BENJAMIN C. JUCO, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and

NATIONAL HOUSING CORPORATION, respondents.

G.R. No. 98107. August 18, 1997

Facts: Petitioner Benjamin C. Juco was hired as a project engineer of respondent National Housing

Corporation (NHC) from November 16, 1970 to May 14, 1975. On May 14, 1975, he was separated

from the service for having been implicated in a crime of theft and/or malversation of public funds.

On March 25, 1977, petitioner filed a complaint for illegal dismissal against the NHC with the

Department of Labor. On September 17, 1977, the Labor Arbiter rendered a decision dismissing the

complaint on the ground that the NLRC had no jurisdiction over the case. Petitioner then elevated the

case to the NLRC which rendered a decision on December 28, 1982, reversing the decision of the

Labor Arbiter.

Dissatisfied with the decision of the NLRC, respondent NHC appealed before this Court and on

January 17, 1985, the Court rendered a decision granting the petition and set aside the decision of

NLRC. The decision of the Labor Arbiter dismissing the case before it for lack of jurisdiction is

REINSTATED.

On January 6, 1989, petitioner filed with the Civil Service Commission a complaint for illegal

dismissal, with preliminary mandatory injunction. On February 6, 1989, respondent NHC moved for

the dismissal of the complaint on the ground that the Civil Service Commission has no jurisdiction

over the case. On April 11, 1989, the Civil Service Commission issued an order dismissing the

complaint for lack of jurisdiction. It ratiocinated that the Board finds the comment and/or motion to

dismiss meritorious. It was not disputed that NHC is a government corporation without an original

charter but organized/created under the Corporate Code. For lack of jurisdiction, the instant

complaint is dismissed.

On April 28, 1989, petitioner filed with respondent NLRC a complaint for illegal dismissal with

preliminary mandatory injunction against respondent NHC. On May 21, 1990, respondent NLRC thru

Labor Arbiter Manuel R. Caday ruled that petitioner was illegally dismissed from his employment by

respondent as there was evidence in the record that the criminal case against him was purely

fabricated, prompting the trial court to dismiss the charges against him. Hence, he concluded that

the dismissal was illegal as it was devoid of basis, legal or factual.

Thereafter, the Labor Arbiter rendered a decision, declaring the dismissal of the complainant as

illegal and ordered the respondent to immediately reinstate him to his former position without loss of

seniority rights with full back wages inclusive of allowance and to his other benefits or equivalent

computed from the time it is withheld from him when he was dismissed on March 27, 1977, until

actually reinstated.

On June 1, 1990, respondent NHC filed its appeal before the NLRC and on March 14, 1991, the NLRC

promulgated a decision which reversed the decision of Labor Arbiter Manuel R. Caday on the ground

of lack of jurisdiction.

Issue: Whether or not public respondent committed grave abuse of discretion in holding that

petitioner is not governed by the Labor Code.

Held: The NLRC erred in dismissing petitioners complaint for lack of jurisdiction because the rule

now is that the Civil Service now covers only government-owned or controlled corporations with

original charters. Having been incorporated under the Corporation Law, its relations with its

personnel are governed by the Labor Code and come under the jurisdiction of the National Labor

Relations Commission.

In the case at bench, the National Housing Corporation is a government owned corporation organized

in 1959 in accordance with the Uniform Charter of Government Corporation, dated January 1,

1959. Its shares of stock are and have been one hundred percent (100%) owned by the Government

from its incorporation under Act 1459, the former corporation law. The government entities that own

its shares of stock are the Government Service Insurance System, the Social Security System, the

Development Bank of the Philippines, the National Investment and Development Corporation and the

Peoples Homesite and Housing Corporation. Considering the fact that the NHA had been

incorporated under act 1459, the former corporation law, it is but correct to say that it is a

government-owned or controlled corporation whose employees are subject to the provisions of the

Labor Code. This observation is reiterated in recent case of Trade Union of the Philippines and Allied

Services (TUPAS) v. National Housing Corporation, where we held that the NHA is now within the

jurisdiction of the Department of Labor and Employment, it being a government-owned and/or

controlled corporation without an original charter. Furthermore, we also held that the workers or

employees of the NHC (now NHA) undoubtedly have the right to form unions or employees

organization and that there is no impediment to the holding of a certification election among them as

they are covered by the Labor Code.

PASTOR DIONISIO V. AUSTRIA, petitioner, vs. HON. NATIONAL LABOR RELATIONS

COMMISSION (Fourth Division), CEBU CITY, CENTRAL PHILIPPINE UNION MISSION

CORPORATION OF THE SEVENTH-DAY ADVENTIST, ELDER HECTOR V. GAYARES,

PASTORS REUBEN MORALDE, OSCAR L. ALOLOR, WILLIAM U. DONATO, JOEL WALES,

ELY SACAY, GIDEON BUHAT, ISACHAR GARSULA, ELISEO DOBLE, PROFIRIO BALACY,

DAVID RODRIGO, LORETO MAYPA, MR. RUFO GASAPO, MR. EUFRONIO IBESATE, MRS.

TESSIE BALACY, MR. ZOSIMO KARA-AN, and MR. ELEUTERIO LOBITANA, respondents.

[G.R. No. 124382. August 16, 1999]

Facts: Petitioner had worked with the private respondent Seventh Day Adventists (SDA) for 28 years

before he was terminated. Prior to said termination, petitioner was asked to admit accountability for

the church offerings collected by his wife in the amount of P15,078.10. Petitioner refused since it was

private respondents Pastor Buhat and Eufronio Ibesate who authorized his wife to collect. Thereafter

petitioner requested Pastor Buhat to convene the Executive Committee to settle the dispute between

him and Pastor Rodrigo, but the latter denied the same, and heated arguments between the two

ensued until petitioner banged the attache case of Pastor Buhat on the table, scattered the books and

threw the phone. Later, an Executive Committee meeting was held where the non-remittance of

church collections and the events that transpired were discussed. Subsequently, petitioner received a

letter of dismissal citing therein grounds for the termination of his services.

Petitioner then filed a complaint before the Labor Arbiter for illegal dismissal against the SDA and its

officers and prayed for reinstatement with backwages and benefits, moral and exemplary damages

and other labor law benefits and a decision was rendered in favor of petitioner.

The SDA, through its officers, appealed the decision of the Labor Arbiter to the National Labor

Relations Commission. In a decision the NLRC vacated the findings of the Labor Arbiter for want of

merit.

Petitioner filed a motion for reconsideration of the above-named decision. On 18 July 1995, the NLRC

issued a Resolution reversing its original decision. 

In view of the reversal of the original decision of the NLRC, the SDA filed a motion for

reconsideration of the above resolution. Notable in the motion for reconsideration filed by private

respondents is their invocation, for the first time on appeal, that the Labor Arbiter has no jurisdiction

over the complaint filed by petitioner due to the constitutional provision on the separation of church

and state since the case allegedly involved and ecclesiastical affair to which the State cannot

interfere.

The NLRC, without ruling on the merits of the case, reversed itself once again, sustained the

argument posed by private respondents and, accordingly, dismissed the complaint of petitioner for

lack of jurisdiction.

After the filing of the petition, the Court ordered the Office of the Solicitor General (the OSG) to file

its comment on behalf of public respondent NLRC. Interestingly, the OSG filed a manifestation and

motion in lieu of comment setting forth its stand that it cannot sustain the resolution of the NLRC. In

its manifestation, the OSG submits that the termination of petitioner of his employment may be

questioned before the NLRC as the same is secular in nature, not ecclesiastical.

Issues: 1) Whether or not the Labor Arbiter/NLRC has jurisdiction to try and decide the

complaint filed by petitioner against the SDA;

2) Whether or not the termination of the services of petitioner is an ecclesiastical affair, and, as

such, involves the separation of church and state; and

3) Whether or not such termination is valid.

Held: 1. Under the Labor Code, the provision which governs the dismissal of employees, is

comprehensive enough to include religious corporations, such as the SDA, in its coverage. Article 278

of the Labor Code on post-employment states that the provisions of this Title shall apply to all

establishments or undertakings, whether for profit or not. Obviously, the cited article does not make

any exception in favor of a religious corporation. This is made more evident by the fact that the Rules

Implementing the Labor Code, particularly, Section 1, Rule 1, Book VI on the Termination of

Employment and Retirement, categorically includes religious institutions in the coverage of the law.

Hence, the SDA cannot hide behind the mantle of protection of the doctrine of separation of church

and state to avoid its responsibilities as an employer under the Labor Code.

Private respondents are estopped from raising the issue of lack of jurisdiction for the first time on

appeal. It is already too late in the day for private respondents to question the jurisdiction of the

NLRC and the Labor Arbiter since the SDA had fully participated in the trials and hearings of the

case from start to finish. The Court has already ruled that the active participation of a 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 an invocation 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 bodys jurisdiction. Thus, the active participation of private respondents in the

proceedings before the Labor Arbiter and the NLRC mooted the question on jurisdiction.

2. The case at bar does not concern an ecclesiastical or purely religious affair as to bar the State from

taking cognizance of the same. While the matter at hand relates to the church and its religious

minister it does not ipso facto give the case a religious significance. Simply stated, what is involved

here is the relationship of the church as an employer and the minister as an employee. It is purely

secular and has no relation whatsoever with the practice of faith, worship or doctrines of the church.

In this case, petitioner was not ex-communicated or expelled from the membership of the SDA but

was terminated from employment. Indeed, the matter of terminating an employee, which is purely

secular in nature, is different from the ecclesiastical act of expelling a member from the religious

congregation.

3. In termination cases, the settled rule is that the burden of proving that the termination was for a

valid or authorized cause rests on the employer. Thus, private respondents must not merely rely on

the weaknesses of petitioners evidence but must stand on the merits of their own defense. The issue

being the legality of petitioners dismissal, the same must be measured against the requisites for a

valid dismissal, namely: (a) the employee must be afforded due process, i.e., he must be given an

opportunity to be heard and to defend himself, and; (b) the dismissal must be for a valid cause as

provided in Article 282 of the Labor Code. Without the concurrence of this twin requirements, the

termination would, in the eyes of the law, be illegal.

Before the services of an employee can be validly terminated, Article 277 (b) of the Labor Code and

Section 2, Rule XXIII, Book V of the Rules Implementing the Labor Code further require the employer

to furnish the employee with two (2) written notices, to wit: (a) a written notice served on the

employee specifying the ground or grounds for termination, and giving to said employee reasonable

opportunity within which to explain his side; and, (b) a written notice of termination served on the

employee indicating that upon due consideration of all the circumstances, grounds have been

established to justify his termination. The first notice, which may be considered as the proper charge,

serves to apprise the employee of the particular acts or omissions for which his dismissal is

sought. The second notice on the other hand seeks to inform the employee of the employers decision

to dismiss him. This decision, however, must come only after the employee is given a reasonable

period from receipt of the first notice within which to answer the charge and ample opportunity to be

heard and defend himself with the assistance of a representative, if he so desires. This is in

consonance with the express provision of law on the protection of labor and the broader dictates of

procedural due process. Non-compliance therewith is fatal because these requirements are

conditions sine qua non before dismissal may be validly effected.

We cannot sustain the validity of dismissal based on the ground of breach of trust. Private

respondents allege that they have lost their confidence in petitioner for his failure, despite demands,

to remit the tithes and offerings amounting to P15,078.10, which were collected in his district. A

careful study of the voluminous records of the case reveals that there is simply no basis for the

alleged loss of confidence and breach of trust. Settled is the rule that under Article 282 (c) of the

Labor Code, the breach of trust must be willful. A breach is willful if it is done intentionally,

knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly,

thoughtlessly, heedlessly or inadvertently. 

With respect to the grounds of serious misconduct and commission of an offense against the person

of the employers duly authorized representative, we find the same unmeritorious and, as such, do not

warrant petitioners dismissal from the service. Misconduct has been defined as improper or wrong

conduct. It is the transgression of some established and definite rule of action, a forbidden act, a

dereliction of duty, willful in character, and implies wrongful intent and not mere error in

judgment. For misconduct to be considered serious it must be of such grave and aggravated

character and not merely trivial or unimportant. 

 The final ground alleged by private respondents in terminating petitioner, gross and habitual neglect

of duties, does not require an exhaustive discussion. Suffice it to say that all private respondents had

were allegations but not proof.

In view of the foregoing, we sustain the finding of the Labor Arbiter that petitioner was terminated

from service without just or lawful cause. Having been illegally dismissed, petitioner is entitled to

reinstatement to his former position without loss of seniority rights and the payment of full

backwages without any deduction corresponding to the period from his illegal dismissal up to actual

reinstatement.

ALIPIO R. RUGA, JOSE PARMA, ELADIO CALDERON, LAURENTE BAUTU, JAIME BARBIN,

NICANOR FRANCISCO, PHILIP CERVANTES and ELEUTERIO BARBIN, petitioners, 

vs.

NATIONAL LABOR RELATIONS COMMISSION and DE GUZMAN FISHING ENTERPRISES

and/or ARSENIO DE GUZMAN, respondents.

G.R. No. L-72654-61 January 22, 1990

Facts: Petitioners were the fishermen-crew members of one of several fishing vessels owned and

operated by private respondent De Guzman Fishing Enterprises which is primarily engaged in the

fishing business with port and office at Camarines Sur. Petitioners rendered service aboard said

fishing vessel in various capacities, as follows: Alipio Ruga and Jose Parma patron/pilot; Eladio

Calderon, chief engineer; Laurente Bautu, second engineer; Jaime Barbin, master fisherman; Nicanor

Francisco, second fisherman; Philip Cervantes and Eleuterio Barbin, fishermen.

For services rendered in the conduct of private respondent's regular business of "trawl" fishing,

petitioners were paid on percentage commission basis in cash by one Mrs. Pilar de Guzman, cashier

of private respondent. As agreed upon, they received thirteen percent (13%) of the proceeds of the

sale of the fish-catch if the total proceeds exceeded the cost of crude oil consumed during the fishing

trip, otherwise, they received ten percent (10%) of the total proceeds of the sale. The patron/pilot,

chief engineer and master fisherman received a minimum income of P350.00 per week while the

assistant engineer, second fisherman, and fisherman-winchman received a minimum income of

P260.00 per week.

On September 11, 1983 upon arrival at the fishing port, petitioners were told by Jorge de Guzman,

president of private respondent, to proceed to the police station at Camaligan, Camarines Sur, for

investigation on the report that they sold some of their fish-catch at midsea to the prejudice of private

respondent. Petitioners denied the charge claiming that the same was a countermove to their having

formed a labor union and becoming members of Defender of Industrial Agricultural Labor

Organizations and General Workers Union (DIALOGWU).

On September 22, 1983, petitioners individually filed their complaints for illegal dismissal and non-

payment of 13th month pay, emergency cost of living allowance and service incentive pay, with the

then Ministry (now Department) of Labor and Employment.

Private respondent, thru its operations manager, Conrado S. de Guzman, submitted its position paper

denying the employer-employee relationship between private respondent and petitioners on the

theory that private respondent and petitioners were engaged in a joint venture.

After the parties failed to reach an amicable settlement, the Labor Arbiter scheduled the case for

joint hearing furnishing the parties with notice and summons. After two (2) previously scheduled joint

hearings were postponed due to the absence of private respondent, one of the petitioners herein,

Alipio Ruga, the pilot/captain of the 7/B Sandyman II, testified, among others, on the manner the

fishing operations were conducted, mode of payment of compensation for services rendered by the

fishermen-crew members, and the circumstances leading to their dismissal.

After the case was submitted for resolution, Labor Arbiter Asisclo S. Coralde rendered a joint

decision dismissing all the complaints of petitioners on a finding that a "joint fishing venture" and not

one of employer-employee relationship existed between private respondent and petitioners.

From the adverse decision against them, petitioners appealed to the National Labor Relations

Commission. The National Labor Relations Commission promulgated its resolution affirming the

decision of the labor arbiter that a "joint fishing venture" relationship existed between private

respondent and petitioners.

Issue: Whether or not the fishermen-crew members of the trawl fishing vessel 7/B Sandyman II are

employees of its owner-operator, De Guzman Fishing Enterprises, and if so, whether or not they were

illegally dismissed from their employment.

Held: Petition is granted.

We have consistently ruled that in determining the existence of an employer-employee relationship,

the elements that are generally considered are the following (a) the selection and engagement of the

employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer's power to

control the employee with respect to the means and methods by which the work is to be

accomplished. The employment relation arises from contract of hire, express or implied. In the

absence of hiring, no actual employer-employee relation could exist.

From the four (4) elements mentioned, We have generally relied on the so-called right-of-control test

where the person for whom the services are performed reserves a right to control not only the end to

be achieved but also the means to be used in reaching such end. The test calls merely for the

existence of the right to control the manner of doing the work, not the actual exercise of the right.

The case of Pajarillo vs. SSS, supra, invoked by the public respondent as authority for the ruling that

a "joint fishing venture" existed between private respondent and petitioners is not applicable in the

instant case. There is neither light of control nor actual exercise of such right on the part of the boat-

owners in the Pajarillo case, where the Court found that the pilots therein are not under the order of

the boat-owners as regards their employment; that they go out to sea not upon directions of the boat-

owners, but upon their own volition as to when, how long and where to go fishing; that the boat-

owners do not in any way control the crew-members with whom the former have no relationship

whatsoever; that they simply join every trip for which the pilots allow them, without any reference to

the owners of the vessel; and that they only share in their own catch produced by their own efforts.

The aforementioned circumstances obtaining in Pajarillo case do not exist in the instant case. The

conduct of the fishing operations was undisputably shown by the testimony of Alipio Ruga, the

patron/pilot of 7/B Sandyman II, to be under the control and supervision of private respondent's

operations manager. Matters dealing on the fixing of the schedule of the fishing trip and the time to

return to the fishing port were shown to be the prerogative of private respondent. While performing

the fishing operations, petitioners received instructions via a single-side band radio from private

respondent's operations manager who called the patron/pilot in the morning. They are told to report

their activities, their position, and the number of tubes of fish-catch in one day. Clearly thus, the

conduct of the fishing operations was monitored by private respondent thru the patron/pilot of 7/B

Sandyman II who is responsible for disseminating the instructions to the crew members.

Private respondent is ordered to reinstate petitioners to their former positions or any equivalent

positions with 3-year backwages and other monetary benefits under the law. No pronouncement as to

costs.

PERPETUAL HELP CREDIT COOPERATIVE, INC., petitioner, vs. BENEDICTO FABURADA,

SISINITA VILLAR, IMELDA TAMAYO, HAROLD CATIPAY, and the NATIONAL LABOR

RELATIONS COMMISSION, Fourth Division, Cebu City, respondents.

G.R. No. 121948. October 8, 2001

Facts: Benedicto Faburada, Sisinita Vilar, Imelda Tamayo and Harold Catipay, private respondents,

filed a complaint against the Perpetual Help Credit Cooperative, Inc. (PHCCI), petitioner, with the

Arbitration Branch, Department of Labor and Employment (DOLE) for illegal dismissal, premium pay

on holidays and rest days, separation pay, wage differential, moral damages, and attorneys fees.

Forthwith, petitioner PHCCI filed a motion to dismiss the complaint on the ground that there is no

employer-employee relationship between them as private respondents are all members and co-

owners of the cooperative. Furthermore, private respondents have not exhausted the remedies

provided in the cooperative by-laws.

Petitioner filed a supplemental motion to dismiss alleging that Article 121 of R.A. No. 6939, otherwise

known as the Cooperative Development Authority Law which took effect on March 26, 1990, requires

conciliation or mediation within the cooperative before a resort to judicial proceeding. The Labor

Arbiter denied petitioner's motion to dismiss, holding that the case is impressed with employer-

employee relationship and that the law on cooperatives is subservient to the Labor Code.

The Labor Arbiter rendered a decision declaring complainants were illegally dismissed, thus

respondent is directed to pay Complainants backwages computed from the time they were illegally

dismissed up to the actual reinstatement but subject to the three year backwages rule, separation pay

for one month for every year of service since reinstatement is evidently not feasible anymore, to pay

complainants 13th month pay, wage differentials and Ten Percent (10%) attorneys fees from the

aggregate monetary award.

On appeal, the NLRC affirmed the Labor Arbiter's decision.

Hence, this petition by the PHCCI.

Issue: Whether or not respondent judge committed grave abuse of discretion in ruling that there is

an employer-employee relationship between the parties and that private respondents were illegally

dismissed.

Held: Petition is denied.

In determining the existence of an employer-employee relationship, the following elements are

considered: (1) the selection and engagement of the worker or the power to hire; (2) the power to

dismiss; (3) the payment of wages by whatever means; and (4) the power to control the workers

conduct, with the latter assuming primacy in the overall consideration. No particular form of proof is

required to prove the existence of an employer-employee relationship. Any competent and relevant

evidence may show the relationship.

The above elements are present here. Petitioner PHCCI, through Mr. Edilberto Lantaca, Jr., its

Manager, hired private respondents to work for it. They worked regularly on regular working hours,

were assigned specific duties, were paid regular wages and made to accomplish daily time records

just like any other regular employee. They worked under the supervision of the cooperative manager. 

Necessarily, this leads us to the issue of whether or not private respondents are regular

employees. Article 280 of the Labor Code provides for three kinds of employees: (1) regular

employees or those who have been engaged to perform activities which are usually necessary or

desirable in the usual business or trade of the employer; (2) project employees or those whose

employment has been fixed for a specific project or undertaking, the completion or termination of

which has been determined at the time of the engagement of the employee or where the work or

service to be performed is seasonal in nature and the employment is for the duration of the season;

and (3) casual employees or those who are neither regular nor project employees. The employees

who are deemed regular are: (a) those who have been engaged to perform activities which are

usually necessary or desirable in the usual trade or business of the employer; and (b) those casual

employees who have rendered at least one (1) year of service, whether such service is continuous or

broken, with respect to the activity in which they are employed. Undeniably, private respondents

were rendering services necessary to the day-to-day operations of petitioner PHCCI. This fact alone

qualified them as regular employees.

All of them, except Harold D. Catipay, worked with petitioner for more than one (1) year. That

Benedicto Faburada worked only on a part-time basis, does not mean that he is not a regular

employee. Ones regularity of employment is not determined by the number of hours one works but by

the nature and by the length of time one has been in that particular job. As regular employees or

workers, private respondents are entitled to security of tenure. Thus, their services may be

terminated only for a valid cause, with observance of due process.

The valid causes are categorized into two groups: the just causes under Articles 282 of the Labor

Code and the authorized causes under Articles 283 and 284 of the same Code. The just causes are:

(1) serious misconduct or willful disobedience of lawful orders in connection with the employees

work; (2) gross or habitual neglect of duties; (3) fraud or willful breach of trust; (4) commission of a

crime or an offense against the person of the employer or his immediate family member or

representative; and, analogous cases. The authorized causes are: (1) the installation of labor-saving

devices; (2) redundancy; (3) retrenchment to prevent losses; and (4) closing or cessation of

operations of the establishment or undertaking, unless the closing is for the purpose of circumventing

the provisions of law. Article 284 provides that an employer would be authorized to terminate the

services of an employee found to be suffering from any disease if the employees continued

employment is prohibited by law or is prejudicial to his health or to the health of his fellow

employees. Private respondents were dismissed not for any of the above causes. They were dismissed

because petitioner considered them to be mere voluntary workers, being its members, and as such

work at its pleasure. 

Procedural due process requires that the employer serve the employees to be dismissed two (2)

written notices before the termination of their employment is effected: (a) the first, to apprise them of

the particular acts or omissions for which their dismissal is sought and (b) the second, to inform them

of the decision of the employer that they are being dismissed. In this case, only one notice was served

upon private respondents by petitioner. It was in the form of a Memorandum signed by the Manager

of the Cooperative dated January 2, 1990 terminating their services effective December 29,

1989. Clearly, petitioner failed to comply with the twin requisites of a valid notice.

Petitioner contends that the labor arbiter has no jurisdiction to take cognizance of the complaint

of private respondents considering that they failed to submit their dispute to the grievance machinery

as required by P.D 175 (strengthening the Cooperative Movement). As aptly stated by the Solicitor

General in his comment, P.D. 175 does not provide for a grievance machinery where a dispute or

claim may first be submitted.

There is no evidence that private respondents are members of petitioner PHCCI and even if they

are, the dispute is about payment of wages, overtime pay, rest day and termination of

employment. Under Art. 217 of the Labor Code, these disputes are within the original and exclusive

jurisdiction of the Labor Arbiter.