three months salary in lieu of notice. The plaintiff, needing more time to relocate his family, asked for three months notice. He was given two months notice and one month's salary. He then filed an illegal dismissal complaint against the airline. ISSUES: 1.) Can an employee with a fixed period of employment be retrenched? 2.) Can retrenchment be valid if the employer merely fails to realize the expected profits, even if it is not suffering actual losses? HELD: 1.) Yes. The petitioner's employment contract allowed for pre-termination of employment. Since he agreed to the employment terms and conditions of Singapore Airlines, he was bound by such a clause. 2.) No. There must be actual losses (expenses are greater than income on the balance sheet). However, in this case, Singapore Airlines proved that it suffered actual losses. Hence, the petitioner's termination was for an authorized cause. Jo vs. NLRC 324 SCRA 437 February 2, 2000 FACTS: Peter Mejila was a barber employed by a barbershop. The owners of the shop attempted to mediate in the incessant squabbling between Mejila and a fellow employee. Mejila then unilaterally demanded his separation pay and other benefits, despite his employers' assurances that he was not being dismissed. He then turned over the duplicate keys of the shop (which he held as caretaker) to the cashier and took all his personal belongings from his workplace, and found similar employment in another shop. He then filed a complaint for illegal dismissal. ISSUE: Was Mejila dismissed, or did he abandon his employment? HELD: He abandoned his work. This was manifested by: His having bragged to fellow workers his intention to quit his work in the shop; his surrender of the shop's keys and his taking all of his personal belongings from the said place; his failure to report for work and not giving any valid reason for such; he acquired employment in another shop immediately, despite reassurances that he could stay in his old place of work; and finally, his complaint for illegal dismissal did not include a prayer for reinstatement. All of these show concurrence of the intent to abandon his work and overt acts that show his lack of interest in continuing his work. Vinoya v. NLRC G.R. No. 126596 February 2, 2000. FACTS: Petitioner Vinoya was hired by RFC as sales representative. He avers that he was transferred by RFC to PMCI, an agency which provides RFC with additional contractual workers. In PMCI, he was reassigned to RFC as sales representative and then later informed by the personnel manager of RFC that his services were terminated. RFC maintains that no employer-employee relationship existed between petitioner and itself. Petitioner filed complaint for illegal dismissal. RFC alleges that PMCI is an independent contractor as the latter is a highly capitalized venture. ISSUE: W/N petitioner was an employee of RFC and thereby, illegally dismissed. HELD: Yes. PMCI was a labor-only contractor. Although the Neri doctrine stated that it was enough that a contractor had substantial capital to show it was an independent contractor, the case of Fuji Xerox clarified the doctrine stating that an independent business must undertake



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the performance of the contract according to its own manner and method free from the control of the principal. In this case, PMCI did not even have substantial capitalization as only a small amount of its authorized capital stock was actually paid-in. Also, PMCI did not carry on an independent business or undertake the performance of its contract according to its own manner and method. Furthermore, PMCI was not engaged to perform a specific and special job or service, which is one of the strong indicators that it is an independent contractor. Lastly, in labor-only contracting, the employees supplied by the contractor perform activities, which are directly related to the main business of its principal. It is clear that in this case, the work of petitioner as sales representative was directly related to the business of RFC. Since due to petitioner‟s length of service, he attained the status of regular employee thus cannot be terminated without just or valid cause. RFC failed to prove that his dismissal was for cause and that he was afforded procedural due process. Petitioner is thus entitled to reinstatement plus full backwages from his dismissal up to actual reinstatement. Cruz vs. NLRC 324 SCRA 770 February 7, 2000

FACTS: Petitioner was an employee of Norkis Distributors. In the course of her duties, she collapsed and was subsequently diagnosed as suffering from meningitis. Norkis then terminated her, citing health reasons as basis. It also cited the petitioner's supposedly unexplained absence for three months, which allegedly constituted abandonment. Petitioner then filed an illegal dismissal case against Norkis. ISSUE: Was petitioner illegally dismissed? HELD: Yes. Under the Labor Code, for disease to serve as the basis for dismissal of an employee, the latter's continued employment while suffering from the disease must either be prohibited by law or prejudicial to his health or that of his co-employees. Furthermore, there must be a certification by a competent public health authority that the disease is such that it cannot be cured within a six-month period, even with proper medical treatment. In the case at bar, Norkis failed to overcome the burden of proof incumbent upon it as the employer that it had complied with the aforesaid provisions. Furthermore, in order to constitute abandonment, there must be: 1.) failure to report for work/absence without justifiable reason, and 2.) clear intention to sever the employer-employee relationship. The second element is the more determinative factor. In the case at bar, the petitioner was absent because she was confined in the hospital for treatment for three months. Norkis could not have been unaware of her medical condition, since she had collapsed within company premises. Furthermore, in its termination letter, Norkis specifically stated her "ill-health" as the ground for her dismissal. Hence, there was no abandonment. OSS Security and Allied Services, Inc. v. NLRC G.R. No. 112752 February 9, 2000. FACTS: Private respondent is a lady Security Guard of OSS Security Agency. He was last assigned at Vicente Madrigal Condominium II located in Ayala Avenue, Makati. In a memorandum, the Building Administrator of VM Condomunium II complained of the laxity of the guards in enforcing security measures and requested to reorganize the men and women assigned to the building to induce more discipline and proper decorum. Petitioner was then transferred to Minami International Corporation in Taytay, Rizal. Private respondent filed a complaint alleging that her transfer amounted to an unjust dismissal. The NLRC ruled that transfer of private respondent was illegal. ISSUE: W/N the transfer of private respondent was illegal. HELD: No. Service-oriented enterprises adhere to the business adage that, “the customer is always right.” In the employment of personnel, the employer has management prerogatives subject only to limitations imposed by law. The transfer of an employee would only amount to constructive dismissal when such is unreasonable, inconvenient, or prejudicial to the employee, and when it involves a demotion in rank or diminution of salaries, benefits and other privileges.



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In this case, the transfer was done in good faith and in the best interest of the business enterprise. Evidence does not show that petitioner discriminated against private respondent in effecting her transfer as such was done to comply with a reasonable request. Also, the mere inconvenience of a new job assignment does not by itself make the transfer illegal. Cheniver Deco Print Technics Corporation v. NLRC G.R. No. 122876 February 17, 2000. FACTS: Petitioner is printing business in Sta. Cruz Makati. Petitioner informed its workers that it was going to transfer its site in Makati to Batangas. It gave its employees time to inform the management of their willingness to go with petitioner, otherwise, they would find replacements. The union advised petitioner that its members were not willing to transfer to the new site. Private respondents herein filed a complaint for ULP, illegal dismissal, underpayment of wages, non-payment of holiday pay, 13th month pay, SIL and separation pay. The Labor arbiter directed petitioner to pay separation pay and attorney‟s fees. The NLRC affirmed the decision, but deleted the award of attorney‟s fees. ISSUE: W/N private respondents are entitled to separation pay by virtue of their refusal to transfer to the business in Batangas. HELD: Yes. Although there is no complete dissolution of petitioner‟s undertaking, but a mere relocation; the phrase, “closure or cessation of operation of an establishment not due to serious business losses or reverses,” under Article 283 of the Labor Code includes the cessation of only part of a company‟s business. Petitioner did have legitimate reason to relocate its p lant due to the expiration of the lease contract in Makati; however, petitioner is still required to pay its workers separation pay. Cessation of operation not due to serious business losses is an authorized cause for termination; but the Labor Code provides that the terminated employees are entitled to separation pay of 1 month pay or at least ½ month for every year of service, whichever is higher. Manila Electric Company v. Secretary of Labor G.R. No. 127598 February 22, 2000.

FACTS: Meralco and its union MEWA renegotiated its 1992-1997 CBA insofar as the last two-year period was concerned. The Secretary of Labor assumed jurisdiction and granted the arbitral awards. There was no question that these arbitral awards were to be given retroactive effect. However, the parties dispute the reckoning period when retroaction shall commence. Meralco claims that the award should retroact only from such time that the Secretary of Labor rendered the award. The union argues that the awards should retroact to such time granted by the Secretary who has plenary and discretionary power to determine the effectivity of the arbitral award. The union cited the case of St. Luke‟s and Mindanao Terminal where the Secretary ordered the retroaction of the CBA to the date of expiration of the previous CBA. ISSUE: When should the arbitral award retroact?

HELD: Labor laws are silent as to when an arbitral award in a labor dispute where the Secretary has assumed jurisdiction by virtue of Art. 263 (g) shall retroact. Despite the silence of the law, teh Court ruled that the CBA arbitral awards granted after six months from the expiration of the last CBA shall retroact to such time agreed upon by both the employer and the employees or their union. Absent such agreement as to retroactivity, the award shall retroact to the first day after the six-month period following the expiration of the last day of the CBA should there be one. In the absence of a CBA, the Secretary‟s determination of the date of effectivity as part of his discretionary powers over arbitral awards shall control. Jardin v. NLRC G.R. No. 119268 February 23, 2000.

FACTS: Petitioners were drivers of private respondent driving the latter‟s taxicabs every other day on a 240 hour work schedule under the boundary system where petitioners earn an



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average of P400 daily and private respondent regularly deducts an amount for the washing of the taxi units. Petitioners decided to form a labor union. Later, private respondent refused to let petitioners drive their taxicabs. Petitioners filed with the labor arbiter a complaint for ULP, illegal dismissal, and illegal deductions. The labor arbiter dismissed the complaint. The NLRC reversed the judgment stating that dismissal must be for just cause and after due process. Private respondent‟s first motion for reconsideration was denied. It filed another MR, which was then granted. ISSUES: W/N an ee-er relationship exists, thereby making the dismissals illegal. HELD: Yes. The relationship between jeepney-owners and jeepney drivers under the boundary system is that of ee-er and not that of lessor-lessee. The fact that the drivers do not receive fixed wages is not sufficient to withdraw the relationship from that of er and ee. The termination of employment must be effectuated in accordance with law. With regard to the amount deducted for washing, such was not illegal as such is indeed a practice in the taxi industry and is dictated by fair play. Malayang Samahan ng mga Manggagawa sa M. Greenfield (MSMG0UWP) v. Ramos, NLRC G.R. No. 113907 February 28, 2000. FACTS: Petitioner MSMS, (local union) is an affiliate of ULGWP (federation). A local union election was held under the action of the federation. The defeated candidates filed a petition for impeachment. The local union held a general membership meeting. Several union members failed to attend the meeting. The local union requested the company to deduct the union fines from the wage of those union members who failed to attend the general membership meeting. The Secretary General of the federation disapproved the resolution imposing the P50 fine. The company then sent a reply to petitioner‟s request stating it cannot deduct fines without going against certain laws. The imposition of the fine became the subject of a bitter disagreement between the Federation and the local union culminating in the latter‟s declaration of general autonomy from the former. The federation asked the company to stop the remittance of the local union‟s share in the education funds. The company filed a complaint of interpleader with the DOLE . The federation called a meeting placing the local union under trusteeship and appointing an administrator. Petitioner union officers received letters from the administrator requireing them to explain why they should not be removed from their office and expelled from union membership. The officers were expelled from the federation. The federation advised the company of the expulsion of the 30 union officers and demanded their separation pursuant to the Union Security Clause in the CBA. The Federation filed a notice of strike with the NCMB to compel the company to effect the immediate termination of the expelled union officers. Under the pressure of a strike, the company terminated the 30 union officers from employment. The petitioners filed a notice of strike on the grounds of discrimination; interference; mass dismissal of union officers and shop stewards; threats, coercion and intimidation; and union busting. The petitioners prayed for the suspension of the effects of their termination. Secretary Drilon dismissed the petition stating it was a intra-uion matter. Later, 78 union shop stewards were placed under preventive suspension. The union members staged a walk-out and officially declared a strike that afternoon. The strike was attended by violence. ISSUE: 1. W/N the company was of illegal dismissal. 2. W/n the strike was illegal. 3. W/n petitioners can be deemed to have abandoned their work. HELD: 1. Yes. The charges against respondent company proceeds from one main issue -- the

termination of several employees upon the demand of the federation pursuant to the union security clause. Although the union security clause may be validly enforced, such must comply with due process. In this case, petitioner union officers were expelled for allegedly committing acts of disloyalty to the federation. The company did not inquire into the cause of the expulsion and merely relied upon the federation‟s allegations. The issue is not a purely intra-union matter as it was later on converted into a termination dispute when the



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company dismissed the petitioners from work without the benefit of a separate notice and hearing. Although it started as an intra-union dispute within the exclusive jurisdiction of the BLR, to remand the same to the BLR would intolerably delay the case and the Labor Arbiter could rule upon it. As to the act of disaffiliation by the local union; it is settled that a local union has the right to disaffiliate from its mother union in the absence of specific provisions in the federation‟s constitution prohibiting such. There was no such provision in federation ULGWP‟s constitution.

2. No. As to the legality of the strike; it was based on the termination dispute and petitioners believed in good faith that in dismissing them, the company was guilty of ULP. A no-strike, no lockout provision in the CBA can only be invoked when the strike is economic. As to the violence, the parties agreed that the violence was not attributed to the striking employees alone as the company itself hired men to pacify the strikers. Such violence cannot be a ground for declaring the strike illegal.

3. As to the dismissal of the petitioners; respondents failed to prove that there was abandonment absent any proof of petitioner‟s intention to sever the ee-er relationship.

Coral Point Development Corporation v. NLRC G.R. No.129761 February 28, 2000.

FACTS: The LA ordered petitioner to pay respondents the sum of P655, 866.41. Petitioner appealed to the NLRDC and a motion for the reduction of the supersedeas bond to the NLRC and a motion for the reduction of the supersedeas bond to P100,000 and thereafter posted a cash bond of P100,000. The NLRC dismissed the appeal for insufficiency of the bond. Petitioner said the Star Angel doctrine should apply where the appeal may be perfected after that period upon posting of a cash or surety bond. However, the NLRC disagreed stating that in this case, the petitioner did not file a motion for reduction of bond within the period but instead posted a bond in an amount not equivalent to the monetary award. ISSUE: W/N there was a motion for reduction filed within the reglementary period. HELD: Yes. Basically, that petitioner did file a motion within the period is supported by the following: 1. The motion for reduction was stamped with the “received” rubber stamp marker of the NLRC

and indicated the date of filing as 6.7.96. 2. Both the motion and the appeal memorandum were sent to respondents in one envelope

and sent by registered mail under Reg. Receipt 3576. 3. The same person notarized both the motion and the appeal on the same date. 4. On the last page of their comments, respondents stated that “the motion for reduction

should be founded on meritorious grounds.” This was found by the SC to be an implied admittance of the receipt of the motion. Besides, respondents could just as well have stated in their comments that no motion was filed.

Navarro v. NLRC G.R. No. 116464. March 1, 2000.

FACTS: Petitioners were jeepney driver of private respondent Cornejo on the boundary system. Due to a change in schedule, they did not report to work as protest. They were then replaced. Petitioners filed a complaint for illegal dismissal asking for separation pay and other benefits. On November 26, 1991, the labor arbiter rendered judgment in favor of petitioners. Private respondents were served a copy of the decision on April 3, 1992. They filed their memorandum on appeal on April 13, 1992; however the appeal bond was only filed on April 30, 1992. Also, such bond was found to be spurious. It was only on July 20, 1993 that a substitute bond was issued by another company. ISSUE: W/N the NLRC has jurisdiction to hear the appeal. HELD: No. The perfection of an appeal within the reglementary period and in the manner prescribed by law is jurisdictional, and noncompliance with such legal requirement is fatal and has the effect of rendering the judgment final and executory. Perfection of an appeal includes



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the filing, within the prescribed period of the memorandum of appeal and posting of the appeal bond. In cases where the judgment involves a monetary award, as in this case, the appeal may be perfected only upon posting of a cash or surety bond to the NLRC. Since the private respondents received the LA‟s decision on April 3, they had only until April 13 to file their appeal. The bond was posted only on April 30; beyond the reglementary period. The requirement of posting the bond has only been relaxed on grounds of substantial justice and special circumstances which are not attendant in this case. Furthermore, the bond posted was not genuine. The decision can no longer be amended nor altered by the labor tribunal. National Federation of Labor v. NLRC G.R. No. 127718 March 2, 2000.

FACTS: Petitioners are members of the NFL, employed by private respondents in the Patalon Coconut Estate in Zamboanga City. Pursuant to RA 6657, the Comprehensive Agrarian Reform Law, the Patalon Cocount Estate was warded to the Patalon Estate Reform Association, of which petitioners are members and co-owners. As a result of this acquisition, the Patalon Estate shut down operations and the employment of the petitioners were severed. Petitioners did not receive separation pay. Petitioners became co-owners of the land and subsequently filed complaints for illegal dismissal. The Regional Arbitration Branch of the NLRC dismissed the charge for illegal dismissal but ordered the payment of separation pay. The NRLC reversed the decision. ISSUE: W/N an employer that was compelled to cease its operation because of compulsory acquisition by the gov‟t of its land for purposes of agrarian reform is liable to pay separation pay to its affected employees. HELD: No. The peculiar circumstance in the case at bar involves neither the closure of an establishment nor a reduction in personnel as contemplated in Article 283. The closure contemplated in 283 is a voluntary act on the part of the employer as may be gleaned for the wording, “the employer MAY also terminate,” denoting that it is directory in nature. The Labor Code does not contemplate a situation where the closure is forced upon the employer. As such, petitioners are not entitled to separation pay as private respondents did not voluntary shut down operations as they even sought to be exempted from the coverage of RA 6657. Diamonon v. DOLE, Laguesma G.R. No. 108951 March 7, 2000.

FACTS: Petitioner was National Executive VP of the NACUSIP and VP for Luzon of the PACIWU. He later learned of his removal from the positions he held in both unions in a resolution approved during a meeting of the National Executive Boards of both unions. Petitioner sought reconsideration of the resolution on his removal; at the same time, he initiated a complaint before the DOLE against the National President of NACUSIP and PACIWU questioning the validity of his removal. He filed a second complaint accusing officers of the NACUSIP and PACIWU of violation of the C/BL, illegal disbursement of union funds and abuse of authority. The first case was decided declaring his removal null and void. The Med-arbiter dismissed the second complaint for lack of personality. Petitioner appealed the dismissal of the second complaint to public respondent DOLE who issued the order holding that petitioner‟s failure to show that the administrative remedies have been exhausted was fatal to his cause. Petitioner alleges that public respondents “switched” the ground for dismissal from that of “lack of personality to file the complaint” to “non exhaustion of administrative remedies.” Thereby by going outside the issued and purporting to adjudicate on something upon which the parties were not heard. ISSUE: W/N public respondent committed grave abuse of discretion in dismissing the appeal interposed. HELD: No. An appellate court may only pass upon errors assigned, but such is not without exceptions. An appellate court, as well as those in administrative bodies, are given broad discretionary powers to waive the lack of assignment of errors and consider errors not assigned.



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In this case, not only did petitioner fail to comply with the IRR of the Labor Code, but he also did not exhaust the remedies set forth by the C/BL of both unions. A party with an administrative remedy must not merely initiate the prescribed administrative procedure to obtain relief, but also to pursue it to its appropriate conclusion before seeking judicial intervention to prevent unnecessary and premature resort to said bodies. Medenilla vs. Philippine Veterans Bank 328 SCRA 1 March 13, 2000 FACTS: Philippine Veterans Bank was liquidated under the auspecies of the Monetary Board. As a result, petitioners were terminated but immediately rehired. However, their new employment contracts stipulated that their employment was strictly temporary, for the duration of the undertaking for which the employee was hired. The Liquidator also had the right to terminate the employee any time, if the latter was found to be incompetent, unqualified, etc. Subsequently, the petitioners were dismissed. The reason given for the dismissal was to reduce costs inherent to the liquidation process. The petitioners then filed an illegal dismissal case. ISSUE: Was there an illegal dismissal? HELD: Yes. True, the employees were employed under the new contract for a fixed period, as seen in the various stipulations of the agreement. A fixed term contract is valid, provided: (1) The fixed period was knowingly and voluntarily agreed upon by the parties, with no vitiation of consent, particularly in relation to the employee, and (2) The employer and employee dealt with each other on more or less equal bargaining terms, with no moral compulsion exercised by the former on the latter. Both were present in this case. However, the reason given by the Liquidator for termination was inadequate. It was a mere allegation of the need to cut costs, with no concrete proof of actual losses to substantiate the same. Since the employer in this case did not meet the burden of proving that the dismissal was in fact valid, the conclusion is that it was an illegal dismissal. Millares v. NLRC G.R. No. 110524 March 14, 2000. FACTS: Petitioners were employed by ESSO International Shipping Company. Petitioner Millares applied for a leave of absence and informed the Operations Manager of his intention to avail of the optional retirement plan under the Consecutive Enlistment Incentive Plan (CEIP). Such was denied. Petitioner Lagda also applied for a leave of absence and informed the Operations Manger of his intention to avail of the optional early retirement plan in view of his 20 years of service which was likewise denied. Both petitioners requested for extension of their leaves of absence. But later, they discovered that they were dropped from the roster of crew members. ISSUE: 1. W/N petitioners are contractual employees whose employment are terminated every time

their contracts expire and were thus validly dismissed. 2. Whether they should have been granted the retirement benefits under the optional early

retirement policy. HELD: 1. No. The primary standard to determine a regular employment is the reasonable connection

between the activity performed by the employee in relation to the usual business or trade of the employer. In this case it is undisputed that petitioners were employees of private respondents. Also, as they had been in the employ of private respondents for 20 years as they were repeatedly re-hired after the expiration of their respective contracts, it is clear that their service was necessary and indispensable to private respondent‟s business. Therefore, they could only be dismissed for just and valid cause. There is no showing that they abandoned their job as there was no showing of their unjustified refusal to resume employment.



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2. No. The evidence of petitioners regarding the announcement by Captain Estaniel of the controverted optional retirement plan consisted merely of affidavits of petitioners and their witnesses which was successfully rebutted by the evidence of private respondents. Nowhere in the CEIP is there reference to an optional retirement plan, nor a provision for retirement for service of 20 years. There are clear provisions on retirement benefits.

Gabriel, et al v. Secretary of Labor G.R. No. 115949 March 16, 2000. FACTS: Petitioners comprise the Executive Board of the Solidbank union, the collective bargaining agent for the Solidbank corporation. Private respondents are members of said union. The union‟s EB decided to retain the services of their counsel in connection with negotiations for a new CBA. A general membership meeting was called where majority of union members approved a resolution confirming the decision to engage the services of the union‟s counsel, Atty. Lacsina. The resolution provided that 10% of the total economic benefits that may be secured be given to the counsel at attorney‟s fees. Also it contained an authorization for Solidbank Corporation to check-off said attorney‟s fees from the first lump sum of payment of benefits under the new CBA. Private respondents issued a complaint for illegal deduction. ISSUE: W/N the union may check-off attorney‟s fees. HELD: No. Article 241 has 3 requisites for the validity of the special assessment for union‟s incidental expenses, attorney‟s fees and representation expenses. They are: 1. authorization by a written resolution of majority of all the members at the general

membership meeting called for the purpose 2. secretary‟s record of the minutes of the meeting 3. individual written authorization for check-off duly signed by the employees concerned. Such requirements were not complied with as there were no individual written check off authorizations; thus, the employer cannot legally deduct thus the assessment. The union should be made to shoulder the expenses incurred for the services of a lawyers and accordingly, reimbursement should be charged to the union‟s general fund or account. No deduction can be made from the salaries of the concerned employees other than those mandated by law. PAL v. NLRC G.R. No. 126805 March 16, 2000. FACTS: Private respondents Pescante and another PAL employee, Vcente were employed by Pal as load controller and check-in clerk, respectively. On January 19, 1993, a passenger by the name of Cominero checked in for the flight. It appears that Vicente reflected a lighter weight of baggage on Cominero‟s ticket to make it appear that the same was within the allowable level. When the anomaly was later discovered, Vicente went to the cashier to pay the excess baggage fee. Cominero further paid the sum representing the excess baggage fee. Vicente implicated private respondent in the anomaly. Private respondent and Vicente were charged with “fraud against the company” and were found guilty and meted with the penalty of dismissal. The NLRC found that the alleged defrauding of petitioner‟s excess baggage revenue was not the handiwork of private respondent and that petitioner failed to show it suffered loss in revenues as a consequence of private respondent‟s questioned act. ISSUE: W/N private respondent was validly dismissed. HELD: Yes. The core of petitioner‟s evidence against private respondent included the report of Vicente. It was erroneous for the NLRC to have discredited Vicente‟s testimony because he appeared guilty as well. There is substantial evidence showing that private respondent had direct involvement in the illegal pooling of baggage. Private respondent‟s act is inexcusable as it constitutes a serious offense under petitioner‟s Code of Discipline. The fact that petitioner failed to show it suffered losses in revenue is immaterial as private respondent‟s mere attempt to deprive petitioner of its lawful remedy is already tantamount to fraud. Therefore, private respondent was validly dismissed and as such was for a just cause, he is not entitled to backwages nor separation pay.



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New Pacific Timber Supply Co. v. NLRC G.R. No. 124224 March 17, 2000.

FACTS: the NFL was the sole and exclusive bargaining representative for the rank and file employees of petitioner. NFL started to negotiate for better terms and conditions of employment; which were met with resistance by petitioner company. The NFL filed a complaint for ULP on the ground of refusal to bargain collectively. LA issued an order declaring the company guilty of ULP and ordering the CBA proposals submitted by the NFL as the CBA between the parties. Later, 186 of private respondents claiming they were wrongfully excluded from the benefits under the CBA filed a petition for relief. Petitioner asserts that private respondents are not entitled to the benefits under the CBA because employees hired after the term of a CBA are not parties to the agreement and may not claim benefits thereunder. As for the CBA, petitioner maintains that the force and effect of the CBA‟s terms are limited to only three years and cannot extend to terms and conditions which ceased to have force and effect. ISSUES: 1. W/N the terms of an existing CBA as to its economic provisions can be extended beyond the

period stipulated therein, even beyond the three year period prescribed by law, in the absence of a new agreement.

2. W/N the rank and file employees hired after the term of the CBA, considering their subsequent membership in the bargaining unit, are parties to the agreement and may claim benefits thereunder.

HELD: 1. Yes. It is clear from Art. 253 that until a new CBA has been executed by and between the

parties, they are duty bound to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement. In the case at bar, no new agreement was entered between the parties pending appeal of the decision in the NLRC. Consequently, the employees from to the year 1985 (after expiration of the CBA) onwards would be deprived of a substantial amount of monetary benefits if the terms and conditions of the CBA were not to remain in force and effect which runs counter to the intent of the Labor Code to curb labor unrest and promote industrial peace.

2. Yes. When a CBA is entered into by the union representing the employees and the employer, even the non-union members are entitled to the benefits of the contract. A laborer can claim benefits from a CBA entered into the company and the union of which he is a member at the time of the conclusion of the agreement even after he has resigned from said union. Therefore, the benefits under the CBA should be extended to those who only became such after it expired, to exclude them would constitute undue discrimination.

Imbuido v. NLRC G.R. No. 114734 March 31, 2000.

FACTS: Petitioner was employed as a date encoder by private respondent. From 1988 until 1991, she entered into 13 employment contracts with private respondent, each contract for a period of 3 months. In September 1991, petitioner and 12 other employees allegedly agreed to the filing of a PCE of the rank and file employees of private respondent. Subsequently, petition received a termination letter due to “low volume of work.” Petitioner filed a complaint for illegal dismissal. The Labor Arbiter found in favor of petitioner ruling that she was a regular employee. The NLRC reversed the decision stating that although petitioner is a regular employee, she has no tenurial security beyond the period for which she was hired (only up to the time the specific project for which she was hired was completed). Petitioner filed the present appeal. ISSUE: W/N petitioner is a regular employee entitled to tenurial security and was therefore unjustly dismissed. HELD: Yes. Even though petitioner is a project employee, as in the case of Maraguinot, Jr. v. NLRC, the court held that a project employee or member of a work pool may acquire the status of a regular employee when the following concur: 1. there is continuous rehiring of project employees even after the cessation of a project



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2. the tasks performed by the alleged “project employee” are vital, necessary and indispensable to the usual business and trade of the employer.

Private respondent was employed as a data encoder performing duties, which are usually necessary or desirable in the usual business or trade of the employer, continuously for a period of more than 3 years. Being a regular employee, petitioner is entitled to security of tenure and could only be dismissed for a just and authorized cause; low volume of work is not a valid cause for dismissal under Arts. 282 or 283. Having worked for more than 3 years, petitioner is also entitled to service incentive leave benefits from 1989 until her actual reinstatement since such is demandable after one year of service, whether continuous or broken. Lagera v. NLRC G.R. No. 123636 March 31, 2000.

Petitioner did not file a motion for reconsideration with the NLRC and immediately filed a special civil action for certiorari. An MR is indispensable for it affords the NLRC an opportunity to rectify errors or mistakes it might have committed before resort to the courts can be had. Certiorari will lie only if there is no appeal or any other plain, speedy and adequate remedy in the ordinary course of law against acts of public respondent. As the MR was not filed within the 10 day reglementary period, the questioned order of the NLRC has become final and executory. Torres v. NLRC G.R. No. 107014 April 12, 2000.

FACTS: Petitioner was employed as a security guard by E & R Security agency. During a routinary meeting of the security guards, petitioner stood up and shouted at the presiding officer. She was then suspended for 15 days. Later, she received a letter that she was reassigned and required to report to respondent‟s Manila office. Her services were terminated for abandonment when she failed to report for work in her new assignment. The Labor Arbiter found for petitioner. Private respondent appealed to the NLRC, which denied the appeal. The decision having become final, the LA issued a writ of execution on the reinstatement aspect, but it was not implemented as the monetary aspect remained to be determined. Later, NLRC sheriff issued a notice of Garnishment served on private respondent‟s deposit account with the PNB. The LA directed the PNB to release the amount. Meanwhile, respondent security agency filed with the LA a motion to quash the writ of execution on the ground that there has been a change in the situation of the parties which makes the execution inequitable. It contends that petitioner accepted employment from another security agency without previously resigning from respondent‟s agency. The NLRC then ordered the LA to resolve respondent‟s urgent motion to quash the writ of execution. ISSUE: W/N the Labor Arbiter should have ordered the release of the judgment award HELD: Yes. Execution is the final stage of litigation, the end of the suit. It cannot be frustrated except for serious reasons demanded by justice and equity. IT is the ministerial duty of the court to issue a writ of execution to enforce the judgment. The respondent agency‟s contention that there has been a change in the situation of the parties is without merit. It has been held that back wages awarded to an illegally dismissed employee shall not be diminished or reduced by the earnings by him elsewhere during the period of his illegal dismissal. The decision is final and the total amount representing the salary differentials and back wages awarded to the petitioner has been garnished from the account of respondent agency with no opposition or resistance. Therefore, it is the ministerial duty of the LA to release the money to petitioner. De la Salle University v. De La Salle University Employees Association G.R. No. 109002 April 12, 2000.

FACTS: On December 1986, De La Salle University and De La Salle University Employee‟s Association, which is composed of regular non-academic rank and file employees entered into a CBA. During the freedom period of such CBA, the Union initiated negotiations, which turned out to be unsuccessful. After several conciliation meetings, 5 out of 11 issues were resolved by the parties. A partial CBA was executed. The parties then entered into a Submission Agreement



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identifying the remaining issues for arbitration. The VA resolved the issues regarding: (1) scope of the bargaining unit; (2) union security clause; (3) security of tenure, (4) salary increases; (5) indefinite union leave, reduction of the union president‟ s workload, special leave, and (6) duration of the agreement. Subsequently both parties filed their respective motions for reconsideration and then this petition for certiorari assailing the decision of the VA. ISSUES: 1. W/N VA properly included the computer operators from the scope of the CBA and whether

the employees of the College of St. Benilde were properly excluded. 2. Whether the VA correctly upheld the union shop clause 3. Whether or not the VA correctly denied the union‟s proposal for the use of the “last in-first

out” method in the case of lay-off, termination due to retrenchment and transfer of employees.

4. Whether the VA correctly ruled that the university can no longer be required to grant a second round of wage increases.

5. W/n the VA correctly denied the union‟s proposals on the deloading of the union president, improved leave benefits and indefinite union leave with pay.

HELD: 1. Yes. The express exclusion of the computer operators in the past does not bar any re-

negotiation for future inclusion of the said employees in the bargaining unit. Also, as to the employees of the CSB, they were properly excluded at the two education institutions have their own separate juridical personality.

2. Yes. The right to refrain from joining labor organizations is limited. The legal protection granted to such right is withdrawn by operation of law where a labor union and an employer have agreed on a closed shop.

3. Yes. As an exercise of management prerogative, the University has the right to adopt valid and equitable grounds for terminating or transferring employees.

4. No. The financial capability of a company cannot be based on its proposed budget as such does not reflect the true financial condition of a company.

5. Yes. There was no justifiable reason for granting the same. Catubay v. NLRC G.R. No.119289 April 12, 2000. FACTS: Private respondent Fishwealth is a company engaged in the manufacture of canned sardines. The petitioners‟ job was to handle and process these frozen sardines in preparation for canning. Petitioners went on unpaid sick leave with the approval of private respondents. When they returned to work after their leave, respondents refused to take them back unless they applied with an employment agency and accept new terms of employment. Petitioners filed a complaint for payment of salary differentials and separation pay. Private respondents allege that petitioners are piece-rate workers and not entitled to minimum wage. LA ruled in favor of petitioners. Private respondents filed a manifestation and motion to admit appeal fee; while petitioners moved for execution of the judgment. Although the respondent‟s payment of the appeal fee and posting of the surety bond was late, the NLRC still took cognizance of their appeal and rendered a decision in favor of private respondents remanding the case to the labor arbiter. In the last 2 scheduled hearings, respondents did not submit any memorandum in support of their stand. Also they failed to appear at the hearings set by the labor arbiter. ISSUE: WN private respondents were denied due process. HELD: No. They were afforded more than an adequate chance to present their evidence. Private respondents failed to appear at the last hearing set by the labor arbiter, neither did they submit their memorandum. Also, this case has been pending for more or less 7 years. To remand the case to the labor arbiter for further proceedings would be the height of injustice. Samson v. NLRC G.R. No.121035 April 12, 2000.



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FACTS: Petitioner Samson received a letter calling the attention of petitioner‟s conduct during a Sales and Marketing Christmas gathering where Samson allegedly made utterances of obscene, insulting and offensive words towards the SPC‟s Management Committee. Complainant was given two days to explain why no disciplinary action should be taken against him and he was thereafter placed on preventive suspension. Samson replied stating that such utterances were only made in reference to a decision taken by the management committee on the Cua Lim Case and not to any specific person. Petitioner was thereafter informed in a letter that his employment was terminated. The Labor Arbiter rendered a decision declaring the dismissal of petitioner illegal. Both parties appealed the decision; petitioner filed a partial appeal of the denial of his claim for holiday pay and the cash equivalent of the rice subsidy; respondent company sought the reversal of the labor arbiter‟s ruling of illegal dismissal. The NLRC found that dismissal was made for just cause. ISSUE: W/N Petitioner was validly dismissed. HELD: No. Petitioner‟s dismissal was brought about by utterances made during an informal Christmas gathering. For misconduct to warrant dismissal, it must be in connection with the employee‟s work. In this case, the alleged misconduct was neither in connection with employee‟s work, as such utterances of petitioner is expected in informal gatherings; also, such conduct was not even of such serious and grave character. Furthermore, petitioner‟s outburst was in reaction to the decision of the management in a certain case and was not intended to malign on the person of the respondent company‟s president and general manager. Respondent company itself did not seem to consider the offense serious to warrant an immediate investigation. It is also provided in respondent company‟s rules and regulations that for conduct such as that of petitioner, a first offense would only warrant a “verbal reminder” and not dismissal. Petitioner‟s position does not fall within the definition of a managerial employee; and even assuming that he is, the ground for loss of confidence is without basis as it was not clearly established. Therefore, there was no just cause for petitioner‟s dismissal and thus was unlawful. Aparente, Sr. v. NLRC G.R. No. 117652 April 27, 2000.

FACTS: Petitioner was employed by Coca-Cola Bottlers Phils. Inc., as assistant mechanic. Petitioner drove private respondent‟s truck to install a panel sign and accidentally sideswiped a ten year old girl whose injuries incurred hospitalization expenses of up to P19,534.45. Such amount was not reimbursed by insurance as petitioner had no driver‟s license at the time of the accident; therefore private respondent shouldered the expenses. Private respondent conducted an investigation where petitioner was given the opportunity to defend himself. Petitioner was then dismissed for violating the company rules and regulation for blatant disregard of established control procedures resulting in company damages. ISSUE: W/N Petitioner was validly dismissed. HELD: Yes. Although petitioner contends that he was investigated simply for the offense of driving without a valid driver‟s license, it was clear that he was fully aware that he was being investigated for his involvement in the vehicular accident. It was also known to him that the accident caused the victim to suffer serious injuries leading to expenses which the insurance refused to cover. Due process does not necessarily require a hearing, as long as one is given reasonable opportunity to be heard. Despite petitioner‟s 18 years of satisfactory service and that the infraction committed by him was his first offense; petitioner‟s dismissal is justified by the company rules and regulations. In order to constitute willful disobedience, the employee‟s conduct must have been willful or intentional and the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge. Such elements are attendant in the present case. Although an employee who is dismissed for just cause is not entitled to any financial assistance, due to equity considerations as this is petitioner‟s first offense in 18 years of service, he is to be granted separation pay by way of financial assistance of ½ month‟s pay for every year of service. Philippine Aeolus Automotive United Corporatoin v. NLRC G.R. No. 124617



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April 28, 2000. FACTS: Private respondent was a company nurse for the Philippine Aeolus United Corporation. A memorandum was issued by the personnel manager of petitioner corporation to respondent Cortez asking her to explain why no action should be taken against her for (1) throwing a stapler at plant manager William Chua; (2) for losing the amount of P1,488 entrusted to her, (3) for asking a co-employee to punch in her time card one morning when she was not there. She was then placed on preventive suspension. Another memorandum was sent to her asking her to explain why she failed to process the ATM applications of her co-employees. She submitted a written explanation as to the loss of the P1,488 and the punching in of her time card. A third memorandum was sent to her informing her of her termination from service for gross and habitual neglect of duties, serious misconduct, and fraud or willful breach of trust. ISSUE: 1. W/N petitioenr was illegally dismissed. 2. If such dismissal was illegal, W/N petitioner should be entitled to damages. HELD: 1. Yes. The grounds by which an employer may validly terminate the services of an employee

must be strictly construed. As to the first charge, respondent claims that plant manager William Chua had been making sexual advances on her since her first year of employment and that when she would not accede to his requets, he threatened that he would cause her termination from service. As to the second charge, the money entrusted to her was not lost, but given to the personnel-in charge for proper transmittal as evidenced by a receipt signed by the latter. As to the third charge, she explains that she asked someone to punch in her card as she was doing an errand for one of the company‟s officers and with the permission of William Chua. As to the fourth charge, she asserts that she had no knowledge thereof. To constitute serious misconduct to justify dismissal, the acts must be done in relation to the performance of her duties as would show her to be unfit to continue working for her employer. The acts complained of did not pertain to her duties as a nurse nor did they constitute serious misconduct. However due to the strained relations, in lieu of

reinstatement, she is to be awarded separation pay of one month for every year of service until finality of this judgment.

2. Yes. Private respondent admittedly allowed four years to pass before coming out with her employer‟s sexual impositions; but the time to do such varies depending upon the needs, circumstances and emotional threshold of the employee. It is clear that respondent has suffered anxiety, sleepless nights, besmirched reputation and social humiliation by reason of the act complained of. Thus, she should be entitled to moral and exemplary damages for the oppressive manner with which petitioner‟s effected her dismissal and to serve as a warning to officers who take advantage of their ascendancy over their employees.

Serrano v. NLRC GR No 117040 May 4, 2000 FACTS: Respondent Isetann Dept Store dismissed petitioner due to retrenchment. However

instead of giving the required 30 day notice, respondents gave 30 days pay arguing that this is effective notice. They made the dismissed employees sign quitclaims so that there would be no more claims from them. The Labor Arbiter ruled that the employees were illegally dismissed because they were not afforded due process because they failed to prove retrenchment due to losses. The NLRC reversed the ruling saying that the dismissal was justified because it was due to redundancy and not retrenchment. The NLRC however did not rule on whether the 30 day pay was a sufficient substitute for the 30 day notice. The petitioner argues further that they should be given the chance to present his side. ISSUE: Whether or not the 30 days pay is sufficient replacement for 30 day notice. HELD: The Court ruled that since the dismissal is due to an authorized cause only notice is required and that the employee has no right to present his side. The 30 day notice is needed in order to afford the employee enough time to look for work and to give the DOLE time to look into the validity of the authorized cause. 30 days pay is not enough to replace the notice



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requirement because it would not serve the purpose of the notice. Additionally, backwages are not a severe punishment because it is a consequence of the employer‟s failure to give notice and due process and the employee is therefore not deemed terminated so he should be compensated for that period.

Industrial Management International Devt Corp v. NLRC Gr No 101723 May 11, 2000 FACTS: The Labor Arbiter rendered a decision awarding separation pay and backwages to the respondents and no appeal was filed therefore the decision became final and executory. The LA then issued a writ of execution but it was returned unsatisfied. He then issued an alias writ of execution to which the petitioner filed a motion to quash, arguing that the writs changed the liability by making the petitioners solidarily liable instead of joint by adding and/or to the writ. The NLRC upheld the validity of the writ sying that according to the facts, they are solidarily liable and that they may waive any error, defect or irregularity in any proceeding before them. ISSUE: Whether or not the liability of the petitioner is solidary or joint. HELD: The Court held that since the dispositive portion of the LA‟s decision failed to state that the liability was solidary, it should be joint. Solidary liability cannot be lightly inferred. Once the decision becomes final and executory it is removed from the jurisdiction of the body rendering the decision. The LA can no longer amend the decision. The liability is only joint. Villar v. NLRC GR No 130935 May 11, 2000 FACTS: Petitioners filed a petition for certification election. Their petition was granted but they lost in the election as majority of the employees voted for “no union”. The next day, they failed to report for work. They claim that they were barred from entering the premises. They filed a suit for illegal dismissal and backwages. The company denied these allegations and alleged that the workers refused to return to work despite their attention being called. The labor arbiter ruled that they were illegally dismissed and that they should be reinstated with full backwages. The NLRC however ruled that there was no illegal dismissal but that they voluntarily abandoned their work so they shouldn‟t be awarded backwages but they can return to work if they want to. ISSUE: Whether or not there was illegal dismissal and whether or not they are entitled to

backwages. HELD: The Court ruled that an immediate filing of a complaint for illegal dismissal is incompatible with abandonment. Abandonment is a matter of intention. There must be proof of deliberate and unjustified intent to sever the employer-employee relationship. This burden rests on the employer. In this case, the employer failed to do so. There was illegal dismissal. As to the second issue, the Court ruled that since they were illegally dismissed, the employees are entitled to reinstatement with full backwages, undiminished by their earnings elsewhere. International School Alliance of Educators v. Quisumbing GR No 128845 June 1, 2000 FACTS: The school had two kinds of employees, the local-hire and the foreign-hire. The foreign-hire teachers were given an added 25% in their salary and some benefits like transportation and housing, shipping costs etc. These were given based on two things: dislocation and limited tenure. The added compensation was the school‟s way of remaining competitive on an international level in terms of attracting competent teachers. The local-hire teachers, part of the union contested the difference, a deadlock resulted so the teachers went on strike. The acting secretary of DOLE assumed jurisdiction and said that there was a valid discrimination so the



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teachers cannot ask for equal protection. He said that “equal pay for equal work” does not apply in this case.

ISSUE: Whether or not there is discrimination in terms of wages.

HELD: The Court ruled that there was discrimination. It is public policy and also an international principle that inequality and discrimination are abhorred. All the more in the workplace where relations between capital and labor are often skewed in favor of capital are inequality and discrimination all the more reprehensible. Discrimination in terms of wages is frowned upon by the Labor Code. The principle “equal pay for equal work” should apply in this case. Persons who work with substantially equal qualifications, skill, effort and responsibility, under similar conditions, should be paid similar salaries. It is the policy of the State to provide equal pay for substantially equal work and to base differences in pay upon substantive differences in duties and responsibilities and qualification requirements of the positions. If an employee is paid less it is upon the employer to explain why the employee is treated differently. Dislocation and limited tenure cannot serve as adequate or valid bases for the difference in the salary rates. The other benefits are enough to make up for these two factors. There is no reasonable distinction between the work of a local-hire and a foreign-hire that will justify the difference. The foreign-hires cannot join the bargaining unit nor do they belong to the same bargaining unit. The factors in determining the appropriate barganing unit are (1) will of the employees; (2) affinity and unity of the employees‟ interests; (3) prior co llective bargaining history; (4) similarity of employment status. Workers of Antique Electric Cooperative v. NLRC GR No 120062 June 8, 2000

FACTS: Respondents were found to have underpaid their employees and did not pay the 13 th month pay on a routine inspection conducted by DOLE. The regional director ordered the company to pay the deficiency. Subsequently, the NLRC affirmed the order. A waiver was signed by 108 of the workers where they reduced by half the amount that was due. DOLE approved the waiver saying that it was not contrary to law, good customs and public policy. Later, petitioner filed a motion for reconsideration alleging undue influence, coercion, intimidation, and no assistance of counsel. The motion was denied. Eduardo Nietes, claiming that he represented the workers, filed a position paper with the same argument. The NLRC dismissed the case for failure to acquire jurisdiction. He again filed an appeal but the appeal was denied for being filed out of time. The appeal was filed 9 days late along with the appeal fee and research fee.

ISSUE: Whether or not the appeal was filed out of time.

HELD: The Court ruled that the appeal was filed out of time. The perfection of an appeal within the reglementary period and in the manner prescribed by law is mandatory and jurisdictional. Non-compliance renders the judgement appealed final and executory. An appeal is perfected when there is proof of payment of the appeal fee and in cases of the employer appealing and there is a monetary award, payment of the appeal bond. A mere notice of appeal without complying with the other requisites shall not stop the running of the period for perfecting an appeal. Sometimes though, in the interest of justice, late appeals have been allowed. An instance is a class suit. In this case there is no evidence that there is a class suit. There is no evidence that the workers chose Nietes to represent them. There is no showing that the workers are joined by a common interest. As there is no basis to invalidate the waiver the workers signed, the waiver is valid.

Seagull Shipmanagement and Transport Inc. v. NLRC GR No 123619 June 8, 2000

FACTS: Respondent was a radio operator on board a ship, he had a contract for 12 months. He was required to submit himself to a medical examination. Prior to this he had a pacemaker inserted but he was declared fit to work. On board the vessel, he had bouts of coughing and he



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needed open heart surgery. He filed for sickness and disability benefits with the POEA and these were awarded to him. The NLRC affirmed the decision. Petitioners appealed the decision under Rule 45 but asked that it be considered under Rule 65. Respondent claims that the petition should not prosper for failure to exhaust all administrative remedies. Petitioners also claim that respondents‟ sickness was not sustained during work and should not be compensable.

ISSUE: Whether or not the sickness is compensable and whether or not administrative remedies were exhausted.

FACTS: The Court ruled that he filing of a motion for reconsideration is a condition sine qua non to the institution of a special civil action for certiorari, subject to exceptions. Certiorari cannot be resorted to as a shield from the adverse consequences of ones‟ omission to file the required motion for reconsideration. The Court also ruled that the petitioners‟ own physicians certified him as fit for work. What matters is that work has contributed, even in a small degree, to the development of the disease. Previous physical condition is unimportant. Escario v. NLRC GR No 124055 June 8, 2000

FACTS: Petitioners are merchandisers of respondent company. They withdraw stocks from the warehouse , fix the prices, price-tagging, displaying the products and inventory. They were paid by the company through an agent to avoid liability. They claim that they were under the control and supervision of the company. They asked for regularization of their status. They were then gven notice of their termination. The company denied any employer-employee relationship. They claim that they used an agent or independent contractors to sell the merchandise. The LA ruled that there was an employer-employee relationship. The NLRC set aside the decision and said that there was no such relationship. The agent was a legitimate independent contractor.

ISSUE: Whether or not the petitioners are employees of the company.

HELD: The Court ruled that there is no employer-employee relationship and that petitioners are employees of the agent. The agent is a legitimate independent contractor. Labor-only contractor occurs only when the contractor merely recruits, supplies or places workers to perform a job for a principal. The labor-only contractor doesn‟t have substantial capital or investment and the workers recruited perform activities directly related to the principal business of the employer. There is permissible contracting only when the contractor carries an independent business and undertakes the contract in his own manner and method, free from the control of the principal and the contractor has substantial capital or investment. The agent, and not the company, also exercises control over the petitioners. No documents were submitted to prove that the company exercised control over them. The agent hired the petitioners. The agent also pays the petitioners, no evidence was submitted showing that it was the company paying them and not the agent. It was also the agent who terminated their services. By petitioning for regularization, the petitioners concede that they are not regular employees. PGA Brotherhood Assoccation, et al., v. NLRC G.R. No. 131084 June 19, 2000

FACTS: Petitioners were officers and members of the PGA Brotherhood Association, a duly registered LO, operating as security guards employed by PSVSIA, GVM and ASDA. Prior to their dismissal, they were assigned and posted with three different companies of the Roces Group of Companies. On March 21, 1989, petitioners were informed that their services were being terminated. They contended that prior to such dismissal, they were harassed by PSVSIA officers to withdraw their membership from the PGA Brotherhood Association. Although PSVSIA denied the charge of illegal dismissal, the Labor Arbiter declared PSVSIA and its responsible officers guilty of ULP and declared that petitioners were constructively dismissed, thereby ordering respondent to reinstate petitioners to their former positions with backwages up



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to the time of actual reinstatement. PSVSIA failed to submit any evidence to rebut the charges leveled against them. Petitioners then filed a motion to execute the reinstatement. Such motion was not enforced due to the manifestation filed by PSVSIA that petitioners were already “payroll-reinstated,” which the latter denied. On July 9, 1993, the NLRC affirmed the decision of the LA; but modified the amount of backwages to three years. Also, since complainants Rodolfo Dacanay and Alfredo Tapel did not claim for non-payment of backwages, they were not included among those who were to receive backwages. The NLRC did not delve on the issue of “payroll reinstatement” which was the subject of the motion for contempt. Petitioner filed a motion for clarification of the resolution reiterating their prayer for the inclusion of their backwages from time they were termianted up to the present (until actual or payroll reinstatement). Petitioners were paid monetary award for bakcwages pursuant to the July 9, 1993 decision of the NLRC. ISSUE: Are petitioners entitled to the collection of their earned salaries, wages and other benefits as payroll-reinstated employees? HELD: No. Petitioners claim that as early as February 25, 1991, PSVSIA had opted to reinstate petitioners in the “payroll”. However, the July 9, 1993 decision has become final and executory. Neither a motion for reconsideration nor appeal was ever taken by petitioners on this point. This procedural lapse is fatal. A final and executory decision cannot be altered nor amended except where a supervening cause transpires which renders its execution unjust or impossible, or in cases of special and exceptional nature, where it becomes imperative in the highest interest of justice to direct the suspension of its execution. Also, petitioners actively participated in the enforcement of the execution by garnishing the supersedeas bond and the bank deposits of PSVSIA. Petitioners, in fact, assented to the computation made by the NLRC showing the backwages of three years and filed a motion to release the remaining balance to satisfy the judgment awards. Also, the Joint Manifestation dated 29 September 1995 executed between petitioners and PSVSIA, stating that “further garnishments on respondent‟s bank account are no longer appropriate and necessary” shows that petitioners consented to the amount agreed upon. Leonardo vs. NLRC 333 SCRA 589 June 16, 2000

FACTS: Petitioner was a mechanic employed by Reynaldo's Marketing Corporation. He was transferred to another plant of the company, and his supervisor's allowance correspondingly withdrawn, allegedly due to his failure to meet his sales quota. He then filed a complaint for illegal dismissal, alleging constructive dismissal. Reynaldo's denied the charge; it was simply carrying out a policy designed to encourage work efficiency and competitiveness by giving out extra allowances and choice assignments to employees who met the required quota. Failure to maintain such a quota simply means loss of the assignment and extra allowances. ISSUE: Was petitioner constructively dismissed? HELD: No. Constructive dismissal is an involuntary resignation resorted to by an employee when his continued employment becomes impossible, unreasonable, or unlikely; or when there is demotion in rank or diminution in pay, or when a clear discrimination, insensibility, or disdain by the employer becomes unbearable. In the case at bar, there was a demotion and corresponding decrease in pay, but it was for cause (failure to meet the required quota). The right to demote falls within the employer's prerogative, since an employer may set employment standards and appropriate sanctions for failure to meet the latter. Icawat v. NLRC GR 133572 June 20, 2000.

FACTS: Private Respondent Jose Yape was working for petitioner as driver of their passenger jeepneys. On December 27, 1994, private respondent lost his driver‟s license and asked for permission to go on vacation leave to secure a new one. After obtaining his license, he



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returned to work but was informed that another driver had already taken his place. Private Respondent filed for illegal dismissal. Petitioners contend that private respondent is only an alternate driver; driving the jeepney only on a half day shifting basis on certain days of teh week, and that when he went on vacation and came back to work after three months, petitioenrs told him that they have already hired regular drivers. Labor Arbiter ruled in favor of private respondent stating that Yape started as regular driver and cannot be dismissed without due process of law. Petitioners assert that there was no er-ee relationship; the private respondent is not a regular employee; and that as spare driver, he is a redundancy. NLRC modified LA‟s decision by deleting the award representing 13 th month pay and the award of attorney‟s fees. Petitioners argue that the prolonged absence of Yape constituted abandonment. ISSUE: W/N Petitioners absence constituted abandonment. HELD: No. To constitute abandonment, two elements must concur: (1) the failure to report for work or absence without valid or justifiable reason, and (2) a clear intention to sever the employer-employee relationship. Such is disputed by the fact that private respondent immediately reported back for work and lost no time in filing a case for illegal dismissal against petitioners. Additionally, petitioners failed to serve written notice of respondent‟s terminatin, thus constituting illegal dismissal. Private Respondent is entitled to payment of backwages; however, the determination of such is subject to determination by the Labor Arbieter due to lack of evidence presented by respondent to warrant such award. Nokom v. NLRC G.R. No.140043 July 18, 2000

FACTS: Petitioner Carmelita Nokom was employed as manager by private respondent Rentokil for its Healthcare Division. In April 1996, fictitious invoices were sent to clients made to inflate the gross revenues of the Healthcare Division; and Nokom was placed on preventive suspension as initial findings showed her to be involved in such anomaly. Similar anomalies were discovered in the Pest Control Division, whose head was also placed on preventive suspension. Petitioner admitted the irregularities and made no explanation. Petitioner failed to appear during the hearing. After the investigation, petitioner‟s employment was terminated in a letter. Framie Ong-dela Luna of the Pest Control Division was likewise terminated. Petitioner filed with the Labor Arbiter a complaint for illegal suspension, illegal dismissal and non-payment of salaries. The Labor Arbiter found for Petitioner. The NLRC reversed and set aside such decision finding that Nokom was directly involved in the fraudulent activities and had waived her right to due process for failing to explain her side either in writing or in hearing. Nokom was found to have been dismissed for “„fraud or willful breach‟ of the trust reposed on her by her employer or duly authorized representative.” Petitioner appealed to the CA, which was dismissed for lack of merit. ISSUE: W/N petitioner was legally dismissed. HELD: Yes. To constitute valid dismissal, two requisites must concur: the dismissal must be for any of the causes provided in Art 282 of the Labor Code; and the employee must be given due notice and the opportunity to be heard and present his side. In the case at bar, petitioner‟s position demanded a high degree of responsibility, including the unearthing of fraudulent and irregular activities. Petitioner failed to do such and her bare denials did not disprove her guilt. The ordinary rule is that one who has knowledge peculiarly within his control, and refuses to divulge it, cannot complain if the court puts the most unfavorable construction upon his silence, and infers that a disclosure would have shown the fact to be as claimed by the opposing party. Findings of fact of the CA, affirming those of the trial court, are not to be disturbed on appeal. Loss of confidence is one of the just causes for a valid dismissal; and it is enough that there be “some basis” for such loss of confidence. The guidelines for the application of the doctrine of loss of confidence as enunciated in Midas Touch Food Corporation, are:

a.....loss of confidence should not be simulated; b.....it should not be used as a subterfuge for causes which are improper, illegal or unjustified; c.....it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and d.....it must be genuine, not a mere afterthought to justify earlier action taken in bad faith.



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An employer enjoys a wide latitude in the promulgation of company rules; and in this case, the policies of respondent were fair and reasonable. Rubberworld v. NLRC G.R. No. 128003 July 26, 2000 FACTS: Petitioner Rubberworld, Inc. filed with the DOLE a notice of temporary shutdown of operations; but even before the effectivity of such, was forced to prematurely shutdown its operations. Private Respondents filed with the NLRC a petition for illegal dismissal and non-payment of separation pay. Rubberworld then filed with the SEC a petition for declaration of suspension of payments with a proposed rehabilitation plan. SEC then ordered an order, stating that, “all actions for claims against Rubberworld Philippines, Inc. pending before any court, tribunal, office, board, body, Commission or sheriff are hereby deemed SUSPENDED.” Petitioner submitted to the labor arbiter a motion to suspend to suspend the proceedings invoking the SEC order. The Labor arbiter ignored the motion and thereafter rendered a decision finding Rubberworld guilty of illegal shutdown, ordering it to pay separation pay; and moral and exemplary damages. On appeal, the NLRC affirmed the decision with modification deleting the award for moral and exemplary damages. ISSUE: W/N the DOLE, Labor arbiter, or NLRC may legally act on claims despite an order of the SEC suspending all actions against a company under rehabilitation by a management committee. HELD: YES. PD 902-A is clear that “"all actions for claims against corporations, partnerships or associations under management or receivership pending before any court, tribunal, board or body shall be suspended accordingly." The law did not make any exception in favor of labor claims. The justification for such to enable the management committee to exercise its powers free from interference that might hinder or prevent the “rescue” of the debtor company. To allow the labor case to proceed would open the defeat the rescue effort of the management committee. Even if an award is given, the ruling could not be enforced as long as petitioner is under management committee. Manila Electric Company v. Secretary of Labor G.R. No. 127598. August 1, 2000 FACTS: This is a motion for partial modification regarding the ruling in the Meralco case of February 22, 2000 wherein it ruled that the arbitral award would retroact to the date after the expiration of the previous CBA. The assailed resolution stated since labor laws are silent as to when an arbitral award in a labor dispute upon which the Secretary had assumed jurisdiction shall retroact. The Court thus ruled that the CBA arbitral awards granted after six months from the expiration of the last CBA shall retroact to such time agreed upon by the employer and the employees or their union. Absent an agreement as to retroactivity, the award shall retroact to the first day after the six-month period following the expiration of the last day of the CBA; in the absence oef a CBA, the Secretary shall have plenary discretionary powers to determine the date of retroactivity. Petitioner also alleges that the retroactive application of the arbitral award will cost it no less than P800 million. ISSUE: When should an arbitral award retroact? HELD: The cases cited by petitioner involve articles 253-A in relation to Article 263 (g). The case of Union of Filipro Employees, it was ruled that since the resolution was outside the six month period from the expiration of the past CBA, the NLRC could give prospective effect to the CBA and that the two-year arbitral award should be given prospective effect. There is Nothing that says the arbitral awards or renewals of collective bargaining agreements shall always have retroactive effect. Although respondent MEWA (union) cites the St. Lukes case, stating that the Secretary of Labor has plenary and discretionary power to determine the effectivity of arbitral wards. The Court therefore issued the resolution that: where an arbitral awards granted beyond six months after the expiration of the existing CBA, and there is no agreement between the parties as to the date of effectivity thereof, the arbitral award shall retroact to the first day after the six month period following the expiration of the last day of the CBA.



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In resolving the motions for reconsideration in this case, the Court took into consideration the fact that petitioner belongs to an industry imbued with public interest and cannot ignore the enormous cost in case of full retroaction of the arbitral award. Balancing this with the interests of social justice; the arbitral award in this case would retroact to the first day after the six-month period following the expiration of the last day of the CBA. Parenthetically, during the period between the expiration of the economic provisions and the date of effectivity of the arbitral award, the hold-over principle shall govern. Vinoya v. NLRC G.R. 126586. August 25, 2000.

FACTS: This case involves a motion for reconsideration filed by private respondent Regent Food Corporation (RFC), of the decision ordering RFC to reinstate petitioner Alexander Vinoya to his former position and pay him backwages. The Court found that RFC was the rightful employer of petitioner under the four-fold test of employer-employee relations, contrary to RFC‟s claim that Vinoya was actually an employee of the PMCI. RFC now claims that reinstatement is no longer feasible due to the parties‟ strained relations. ISSUE: Whether or not petitioner Vinoya is entitled to reinstatement? HELD: No. As a general rule, strained relations is an issue factual in nature and should be raised and proved before the Labor Arbiter. In this case, the strained relations arose only after the filing of the case. The issue of strained relations was never dealth with in the decision being reconsidered. The Court finds that it would be impractical to reinstate petitioner to his former position as such position as sales representative involves the handling of accounts and other property of RFC. Therefore, in lieu of reinstatement, payment of separation pay equivalent to one month‟s salary for every year of service is granted. The Learning Child, Inc. vs. Lazaro 340 SCRA 72 September 7, 2000

This is a review of the compromise agreement arrived at between The Learning Child school and its employees in an illegal dismissal case. Since both parties had agreed to settle the case amicably, the school agreed to pay an amount slightly less than what the illegally dismissed employees were demanding. The employees in turn agreed not to institute any case or suit against the school over the matter. The Court held that since the agreement was not contrary to law, good morals, public order, or public policy, it approved the same and enjoined the parties to abide by all its terms and conditions. Philippine Carpet Employees Association vs. Philippine Carpet Manufacturing Corporation. 340 SCRA 383 September 14, 2000

FACTS: Jonathan Barquin was the only employee of the Philippine Carpet Manufacturing Corporation receiving minimum wage (all other employees were paid above the minimum wage). Wage Orders were issued, and the company refused to implement them, claiming that no one in the company was receiving the minimum wage; hence, the company was not covered by such Wage Orders. As it turned out, the company had dismissed Barquin on grounds of retrenchment, so by the time the union made the demand for compliance with the Wage Orders, there really was no employee receiving the minimum wage. The voluntary arbitrator then ruled that Barquin had been illegally dismissed so the company could avoid compliance with the Wage Order, but was not entitled to reinstatement since he had received separation pay and had signed a quitclaim. ISSUES: Was Barquin illegally dismissed, and if yes, is he entitled to reinstatement? HELD: Yes, he was illegally dismissed and is entitled to reinstatement. The company cannot claim retrenchment, since it is highly improbable that laying off one minimum wage worker would help stem the losses of the company. The latter's motive in terminating Barquin was to



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avoid compliance with the Wage Orders, since doing so would cause a wage distortion, and require the company to raise all the workers' salaries. Since Barquin was misled by the company that he was being retrenched, his consent to the quitclaim was vitiated by mistake, and thus the quitclaim was invalid. Colegio De San Juan De Letran v. Assoc. of Employees and Faculty of Letran G.R. 141471. September 18, 2000 FACTS: Salvador Abtria, President of respondent union initiated renegotiations of its CBA with petitioner for the last two years of the CBA‟s 5 year lifetime from 1989-1994. On the same year, the union elected a new set of officers with private respondent Eleanor Ambas as the newly elected President. Ambas wanted to continue renegotiation, but petitioner claimed that the CBA was already prepared for signing. The CBA was submitted to a referendum which was rejected by the union members. Later, the union notified the NCMB of its intention to strike due to petitioner‟s refusal to bargain. Thereafter, the parties agreed to disregard the unsigned CBA and to start negotiation on a new five-year CBA. The union submitted its proposals to petitioner, which notified the union that the same was submitted to its Board of Trustees. Meanwhile, Ambas‟ work schedule was changed, which she protested and requested to be submitted to a grievance machinery under the old CBA. Due to petitioner‟s inaction, the union filed a notice of strike. Later, the Ambas was dismissed for alleged insubordination. Both parties again discussed the ground rules for the CBA renegotiations; however petitioner stopped negotiations after allegedly receiving information that a new group of employees had filed a PCE. The union struck and the Secretary assumed jurisdiction ordering all striking workers to return to work. All were readmitted except Ambas. Public respondent declared petitioner guilty of ULP and directed reinstatement of Ambas with backwages. ISSUES: (1) whether petitioner is guilty of unfair labor practice by refusing to bargain with the union when

it unilaterally suspended the ongoing negotiations for a new Collective Bargaining Agreement (CBA) upon mere information that a petition for certification has been filed by another legitimate labor organization?

(2) whether the termination of the union president amounts to an interference of the employees‟ right to self-organization?

HELD: 1. No. The duty to bargain collectively includes the mutual obligation to meet and convene

promptly and expeditiously in good faith for the purpose of negotiating an agreement. Petitioner failed to make a timely reply to the union‟s proposals, thereby violating the proper procedure in collective bargaining as provided in Article 250. In order to allow the employer to validly suspend the bargaining process, there must be a valid PCE raising a legitimate representation issue. In this case, the petition was filed outside the 60-day freedom period; therefore there was no legitimate representation issue and the filing of the PCE did not constitute a bar to the ongoing negotiation.

2. Yes. The dismissal was in violation of the employee‟s right to self-organization. The dismissal must be made pursuant to the tenets of equity and fair play; wherein the employer‟s right to terminate the services of an employee must be exercised in good faith; furthermore, it must not amount to interfering with, restraining or coercing employees in their right to self-organization. The factual backdrop of the Ambas‟ termination reveals that such was done in order to strip the union of a leader. Admittedly, management has the prerogative to discipline its employees for insubordination. But when the exercise of such management right tends to interfere with the employees’ right to self-organization, it amounts to union-busting and is therefore a prohibited act.

Narzoles v. NLRC G.R. 141959 September 29,2000

FACTS: In this case, petitioner-employees received the adverse NLRC decision on July 23, 2998; and filed a motion for reconsideration on August 3, 1998. On September 1, 1998, Section 4, Rule 65, was amended by Circular No. 39-99 providing that the 60-day period for filing a



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petition for certiorari shall be interrupted by the filing of a motion for reconsideration; and in the event of a denial, petitioner only has the remaining period within which to file the petition. the aforementioned amendment took effect. Previous to this amendment, a petitioner was given 60 days from notice of judgment within which to file the petition. On October 19, 1998, petitioners received a copy of the NLRC resolution denying their motion for reconsideration; petitioners filed a petition for certiorari in the Supreme Court on December 17, 1998. Such was referred to the CA; and denied due to late filing. Petitioner‟s last day to file their petition for certiorari is December 8, 1998. The amendments brought about by Circular No. 39-98 were already in force as statutes regulating the procedure of the courts are applicable to actions pending and undetermined at the time of their passage. Procedural laws are retroactive in that sense. The CA correctly deducted the 16 days it took for petitioners to file their MR. ISSUE: Whether or not the petition was filed out of time. HELD: No. Due to the tremendous confusion brought about by the amendments of Circular 39-98; further amendments have been made to Section 4, Rule 65. The Court resolved in A.M. No 00-2-03-SC, to further amend Section 4, Rule 65 to the effect that in case a motion for reconsideration or new trial is timely filed, the 60 day period shall be counted from notice of the denial of said motion. The latest amendments took effect on September 1, 2000. Yet since curative statutes are enacted to cure defects in a prior law to validate legal proceedings which would otherwise be void for want of conformity with certain legal requirements. Curative statues, therefore, by their very essence, are retroactive. Such conclusion was made bearing in mind that the substantive aspects of this case involves the rights and benefits, even the livelihood, of petitioner-employees.



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2001 CASES People v. dela Piedra G.R. 121777 January 24, 2001

Appellants assail the constitutionality of the definition of “illegal recruitment” in Section 13 (b) of PD 442, the Illegal Recruitment Law alleging it violates due process for being vague and that it violates the right to equal protection of the law. The Supreme Court upheld the constitutionality of the law.

Due process requires that terms of the penal statute be sufficiently explicit to inform those who are subject to it what conduct on their part will render them liable to its penalties. That Section 13 (b) encompasses what appellant apparently considers as customary and harmless acts such as “labor or employment referral” does not render the law overbroad. The interpretation of the section should be given more force to campaign against illegal recruitment and placement. The absence of records to shed light on the meaning of the proviso does not prevent the Court from arriving at a reasonable interpretation of the proviso by applying principles in criminal law and drawing from the language and intent of the law itself. A statute may be said to be overbroad where it operates to inhibit the exercise of individual freedoms affirmatively guaranteed by the Constitution, such as the freedom of speech or religion. The appellant in this case did not specify what constitutionally protected norms are embraced by the definition of recruitment and placement that would render the same constitutionally overbroad.

As to the claim that the section violates equal protection cannot be sustained either. The prosecution of one guilty person while others equally guilty are not prosecuted is not, by itself, a denial of the equal protection of the laws unless there is an element of intentional or purposeful discrimination. But a discriminatory purpose is not presumed, there must be a clear showing of “clear and intentional discrimination.” Likewise, if the failure of prosecutors to enforce criminal laws as to some persons should be converted into a defense for others charged with the crime, the enforcement of laws would suffer a complete breakdown. Security and Credit Investigation, Inc. v. NLRC G.R. 114316 January 26, 2001

FACTS: Private respondents M, S and O were employed as security guards be petitioner and assigned to CHR which was petitioner‟s client. About 18 of petitioner‟s security guards detailed at CHR, including M, S and O filed a complaint for money claims against petitioner. Upon petitioner‟s request that the security guards withdraw the complaint, each except for M, S and O signed a release and quitclaim in favor of petitioner. M, S and O averred that he was being pressured by petitioner to sign a release and quit claim so he went on leave from work. He was later informed that he was suspended from work. They filed complaints for illegal dismissal and underpayment of backwages against petitioner. Petitioner claims that M, S and O abandoned their employment. Petitioner filed a third party complaint against the CHR claiming the latter failed to effect the increase in the minimum wage of respondent security guards from July 1, 1989 to March 31, 1990 pursuant to RA 6727. The CHR denied that it had the obligation to pay the increase in the wage rates as it had been paying more than P100 a day even before the effectivity of said law. The Labor Arbiter found that there was neither dismissal nor abandonment. Also, it ruled that there was underpayment of respondent guards‟ salaries. ISSUES: 1) W/N there was illegal dismissal or abandonment. 2) W/N there was underpayment. HELD: 1) No. There was no clear proof that petitioners had in fact dismissed respondent security

guards. None of the respondents exerted efforts to confirm from petitioner‟s office whether they ha din fact been dismissed. Absent any showing of an overt of positive act proving that petitioner had dismissed M, S and O, their claim of illegal dismissal cannot be sustained. As to the claim of abandonment, they must have failed to report for work without justifiable



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reason and there must have been a clear intention to sever the er-ee relationship manifested by some overt acts. The filing by M, S and O of their complaints negates the existence of any intention on their part to abandon their employment.

2) The discrepancy between the minimum wage prevailing for the periods concerned and the wages and other benefits received served as basis for underpayment. In cases of payment of wages in construction projects, security, janitorial services; the contractor and principal or client are jointly and severably liable. Thus, CHR is the party liable for the wage increase; while petitioner is solidarily liable for the payment of wages, including wage increases.

Curaza v. NLRC GR 102895 March 15,2001

FACTS: Petitioner was employed by PCBCP, they were later absorbed by PCDPI then PCPPI when the companies were all sold one after the other. He claims that he was dismissed without any valid legal cause then his office was padlocked to prevent him from entering. PCPPI alleges that he was continually absent without explaining why so they had to lock the office because the office contained many confidential documents. The LA dismissed the complaint. Then Curaza filed a manifestation that he be counsel along with his attorney. On appeal, the NLRC dismissed the petition. 3 months later, Curaza filed his motion for reconsideration, which was denied for being filed beyond the 10 day period. He now argues that he only received the notice of the decision a few days before he filed his motion and since he is also counsel he is entitled to notice and that the 10 day period starts from when he received the notice. ISSUE:W/N he is entitled to notice and when does the 10 day period start HELD: The SC ruled that Curaza is not entitled to notice. He was still represented by his lawyer and since the NLRC Rules of Procedure have no specific rule, the Rules of Court apply suppletorily and it provides that where a eprson is represented by more than one counsel, service upon one is considered service to all unless personal notice is ordered by the Court. Also since his lawyer received the notice 3 months earlier the 10 day period starts from this date. The NLRC Rules of Procedure provide that notices of decisions shall be served upon the counsel of record. The failure of the counsel binds the client and is not a ground for setting aside a judgement that is valid and regular on its face. Fleischer Company vs NLRC GR 121608 March 26, 2001 FACTS: Respondents were hired as security guards and had licenses to carry firearms. Later on they were terminated because the positions had either become redundant or because they lost their licenses. They filed a complaint for illegal dismissal. The LA ruled that there was illegal dismissal but the NLRC reversed the decision and ruled that there was no illegal dismissal. It is now argued that there is no employer-employee relationship and that they have already settled. ISSUE: W/N there is an employer-employee relationship and was there settlement HELD: The SC ruled that the questions raised by the parties were questions of fact. The NLRC found that there was an employer-employee relationship and this finding is accorded great respect and even finality when supported by substantial evidence. As to the settlement, the SC ruled that since the NL:RC ruled that there was a settlement then this will stand as review in the SC concerning factual findings is confined to determining allegations of lack of jurisdiction or grave abuse of discretion and there was no cogent reason to disturb the findings of the NLRC. Unicraft Industries International Corporation v. Galvez GR 134903 March 26, 2001

FACTS: Petitioner opened a branch in Lapu-lapu City to which Private respondents (ees of petitioner) were transferred. Due to failure to comply with some legal requirements for its business operation, that branch was rendered closed and private respondents were dismissed. A complaint for illegal dismissal and payment of benefits was filed and submitted for voluntary



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arbitration. For failure of petitioners to appear and present evidence, the voluntary arbitrator rendered a decision in favor of respondents. Petitioners elevated the case to the CA and the case was remanded to the voluntary arbitrator to give petitioners a chance to prove their case. The voluntary arbitrator claimed that he lost jurisdiction over the case upon rendition of the judgment. The CA rendered a resolution allowing an execution of the award of separation pay and attorney‟s fees. Hence this petition. ISSUES: 1) Can the voluntary arbitrator review its judgments? 2) Was the decision of the voluntary arbitrator void? HELD: 1) Yes. When there is a violation of due process, judgments of voluntary arbitrators may be

reviewed. It is clear that the petitioners were unable to present evidence as evident from the stipulation entered into by the parties and submitted to the CA. Such was an acknowledgment that the proceedings before the VA had not been completed. While under the law, decisions of voluntary arbitrators are accorded finality, the same may still be subject to review, such as here where there was a violation of petitioner‟s right to due process and to be heard.

2) Yes. The decision of the voluntary arbitrator in this case was void in this case for the petitioners were not given notice to appear at the scheduled hearing until it was too late. Such was a violation of their constitutional right and has the effect of rendering the judgment null and void. It is a cardinal rule in law that a decision or judgment is fatally defective if rendered in violation of a party-litigant‟s right to due process. Even the Procedural Guidelines in the Conduct of Voluntary Arbitration Proceedings requires that the arbitrator should provide the parties adequate opportunities to be heard. Thus, it was grave abuse of discretion for the CA to order the execution of the award of separation pay without giving the petitioners opportunity to present evidence.

Producer’s Bank of the Philippines v. NLRC GR 100701 March 28, 2001

An employer cannot be forced to distribute bonuses which it can no longer afford to pay. A bonus is an amount granted and paid to an employee for his industry and loyalty which contributed to the success of the employer‟s business and made possible the realization of profits. It is an act of generosity and is a management prerogative, given in addition to what is ordinarily received by or strictly due the recipient. Thus, it is not a demandable and enforceable obligation, except when it is made part of the wage, salary or compensation of the employee.

The conservator was justified in reducing the mid-year and Christmas bonuses of petitioner‟s employees. Ultimately, it is to the employee‟s advantage that the conservatorship achieve its purposes otherwise, the closure of the company would result in the employees losing their jobs. PD 851 requires all employees to pay their employees a basic salary of not more than P1,000 a 13th month pay. However, employers already paying their employees a 13 th month pay are not covered by the law. The term “equivalent” shall be construed to include Christmas bonus, mid year bonus, cash bonuses and other payments amounting to not less than 1/12 of the basic salary. The intention was to grant relief to those not actually paid a bonus, by whatever name called. Thus, petitioner is justified in crediting the mid year bonus and Christmas bonus as part of the 13th month pay. The divisor used by petitioner in arriving at the employee‟s daily rate for the purpose of computing salary related benefits is 314 days. This finding was not disputed by the NLRC. However, the divisor was reduced to 303 by virtue of an inter-office memorandum. The reduction of the divisor was for the sole purpose of increasing the employee‟s overtime pay and was not meant to replace the use of 314 as the divisor in the computation of the daily rate for salary-related benefits. Felix v. Enertech Systems Industries, Inc. GR 142007



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March 28, 2001 FACTS: Y Company is engaged in the manufacture of boilers and tanks. X worked as a welder in respondent company. X and 3 other employees were assigned to install a smokestack at the Big J Feedmills in Bulacan. X and his co-workers accomplished daily time records on the basis of which the ir wages were computed. The work was estimated to be completed in one week, but it took them two weeks to finish. Thus, X and his co employees were given notice to explain why they should not be dismissed for reporting at the jobsite at 11am and leaving the site at 2pm in violation of company rules, in view of reports that came to the office. Thus, the employees were placed under preventive suspension pending investigation. After investigation, the petitioner‟s were dismissed on grounds of dishonesty by falsifying time cards which allowed them to collect full salary and for insubordination. X filed a complaint for illegal dismissal with the Labor Arbiter who ruled for X. The NLRC reversed the decision. The CA affirmed the NLRC. ISSUE: W/N there was illegal dismissal. HELD: No. The CA, taking into account the findings of the NLRC, correctly concluded that there was substantial evidence showing that petitioner did not really work 8 hours a day. The validity of petitioner‟s dismissal is a factual question and the rule is well settled that the findings of fact of quasi-judicial agencies, like the NLRC, are accorded not only respect, but finality if they are supported by substantial evidence. Furthermore, the omnibus motion filed by Y Co. during the pendency of the appeal is not an admission that it is liable for reinstatement or separation pay. People v. Chua April 4, 2001

FACTS: Chua was found guilty beyond reasonable doubt of illegal recruitment committed in large scale for recruiting and promising work in Taiwan to 9 people, without a license. According to Chua, she received a call from Taiwan informing her that some people were needed so she called several people and collected money but the placement in Taiwan never materialized. The POEA issued a certification that Chua was not licensed to recruit persons/workers for overseas employment. Chua argues that she had an approved application for a service contractor's authority. But the records show that she failed to comply with post-licensing requirements. ISSUE: Whether or not Chua was licensed to recruit workers for overseas work HELD: The SC held that Chua wasn‟t licensed to perform recruiting activities. The records show that the license was not issued due to her failure to comply with post-licensing requirements. It is the issuance of the license which makes the holder thereof authorized to perform recruitment activities. The law specifically provides that "every license shall be valid for at least 2 yrs from the date of issuance unless sooner cancelled or revoked by the Secretary. Chua admitted herself that she wasn‟t licensed when she replied to the Taiwan company. Philsa International Placement v. Secretary of Labor April 4, 2001

FACTS: Petitioner Philsa is a domestic corporation engaged in the recruitment of workers for overseas employment. Private respondents were recruited by petitioner for employment in Saudi Arabia and were required to pay placement fees then they began work for Al-Hejailan Consultants A/E, the foreign principal of petitioner. While in Saudi Arabia, private respondents were allegedly made to sign a second contract which changed some of the provisions of their original contract resulting in the reduction of some of their benefits and privileges. They were then allegedly forced to sign a third contract which increased their work hours from 48 hours to 60 hours a week without any corresponding increase in their basic monthly salary. When they refused to sign this third contract, their services were terminated. Upon their arrival in the Philippines, private respondents demanded from petitioner Philsa the return of their placement fees and for the payment of their salaries for the unexpired portion of their contract. Petitioner refused so they filed a case before the POEA for illegal dismissal, payment of salary differentials, illegal deduction/withholding of salaries, illegal exactions of placement fees and contract substitution. Under the POEA rules, complaints involving employer-employee relations arising out of or by virtue of any law or contract involving Filipino workers for overseas



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employment, including money claims, are adjudicated by the Workers' Assistance and Adjudication Office (WAAO) thru the POEA Hearing Officers and may be appealed to the NLRC. On the other hand, complaints involving recruitment violations warranting suspension or cancellation of the license of recruiting agencies are cognizable by the POEA through its Licensing and Recruitment Office (LRO), which may be appealed to the DOLE. In cases where a complaint partakes of the nature of both an employer-employee relationship case and a recruitment regulation case, the POEA Hearing Officer shall act as representative of both the WAAO and the LRO and both cases shall be heard simultaneously. In such cases, the Hearing Officer shall submit two separate recommendations for the two aspects of the case. In this case, the first two causes of action were in the nature of money claims arising from the employer-employee relations and were properly cognizable by the WAAO. The last two causes of action were in the nature of recruitment violations and may be investigated by the LRO. The third cause of action, illegal deduction/withholding of salary, is both a money claim and a violation of recruitment regulations and is thus under the investigatory jurisdiction of both the WAAO and the LRO. Philsa was found guilty of illegal exactions and contract substitution. ISSUE: Whether or not PHILSA is guilty of illegal exactions and contract substitution. HELD: The SC held that as to the illegal exactions, it was a question of fact so the SC would not inquire into those matters anymore and that in any case, it is clear that Philsa was guilty of illegal exactions as supported by evidence. The fees were in excess of those allowed by the POEA. As to contract substitution, the SC also said that this is a question of fact which may not be disturbed if the same is supported by substantial evidence. There was definitely a contract of substitution in the first count. The first contract was duly approved by the Administration therefore the parties are bound by the terms and condition thereof until its expiration. The mere intention of respondents to increase the number of hours of work, even if there was a corresponding increase in wage is a clear violation of the contract as approved by the Administration, and notwithstanding the same, the amendment is evidently contrary to law, morals, good customs and public policy and hence, must be shunned. As to the second contract substitution, a third contract was emphatically intended, which, however, was not consummated due to the adamant refusal of complainants to sign thereon. Mere intention of the respondent to commit contract substitution for a second time should not go unpunished. It is the duty of this Office to repress such acts. Sevillana vs. I.T. Corp. April 16, 2001

FACTS: Petitioner Sevillana was contracted to work as a driver by I.T. for its foreign accredited principal, Samir Maddah in Saudi Arabia. He argues however, that only 1/3 of his salary was received. After working 12 months, he said that he was repatriated without any valid and justifiable reason. He filed a complaint with the POEA for underpayment of salaries and illegal dismissal against I.T., and Samir Maddah. The company argued that his blood pressure was considered critical and when his blood pressure did not stabilize and begun affecting his work as driver due to frequent headaches and dizziness, he was repatriated to avoid further injury and complication. I.T. claimed that after he had received all the benefits accorded to an employee consisting of full salaries and separation pay, he refused to be repatriated and instead decided to run away and since then, his whereabouts were unknown and I.T. only heard about him when he reported to their office in the Philippines and later on filed the complaint. The POEA Adjudication Office, held the private respondents herein jointly and severally liable to the petitioner. The NLRC reversed this saying that I.T. is a recruitment agency and is not the employer itself and at most it is an agent of the employer. ISSUE: Whether or not Sevillana was illegally dismissed. HELD: The SC held that there was illegal dismissal. I.T. cannot be considered as an agent of its foreign principal. The NLRC disregarded the rule regarding the solidary liability of the local employment agency with its foreign principal in overseas employment contracts. Private employment agencies are held jointly and severally liable with the foreign-based employer for any violation of the recruitment agreement or contract of employment. The solidary liability imposed is to assure the aggrieved worker of immediate and sufficient payment of what is due him. Also the Labor Code puts the burden of proving that the dismissal was for a valid or authorized cause on the employer. For a dismissal to be valid it must be for a valid cause and



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there must be due process. The record shows that neither of the 2 conditions were shown to have been complied with. All I.T. did was to rely on its claim that petitioner was repatriated by its foreign principal. Under Section 8, Rule I, Book VI of the Rules and Regulations Implementing the Labor Code, for a disease to be a valid ground for dismissal, the continued employment of the employee is prohibited by law or prejudicial to his health or the health of his co-employees, and there must be a certification by a competent public health authority that the disease is of such nature or at such a stage that it cannot be cured within a period of 6 months, even with proper medical treatment. LMG Chemicals Corporation v. Sec. Of the DOLE April 17, 2001

FACTS: LMG has three divisions and there are two unions within one of the divisions. One union represents the daily paid employees and the other union represents the monthly paid employees. Chemical Workers Union, respondent, a duly registered labor organization acts as the collective bargaining agent of all the daily paid employees of petitioner's Inorganic Division. Negotiations for a new CBA took place as the old CBA was about to expire. They were able to agree on the political provisions of the new CBA, but no agreement was reached on the issue of wage increase and economic issues were also not settled so with the negotiations at a deadlock, the union filed a Notice of Strike with the NCMB and despite several conferences and efforts of the conciliator-mediator, the parties failed to reach an amicable settlement so the union staged a strike. In an attempt to end the strike early, petitioner made an improved offer. Another conciliation meeting was held and petitioner reiterated its improved offer but the union rejected it. The Secretary of Labor found the labor dispute impressed with national interest and assumed jurisdiction. Then petitioner stated that it could no longer afford to grant its previous offer due to serious losses of the division so they made a lower offer. The union claims it has a positive performance in terms of income. The Secretary ordered the company to increase the wages but all other economic demands of the union were rejected. Also since the new CBA wasn‟t signed within 6 months after the old one expired and the parties could not agree as to the retroactivity, the Secretary fixed the date of retroactivity. ISSUE: W/N the company should be made to pay increased wages despite losses and whether or not the Secretary of Labor could fix the date of effectivity. HELD: The SC ruled that the wage increases were justified. It is the income from all sources that determines financial condition. A particular division may have lost money, but other divisions may make up for it so there will be net income as a whole. Also, the company granted an increase to its‟ supervisory employees so it‟s unfair to deny a wage increase to the rank and file workers. On the second ground, the SC ruled that the Secretary‟s authority to assume jurisdiction carries with it the power to determine the retroactivity of the CBA. The authority of the Secretary to assume jurisdiction over a labor dispute includes and extends to all questions and controversies arising therefrom. The power is plenary and discretionary in nature for an effective and efficient disposal of the primary dispute. To deprive the Secretary of such power and discretion runs counter to the well-established rule that all doubts in the interpretation of labor laws be resolved in favor of labor. The SC is only giving meaning to this rule as the labor authorities should be helped in providing workers immediate benefits, without being hampered by arbitration or litigation processes that prove to be nerve-wracking and financially burdensome. People v. Gonzales-Flores April 19, 2001

FACTS: Gonzalez-Flores was found guilty of illegal recruitment in large scale for recruiting as seamen three different people at the same time and collecting money from them without the necessary license. The complainants filed a complaint after they tried to follow-up their applications and nothing happened for three months and they found out from the POEA that the accused wasn‟t licensed. The evidence consisted of the complainants‟ testimonies and testimonies of other witnesses. Accused now argues that the Court didn‟t have enough evidence to convict her. ISSUE: W/N the Court had enough evidence to convict the accused.



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HELD: The SC upheld the conviction. The elements of illegal recruitment in large scale are: (1) the accused engages in acts of recruitment and placement of workers; (2) the accused has no license or an authority to recruit and deploy workers, either locally or overseas; and (3) the accused commits the unlawful acts against three or more persons, individually or as a group. All the conditions are present. The evidence shows that she sought out complainants and promised them overseas employment and led them to believe that she could do something to get their applications approved. Accused contends that all she did was to refer the complainants but the Labor Code, recruitment includes "referral," which is defined as the act of passing along or forwarding an applicant for employment after initial interview of a selected applicant for employment to a selected employer, placement officer, or bureau. Also she did more than just make referrals, she actively and directly enlisted complainants for employment abroad, even promising jobs as seamen, and collected money. MSMG-UWP v. Ramos April 27, 2001

FACTS: The petitioners were terminated by the company but the NLRC upheld the dismissal. Later on, the SC reversed the decision and ordered all of them reinstated and paid full backwages but it also held that the officers of the company shouldn‟t be held liable. This is the subject of this motion for partial recon as the union argues that it was the officers who made the decision to terminate the employees. Petitioners further contend that while the case was pending, the company began removing its machineries and equipment from its plant and began diverting jobs intended for the regular employees to its sub-contractor/satellite branches. ISSUE: W/N the officers should be held liable for the illegal dismissal. HELD: The SC ruled that the officers cannot be held liable bec a corp has a personality separate and distinct from those acting in its behalf. The rule is that obligations incurred by the corp, through its directors, officers and employees, are its sole liabilities. In labor cases, corporate directors and officers are solidarily liable with the corporation for the termination of employment of corporate employees done with malice or in bad faith. Bad faith does not connote bad judgment or negligence; it imports a dishonest purpose or some moral obliquity and conscious doing of wrong; it means breach of a known duty thru some motive or interest or ill will; it partakes of the nature of fraud. In this case, there is nothing on record to show that the officers acted in patent bad faith or were guilty of gross negligence in terminating the services of petitioners so as to warrant personal liability. Shangri-la Hotel vs. Dialogo April 20, 2001

FACTS: Respondent, a receptionist of petitioner, went on sick leave for 3 days. When she received her salary for that month she received overtime pay for one of the sick days without rendering overtime work. For this, respondent was dismissed from the service for alleged dishonesty. She filed a complaint for illegal dismissal, she argues that she signed the list, subsequently attached to the overtime authorization form, before she went on sick leave and that she did not know then that her salary included the overtime pay for work supposedly rendered. The LA didn‟t agree but the NLRC did, ruling that she could not be held guilty of dishonesty precisely because she didn‟t know that the blank form she signed was an overtime authorization form and she also had no knowledge that her salary included the overtime pay. The hotel was ordered to reinstate her and pay backwages. The CA upheld the NLRC. ISSUE: W/N respondent was illegally dismissed HELD: The SC ruled that the respondent didn‟t commit any act of dishonesty. She did not deliberately make petitioner believe that she rendered overtime work. She only affixed her name and signature on a blank piece of paper which was not the official overtime authorization form used by petitioner. There is no basis therefore for the conclusion of that respondent knew that the blank piece of paper she signed served as the overtime authorization form. It was just a case of an ordinary employee expecting to earn more by rendering overtime work but who got sick during the designated time. The policy of the company was to require the preparation of the overtime authorization form before the designated date the overtime work was supposed to be rendered. The overtime work must first be authorized before it could be rendered.



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Food Terminal Inc. v. NLRC April 27, 2001

FACTS: Petitioner is a GOCC and respondents are its‟ rank-and-file employees seeking their salary differentials, traveling allowance differentials, 13th month pay, 14th month pay and other incremental increases as a result of an increase in their gross pay, plus interest, exemplary damages, attorney's fees and costs of the litigation. The facts show that Special Orders upgrading their positions and correspondingly adjusting their salaries were issued but despite several representations from respondents, petitioner‟s new board refused to implement the Special Orders. Respondents filed a complaint before the LA praying for the implementation of the Special Orders which the LA granted. The NLRC and the CA both upheld the decision. Petitioner claims that the officer who issued the orders was not authorized by the Board to issue the subject Special Orders, so the Special Orders had no binding force and effect. It also claims that only 21 out of the 65 complainants signed the verification attached to the complaint filed with the LA, hence, only they have legal personality to prosecute the case and as for the rest, the complaint was dismissible as to them for lack of legal personality. ISSUE: Whether or not the special orders were valid and could be implemented and whether or not the rest of the complainants have legal personality in the suit. HELD: The SC upheld all the decisions. On the first ground, petitioner failed to show evidence that the orders were issued without authority. All their statements were self-serving therefore not given much weight. On the second ground the complaint shows that complainants therein were being represented by their counsel of choice and in the verification attached to the complaint, it is manifested that the 21 signatories were not only signing in their own behalf but also in behalf of the other. And in the NLRC rules of procedure, sec 7 provides that attorneys and other representatives of parties shall have authority to bind their clients in all matters of procedure; but they cannot, w/o a special power of attorney or express consent, enter into a compromise agreement with the opposing party in full or partial discharge of a client's claim. In this case no special power of attorney was needed bec no compromise agreement was being entered into. Moncielcoji Corp. v. NLRC April 27, 2001 FACTS: Respondent filed a complaint with the LA against petitioner for illegal dismissal, separation pay and non-payment of salary and other benefits. She alleged that she was employed as a supervisor until she was told to take a vacation and report for work after 1 month then when she reported back she was refused readmission. She kept returning to resume work but her efforts proved futile. She was merely promised that she‟d receive separation pay but none was given. Petitioner countered that on the first 2 days of work she worked very well but then she was often absent or tardy and failed to properly monitor the performance of her subordinates. Petitioner asserts that it called her attention and reprimanded her but then she did not report for work anymore. The LA ruled for the respondent and ordered reinstatement without loss of seniority rights and the payment of backwages. The NLRC affirmed the decision but granted separation pay in lieu of reinstatement. The CA upheld the decision. ISSUE:W/N respondent was illegally dismissed or if she abandoned her work. HELD: The SC upheld the decisions. The dismissal was based on technicalities such as the failure to indicate the material dates showing when the notice of judgment was received and failure to submit a certified true copy of the decision and failure to submit a sworn certification against forum shopping as required by Rule 46 of the Rules of Court. As a matter of clarification, the SC added that accdg to established jurisprudence when separation pay is awarded in lieu of reinstatement, back wages shall be computed from the time compensation was withheld from the employee up to the finality of the Decision of the Court. Negros Cooperative I (NORECO) v. Secretary of DOLE May 9, 2001

FACTS: The employees of petitioner organized themselves into a local chapter of PACIWU-TUCP. The union submitted its charter certificate and supporting documents on the same date. They filed a petition for certification election on behalf of the NORECO chapter, seeking to



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represent the 77 rank-and-file employees of NORECO. PACIWU-TUCP alleged that it had created a local chapter in NORECO which was reported to the DOLE Regional and that NORECO is an unorganized establishment, and that there is no other labor organization presently existing at the said employer establishment. The Med-Arbiter dismissed the petition saying that no certificate has been issued yet so it has not acquired the status of a legitimate labor organization. The union filed an MR which the Secretary of Labor treated as an appeal and dismissed it. The CA ruled that the union had become a legitimate labor org (llo) 3 days before the petition for certification election and that there was no proof of supervisors being members of the union. ISSUE: whether or not the union had supervisory employees. HELD: The SC upheld the decision of the CA. There was no persuasive evidence to show that there were supervisory and confidential employees in appellant union who under the law are disqualified to join the same. Also, petitioner only raised this issue on appeal so it could not be considered. The determination of such factual issues is vested in the appropriate Regional Office of the DOLE and pursuant to the doctrine of primary jurisdiction, the Court should refrain from resolving such controversies. The doctrine of primary jurisdiction does not warrant a court to abrogate unto itself the authority to resolve a controversy the jurisdiction over which is initially lodged with an administrative body of special competence. PIGLAS-KAMAO vs. NLRC May 9, 2001

FACTS: The union filed complaints for unfair labor practice and illegal dismissal. They argue that the company closed down to prevent the formation of a union, but still a union was formed despite the interference of the company‟s president. When a petition for certification election was filed, the company told the DOLE that they were shutting down due to business losses so the workers were given notices of termination. The LA ruled that there was no illegal dismissal instead it was a lawful retrenchment and that there was no proof that the closure was done for union-busting. Also a CBA was already signed so the company can‟t be said to be anti-union. The NLRC affirmed the decision. The CA dismissed the union‟s appeal due to their failure to follow the Rules of Court. The union now contends that technicalities have no room in labor cases, where the Rules of Court is only applied to effectuate the objectives of the Labor Code. ISSUE: May the case be dismissed based on mere technicalities? HELD: The SC ruled in favor of the union and remanded the case back to the CA. The CA dismissed the case due to the failure to submit copies of the Amended and Supplemental Complaints, the Notice and Memorandum of Appeal based on Sec 3 Rule 46. The SC held that since certified true copies of the decision were attached to the petition, it obviated the need for the other documents that the CA found fatally omitted The attached LA Decision laid down the substance of the Amended and Supplemental Complaints and the NLRC Resolutions discussed the grounds for the appeal and the arguments raised therein, thereby negating the need for the Notice and Memorandum of Appeal. The SC held that the policy is to encourage full adjudication on the merits. De Leon v. NLRC May 30, 2001

FACTS: Fortune Tobacco (FTC) and FISI had a contract for security services and petitioners were among those engaged as guards. Later all FISI stock was sold and its name changed to MISI. FTC then terminated the contract so 582 guards were released. Later on, the union of FTC sent a notice of strike to FISI/MISI, claiming to represent the guards who were released. It argues that FISI/MISI and FTC are one and the same as both use the name Fortune and that they were terminated because FTC wanted to bust their union-forming activities. FTC argues that it is distinct from FISI/MISI and that it had no employer-employee relationship with the guards. FISI argues that the guards were not illegally dismissed but they were on floating status due to FTC‟s termination of the contract. The LA ruled in favor of the guards saying that FTC and FISI are one as they had the same shareholders and shared the same address so there was illegal dismissal and union busting. The NLRC reversed it bec when the guards were



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terminated, MISI was handling them and it had a different set of shareholders and they were released bec FTC terminated the contract so FISI could not be faulted ISSUE: W/N there was illegal dismissal and union-busting. HELD: The SC ruled in favor of the guards. There is sufficient ground to conclude that there was ULP as the company interfered with the self-organization of the guards. FISI had no other clients except FTC and other companies controlled by Lucio Tan, so it was a mere instrumentality of FTC. When the stocks of FISI were sold and when FTC terminated the contracts it was a concerted effort to remove the guards from the company and abate the growth of the union and block its actions to enforce their demands as this was all done soon after the guards started organizing themselves. The test of whether an employer has interfered with and coerced employees is whether he has engaged in conduct which may reasonably be said to interfere with the free exercise of employees' rights and it is not necessary that there be direct evidence that any employee was in fact intimidated or coerced by statements of threats of the employer if there is a reasonable inference that anti-union conduct of the employer does have an adverse effect on self-organization and collective bargaining. Suan v. NLRC June 19, 2001

FACTS: Petitioner was employed on board Irma Inc‟s vessel. He suffered a stroke while on board and had to disembark. He applied for and was granted sick leave to enable him to recover. When he reported for work, he was refused work and was told to secure a med cert attesting to his physical condition. He got one but still he wasn‟t allowed to work. He was told to just accept separation pay bec he was too old and sickly so he filed a complaint for illegal dismissal. The company argues that when he reported he didn‟t look alright so they told him to get a med cert but he said that he wanted to work and asked that he be assigned a different station. Permission from management still had to be obtained so either he accept separation pay or wait for further word. While they were waiting, he filed the case and while the case was pending, he received a letter declaring him AWOL and asking him to explain his absence. He claims that this was just strategy of the corp to counter his claim. The LA, NLRC, and CA all dismissed his claims. ISSUE: W/N Suan was illegally dismissed. HELD: The SC ruled that there was no illegal dismissal. They said that the question of his illegal dismissal was a question of fact and that these cannot be entertained unless the findings of fact are not supported or are glaringly erroneous. Records show that his ailment was not to be taken lightly and it normally took a yr to recover but he reported back in only 6 months while looking sickly so decisions had to be made and while management was still thinking he filed the case so there was no dismissal. Since there was none he may either be reinstated w/o backwages or paid in lieu of reinstatement, separation pay at 1 month's pay or ½ month's pay per year of service whichever is higher, a fraction of 6 months being considered as 1 whole year pursuant to Art 294 of the Labor Code. An employer may terminate an employee found suffering from any disease and whose continued employment is prohibited by law or prejudicial to his health as well as to the health of his co-employees provided that he is paid separation pay of at least 1 month salary or ½ month salary for every year of service, whichever is greater, a fraction of at least 6 months being considered as 1 whole year. EDI Staff Builders International, Inc. vs. Magsino June 20, 2001

FACTS: EDI is a duly licensed recruitment agency and respondent Magsino was a supervisor until she was dismissed. One of the things she was to do was the remit the premium payments made by the contract workers on their repatriation bonds. It was discovered that over one year of payments were missing so she was asked to explain this and to show reason why no disciplinary action shouldn‟t be taken but respondent resigned but her resignation was not acted upon bec of the investigation, later she was notified of her termination. She filed a case for illegal dismissal argued that she wasn‟t afforded due process bec there was no cause and no notice of termination. The LA and the NLRC ruled that there was illegal dismissal bec there wasn‟t enough proof to terminate respondent. The NLRC ruled that the company couldn‟t



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appeal bec it didn‟t conform to the NLRC Rules of Procedure and that the issues raised were raised for the first time on appeal. The CA upheld the decision. ISSUE: W/N there was illegal dismissal. HELD: The SC ruled that the NLRC should have allowed the company to present its evidence as it is in the best interest of justice that all facts come out. However, the evidence is still insufficient to terminate respondent. In illegal dismissal cases, the burden of proof is on the employer but the company failed to show enough evidence proving and justifying the dismissal. Hyatt Taxi Services, Inc. v. Catinoy June 26, 2001 FACTS: Catinoy was a taxi driver of Hyatt Taxi Services, Inc. He is also a member and officer of Hyatt Taxi Employees Association, a legitimate labor organization registered with the DOLE and is the exclusive bargaining representative of all taxi drivers of the company. One day he found out that his desk was forcibly opened and he found out that it was the acting union president who opened it so an argument began that ended in blows where he was injured so he filed a criminal complaint against the president. The union asked the company to suspend them both for fighting and a memo was issued. It said that company rules and the union‟s by-laws had been violated so they were put on indefinite suspension. Catinoy then filed a complaint for illegal suspension. After 30 days of suspension, he reported for work but he was not allowed to bec of the 2 cases he filed. He then amended his complaint to constructive dismissal. The LA ruled that there was illegal dismissal and the NLRC affirmed it but did not award backwages bec there was no concrete showing of illegal dismissal and it was only constructive illegal dismissal. The CA reversed it and ruled that there was illegal dismissal and awarded full backwages. ISSUE: W/N there was illegal dismissal or constructive dismissal. HELD: The SC ruled that there was illegal dismissal, not merely constructive dismissal. There was no justification for the deletion of the award of backwages. The factual findings of the LA, which the NLRC initially adopted, show that respondent was not taken back after the 30-day suspension. The LA appreciated the events as badges of constructive dismissal. Constructive dismissal is when the employee wants to work but cannot due to the prevailing conditions. But here, what made it impossible or unacceptable for respondent to resume work was an insistence that he first desist from filing his complaints before he be allowed to return. He refused and amended his complaint to include constructive dismissal. His refusal to yield is understandable for he has every right not to bargain away his right to prosecute his complaints in exchange for the employment to which he was in the first place rightfully entitled. Jo Cinema v. NLRC June 28, 2001

FACTS: Petitioner is in the movie business. Respondent was a theater porter. A memo was issued saying that no checks should be encashed but respondent, for her friend, encashed without permission 4 checks with the ticket seller. The checks bounced so she was asked to show cause why she shouldn‟t be disciplined but she didn‟t answer so she was preventively suspended. An investigation was held where she participated in. During the investigation she filed a case for illegal dismissal bec when she was suspended, she was allegedly terminated also. The LA and NLRC ruled that there was illegal dismissal or at least constructive dismissal and ordered separation pay and full backwages. The LA ruled that since the company insisted on making her pay the amount she couldn‟t come back to work even if she wanted to. The NLRC ruled that even though respondent had no cause of action against the company as she was merely placed on preventive suspension she was still illegally dismissed. ISSUE: W/N respondent was illegally dismissed HELD: It is clear that respondent was not dismissed but merely placed under preventive suspension. It cannot be construed as dismissal since the cessation from work is only temporary. She could not have been dismissed because a formal investigation was still being conducted. She even attended the investigation admitted the allegations. If she was indeed dismissed the investigation wouldn‟t have continued. There was also no constructive dismissal.



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Constructive discharge is quitting because continued employment is rendered impossible, unreasonable or unlikely. This does not hold. The demand for payment out of her own pockets was reasonable as it was attributed to her. As she was not illegally dismissed, separation pay and backwages are not in order. UIC vs. U.I.C. Teaching and Non-teaching Personnel and Employees Union v. NLRC FACTS: Petitioner is a school and respondent UIC Teaching and Non-Teaching Personnel and Employment Union is the labor representative of both the teaching and non-teaching employees of the UIC. A professor was terminated after he was found guilty of improper conduct for soliciting money from students. The union filed a case for ULP and illegal suspension. He argues that the charges were established long before he was terminated and he was terminated for his union activities. Other employees were also dismissed as the school claims that their services had either become redundant or their work was unsatisfactory. So they filed complaints for illegal dismissal and ULP. The LA ruled that only the teacher was illegally dismissed. The NLRC ruled that there was no illegal dismissal and no ULP and declared all the terminations as legal, some for just cause, the others for expiration of contracts. The CA affirmed the decision except for 2 employees , dismissed for redundancy, which it ruled should be reinstated. ISSUE: W/N there was illegal dismissal and ULP. HELD: The SC ruled that there was illegal dismissal. Factual findings are accorded great respect. In this case there was no reason to overturn their findings. Redundancy is when an employee‟s services are in excess of that reasonably demanded by the actual requirements of the enterprise. A position is redundant when it is superfluous, which may be the outcome of a number of factors, like overhiring, decreased volume of business, or the dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise. There was no claim that the position had become useless or redundant such that it had to be abolished. In fact there was a replacement for the position, a student-trainee who would work for free. Asuncion v. NLRC July 31, 2001

FACTS: Petitioner was an accountant/bookkeeper of the Mabini Medical Clinic. The NCR-Industrial Relations Division of the DOLE conducted a routine inspection of the premises of the company and discovered upon petitioner‟s disclosure that there were violations of the labor standards law. Later a memo was issued charging petitioner with chronic absentism, habitual tardiness, wasting time, getting money without a receipt, and disobedience and was asked to explain why she should not be terminated so she submitted her response. She was dismissed on the same day so she filed a complaint for illegal dismissal. The LA ruled that there was illegal dismissal. The NLRC set it aside saying that petitioner admitted that charges. ISSUE: W/N there was illegal dismissal. HELD: The SC ruled in favor of petitioner. For a valid dismissal, not only must there be just cause supported by clear and convincing evidence, there must also be an opportunity to be heard. The employer has the burden to prove that the dismissal was with just or authorized cause. Failure to discharge this burden means that the dismissal is unjustified. Here, the evidence submitted were merely unsigned handwritten records and print-outs. This is insufficient to justify a dismissal. The provision for flexibility in administrative procedure does not justify decisions w/o basis in evidence having rational probative value. Here, both the handwritten listing and computer print-outs being unsigned, so the authenticity is suspect and devoid of any rational probative value. Nor was there due process. There is no showing that there was warning of the absences and tardiness. The 2 day period given to answer the allegations is an unreasonably short period of time. The clinic can‟t have given ample opportunity to answer the charges filed. There are serious doubts as to the factual basis of the charges against petitioner. These doubts shall be resolved in her favor in line with the policy under the Labor Code to afford protection to labor and construe doubts in favor of labor. The rule is that if doubts exist between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter.



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Concorde Hotel v. CA August 9, 2001 FACTS: Petitioner engaged in a mass hiring through a manpower service agency. Respondent was one of those hired as assistant cook. Petitioner discovered some missing and unaccounted stock so an inquiry was conducted. It was discovered that employees were bringing home inventory. An in-house investigation was held and they were asked to explain such. The agency was given a list of those involved. They were called and asked to explain in writing that same day. When nobody complied petitioner and the agency issued separate notices of termination. Later on respondent was included and also terminated so he filed a complaint for illegal dismissal. He argues that he was made to testify against those charged but he refused so he was terminated for allowing the thefts to take place. He argues that it couldn‟t be true because he complained to the police that he was threatened to keep quiet by the employees stealing. Another reason for his dismissal was his failure to meet minimum company standards. The LA dismissed the complaint but the NLRC and CA ruled that that the dismissal was without cause. The hotel argues that it was the agency that dismissed him and not the hotel. ISSUE: W/N there was illegal dismissal by the hotel HELD: The SC ruled that there was illegal dismissal. An employee may be terminated for loss of trust and confidence but this can‟t be used to justify every dismissal so the Court came up with guidelines for the application of the doctrine: (1) loss of confidence should not be simulated; (2) it should not be used as a subterfuge for causes which are improper, illegal or unjustified; (3) it should not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and (4) it must be genuine, not a mere afterthought to justify earlier action taken in bad faith. It applies only to employees who occupy positions of trust and confidence, or to situations where the employee is routinely charged with the care and custody of the employer's money or property. It must be shown that there is reasonable ground to believe that the employee is responsible for the misconduct or infraction and that the nature of his participation rendered him unworthy of the trust and confidence demanded by his position. Loss of confidence must be based on a willful breach of trust, founded on clearly established facts. As assistant cook, respondent is charged with the care of food preparation in the coffee shop and responsible for the custody of food supplies and must see to it that there is sufficient stock in the kitchen. He should not permit food or other materials to be taken out without the necessary order slip or authorization as these are hotel property. Thus, the nature of his position as assistant cook is one charged with trust and confidence. In this case the burden of proof establishing the charge wasn‟t overcome and there was no due process as the 2-notice requirement wasn‟t met and he was never given an opportunity to explain his side. ATCI Overseas Corporation vs. CA August 9, 2001

FACTS: ATCI and the Ministry of Public Health of Kuwait entered into an agreement. ATCI would recruit medical professionals for the latter. Respondents were hired for the Ministry. They underwent physical and medical exams in a POEA accredited clinic and were declared fit. In Kuwait, they were subjected to another examination and, after 2 months, they were dismissed for being physically unfit for their jobs and were repatriated so they filed a complaint in the POEA for illegal dismissal, alleging that they weren‟t given by their foreign employer copies of the results of their medical exam and written notice of termination. ATCI claims that the Ministry has the right to dismiss them because they were found to be physically unfit to work. It appears on record that they were just not allowed to work anymore, there was no notice nor was there any opportunity given to allow them to defend themselves. The POEA ruled that there was illegal dismissal. The NLRC reversed the decision saying that the labor code provides that in proceedings before the NLRC, they may use all reasonable means to ascertain facts and they cannot simply disregard the certification of the Ministry of Health of Kuwait, however, this was only presented in the appeal to the NLRC. The CA reversed the NLRC. ATCI claims that respondents were merely probationary dismissed for failure to qualify since they were physically unfit. ISSUE: W/N there was illegal dismissal.



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HELD: The SC ruled that there was illegal dismissal. There was no proof that they were probationary. Being regular employees, the dismissal must meet the requirements of Art 284 of the Labor Code. An employee may be terminated if found to be suffering from a disease and the continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees but the dismissal may not be summarily carried out. The employer must meet certain prerequisites contained in Sec. 8, Rule I, Book VI, of the Omnibus Rules Implementing the Labor Code. There must be a certification by a competent public health authority that the disease is of such nature or at such a stage that it cannot be cured within a period of six (6) months even with proper medical treatment. If the disease or ailment can be cured within the period, the employee can‟t be terminated but must take a leave and he will be reinstated immediately upon the restoration of his normal health. The letter from the Ministry falls short of the demands of the Omnibus Rules. There is no finding that the disease is of such nature or at such a stage that it cannot be cured within a period of six (6) months with proper medical treatment. Also ATCI has not proven that the same was presented prior to the termination. Private employment or recruitment agencies are jointly and severally liable with its principal, the foreign-based employer, for all claims filed by recruited workers which may arise in connection with the service agreements or employment contracts. NDC-GUTHRIE Plantations, Inc. v. NLRC August 9, 2001

FACTS: Petitioners are both GOCC‟s. They hired hundreds of farm workers for their plantations and several supervisors to oversee the workers. NGPI discovered that it was sustaining tremendous losses so they terminated the services of 279 field workers. NGEI had a similar fate so it terminated 153 employees. Later several employees of the companies bonded together and formed the NDC-GUTHRIE Staff Workers Union and after it had been issued a Certificate of Recognition by the DOLE, they sent notice to NGPI and NGEI requesting that it be recognized as the sole and exclusive bargaining agent of all its member-employees. The companies replied asking for proof confirming their claim that it represented the majority of the employees covered by the proposed bargaining unit so the union presented its minutes. Since the documents submitted did not constitute proof of majority representation, petitioners denied recognition of the Union. The Union filed a petition for a certification election among all employees covered by the proposed bargaining unit. Then the companies informed the DOLE of their losses and retrenched 17 more employees. Believing that their dismissal was because of their union activities and in violation of their rights to self-organization and to collective bargaining, the 17 filed a Complaint for illegal dismissal and unfair labor practice. Petitioners deny the claim of illegal dismissal and assert that it‟s a prerogative to lay off employees to prevent losses. They presented financial statements prepared by the Commission on Audit showing tremendous losses for 4 consecutive years. They further claimed that the retrenchment was done in good faith as it was based on a number of criteria, namely, seniority, service record and performance. The LA and NLRC ruled that there was illegal dismissal saying that the losses were unsubstantiated. ISSUE: W/N there were actual losses and were the dismissals valid. HELD: The SC ruled that there were in fact losses that justified the termination of the employees. Proof was also presented that even prior to the dismissal of the 17, hundreds had already been retrenched to save on capital. The financial documents audited by the CA is the normal and reliable method of proof of the profit and loss performance of aGOCC. Also, management cannot be denied recourse to retrenchment if it can successfully prove the existence of the following: (a) substantial losses which are not merely de minimis in extent; (b) imminence of such substantial losses; (c) retrenchment would effectively prevent the expected additional losses; and, (d) alleged losses and expected losses must be proven by sufficient and convincing evidence. As these were faithfully observed the retrenchment was justified. Serrano v. CA G.R. No. 139420 August 15, 2001

From 1974 to 1991, A Company., the local agent of foreign corporation B Company, deployed petitioner Serrano as a seaman to Liberian, British and Danish ships. As petitioner was on



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board a ship most of the time, respondent Maersk offered to send portions of petitioner‟s salary to his family in the Philippines by money order. Petitioner agreed and from 1977 to 1978, he instructed respondent Maersk to send money orders to his family. Respondent Maersk also deducted various amounts from his salary for Danish Social Security System (SSS), welfare contributions, ship club, and SSS Medicare. Petitioner‟s family failed to receive the money orders petitioner sent through respondent Maersk. Upon learning this in 1978, petitioner demanded that respondent Maersk pay him the amounts the latter deducted from his salary, which requests were ignored. Whenever he returned to the Philippines, petitioner follow up his money claims but he would be told to return after several weeks while respondent Maersk would hire him again to board another one of their vessels for about a year. Finally, in October 1993, petitioner wrote to respondent Maersk demanding immediate payment to him of the total amount of the money orders deducted from his salary from 1977 to 1978. On November 11, 1993, B company replied to petitioner that they keep accounting documents only for a certain number of years, thus data on his money claims from 1977 to 1978 were no longer available. Likewise, it was claimed that it had no outstanding money orders. B Company declined petitioner's demand for payment. In April 1994, petitioner filed a complaint for collection of the total amount of the unsent money orders and illegal salary deductions against the respondent Maersk in the Philippine Overseas Employment Agency (POEA). The NLRC dismissed the case on the ground of prescription, based on Article 291 stating money shall be filed within three years from the time the cause of action accrued, otherwise they shall be forever barred. ISSUE: Did the money claim of petitioner prescribe? HELD: No. Petitioner‟s cause of action accrued only in 1993 when respondent A.P. Moller wrote to him that its accounting records showed it had no outstanding money orders and that his case was considered outdated. Thus, the three (3) year prescriptive period should be counted from 1993 and not 1978 and since his complaint was filed in 1994, he claims that it has not prescribed. It is settled jurisprudence that a cause of action has three elements, to wit, (1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; (2) an obligation on the part of the named defendant to respect or not to violate such right; and (3) an act or omission on the part of such defendant violative of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff. In October 1993, Serrano finally demanded in writing payment of the unsent money orders. Then and only then was the claim categorically denied by respondent A.P. Moller in its letter dated November 22, 1993. Following the Baliwag Transit ruling (1989), petitioner‟s cause of action accrued only upon respondent A.P. Moller's definite denial of his claim in November 1993. Having filed his action five (5) months thereafter or in April 1994, we hold that it was filed within the three-year (3) prescriptive period provided in Article 291 of the Labor Code.