238546164 Labor Finals Digests 2014

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UNIVERSITY OF SAN CARLOS

COLLEGE OF LAW

COMPENDIUM OF LABOR STANDARDS LAW

FINAL CASE DIGESTS 2014

_________________________________

IN PARTIAL FULFILLMENT

FOR THE REQUIREMENTS IN

LLB 242N (LABOR STANDARDS LAW)

_________________________________

SUBMITTED BY:

MIKKO GABRIEL L. VALENDEZ

JD – 2 (EH306)

SUBMITTED TO:

ATTY. JEFFERSON M. MARQUEZ

OCTOBER 16, 2014


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LABOR STANDARDS LAW

UNIVERSITY OF SAN CARLOS SCHOOL OF LAW AND GOVERNANCE 2

LIST OF LABOR STANDARD CASES

JURISDICTION OF THE LABOR ARBITER

1.

Tolosa vs. NLRC, G.R. No. 149578, April10, 20032. Austria vs. NLRC, 312 SCRA 4133. Eviota vs. Court of Appeals, 407 SCRA 3944. Dynamic Signmaker Outdoor Advertising

Services vs. Potongan, G.R. No. 156589,June 27, 2005

5. Metromedia Times Corp., vs. Pastorin, G.R. No. 154295, July 29, 2005

6. Yusen Air & Sea Service Phils vs. Villamor,G.R. No. 154942, August 16, 2005

7. Duty Free Phils., vs. Mojica, G.R. No.

166365, September 30, 20058. Easycall Communication Phils., vs. King,

G.R. No. 145901, December 15, 20059. San Miguel Foods Inc., vs. San Miguel Corp

Employees Union-PTGWO, G.R. No.168569, October 5, 2007

10. Leyte IV Electric Cooperative Inc vs.LEYECO IV Employees Union-ALU, G.R.

No. 1577745, October 19, 200711. Atty Garcia vs. Eastern Telecommunications

Phils., et al., GR No. 173115 & 173163-64,April 16, 2009

12.

Halaguena et al., vs. Phil Airlines GR No.172013, Oct 2, 2009

13. Okol vs. Slimmer’s World International, etal., G.R. No. 160146, December 11, 2009

14. Hugo et al., vs. Light Rail Transit Authority,G.R. No. 181866, March 18, 2010

15. Matling Industrial and Commercial Corp etal., vs. Coros, GR No. 157802, Oct. 13,2010

16. Manila Electric Co. et al., vs. Lim, GR No.184769, Oct. 5, 2010

17.

Hongkong and Shanghai Banking Corp., vs.Sps. Broqueza, GR No. 178610, Nov. 17,2010

18. Real vs. Sangu Phils., Inc., et al., G.R. No.168757, January 19, 2011

19. Portillo vs. Rudolf Lietz, Inc. et al., G.R. No. 196539, October 10, 2012

20.

Ace Navigation Co. Inc. et al., vs.Fernandez, G.R. No. 197309, October 10,2012

21. Cosare vs. Broadcom Asia, Inc. GR No.201298, February 5, 2014, citing 2010Matling Industrial and Commercial Corp etal., vs. Coros, GR No. 157802 and 2011Real vs. Sangu Phils., Inc., et al., G.R. No.168757

2011 NLRC RULES OF PROCEDURE

22. T/SGP Larkins vs. NLRC, G.R. No. 92432,February 23, 1995

23. UERM Memorial Medical Center vs. NLRC, G.R. No. 110419, March 3, 1997

24. Phil Tranco Services vs. NLRC, G.R. No.124100, April 1, 1998

25. St. Martin Funeral Homes vs. NLRC, G.R. No. 130866, September 16, 1998

26. Ludo & Luym Corp., vs. Saornido, G.R. No.140960, January 20, 2003

27. Hansin Engineering & Construction vs. CA,G.R. No. 165910, April 10, 2006

28.

Phil. Journalist Inc. vs. NLRC, G.R. No.166421, Sept. 5, 2006

29. Balagtas Multi-purpose Coop. Vs. CA, G.R. No. 159268, Oct. 27, 2006

30. St. Martin Funeral Homes vs. NLRC, G.R. No. 142351, Nov. 22, 2006

31. DOLE Phils. Vs. Esteva, G.R. No. 161115, Nov. 30, 2006

32. Intercontinental Broadcasting Corp., vs.Panganiban, G.R. No. 151407, February 6,2007

33. Far East Agricutural Supply vs. Lebatigue,G.R. No. 162813, February 12, 2007

34. Letran Calamba Faculty & EmployeesAssociation vs. NLRC, G.R. No. 156225,January 29, 2008

35. Metro Transit Organization vs. Piglas NFWU-KMU et al., G.R. No. 175460, April14, 2008


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36. J.K. Mercado & Sons AgriculturalEnterprises, Inc., vs Sto. Tomas, G.R.No.158084, August 29, 2008

37. J. Phil. Marine Inc., vs. NLRC, G.R. No.1753661, August 11, 2008; but see Ilaganvs. Court of Appeals, G.R. No. 162089, July

9, 200838. Sy vs. ALC Industries, G.R. No. 168339,

October 10, 200839. PCI Travel Corp., vs. NLRC, G.R. No.

154379, October 31, 200840. Lopez vs. Q. C. Sports Club, G.R. No.

164032, January 19, 200941. Lockheed Detective & Watchman Agency,

G.R. No. 185918, April 18, 201242. Portillo vs. Rudolf Lietz, Inc. et al., G.R.

No. 196539, October 10, 2012

43.

Building Care Corp. vs. Macaraeg, G.R. No.198357, December 10, 2012

OTHER IMPORTANT LABOR PROVISIONS

A.CONTRACTING ARRANGEMENT

44. PBCom vs. NLRC, 146 SCRA 347 [1986]45. Neri vs. NLRC, 224 SCRA 717 [1993]46. Filipinas Synthetic Fiber Corp., vs. NLRC,

257 SCRA 336 [1996]

47.

Maraquinot vs. NLRC, 284 SCRA 539[1998]

48. Urbanes Jr. vs. Sec. Of Labor, G.R. No.122791, Feb. 19, 2003

49. San Miguel vs. Maerc Integrated Services,G.R. No. 144672, July 10, 2003

50. Mariveles Shipyard vs. CA, G.R. No.144134, Nov. 11, 2003

51. New Golden City Builders vs. CA, G.R. No.154715, Dec. 11, 2003

52. National Food Authority vs. MacedaSecurIty Agency, G.R. No. 163448, March

8, 200553. Abella vs. PLDT, G.R. No. 159469, June 8,

200554. San Miguel vs. Aballa, G.R. No. 149011,

June 28, 200555. Manila Electric Co., vs. Benamira, G.R. No.

145271, July 14, 2005

56. Granspan Development Corp., vs. Bernardo,G.R. No. 141464, Sept. 21, 2005

57. Acevedo vs. Advanstar Co., G.R. No.157656, Nov. 11, 2005

58. Big AA Manufacturer vs. Antonio, G.R. No.1608504, March 3, 2006

59.

DOLE Phils. Vs. Esteva, G.R. No. 161115, Nov. 30, 2006

60. San Miguel Vs. NLRC, G.R. No. 147566,Dec. 6, 2006 citing Maerc IntegratedServices case

61. Eparwa Security & Janitorial Services vs.Liceo De Cagayan Univ. G.R. No. 150402,

Nov. 28, 2006, citing Eagle Security case62. Lapanday Agri Development Corp., vs.

Court of Appeals, 324 SCRA 3963. Escario vs. NLRC, 333 SCRA 257 [2000]

64.

Aboitiz Haulers vs. Dimapatoi, G.R. No.148619, Sept. 19, 200665. GSIS vs. NLRC, G.R. No. 157647, October

15, 2007, citing Rosewood Processing vs. NLRC, 290 SCRA 408

66. Republic of the Phils/SSC/SSS vs. AsiaproCooperative, G.R. No. 172101, November23, 2007

67. Almeda et al., vs. Asahi Glass, G.R. No.177785, Sept 3, 2008

68. Sasan, Sr et al., vs. NLRC and EPCIB, G.R. No. 176240, October 17, 2008

69.

Purefoods Corp., vs. NLRC et al., G.R. No.172241, November 20, 2008

70. Maranaw Hotels and Resort vs. Court ofAppeals, et al., G.R. No. 149660, Jan. 20,2009

71. CCBPI vs. Agito et al., G.R. No. 179546,Feb. 13, 2009

72. South Davao Development Company et al.,vs. Gamo et al., GR No. 171814, May 8,2009

73. Traveno et al., vs. Bobongon Banana

Growers Multi-purpose Cooperative et al.,GR No. 164205, Sept. 3, 200974. Locsin et al., vs. PLDT, GR No. 185251,

Oct 2, 200975. Aliviado et al vs. Procter & Gamble Phils

GR No. 160506, March 9, 201076. San Miguel Corp. vs. Semillano et al., GR

No. 164257, July 5, 201


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77. Manila Water Co. vs. Dalumpines, GR No.175501, Oct. 4, 2010

78. Teng vs. Pahagac, GR No. 169704, November 17, 2010

79. GSIS vs. NLRC et al., GR No. 180045, Nov. 17, 2010

80.

Sy et al., vs. Fairland Knitcraft Co Inc. G.R. No. 189658, December 12, 2011

81. Polyfoam-RGC International Corp., vs.Concepcion, G.R. No. 172349, June 13,2012

82. Superior Packaging Corp., vs. Balagsay etal., G.R. No. 178909, October 10, 2012

83. Digital Telecommunications Phils Inc. vs.Digitel Employees Union et al., G.R. No.184903-04, October 10, 2012

84. Norkis Trading Corp., vs. Buenavista, et al.,

G.R. No. 182018, October 10, 201285. Goya Inc. vs. Goya Inc. Employees Union-FFW G.R. No. 170054, Jan. 21, 2013

86. Vigilla et al., vs. Phil. College ofCriminology Inc., G.R. No. 200094, June10, 2013

87. BPI Employees Union-Davao city-FUBUvs. Bank of the Phil Islands et al., G.R. No.174912, July 24, 2013

B.WORKER'S PREFERENCE

88.

DBP vs. NLRC, 242 SCRA 59 [1995]89. Batongbuhay Gold Mines vs. De la Serna,312 SCRA 45

90. Barayoga vs. Asset Privatization Trust, G.R. No. 160073, October 24, 2005

91. Phil. Airlines vs. Zamora, G.R. No. 166996,Feb. 6, 2007

92. Phil. Airlines vs. Phil. Airlines EmployeesAssociation, 525 SCRA 29 [2007], citingRubberworld vs. NLRC, 305 SCRA 721[1999]

93. Garcia vs. Phil Air Lines, G.R. No. 164856,

January 20, 2009

C.ATTORNEY'S FEES & APPEARANCE OFLAWYERS

94. Bank of the Philippines Island vs. NLRC,171 SCRA 556

95. Traders Royal Bank Employees Union vs. NLRC, 269 SCRA 733 [1997]

96. Brahm Industries vs. NLRC, 280 SCRA 824[1997]

97. Heirs of Aniban vs. NLRC, 282 SCRA 377[1997]

98. Sapio vs. Undaloc Construction et al., G.R. No. 155034, May 22, 2008

99.

Atty. Ortiz vs. San Miguel Corp., G.R. No.151983-84, July 31, 2008

100. Masmud vs. NLRC et al., G.R. No. 183385,Feb. 13, 2009

101. Kaisahan at kapatiran ng mga Manggagawaat Kawani sa MWC-East Zone Union vs.Manila Water Company, G.R. No. 174179,

November 16, 2011102. Malvar vs. Kraft Food Phils Inc. et al., G.R.

No. 183952, Sept. 9, 2013

D.SPECIAL TYPES OF WORKERS

103. Bernardo vs. NLRC, 310 SCRA 186 [1999]

E. EMPLOYMENT OF WOMEN

104. PT&T vs. NLRC, 272 SCRA 596 [1997]

105. Del Monte Phils vs. Velasco, G.R. No.

153477, March 6, 2007

106. Co vs. Vargas, G.R. No. 195167, November

16, 2011

F. EMPLOYMENT OF CHILDRENG. EMPLOYMENT OF HOUSEHELPER

107. Ultra Villa Food Haus vs. Geniston, 309

SCRA 17 [1999]

108. Remington Industrial Sales Corp., vs.

Castaneda, G.R. No. 169295-96, Nov. 20,

2006 citing Apex Mining

Co vs. Vargas, G.R. No. 195167, November

16, 2011

H. EMPLOYMENT OF HOMEWORKERS

I. EMPLOYMENT OF NON-RESIDENT

ALIENS

J. EMPLOYMENT OF STUDENTS &

WORKING SCHOLAR

K.EMPLOYMENT OF ACADEMIC/NON-


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ACADEMIC PERSONNEL IN PRIVATE

EDUCATIONAL INSTITUTION

109. University of the east et al., vs. Pepanio, G.r.

No. 193897, Jan. 23, 2013

110.

Colegio Del Santisimo Rosario et al., vs.Rojo, G.R. No. 170388, Sept. 4, 2013 citing

Mercado et al., vs. AMA Computer College-

Paranaque City, GR No. 183572, April 13,

2010

111. Herrera-Manaois vs. St. Scholasticas

College, GR No. 188914, December 11,

2013

MEDICAL, DENTAL AND OCCUPATIONAL

SAFETY

112. Tolosa vs. NLRC, G.R. No. 149578, April

10, 2003

113. U-Bix Corp., vs. Bandiola, 525 SCRA 566

[2007]

114. Ocean Builders Construction vs. Sps.

Cubacub, GR No. 150898, April 13, 2011

MIGRANT WORKER'S ACT & OVERSEAS

FILIPINO ACT OF 1995 & RECRUITMENTAND PLACEMENT

115. ISS Indochina Corp., vs. Ferrer, G.R. No.

156381, Oct. 14, 2005

116. People vs. Capt. Gasacao, G.R. No. 168449,

Nov. 11, 2005

117. Acuna vs. CA, G.R. No. 159832, May 5,

2006

118. Asian International Manpower Services vs.

CA, G.R. No. 169652, October 9, 2006

119. Sim vs. NLRC et al., G.R. No. 157376,

October 2, 2007

120. Bahia Shipping Services vs. Chua, G.R. No.

162195, April 8, 2008

121.

Masangkay vs. Trans-Global MaritimeAgency Inc., et al., G.R. No. 172800,

October 17, 2008

122. Magsaysay Maritime Corp., et al., vs.

Velasquez, et al., G.R. No. 179802, Nov 14,

2008

123. Serrano vs. Gallant Maritime Services et al.,

G.R. No. 167614, March 24, 2009 – En

Banc

124. Becmen Service Exporter and Promotion

Inc., vs. Spouses Cuaresma, GR Nos.

182978-79 & 184298-99, April 7, 2009

125. People vs. Domingo, GR No. 181475, April

7, 2009

126. ATCI Overseas Corp. et al., vs. Echin, GR

No. 178551, Oct. 11, 2010

127. Yap vs. Thenamaris Ship Management et

al., G.R. No. 179532, May 30, 2011128. Skippers United Pacific vs. Doza et al., G.R.

No. 175558, February 8, 2012

129. International Management Services vs.

Logarta, G.R. No. 163657, April 18, 2012

130. Pert/Cpm Manpower Exponent Co., Inc. vs.

Vinuya et al., G.R. No. 197528, September

8, 2012

131. Hon. Sto. Tomas, et al., vs. Salac et al., G.R.

No. 152642 & 152710, November 13, 2012


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1.

Tolosa vs. NLRC G.R. No. 149578, April 10,2003

Facts: Petitioner is the wife of Capt. Tolosa who washired to be the master of M/V Lady Dona with

private respondents Garate and Asis as Chief Mate

and Second Mate of the vessel respectively. Capt.Tolosa was hired by co-private respondent Qwana-Kaiun through the manning agent Asia BulkTransport Phils., Inc. The voyage was fromYokohama, Japan to Long Beach, California. Capt.Tolosa was given a compensation of US$1,700monthly plus US$400 overtime allowance monthly.Upon embarkation, Capt. Tolosa’s health was still ingood shape but after being drenched in rainwaterafter embarkation, he suffered Loose BowelMovement and fever which led eventually to hisdeath after several days.

Petitioner filed a Complaint/Position Paper with thePhilippine Overseas Employment Agency against

private respondents herein but because of theamendatory law expanding the jurisdiction of the

National Labor Relations Commission (NLRC), thecase was raffled to a Labor Arbiter. She sought torecover (a) loss of earning capacity as ‘actualdamages’ and (b) blacklisting imputing grossnegligence to private respondents Garate and Asis.She anchored her claim on Article 161 of the Labor

Code regarding Assistance of Employer.

Private respondents, on the other hand, asserted thatthe Labor Arbiter has no jurisdiction as the complaintis based on torts which the regular courts have

jurisdiction.

The Labor Arbiter ruled in favor of petitionergranting her the relief sought. On appeal, the NLRCreversed the Labor Arbiter’s Decision. It ruled thatthe Labor Arbiter had no jurisdiction over the subjectmatter. The Court of Appeals affirmed the NLRC. It

ruled that the case did not arise from a quasi-delict ortort and not from an employee-employer relationshipnor does it have any reasonable causal connection fordamages to be awarded incident to an employee-employer relationship. Hence, this instant petition.

Petitioner argued that her cause of action is not basedon negligence but on Art. 161 of the Labor Code. She

alleged that the reasonable causal rule should beapplied in her favor.

Issue: Whether or not the Labor Arbiter has jurisdiction over the subject matter?

Ruling: No, the Labor Arbiter does not have jurisdiction over the subject matter. The Court ruledthat labor arbiters and the NLRC have no power togrant reliefs from claims that do not arise fromemployer-employee relationships. They have no

jurisdiction over torts that do not have a reasonablecausal connection to any of the claims provided for inthe Labor Code, other labor statutes, or collective

bargaining agreements.

It has been emphasized that the allegation of thecomplaint determines the nature of the action and

consequently, the jurisdiction of the courts. TheCourt was convinced that the allegations were in thenature of an action based on quasi-delict or tortresulting from gross negligence. Even though LaborArbiters have jurisdiction to grant damages under theCivil Code, these reliefs must still be based on anaction that has a reasonable causal connection withthe Labor Code, other labor statutes, or collective

bargaining agreements. It is the character of the principal relief that appears essential in thisconnection.

In the case at hand, loss of earning capacity and blacklisting cannot be equated to wages, overtimecompensation or separation pays. They arise fromcauses within the realm of civil law. Petitioner cannotalso anchor her claim on Article 161 as this does notgrant or specify a claim or relief.

2. Austria vs. NLRC G.R. No. 124382August 16, 1999

Facts:Private Respondent Central Philippine Union MissionCorporation of the Seventh-Day Adventists (SDA) isa religious corporation duly organized and existingunder Philippine law. Austria was a Pastor of theSDA until 1991, when his services were terminated.

Austria worked with the SDA for 28 years from 1963to 1991. He began his work with the SDA as aliterature evangelist, selling literature of the SDA


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over the island of Negros. From then on, he workedhis way up the ladder and got promoted severaltimes. He was elevated to the position of Pastor andthe finally as a District Pastor in Negros with 12churches under his jurisdiction.

On various occasions, Austria received severalcommunications the treasurer of the Negros Missionasking him to admit accountability and responsibilityfor the church tithes and offerings. After severalmeetings were held and an investigation was made onthe matter, Austria received a letter of dismissal citingmisappropriation of denominational funds, willful

breach of trust, serious misconduct, gross andhabitual neglect of duties, and commission of anoffense against the person of employer's dulyauthorized representative, as grounds for thetermination of his services.

Reacting against the adverse decision of the SDA,Austria filed a before the Labor Arbiter for illegaldismissal against the SDA and its officers and prayedfor reinstatement with backwages and benefits, moraland exemplary damages and other labor law benefits.

The SDA contended that by virtue of the doctrine ofseparation of church and state, the Labor Arbiter andthe NLRC have no jurisdiction to entertain thecomplaint filed by Austria. Since the matter at barallegedly involves the discipline of a religiousminister, it is to be considered a purely ecclesiasticalaffair to which the State has no right to interfere.

Issue:Do the Labor Arbiter and the NLRC have jurisdictionto try and decide the complaint filed by Austriaagainst the SDA?

Ruling:Yes, they have jurisdiction.

The principle of separation of church and state findsno application here. The case at bar does not concernan ecclesiastical or purely religious affair as to barthe State from taking cognizance of the same. An

ecclesiastical affair involves the relationship betweenthe church and its members and relate to matters offaith, religious doctrines, worship and governance ofthe congregation. To be concrete, examples of thisso-called ecclesiastical affairs to which the Statecannot meddle are proceedings for excommunication,ordinations of religious ministers, administration ofsacraments and other activities with attachedreligious significance.

While the matter at hand relates to the church and itsreligious minister it does not ipso facto give the casea religious significance. What is involved here is therelationship of the church as an employer and theminister as an employee. The matter of terminatingan employee, which is purely secular in nature, isdifferent from the ecclesiastical act of expelling amember from the religious congregation. As such, theState, through the Labor Arbiter and the NLRC, hasthe right to take cognizance of the case and todetermine whether the SDA, as employer, rightfullyexercised its management prerogative to dismiss anemployee. This is in consonance with the mandate ofthe Constitution to afford full protection to labor.

Under the Labor Code, the provision which governsthe dismissal of employees, is comprehensive enoughto include religious corporations, such as the SDA, inits coverage. Article 278 of the Labor Code on post-employment states that "the provisions of this Titleshall apply to all establishments or undertakings,whether for profit or not." Obviously, the cited articledoes not make any exception in favor of a religiouscorporation. This is made more evident by the factthat the Rules Implementing the Labor Code,

particularly, Section 1, Rule 1, Book VI on theTermination of Employment and Retirement,categorically includes religious institutions in thecoverage of the law, to wit:

Sec. 1. Coverage. — This Rule shall applyto all establishments and undertakings,whether operated for profit or not, includingeducational, medical, charitable andreligious institutions and organizations, incases of regular employment with theexception of the Government and its

political subdivisions including government-owned or controlled corporations.

3. Eviota vs. Court of Appeals 407 SCRA 394

FACTS:

Sometime on January 26, 1998, the respondentStandard Chartered Bank and petitioner Eduardo G.Eviota executed a contract of employment underwhich the petitioner was employed by the respondent

bank as Compensation and Benefits Manager, VP(M21). Petitioner came up with many proposalswhich the bank approved and made preparations of.He was also given privileges like car, renovation of


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the office, and even a trip to Singapore at thecompany’s expense. However, the petitioner abruptlyresigned from the respondent bank barely a monthafter his employment and rejoined his formeremployer. On June 19, 1998, the respondent bankfiled a complaint against the petitioner with the RTC

of Makati City for damages brought about his abruptresignation. Though petitioner reimbursed part of theamount demanded by Standard, he was not able topayit full. Standard alleged that assuming arguendo thathad the right to terminate his employment with theBank for no reason, the manner in and circumstancesunder Eviota which he exercised the same are clearlyabusive and contrary to the rules governing humanrelations, governed by the Civil Code. Further,Standard alleged that petitioner also violated theLabor Code when he terminated his employment

without one (1) notice in advance. This stipulationwas also provided in the employment contract ofEviota with Standard, which would also constitute

breach of contract. The petitioner filed a motion todismiss the complaint on the ground that the actionfor damages of the respondent bank was within theexclusive jurisdiction of the Labo Arbiter under

paragraph 4, Article 217 of the Labor Code of thePhilippines, as amended. The petitioner averred thatthe respondent bank’s claim for damages arose out ofor were in connection with his employer-employeerelationship with the respondent bank or some aspect

or incident of such relationship. The respondent bankopposed the motion, claiming that its action fordamages was within the exclusive jurisdiction of thetrial court. Although its claims for damagesincidentally involved an employer-employeerelationship, the said claims are actually predicatedon the petitioner’s acts and omissions which areseparately, specifically and distinctly governed by the

New Civil Code.

ISSUE: Whether or not the RTC had jurisdictionover the case.

HELD: The SC held that the RTC has jurisdiction.Case law has it that the nature of an action and thesubject matter thereof, as well as which court has

jurisdiction over the same, are determined by the

material allegations of the complaint and the reliefs prayed for in relation to the law involved. Not everycontroversy or money claim by an employee againstthe employer or vice-versa is within the exclusive

jurisdiction of the labor arbiter. A money claim by aworker against the employer or vice-versa is within

the exclusive jurisdiction of the labor arbiter only ifthere is a reasonable causal connection between theclaim asserted and employee-employerrelation. Absent such a link, the complaint will becognizable by the regular courts of justice. Actions

between employees and employer where theemployer-employee relationship is merely incidentaland the cause of action precedes from a differentsource of obligation is within the exclusive

jurisdiction of the regular court. The jurisdiction ofthe Labor Arbiter under Article 217of the Labor

Code, as amended, is limited to disputes arising froman employer-employee relationship which can only be resolved by reference to the Labor Code of thePhilippines, other labor laws or their collective

bargaining agreements. Jurisprudence has evolvedthe rule that claims for damages under paragraph 4 ofArticle 217, to be cognizable by the Labor Arbiter,must have a reasonable causal connection with any ofthe claims provided for in that article. Only if there issuch a connection with the other claims can the claimfor damages be considered as arising from employer-employee relations. In this case, the private

respondent’s first cause of action for damages isanchored on the petitioner’s employment of deceitand of making the private respondent believe that hewould fulfil his obligation under the employmentcontract with assiduousness and earnestness. The

petitioner volte face when, without the requisitethirty-day notice under the contract and the LaborCode of the Philippines, as amended, he abandonedhis office and rejoined his former employer; thus,forcing the private respondent to hirea replacement. The private respondent was left in

a lurch, and its corporate plans and program in jeopardy and disarray. Moreover, the petitioner tookoff with the private respondent’s computer diskette,

papers and documents containing confidentialinformation on employee compensation and other

bank matters. On its second cause of action, the petitioner simply walked away from his employmentwith the private respondent sans any written notice,to the prejudice of the private respondent, its banking


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operations and the conduct of its business. Anent itsthird cause of action, the petitioner made false andderogatory statements that the private respondentreneged on its obligations under their contract ofemployment; thus, depicting the private respondentas unworthy of trust. The primary relief sought is for

liquidated damages for breach of acontractual obligation. The other items demanded arenot labor benefits demanded by workers generallytaken cognizance of in labor disputes, such as

payment of wages, overtime compensation orseparation pay. The items claimed are the naturalconsequences flowing from breach of an obligation,intrinsically a civil dispute. It is evident that thecauses of action of the private respondent against the

petitioner do not involve the provisions of the LaborCode of the Philippines and other labor laws but the

New Civil Code. Thus, the said causes of action areintrinsically civil. There is no causal relationship between the causes of action of the privaterespondent’s causes of action against the petitionerand their employer-employee relationship. The factthat the private respondent was the erstwhileemployer of the petitioner under an existingemployment contract before the latter abandoned hisemployment is merely incidental. Petition is denied.

4. DYNAMIC SIGNMAKER OUTDOORADVERTISING SERVICES, INC. vs.

FRANCISCO POTONGAN G.R. No. 156589June 27, 2005

FACTS:

In 1987, respondent started working for petitionercorporation as a Production Supervisor at a monthlysalary ofP16,000.00.3

In early February 1996, the union of rank and fileemployees of petitioner corporation,the BigkisManggagawasaDynamicSignmakersOutdoor Advertising Services – KilusanngManggagawangMakabayan (KMM-Katipunan),4declared a strike on account of which

petitioner corporation replaced all its supervisors anddesignated, by letter memorandum5 dated February16, 1996, certain persons to take over the operationsof the corporation including Rufino Hornilla6 whotook over petitioner’s functions.

By February 21, 1996, respondent’s salary waswithheld7 and was advised to take a leave of absenceuntil further notice.8

Respondent later received on February 28, 1996 aletter from petitioner Filomeno P. Hernandez,

President/General Manager of the corporation,"inviting" him to answer the following charges:

1.) That on February 21, 1996, at around 9:00 A.M.you entered the company fabrication shop where youwere assigned as supervisor and caused to create fire

by secretly switching ‘on’ the idle plastic oven andgrounded the 2 electric machine welders while the‘strike’ was on-going outside the premises.

Witnesses also in the persons of Mr. Luis Mimay,and his men found out later what you have done andnoticed the electric current and the burning of the

oven already very hot. You secretly left the premisesand had not for the said witnesses and contractors,you had vehemently caused to burn the company’smain building and its offices.

2.) That you allegedly on several occasions, urgedstrongly the same group of contractors led by Mr.Luis Mimay, working on some left over jobs at thefactory, to slow down work or not to work at all insympathy to the ‘strikers’who are in the ranking files.Those proved also that as our trusted staff andsupervisor you have caused disruption of work of thecontractors. The company suffered losses in its

failure to accomplish its job projects on due dates.Your actuations and actions proved disastrous to thecompany’s interest. Considering these circumstances,we urge you to reply your side on these matters sothat we could institute proper corresponding action

based on the above in 5 days time from receipt of thisletter .9 (Underscoring supplied)

By letter of March 4, 1996, respondent throughcounsel, denied the charges proffered against him, heinsisting that they were fabricated to justify histermination due to suspicions that he was a strike-sympathizer .10 In the same letter, respondent

expressed his openness to the conduct of a full-blowninvestigation of the case by the NLRC.11

Respondent later filed on January 29, 1997 acomplaint against herein petitioners for illegaldismissal, reinstatement, backwages and damageswith the Regional Arbitration Branch of the NLRC,docketed as NLRC Case No. RAB-IV-1-8738-97-RI,12 the case subject of the petition.

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Respondent complained that although he was not senta formal notice of termination, he was effectivelydismissed from employment for after he was asked totake a leave of absence on February 21, 1996, as hedid, and he was not instructed nor allowed to returnto work, nor paid his salaries.13

By Decision30 of September 30, 2002, the appellatecourt reversed the NLRC decision, it holding thatrespondent was denied due process and wasdismissed without cause when he was replaced byRufinoHornilla and instructed to go on leaveindefinitely.31

In reversing the NLRC decision, the appellate courtnoted that it was on account of respondent’sreplacement as Operations Manager and theinstruction for him to go on indefinite leave that ittook almost a year for him to file the complaint for

illegal dismissal. Hence, the appellate courtconcluded, he should not be faulted for laches. Nor,said the appellate court, could respondent be deemedto have abandoned his work on receipt of petitioner’scounsel’s return to work March 1, 1999 letter because

prior thereto he had considered himself illegallyterminated as in fact he had filed on January 29, 1997the complaint for illegal dismissal.32

ISSUE:

Petitioners insist that respondent was not illegallydismissed, "management [having] merely opted to

reorganize," hence, the award to him of full backwages, reinstatement or separation pay, andattorney’s fees is bereft of factual and legal basis.33

HELD:

This Court upholds then the appellate court’s findingthat respondent was constructively dismissed:

There is no doubt, therefore, that the petitioner in thiscase was effectively terminated from employment byrespondent when he was replaced as OperationsManager and instructed to take a leave indefinitely.

Petitioner was neither transferred nor reassigned toanother office or position contrary to what publicrespondent seems to allude. Petitioner was simplyreplaced and instructed to take a leave indefinitely."In cases of illegal dismissal, the burden is on theemployer to prove that there was a valid ground fordismissal." Medenilla vs. Philippne Veterans Bank,328 SCRA 1, 7. We failed to extract from the recordany evidence to show that there exists valid and just

cause to terminate herein petitioner fromemployment. In fact during the pendency of thecomplaint for illegal dismissal by the petitioneragainst private respondents, the latter in a letter datedMarch 1, 1999, ordered petitioner to report back towork immediately. This in itself proves that herein

private respondents believe that there exists no validand just grounds (sic) to terminate herein petitionersfrom his employment.42 (Underscoring supplied)

It upholds too the award to respondent of attorney’sfees in the amount of P50,000.00, he having beenforced to litigate and thereby incur expenses to

protect his rights and interests.43

Clutching at straws, petitioners fault the appellatecourt for failure to recognize the final and executorynature of the June 24, 1996 NLRC Decision renderedin the consolidated cases and for affirming the

nullification of said decision, with respect torespondent, which could be attacked only by directaction.44

Contrary to petitioners’ position, the validity of a judgment or order of a court or quasi-judicial tribunalwhich has become final and executory may beattacked when the records show that it lacked

jurisdiction to render the judgment.45 For a judgmentrendered against one in a case where jurisdiction overhis person was not acquired is void, and a void

judgment maybe assailed or impugned at anytime either directly or collaterally by means of a

petition filed in the same or separate case, or byresisting such judgment in any action or proceedingwherein it is invoked.46

Petitioners in fact do not even dispute respondent’sclaim that no summons was ever issued and servedon him either personally or through registered mail asrequired under Rule III, Sections 3 and 6 of the Rulesof Procedure of the NLRC, as amended byResolution No. 01-02, Series of 2002:

SEC. 3. Issuance of Summons. Within two (2) daysfrom receipt of a case, the Labor Arbiter shall issue

the required summons, attaching thereto a copy of thecomplaint/petition and supporting documents, if any.The summons, together with a copy of the complaint,shall specify the date, time and place of theconciliation and mediation conference in two (2)settings.

xxx

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SEC. 6. Service of Notices and Resolutions. a) Notices or summonses and copies of orders, shall beserved on the parties to the case personally by the

bailiff or duly authorized public officer within three(3) days from receipt thereof or by registered mail,

provided that in special circumstances, service ofsummons may be effected in accordance with the

pertinent provisions of the Rules of Court; xxx

Supplementary or applied by analogy to these provisions are the provisions and prevailing jurisprudence in Civil Procedure. Where there is thenno service of summons on or a voluntary generalappearance by the defendant, the court acquires no

jurisdiction to pronounce a judgment in the cause.47

At all events, even if administrative tribunalsexercising quasi-judicial powers are not strictly

bound by procedural requirements, they are still

bound by law and equity to observe the fundamentalrequirements of due process.48

Res inter aliosactanocerenondebet. Things done between strangers ought not to injure those who arenot parties to them.49

WHEREFORE, the instant petition is herebyDENIED. The decision of the appellate court ishereby AFFIRMED with the MODIFICATION thatif reinstatement is no longer possible due to strainedrelations between the parties, petitioners are orderedto pay respondent, Francisco Potongan, separation

pay equivalent to One Month salary for every year ofservice, computed from the time he was firstemployed until the finality of this decision.

SO ORDERED.

5. METROMEDIA TIMES CORPORATIONand/or ROBINA GOKONGWIE PE, v. JohnnyPastorin G.R. NO. 154295. July 29, 2005

FACTS: Johnny Pastorin (Respondent) was

employed by Metromedia Times Corporation

(Petitioner) on 10 December 1990 as a Field

Representative/Collector. His task entailed the

periodic collection of receivables from dealers of

petitioner's newspapers.

Respondent, because of tardiness was

supposedly terminated by the petitioner company, but

because of the timely intervention of the union, the

dismissal was not effected.

However, he incurred another infraction

when he obtained a loan from a magazine dealer and when he was not able to pay the loan, he

stopped collecting the outstanding dues of the

dealer/creditor. After requiring him to explain,

respondent admitted his failure to pay the loan but

gave no definitive explanation for the same.

Thereafter, he was penalized with

suspension. He was also not allowed to do field

work, and was transferred to a new position. Despite

the completion of his suspension, respondent stopped

reporting for work and sent a letter communicating

his refusal to accept the transfer. He then filed a

complaint for constructive dismissal, non-payment of

backwages and other money claims with the labor

arbiter.

The complaint was resolved in favor of

respondent. Petitioner lodged an appeal with the

NLRC, raising as a ground the lack of jurisdiction of

the labor arbiter over respondent’s complaint.

Significally, this issue was not raised by petitioner inthe proceedings before the Labor Arbiter.

The NLRC reversed the decision of the LA

and ruled that the LA has no jurisdiction over the

case, it being a grievance issue properly cognizable

by the voluntary arbitrator. However, the CA

reinstated the ruling of the CA. The CA held that the

active participation of the party against whom the

action was brought, coupled with his failure to object

to the jurisdiction of the court or quasi-judicial body

where the action is pending, is tantamount to aninvocation of that jurisdiction and a willingness to

abide by the resolution of the case and will bar said

party from later on impugning the court or body’s

jurisdiction.

ISSUE:

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Whether or not petitioner is estopped from

questioning the jurisdiction of the LA during appeal.

HELD:

The SC held that petitioner is not estopped

from questioning the jurisdiction of the LA duringappeal.

The general rule is that the jurisdiction of

a court over the subject matter of the action is a

matter of law and may not be conferred by

consent or agreement of the parties. The lack of

jurisdiction of a court may be raised at any stage of

the proceedings, even on appeal . This doctrine has

been qualified by recent pronouncements which

stemmed principally from the ruling in the cited case

of Sibonghanoy. It is to be regretted, however, that

the holding in said case had been applied to situations

which were obviously not contemplated therein. The

exceptional circumstances involved in Sibonghanoy

which justified the departure from the accepted

concept of non-waivability of objection to

jurisdiction has been ignored and, instead a blanket

doctrine had been repeatedly upheld that rendered the

supposed ruling in Sibonghanoy not as the exception,

but rather the general rule, virtually overthrowing

altogether the time honored principle that the issue of jurisdiction is not lost by waiver or by estoppel.

The operation of the principle of estoppel on

the question of jurisdiction seemingly depends upon

whether the lower court actually had jurisdiction or

not. If it had no jurisdiction, but the case was

tried and decided upon the theory that it had

jurisdiction, the parties are not barred, on appeal,

from assailing such jurisdiction, for the same

'must exist as a matter of law, and may not be

conferred by consent of the parties or by estoppel. However, if the lower court had jurisdiction, and the

case was heard and decided upon a given theory,

such, for instance, as that the court had no

jurisdiction, the party who induced it to adopt such

theory will not be permitted, on appeal, to assume an

inconsistent position — that the lower court had

jurisdiction. Here, the principle of estoppel applies.

The rule that jurisdiction is conferred by law, and

does not depend upon the will of the parties, has no

bearing thereon.

Applying the general rule that estoppeldoes not confer jurisdiction, petitioner is not

estopped from assailing the jurisdiction of the

labor arbiter before the NLRC on appeal.

Decision of the CA is set aside.

YUSEN AIR AND SEA SERVICEPHILIPPINES, INCORPORATED,petitioner

vs.

ISAGANI A. VILLAMOR,respondent

Facts:

-Petitioner,is engaged in the business of freightforwarding. As such, it is contracted by clients to

pick-up, unpack, consolidate, deliver, transport anddistribute all kinds of cargoes, acts as cargo or freightaccommodation and enters into charter parties for the

carriage of all kinds of cargoes or freight.

-On 1993, petitioner hired respondent as branchmanager in its Cebu Office. Later, petitionerreclassified respondent’s position to that of DivisionManager, which position respondent held until hisresignation on February 1, 2002.

- Immediately after his resignation, respondentstarted working for Aspac International , acorporation engaged in the same line of business asthat of petitioner.

- On February 11, 2002,petitioner filed againstrespondent a complaint[3] for injunction and damageswith prayer for a temporary restraining order, thecomplaint alleged,inter alia, as follows:

7. That [respondent]duly signed an

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undertaking to abide bythe policies of the[Petitioner] whichincludes the provision onthe employees’responsibility andobligation in cases ofconflict of interest, whichreads:

No employee may engage in any business orundertaking that is directly or indirectly incompetition with that of the company and itsaffiliates or engage directly or indirectly in anyundertaking or activity prejudicial to the interests ofthe company or to the performance of his/her job orwork assignments. The same provision will be

implemented for a period of two (2) years fromthe date of an employee’s resignation, terminationor separation from the company.

-Petitioner thus prayed for a judgment enjoiningrespondent from “further pursuing his work at Aspac International”, and awarding it P2,000,000 as actualdamages; P300,000 as exemplary damages;

- respondent filed against petitioner a case for illegaldismissal before the National Labor RelationsCommission.

- Meanwhile, instead of filing his answer,respondent filed a Motion to Dismiss,arguing that theRTC has no jurisdiction over the subject matter ofsaid case because an employer-employee relationshipis involved.

1st issue:

With regards to the 2 yr prohibition

HELD:

-The petition is impressed with merit.

- the 2-year prohibition against employment in acompeting company which petitioner seeks toenforce thru injunction, had already expiredsometime in February 2004. Necessarily, upon theexpiration of said period, a suit seeking the issuanceof a writ of injunction becomes functusoficio andtherefore moot.

2nd issue:

With regards to the claim for damages

*whether petitioner's claim for damagesarose from employer-employee relations between the

parties.

HELD:

In Dai-Chi Electronics Manufacturing vs.

Villarama,with a substantially similar factual backdrop, we held that an action for breach ofcontractual obligation is intrinsically a civil dispute.

There, a complaint for damages was filed withthe regular court by an employer against a formeremployee who allegedly violated the non-compete

provision of their employment contract when, withintwo years from the date of the employee’sresignation, he applied with, and was hired by acorporation engaged in the same line of business asthat of his former employer. The employer sought torecover liquidated damages. The trial court ruled thatit had no jurisdiction over the subject matter of thecontroversy because the complaint was for damagesarising from employer-employee relations, citingArticle 217 (4) of the Labor Code, as amended by

R.A. No. 6715, which stated that it is the LaborArbiter who had original and exclusive jurisdictionover the subject matter of the case.

When the case was elevated to this Court, weheld that the claim for damages did not arise fromemployer-employee relations, to wit:


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Petitioner does not ask for any relief under theLabor Code of the Philippines. It seeks to recoverdamages agreed upon in the contract as redress for

private respondent’s breach of his contractual

obligation to its “damage and prejudice”. Such causeof action is within the realm of Civil Law.

-Indeed, jurisprudence has evolved the rule thatclaims for damages under paragraph 4 of Article 217,to be cognizable by the Labor Arbiter, must have areasonable causal connection with any of the claims

provided for in that article. Only if there is such aconnection with the other claims can a claim fordamages be considered as arising from employer-employee relations.

Article 217, as amended by Section 9 of RA6715, provides:

Art. 217. Jurisdiction ofLabor Arbiters and theCommission. — (a) Except asotherwise provided under thisCode, the Labor Arbiters shall haveoriginal and exclusive jurisdictionto hear and decide, within thirty(30) calendar days after thesubmission of the case by the

parties for decision withoutextension, even in the absence ofstenographic notes, the followingcases involving all workers,whether agricultural or non-agricultural:

xxx xxx xxx

4. Claims foractual,moral,

exemplary andotherforms ofdamagesarisingfrom theemployer-employeerelations;"

xxx xxx xxx

- In San Miguel Corporation vs. National Labor Relations Commission

“While paragraph 3 above refers to “all moneyclaims of workers,” it is not necessary to suppose thatthe entire universe of money claims that might beasserted by workers against their employers has beenabsorbed into the original and exclusive jurisdictionof Labor Arbiters. In the first place, paragraph 3should be read not in isolation from but rather within

the context formed by paragraph 1 (relating to unfairlabor practices), paragraph 2 (relating to claimsconcerning terms and conditions of employment),

paragraph 4 (claims relating to household services, a particular species of employer-employee relations),and paragraph 5 (relating to certain activities

prohibited to employees or employers). It is evidentthat there is a unifying element which runs through

paragraph 1 to 5 and that is, that they all refer tocases or disputes arising out of or in connection withan employer-employee relationship.

For it cannot be presumed that money claims ofworkers which do not arise out of or in connectionwith their employer-employee relationship, andwhich would therefore fall within the general

jurisdiction of regular courts of justice, were intended by the legislative authority to be taken away from the jurisdiction of the courts and lodged with LaborArbiters on an exclusive basis. The Court, therefore,


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believes and so holds that the “money claims ofworkers” referred to in paragraph 3 of Article 217embraces money claims which arise out of or inconnection with the employer-employee relationship,or some aspect or incident of such relationship. Put alittle differently, that money claims of workers whichnow fall within the original and exclusive jurisdictionof Labor Arbiters are those money claims which havesome reasonable causal connection with theemployer-employee relationship.”

-With the reality that the stipulation refers to the post-employment relations of the parties.

For sure, a plain and cursory reading of the

complaint will readily reveal that the subject matter isone of claim for damages arising from a breach ofcontract, which is within the ambit of the regularcourt’s jurisdiction

Duty Free Philippines v. Rossano Mojica, GR No.166365, 30 September 2005, First Division,

Ynares-Santiago1

Pri nciples of law: Complaints of civil service

employees come under the jurisdiction of the CSC

and not NLRC; any decision of the Labor Arbiter

involving a CS employee is void for want of

jurisdiction

Facts

Mojica was an employee of Duty FreePhilippines who was charged with neglectresulting to considerable damage to or lossof materials, assets and properties of DFP;

Hence, the discipline committee of Duty

Free considered her resigned with forfeitureof all benefits except salary and accruedleave credits;

As a result a complaint for illegal dismissalwith prayer of full back wages andreinstatement was filed by Mojica before the

NLRC;

1 19 August 2014.

The Labor Arbiter awarded the back wagesincluding an order for reinstatement; thiswas, however, reversed by NLRC;

A motion for reconsideration was likewisedismissed by NLRC;

A petition for Certiorari under Rule 65 wasfiled by Mojica before the CA, which courtgranted the reliefs prayed for; Duty Free

petitioned before the SC;

Issue

1. Whether the filing by Mojica of thecomplaint before the NLRC was proper

2. What is the nature of DFP?3. What is the tribunal clothed with jurisdiction

to try civil service cases?

Held

1. No, DFP being a government agencyattached with DOT, complaints against it arenot cognizable by NLRC. 2

DFP was created under Executive Order(EO) No. 46 on September 4, 1986 primarilyto augment the service facilities for touristsand to generate foreign exchange andrevenue for the government. In order for thegovernment to exercise direct and effectivecontrol and regulation over the tax and dutyfree shops, their establishment and operationwas vested in the Ministry, now Departmentof Tourism (DOT), through itsimplementing arm, the Philippine TourismAuthority (PTA). All the net profits fromthe merchandising operations of the shopsaccrued to the DOT.

2. EO No. 292 or The Administrative Code of1987 empowered the Civil Service

Commission to hear and decideadministrative cases instituted by or brought

before it directly or on appeal, includingcontested appointments, and reviewdecisions and actions of its offices and of theagencies attached to it.

2 Note that it was initially decided upon by the Labor

Arbiter. NLRC in fact dismissed the petition


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8. Easycall Communications Phils., Inc vs.Edward King

Facts:

Petitioner Easycall Communications Phils., Inc was adomestic corporation engaged in the business ofmessage handling. On May 1992, petitioner, throughits general manager, Roberto Malonzo, hired theservices of respondent as assistant to the generalmanager. He was given the responsibility of ensuringthat the expansion plans outside Metro Manila andMetro Cebu were achieved as soon as possible.

In an Memo dated Aug 14, Mr. RT Casas,respondent’s immediate superior, recommended his

promotion to assistant vice president for nationwideexpansion. On December 22, respondent wasappointed to the even higher position. His promotionwas based his performance for the preceding 6months of his appointment. As VP, he becameresponsible for the sales and rentals of pager units inthe expansion areas. He also coordinated with thedealers.

Sometime in March 1993, Malonzo reviewed King’ssales performance. He also scrutinized status of

petitioner’s Nationwide Expansion program (NEP)which was under King’s responsibility. The

management then confronted respondent. On April1993, Rockwell Gohu, petitioner’s deputy manager,talked to respondent and told him that Malonzowanted respondent’s resignation. He then wrote aletter confronting Malonzo.

On April 19 1993, he received a termination letterfrom Malonzo effective April 30 with the reason thatthe management is no longer confident with him forthe position he’s occupying. Aggrieved, respondentfiled a complaint for illegal dismissal with NLRC.LA found the termination ground for loss ofconfidence valid. On appeal, NLRC affirmed thatdecision of LA but ordered petitioner to indemnify

respondent for lack of due process. MR dismissed.Filed certiorari before CA.CA held NLRC lacked

jurisdiction and that there was illegal dismissal.Petitioner filed MR, denied. Hence, this petition.

Issue/s:

1. Whether or not NLRC had jurisdiction overthe case of respondent’s illegal dismissal

2. Whether or not respondent Edward Kingwas validly dismissed

Ruling:

SC ruled first with jurisdiction as it is decisive. If NLRC has no jurisdiction, then it would be

unnecessary to talk about the validity of dismissal.

Petitioner contends that it is SEC, and not the NLRC,who has jurisdiction since respondent was a“corporate officer.” Is respondent a corporate officer?Here, petitioner failed to prove that respondent was acorporate officer.

“Corporate officers” are those officers whoare given that character under theCorporation Code. Under Section 25thereof, the “corporate officers” are the

president, secretary, treasurer and such other

officers as may be provided by the by-laws.Since petitioner failed to satisfy burden of proof thatwas required of it, we cannot sanction its claim thatrespondent was a corporate officer whose removalwas cognizable by the SEC under PD 902-A and not

by NLRC.

An “office” is created by the charter of thecorporation and the officer is elected by thedirectors and stockholders. On the otherhand, employee occupies no office andgenerally is employed not by the action ofthe directors or stockholders but by the

managing officer of the corporation whoalso determines compensation of employee.

Respondent was appointed VP by Malonzo, petitioner’s manager, not by the board of directors. Itwas also Malozo who determined respondent’scompensation package. Thus, respondent was anemployee, not a corporate officer. The CA wascorrect in ruling that jurisdiction over the case was

properly with NLRC, not with SEC.

Validity of the Dismissal

While loss of confidence is a valid ground fordismissing the employee, it should not be simulated.It must not be indiscriminately used as a shield by theemployer against a claim that the dismissal wasarbitrary.

Loss of trust and confidence must be basedon a willful breach and founded on clearyestablished facts. A breach is willful if it isdone intentionally, knowingly and


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purposely, without justifiable excuse asopposed to carelessness, thoughtlessness andheedlessness. It cannot be from merecarelessness.

In this case, LA’s finding, was that sales record ofrespondent at the time he spent work in the field wereclear indications of complainant’s inefficiency and/ornegligence. Inefficiency implies incompetence,ignorance and carelessness. They were not sufficientto claim a loss of confidence as a ground fordismissal.

Moreover, the promotion of the employee negates theemployer’s claim that it has lost its trust andconfidence on the employee. The lack of cause inrespondent’s dismissal was aggravated by theabsence of due process. The twin requirements ofnotice and hearing constitute the essential elements ofdue process.

The law requires the employer to furnish theemployee sought to be dismissed 2 writtennotices before termination can be legallyeffected:

1. Written notice apprising the employeeof the particular acts for which hisdismissal is sought to afford him anopportunity to be heard and defendhimself

2. Subsequent notice informingemployer’s decision.

The procedure above is MANDATORY and itsabsence taints the dismissal with illegality. In thecase at bar, respondent was only served with 1 notice

– notice of his termination.

Petition is DENIED. CA is affirmed.

9. SAN MIGUEL FOODS, INC. v. SAN MIGUELCORPORATION EMPLOYEES UNION-PTWGO G.R. NO. 168569 October 5, 2007

FACTS:

At the time material to the case, respondent,San Miguel Corporation Employees Union - PTWGO(the Union), was the sole bargaining agent of all themonthly paid employees of petitioner San MiguelFoods, Incorporated (SMFI).

On November 9, 1992, some employees ofSMFI's Finance Department, through the Unionrepresented by Edgar Moraleda, brought agrievance against Finance Manager GideonMontesa (Montesa), for "discrimination,favoritism, unfair labor practices, not flexible[sic], harassment, promoting divisiveness andsectarianism, etc.," before SMFI Plant OperationsManager George Nava in accordance with Step 1 ofthe grievance machinery adopted in the CollectiveBargaining Agreement (CBA) forged by SMFI andthe Union.

The Union sought:

1. review, evaluation & upgrading of allFinance staff and

2. promotion of G.Q. Montesa to other SMC

affiliates & subsidiaries.

January 14, 1993- A grievance meeting washeld by SMFI informing the Union that a “workmanagement review” to be completed on March 1993would be done to address the grievence, asking thefinance personnel to give it their attention.

The "work management review" was notcompleted by March 1993, however, prompting theUnion to, on March 26, 1993, elevate the grievanceto Step 2.

Almost nine months after the grievancemeeting was held or on October 6, 1993, SMFIrendered a "Decision on Step 1 Grievance" statingthat it was still in the process of completing the "workmanagement review," hence, the Union's requestscould not be granted.

October 20, 1993- The Union filed acomplaint before the NLRC Arbitration branceagainst SMFI, its president and Montesa for "unfairlabor practice, [and] unjust discrimination inmatters of promotion . . . " It prayed that SMFI etal. be ordered to promote the therein named

employees "with the corresponding pay increases oradjustment including payment of salary differentials

plus attorney's fees[,] and to cease and desist fromcommitting the same unjust discrimination in mattersof promotion."7

Instead of filing a position paper as isrequired for step 2, SMFI filed for a motion todismiss instead on the ground that that the issues

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raised in the complaint were grievance issues and,therefore, "should be resolved in the grievancemachinery provided in [the] collective bargainingagreements [sic] of the parties or in the mandatedprovision of voluntary arbitration which is alsoprovided in the CBA."

ISSUE:

Whether respondent's complaint is one for unfairlabor practice (ULP) over which a Labor Arbiter has

jurisdiction

RULING:

The jurisdiction of Labor Arbiters,enumerated in Article 217 of the Labor Code,includes complaints for ULP.

SMFI argues that the allegations in theUnion's complaint filed before the Labor Arbiter donot establish a cause of action for ULP, the Unionhaving merely contended that SMFI was guiltythereof without specifying the ultimate facts uponwhich it was based. It cites Section 1 of Rule 8 ofthe Rules of Court as applying suppletorily to the

proceedings before the Labor Arbiter, which Sectionreads:

Section 1. In general . - Every pleading shall contain in amethodical and logical form, a

plain concise and direct statementof the ultimate facts on which the

party pleading relies for his claim .. .

Alleging that the Union failed to complywith this Rule, SMFI concludes that the LaborArbiter has no jurisdiction over its complaint.

A perusal of the complaint shows that,indeed, the particular acts of ULP alleged to have

been committed by SMFI were not specified; neitherwere the ultimate facts in support thereof. In itsPosition Paper, however, the Union detailed theparticular acts of ULP attributed to SMFI and theultimate facts in support thereof.

Section 7, Rule V of the New Rules of Procedure ofthe NLRC provides:

Nature of Proceedings. - Theproceedings before the Labor

Arbiter shall be non-litigious innature. Subject to the requirementsof due process, the technicalitiesof law and procedure and therules obtaining in the courts oflaw shall not strictly applythereto. The Labor Arbiter mayavail himself of all reasonablemeans to ascertain the facts of thecontroversy speedily, includingocular inspection and examinationof well-informed persons.( Emphasis and underscoring supplied )cralawlibrary

Section 1 of Rule 8 of the Rules of Courtshould thus not be strictly applied to a case filed

before a Labor Arbiter. In determining jurisdictionover a case, allegations made in the complaint, aswell as those in the position paper, may thus beconsidered.

On the questioned promotions, the Uniondid not allege that they were done to encourage ordiscourage membership in a labor organization. Infact, those promoted were members of thecomplaining Union. The promotions do not thusamount to ULP under Article 248(e) of the LaborCode.

As for the alleged ULP committed underArticle 248(i), for violation of a CBA, this Article isqualified by Article 261 of the Labor Code, the

pertinent portion of which latter Article reads:

x xx violations of a CollectiveBargaining Agreement, exceptthose which are gross incharacter, shall no longer betreated as unfair labor practiceand shall be resolved as grievances

under the Collective BargainingAgreement. For purposes of thisarticle, gross violations ofCollective Bargaining Agreementshall mean flagrant and/ormalicious refusal to comply withthe economic provisions of suchagreement. ( Emphasis andunderscoring

supplied )cralawlibrary


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Silva v. NLRC instructs that for a

ULP case to be cognizable by the LaborArbiter, and the NLRC to exercise its appellate

jurisdiction, the allegations in the complaint shouldshow prima facie the concurrence of two things,

namely: (1) gross violation of the CBA; AND (2)the violation pertains to the economic provisionsof the CBA.17 ( Emphasis and underscoring supplied )cralawlibrary

As reflected in the above-quoted allegationsof the Union in its Position Paper, the Union chargesSMFI to have violated the grievance machinery

provision in the CBA. The grievance machineryprovision in the CBA is not an economicprovision, however, hence, the secondrequirement for a Labor Arbiter to exercise jurisdiction of a ULP is not present.

The Union likewise charges SMFI, however,to have violated the Job Security provision in theCBA, specifically the seniority rule, in that SMFI"appointed less senior employees to positions at itsFinance Department, consequently intentionally by-

passing more senior employees who are deserving ofsaid appointment."

Article 4 of the Labor Code provides that "All doubts in theimplementation andinterpretation of the provisions

of this Code, includingimplementing rules andregulations, shall be resolved infavor of labor." Since theseniority rule in the promotionof employees has a bearing onsalary and benefits, it may,following a liberal constructionof Article 261 of the LaborCode, be considered an"economic provision" of theCBA.

As above-stated, the Union charges SMFI tohave promoted less senior employees, thus bypassingothers who were more senior and equally or morequalified. It may not be seriously disputed that thischarge is a gross or flagrant violation of theseniority rule under the CBA, a ULP over whichthe Labor Arbiter has jurisdiction.

SMFI, at all events, questions why the Courtof Appeals came out with a finding that it (SMFI)

disregarded the seniority rule under the CBA whenits petition before said court merely raised a questionof jurisdiction. The Court of Appeals having affirmedthe NLRC decision finding that the Labor Arbiter has

jurisdiction over the Union's complaint and thusremanding it to the Labor Arbiter for continuation of

proceedings thereon, the appellate court's saidfinding may be taken to have been made only forthe purpose of determining jurisdiction.

LEYTE IV ELECTRIC COOPERATIVE, INC., vs LEYECO IV Employees Union- ALU,

G.R. No. 157775October 19, 2007

Facts: The Leyte IV Electric Cooperative, Inc. (petitioner) and Leyeco IV Employees Union-ALU

(respondent) entered into a Collective BargainingAgreement covering petitioner rank-and-fileemployees, for a period of five (5) years.

The Regional Vice-President, Vicente P. Casilan (forrespondent), sent a letter to petitioner demandingholiday pay and in effect enforcing the CBA.Petitioner sent a letter-reply to respondent claimingthat it had already paid all employees all the holiday

pay by reviewing the pay slips.

After exhausting the procedures of the grievance

machinery, both parties agreed to submit their issuesfor arbitration of the National Conciliation andMediation Board (NCMB). Petitioner claimed that

payment was presumed since the formula used indetermining the daily rate of pay of the coveredemployees is Basic Monthly Salary divided by 30days or Basic Monthly Salary multiplied by 12divided by 360 days, thus with said formula, theemployees are already paid their regular and specialdays, the days when no work is done, the 51 un-worked Sundays and the 51 un-worked Saturdays.

Issue: WON Leyte IV Electric Cooperative is liablefor underpayment of holiday pay.

Held: Leyte IV Electric Cooperative is not liable forunderpayment of holiday pay.

The Voluntary Arbitrator gravely abused itsdiscretion in giving a strict or literal interpretation ofthe CBA provisions that the holiday pay be reflected

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in the payroll slips. Such literal interpretation ignoresthe admission of respondent in its Position Paper thatthe employees were paid all the days of the montheven if not worked. In light of such admission,

petitioner's submission of its 360 divisor in thecomputation of employees' salaries gains

significance.

This ruling was applied in Wellington Investment andManufacturing Corporation v. Trajano, 43 ProducersBank of the Philippines v. National Labor RelationsCommission. In this case, the monthly salary wasfixed by Wellington to provide for compensation forevery working day of the year including the holidaysspecified by law — and excluding only Sundays. Infixing the salary, Wellington used what it called the"314 factor"; that is, it simply deducted 51 Sundaysfrom the 365 days normally comprising a year andused the difference, 314, as basis for determining themonthly salary. The monthly salary thus fixedactually covered payment for 314 days of the year,including regular and special holidays, as well asdays when no work was done by reason of fortuitouscause, such as transportation strike, riot, or typhoonor other natural calamity, or cause not attributable tothe employees.

It was also applied in Odango v. National LaborRelations Commission, where Court ruled that the

use of a divisor that was less than 365 days cannotmake the employer automatically liable forunderpayment of holiday pay. In said case, theemployees were required to work only from Mondayto Friday and half of Saturday. Thus, the minimumallowable divisor is 287, which is the result of 365days, less 52 Sundays and less 26 Saturdays (or 52half Saturdays). Any divisor below 287 days meantthat the employees were deprived of their holiday payfor some or all of the ten legal holidays. The 304-daydivisor used by the employer was clearly above theminimum of 287 days.

In this case, the employees are required to work onlyfrom Monday to Friday. Thus, the minimumallowable divisor is 263, which is arrived at bydeducting 51 un-worked Sundays and 51 un-workedSaturdays from 365 days. Considering that petitionerused the 360-day divisor, which is clearly above theminimum, indubitably, petitioner's employees are

being given their holiday pay. Thus, the VoluntaryArbitrator should not have simply brushed aside

petitioner's divisor formula. In granting respondent'sclaim of non-payment of holiday pay, a "double

burden" was imposed upon petitioner because it was being made to pay twice for its employees' holiday

pay when payment thereof had already been includedin the computation of their monthly salaries.

11.) GR No. 173115 & 173163-64, April 16, 2009Atty Garcia vs. Eastern

Telecommunications Phils., et al.,

FACTS:

Atty. Virgilio R. Garcia was placed under preventive suspension for complaints of sexual

harassment. After the period of preventivesuspension, Atty. Garcia was terminated as VicePresident and Head of Business Support Services andHuman Resource Departments of the EasternTelecommunications Philippines, Inc. (ETPI) byAtty. Salvador C. Hizon, President/Chief ExecutiveOfficer of ETPI. Aggrieved by his termination fromETPI, Atty. Garcia filed a case before the NationalLabor Relations Commission (NLRC) for illegaldismissal with prayer for full back wages.

The Labor Arbiter ruled that the preventivesuspension and the subsequent dismissal of Atty.

Garcia are illegal. However, the NLRC, on appeal,dismissed the case for lack of jurisdiction.Unperturbed, Atty. Garcia appealed the dismissal ofthe case to the Court of Appeals (CA). Upon reviewof the case, the appellate court dismissed the case forlack of merit. The appellate court ruled that Atty.Garcia, being the Vice President for BusinessSupport Services and Human Resource Departmentsof ETPI, was a corporate officer at the time he wasremoved. Being a corporate officer, his removal wasa corporate act and/or an intra-corporate controversy,the jurisdiction of which rested with the Securitiesand Exchange Commission (now with the Regional

Trial Court), and not the Labor Arbiter and the NLRC. It added that ETPI and Atty. Hizon were notestopped from questioning the jurisdiction of theLabor Arbiter before the NLRC on appeal, inasmuchas said issue was seasonably raised by ETPI andAtty. Hizon in their reply memorandum before theLabor Arbiter.

Atty. Garcia is now before us via a Petitionfor Review, which he filed on 3 August 2006. The


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petition was docketed as G.R. No. 173115. On 8August 2006, he filed an Amended Petition forReview.He prays that the decision of the NLRC dated21 March 2003 and its resolution dated 16 December2003, and the decision of the Court of Appeals dated24 March 2006 and its resolution dated 14 June 2006,

be reconsidered and set aside and that the decision ofthe Labor Arbiter dated 30 September 2002 beaffirmed and reinstated.

ISSUE: Whether or not the Labor Arbiter has the jurisdiction over the case

RULING:Labor Arbiter has no jurisdiction over thecase

The Supreme Court, in a long line of cases,has decreed that a corporate officer’s dismissal orremoval is always a corporate act and/or an intra-corporate controversy, over which the Securities and

Exchange Commission [SEC] (now the RegionalTrial Court) has original and exclusive jurisdiction.

We have ruled that an intra-corporatecontroversy is one which pertains to any of thefollowing relationships: (1) between the corporation,

partnership or association and the public; (2) betweenthe corporation, partnership or association and theState insofar as the former’s franchise, permit orlicense to operate is concerned;(3) between thecorporation, partnership or association andits stockholders, partners, members or officers; and(4) among the stockholders, partners or associates

themselves. In Lozon v. National Labor RelationsCommission,we declared that Presidential Decree No.902-A confers on the SEC original and exclusive

jurisdiction to hear and decide controversies andcases involving intra-corporate and partnershiprelations between or among the corporation, officersand stockholders and partners, including theirelections or appointments …xxx…

Before a dismissal or removal could properly fall within the jurisdiction of the SEC, it hasto be first established that the person removed ordismissed was a corporate officer. “Corporate

officers” in the context of Presidential Decree No.902-Aare those officers of the corporation who aregiven that character by the Corporation Code or bythe corporation’s by-laws. There are three specificofficers whom a corporation must have under Section25 of the Corporation Code. These are the president,secretary and the treasurer. The number of officers isnot limited to these three. A corporation may havesuch other officers as may be provided for by its by-laws like, but not limited to, the vice-president,

cashier, auditor or general manager. The number ofcorporate officers is thus limited by law and by thecorporation’s by-laws.

In the case before us, the by-laws of ETPI provide:

ARTICLE V

Officers

Section 1. Number . – Theofficers of the Company shall be aChairman of the Board, a President,one or more Vice-Presidents, aTreasurer, a Secretary, an AssistantSecretary, and such other officersas may be from time to time beelected or appointed by the Boardof Directors. One person may hold

any two compatible offices.

Atty. Garcia tries to deny he is an officer ofETPI. Not being a corporate officer, he argues thatthe Labor Arbiter has jurisdiction over the case. Oneof the corporate officers provided for in the by-lawsof ETPI is the Vice-President. It can be gatheredfrom Atty. Garcia’s complaint-affidavit that he wasVice President for Business Support Services andHuman Resource Departments of ETPI when hisemployment was terminated effective 16 April2000. It is therefore clear from the by-laws and fromAtty. Garcia himself that he is a corporate

officer. One who is included in the by-laws of acorporation in its roster of corporate officers is anofficer of said corporation and not a mereemployee. Being a corporate officer, his removal isdeemed to be an intra-corporate dispute cognizable

by the SEC and not by the Labor Arbiter.

We agree with both the NLRC and the Courtof Appeals that Atty. Garcia’s ouster as Vice-President, who is a corporate officer of ETPI,

partakes of the nature of an intra-corporatecontroversy, jurisdiction over which is vested in theSEC (now the RTC). The Labor Arbiter thus erred in

assuming jurisdiction over the case filed by Atty.Garcia, because he had no jurisdiction over thesubject matter of the controversy.


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12.)HALAGUEÑA vs. PHILIPPINE AIRLINESINCORPORATED

G.R. No. 172013

October 2, 2009

Facts:

Petitioners were employed as female flightattendants of respondent Philippine Airlines (PAL)on different dates prior to November 22, 1996. Theyare members of the Flight Attendants and StewardsAssociation of the Philippines (FASAP), a labororganization certified as the sole and exclusivecertified bargaining representative of the flightattendants, flight stewards and pursers of respondent.

On July 11, 2001, respondent and FASAPentered into a Collective Bargaining Agreement[3]incorporating the terms and conditions of theiragreement for the years 2000 to 2005, hereinafterreferred to as PAL-FASAP CBA.

The controversy of this petition is the theconstitutionality of Section 144, Part A of theirPAL-FASAP CBA, it provides that:

“ A. For the Cabin Attendants hir ed before 22November 1996 :

3. Compulsory Reti rement

Subject to the grooming standards

provisions of this Agreement, compulsory

retirement shall be fi fty-f ive (55) for

females and sixty (60) for males . Xxxx”

Petitioners and several female cabin crews

challenged the aforementioned CBA provision oncompulsory retirement averring that the provision isdiscriminatory, and demanded for an equal treatmentwith their male counterparts.

On July 29, 2004, petitioners filed a Special CivilAction for Declaratory Relief with Prayer for theIssuance of Temporary Restraining Order and Writ ofPreliminary Injunction with the Regional Trial Court

(RTC) of Makati City against respondent for theinvalidity of Section 144, Part A of the PAL-FASAPCBA.

Respondent questioned the jurisdiction of the RTCas the case make out a labor dispute arising from

employer-employee relationship .

On August 9, 2004, the RTC issued an Orderupholding its jurisdiction over the present case. TheRTC reasoned that the instant case, the thrust of thePetition is Sec. 144 of the subject CBA which isallegedly discriminatory as it discriminates againstfemale flight attendants, in violation of theConstitution, the Labor Code, and the CEDAW. Theallegations in the Petition do not make out a labordispute arising from employer-employee relationshipas none is shown to exist.

Aggrieved, respondent, on Octob

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