Database Supreme Court Cases on Labor 2011-2012.xlsx

Philippine Supreme Court Decisions on LaborJanuary 2011 - March 2012

Topic/Syllabus Title of the Action G.R. No.

Abandonment; elements. G.R. No. 182070

Abandonment; elements. GR No. 167751

G.R. No. 170416

E.G. & I. Construction Corporation and Edsel Galeos v. Ananias P. Sato, et al.

Harpoon Marine Services, Inc., et al. v. Fernan H. Francisco

Appeal from decisions of labor arbiter; bond requirement for perfection of appeal may be relaxed in meritorious cases.

University Plans, Inc. vs. Belinda P. Solano, et al.

G.R. No. 196426

G.R. No. 189314

G.R. No. 169510

G.R. No. 194306

G.R. No. 171673

Appeal of the decision of the labor arbiter; posting of bond.

Marticio Semblante and Dubrick Pilar vs. Court of Appeals

Appeal; decision of DOLE Secretary.

Miguel Dela Pena Barairo vs. Office of the President and MST Marine Services (Phils.) Inc.

Appeal; decision or resolution of NLRC.

Atok Big Wedge Company, Inc. vs. Jesus P. Gison

Appeal; factual finding of NLRC.

Sebastian F. Oasay, Jr. vs. Palacio del Gobernador Condominium Corporation and Omar T. Cruz

Appeal; posting of appeal bond within the 10-day period is mandatory and jurisdictional.

Banahaw Broadcasting Corporation vs. Cayetano PACANa III, et al

G.R. No. 171673

G.R. No. 187320

G.R. No. 174179

G.R. No. 174179

Appeal; posting of Appeal Bond; Government’s exemption from the same.


Apprenticeship agreement; validity.

Atlanta Industries, Inc. and/or Robert Chan vs. Aprilito R. Sebolino, et al.,

Award of attorney’s fees; Article 111.

Kaisahan at Kapatiran ng mga Manggagawa at Kawani sa MWC-East Zone Union and Eduardo Borela, etc. vs. Manila Water Company, Inc.

Award of attorney’s fees; concepts.


G.R. No. 169564

G.R. No. 169754

G.R. No. 146206

G.R. No. 168922

G.R. No. 165381

Breach of Trust and Confidence; duties of employee.

James Ben L. Jerusalem v. Keppel Monte Bank, et al.

Certification election; petition for cancellation of union registration.

Legend International Resorts Limited v. Kilusang Manggagawa ng Legenda

Certification election; role of employers.

San Miguel Foods, Inc. vs. San Miguel Corp. Supervisors and Exempt Union

Certiorari under Rule 45; questions of law and exceptions.

Wilfredo Y. Antiquina v. Magsaysay Maritime Corporation and/or Masterbulk Pte., Ltd.

Certiorari under Rule 65; review of facts by the Court of Appeals.

Nelson A. Culili v. Eastern Telecommunications Philippines, Inc., et al.

G.R. No. 174158

G.R. No. 174941

G.R. No. 185352

G.R. No. 168501

Certiorari; substantial compliance.

William Endeliseo Barroga vs. Data Center College of the Philippines, et al.

Civil Service; Clark Development Corporation.

Antonio B. Salenga, et al. vs. Court of Appeals, et al.

Claim of disability benefits and sickness allowance; reporting requirements.

Coastal Safeway Marine Services vs. Esguerra

Collection of accrued wages; two-fold test.

Social Security System vs. Efren Capada, et al.

G.R. Nos. 183122/

Complaint; reinstatement. G.R. No. 167291

G.R. No. 166109

G.R. No. 177816

Collective bargaining agreement; duty of parties to maintain status quo pending renegotiation.

General Milling Corporation-Independent Labor Union [GMC-ILU] vs. General Milling Corporation/General Milling Corporation vs.General Milling Corporation-Independent Labor Union [GMC-ILU], et al.

Prince Transport, Inc. and Mr. Renato Claros vs. Diosdado Garcia, et al.,

Construction Industry; project employees.

Exodus International Construction Corporation, et al. v. Guillermo Biscocho, et al.

Constructive dismissal; burden of proof.

Nippon Housing Phil. Inc., et al. vs. Maiah Angela Leynes

G.R. No. 186614

G.R. No. 186614

G.R. No. 186614

GR No. 167751

Constructive dismissal; defense of abandonment.

Nationwide Security and Allied Services, Inc. v. Ronald P. Valderama

Constructive dismissal; defense of resignation.


Constructive Dismissal; security guards.


Corporate officer; solidary liability.


G.R. No. 160506

G.R. No. 192686

G.R. No. 168922

G.R. No. 192686

G.R. No. 179428

Damages; fraud or bad faith for the award of moral damages.

Joeb M. Aliviado, et al. vs. Procter and Gamble Phils., Inc., et al.

Disability benefits; compensable.

Fil-star Maritime Corporation, et al. vs. Hanziel O. Resete

Disability Benefits; entitlement and burden of proof.


Disability benefits; total disability.


Disciplinary measures; management prerogative.

Primo E. Caong, Jr., et al. vs. Avelino Regualos

G.R. No. 169564

G.R. No. 181146

G.R. No. 174158

G.R. No. 174173

Dismissal; breach of trust and confidence.


Dismissal; constructive dismissal.

The University of the Immaculate Conception, et al. vs. NLRC, et al.




Ma. Melissa A. Galang vs. Julia Malasuqui

G.R. No. 188086

G.R. No. 182848

Dismissal; due process. G.R. No. 177937



Francis Bello, represented herein by his daughter and attorney-in-fact, Geraldine Bello-Ona vs. Bonifacio Security Services, Inc. and Samuel Tomas


Emirate Security and Maintenance Systems, Inc. and Roberto Yan vs. Glenda M. Menese

Robinsons Galleria/Robinsons Supermarket Corp. and/or Jess Manuel vs. Irene R. Ranchez

Philippine Charity Sweepstakes Office Board of Directors and Reynaldo P. Martin v. Marie Jean C. Lapid

G.R. No. 160506

G.R. No. 160506

G.R. No. 169191

G.R. Nos. 180849

Dismissal; elements for loss of trust or confidence.


Dismissal; elements for serious misconduct.

Joeb M. Aliviado, et al. vs. Procter and Gamble Phils., Inc., et al.,

Dismissal; financial assistance based on equity .

Romeo Villaruel vs. Yeo Han Guan, doing business under the name and style Yuhans Enterprises

Dismissal; gross and habitual neglect of duties.

Philippine National Bank vs. Dan Padao

Dismissal; illegal. G.R. No. 174631

G.R. No. 190559

Dismissal; neglect of duty. G.R. No. 176287

G.R. No. 176287

Jhorizaldy Uy vs. Centro Ceramica Corporation, et al.

Dismissal; loss of trust and confidence.

Blue Sky Trading Company, Inc. et al. vs. Arlene P. Blas and Joseph D. Silvano

Hospital Management Services – Medical Center Manila vs. Hospital Management Services, Inc. – Medical Center Manila Employees Association-AFW.

Dismissal; negligence in patient management.


G.R. No. 191288

G.R. No. 185255

G.R. No. 175558

G.R. No. 169191

Dismissal; probationary employees.

Manila Electric Company vs. Jan Carlo Gala

Dismissal; relief of illegally dismissed employee.

Norkis Distribution, Inc., et al. vs. Delfin S. Descallar

Dismissal; resignation vs. illegal dismissal; telex is not equivalent to tender of resignation.

Skippers United Pacific, Inc. and Skippers Maritime Services, Inc. Ltd. vs. Nathaniel Doza, et al.

Dismissal; separation pay due to disease.


G.R. No. 175558

G.R. Nos. 180849

G.R. No. 179532

G.R. No. 178409/G.

G.R. No. 174725

Dismissal; substantive and procedural due process.


Dismissed employees; separation pay.


Doctrine of Operative Fact; applied as a matter of equity and fair play.

Claudio S. Yap vs. Thenamaris Ship’s Management and Intermare Maritime Agencies, Inc.

DOLE assumption of jurisdiction; effects.

Yolito Fadriquelan, et al. vs. Monterey Foods Corporation/Monterey Foods Corporation v. Bukluran ng mga Manggagawa sa Monterey-ILAW, et al.

Employee benefits; compensable illness.

Alexander B. Gatus vs. Social Security System,

G.R. Nos. 156556-

G.R. No. 179593

G.R. No. 185665

G.R. No. 173882

Employee benefits; entitlement to retirement benefits.

Enrique U. Betoy vs. The Board of Directors, National Power Corporation,

Employee benefits; principle against diminution of benefits.

University of the East vs. University of the East Employees’ Association

Employee benefits; right to bonus; diminution.

Eastern Telecommunications Philippines, Inc. vs. Eastern Telecoms Employees Union

Employee dismissal; constructive dismissal.

Julie’s Bakeshop and/or Edgar Reyes vs. Henry Arnaiz, et al.

G.R. No. 175932

G.R. No. 194306

G.R. No. 173291

G.R. No. 194306

G.R. No. 173291

Employee dismissal; disease; dereliction of duties.

Wuerth Philippines, Inc. vs. Rodante Ynson

Employee dismissal; due process.



Romeo A. Galang vs. Citiland Shaw Tower, Inc. and Virgilio Baldemor

Employee dismissal; grounds. Sebastian F. Oasay, Jr. vs. Palacio del Gobernador Condominium Corporation and Omar T. Cruz

Employee dismissal; just cause.


Employee; death benefits. G.R. No. 151993

G.R. No. 192084

Employee; overtime pay. G.R. No. 182848

G.R. No. 176884

Maritime Factors Inc. vs. Bienvenido R. Hindang

Employee; existence of employer-employee relationship.

Jose Mel Bernante vs. Philippine Basketball Association, et al.


Employee; permanent disability benefits.

Carmelito N. Valenzona vs. Fair Shipping Corporation, et al.

G.R. No. 169905

G.R. No. 178901

G.R. No. 174792

G.R. No. 178901

Employee; probationary employee.

St. Paul College Quezon City, et al. vs. Remigio Michael A. Ancheta II and Cynthia A. Ancheta

Employee’s compensation; increased risk theory.

Government Service Insurance System vs. Manuel P. Besitan

Employees; project vs. regular employees.

Wilfredo Aro, Ronilo Tirol, et al. vs. NLRC, Fourth Division, et al.

Employees’s Compensation; proceedings; quantum of proof.


G.R. No. 187122

G.R. No. 196426

G.R. No. 169510

G.R. No. 179428

G.R. No. 192558

Employer; right to discipline employee.

Negros Slashers, Inc., Rodolfo C. Alvarez and Vicente Tan vs. Alvin L. Teng

Employer-employee relationship; four-fold test.

Marticio Semblante and Dubrick Pilar vs. Court of Appeals,



Employer-employee relationship; jeepney driver.


Employer-employee relationship; onus probandi.

Bitoy Javier (Danilo P. Javier) vs. Fly Ace Corporation/Flordelyn Castillo

G.R. No. 167622

G.R. No. 177937

G.R. No. 187320

G.R. No. 192558

Employer-employee relationship; primary element.

Gregorio V. Tongko vs. The Manufacturers Life Insurance Co. (Phils.), Inc. and Renato A. Vergel de Dios

Employer-employee relationship; probationary employment.


Employer-employee relationship; regular employment.

Atlanta Industries, Inc. and/or Robert Chan vs. Aprilito R. Sebolino, et al.

Employer-employee relationship; test.


G.R. Nos. 178699/

G.R. No. 179469

Employment of seafarers. G.R. No. 185412

G.R. No. 185412

Employment benefits; entitlement to vacation and sick leave.

BPI Employees Union-Metro Manila, et al. vs. Bank of the Philippine Islands/Bank of the Philippine Islands vs. BPI Employees Union-Metro Manila, et al.

Employment contract; stages. C.F. Sharp & Co. Inc. and John J. Rocha vs. Pioneer Insurance and Surety Corporation, et al.

Gilbert Quizora vs. Denholm Crew Management (Philippines), Inc.

Employment of seafarers; disability compensation.


G.R. No. 179469

G.R. No. 169510

G.R. No. 184007

Floating status; validity. G.R. No. 177816

Employment relationship; commencement.

C.F. Sharp & Co. Inc. and John J. Rocha vs. Pioneer Insurance and Surety Corporation, et al.

Employment; regular employee.


Execution of Judgment; properties covered.

Paquito V. Ando v. Andresito Y. Campo, et al.


G.R. No. 187122

GSIS; retirement plan. G.R. No. 162372

G.R. No. 182070

G.R. No. 166109

Forum shopping; elements; res judicata.


Government Service Insurance System (GSIS), et al. vs. Commission on Audit, et al.

Illegal dismissal; burden of proof.




G.R. No. 169757

G.R. No. 191459

G.R. No. 167332

G.R. No. 165381

Illegal dismissal; employer-employee relationship.

Cesar C. Lirio, doing business under the name and style of Celkor Ad Sonimix vs. Wilmer D. Genovia

Illegal dismissal; execution of waiver and quitclaim.

Bernadeth Londonio and Joan Corcoro vs. Bio Research, Inc. and Wilson Y. Ang

Illegal dismissal; final and executory judgment.

Filipinas Palmoil Processing, Inc. and Dennis T. Villareal v. Joel P. Dejapa, represented by his Attorney-in-Fact Myrna Manzano

Illegal dismissal; liability of corporate officers.


Illegal dismissal; redundancy. G.R. No. 165381

G.R. No. 177937

G.R. No. 173792

G.R. No. 173792


Illegal dismissal; strained relations.


Illegal recruitment and estafa; may be charged separately.

People of the Philippines vs. Rosario “Rose” Ochoa

Illegal recruitment; admissibility of POEA certification.


G.R. No. 176264

G.R. No. 171644

G.R. No. 160506

Illegal recruitment; elements. People of the Philippines vs. Teresita “Tessie” Laogo

Illegal recruitment; elements.

Delia D. Romero vs. People of the Philippines, Romulo Padlan and Aruturo Siapno

Independent job contracting; required substantial capital.


Jurisdiction; labor arbiter. G.R. No. 168757

Jurisdiction; labor dispute. G.R. No. 181146

Jurisdiction; NLRC. G.R. No. 174941

Renato Real vs. Sangu Philippines, Inc. et al.



G.R. No. 179652

G.R. No. 175558.

Labor contracting; elements. G.R. No. 160278

G.R. No. 169717

Jurisdiction; power of the DOLE to determine the existence of employer-employee relationship.

People’s Broadcasting Service (Bombo Rado Phils., Inc.) vs. The Secretary of the Dept. of Labor & Employment, et al

Labor Code; maximum award of attorney’s fees in cases of recovery of wages.


Garden of Memories Park and Life Plan, Inc., et al. vs. NLRC, 2nd Div., et al.

Labor organization; collateral attack on legal personality.

Samahang Manggagawa sa Charter Chemical Solidarity of Unions in the Philippines for Empowerment and Reforms [SMCC-SUPER], Zacarrias Jerry Victorio – Union President v. Charter Chemical and Coating Corporation

G.R. No. 146206

G.R. No. 146206

G.R. No. 169717

G.R. No. 169717

Labor organization; confidential employees.


Labor organization; ineligibility to join.


Labor organization; membership of supervisory employees.


Labor organization; registration.


G.R. No. 146206

G.R. No. 178409/G.

G.R. No. 169754

G.R. No. 173792

Labor relations; appropriate bargaining unit.


Strikes; liability of union officers and participating workers.


Labor Union; collateral attack on legal personality.


Illegal recruitment in large scale.


G.R. No. 181974

G.R. No. 181974

G.R. No. 181974

G.R. No. 181974

Labor; liability of officers if termination is attended with bad faith.

Lynvil Fishing Enterprises, Inc. vs. Andres G. Ariola, et al.

Procedural and substantive due process; grounds for valid termination; breach of trust.


Labor; public prosecutor’s decision not binding on the labor tribunal.


Labor; regular employee; fixed-contract agreement, requisites for validity.


G.R. No. 160506

G.R. No. 184885

G.R. No. 179532

G.R. No. 175558

Labor-only contracting v. independent job contracting.


Management prerogative; resignation of employees running for public office.

Ernesto Ymbong vs. ABS-CBN Broadcasting Corporation, Veranda Sy & Dante Luzon

Migrant workers; computation of salary award.


Migrant Workers; RA No. 8042; money claims in cases of unjust termination.


G.R. No. 182070

G.R. No. 175251

G.R. No. 184007

G.R. No. 181974

Money claims; burden of proof.


National Labor Relations Commission; authority to review is limited to issues specifically brought before it on appeal.

Rodolfo Luna vs. Allado Construction Company, Inc. and/or Ramon Allado

National Labor Relations Commission; jurisdiction.


Security of tenure. Nature of employment;


NLRC; Certiorari. G.R. No. 195033

NLRC; contempt powers. G.R. No. 176085

NLRC; factual findings. G.R. No. 167291


AGG Trucking and/or Alex Ang Gaeid vs. Melanio B. Yuag

Federico S. Robosa, et al. vs. National Labor Relations Commission (First Division), et al.

Prince Transport, Inc. and Mr. Renato Claros vs. Diosdado Garcia, et al.


G.R. No. 195033

G.R. No. 167291

G.R. No. 187320

Petition; verification. G.R. No. 167291

NLRC; motion for reconsideration.


Petition; certificate of non-forum shopping.


Petition; failure to attach documents.



G.R. No. 179242

Pleading; verification. G.R. No. 188086

G.R. No. 172223

G.R. No. 172223

Placement Fee; proof of excessive collection.

Avelina F. Sagun v. Sunace International Management Services, Inc.


Probationary employee; valid cause for dismissal but without procedural due process; employee entitled to nominal damages.

Canadian Opportunities Unlimited, Inc. vs. Bart Q. Dalangin, Jr.

Probationary employee; valid dismissal even before 6 months.


G.R. No. 192881

G.R. No. 192881

G.R. No. 165381

G.R. No. 194031

G.R. No. 187122

Probationary employment; security of tenure.

Tamson’s Enterprises, Inc., et al. vs. Court of Appeals and Rosemarie L. Sy

Probationary employment; termination.


Procedural due process; notice requirements.


Procedural rules; failure to attach duplicate original or certified true copy of the assailed decision.

Jobel Enterprises and/or Mr. Benedict Lim vs. NLRC and Eric Martinez, Sr.

Procedural rules; liberal application.


G.R. No. 191940

G.R. No. 191940

Quitclaims; validity. G.R. No. 183390

G.R. No. 178296

Public office; casual employees.


Public office; security of tenure.


Plastimer Industrial Corporation and Teo Kee Bin v. Natalia C. Gopo, et al.

Regional director; review of decision.

The Heritage Hotel Manila, acting through its owner, Grand Plaza Hotel, Corp. vs. National Union of Workers in the Hotel, Restaurant and Allied Industries-Heritage Hotel Manila Supervisors Chapter (NUWHRAIN-HHMSC)

G.R. No. 177467

Reinstatement; backwages. G.R. No. 188722

G.R. No. 188722

G.R. No. 177467

Reinstatement; accrued backwages.

Pfizer, Inc., et al. v. Geraldine Velasco,

Bank of Lubao, Inc. vs. Rommel J. Manabat, et al.

Reinstatement; doctrine of strained relations; when applicable.


Reinstatement; immediately executory order.

Pfizer, Inc., et al. v. Geraldine Velasco

G.R. No. 177467

G.R. No. 183390

G.R. No. 183390

G.R. No. 168922

Reinstatement; terms and conditions.


Retrenchment; notice requirements.




Rules of Procedure; liberal construction in favor of working class.

Wilfredo Y. Antiquina v. Magsaysay Maritime Corporation and/or Masterbulk Pte., Ltd.,

G.R. No. 165935

G.R. No. 190515

G.R. No. 179532

G.R. No. 155109/G.

Seafarers; employment contract; perfection stage vs. commencement stage.

Bright Maritime Corporation (BMC) / Desiree P. Tenorio vs. Ricardo B. Fantonial

Secretary of Labor; power to give arbitral awards.

Cirtek Employees Labor Union-Federation of Free workers vs. Cirtek Electronics, Inc.

Section 10, Republic Act No. 8042; unconstitutional.


Separation pay; payment to those who participated in illegal strikes.

C. Alcantara & Sons, Inc. vs. Court of Appeals, et al./Nagkahiusang Mamumuo sa Alsons-SPFL, et al. vs. C. Alcantara & Sons, Inc., et al./Nagkahiusang Mamumuo sa Alsons-SPFL, et al. vs. C. Alcantara & Sons, Inc., et al.

Strike; illegal strike. G.R. No. 191138-3

G.R. No. 171189

G.R. No. 178903

G.R. No. 169191

Magdala Multipurpose & Livelihood, et al. vs. KMLMS, et al.

Termination by employer; willful disobedience.

Lores Realty Enterprises, Inc., Lorenzo Y. Sumulong III v. Virginia E. Pacia

Termination for Just Cause; separation pay by way of financial assistance.

Juliet G. Apacible vs. Multimed Industries, et al.,

Termination of employment; resignation v. dismissal.


G.R. Nos. 180849

G.R. No. 182397

G.R. Nos. 178699/

G.R. No. 186209

Termination of employment; when company tolerated violation of company policy.


Termination; abandonment of work.

Alert Security and Investigation Agency, Inc., et al. vs. Saidali Pasawilan, et al.

Termination; award of backwages.


Termination; constructive dismissal.

United Laboratories, Inc. vs. Jaime Domingo Substituted by his spouse Carmencita Punzalan Domingo, et al.

G.R. No. 181974

G.R. No. 164181

G.R. No. 182397

G.R. No. 176800

Termination; effect if procedural due process not followed but with valid cause


Termination; gross and habitual neglect.

Nissan Motors Phils., Inc. vs. Victorino Angelo

Termination; illegal dismissal. Alert Security and Investigation Agency, Inc., et al. vs. Saidali Pasawilan, et al.

Termination; loss of trust and confidence.

Elmer Lopez vs. Keppel Bank Philippines, Inc. et al.

G.R. No. 187887

G.R. No. 165381

G.R. No. 178296

Union shop; new employees. G.R. No. 164301


Pamela Florentina P. Jumuad vs. Hi-Flyer Food, Inc. and/or Jesus R. Montemayor

Unfair Labor Practice; right to self-organize.


Union registration; cancellation.


Bank of the Philippine Islands vs. BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank

Unions; disaffiliation. G.R. No. 190515

G.R. No. 175251

G.R. No. 172161

G.R. No. 168501


Voluntary Resignation; financial assistance may be awarded on equity considerations.


Wages; facilities and supplements.

SLL International Cables Specialist and Sonny L. Lagon v. NLRC, Roldan Lopez, et al.

Wages; payment pending reinstatement.


Wages; proof of payment. G.R. No. 172161

Wages; value of facilities. G.R. No. 172161


Dismissal; just cause. G.R. No. 185829



Armando Ailing vs. Jose B. Feliciano, Manuel F. San Mateo III, et al.,


Dismissal; retrenchment. G.R. No. 163657

G.R. No. 185829

G.R. No. 182331

G.R. No. 163700

International Management Services/Marilyn C. Pascual vs. Roel P. Logarta



Employee; separation package.

Ma. Corina C. Jiao, et al. vs. Global Business Bank, Inc., et al.

Employer-employee relationship.

Charlie Jao vs. BCC Products Sales, Inc. and Terrance Ty

G.R. No. 192514

G.R. No. 192190

Dismissal; inefficiency. G.R. No. 192190

Project employee; conversion into regular employee.

D.M. Consunji, Inc. and/or David M. Consunji vs. Estelito

Dismissal; willful disobedience.

Realda v. New Age Graphics, Inc. et. al.



G.R. No. 194813


Dismissal; willful disobedience.

Kakampi and its members, et al. v. Kingspoint Express and Logistic and/or Mary Ann Co

G.R. No. 194813Dismissal; procedural due process requirements.

Kakampi and its members, et al. v. Kingspoint Express and Logistic and/or Mary Ann Co


February 16, 2011

March 02, 2011

June 22, 2011

Date of Promulgation

August 15, 2011

June 15, 2011

August 08, 2011

February 06, 2012

May 30, 2011

May 30, 2011

January 26, 2011

November 16, 2011

November 16, 2011

April 06, 2011

February 23, 2011

August 01, 2011

April 13, 2011

February 09, 2011

June 27, 2011

February 01, 2012

August 10, 2011

January 31, 2011

June 15, 2011

January 12, 2011

February 23, 2011

August 03, 2011

February 23, 2011

February 23, 2011

February 23, 2011

March 02, 2011

June 06, 2011

November 23, 2011

April 13, 2011

November 23, 2011

January 26, 2011

April 06, 2011

January 26, 2011

June 27, 2011

March 07, 2012

August 03, 2011

October 05, 2011

January 19, 2011

April 12, 2011

June 06, 2011

June 06, 2011

June 01, 2011

November 16, 2011

October 19, 2011

March 07, 2012

January 31, 2011

January 31, 2011

March 07, 2012

March 14, 2012

February 08, 2012

June 01, 2011

February 08, 2012

November 16, 2011

May 30, 2011

June 08, 2011

January 26, 2011

October 04, 2011

September 14, 2011

February 08, 2012

February 15, 2012

February 15, 2012

February 06, 2012

February 08, 2012

February 06, 2012

February 08, 2012

October 19, 2011

September 14, 2011

October 05, 2011

October 19, 2011

September 07, 2011

November 23, 2011

March 07, 2012

November 23, 2011

February 22, 2012

August 15, 2011

August 08, 2011

January 26, 2011

February 15, 2012

January 25, 2011

January 19, 2011

January 26, 2011

February 15, 2012

September 21, 2011

February 15, 2012

November 16, 2011

November 16, 2011

February 15, 2012

August 08, 2011

February 16, 2011

August 03, 2011

February 22, 2012

October 19, 2011

February 16, 2011

February 23, 2011

November 23, 2011

January 17, 2011

February 07, 2011

February 09, 2011

February 09, 2011

January 19, 2011

August 31, 2011

August 31, 2011

January 10, 2011

November 23, 2011

June 06, 2011

January 19, 2011

January 26, 2011

February 01, 2012

March 06, 2012

February 08, 2012

February 08, 2012

March 16, 2011

August 01, 2011

August 01, 2011

March 16, 2011

March 16, 2011

August 01, 2011

June 08, 2011

February 23, 2011

August 31, 2011

February 01, 2012

February 01, 2012

February 01, 2012

February 01, 2012

June 06, 2011

March 07, 2012

May 30, 2011

February 08, 2012

February 16, 2011

May 30, 2011

February 16, 2011

February 01, 2012

October 12, 2011

February 08, 2012

January 12, 2011

February 15, 2012

October 12, 2011

January 12, 2011

January 26, 2011

January 12, 2011

February 23, 2011

August 03, 2011

February 06, 2012

February 06, 2012

November 16, 2011

November 16, 2011

February 09, 2011

August 08, 2011

February 22, 2012

April 12, 2011

April 12, 2011

February 16, 2011

January 12, 2011

March 09, 2011

February 01, 2012

February 01, 2012

March 09, 2011

March 09, 2011

February 16, 2011

February 16, 2011

April 13, 2011

February 08, 2012

June 06, 2011

May 30, 2011

March 14, 2012

October 19, 2011

March 09, 2011

May 30, 2011

June 01, 2011

November 16, 2011

September 14, 2011

September 21, 2011

September 21, 2011

February 01, 2012

September 14, 2011

September 14, 2011

September 05, 2011

September 07, 2011

February 09, 2011

January 12, 2011

October 19, 2011

June 06, 2011

May 30, 2011

March 02, 2011

January 31, 2011

March 02, 2011

March 02, 2011

April 25, 2012

April 25, 2012

April 18, 2012

April 25, 2012

April 18, 2012

April 18, 2012

April 18, 2012

April 25, 2012

April 25, 2012

April 25, 2012

April 25, 2012

April 25, 2012


Salient Discussion

Respondents filed an illegal dismissal case against the petitioner-corporation. For its defense, petitioner-corporation alleged that the respondents abandoned their work and were not dismissed, and that it sent letters advising respondents to report for work, but they refused. The Court held that for abandonment to exist, it is essential (a) that the employee must have failed to report for work or must have been absent without valid or justifiable reason; and (b) that there must have been a clear intention to sever the employer-employee relationship manifested by some overt acts. The employer has the burden of proof to show the employee’s deliberate and unjustified refusal to resume his employment without any intention of returning. Mere absence is not sufficient. There must be an unequivocal intent on the part of the employee to discontinue his employment. Based on the evidence presented, the reason why respondents failed to report for work was because petitioner-corporation barred them from entering its construction sites. It is a settled rule that failure to report for work after a notice to return to work has been served does not necessarily constitute abandonment. The intent to discontinue the employment must be shown by clear proof that it was deliberate and unjustified. Petitioner-corporation failed to show overt acts committed by respondents from which it may be deduced that they had no more intention to work. Respondents’ filing of the case for illegal dismissal barely four (4) days from their alleged abandonment is totally inconsistent with the known concept of what constitutes abandonment. Respondent employee was dismissed by petitioners on the ground of alleged habitual absenteeism and abandonment of work. Jurisprudence provides for two essential requirements for abandonment of work to exist: (1) the failure to report for work or absence without valid or justifiable reason, and (2) clear intention to sever the employer-employee relationship manifested by some overt acts should both concur. Further, the employee’s deliberate and unjustified refusal to resume his employment without any intention of returning should be established and proven by the employer. The Court held that petitioners failed to prove that it was respondent employee who voluntarily refused to report back for work by his defiance and refusal to accept the memoranda and the notices of absences sent to him. Petitioners failed to present evidence that they sent these notices to respondent employee’s last known address for the purpose of warning him that his continued failure to report would be construed as abandonment of work. Moreover, the fact that respondent employee never prayed for reinstatement and has sought employment in another company which is a competitor of petitioners cannot be construed as his overt acts of abandoning employment. Neither can the delay of four months be taken as an indication that the respondent employee’s filing of a complaint for illegal dismissal is a mere afterthought. Records show that respondent employee attempted to get his separation pay and alleged commissions from the company, but it was only after his requests went unheeded that he resorted to The posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards from the decision of the labor arbiter. However, under Section 6, Rule VI of the NLRC’s Revised Rules of Procedure, the bond may be reduced albeit only (1) on meritorious grounds and (2) upon posting of a partial bond in a reasonable amount in relation to the monetary award. For this purpose, the NLRC is not precluded from conducting a preliminary determination of the employer’s financial capability to post the required bond, without necessarily passing upon the merits. In the present case, the NLRC gravely abused its discretion in denying petitioner’s motion to reduce bond peremptorily without considering the evidence presented by petitioner showing that it was under a state of receivership. Such circumstance constitutes meritorious grounds to reduce the bond. Moreover, the petitioner exhibited its good faith by posting a partial cash bond during the reglementary period.

The posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards from the Decision of the Labor Arbiter. However, the Supreme Court, considering the substantial merits of the case, has on certain occasions relaxed this rule on, and excused the late posting of, the appeal bond when there are strong and compelling reasons for the liberality. In this case, the exception applies. The rule on the posting of an appeal bond cannot defeat the substantive rights of respondents to be free from an unwarranted burden of answering for an illegal dismissal for which they were never responsible since no employer-employee relationship existed between the two.

For petitioner’s refusal to comply with his deployment assignment, respondent manning agency filed a complaint against him for breach of contract before the Philippine Overseas Employment Administration (POEA). The POEA penalized petitioner with one year suspension from overseas deployment. The suspension was reduced to six months by the Secretary of Labor. Petitioner appealed the latter’s decision with the Office of the President (OP). The Supreme Court ruled that petitioner’s appeal was erroneous. The proper remedy to question the decisions or orders of the Secretary of Labor is via Petition for Certiorari under Rule 65. Appeals to the OP in labor cases have been eliminated, except those involving national interest over which the President may assume jurisdiction. The present case does not affect national interest. Hence, petitioner’s appeal to the OP did not toll the running of the period and the assailed decision of the Secretary of Labor is deemed to have attained finality.

As was enunciated in the case of St. Martin Funeral Home v. NLRC, the special civil action of certiorari under Rule 65 of the Rules of Civil Procedure, which is filed before the CA, is the proper vehicle for judicial review of decisions of the NLRC. The petition should be initially filed before the Court of Appeals in strict observance of the doctrine on hierarchy of courts as the appropriate forum for the relief desired. Thus, respondent’s recourse to the CA was the proper remedy to question the resolution of the NLRC.

Findings of fact of administrative agencies and quasi-judicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only respect but finality when affirmed by the Court of Appeals. Factual findings of quasi-judicial bodies like the NLRC, if supported by substantial evidence, are accorded respect and even finality by the Supreme Court, more so when they coincide with those of the Labor Arbiter. Such factual findings are given more weight when the same are affirmed by the Court of Appeals. In the present case, the Supreme Court found no reason to depart from these principles since the Labor Arbiter found that there was substantial evidence to conclude that Oasay had breached the trust and confidence of Palacio Del Gobernador Condominium Corporation, which finding the NLRC had likewise upheld.

Respondents filed a complaint for illegal dismissal, unfair labor practice, and reimbursement of unpaid Collective Bargaining Agreement (CBA) benefits against petitioner. The Labor Arbiter rendered a decision in favor of respondents and ordered petitioner BBC to pay the money claims. Petitioner appealed to the NLRC, and without posting the appeal bond, filed a Motion for the Re-computation of the Monetary Award in order that the appeal bond may be reduced. The NLRC denied the motion and dismissed the appeal of BBC for non-perfection. The Court of Appeals and the Supreme Court both sustained the dismissal by the NLRC. The Motion for the Re-computation of the Monetary Award filed by BBC was tantamount to a motion for extension to perfect the appeal, which is prohibited by the rules. The payment of the appeal bond within the period provided by law is an indispensable and jurisdictional requisite and not a mere technicality of law or procedure. Hence, the failure on the part of BBC to perfect the appeal had the effect of rendering the judgment final and executory.

Respondents are supervisory and rank and file employees of the DXWG-Iligan City radio station which is owned by petitioner Banahaw Broadcasting Corporation (BBC). Respondents filed a complaint for illegal dismissal, unfair labor practice, and reimbursement of unpaid Collective Bargaining Agreement (CBA) benefits against petitioner. The Labor Arbiter rendered a decision ordering petitioner BBC to pay the money claims. On appeal to the NLRC, petitioner BBC averred that since it is wholly owned by the Republic of the Philippines, it need not post an appeal bond. The NLRC dismissed the appeal of BBC for non-perfection. The Court of Appeals affirmed the NLRC. The Supreme Court, in sustaining the CA, held that as a general rule, the government and all the attached agencies with no legal personality distinct from the former are exempt from posting appeal bonds. The rationale is to protect the presumptive judgment creditor against the insolvency of the presumptive judgment debtor. When the State litigates, it is not required to put up an appeal bond because it is presumed to be always solvent. This exemption, however, does not, as a general rule, apply to government-owned and controlled corporations (GOCCs) for the reason that the latter has a personality distinct from its shareholders. In this case, BBC, though owned by the government, is a corporation with a personality distinct from the Republic or any of its agencies or instrumentalities, and therefore do not partake in the latter’s exemption from the posting of appeal bonds. The apprenticeship agreements did not indicate the trade or occupation in which the apprentice would be trained; neither was the apprenticeship program approved by the Technical Education and Skills Development Authority (TESDA). These were defective as they were executed in violation of the law and the rules. Moreover, with the expiration of the first agreement and the retention of the employees, the employer, to all intents and purposes, recognized the completion of their training and their acquisition of a regular employee status. To foist upon them the second apprenticeship agreement for a second skill which was not even mentioned in the agreement itself, is a violation of the Labor Code’s implementing rules and is an act manifestly unfair to the employees.

One of the issues of this case involved the effect of the Memorandum of Agreement provision that attorney’s fees shall be deducted from the amelioration allowance (AA) and CBA receivables. In this regard, the CA held that the additional grant of 10% attorney’s fees by the NLRC violates Article 111 of the Labor Code, considering that the MOA between the parties already ensured the payment of 10% attorney’s fees deductible from the AA and CBA receivables of the Union’s members. In the present case, the Union bound itself to pay 10% attorney’s fees to its counsel under the MOA and also gave up the attorney’s fees awarded to the Union’s members in favor of their counsel. The award by the NLRC cannot be taken to mean an additional grant of attorney’s fees, in violation of the ten percent (10%) limit under Article 111 of the Labor Code since it rests on an entirely different legal obligation than the one contracted under the MOA. Simply stated, the attorney’s fees contracted under the MOA do not refer to the amount of attorney’s fees awarded by the NLRC; the MOA provision on attorney’s fees does not have any bearing at all to the attorney’s fees awarded by the NLRC under Article 111 of the Labor Code. Based on these considerations, it is clear that the CA erred in ruling that the LA’s award of attorney’s fees violated the maximum limit of ten percent (10%) fixed by Article 111 of the Labor Code.

There are two commonly accepted concepts of attorney’s fees – the ordinary and extraordinary. In its ordinary concept, an attorney’s fee is the reasonable compensation paid to a lawyer by his client for the legal services the former renders; compensation is paid for the cost and/or results of legal services per agreement or as may be assessed. In its extraordinary concept, attorney’s fees are deemed indemnity for damages ordered by the court to be paid by the losing party to the winning party. This is payable not to the lawyer but to the client, unless the client and his lawyer have agreed that the award shall accrue to the lawyer as additional or part of his compensation. Article 111 of the Labor Code, as amended, contemplates the extraordinary concept of attorney’s fees. Although an express finding of facts and law is still necessary to prove the merit of the award, there need not be any showing that the employer acted maliciously or in bad faith when it withheld the wages. Thus the SC concluded that the CA erred in ruling that a finding of the employer’s malice or bad faith in withholding wages must precede an award of attorney’s fees under Article 111 of the Labor Code. To reiterate, a plain showing that the lawful wages were not paid without justification is sufficient.

Petitioner was employed as Assistant Vice-President in respondent bank. His employment was terminated on the ground of willful breach of trust and confidence for endorsing VISA card applicants who later turned out to be impostors resulting in financial losses to respondent bank. The court held that petitioner was illegally dismissed. As provided in Article 282 of the Labor Code, an employer may terminate an employee’s employment for fraud or willful breach of trust reposed in him. However, in order to constitute a just cause for dismissal, the act complained of must be ‘work-related’ such as would show the employee concerned to be unfit to continue working for the employer. The act of betrayal of trust, if any, must have been committed by the employee in connection with the performance of his function or position. The court found that the element of ‘work-connection’ was not present in this case since petitioner was assigned under the Jewelry department, and therefore had nothing to do with the approval of VISA Cards, which was under a different department altogether.

Respondent union filed a petition for certification election. Petitioner moved to dismiss the petition for certification election alleging the pendency of a petition for cancellation of the union’s registration. The DOLE Secretary ruled in favor of the legitimacy of the respondent as a labor organization and ordered the immediate conduct of a certification election. Pending appeal in the Court of Appeals, the petition for cancellation was granted and became final and executory. Petitioner argued that the cancellation of the union’s certificate of registration should retroact to the time of its issuance. Thus, it claimed that the union’s petition for certification election and its demand to enter into collective bargaining agreement with the petitioner should be dismissed due to respondent’s lack of legal personality. The Court ruled that the pendency of a petition for cancellation of union registration does not preclude collective bargaining, and that an order to hold a certification election is proper despite the pendency of the petition for cancellation of the union’s registration because at the time the respondent union filed its petition, it still had the legal personality to perform such act absent an order cancelling its registration.

The general rule is that an employer has no standing to question the process of certification election, since this is the sole concern of the workers. Law and policy demand that employers take a strict, hands-off stance in certification elections. The bargaining representative of employees should be chosen free from any extraneous influence of management. The only exception is where the employer itself has to file the petition pursuant to Article 258 of the Labor Code because of a request to bargain collectively.

The Labor Arbiter and the NLRC found that respondent employer neglected to pay petitioner’s sickness allowance. However, on appeal, the Court of Appeals reversed such findings and held that petitioner already received his sickness allowance from respondent. Petitioner questioned the ruling of the Court of Appeals by filing a petition for review on certiorari under Rule 45. The Supreme Court held that, as a rule, only questions of law, not questions of fact, may be raised in a petition for review on certiorari under Rule 45. However, this principle is subject to recognized exceptions. In the labor law setting, the Court will delve into factual issues when conflict of factual findings exists among the labor arbiter, the NLRC, and the Court of Appeals. Considering that in the present case there were differing factual findings on the part of the Court of Appeals, on one hand, and the Labor Arbiter and the NLRC, on the other, the Supreme Court found it necessary to make an independent evaluation of the evidence on record.

While it is true that factual findings made by quasi-judicial and administrative tribunals, if supported by substantial evidence, are accorded great respect and even finality by the courts, this general rule admits of exceptions. When there is a showing that a palpable and demonstrable mistake that needs rectification has been committed or when the factual findings were arrived at arbitrarily or in disregard of the evidence on record, these findings may be examined by the courts. In the present case, the Court of Appeals found itself unable to completely sustain the findings of the NLRC thus, it was compelled to review the facts and evidence and not limit itself to the issue of grave abuse of discretion.

The three material dates which should be stated in the petition for certiorari under Rule 65 are the dates when the notice of judgment was received, when a motion for reconsideration was filed and when the notice of the denial of the motion for reconsideration was received. These dates should be reflected in the petition to enable the reviewing court to determine if the petition was filed on time. In the present case, the petition filed with the Court of Appeals failed to state when petitioner received the assailed NLRC Decision and when he filed his partial motion for reconsideration. However, this omission is not at all fatal because these material dates are reflected in petitioner’s Partial Motion for Reconsideration attached to the petition. The failure to state these two dates in the petition may be excused if the same are evident from the records of the case. The Court further stated that the more important material date which must be duly alleged in the petition is the date of receipt of the resolution of denial of the motion for reconsideration. Since petitioner has duly complied with this rule, there was substantial compliance with the requisite formalities.

Clark Development Corporation (CDC) owes its existence to Executive Order No. 80 issued by then President Fidel V. Ramos. It was meant to be the implementing and operating arm of the Bases Conversion and Development Authority tasked to manage the Clark Special Economic Zone. Expressly, CDC was formed in accordance with Philippine corporation laws and existing rules and regulations promulgated by the Securities and Exchange Commission pursuant to Section 16 of Republic Act 7227. CDC, a government owned or controlled corporation without an original charter, was incorporated under the Corporation Code. Pursuant to Article IX-B, Sec. 2(1) of the Constitution, the civil service embraces only those government owned or controlled corporations with original charter. As such, CDC and its employees are covered by the Labor Code and not by the Civil Service Law.

Anent a seafarer’s entitlement to compensation and benefits for injury and illness, Section 20-B (3) of 2000 POEA-SEC provides that in order for the seafarer to claim the said benefits, he must submit himself to a post-employment medical examination by a company-designated physician within three working days upon his return, except when he is physically incapacitated to do so, in which case, a written notice to the agency within the same period is deemed as compliance. Failure of the seafarer to comply with the mandatory reporting requirement shall result in his forfeiture of the right to claim the above benefits. In this case, there was no dispute regarding the fact that Esguerra had altogether failed to comply with the mandatory reporting requirement. Esguerra also did not present any evidence to prove justification for his inability to submit himself to a post-employment medical examination by a company-designated physician. Self-serving and unsubstantiated declarations are insufficient to establish a case before quasi-judicial bodies where the quantum of evidence required in establishing a fact is substantial evidence.

After the Labor Arbiter’s decision is reversed by a higher tribunal, the employee may be barred from collecting the accrued wages, if it is shown that the delay in enforcing the reinstatement pending appeal was without fault on the part of the employer. The two-fold test in determining whether an employee is barred from recovering his accrued wages requires that — (1) there must be actual delay or that the order of reinstatement pending appeal was not executed prior to its reversal; and (2) the delay must not be due to the employer’s unjustified act or omission. If the delay is due to the employer’s unjustified refusal, the employer may still be required to pay the salaries notwithstanding the reversal of the Labor Arbiter’s Decision.

Article 253 of the Labor Code mandates the parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period prior to the expiration of the old CBA and/or until a new agreement is reached by the parties. The law does not provide for any exception nor qualification on which economic provisions of the existing agreement are to retain its force and effect. Likewise, the law does not distinguish between a CBA duly agreed upon by the parties and an imposed CBA like the one in the present case. Hence, considering that no new CBA had been, in the meantime, agreed upon by respondent GMC and the Union, the provisions of the imposed CBA continues to have full force and effect until a new CBA is entered into by the parties.

Petitioners question the order to reinstate respondents to their former positions, considering that the issue of reinstatement was never brought up before the Court of Appeals and respondents never questioned the award of separation pay to them. Section 2 (c), Rule 7 of the Rules of Court provides that a pleading shall specify the relief sought, but may add a general prayer for such further or other reliefs as may be deemed just and equitable. Under this rule, a court can grant the relief warranted by the allegation and the evidence even if it is not specifically sought by the injured party; the inclusion of a general prayer may justify the grant of a remedy different from or in addition to the specific remedy sought, if the facts alleged in the complaint and the evidence introduced so warrant. The prayer in the complaint for other reliefs equitable and just in the premises justifies the grant of a relief not otherwise specifically prayed for. Therefore, the court may grant relief warranted by the allegations and the proof even if no such relief is prayed for. In the instant case, aside from their specific prayer for reinstatement, respondents, in their separate complaints, prayed for such reliefs which are deemed just and equitable.

Petitioner is a duly licensed labor contractor engaged in painting houses and buildings. Respondents, former painters of the petitioner, filed an illegal dismissal case against petitioner. Petitioner alleged that the respondents abandoned their job and were not dismissed by the petitioner. The Labor Arbiter ruled that there was neither illegal dismissal nor abandonment of job and that the respondents should be reinstated but without any backwages. On appeal, petitioner alleged that the reinstatement of respondents to their former positions, which were no longer existing, is impossible, highly unfair and unjust. It further alleged that the project they were working on at the time of their alleged dismissal was already completed. Having completed their tasks, their positions automatically ceased to exist. Thus, there were no more positions where they can be reinstated as painters. The Court ruled that there are two types of employees in the construction industry. The first is referred to as project employees or those employed in connection with a particular construction project or phase thereof and such employment is coterminous with each project or phase of the project to which they are assigned. The second is known as non-project employees or those employed without reference to any particular construction project or phase of a project. Respondents belonged to the second type and are classified as regular employees of petitioner. It is clear from the records of the case that when one project is completed, respondents were automatically transferred to the next project awarded to petitioners. There was Constructive dismissal exists where there is cessation of work because continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank and a diminution in pay. In constructive dismissal cases, the employer is, concededly, charged with the burden of proving that its conduct and action or the transfer of an employee are for valid and legitimate grounds such as genuine business necessity. The Supreme Court found that in this case, respondents have more than amply discharged this burden with proof of the circumstances surrounding Engr. Carlos’ employment as Property Manager for the Project and the consequent unavailability of a similar position for Leynes.

Respondent filed an illegal dismissal case against the petitioner. Petitioner alleged that respondent abandoned his job and was not dismissed. The Court held that respondent was illegally dismissed. The jurisprudential rule on abandonment is constant. It is a matter of intention and cannot lightly be presumed from certain equivocal acts. To constitute abandonment, two elements must concur: (1) the failure to report for work or absence without valid or justifiable reason; and (2) a clear intent, manifested through overt acts, to sever the employer-employee relationship. In this case, petitioner failed to establish clear evidence of respondent’s intention to abandon his employment. Except for petitioner’s bare assertion that respondent did not report to the office for reassignment, no proof was offered to prove that respondent intended to sever the employer-employee relationship. Besides, the fact that respondent filed the instant complaint negates any intention on his part to forsake his work. It is a settled doctrine that the filing of a complaint for illegal dismissal is inconsistent with the charge of abandonment, for an employee who takes steps to protest his dismissal cannot by logic be said to have abandoned his work.

Respondent, a security guard, filed an illegal dismissal case against the petitioner. To refute the claim, petitioner alleged that respondent was not constructively or illegally dismissed, but had voluntarily resigned. Petitioner alleged that respondent’s resignation is evident from his withdrawal of his cash and firearm bonds. Resignation is the voluntary act of an employee who is in a situation where one believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and one has no other choice but to dissociate oneself from employment. It is a formal pronouncement or relinquishment of an office. The intent to relinquish must concur with the overt act of relinquishment. Thus, the acts of the employee before and after the alleged resignation must be considered in determining whether, he or she, in fact, intended to sever his or her employment. Should the employer interpose the defense of resignation, it is incumbent upon the employer to prove that the employee voluntarily resigned. On this point, the Court held that petitioner failed to discharge its burden. Moreover, the filing of a complaint belies petitioner’s claim that respondent voluntarily resigned.

Respondent was hired by petitioner, a security agency, as a security guard. He was assigned at the Philippine Heart Center until his relief on January 30, 2006. Respondent was not given any assignment thereafter. Thus, on August 2, 2006, he filed a complaint for constructive dismissal and nonpayment of 13th month pay, with prayer for damages against petitioner. To refute the claim, petitioner alleged that respondent was not constructively or illegally dismissed, but had voluntarily resigned. The Court held that respondent was constructively dismissed. In cases involving security guards, a relief and transfer order in itself does not sever employment relationship between a security guard and his agency. An employee has the right to security of tenure, but this does not give him a vested right to his position as would deprive the company of its prerogative to change his assignment or transfer him where his service, as security guard, will be most beneficial to the client. Temporary “off-detail” or the period of time security guards are made to wait until they are transferred or assigned to a new post or client does not constitute constructive dismissal, so long as such status does not continue beyond six months. The onus of proving that there is no post available to which the security guard can be assigned rests on the employer. In the instant case, the failure of petitioner to give respondent a work assignment beyond the reasonable six-month period makes it liable for constructive dismissal.

Respondent employee filed an illegal dismissal case against the Petitioner Corporation and its President. Though the Court found that Respondent was illegally dismissed, it held that the President of the Petitioner Corporation should not be held solidarily liable with Petitioner Corporation. Obligations incurred by corporate officers, acting as such corporate agents, are not theirs but the direct accountabilities of the corporation they represent. Thus, they should not be generally held jointly and solidarily liable with the corporation. The general rule is grounded on the theory that a corporation has a legal personality separate and distinct from the persons comprising it. As exceptions to the general rule, solidary liability may be imposed: (1) When directors and trustees or, in appropriate cases, the officers of a corporation –(a) vote for or assent to [patently] unlawful acts of the corporation; (b) act in bad faith or with gross negligence in directing the corporate affairs; (c) are guilty of conflict of interest to the prejudice of the corporation, its stockholders or members, and other persons; (2) When the director or officer has consented to the issuance of watered stock or who, having knowledge thereof, did not forthwith file with the corporate secretary his written objection thereto; (3) When a director, trustee or officer has contractually agreed or stipulated to hold himself personally and solidarily liable with the corporation; (4) When a director, trustee or officer is made, by specific provision of law, personally liable for his corporate action. To warrant the piercing of the veil of corporate fiction, the officer’s bad faith or wrongdoing must be

Moral and exemplary damages are recoverable where the dismissal of an employee was attended by bad faith or fraud, or constituted an act oppressive to labor, or were done in a manner contrary to morals, good customs or public policy. In the present case, P&G dismissed its employees in a manner oppressive to labor. The sudden and peremptory barring of petitioners from work, and from admission to the work place, after just a one-day verbal notice, and for no valid cause, constitutes oppression and utter disregard of the right to due process of the concerned petitioners. Hence, the Supreme Court held that an award of moral damages is called for under the circumstances.

In this case, respondent was diagnosed with Central Retinal Vein Occlusion of his left eye. Central retinal vein occlusion causes painless vision loss which is usually sudden, but it can also occur gradually over a period of days to weeks. This condition, despite numerous medical procedures undertaken, eventually led to a total loss of sight of respondent’s left eye. Loss of one bodily function falls within the definition of disability which is essentially “loss or impairment of a physical or mental function resulting from injury or sickness.” The disputable presumption that a particular injury or illness that results in disability, or in some cases death, is work-related stands in the absence of contrary evidence. In the case at bench, the said presumption was not overturned by the petitioners. Although, the employer is not the insurer of the health of his employees, he takes them as he finds them and assumes the risk of liability. Consequently, the Court concurred with the finding of the lower courts that respondent’s disability is compensable.

Petitioner suffered a fractured arm while working on respondent’s vessel. He filed a complaint for permanent disability benefits, among others. Petitioner claims that he is entitled to the higher amount of disability benefits under the Collective Bargaining Agreement which respondent entered into with a union of which petitioner was a member. The Court of Appeals denied the petitioner’s claim. The Supreme Court, in upholding the Court of Appeals, held that the burden of proof rests upon the party who asserts the affirmative of an issue. And in labor cases, the quantum of proof necessary is substantial evidence, or such amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. Petitioner had the duty to prove by substantial evidence his own positive assertions. He did not discharge this burden of proof when he submitted photocopied portions of a different CBA with a different union.

A total disability does not require that the employee be completely disabled, or totally paralyzed. What is necessary is that the injury must be such that the employee cannot pursue his or her usual work and earn from it. On the other hand, a total disability is considered permanent if it lasts continuously for more than 120 days. What is crucial is whether the employee who suffers from disability could still perform his work notwithstanding the disability he incurred. Evidently, respondent was not able to return to his job as a seafarer after his left eye was declared legally blind. Records showed that the petitioners did not give him a new overseas assignment after his disability. This only proved that his disability effectively barred his chances to be deployed abroad as an officer of an ocean-going vessel. Hence, the Supreme Court found it fitting that respondent be entitled to permanent total disability benefits considering that he would not be able to resume his position as a maritime officer, and the probability that he would be hired by other maritime employers would be close to impossible.

The policy of suspending drivers pending payment of arrears in their boundary obligations is reasonable. It is acknowledged that an employer has free rein and enjoys a wide latitude of discretion to regulate all aspects of employment, including the prerogative to instill discipline on his employees and to impose penalties, including dismissal, if warranted, upon erring employees. This is a management prerogative. Indeed, the manner in which management conducts its own affairs to achieve its purpose is within the management’s discretion. The only limitation on the exercise of management prerogative is that the policies, rules, and regulations on work-related activities of the employees must always be fair and reasonable, and the corresponding penalties, when prescribed, commensurate to the offense involved and to the degree of the infraction.

Petitioner was employed as Assistant Vice-President of the Jewelry Department in respondent bank. His employment was terminated on the ground of willful breach of trust and confidence. Jurisprudence provides for two requisites for dismissal on the ground of loss of trust and confidence; (1) the employee concerned must be holding a position of trust and confidence, and (2) there must be an act that would justify the loss of trust and confidence. Loss of trust and confidence, to be a valid cause for dismissal, must be based on a willful breach of trust and founded on clearly established facts. The basis for the dismissal must be clearly and convincingly established but proof beyond reasonable doubt is not necessary. Furthermore, the burden of establishing facts as bases for an employer’s loss of confidence is on the employer. The court held that the termination of petitioner was without just cause and therefore illegal. Although the first requisite was present, the respondent failed to satisfy the second requisite. Respondent bank was not able to show any concrete proof that petitioner had participated in the approval of the questioned accounts. The invocation by respondent of the loss of trust and confidence as ground for petitioner’s termination has therefore no basis at all.

Respondent was suspended for one year after being charged with and found liable for AWOL. After serving her suspension, respondent was allowed to return to work. Respondent cannot be considered to have been constructively dismissed by the petitioner during her period of suspension. Constructive dismissal occurs when there is cessation of work because continued employment is rendered impossible, unreasonable, or unlikely as when there is a demotion in rank or diminution in pay or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee leaving the latter with no other option but to quit. In this case, there was no cessation of employment relations between the parties. It is unrefuted that respondent promptly resumed teaching at the university right after the expiration of the suspension period. In other words, respondent never quit. Hence, she cannot claim to have been left with no choice but to quit, a crucial element in a finding of constructive dismissal.

Petitioner was employed as an instructor of Data Center College located in Ilocos Norte. When the college proposed to transfer him to Abra, he filed a complaint alleging constructive dismissal since his re-assignment will entail an indirect reduction of his salary or diminution of pay considering that no additional allowance will be given to cover for board and lodging expenses. He claims that such additional allowance was given in the past and therefore cannot be discontinued and withdrawn without violating the prohibition against non-diminution of benefits. The Supreme Court affirmed the findings of the lower bodies and declared that petitioner’s re-assignment did not amount to constructive dismissal. Constructive dismissal is quitting because continued employment is rendered impossible, unreasonable or unlikely, or because of a demotion in rank or a diminution of pay. It exists when there is a clear act of discrimination, insensibility or disdain by an employer which becomes unbearable for the employee to continue his employment. In the present case, the college’s right to transfer petitioner is based on contractual stipulation, particularly the condition laid down in petitioner’s employment contract that respondents have the prerogative to assign petitioner in any of its branches or tie-up schools as the necessity demands. In any event, it is management prerogative for employers to transfer employees on just and valid grounds such as genuine business necessity. Since respondents have shown that it was experiencing some financial constraints at the time, the re-assignment was not tainted with bad faith. Constructive dismissal exists where there is cessation of work because continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank and a diminution in pay. Constructive dismissal is a dismissal in disguise or an act amounting to dismissal but made to appear as if it were not. In constructive dismissal cases, the employer is, concededly, charged with the burden of proving that its conduct and action or the transfer of an employee are for valid and legitimate grounds such as genuine business necessity. In the instant case, the overt act relied upon by petitioner is not only a doubtful occurrence but is, if it did transpire, even consistent with the dismissal from employment posited by the respondent. The factual appraisal of the Court of Appeals is correct. Petitioner was displeased after incurring expenses for respondent’s medical check-up and, it is credible that, thereafter, respondent was prevented entry into the work premises. This is tantamount to constructive dismissal. The Supreme Court agreed with the Court of Appeals that the incredibility of petitioner’s submission about abandonment of work renders credible the position of respondent that she was prevented from entering the property. This was even corroborated by the affidavits of Siarot and Mendoza which were made part of the records of this case.

Case law defines constructive dismissal as a cessation of work because continued employment has been rendered impossible, unreasonable, or unlikely, as when there is a demotion in rank or diminution in pay, or both, or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee. In this case, other than his bare and self-serving allegations, Bello has not offered any evidence that he was promoted in a span of four months since his employment as traffic marshal in July 2001 to a detachment commander in November 2001. At most, the BSSI merely changed his assignment or transferred him to the post where his service would be most beneficial to its clients. The management’s prerogative of transferring and reassigning employees from one area of operation to another in order to meet the requirements of the business is generally not constitutive of constructive dismissal. This was what exactly occurred in this case.

For a transfer not to be considered a constructive dismissal, the employer must be able to show that the transfer is for a valid reason, entails no diminution in the terms and conditions of employment, and must not be unreasonably inconvenient or prejudicial to the employee. If the employer fails to meet these standards, the employee’s transfer shall amount, at the very least, to constructive dismissal. In this case, the Supreme Court found that the real reason Menese was transferred from being the agency’s payroll and billing clerk of the PGH detachment to being a lady guard in the agency’s main office, was because of the request of Dapula, the new chief of the UP-PGH Security Division. The latter’s request was based on the fact that she had committed the previous position of Menese to a certain Amy Claro, a protégée of Dapula. Thus, the Supreme Court found justification for Menese’s refusal to be transferred. Not only was the transfer arbitrary and done in bad faith, it would also result in a demotion in rank and a diminution in pay: (1) she would hold the position of lady guard and (2) she would be paid in accordance with the statutory minimum wage, or from P11,720.00 to P7,500.00. Clearly, there was a demotion in rank and salary undertaken in bad faith amounting to constructive dismissal.

Respondent employee reported to the petitioner employer the loss of cash which she placed inside the company locker. Immediately, petitioner ordered that she be strip-searched by the company guards. However, the search on her and her personal belongings yielded nothing. The petitioner also reported the matter to the police and requested the Prosecutor’s Office for an inquest. Respondent was constrained to spend two weeks in jail for failure to immediately post bail. The Court ruled that petitioners failed to accord respondent substantive and procedural due process. Article 277(b) of the Labor Code mandates that subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal, except for just and authorized cause and without prejudice to the requirement of notice under Article 283 of the same Code, the employer shall furnish the worker, whose employment is sought to be terminated, a written notice containing a statement of the causes of termination, and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of a representative if he so desires, in accordance with company rules and regulations pursuant to the guidelines set by the Department of Labor and Employment. The due process requirements under the Labor Code are mandatory and may not be supplanted by police investigation or court proceedings. The criminal aspect of the case is considered independent of the administrative aspect. Thus, employers should not rely solely on the findings of the Prosecutor’s Office. They are mandated to Respondent was dismissed from her post as casual teller. When respondent appealed her dismissal to the Civil Service Commission (CSC), the latter found that respondent was never formally charged for the administrative offenses for which she was dismissed. However, despite finding that procedural due process was not complied with, the CSC nevertheless upheld the dismissal on the ground that being a casual employee, respondent enjoyed no security of tenure and can be dismissed anytime. The Court found that respondent was illegally terminated and ordered her reinstatement. Casual employees are entitled to due process especially if they are to be removed for more serious causes or for causes other than the reasons mentioned in CSC Form No. 001. This is pursuant to Section 2, Article IX(B) of the Constitution. Furthermore, Section 46 of the Civil Service Law provides that “no officer or employee in the Civil Service shall be suspended or dismissed except for cause as provided by law after due process.” The reason for this is that their termination from the service could carry a penalty affecting their rights and future employment in the government.

Petitioners were employees of Promm-Gem, a legitimate independent contractor, and were hired to work as merchandisers for respondent P&G. When petitioners filed a claim against P&G for regularization and other benefits, it likewise attacked Promm-Gem as being merely a labor-only contractor. The latter treated such move as an act of disloyalty against Promm-Gem and petitioners were dismissed on the ground of grave misconduct and breach of trust. The Supreme Court declared such termination illegal for being without valid cause. Loss of trust and confidence, as a cause for termination of employment, is premised on the fact that the employee concerned holds a position of responsibility or of trust and confidence. As such, he must be invested with confidence on delicate matters, such as custody, handling or care and protection of the property and assets of the employer. Moreover, in order to constitute a just cause for dismissal, the act complained of must be work-related and must show that the employee is unfit to continue to work for the employer. In the instant case, the petitioners have not been shown to be occupying positions of responsibility or of trust and confidence. Neither is there any evidence to show that they are unfit to continue to work as merchandisers for Promm-Gem.

Petitioners were employees of Promm-Gem, a legitimate independent contractor. After several years of working as merchandisers for respondent P&G, petitioners filed a claim against P&G for regularization and other benefits, and asserted incidentally that Promm-Gem was merely a labor-only contractor. The latter treated such move as an act of disloyalty against Promm-Gem and petitioners were dismissed on the ground of grave misconduct and breach of trust. The Supreme Court declared such termination illegal for lack of a valid clause. To be a just cause for dismissal, such misconduct (a) must be serious; (b) must relate to the performance of the employee’s duties; and (c) must show that the employee has become unfit to continue working for the employer. In other words, in order to constitute serious misconduct under Article 282 (a) of the Labor Code, it is not sufficient that the act or conduct complained of has violated some established rules or policies. It is equally important and required that the act or conduct must have been performed with wrongful intent. In the instant case, petitioners may have committed an error of judgment in claiming to be employees of P&G, but it cannot be said that they were motivated by any wrongful intent in doing so. As such, the court found them guilty of simple misconduct only which does not warrant a dismissal.

The award of separation pay is authorized under Article 283 and 284 of the Labor Code, and under Section 4 (b), Rule I, Book VI of the Implementing Rules and Regulations where there is illegal dismissal and reinstatement is no longer feasible. By way of exception, the courts have allowed grants of separation pay to stand as “a measure of social justice” where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. However, there is no provision in the Labor Code which grants separation pay to voluntarily resigning employees. In fact, the rule is that an employee who voluntarily resigns from employment is not entitled to separation pay, except when it is stipulated in the employment contract or collective bargaining agreement (CBA), or it is sanctioned by established employer practice or policy. In the present case, neither the abovementioned provisions of the Labor Code nor the exceptions apply because petitioner was not dismissed from his employment nor is there any evidence to show that payment of separation pay is stipulated in his employment contract or sanctioned by established practice or policy of his employer. Nevertheless, the Court noted that petitioner never had any derogatory record during his long years of service with respondent and that his employment was severed not by reason of any infraction on his part but because of his failing physical condition. Hence, as a measure of social and compassionate justice and as an equitable concession, the Court granted separation pay to petitioner by way of financial assistance. Gross negligence connotes want of care in the performance of one’s duties, while habitual neglect implies repeated failure to perform one’s duties for a period of time, depending on the circumstances. In the case at bench, Padao was accused of having presented a fraudulently positive evaluation of the business, credit standing/rating and financial capability of Reynaldo and Luzvilla Baluma and eleven other loan applicants. Some businesses were eventually found not to exist at all, while in other transactions, the financial status of the borrowers simply could not support the grant of loans in the approved amounts. Moreover, Padao over-appraised the collateral of spouses Gardito and Alma Ajero, and that of spouses Ihaba and Rolly Pango. Padao’s repeated failure to discharge his duties as a credit investigator of the bank amounted to gross and habitual neglect of duties under Article 282 (b) of the Labor Code. He not only failed to perform what he was employed to do, but also did so repetitively and habitually, causing millions of pesos in damage to PNB. Thus, PNB acted within the bounds of the law by meting out the penalty of dismissal, which it deemed appropriate given the circumstances.

Resignation is defined as “the voluntary act of employees who are compelled by personal reasons to disassociate themselves from their employment. It must be done with the intention of relinquishing an office, accompanied by the act of abandonment.” In this case, the evidence on record suggested that petitioner did not resign; he was orally dismissed by Sy. The crucial factor is the verbal order directly given by Sy, the company president, for petitioner to immediately turn over his accountabilities. It is this lack of clear, valid and legal cause, not to mention due process that made his dismissal illegal, warranting reinstatement and the award of backwages. Moreover, the filing of a complaint for illegal dismissal just three weeks later is difficult to reconcile with voluntary resignation. Had petitioner intended to voluntarily relinquish his employment after being unceremoniously dismissed by no less than the company president, he would not have sought redress from the NLRC and vigorously pursued this case against the respondents.

The rule is long and well settled that, in illegal dismissal cases like the one at bench, the burden of proof is upon the employer to show that the employee’s termination from service is for a just and valid cause. The employer’s case succeeds or fails on the strength of its evidence and not on the weakness of that adduced by the employee, in keeping with the principle that the scales of justice should be tilted in favor of the latter in case of doubt in the evidence presented by them. Often described as more than a mere scintilla, the quantum of proof is substantial evidence which is understood as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other equally reasonable minds might conceivably opine otherwise. Failure of the employer to discharge the foregoing onus would mean that the dismissal is not justified and therefore illegal. In the case at bar, the Supreme Court agreed with the petitioners that mere substantial evidence and not proof beyond reasonable doubt is required to justify the dismissal from service of an employee charged with theft of company property. However, the Court found no error in the CA’s findings that the petitioners had not adequately proven by substantial evidence that Arlene and Joseph indeed participated or cooperated in the commission of theft relative to the six missing intensifying screens so as to justify the latter’s termination from employment on the ground of loss of trust and confidence.

Neglect of duty, to be a ground for dismissal, must be both gross and habitual. Gross negligence connotes want of care in the performance of one’s duties. Habitual neglect implies repeated failure to perform one’s duties for a period of time, depending upon the circumstances. A single or isolated act of negligence does not constitute a just cause for the dismissal of the employee.

Negligence is defined as the failure to exercise the standard of care that a reasonably prudent person would have exercised in a similar situation. The Court emphasizes that the nature of the business of a hospital requires a higher degree of caution and exacting standard of diligence in patient management and health care as what is involved are lives of patients who seek urgent medical assistance. An act or omission that falls short of the required degree of care and diligence amounts to serious misconduct which constitutes a sufficient ground for dismissal.

Gala insists that he cannot be sanctioned for the theft of company property on May 25, 2006. He maintains that he had no direct participation in the incident and that he was not aware that an illegal activity was going on as he was at some distance from the trucks when the alleged theft was being committed. He adds that he did not call the attention of the foremen because he was a mere lineman and he was focused on what he was doing at the time. He argues that in any event, his mere presence in the area was not enough to make him a conspirator in the commission of the pilferage. Gala misses the point. He forgets that as a probationary employee, his overall job performance and his behavior were being monitored and measured in accordance with the standards (i.e., the terms and conditions) laid down in his probationary employment agreement. Under paragraph 8 of the agreement, he was subject to strict compliance with, and non-violation of the Company Code on Employee Discipline, Safety Code, rules and regulations and existing policies. Par. 10 required him to observe at all times the highest degree of transparency, selflessness and integrity in the performance of his duties and responsibilities, free from any form of conflict or contradicting with his own personal interest.

An illegally dismissed employee is entitled to two reliefs: back wages and reinstatement. The two reliefs provided are separate and distinct. In instances where reinstatement is no longer feasible because of strained relations between the employee and the employer, separation pay is granted. In effect, an illegally dismissed employee is entitled to either reinstatement if such is viable, or separation pay if reinstatement is no longer viable, and to back wages. The normal consequences of respondent’s illegal dismissal, then, are reinstatement without loss of seniority rights, and payment of back wages computed from the time compensation was withheld from him up to the date of actual reinstatement. Where reinstatement is no longer viable as an option, separation pay equivalent to one month salary for every year of service should be awarded as an alternative. The payment of separation pay is in addition to payment of back wages. Petitioners question the CA Resolution dated October 24, 2008, arguing that it modified its March 31, 2008 Decision which has already attained finality insofar as respondent is concerned. Such contention is misplaced. The CA merely clarified the period of payment of back wages and separation pay up to the finality of its decision (March 31, 2008) modifying the Labor Arbiter’s decision. In view of the modification of monetary awards in the Labor Arbiter’s decision, the time frame for the payment of back wages and separation pay is accordingly modified to the finality of the CA decision. Article 285 of the Labor Code recognizes termination by the employee of the employment contract by “serving written notice on the employer at least one (1) month in advance.” Given that provision, the law contemplates the requirement of a written notice of resignation. In the absence of a written resignation, it is safe to presume that the employer terminated the seafarers. In this case, the Supreme Court found the dismissal of De Gracia, et al. to be illegal since Cosmoship merely sent a telex to Skippers, the local manning agency, claiming that De Gracia, et al. were repatriated because the latter voluntarily pre-terminated their contracts.

Petitioner was employed as a machine operator until he stopped working when he suffered from an illness. After his recovery, petitioner was directed to report for work but he refused. Instead, he filed a case with the NLRC demanding his separation pay. The NLRC awarded him separation benefits under Article 284 of the Labor Code. However, the Court of Appeals (CA) deleted such award. On appeal, the Supreme Court stated that Article 284 presupposes that it is the employer who terminates the services of the employee found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees. It does not contemplate a situation where it is the employee who severs his or her employment ties. This is precisely the reason why Section 8, Rule 1, Book VI of the Omnibus Rules Implementing the Labor Code, directs that an employer shall not terminate the services of the employee unless there is a certification by a competent public health authority that the disease is of such nature or at such a stage that it cannot be cured within a period of six (6) months even with proper medical treatment. In the present case, petitioner was not terminated from his employment and, instead, is deemed to have resigned therefrom, and therefore he is not entitled to separation pay under Article 284 of the Labor Code.

For a worker’s dismissal to be considered valid, it must comply with both procedural and substantive due process. The legality of the manner of dismissal constitutes procedural due process, while the legality of the act of dismissal constitutes substantive due process. Procedural due process in dismissal cases consists of the twin requirements of notice and hearing. The employer must furnish the employee with two written notices before the termination of employment can be effected: (1) the first notice apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the second notice informs the employee of the employer’s decision to dismiss him. Before the issuance of the second notice, the requirement of a hearing must be complied with by giving the worker an opportunity to be heard. It is not necessary that an actual hearing be conducted. Substantive due process, on the other hand, requires that dismissal by the employer be made based on a just or authorized cause under Articles 282 to 284 of the Labor Code. In this case, there was no written notice furnished to De Gracia, et al. regarding the cause of their dismissal. Cosmoship furnished a telex to Skippers, the local manning agency, claiming that De Gracia, et al. were repatriated because they voluntarily pre-terminated their contracts. This telex was given credibility and weight by the Labor Arbiter and NLRC in deciding that there was pre-termination of the employment contract “akin to resignation” and no illegal dismissal. However, as correctly ruled by the CA, the telex message is “a biased and self-serving Padao is not entitled to financial assistance. The rule regarding separation pay as a measure of social justice is that it shall be paid only in those instances where the employee is validly dismissed for causes other than serious misconduct, willful disobedience, gross and habitual neglect of duty, fraud or willful breach of trust, commission of a crime against the employer or his family, or those reflecting on his moral character. In this case, Padao was guilty of gross and habitual neglect of duties.

Petitioner Yap was employed on respondent’s vessel under a 12-month contract. Upon finding that he was illegally terminated, the Court of Appeals (CA) awarded petitioner salaries for three months as provided under Section 10 of Republic Act No. 8042 (RA 8042). While the case was pending in the Supreme Court, Section 10 of RA 8042 was declared unconstitutional. In deciding to award petitioner his salaries for the entire unexpired portion of his contract, the Supreme Court rejected the application of the operative fact doctrine. As an exception to the general rule, the doctrine applies only as a matter of equity and fair play. It recognizes that the existence of a statute prior to a determination of unconstitutionality is an operative fact and may have consequences which cannot always be ignored. The doctrine is applicable when a declaration of unconstitutionality will impose an undue burden on those who have relied on the invalid law. This case should not be included in the aforementioned exception. After all, it was not the fault of petitioner that he lost his job due to an act of illegal dismissal committed by respondents. To rule otherwise would be iniquitous to petitioner and other OFWs, and would, in effect, send a wrong signal that principals/employers and recruitment/manning agencies may violate an OFW’s security of tenure which an employment contract embodies and actually profit from such violation based on an unconstitutional provision of law.

A strike conducted after the Secretary of Labor has assumed jurisdiction over a labor dispute is illegal and any union officer who knowingly participates in the strike may be declared as having lost his employment. The present case involved a slowdown strike. Unlike other forms of strike, the employees involved in a slowdown do not walk out of their jobs to hurt the company. They need only to stop work or reduce the rate of their work while generally remaining in their assigned post. The Supreme Court upheld the finding that the union officers committed illegal acts that warranted their dismissal from work when they refused to work or abandoned their work to join union assemblies after the Labor Secretary assumed jurisdiction over the labor dispute.

The degree of proof required under P.D. 626 is merely substantial evidence, which means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Accordingly, the claimant must show, at least by substantial evidence that the development of the disease was brought about largely by the conditions present in the nature of the job. What the law requires is a reasonable work connection, not a direct causal relation.

A separation pay at the time of the reorganization of the National Power Corporation and retirement benefits at the appropriate future time are two separate and distinct entitlements. Stated otherwise, a retirement plan is a different program from a separation package. In R.A. No. 1616, the retirees are entitled to gratuity benefits to be paid by the last employer and refund of premiums to be paid by the GSIS. On the other hand, retirement benefits under C.A. No. 186, as amended by R.A. No. 8291, are to be paid by the GSIS. In view of the fact that separation pay and retirement benefits are different entitlements, as they have different legal bases, different sources of funds, and different intents, the “exclusiveness of benefits” rule provided under R.A. No. 8291 is not applicable. (Section 55 of R.A. No. 8291 states: “Whenever other laws provide similar benefits for the same contingencies covered by this Act, the member who qualifies to the benefits shall have the option to choose which benefits will be paid to him.”)

The issue in this case was whether or not the change in the scheme of distribution of the incremental proceeds from tuition fee increase is a diminution of benefit. The Court held that it was not. Generally, employees have a vested right over existing benefits voluntarily granted to them by their employer. The principle against diminution of benefits, however, is applicable only if the grant or benefit is founded on an express policy or has ripened into a practice over a long period of time which is consistent and deliberate. In other words, the benefit must be characterized by regularity and the voluntary and deliberate intent of the employer to grant the benefits over a significant period of time. In the case at bench, contrary to UEEA’s claim, the distribution of the 70% incremental proceeds based on equal sharing scheme cannot be held to have ripened into a company practice since the practice has not been for a long period of time. The same could not also have ripened into a vested right because such grant was not a deliberate and voluntary act on the part of the petitioner. The Supreme Court held that the grant by an employer of benefits through an erroneous application of the law due to the absence of clear administrative guidelines is not considered a voluntary act which cannot be unilaterally discontinued.

From a legal point of view, a bonus is a gratuity or act of liberality of the giver which the recipient cannot demand as a matter of right. The grant of a bonus is basically a management prerogative which cannot be forced upon the employer who may not be obliged to assume the onerous burden of granting bonuses. However, a bonus becomes a demandable or enforceable obligation if the additional compensation is granted without any conditions imposed for its payment. In such case, the bonus is treated as part of the wage, salary or compensation of the employee. Particularly instructive is the ruling of the Court in Metro Transit Organization, Inc. v. National Labor Relations Commission (G.R. No. 116008, July 11, 1995) where the Court said: Whether or not a bonus forms part of wages depends upon the circumstances and conditions for its payment. If it is additional compensation which the employer promised and agreed to give without any conditions imposed for its payment, such as success of business or greater production or output, then it is part of the wage. But if it is paid only if profits are realized or if a certain level of productivity is achieved, it cannot be considered part of the wage. Where it is not payable to all but only to some employees and only when their labor becomes more efficient or more productive, it is only an inducement for efficiency, a prize therefore, not a part of the wage.

In this case, there is no dispute that Eastern Telecommunications Phils., Inc. and Eastern Telecoms Employees Union agreed on the inclusion of a provision for the grant of 14th, 15th and 16th month bonuses in the 1998-2001 CBA Side Agreement, as well as in their 2001-2004 CBA Side Agreement, which contained no qualification for its payment. There were no conditions specified in In constructive dismissal cases, the employer has the burden of proving that the transfer of an employee is for just or valid ground, such as genuine business necessity. The employer must demonstrate that the transfer is not unreasonable, inconvenient, or prejudicial to the employee and that the transfer does not involve a demotion in rank or a diminution in salary and other benefits. “If the employer fails to overcome this burden of proof, the employee’s transfer is tantamount to unlawful constructive dismissal.” [Merck Sharp and Dohme (Philippines) v. Robles, G.R. No. 176506, November 25, 2009] Petitioners failed to satisfy the burden of proving that the transfer was based on just or valid ground. Petitioners’ bare assertions of imminent threat from the respondents are mere accusations which are not substantiated by any proof. The Supreme Court agreed with the Court of Appeals in ruling that the transfer of respondents amounted to a demotion.

With regard to disease as a ground for termination, Article 284 of the Labor Code provides that an employer may terminate the services of an employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health, as well as to the health of his co-employees. In order to validly terminate employment on this ground, Section 8, Rule I, Book VI of the Omnibus Rules Implementing the Labor Code requires that: (i) the employee be suffering from a disease and his continued employment is prohibited by law or prejudicial to his health or to the health of his co-employees, and (ii) a certification by a competent public health authority that the disease is of such nature or at such a stage that it cannot be cured within a period of six (6) months even with proper medical treatment. If the disease or ailment can be cured within the period, the employer shall not terminate the employee but shall ask the employee to take a leave. The employer shall reinstate such employee to his former position immediately upon the restoration of his normal health. In Triple Eight Integrated Services, Inc. v. NLRC (G.R. No. 129584, December 3, 1998), the Court held that the requirement for a medical certificate under Article 284 of the Labor Code cannot be dispensed with; otherwise, it would sanction the unilateral and arbitrary determination by the employer of the gravity or extent of the employee’s illness and, thus, defeat the public policy on the protection of labor. In this case, Ynson should have reported back to work or attended the investigations conducted by Wuerth With respect to due process requirement, the employer is bound to furnish the employee concerned with two (2) written notices before termination of employment can be legally effected. One is the notice apprising the employee of the particular acts or omissions for which his dismissal is sought and this may loosely be considered as the proper charge. The other is the notice informing the employee of the management’s decision to sever his employment. 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, thereby giving him ample opportunity to be heard and defend himself with the assistance of his representative should he so desire. The requirement of notice, it has been stressed, is not a mere technicality but a requirement of due process to which every employee is entitled. Here, Palacio Del Gobernador Condominium Corporation complied with the “two-notice rule” stated above.

Cityland did not afford Galang the required notice before he was dismissed. As the Court of Appeals noted, the investigation conference Tupas called to look into the janitors’ complaints against Galang did not constitute the written notice required by law as he had no clear idea what the charges against him were.

The validity of an employee’s dismissal from service hinges on the satisfaction of the two substantive requirements for a lawful termination. These are, first, whether the employee was accorded due process the basic components of which are the opportunity to be heard and to defend himself. This is the procedural aspect. And second, whether the dismissal is for any of the causes provided in the Labor Code of the Philippines. This constitutes the substantive aspect. On the substantive aspect, the Supreme Court found that Palacio Del Gobernador Condominium Corporation’s termination of the Oasay’s employment was for a cause provided under the Labor Code. In terminating Oasay’s employment, Palacio Del Gobernador Condominium Corporation invoked loss of trust and confidence. The first requisite for dismissal on the ground of loss of trust and confidence is that the employee concerned must be holding a position of trust and confidence. Here, it is indubitable that Oasay holds a position of trust and confidence. The position of Building Administrator, being managerial in nature, necessarily enjoys the trust and confidence of the employer. The second requisite is that there must be an act that would justify the loss of trust and confidence. Loss of trust and confidence, to be a valid cause for dismissal, must be based on a willful breach of trust and founded on clearly established facts. Palacio Del Gobernador Condominium Corporation had established, by clear and convincing evidence, Oasay’s acts which justified its loss of trust and confidence on the former. The Supreme Court found that Galang had become unfit to continue his employment. The evidence supports the view that he continued to exhibit undesirable traits as an employee and as a person, in relation to both his co-workers and his superiors, particularly Tupas, her immediate supervisor. Quoting the Court of Appeals’ decision with approval, the Supreme Court held: “Without offering any possible ill motive that might have impelled [the respondents] to summarily dismiss [Galang], who admitted having been absorbed by the former as janitor upon the termination of his contract with his agency, this Court is more inclined to give credence to the evidence pointing to the conclusion that [Galang’s] employment was actually severed for a just cause.”

The death of a seaman during the term of employment makes the employer liable to his heirs for death compensation benefits. This rule, however, is not absolute. The employer may be exempt from liability if he can successfully prove that the seaman’s death was caused by an injury directly attributable to his deliberate or willful act. The Supreme Court agreed that Danilo died of Asphyxia by strangulation as proved by the NBI post-mortem findings and certification issued by the medico-legal officer, Dr. Reyes. The photocopy of the fax transmission of the purported English translation of Dr. Hameed’s medical report to prove that Danilo committed suicide should not be considered since the medical report’s genuineness and due execution were unverifiable: (1) the existence of the original medical report, which was written in the arabic language, was not even attached to the records and has not been proved; (2) the identity of the person who made the translation and whether the translator has the recognized competence in both English and the language the medical report was originally written were not established; (3) the alleged translated medical report was not even signed by Dr. Hameed which creates doubt as to its authenticity. The unsigned translated medical report is nothing but a self-serving document which ought to be treated as a mere scrap of paper devoid of any evidentiary value even in administrative proceedings.

To determine the existence of an employer-employee relationship, case law has consistently applied the four-fold test. Respondents argue that the element of control is lacking in this case, making petitioner-referee an independent contractor and not an employee of respondents. The Supreme Court agreed as it found that there was no control over the means and methods by which petitioner performs his work as a referee officiating a PBA basketball game. The contractual stipulations in the retainer contracts do not pertain to, much less dictate, how and when petitioner will blow the whistle and make calls. On the contrary, they merely serve as rules of conduct or guidelines in order to maintain the integrity of the professional basketball league. Moreover, the following circumstances indicate that petitioner is an independent contractor: (1) the referees are required to report for work only when PBA games are scheduled, which is three times a week spread over an average of only 105 playing days a year, and they officiate games at an average of two hours per game; and (2) the only deductions from the fees received by the referees are withholding taxes. There are no deductions for contributions to the Social Security System, Philhealth or Pag-Ibig, which are the usual deductions from employees’ salaries. These undisputed circumstances buttress the fact that petitioner is an independent contractor, and not an employee of respondents.

A claim for overtime pay will not be granted in the absence of any factual and legal basis. In this respect, the records indicated that the labor arbiter granted Menese’s claim for holiday pay, rest day and premium pay on the basis of payrolls. There is no such proof in support of Menese’s claim for overtime pay other than her contention that she worked from 8:00 a.m. up to 5:00 p.m. She presented no evidence to show that she was working during the entire one hour meal break. The Supreme Court thus found the NLRC’s deletion of the overtime pay award in order.

Permanent disability refers to the inability of a worker to perform his job for more than 120 days, regardless of whether he loses the use of any part of his body. What determines petitioner’s entitlement to permanent disability benefits is his inability to work for more than 120 days. The certification by the company-designated physician that petitioner is fit to work was issued after 199 days or more than 120 days from the time he was medically repatriated to the Philippines. Petitioner herein was medically repatriated to the Philippines on October 8, 2001. However, it was only on April 25, 2002 or after a lapse of 199 days that Dr. Cruz issued a certification declaring him fit to work. Thus, the Supreme Court found that petitioner’s disability is considered permanent and total because the “fit to work” certification was issued by Dr. Cruz only on April 25, 2002, or more than 120 days after he was medically repatriated on October 8, 2001. Furthermore, the company-designated physician’s certification that petitioner is fit to work does not make him ineligible for permanent total disability benefits. It does not matter that the company-designated physician assessed petitioner as fit to work. It is undisputed that from the time petitioner was repatriated on October 8, 2001, he was unable to work for more than 120 days as he was only certified fit to work on April 25, 2002. Consequently, petitioner’s disability is considered permanent and total.

Employment on probationary status of teaching personnel is not only governed by the Labor Code but also by the Manual of Regulations for Private Schools. Section 91 of the Manual of Regulations for Private Schools, states that: “Every contract of employment shall specify the designation, qualification, salary rate, the period and nature of service and its date of effectivity, and such other terms and condition of employment as may be consistent with laws and rules, regulations and standards of the school.” Thus, it is important that the contract of probationary employment specify the period or term of its effectivity. In this case, therefore, the letters sent by petitioner College Dean Sr. Racadio, which were devoid of specifics, cannot be considered as contracts. The closest they can resemble to are that of informal correspondence among the said individuals. As such, petitioner school has the right not to renew the contracts of the respondents, the old ones having expired at the end of their terms. Assuming, arguendo, that the employment contracts between the petitioner school and the respondent spouses were renewed, the SC found that there was a valid and just cause for their dismissal since petitioners have repeatedly violated several departmental and instructional policies, such as the late submission of final grades, failure to submit final test questions to the Program Coordinator, the giving of tests in essay form instead of the multiple choice format as mandated by the school and the high number of students with failing grades in the classes that he handled. For a sickness or resulting disability or death to be compensable, the claimant must prove either (1) that the employee’s sickness was the result of an occupational disease listed under Annex “A” of the Amended Rules on Employees’ Compensation, or (2) that the risk of contracting the disease was increased by his working conditions. Under the increased risk theory, there must be a reasonable proof that the employee’s working condition increased his risk of contracting the disease, or that there is a connection between his work and the cause of the disease. In this case, since Besitan’s ailment, End Stage Renal Disease secondary to Chronic Glomerulonephritis is not among those listed under Annex “A,” of the Amended Rules on Employees’ Compensation, he needs to show by substantial evidence that his risk of contracting the disease was increased by his working condition.

The principal test for determining whether particular employees are properly characterized as “project employees” as distinguished from “regular employees” is whether or not the project employees were assigned to carry out a “specific project or undertaking,” the duration and scope of which were specified at the time the employees were engaged for that project. In a number of cases, the Court has held that the length of service or the re-hiring of construction workers on a project-to-project basis does not confer upon them regular employment status, since their re-hiring is only a natural consequence of the fact that experienced construction workers are preferred. Employees who are hired for carrying out a separate job, distinct from the other undertakings of the company, the scope and duration of which has been determined and made known to the employees at the time of the employment are properly treated as project employees and their services may be lawfully terminated upon the completion of a project. Should the terms of their employment fail to comply with this standard, they cannot be considered project employees. Applying the above disquisition, the Court agreed with the findings of the CA that petitioners were project employees. It is not disputed that petitioners were hired for the construction of the Cordova Reef Village Resort in Cordova, Cebu. By the nature of the contract alone, it is clear that petitioners’ employment was to carry out a specific project.

Direct and clear evidence, is not necessary to prove a compensable claim. Strict rules of evidence do not apply as PD No. 626 only requires substantial evidence. The SC found that Besitan has sufficiently proved that his working condition increased his risk of contracting Glomerulonephritis, which according to GSIS may be caused by bacterial, viral, and parasitic infection. When Besitan entered the government service in 1976, he was given a clean bill of health. In 2005, he was diagnosed with End Stage Renal Disease secondary to Chronic Glomerulonephritis. It would appear therefore that the nature of his work could have increased his risk of contracting the disease. His frequent travels to remote areas in the country could have exposed him to certain bacterial, viral, and parasitic infection, which in turn could have caused his disease. Delaying his urination during his long trips to the provinces could have also increased his risk of contracting the disease. As a matter of fact, even the Bank Physician of Bangko Sentral ng Pilipinas, Dr. Gregorio Suarez II, agreed that Besitan’s working condition could have contributed to the weakening of his kidneys, which could have caused the disease. This Medical Certificate is sufficient to prove that the working condition of Besitan increased his risk of contracting Glomerulonephritis. In claims for compensation benefits, a doctor’s certification as to the nature of a claimant’s disability deserves full credence because no medical practitioner would issue certifications indiscriminately.

In Sagales v. Rustan’s Commercial Corporation (G.R. No. 166554, November 27, 2008), the Supreme Court ruled: Truly, while the employer has the inherent right to discipline, including that of dismissing its employees, this prerogative is subject to the regulation by the State in the exercise of its police power. In this regard, it is a hornbook doctrine that infractions committed by an employee should merit only the corresponding penalty demanded by the circumstance. The penalty must be commensurate with the act, conduct or omission imputed to the employee and must be imposed in connection with the disciplinary authority of the employer. (Emphasis in the original.) In the case at bar, the penalty handed out by the petitioners was the ultimate penalty of dismissal. There was no warning or admonition for respondent’s violation of team rules, only outright termination of his services for an act which could have been punished appropriately with a severe reprimand or suspension.

Petitioners are not employees of respondents, since their relationship failed to pass the four-fold test of employment: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee’s conduct, which is the most important element. As found by both the NLRC and the CA, respondents had no part in petitioners’ selection and management; petitioners’ compensation was paid out of the arriba (which is a percentage deducted from the total bets), not by petitioners; and petitioners performed their functions as masiador and sentenciador free from the direction and control of respondents.

To ascertain the existence of an employer-employee relationship jurisprudence has invariably adhered to the four-fold test, to wit: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee’s conduct, or the so-called “control test.” Applying the aforementioned test, an employer-employee relationship was found to be absent in the case at bar. Among other things, respondent was not required to report everyday during regular office hours of petitioner. Respondent’s monthly retainer fees were paid to him either at his residence or a local restaurant. More importantly, petitioner did not prescribe the manner in which respondent would accomplish any of the tasks in which his expertise as a liaison officer was needed; respondent was left alone and given the freedom to accomplish the tasks using his own means and method. Verily, the absence of the element of control on the part of the petitioner engenders a conclusion that he is not an employee of the petitioner.

It is already settled that the relationship between jeepney owners/operators and jeepney drivers under the boundary system is that of employer-employee and not of lessor-lessee. The fact that the drivers do not receive fixed wages but only get the amount in excess of the so-called “boundary” that they pay to the owner/operator is not sufficient to negate the relationship between them as employer and employee.

The onus probandi falls on petitioner to establish or substantiate such claim by the requisite quantum of evidence. The issue of Javier’s alleged illegal dismissal is anchored on the existence of an employer-employee relationship between him and Fly Ace. As the records bear out, the Labor Arbiter and the Court of Appeals found Javier’s claim of employment with Fly Ace as wanting and deficient. Although Section 10, Rule VII of the New Rules of Procedure of the NLRC allows a relaxation of the rules of procedure and evidence in labor cases, this rule of liberality does not mean a complete dispensation of proof. Labor officials are enjoined to use reasonable means to ascertain the facts speedily and objectively with little regard to technicalities or formalities but nowhere in the rules are they provided a license to completely discount evidence, or the lack of it. The quantum of proof required, however, must still be satisfied. Hence, “when confronted with conflicting versions on factual matters, it is for them in the exercise of discretion to determine which party deserves credence on the basis of evidence received, subject only to the requirement that their decision must be supported by substantial evidence.” [Salvador Lacorte v. Hon. Amado G. Inciong, 248 Phil. 232 (1988)] Accordingly, Javier needs to show by substantial evidence that he was indeed an employee of the company against which he claims illegal dismissal.

Control over the performance of the task of one providing service – both with respect to the means and manner, and the results of the service – is the primary element in determining whether an employment relationship exists. Petitioner asserts that his employer Manulife’s control over him was demonstrated (1) when it set the objectives and sales targets regarding production, recruitment and training programs; and (2) when it prescribed the Code of Conduct for Agents and the Manulife Financial Code of Conduct to govern his activities. However, the court ruled that all these appear to speak of control by the insurance company over its agents. There are built-in elements of control specific to an insurance agency, which do not amount to the elements of control that characterize an employment relationship governed by the Labor Code. They are, however, controls aimed only at specific results in undertaking an insurance agency, and are, in fact, parameters set by law in defining an insurance agency and the attendant duties and responsibilities an insurance agent must observe and undertake. They do not reach the level of control into the means and manner of doing an assigned task that invariably characterizes an employment relationship as defined by labor law. To reiterate, guidelines indicative of labor law “control” do not merely relate to the mutually desirable result intended by the contractual relationship; they must have the nature of dictating the means and methods to be employed in attaining the result. Petitioner is an insurance agent not an employee. A probationary employee, like a regular employee, enjoys security of tenure. However, in cases of probationary employment, aside from just or authorized causes of termination, an additional ground is provided under Article 281 of the Labor Code, i.e., the probationary employee may also be terminated for failure to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of the engagement. Thus, the services of an employee who has been engaged on probationary basis may be terminated for any of the following: (1) a just or (2) an authorized cause; and (3) when he fails to qualify as a regular employee in accordance with reasonable standards prescribed by the employer.

The respondent employees were already rendering service to the company when they were made to undergo apprenticeship. The respondent were regular employees because they occupied positions such as machine operator, scaleman and extruder operator – tasks that are usually necessary and desirable in petitioner employer’s usual business or trade as manufacturer of plastic building materials. These tasks and their nature characterized the respondents as regular employees under Article 280 of the Labor Code. Thus, when they were dismissed without just or authorized cause, without notice, and without the opportunity to be heard, their dismissal was illegal under the law.

To determine the existence of an employer-employee relationship, the following are considered: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee’s conduct. Of these elements, the most important criterion is whether the employer controls or has reserved the right to control the employee not only as to the result of the work but also as to the means and methods by which the result is to be accomplished. In this case, Javier was not able to persuade the Court that the above elements exist in his case. He could not submit competent proof that Fly Ace engaged his services as a regular employee; that Fly Ace paid his wages as an employee, or that Fly Ace could dictate what his conduct should be while at work. In other words, Javier’s allegations did not establish that his relationship with Fly Ace had the attributes of an employer-employee relationship on the basis of the above-mentioned four-fold test. Worse, Javier was not able to refute Fly Ace’s assertion that it had an agreement with a hauling company to undertake the delivery of its goods. It was also baffling to realize that Javier did not dispute Fly Ace’s denial of his services’ exclusivity to the company. In short, all that Javier laid down were bare allegations without corroborative proof.

BPI contends that at the time of Uy’s dismissal, she was no longer functioning as a teller of the bank but as a low-counter staff and as such, Uy is not anymore entitled to the teller’s functional allowance pursuant to company policy. BPI further argues that Uy is neither entitled to the monetary conversion of vacation and sick leaves for failure to prove that she is entitled to these benefits at the time of her dismissal. The Supreme Court ruled that Uy is entitled to the teller’s functional allowance but not to the monetary conversion of vacation and sick leaves. Uy’s function as a teller at the time of her dismissal was factually established and was never impugned by the parties during the proceedings held in the main case. Besides, BPI did not present any evidence to substantiate its allegation that Uy was assigned as a low-counter staff at the time of her dismissal. It is a hornbook rule that he who alleges must prove. As to the vacation and sick leave cash conversion benefit, the Supreme Court held that entitlement to the same should be necessarily proved since this privilege is not statutory or mandatory in character but only voluntarily granted. As such, the existence of this benefit as well as the employee’s entitlement thereto cannot be presumed but should be proved by the employee. In this case, however, the records failed to prove that Uy was receiving this benefit at the time of her dismissal on December 14, 1995.

Contracts undergo three distinct stages, to wit: negotiation; perfection or birth; and consummation. Negotiation begins from the time the prospective contracting parties manifest their interest in the contract and ends at the moment of agreement of the parties. Perfection or birth of the contract takes place when the parties agree upon the essential elements of the contract. Consummation occurs when the parties fulfill or perform the terms agreed upon in the contract, culminating in the extinguishment thereof. Under Article 1315 of the Civil Code, a contract is perfected by mere consent and from that moment the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law. An employment contract, like any other contract, is perfected at the moment (1) the parties come to agree upon its terms; and (2) concur in the essential elements thereof: (a) consent of the contracting parties, (b) object certain which is the subject matter of the contract and (c) cause of the obligation. In the present case, C.F. Sharp, on behalf of its principal, International Shipping Management, Inc., hired Agustin and Minimo as Sandblaster/Painter for a 3-month contract, with a basic monthly salary of US$450.00. Thus, the object of the contract is the service to be rendered by Agustin and Minimo on board the vessel while the cause of the contract is the monthly compensation they expect to receive. These terms were embodied in the Contract of Employment which was executed by the parties. The The employment of seafarers, including claims for death benefits, is governed by the contracts they sign every time they are hired or rehired; and as long as the stipulations therein are not contrary to law, morals, public order or public policy, they have the force of law between the parties. While the seafarer and his employer are governed by their mutual agreement, the POEA rules and regulations require that the POEA Standard Employment Contract (POEA-SEC) be integrated in every seafarer’s contract. In this case, considering that petitioner executed an overseas employment contract with respondent company in November 1999, the 1996 POEA-SEC should govern. The 2000 POEA-SEC initially took effect on June 25, 2000. Thereafter, the Court issued the Temporary Restraining Order (TRO) which was later lifted on June 5, 2002. Thus, petitioner cannot simply rely on the disputable presumption provision mentioned in Section 20 (B)(4) of the 2000 POEA-SEC which states that: “Those illnesses not listed in Section 32 of this Contract are disputably presumed as work related.”

Granting that the provisions of the 2000 POEA-SEC apply, the disputable presumption provision in Section 20 (B) does not allow petitioner to just sit down and wait for respondent company to present evidence to overcome the disputable presumption of work-relatedness of the illness. Contrary to his position, the seafarer still has to substantiate his claim in order to be entitled to disability compensation. He has to prove that the illness he suffered was work-related and that it must have existed during the term of his employment contract. For disability to be compensable under Section 20 (B) of the 2000 POEA-SEC, two elements must concur: (1) the injury or illness must be work-related; and (2) the work-related injury or illness must have existed during the term of the seafarer’s employment contract. In other words, to be entitled to compensation and benefits under this provision, it is not sufficient to establish that the seafarer’s illness or injury has rendered him permanently or partially disabled; it must also be shown that there is a causal connection between the seafarer’s illness or injury and the work for which he had been contracted. Unfortunately for petitioner, he failed to prove that his varicose veins arose out of his employment with respondent company.

The commencement of an employer-employee relationship must be treated separately from the perfection of an employment contract. Santiago v. CF Sharp Crew Management, Inc., (G.R. No. 162419, 10 July 2007) is an instructive precedent on this point. In that case, the Supreme Court made a distinction between the perfection of the employment contract and the commencement of the employer-employee relationship, thus: The perfection of the contract, which in this case coincided with the date of execution thereof, occurred when petitioner and respondent agreed on the object and the cause, as well as the rest of the terms and conditions therein. The commencement of the employer-employee relationship, as earlier discussed, would have taken place had petitioner been actually deployed from the point of hire. Thus, even before the start of any employer-employee relationship, contemporaneous with the perfection of the employment contract was the birth of certain rights and obligations, the breach of which may give rise to a cause of action against the erring party. Despite the fact that the employer-employee relationship has not commenced due to the failure to deploy Agustin and Minimo in this case, Agustin and Minimo are entitled to rights arising from the perfected Contract of Employment, such as the right to demand performance by C.F. Sharp of its obligation under the contract.

Article 280 of the Labor Code, in which the lower court used to buttress its findings that respondent became a regular employee of the petitioner, is not applicable in the case at bar. The Supreme Court has ruled that said provision is not the yardstick for determining the existence of an employment relationship because it merely distinguishes between two kinds of employees, i.e., regular employees and casual employees, for purposes of determining the right of an employee to certain benefits, to join or form a union, or to security of tenure; it does not apply where the existence of an employment relationship is in dispute. It is, therefore, erroneous on the part of the Court of Appeals to rely on Article 280 in determining whether an employer-employee relationship exists between respondent and the petitioner. Therefore, despite the fact that petitioner made use of the services of respondent as a part-time consultant on retainer basis for eleven years, he still cannot be considered as a regular employee of petitioner using only as basis Article 280 of the Labor Code.

Premier Allied and Contracting Services, Inc. (PACSI) and its President, the petitioner, were held liable to pay the respondents separation pay and attorney’s fees. To execute this judgment, the NLRC sheriff issued a Notice of Sale of a property with a TCT in the name of the petitioner and his wife. The Court ruled that the Notice of Sale is null and void. The power of the NLRC, or the courts, to execute its judgment extends only to properties unquestionably belonging to the judgment debtor alone. A sheriff, therefore, has no authority to attach the property of any person except that of the judgment debtor. Likewise, there is no showing that the sheriff ever tried to execute on the properties of the corporation. The TCT of the property bears out that, indeed, it belongs to petitioner and his wife. Thus, even if we consider petitioner as an agent of the corporation – and, therefore, not a stranger to the case – such that the provision on third-party claims will not apply to him, the property was registered not only in the name of petitioner but also of his wife. She stands to lose the property subject of execution without ever being a party to the case. This will be tantamount to deprivation of property without due process.

The rule is settled that “off-detailing” is not equivalent to dismissal, so long as such status does not continue beyond a reasonable time and that it is only when such a “floating status” lasts for more than six months that the employee may be considered to have been constructively dismissed. A complaint for illegal dismissal filed prior to the lapse of the six-month period and/or the actual dismissal of the employee is generally considered as prematurely filed. In this case, the evidence adduced a quo clearly indicates that petitioners were not in bad faith when they placed Leynes under floating status. Disgruntled by NHPI’s countermanding of her decision to bar Engr. Cantuba from the Project, Leynes twice signified her intention to resign from her position on 12 February 2002. In view of the sensitive nature of Leynes’ position and the critical stage of the Project’s business development, NHPI was constrained to hire Engr. Jose as Leynes’ replacement as a remedial measure.

For forum shopping to exist, it is necessary that (a) there be identity of parties or at least such parties that represent the same interests in both actions; (b) there be identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (c) the identity of the two preceding particulars is such that any judgment rendered in one action will, regardless of which party is successful, amount to res judicata in the other action. Petitioners are correct as to the first two requisites of forum shopping. First, there is identity of parties involved: Negros Slashers Inc. and respondent Teng. Second, there is identity of rights asserted i.e., the right of management to terminate employment and the right of an employee against illegal termination. However, the third requisite of forum shopping is missing in this case. Any judgment or ruling of the Office of the Commissioner of the Metropolitan Basketball Association will not amount to res judicata. Res judicata is defined in jurisprudence as to have four basic elements: (1) the judgment sought to bar the new action must be final; (2) the decision must have been rendered by a court having jurisdiction over the subject matter and the parties; (3) the disposition of the case must be a judgment on the merits; and (4) there must be as between the first and second action, identity of parties, subject matter, and causes of action. Here, although contractually authorized to settle disputes, the Office of the Commissioner of the Metropolitan Basketball Association is not a court of competent jurisdiction as contemplated by law with respect to the application of the doctrine of res Section 41(n) of Republic Act No. 8291 contemplates a situation wherein GSIS, due to a reorganization, a streamlining of its organization, or some other circumstance, which calls for the termination of some of its employees, must design a plan to encourage, induce, or motivate these employees, who are not yet qualified for either optional or compulsory retirement under our laws, to instead voluntarily retire. Such is not the case with the GSIS RFP. Its very objective, “to motivate and reward employees for meritorious, faithful, and satisfactory service,” contradicts the nature of an early retirement incentive plan, or a financial assistance plan, which involves a substantial amount that is given to motivate employees to retire early. Instead, it falls exactly within the purpose of a retirement benefit, which is a form of reward for an employee’s loyalty and lengthy service, in order to help him or her enjoy the remaining years of his life. Without a doubt, the GSIS RFP is a supplementary retirement plan, which is prohibited by the Teves Retirement Law.

Respondents filed an illegal dismissal case against petitioner. Petitioner alleged that the respondents abandoned their work and were never dismissed by the petitioner. NLRC ruled that the respondents were not illegally dismissed since they failed to present a written notice of termination. This was however reversed by the Court of Appeals. The Court held that a written notice of dismissal is not a pre-requisite for a finding of illegal dismissal. Petitioner failed to prove that respondents were dismissed for a just or authorized cause. In an illegal dismissal case, the onus probandi rests on the employer to prove that the dismissal of an employee is for a valid cause.

Respondents filed an illegal dismissal case against the petitioners. Petitioners, in their defense, alleged that the respondents abandoned their work and were not dismissed by the petitioners. Although In cases of illegal dismissal, the employer bears the burden of proof to prove that the termination was for a valid or authorized cause, the employee must first establish by substantial evidence the fact that he was dismissed. If there is no dismissal, then there can be no question as to the legality or illegality thereof. In the present case, the Court held that there was no evidence that respondents were dismissed or that they were prevented from returning to their work. It was only respondents’ unsubstantiated conclusion that they were dismissed. As a matter of fact, respondents could not name the particular person who effected their dismissal and under what particular circumstances. Absent any showing of an overt or positive act proving that petitioners had dismissed respondents, the latters’ claim of illegal dismissal cannot be sustained.

The elements to determine the existence of an employment relationship are: (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’s conduct. In this case, the documentary evidence presented by respondent to prove that he was an employee of petitioner are as follows: (a) a document denominated as “payroll” (dated July 31, 2001 to March 15, 2002) certified correct by petitioner, which showed that respondent received a monthly salary of P7,000.00 with the corresponding deductions due to absences incurred by respondent; and (2) copies of petty cash vouchers, showing the amounts he received and signed for in the payrolls. These documents showed that petitioner hired respondent as an employee and he was paid monthly wages of P7,000.00. Additionally, as to the existence of the power of control, it is not essential for the employer to actually supervise the performance of duties of the employee. It is sufficient that the former has a right to wield the power. In this case, petitioner even stated in his Position Paper that it was agreed that he would help and teach respondent how to use the studio equipment. In such case, petitioner certainly had the power to check on the progress and work of respondent.

An employee’s execution of a final settlement and receipt of amounts agreed upon does not foreclose his right to pursue a claim for illegal dismissal. Thus, an employee illegally retrenched is entitled to reinstatement without loss of seniority rights and privileges, as well as to payment of full backwages from the time of her separation until actual reinstatement, less the amount which he/she received as retrenchment pay.

Respondent employee filed an illegal dismissal case against the petitioner-company and Tom Madula, its operations manager. The case was dismissed by the labor arbiter and the dismissal was affirmed by NLRC. On August 29, 2002, the Court of Appeals reversed and set aside the NLRC decision and resolution. The CA ordered the petitioner company to pay respondent separation pay, moral and exemplary damages, and attorney’s fees. The decision became final and executory on February 27, 2004, and consequently a writ of execution was issued. Petitioner-company filed a Motion to Quash Writ of Execution. The Labor Arbiter granted the Motion and exonerated the petitioner company from paying backwages and held that it was petitioner Madula who should be liable to pay backwages. Respondent then filed before the CA a Very Urgent Motion for Clarification of Judgment. On December 10, 2004, CA granted the Motion and held that petitioner-company is solely liable for the judgment award. As a general rule, final and executory judgments are immutable and unalterable, except under these recognized exceptions, to wit: (a) clerical errors; (b) nunc pro tunc entries which cause no prejudice to any party; and (c) void judgments. The underlying reason for the rule is two-fold: (1) to avoid delay in the administration of justice and thus make orderly the discharge of judicial business, and (2) to put judicial controversies to an end, at the risk of occasional errors, inasmuch as controversies cannot be allowed to drag on indefinitely and the rights and obligations of every litigant must not hang in suspense for an indefinite period Petitioner filed a complaint against respondent company and its officers for illegal dismissal, unfair labor practice, and money claims. Petitioner alleged that the officers should be held personally liable for the acts of company which were tainted with bad faith and arbitrariness. As a general rule, a corporate officer cannot be held liable for acts done in his official capacity because a corporation, by legal fiction, has a personality separate and distinct from its officers, stockholders, and members. To pierce this fictional veil, it must be shown that the corporate personality was used to perpetuate fraud or an illegal act, or to evade an existing obligation, or to confuse a legitimate issue. In illegal dismissal cases, corporate officers may be held solidarily liable with the corporation if the termination was done with malice or bad faith. Moral damages are awarded only where the dismissal was attended by bad faith or fraud, or constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs or public policy. Exemplary damages may avail if the dismissal was effected in a wanton, oppressive or malevolent manner. In the present case, the Court held that petitioner failed to prove that his dismissal was orchestrated by the individual respondents and their acts were attended with bad faith or were done oppressively.

Respondent-company, due to business troubles and losses, implemented a Right-Sizing Program which entailed a company-wide reorganization involving the transfer, merger, absorption or abolition of certain departments of the company. As a result, respondent-company terminated the services of petitioner on account of redundancy. Petitioner filed a complaint against respondent-company and its officers for illegal dismissal, unfair labor practice, and money claims. The Court ruled that petitioner was validly dismissed. There is redundancy when the service capability of the workforce is greater than what is reasonably required to meet the demands of the business enterprise. A position becomes redundant when it is rendered superfluous by any number of factors such as over-hiring of workers, decrease in volume of business, or dropping a particular product line or service activity previously manufactured or undertaken by the enterprise. The Court has been consistent in holding that the determination of whether or not an employee’s services are still needed or sustainable properly belongs to the employer. Provided there is no violation of law or a showing that the employer was prompted by an arbitrary or malicious act, the soundness or wisdom of this exercise of business judgment is not subject to the discretionary review of the Labor Arbiter and the NLRC. However, an employer cannot simply declare that it has become overmanned and dismiss its employees without producing adequate proof to sustain its claim of redundancy. Among the requisites of a valid redundancy program are: (1) the Article 279 of the Labor Code provides that an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges, to full backwages, inclusive of allowances, and to other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. However, due to the strained relations of the parties, the payment of separation pay has been considered an acceptable alternative to reinstatement, when the latter option is no longer desirable or viable. On the one hand, such payment liberates the employee from what could be a highly oppressive work environment. On the other, the payment releases the employer from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer trust. Thus, as an illegally or constructively dismissed employee, respondent is entitled to: (1) either reinstatement, if viable, or separation pay, if reinstatement is no longer viable; and (2) backwages. These two reliefs are separate and distinct from each other and are awarded conjunctively.

A person may be charged and convicted separately of illegal recruitment under Republic Act No. 8042, in relation to the Labor Code, and estafa under Article 315, paragraph 2(a) of the Revised Penal Code. The offense of illegal recruitment is malum prohibitum, while estafa is malum in se. In this case, therefore, Ochoa may also be charged and correspondingly held liable for estafa since all the elements for the crime are present in Criminal Case Nos. 98-77301, 98-77302, and 98-77303. Ochoa’s deceit was evident in her false representation to private complainants Gubat, Cesar, and Agustin that she possessed the authority and capability to send said private complainants to Taiwan/Saudi Arabia for employment as early as one to two weeks from completion of the requirements, among which were the payment of placement fees and submission of a medical examination report.

Section 36, Rule 130 of the Revised Rules on Evidence, states that a witness can testify only to those facts which he knows of or comes from his personal knowledge, that is, which are derived from his perception. This is known as the hearsay rule. The law, however, provides for specific exceptions to the hearsay rule, and one of the exceptions refers to entries in official records made in the performance of duty by a public officer. Accordingly, in the case at bar, although Dir. Mateo was not presented in court or did not testify during the trial to verify the said certification, such certification is considered as prima facie evidence of the facts stated therein and is therefore presumed to be truthful, because Ochoa did not present any plausible proof to rebut its truthfulness.

Recruitment and placement refers to the act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not. When a person or entity, in any manner, offers or promises for a fee employment to two or more persons, that person or entity shall be deemed engaged in recruitment and placement. Article 38(a) of the Labor Code, as amended, specifies that recruitment activities undertaken by non-licensees or non-holders of authority are deemed illegal and punishable by law. And when the illegal recruitment is committed against three or more persons, individually or as a group, then it is deemed committed in large scale and carries with it stiffer penalties as the same is deemed a form of economic sabotage. But to prove illegal recruitment, it must be shown that the accused, without being duly authorized by law, gave complainants the distinct impression that he had the power or ability to send them abroad for work, such that the latter were convinced to part with their money in order to be employed. It is important that there must at least be a promise or offer of an employment from the person posing as a recruiter, whether locally or abroad.

The crime of illegal recruitment is committed when two elements concur, namely: (1) the offender has no valid license or authority required by law to enable one to lawfully engage in recruitment and placement of workers; and (2) he undertakes either any activity within the meaning of “recruitment and placement” defined under Article 13 (b), or any prohibited practices enumerated under Article 34 of the Labor Code. First, the petitioner was found not to have been issued a license as proven by the certification from the DOLE-Dagupan District Office stating that petitioner has not been issued any license by the POEA and neither is it a holder of an authority to engage in recruitment and placement activities. Second, from the testimonies of the private respondents, it is apparent that petitioner was able to convince the private respondents to apply for work in Israel after parting with their money in exchange for the services she would render. The said act of the petitioner, without a doubt, falls within the meaning of recruitment and placement as defined in Article 13 (b) of the Labor Code. Finally, the Supreme Court noted that in illegal recruitment cases, the failure to present receipts for money that was paid in connection with the recruitment process will not affect the strength of the evidence presented by the prosecution as long as the payment can be proved through clear and convincing testimonies of credible witnesses.

Petitioners assert that they are employees of P&G and that Promm-Gem and SAPS are merely labor-only contractors providing manpower services to P&G. There is “labor-only” contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such person are performing activities which are directly related to the principal business of such employer. In the instant case, the Supreme Court found that Promm-Gem has substantial investment which relates to the work to be performed. The financial statementsshow that it has authorized capital stock of P1 million and a substantial amount of paid-in capital and other assets to support its operations. Under the circumstances, Promm-Gem cannot be considered a labor-only contractor; it is in fact a legitimate independent contractor. On the other hand, the financial records of SAPS show that it has a paid-in capital of only P31,250.00. There is no other evidence presented to show how much its working capital and assets are. Furthermore, there is no showing of substantial investment in tools, equipment or other assets. Considering that SAPS has no substantial capital or investment and the workers it recruited are performing activities which are directly related to the principal business of P&G, SAPS is considered to be engaged in “labor-only contracting”.

Petitioner was removed from his position as a manager through a Board Resolution. Petitioner filed a complaint for illegal dismissal before the labor arbiter. Respondents claimed that petitioner is both a stockholder and a corporate officer of respondent corporation, hence, his action against respondents is an intra-corporate controversy over which the Labor Arbiter has no jurisdiction. The Court ruled that this is not an intra-corporate controversy but a labor case cognizable by the labor arbiter. To determine whether a case involves an intra-corporate controversy that is to be heard and decided by the branches of the RTC specifically designated by the Court to try and decide such cases, two tests must be applied: (a) the status or relationship test, and (2) the nature of the controversy test. The first test requires that the controversy arise out of intra-corporate or partnership relations among the stockholders, members or associates of the corporation, partnership or association, between any or all of them and the corporation, partnership or association of which they are stockholders, members or associates; between such corporation, partnership, or association and the public or between such corporation, partnership, or association and the State insofar as it concerns its franchise, license or permit to operate. The second test requires that the dispute among the parties be intrinsically connected with the regulation of the corporation. The Court in this case held that petitioner is not a corporate officer because he was not validly appointed by the Board, thus, failing the relationship test, and that this is a case of employment termination which is a labor controversy and not an intra-corporate dispute, thus failing the nature of the controversy test.

Article 217 of the Labor Code states that unfair labor practices and termination disputes fall within the original and exclusive jurisdiction of the Labor Arbiter. As an exception, under Article 262 the Voluntary Arbitrator, upon agreement of the parties, shall also hear and decide all other labor disputes including unfair labor practices and bargaining deadlocks. For the exception to apply, there must be agreement between the parties clearly conferring jurisdiction to the voluntary arbitrator. Such agreement may be stipulated in a collective bargaining agreement. However, in the absence of a collective bargaining agreement, it is enough that there is evidence on record showing the parties have agreed to resort to voluntary arbitration.

It is clear from the NLRC Rules of Procedure that appeals must be verified and certified against forum-shopping by the parties-in-interest themselves. The purpose of verification is to secure an assurance that the allegations in the pleading are true and correct and have been filed in good faith. In the case at bar, the parties-in-interest are petitioner Salenga, as the employee, and respondent Clark Development Corporation as the employer. A corporation can only exercise its powers and transact its business through its board of directors and through its officers and agents when authorized by a board resolution or its bylaws. The power of a corporation to sue and be sued is exercised by the board of directors. The physical acts of the corporation, like the signing of documents, can be performed only by natural persons duly authorized for the purpose by corporate bylaws or by a specific act of the board. Absent the requisite board resolution, neither Timbol-Roman nor Atty. Mallari, who signed the Memorandum of Appeal and Joint Affidavit of Declaration allegedly on behalf of respondent corporation, may be considered as the “appellant” and “employer” referred to by the NLRC Rules of Procedure. As such, the NLRC had no jurisdiction to entertain the appeal.

If a complaint is filed with the DOLE, and it is accompanied by a claim for reinstatement, the jurisdiction is properly with the Labor Arbiter, under Art. 217(3) of the Labor Code, which provides that the Labor Arbiter has original and exclusive jurisdiction over those cases involving wages, rates of pay, hours of work, and other terms and conditions of employment, if accompanied by a claim for reinstatement. In the present case, the finding of the DOLE Regional Director that there was an employer-employee relationship has been subjected to review by the Supreme Court, with the finding being that there was no employer-employee relationship between petitioner and private respondent, based on the evidence presented. The DOLE had no jurisdiction over the case, as there was no employer-employee relationship present. Thus, the dismissal of the complaint against petitioner is proper.

Article 111 of the Labor Code provides for a maximum award of attorney’s fees in cases of recovery of wages: (a.) In cases of unlawful withholding of wages, the culpable party may be assessed attorney’s fees equivalent to ten percent of the amount of wages recovered. (b.) It shall be unlawful for any person to demand or accept, in any judicial or administrative proceedings for the recovery of wages, attorney’s fees which exceed ten percent of the amount of wages recovered. Since De Gracia, et al. had to secure the services of the lawyer to recover their unpaid salaries and protect their interest, attorney’s fees in the amount of ten percent (10%) of the total claims was imposed.

There is labor-only contracting where: (a) the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others; and (b) the workers recruited and placed by such person are performing activities which are directly related to the principal business of the employer. In the present case, the Supreme Court found that both the capitalization requirement and the power of control on the part of Requiño are wanting. Generally, the presumption is that the contractor is a labor-only contractor unless such contractor overcomes the burden of proving that it has the substantial capital, investment, tools and the like. In the present case, though Garden of Memories is not the contractor, it has the burden of proving that Requiño has sufficient capital or investment since it is claiming the supposed status of Requiño as independent contractor. Garden of Memories, however, failed to adduce evidence purporting to show that Requiño had sufficient capitalization. Neither did it show that she invested in the form of tools, equipment, machineries, work premises and other materials which are necessary in the completion of the service contract.

Respondent company questioned the legal personality of the petitioner union in a certification election proceeding. The Court ruled that the legal personality of the petitioner union cannot be collaterally attacked by respondent company. Except when it is requested to bargain collectively, an employer is a mere bystander to any petition for certification election; such proceeding is non-adversarial and merely investigative, considering that its purpose is to determine if the employees would like to be represented by a union and to select the organization that will represent them in their collective bargaining with the employer. The choice of their representative is the exclusive concern of the employees; the employer cannot have any partisan interest therein; it cannot interfere with, much less oppose, the process by filing a motion to dismiss or an appeal from it; not even the allegation that some employees participating in a petition for certification election are actually managerial employees will give an employer legal personality to block the certification election. The employer’s only right in the proceeding is to be notified or informed thereof.

Confidential employees are defined as those who (1) assist or act in a confidential capacity, in regard (2) to persons who formulate, determine, and effectuate management policies in the field of labor relations. The two criteria are cumulative, and both must be met if an employee is to be considered a confidential employee. Confidential employees, such as accounting personnel, should be excluded from the bargaining unit, as their access to confidential information may become the source of undue advantage. However, such fact does not apply to the position of Payroll Master (as in this case) and the whole gamut of employees who has access to salary and compensation data. The CA correctly held that the position of Payroll Master does not involve dealing with confidential labor relations information in the course of the performance of his functions. In other words, since the nature of his work does not pertain to company rules and regulations and confidential labor relations, it follows that he cannot be excluded from the subject bargaining unit.

Although Article 245 of the Labor Code limits the ineligibility to join, form and assist any labor organization to managerial employees, jurisprudence has extended this prohibition to confidential employees. In this regard, the CA correctly ruled that the positions of Human Resource Assistant and Personnel Assistant belong to the category of confidential employees and, hence, are excluded from the bargaining unit, considering their respective positions and job descriptions. As Human Resource Assistant, the scope of one’s work necessarily involves labor relations, recruitment and selection of employees, access to employees’ personal files and compensation package, and human resource management. As regards a Personnel Assistant, one’s work includes the recording of minutes for management during collective bargaining negotiations, assistance to management during grievance meetings and administrative investigations, and securing legal advice for labor issues from the petitioner’s team of lawyers, and implementation of company programs. Therefore, in the discharge of their functions, both gain access to vital labor relations information which outrightly disqualifies them from union membership.

Petitioner union filed a Petition for Certification Election among the regular rank-and-file employees of the respondent company. Respondent contends that petitioner union is not a legitimate labor organization because its composition is a mixture of supervisory and rank-and-file employees. The Court ruled that the inclusion of the supervisory employees in petitioner union does not divest it of its status as a legitimate labor organization. After a labor organization has been registered, it may exercise all the rights and privileges of a legitimate labor organization. Any mingling between supervisory and rank-and-file employees in its membership cannot affect its legitimacy for that is not among the grounds for cancellation of its registration, unless such mingling was brought about by misrepresentation, false statement or fraud under Article 239 of the Labor Code.

Petitioner union filed a Petition for Certification Election among the regular rank-and-file employees of the respondent company. Respondent company filed an Answer with Motion to Dismiss on the ground that petitioner union is not a legitimate labor organization because of its failure to comply with the documentary requirements set by law, i.e. non-verification of the charter certificate. The Court ruled that it was not necessary for the charter certificate to be certified and attested by the local/chapter officers. Considering that the charter certificate is prepared and issued by the national union and not the local/chapter, it does not make sense to have the local/chapter’s officers certify or attest to a document which they did not prepare. In accordance with this ruling, petitioner union’s charter certificate need not be executed under oath. Consequently, it validly acquired the status of a legitimate labor organization upon submission of (1) its charter certificate, (2) the names of its officers, their addresses, and its principal office, and (3) its constitution and by-laws— the last two requirements having been executed under oath by the proper union officials.

An appropriate bargaining unit is defined as “a group of employees of a given employer, comprised of all or less than all of the entire body of employees, which the collective interest of all the employees, consistent with equity to the employer, indicate to be best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law”. The test of grouping is community or mutuality of interest. In this case, there should be only one bargaining unit for the employees in the Cabuyao, San Fernando, and Otis plants of the Magnolia Poultry Products involved in “dressed” chicken processing and Magnolia Poultry Farms engaged in “live” chicken operations. Certain factors, such as specific line of work, working conditions, location of work, mode of compensation, and other relevant conditions do not affect or impede their commonality of interest. Although they seem separate and distinct from each other, the specific tasks of each division are actually interrelated and there exists mutuality of interests which warrants the formation of a single bargaining unit.

A distinction exists between the ordinary workers’ liability for illegal strike and that of the union officers who participated in it. The ordinary worker cannot be terminated for merely participating in the strike. There must be proof that he committed illegal acts during its conduct. On the other hand, a union officer can be terminated upon mere proof that he knowingly participated in the illegal strike. Moreover, the participating union officers have to be properly identified. In the present case, with respect to those union officers whose identity and participation in the strike having been properly established, the termination was legal.

Petitioner moved to dismiss the petition for certification election filed by respondent union by questioning the validity of the respondent’s union registration. The Court held that legitimacy of the legal personality of respondent cannot be collaterally attacked in a petition for certification election proceeding but only through a separate action instituted particularly for the purpose of assailing it. The Implementing Rules stipulate that a labor organization shall be deemed registered and vested with legal personality on the date of issuance of its certificate of registration. Once a certificate of registration is issued to a union, its legal personality cannot be subject to a collateral attack. It may be questioned only in an independent petition for cancellation in accordance with Section 5 of Rule V, Book V of the Implementing Rules.

To prove illegal recruitment, it must be shown that appellant gave complainants the distinct impression that she had the power or ability to send complainants abroad for work such that the latter were convinced to part with their money in order to be employed. All eight private complainants in this case consistently declared that Ochoa offered and promised them employment overseas. Moreover, Ochoa can also be convicted for illegal recruitment based on Section 6 of Republic Act No. 8042, which clearly provides that any person, whether or not a licensee or holder of authority may be held liable for illegal recruitment for certain acts as enumerated in paragraphs (a) to (m). Among such acts is the “failure to reimburse expenses incurred by the worker in connection with his documentation and processing for purposes of deployment, in cases where the deployment does not actually take place without the worker’s fault.” In this case, Ochoa received placement and medical fees from private complainants and failed to reimburse the private complainants the amounts they had paid when they were not able to leave for Taiwan and Saudi Arabia, through no fault of their own.

In labor cases, the corporate directors and officers are solidarily liable with the corporation for the termination of employment of employees done with malice or in bad faith. Indeed, moral damages are recoverable when the dismissal of an employee is attended by bad faith or fraud or constitutes an act oppressive to labor, or is done in a manner contrary to good morals, good customs or public policy. The term “bad faith” contemplates a “state of mind affirmatively operating with furtive design or with some motive of self-interest or will or for ulterior purpose.” The Supreme Court agreed with the ruling of both the NLRC and the Court of Appeals when they pronounced that there was no evidence on record that indicates commission of bad faith on the part of De Borja, the general manager of Lynvil, who was tasked with the supervision of the employees and the operation of the business. There is no proof that he imposed on Ariola, et al. the “por viaje” provision for purpose of effecting their summary dismissal.

Just cause is required for a valid dismissal. The Labor Code provides that an employer may terminate an employment based on fraud or willful breach of the trust reposed on the employee. Such breach is considered willful if it is done intentionally, knowingly, and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. It must also be based on substantial evidence and not on the employer’s whims or caprices or suspicions otherwise, the employee would eternally remain at the mercy of the employer. Loss of confidence must not be indiscriminately used as a shield by the employer against a claim that the dismissal of an employee was arbitrary. And, in order to constitute a just cause for dismissal, the act complained of must be work-related and shows that the employee concerned is unfit to continue working for the employer. In addition, loss of confidence as a just cause for termination of employment is premised on the fact that the employee concerned holds a position of responsibility, trust and confidence or that the employee concerned is entrusted with confidence in delicate matters, such as the handling or care and protection of the property and assets of the employer. The betrayal of this trust is the essence of the offense for which an employee is penalized. The Supreme Court found that breach of trust is present in this case, when Ariola (the captain), Alcovendas (Chief Mate), Calinao (Chief Engineer), Nubla (cook), Bañez (oiler), and Sebullen (bodegero) conspired with one another and stole “pampano” and “tangigue” fish and delivered them to The Supreme Court has held in Nicolas v. National Labor Relations Commission [327 Phil. 883, 886-887 (1996)] that a criminal conviction is not necessary to find just cause for employment termination. Otherwise stated, an employee’s acquittal in a criminal case, especially one that is grounded on the existence of reasonable doubt, will not preclude a determination in a labor case that he is guilty of acts inimical to the employer’s interests. In the reverse, the finding of probable cause is not followed by automatic adoption of such finding by the labor tribunals. In other words, whichever way the public prosecutor disposes of a complaint, the finding does not bind the labor tribunal. Lynvil contends that the filing of a criminal case before the Office of the Prosecutor is sufficient basis for a valid termination of employment based on serious misconduct and/or loss of trust and confidence. The Supreme Court held that Lynvil cannot argue that since the Office of the Prosecutor found probable cause for theft, the Labor Arbiter must follow the finding as a valid reason for the termination of respondents’ employment. The proof required for purposes that differ from one and the other are likewise different.

Prior Supreme Court decisions have laid two conditions for the validity of a fixed-contract agreement between the employer and employee: First, the fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress, or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent; or Second, it satisfactorily appears that the employer and the employee dealt with each other on more or less equal terms with no moral dominance exercised by the former or the latter. Lynvil contends that Ariola, et al. were employed under a fixed-term contract which expired at the end of the voyage. Contrarily, Ariola, et al. contend that they became regular employees by reason of their continuous hiring and performance of tasks necessary and desirable in the usual trade and business of Lynvil. Textually, the provision in the contract between Lynvil and Ariola, et al. that: “NA ako ay sumasang-ayon na maglingkod at gumawa ng mga gawain sang-ayon sa patakarang “por viaje” na magmumula sa pagalis sa Navotas papunta sa pangisdaan at pagbabalik sa pondohan ng lantsa sa Navotas, Metro Manila” is for a fixed period of employment. In the context, however, of the facts that: (1) Ariola, et al. were doing tasks necessarily to Lynvil’s fishing business with positions ranging from captain of the vessel to bodegero; (2) after the end of a trip, they will again be hired for another trip with new contracts; and (3) this arrangement continued for more than ten years, the clear intention is to go around the security of tenure of Ariola, et al. as

The law allows contracting arrangements for the performance of specific jobs, works or services, regardless of whether such activity is peripheral or core in nature. However, in order for such outsourcing to be valid, it must be made to an independent contractor because the current labor rules expressly prohibit labor-only contracting. There is labor-only contracting when the contractor or sub-contractor merely recruits, supplies or places workers to perform a job, work or service for a principaland any of the following elements are present: (i) The contractor or subcontractor does not have substantial capital or investment which relates to the job, work or service to be performed and the employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal; or (ii) The contractor does not exercise the right of control on the performance of the work of the contractual employee. Where ‘labor-only’ contracting exists, the law establishes an employer-employee relationship between the employer and the employees of the ‘labor-only’ contractor. The statute establishes this relationship for a comprehensive purpose: to prevent a circumvention of labor laws. The contractor is considered merely an agent of the principal employer and the latter is responsible to the employees of the labor-only contractor as if such employees had been directly employed by the principal employer. In the present case, petitioners, who were recruited by Promm-Gem and SAPS to work as merchandisers of respondent P&G, filed a complaint against the latter The Supreme Court has consistently held that so long as a company’s management prerogatives are exercised in good faith for the advancement of the employer’s interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, the Court will uphold them. In the instant case, ABS-CBN validly justified the implementation of Policy No. HR-ER-016. It is well within its rights to ensure that it maintains its objectivity and credibility and freeing itself from any appearance of impartiality so that the confidence of the viewing and listening public in it will not be in any way eroded. Even as the law is solicitous of the welfare of the employees, it must also protect the right of an employer to exercise what are clearly management prerogatives. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied.

Petitioner Yap was employed as an electrician for respondent’s vessel under a 12-month contract. He was found to be illegally terminated with nine months remaining on his contract term, and was declared to be entitled to his salaries for the balance of his contract. Respondents claim that the tanker allowance should be excluded from the definition of the term “salary.” The Supreme Court, after examining the relevant clauses of the contract, rejected respondent’s claim. The word salaries in Section 10 (5) does not include overtime and leave pay. For seafarers, DOLE Department Order No. 33, series 1996, provides a Standard Employment Contract of Seafarers, in which salary is understood as the basic wage, exclusive of overtime, leave pay and other bonuses. A close perusal of the contract reveals that the tanker allowance of US$130.00 was not categorized as a bonus but was rather encapsulated in the basic salary clause, hence, forming part of the basic salary of petitioner. If respondents intended it differently, the contract per se should have indicated that said allowance does not form part of the basic salary or, simply, the contract should have separated it from the basic salary clause.

Section 10 of Republic Act No. 8042 (Migrant Workers Act) provides for money claims in cases of unjust termination of employment contracts: In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, the workers shall be entitled to the full reimbursement of his placement fee with interest of twelve percent (12%) per annum, plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less. The Migrant Workers Act provides that salaries for the unexpired portion of the employment contract or three (3) months for every year of the unexpired term, whichever is less, shall be awarded to the overseas Filipino worker, in cases of illegal dismissal. However, in 24 March 2009, Serrano v. Gallant Maritime Services and Marlow Navigation Co. Inc. (G.R. No. 167614), the Court, in an En Banc Decision, declared unconstitutional the clause “or for three months for every year of the unexpired term, whichever is less” and awarded the entire unexpired portion of the employment contract to the overseas Filipino worker. On 8 March 2010, however, Section 7 of Republic Act No. 10022 (RA 10022) amended Section 10 of the Migrant Workers Act, and once again reiterated the provision of awarding the unexpired portion of the employent contract or three (3) months for every year of the unexpired term, whichever is less. Nevertheless, since the termination occurred on January 1999 before the passage of the amendatory RA 10022, the Supreme Court applied RA 8042, without touching on the

Respondents alleged that petitioner-corporation failed to pay them their full compensation. The Labor Arbiter granted their monetary claims but the NLRC reversed the award considering that the petitioner-corporation submitted copies of payrolls, which it annexed to its memorandum on appeal, showing full payment. The general rule is that the burden rests on the employer to prove payment, rather than on the employee to prove non-payment. The reason for the rule is that the pertinent personnel files, payrolls, records, remittances, and other similar documents — which will show that overtime, differentials, service incentive leave, and other claims of the worker have been paid — are not in the possession of the worker but in the custody and absolute control of the employer. In this case, the submission by petitioner-corporation of the time records and payrolls only when the case was on appeal before the NLRC is contrary to the elementary precepts of justice and fair play. Respondents were not given the opportunity to check the authenticity and correctness of the evidence submitted on appeal. Thus, the Supreme Court held that the monetary claims of respondents should be granted. It is a time-honored principle that if doubts exist between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter. It is the rule in controversies between a laborer and his master that doubts reasonably arising from the evidence, or in the interpretation of agreements and writing, should be resolved in the former’s favor. Petitioner filed a complaint for illegal dismissal against respondent. Finding that petitioner had voluntarily resigned, the Labor Arbiter dismissed the complaint against respondent, but ordered the latter to pay P18,000.00 by way of financial assistance. Respondents interposed an appeal with the National Labor Relations Commission (NLRC), purely for the purpose of questioning the validity of the grant of financial assistance made by the Labor Arbiter. Instead, the NLRC ruled that petitioner was illegally dismissed and was entitled to separation pay. The Court of Appeals (CA) held that it was grave abuse of discretion for the NLRC to rule on the issue of illegal dismissal when the only issue raised to it on appeal was the propriety of the award of financial assistance. The Supreme Court sustained the view of the CA, reasoning that Section 4(d), Rule VI of the 2005 Revised Rules of Procedure of the NLRC expressly provides that, on appeal, the NLRC shall limit itself only to the specific issues that were elevated for review. In the case at bar, the NLRC evidently went against its own rules of procedure when it passed upon the issue of illegal dismissal although this question was not raised by respondents in their appeal.

Respondents filed an illegal dismissal case against Premier Allied and Contracting Services, Inc. (PACSI) and its President, the petitioner. PACSI and the petitioner were held liable to pay the respondents separation pay and attorney’s fees. To execute this judgment, NLRC sheriff issued a Notice of Sale of a property with TCT in the name of the petitioner and his wife. Petitioner filed an action for prohibition and damages with prayer for the issuance of a temporary restraining order (TRO) before the Regional Trial Court (RTC). The Court ruled that the RTC lacks jurisdiction to resolve the matter. The Court has long recognized that regular courts have no jurisdiction to hear and decide questions which arise from and are incidental to the enforcement of decisions, orders, or awards rendered in labor cases by appropriate officers and tribunals of the Department of Labor and Employment. To hold otherwise is to sanction splitting of jurisdiction which is obnoxious to the orderly administration of justice. The NLRC Manual on the Execution of Judgment deals specifically with third-party claims in cases brought before that body. It defines a third-party claim as one where a person, not a party to the case, asserts title to or right to the possession of the property levied upon. It also sets out the procedure for the filing of a third-party claim, to wit: “such person shall make an affidavit of his title thereto or right to the possession thereof, stating the grounds of such right or title and shall file the same with the sheriff and copies thereof served upon the Labor Arbiter or proper officer issuing the writ and upon the prevailing party.” In the present case, there is no In the context of these facts — (1) Ariola, et al. were doing tasks necessary to Lynvil’s fishing business with positions ranging from captain of the vessel to bodegero; (2) after the end of a trip, they will again be hired for another trip with new contracts; and (3) this arrangement continued for more than ten years – the Court believed that Lynvil intended to go around the security of tenure of Ariola, et al. as regular employees. The Court held that by the express provisions of the second paragraph of Article 280 which cover casual employment, Ariola, et al. had become regular employees of Lynvil.

A writ of certiorari is a remedy to correct errors of jurisdiction, for which reason it must clearly show that the public respondent has no jurisdiction to issue an order or to render a decision. Rule 65 of the Rules of Court has instituted the petition for certiorari to correct acts of any tribunal, board or officer exercising judicial or quasi-judicial functions with grave abuse of discretion amounting to lack or excess of jurisdiction. This remedy serves as a check on acts, either of excess or passivity, that constitute grave abuse of discretion of a judicial or quasi-judicial function. In this case, the SC found that the CA proceeded to review the records and to rule on issues that were no longer disputed during the appeal to the NLRC, such as the existence of an employer-employee relationship. The pivotal issue before the NLRC was whether petitioner’s telling respondent to take a rest, or to have a break, was already a positive act of dismissing him. This issue was not discussed by the CA. The SC reviewed the NLRC Resolution that reversed the LA Decision and found nothing in it that was whimsical, unreasonable or patently violative of the law. It was the CA which erred in finding faults that were inexistent in the NLRC Resolution.

Under Article 218 the Labor Code, the NLRC (and the labor arbiters) may hold any offending party in contempt, directly or indirectly, and impose appropriate penalties in accordance with law. The penalty for direct contempt consists of either imprisonment or fine, the degree or amount depends on whether the contempt is against the Commission or the labor arbiter. The Labor Code, however, requires the labor arbiter or the Commission to deal with indirect contempt in the manner prescribed under Rule 71 of the Rules of Court. Rule 71 of the Rules of Court does not require the labor arbiter or the NLRC to initiate indirect contempt proceedings before the trial court. This mode is to be observed only when there is no law granting them contempt powers. As is clear under Article 218(d) of the Labor Code, the labor arbiter or the Commission is empowered or has jurisdiction to hold the offending party or parties in direct or indirect contempt. Robosa, et al., therefore, have not improperly brought the indirect contempt charges against the respondents before the NLRC.

Factual findings of labor officials, who are deemed to have acquired expertise in matters within their jurisdiction, are generally accorded not only respect but even finality by the courts when supported by substantial evidence, i.e., the amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. But these findings are not infallible. When there is a showing that they were arrived at arbitrarily or in disregard of the evidence on record, they may be examined by the courts. The CA can grant the petition for certiorari if it finds that the NLRC, in its assailed decision or resolution, made a factual finding not supported by substantial evidence. Thus, it is within the jurisdiction of the CA to review the findings of the NLRC.

It is a well-entrenched rule that findings of facts of the NLRC, affirming those of the Labor Arbiter, are accorded respect and due consideration when supported by substantial evidence. The Supreme Court, however, found that the doctrine of great respect and finality has no application to the case at bar. The Labor Arbiter dismissed Arnaiz, et al.’s complaints on mere technicality. The NLRC, upon appeal, then came up with three divergent rulings. At first, it remanded the case to the Labor Arbiter. However, in a subsequent resolution, it decided to resolve the case on the merits by ruling that Arnaiz, et al. were constructively dismissed. But later on, it again reversed itself in its third and final resolution of the case and ruled in favor of Julie’s bakeshop. Therefore, contrary to Reyes’s claim, the NLRC did not, on any occasion, affirm any factual findings of the Labor Arbiter. The Court of Appeals is thus correct in reviewing the entire records of the case to determine which findings of the NLRC is sound and in accordance with law. Besides, the Court of Appeals may still resolve factual issues by express mandate of the law despite the respect given to administrative findings of fact.

On the issue of the propriety of entertaining the Petition for Certiorari despite the prescribed Motion for Reconsideration with the NLRC, the SC found that the CA committed error when it entertained the petition for certiorari and explained that when respondent failed to file a Motion for Reconsideration of the NLRC’s 30 November 2006 Resolution within the reglementary period, the Resolution attained finality and could no longer be modified by the Court of Appeals. Untimeliness in filing motions or petitions is not a mere technical or procedural defect, as leniency regarding this requirement will impinge on the right of the winning litigant to peace of mind resulting from the laying to rest of the controversy.

While the general rule is that the certificate of non-forum shopping must be signed by all the plaintiffs in a case and the signature of only one of them is insufficient, the Court has stressed that the rules on forum shopping, which were designed to promote and facilitate the orderly administration of justice, should not be interpreted with such absolute literalness as to subvert its own ultimate and legitimate objective. Strict compliance with the provision regarding the certificate of non-forum shopping underscores its mandatory nature in that the certification cannot be altogether dispensed with or its requirements completely disregarded. It does not, however, prohibit substantial compliance therewith under justifiable circumstances, considering especially that although it is obligatory, it is not jurisdictional. In a number of cases, the Court has consistently held that when all the petitioners share a common interest and invoke a common cause of action or defense, the signature of only one of them in the certification against forum shopping substantially complies with the rules.

The respondent workers sought that the petition be dismissed outright for the petitioners’ failure to attach to the petition a copy of the Production and Work Schedule and a copy of the compromise agreement allegedly entered into — material portions of the record that should accompany and support the petition, pursuant to Section 4, Rule 45 of the Rules of Court. In Mariners Polytechnic Colleges Foundation, Inc. v. Arturo J. Garchitorena the Court held that the phrase “of the pleadings and other material portions of the record xxx as would support the allegation of the petition clearly contemplates the exercise of discretion on the part of the petitioner in the selection of documents that are deemed to be relevant to the petition. The crucial issue to consider then is whether or not the documents accompanying the petition sufficiently supported the allegations therein.” The failure to attach copy of the subject documents is not fatal as the challenged CA decision clearly summarized the labor tribunal’s rulings.

The verification requirement is deemed substantially complied with when some of the parties who undoubtedly have sufficient knowledge and belief to swear to the truth of the allegations in the petition had signed the same. Such verification is deemed a sufficient assurance that the matters alleged in the petition have been made in good faith or are true and correct, and not merely speculative. In any case, the settled rule is that a pleading which is required by the Rules of Court to be verified, may be given due course even without a verification if the circumstances warrant the suspension of the rules in the interest of justice. Indeed, the absence of a verification is not jurisdictional, but only a formal defect, which does not of itself justify a court in refusing to allow and act on a case. Hence, the failure of some of the respondents to sign the verification attached to their Memorandum of Appeal filed with the NLRC is not fatal to their cause of action.

Petitioner filed a complaint against respondent for collection of excess placement fee defined in Article 34(a) of the Labor Code. Petitioner presented as her evidence a promissory note reflecting excessive fees and testified as to the deductions made by her foreign employer. On the other hand, respondent presented an acknowledgment receipt reflecting collection of an amount authorized by POEA. The Court held that the pieces of evidence presented by petitioner are not substantial enough to show that the respondent collected from her more than the allowable placement fee. In proceedings before administrative and quasi-judicial agencies, the quantum of evidence required to establish a fact is substantial evidence, or that level of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. The Court gave more credence to respondent’s evidence consisting of the acknowledgment receipt showing the amount paid by petitioner and received by respondent. A receipt is a written and signed acknowledgment that money or goods have been delivered. Although a receipt is not conclusive evidence, an exhaustive review of the records of the case fails to disclose any other evidence sufficient and strong enough to overturn the acknowledgment embodied in respondent’s receipt as to the amount it actually received from petitioner. Having failed to adduce sufficient rebuttal evidence, petitioner is bound by the contents of the receipt issued by respondent. The subject receipt remains as the primary or best evidence. The promissory note presented by petitioner cannot be considered as adequate Verification of a pleading is a formal, not jurisdictional, requirement intended to secure the assurance that the matters alleged in a pleading are true and correct. It is deemed substantially complied with when one who has ample knowledge to swear to the truth of the allegations in the complaint or petition signs the verification, and when matters alleged in the petition have been made in good faith or are true and correct. In this case, the Supreme Court found that the petition’s verification substantially complied with the requirements of the rules. The SPA authorized Bello-Ona to represent Bello in the case from which the present petition with the Supreme Court originated. As the daughter of Bello, Bello-Ona is deemed to have sufficient knowledge to swear to the truth of the allegations in the petition, which are matters of record in the lower tribunals and the appellate court.

Section 2, Rule I, Book VI of the Labor Code’s Implementing Rules and Regulations provides: “If the termination is brought about by the completion of a contract or phase thereof, or by failure of an employee to meet the standards of the employer in the case of probationary employment, it shall be sufficient that a written notice is served the employee within a reasonable time from the effective date of termination.” Dalangin was hired by Canadian Opportunities as Immigration and Legal Manager, subject to a probationary period of six months. One month after hiring Dalangin, the company terminated his employment, declaring him “unfit” and “unqualified” to continue as Immigration and Legal Manager, for reasons which included obstinacy and utter disregard of company policies. Propensity to take prolonged and extended lunch breaks, shows no interest in familiarizing oneself with the policies and objectives, lack of concern for the company’s interest despite having just been employed in the company (Declined to attend company sponsored activities, seminars intended to familiarize company employees with Management objectives and enhancement of company interest and objectives), lack of enthusiasm toward work, and lack of interest in fostering relationship with his co-employees. The company contends that it complied with the rule on procedural due process when it asked Dalangin, through a Memorandum, to explain why he could not attend the seminar. When he failed to submit his explanation, the company served him a notice the following day terminating his employment. According to the The essence of a probationary period of employment fundamentally lies in the purpose or objective of both the employer and the employee during the period. While the employer observes the fitness, propriety and efficiency of a probationer to ascertain whether he is qualified for permanent employment, the latter seeks to prove to the former that he has the qualifications to meet the reasonable standards for permanent employment. The “trial period” or the length of time the probationary employee remains on probation depends on the parties’ agreement, but it shall not exceed six (6) months under Article 281 of the Labor Code. The Supreme Court found substantial evidence indicating that the company was justified in terminating Dalangin’s probationary employment. Dalangin admitted in compulsory arbitration that the proximate cause for his dismissal was his refusal to attend the company’s “Values Formation Seminar” scheduled for October 27, 2001, a Saturday. He refused to attend the seminar after he learned that it had no relation to his duties, as he claimed, and that he had to leave at 2:00 p.m. because he wanted to be with his family in the province. When the Chief Operations Officer, insisted that he attend the seminar to encourage his co-employees to attend, he stood pat on not attending, arguing that marked differences exist between their positions and duties, and insinuating that he did not want to join the other employees. He also questioned the scheduled 2:00 p.m. seminars on Saturdays as they were not supposed to be doing a company activity beyond 2:00 p.m. He considers 2:00 p.m.

It is settled that even if probationary employees do not enjoy permanent status, they are accorded the constitutional protection of security of tenure. This means they may only be terminated for a just cause or when they otherwise fail to qualify as regular employees in accordance with reasonable standards made known to them by the employer at the time of their engagement. In this case, the justification given by the petitioners for Sy’s dismissal was her alleged failure to qualify by the company’s standard. Other than the general allegation that said standards were made known to her at the time of her employment, however, no evidence, documentary or otherwise, was presented to substantiate the same. Neither was there any performance evaluation presented to prove that indeed hers was unsatisfactory. Hence, for failure of the petitioners to support their claim of unsatisfactory performance by Sy, the SC held that Sy’s employment was unjustly terminated to prevent her from acquiring a regular status in circumvention of the law on security of tenure.

Even on the assumption that Sy indeed failed to meet the standards set by the petitioner-employer and made known to the former at the time of her engagement, still, the termination was flawed for failure to give the required notice to Sy. Section 2, Rule I, Book VI of the Implementing Rules provides that: “If the termination is brought about by the completion of a contract or phase thereof, or by failure of an employee to meet the standards of the employer in the case of probationary employment, it shall be sufficient that a written notice is served the employee, within a reasonable time from the effective date of termination.”

Petitioner was dismissed by respondent-company due to redundancy. However, it failed to provide the Department of Labor and Employment with a written notice regarding petitioner’s termination. The notice of termination was also not properly served on the petitioner. Further, a reading of the notice shows that respondent-company failed to properly inform the petitioner of the grounds for his termination. There are two aspects which characterize the concept of due process under the Labor Code: one is substantive — whether the termination of employment was based on the provision of the Labor Code or in accordance with the prevailing jurisprudence; the other is procedural — the manner in which the dismissal was effected. There is a psychological effect or a stigma in immediately finding one’s self laid off from work. This is why our labor laws have provided for procedural due process. While employers have the right to terminate employees it can no longer sustain, our laws also recognize the employee’s right to be properly informed of the impending termination of his employment. Though the failure of respondent-company to comply with the notice requirements under the Labor Code did not affect the validity of the dismissal, petitioner is however entitled to nominal damages in addition to his separation pay.

The refusal of the Court of Appeals to consider the petition was the absence of a duplicate original or certified true copy of the assailed NLRC decision, in violation of Section 3, Rule 46 of the Rules of Court (in relation to Section 1, Rule 65). The company, however, corrected the procedural lapse by attaching a certified copy of the NLRC decision to its motion for reconsideration. The Supreme Court found that the CA precipitately denied the petition for certiorari based on an overly rigid application of the rules of procedure. In effect, it sacrificed substance to form in a situation where the petitioners’ recourse was not patently frivolous or meritless. Thus, the case was remanded to the NLRC for resolution of its appeal.

Ordinarily, rules of procedure are strictly enforced by courts in order to impart stability in the legal system. However, in not a few instances, the Supreme Court has relaxed the rigid application of the rules of procedure to afford the parties the opportunity to fully ventilate their cases on the merits. This is in line with the time honored principle that cases should be decided only after giving all the parties the chance to argue their causes and defenses. In that way, the ends of justice would be better served. For indeed, the general objective of procedure is to facilitate the application of justice to the rival claims of contending parties, bearing always in mind that procedure is not to hinder but to promote the administration of justice. In Ong Lim Sing, Jr. v. FEB Leasing and Finance Corporation (G.R. No. 168115, June 8, 2007), the Supreme Court ruled: Courts have the prerogative to relax procedural rules of even the most mandatory character, mindful of the duty to reconcile both the need to speedily put an end to litigation and the parties’ right to due process. In numerous cases, this Court has allowed liberal construction of the rules when to do so would serve the demands of substantial justice and equity. x x x Indeed the prevailing trend is to accord party litigants the amplest opportunity for the proper and just determination of their causes, free from the constraints of needless technicalities. In this case, besides the fact that a denial of the recourse to the Court of Appeals would serve more to perpetuate an injustice and violation of Teng’s rights under our labor laws, the Supreme Court found that as correctly held by the Court of

Respondent was a casual teller who was dismissed from service by petitioner without being formally charged. On appeal, the Civil Service Commission (CSC) upheld the dismissal and reasoned that respondent was a casual employee, and therefore her services may be terminated at any time, without need of a just cause. Upon review, both the Court of Appeals and the Supreme Court found that respondent was illegally terminated. The Supreme Court recognized its pronouncement in a recent case that “Even a casual or temporary employee enjoys security of tenure and cannot be dismissed except for cause enumerated in Sec. 22, Rule XIV of the Omnibus Civil Service Rules and Regulations and other pertinent laws.” However, the Court also went on to state that, despite this new ruling on casual employees, it is not the intention of the Court to make the status of a casual employee at par with that of a regular employee, who enjoys permanence of employment. The rule is still that casual employment will cease automatically at the end of the period unless renewed. Casual employees may also be terminated anytime though subject to certain conditions or qualifications with reference to the CSC Form No. 001. Thus, they may be laid-off anytime before the expiration of the employment period provided any of the following occurs: (1) when their services are no longer needed; (2) funds are no longer available; (3) the project has already been completed/finished; or (4) their performance are below par.Respondent was a casual teller who, having been found guilty of ‘Discourtesy in the Course of Official Duties’ and of ‘Grave Misconduct’, was dismissed from service by petitioner. On appeal, the Civil Service Commission (CSC) ruled that despite lapses in procedural due process committed by petitioner employer, the dismissal was proper since respondent belonged to the category of a casual employee which does not enjoy security of tenure. Hence, she may be separated from service at any time, there being no need to show cause. The Court of Appeals disagreed and declared the dismissal illegal. The Supreme Court affirmed the findings of the Court of Appeals. In doing so, the Court relied on Section 3(2), Article XIII of the Constitution which guarantees the rights of all workers to security of tenure. The Court also recognized its pronouncement in a recent case that “Even a casual or temporary employee enjoys security of tenure and cannot be dismissed except for cause enumerated in Sec. 22, Rule XIV of the Omnibus Civil Service Rules and Regulations and other pertinent laws.”

Respondents were terminated from employment due to retrenchment implemented by petitioner. Upon their dismissal, the respondents signed individual “Release Waiver and Quitclaim.” The Court ruled that a waiver or quitclaim is a valid and binding agreement between the parties, provided that it constitutes a credible and reasonable settlement, and that the one accomplishing it has done so voluntarily and with a full understanding of its import. In this case, the respondents were sufficiently apprised of their rights under the waivers and quitclaims that they signed. Each document contained the signatures of the union president and its counsel, which proved that respondents were duly assisted when they signed the waivers and quitclaims. Hence, the Court upheld the validity of the waivers and quitclaims signed by the respondents in this case.

Petitioner appealed an adverse decision to the BLR. BLR Director inhibited himself from the case because he had been a former counsel of respondent. In view of the inhibition, DOLE Secretary took cognizance of the appeal. Jurisdiction to review the decision of the Regional Director lies with the BLR. Once jurisdiction is acquired by the court, it remains with it until the full termination of the case. Thus, jurisdiction remained with the BLR despite the BLR Director’s inhibition. When the DOLE Secretary resolved the appeal, she merely stepped into the shoes of the BLR Director and performed a function that the latter could not himself perform. She did so pursuant to her power of supervision and control over the BLR.

The Labor Arbiter and the NLRC held that petitioner employer illegally dismissed the respondent employee. On appeal, the Court of Appeals reversed the decision and ruled that the dismissal was valid. However, the Court of Appeals ordered petitioner employer to pay respondent employee her salary from the date of the Labor Arbiter’s decision ordering her reinstatement until the Court of Appeals rendered its decision declaring the dismissal valid. Petitioner employer questioned the order and refused to pay. The Court held that even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court. On the other hand, if the employee has been reinstated during the appeal period and such reinstatement order is reversed with finality, the employee is not required to reimburse whatever salary he received, more so, if he actually rendered services during the period. The payment of such wages cannot be deemed as unjust enrichment on respondent’s part.

Employees who are illegally dismissed are entitled to full backwages, inclusive of allowances and other benefits or their monetary equivalent, computed from the time their actual compensation was withheld from them up to the time of their actual reinstatement. But if reinstatement is no longer possible, the backwages shall be computed from the time of their illegal termination up to the finality of the decision. Thus, when there is an order of reinstatement, the computation of backwages shall be reckoned from the time of illegal dismissal up to the time that the employee is actually reinstated to his former position. Pursuant to the order of reinstatement rendered by the Labor Arbiter, the Bank of Lubao sent Manabat a letter requiring him to report back to work on May 4, 2007. Notwithstanding the said letter, Manabat opted not to report for work. Thus, it is but fair that the backwages to be awarded to Manabat should be computed from the time that he was illegally dismissed until the time when he was required to report for work, i.e. from September 1, 2005 until May 4, 2007.

Under the law and prevailing jurisprudence, an illegally dismissed employee is entitled to reinstatement as a matter of right. However, if reinstatement would only exacerbate the tension and strained relations between the parties, or where the relationship between the employer and the employee has been unduly strained by reason of their irreconcilable differences, particularly where the illegally dismissed employee held a managerial or key position in the company, it would be more prudent to order payment of separation pay instead of reinstatement. Under the doctrine of strained relations, the payment of separation pay is considered an acceptable alternative to reinstatement when the latter option is no longer desirable or viable. On one hand, such payment liberates the employee from what could be a highly oppressive work environment. On the other hand, it releases the employer from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer trust. In such cases, it should be proved that the employee concerned occupies a position where he enjoys the trust and confidence of his employer; and that it is likely that if reinstated, an atmosphere of antipathy and antagonism may be generated as to adversely affect the efficiency and productivity of the employee concerned. In the present case, the Supreme Court found that the relations between the parties had been already strained thereby justifying the grant of separation pay in lieu of reinstatement in favor of Manabat. Manabat’s reinstatement to his former position would only serve to intensify the atmosphere The Labor Arbiter held that petitioner employer illegally dismissed the respondent employee. Pending its appeal, petitioner employer failed to immediately admit respondent employee back to work despite of an order of reinstatement. The Court held that that the provision of Article 223 is clear that an award by the Labor Arbiter for reinstatement shall be immediately executory even pending appeal and the posting of a bond by the employer shall not stay the execution for reinstatement. The legislative intent is to make an award of reinstatement immediately enforceable, even pending appeal. To require the application for and issuance of a writ of execution as prerequisites for the execution of a reinstatement award would certainly betray the executory nature of a reinstatement order or award. In the case at bar, petitioner employer did not immediately admit respondent employee back to work which, according to the law, should have been done as soon as an order or award of reinstatement is handed down by the Labor Arbiter without need for the issuance of a writ of execution.

Due to the order of reinstatement issued by the Labor Arbiter, petitioner employer sent a letter to the respondent employee to report back to work and assigned her to a new location. The Court held that such is not a bona fide reinstatement. Under Article 223 of the Labor Code, an employee entitled to reinstatement shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. It is established in jurisprudence that reinstatement means restoration to a state or condition from which one had been removed or separated. The person reinstated assumes the position he had occupied prior to his dismissal. Reinstatement presupposes that the previous position from which one had been removed still exists, or that there is an unfilled position which is substantially equivalent or of similar nature as the one previously occupied by the employee. Applying the foregoing principle, it cannot be said that petitioner employer has a clear intent to reinstate respondent employee to her former position under the same terms and conditions nor to a substantially equivalent position. To begin with, the return-to-work order petitioner sent to respondent employee is silent with regard to the position it wanted the respondent employee to assume. Moreover, a transfer of work assignment without any justification therefor, even if respondent employee would be presumably doing the same job with the same pay, cannot be deemed as faithful compliance with the reinstatement order. Petitioner issued a Memorandum informing all its employees of the decision of the company’s Board of Directors to downsize and reorganize its business operations due to the change of its corporate structure. Petitioner served the individual notice of termination on its employees on May 14, 2004 or 30 days before the effective date of their termination on 13 June 2004, while it submitted the notice of termination to the Department of Labor and Employment only on 26 May 2004, short of the one-month prior notice requirement under Article 283 of the Labor Code. The Court held that petitioners’ failure to comply with the one-month notice to the DOLE is only a procedural infirmity and does not render the retrenchment illegal. When the dismissal is for a just cause, the absence of proper notice will not nullify the dismissal or render it illegal or ineffectual. Instead, the employer should indemnify the employee for violation of his statutory rights.

In 2004, the petitioner had to retrench and consequently terminate the employment of the respondents. Respondents questioned the validity of the retrenchment, and alleged that though petitioner’s financial statements in 2001 and 2002 reflected losses, it declared net income in 2003. The Court ruled that the fact that there was a net income in 2003 does mean that there was no valid reason for the retrenchment. Records showed that the net income of P6,185,707.05 in 2003 was not enough to allow petitioners to recover the loss of P52,904,297.88 which it suffered in 2002. Article 283 of the Labor Code recognizes retrenchment to prevent losses as a right of the management to meet clear and continuing economic threats or during periods of economic recession to prevent losses. There is no need for the employer to wait for substantial losses to materialize before exercising ultimate and drastic option to prevent such losses.

Petitioner claimed disability benefits under a Collective Bargaining Agreement that the respondent employer entered into with a foreign union. The Court of Appeals refused to admit the evidence of petitioner showing his membership in the union on the ground that it was submitted only with the Motion for Reconsideration. The Supreme Court, in agreeing to examine the evidence belatedly submitted by petitioner, pointed out that technical rules of procedure shall be liberally construed in favor of the working class in accordance with the demands of substantial justice. Rules of procedure and evidence should not be applied in a very rigid and technical sense in labor cases in order that technicalities would not stand in the way of equitably and completely resolving the rights and obligations of the parties.

An employment contract, like any other contract, is perfected at the moment (1) the parties come to agree upon its terms; and (2) concur in the essential elements thereof: (a) consent of the contracting parties, (b) object certain which is the subject matter of the contract, and (c) cause of the obligation. The object of the contract was the rendition of service by Fantonial on board the vessel for which service he would be paid the salary agreed upon. In this case, the employment contract was perfected on January 15, 2000 when it was signed by the parties who entered into the contract in behalf of their principal. However, the employment relationship never commenced since Fantonial was not allowed to leave on January 17, 2000 and go on board the vessel M/V AUK in Germany on the ground that he was not yet declared fit to work on the day of his scheduled departure. But, even if no employer-employee relationship commenced, there was, contemporaneous with the perfection of the employment contract, the birth of certain rights and obligations, the breach of which may give rise to a cause of action against the erring party.

The Secretary of Labor is empowered to give arbitral awards in the exercise of his authority to assume jurisdiction over labor disputes under Art. 263 (g) of the Labor Code. In the present case, the Supreme Court upheld the authority of the Secretary of Labor to impose arbitral awards higher than what was supposedly agreed upon in the Memorandum of Agreement (MOA) between the parties. The Court further stated that while an arbitral award cannot per se be categorized as an agreement voluntarily entered into by the parties because it requires the interference and imposing power of the State thru the Secretary of Labor when he assumes jurisdiction, the award can be considered as an approximation of a collective bargaining agreement which would otherwise have been entered into by the parties. Hence, it has the force and effect of a valid contract obligation between the parties.

Petitioner Yap was employed as an electrician for respondent’s vessel under a 12-month contract. He was found to be illegally terminated with nine months remaining on his contract term. The Court of Appeals (CA) awarded petitioner salaries for three months as provided under Section 10 of Republic Act No. 8042. On certiorari, the Supreme Court reversed the CA and declared that petitioner was entitled to his salaries for the full unexpired portion of his contract. The Court has previously declared in Serrano v. Gallant Maritime Services, Inc. (2009) that the clause “or for three months for every year of the unexpired term, whichever is less” provided in the 5th paragraph of Section 10 of R.A. No. 8042 is unconstitutional for being violative of the rights of Overseas Filipino Workers (OFWs) to equal protection of the laws. The subject clause contains a suspect classification in that, in the computation of the monetary benefits of fixed-term employees who are illegally discharged, it imposes a 3-month cap on the claim of OFWs with an unexpired portion of one year or more in their contracts, but none on the claims of other OFWs or local workers with fixed-term employment. The subject clause singles out one classification of OFWs and burdens it with a peculiar disadvantage. Moreover, the subject clause does not state or imply any definitive governmental purpose; hence, the same violates not just petitioner’s right to equal protection, but also his right to substantive due process under Section 1, Article III of the Constitution. Separation pay may be given as a form of financial assistance when a worker is dismissed in cases such as the installation of labor-saving devices, redundancy, retrenchment to prevent losses, closing or cessation of operation of the establishment, or in case the employee was found to have been suffering from a disease such that his continued employment is prohibited by law. It is a statutory right defined as the amount that an employee receives at the time of his severance from the service and is designed to provide the employee with the wherewithal during the period that he is looking for another employment. It is oriented towards the immediate future, the transitional period the dismissed employee must undergo before locating a replacement job. As a general rule, when just causes for terminating the services of an employee exist, the employee is not entitled to separation pay because lawbreakers should not benefit from their illegal acts. The rule, however, is subject to exceptions. Here, not only did the Court declare the strike illegal, rather, it also found the Union officers to have knowingly participated in the illegal strike. Worse, the Union members committed prohibited acts during the strike. Thus, as the Court has concluded in other cases it has previously decided, such Union officers are not entitled to the award of separation pay in the form of financial assistance.

There is no question that the May 6, 2002 strike was illegal, first, because when Kilusang Manggagawa ng LGS, Magdala Multipurpose and Livelihood Cooperative (KMLMS) filed the notice of strike on March 5 or 14, 2002, it had not yet acquired legal personality and, thus, could not legally represent the eventual union and its members. And second, similarly, when KMLMS conducted the strike-vote on April 8, 2002, there was still no union to speak of, since KMLMS only acquired legal personality as an independent legitimate labor organization only on April 9, 2002 or the day after it conducted the strike-vote. Consequently, the mandatory notice of strike and the conduct of the strike-vote report were ineffective for having been filed and conducted before KMLMS acquired legal personality as a legitimate labor organization, violating Art. 263(c), (d) and (f) of the Labor Code and Rule XXII, Book V of the Omnibus Rules Implementing the Labor Code. It is, thus, clear that KMLMS did not comply with the mandatory requirement of law and implementing rules on possession of a legal personality as a legitimate labor organization.

Petitioner employer ordered the respondent employee to prepare checks for payment of petitioner’s obligations. Respondent did not immediately comply with the instruction since petitioner employer has no sufficient funds to cover the checks. Petitioner employer dismissed respondent employee for willful disobedience. The Court held that respondent employee was illegally dismissed. The offense of willful disobedience requires the concurrence of two (2) requisites: (1) the employee’s assailed conduct must have been willful, that is characterized by a wrongful and perverse attitude; and (2) the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge. Though there is nothing unlawful in the directive of petitioner employer to prepare checks in payment of petitioner’s obligations, respondent employee’s initial reluctance to prepare the checks, although seemingly disrespectful and defiant, was for honest and well intentioned reasons. Protecting the petitioner employer from liability under the Bouncing Checks Law was foremost in her mind. It was not wrongful or willful. Neither can it be considered an obstinate defiance of company authority. The Court takes into consideration that respondent employee, despite her initial reluctance, eventually did prepare the checks on the same day she was tasked to do it.

Petitioner Juliet Apacible was employed as Assistant Area Sales Manager for respondent’s Cebu operations. She was informed that she would be transferred to the Pasig office on account of the ongoing reorganization. Petitioner’s repeated refusal to comply with the transfer order was treated by respondent as insubordination and grounds for her dismissal. The Labor Arbiter, the NLRC and the Court of Appeals all found that petitioner was justly dismissed from employment. The NLRC awarded separation pay as financial assistance, however, noting that petitioner’s obstinacy was upon the advice of her counsel and, therefore, there was a modicum of good faith on her part. On appeal, the Court of Appeals (CA) deleted the award of separation pay. The Supreme Court upheld the CA and declared that the award of financial assistance shall not be given to validly terminated employees, whose offenses are iniquitous or reflective of some depravity in their moral character. When the employee commits an act of dishonesty, depravity, or iniquity, the grant of financial assistance is misplaced compassion. In this case, petitioner’s adamant refusal to transfer, coupled with her failure to heed the order for her to return the company vehicle assigned to her and, more importantly, allowing her counsel to write letters couched in harsh language to her superiors unquestionably show that she was guilty of insubordination, hence, not entitled to the award of separation pay.

Petitioner claims he was dismissed on the ground of illness and was therefore entitled to separation benefits under Article 284 of the Labor Code. The Supreme Court (SC) disagreed and instead found that petitioner was the one who initiated the severance of his employment relations on the ground that his health was failing. In fact, he rejected respondent’s offer for him to return to work. The SC declared that this is tantamount to resignation. Resignation is defined as the voluntary act of an employee who finds himself in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the service and he has no other choice but to disassociate himself from his employment.

The CA was correct in stating that when the violation of company policy or breach of company rules and regulations is tolerated by management, it cannot serve as a basis for termination. This principle, however, only applies when the breach or violation is one which neither amounts to nor involves fraud or illegal activities. In such a case, one cannot evade liability or culpability based on obedience to the corporate chain of command. In this case, Padao, in affixing his signature on the fraudulent reports, attested to the falsehoods contained therein. Moreover, by doing so, he repeatedly failed to perform his duties as a credit investigator. Thus, the termination of his employment is justified.

Petitioners aver that respondents were merely transferred to a new post wherein the wages are adjusted to the current minimum wage standards. They maintain that the respondents voluntarily abandoned their jobs when they failed to report for duty in the new location. Assuming that this contention was true, the Supreme Court held that there was no abandonment of work. For there to be abandonment: first, there should be a failure of the employee to report for work without a valid or justifiable reason, and second, there should be a showing that the employee intended to sever the employer-employee relationship. The fact that petitioners filed a complaint for illegal dismissal is indicative of their intention to remain employed with private respondent. On the first element of failure to report for work, in this case, there was no showing that respondents were notified of their new assignments. Granting that the “Duty Detail Orders” were indeed issued, they served no purpose unless the intended recipients of the orders are informed of such. Therefore, the Court held that there was no abandonment of work in this case.

The base figure in computing the award of back wages to an illegally dismissed employee is the employee’s basic salary plus regular allowances and benefits received at the time of dismissal, unqualified by any wage and benefit increases granted in the interim. The full backwages, as referred to in the body of the March 31, 2005 Supreme Court decision pertains to “backwages” as defined in Republic Act No. 6715. Under said law, and as provided in jurisprudence, “full backwages” means backwages without any deduction or qualification, including benefits or their monetary equivalent the employee is enjoying at the time of his dismissal. Consequently, any benefit or allowance over and above that allowed and provided by said law is deemed excluded under the said Supreme Court Decision.

The concept of constructive dismissal is inapplicable to respondents in this case. Constructive dismissal occurs when there is cessation of work because continued employment is rendered impossible, unreasonable, or unlikely as when there is a demotion in rank or diminution in pay or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee leaving the latter with no other option but to quit. That the respondents were indeed not constructively dismissed was found by the Supreme Court to be supported by substantial evidence. First, respondents Domingo and Remigio, even while their petition for certiorari was pending before the CA, remained employed at UNILAB. In those instances, there was actually no dismissal to speak of. Second, the respondents’ positions were not abolished, unlike its provincial depots where the employees therein were considered redundant employees. In this case, their accounting functions were merely consolidated under the Finance Division of Unilab pursuant to its Shared Services Policy (SSP). Respondents, who are accounting employees, cannot refuse their assignment to the Finance Division. The Supreme Court noted that it cannot accept the proposition that when an employee opposes his employer’s decision to transfer him to another work place, there being no bad faith or underhanded motives on the part of either party, that the employee’s wishes should be made to prevail.

It is required that the employer furnish the employee with two written notices: (1) 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 (2) 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 twin requirements of notice and hearing constitute the elements of due process in cases of employee’s dismissal. The requirement of notice is intended to inform the employee concerned of the employer’s intent to dismiss and the reason for the proposed dismissal. Upon the other hand, the requirement of hearing affords the employee an opportunity to answer his employer’s charges against him and accordingly, to defend himself therefrom before dismissal is effected. Obviously, the second written notice, as indispensable as the first, is intended to ensure the observance of due process. In this case, there was only one written notice which required respondents to explain within five (5) days why they should not be dismissed from the service. Alcovendas was the only one who signed the receipt of the notice. The others, as claimed by Lynvil, refused to sign. The other employees argue that no notice was given to them. Despite the inconsistencies, what is clear is that no final written notice or notices of termination were sent to the employees. Due to the failure of Lynvil to follow the procedural requirement of two-notice rule, nominal damages in the amount of P50,000 were granted to Ariola, et al. despite their dismissal for just cause.

Neglect of duty, to be a ground for dismissal, must be both gross and habitual. In this case, Respondent’s repeated failure to turn over his task of preparing the payroll of the petitioner’s employees to someone capable of performing the vital tasks which he could not effectively perform or undertake because of his heart ailment or condition constitutes gross neglect. However, although the dismissal was legal, respondent was still held to be entitled to a separation pay as a measure of compassionate justice, considering his length of service and his poor physical condition which was one of the reasons he filed a leave of absence. As a general rule, an employee who has been dismissed for any of the just causes enumerated under Article 282 of the Labor Code is not entitled to separation pay. By way of exception, however, the grant of separation pay or some other financial assistance may be allowed to an employee dismissed for just causes on the basis of equity.

In the case at bar, respondent security guards were relieved from their posts because they filed with the Labor Arbiter a complaint against their employer for money claims due to underpayment of wages. The Supreme Court found that this was not a valid cause for dismissal. The Labor Code enumerates several just and authorized causes for a valid termination of employment. An employee asserting his right and asking for minimum wage is not among those causes.

Loss of confidence should ideally apply only to: (1) cases involving employees occupying positions of trust and confidence, or (2) situations where the employee is routinely charged with the care and custody of the employer’s money or property. As branch manager of the bank, Lopez occupied a “position of trust.” His hold on his position and his stay in the service depend on the employer’s trust and confidence in him and on his managerial services. In this case, the Supreme Court found that Lopez’s dismissal was justified. He betrayed the trust and confidence of the employer-bank when he issued the subject purchase orders without authority and despite the express directive of the bank to put the client’s application on hold. The bank had a genuine concern over the granted loan applications as it found through its credit committee that Hertz was a credit risk. Whether the credit committee was correct or not is immaterial as the bank’s direct order left Lopez without any authority to clear the loan application on his own.

Jumuad was found to have willfully breached her duties as to be unworthy of the trust and confidence of Hi-Flyer. First, Jumuad was a managerial employee; she executed management policies and had the power to discipline the employees of KFC branches in her area. She recommended actions on employees to the head office. According to the Supreme Court, based on established facts, the mere existence of the grounds for the loss of trust and confidence justifies petitioner’s dismissal. In the present case, the CER’s reports of Hi-Flyer show that there were anomalies committed in the KFC branches managed by Jumuad. On the principle of respondeat superior or command responsibility alone, Jumuad may be held liable for negligence in the performance of her managerial duties. She may not have been directly involved in causing the cash shortages in KFC-Bohol, but her involvement in not performing her duty monitoring and supporting the day to day operations of the branches and ensure that all the facilities and equipment at the restaurant were properly maintained and serviced, could have prevented the whole debacle from occurring.

Respondent-company implemented a company-wide reorganization which resulted in the abolition of petitioner’s position. Petitioner alleged that he was illegally dismissed and that respondent-company is guilty of unfair labor practice because his functions were outsourced to labor-only contractors. The Supreme Court held unfair labor practice refers to acts that violate the workers’ right to organize. The prohibited acts are related to the workers’ right to self-organization and to the observance of a CBA. Thus, an employer may be held liable for unfair labor practice only if it can be shown that his acts interfere with his employees’ right to self-organization. Since there is no showing that the respondent company’s implementation of the Right-Sizing Program was motivated by ill will, bad faith or malice, or that it was aimed at interfering with its employees’ right to self-organization, there is no unfair labor practice to speak of in this case.

The amendment introduced by RA 9481 sought to strengthen the workers’ right to self-organization and enhance the Philippines’ compliance with its international obligations as embodied in the International Labour Organization (ILO) Convention No. 87, pertaining to the non-dissolution of workers’ organizations by administrative authority. ILO Convention No. 87 provides that “workers’ and employers’ organizations shall not be liable to be dissolved or suspended by administrative authority.” The ILO has expressed the opinion that the cancellation of union registration by the registrar of labor unions, which in our case is the BLR, is tantamount to dissolution of the organization by administrative authority when such measure would give rise to the loss of legal personality of the union or loss of advantages necessary for it to carry out its activities, which is true in our jurisdiction. Although the ILO has allowed such measure to be taken, provided that judicial safeguards are in place, i.e., the right to appeal to a judicial body, it has nonetheless reminded its members that dissolution of a union, and cancellation of registration for that matter, involve serious consequences for occupational representation. It has, therefore, deemed it preferable if such actions were to be taken only as a last resort and after exhausting other possibilities with less serious effects on the organization. It is undisputed that appellee failed to submit its annual financial reports and list of individual members in accordance with Article 239 of the Labor Code. However, the existence of this ground should not necessarily lead to the cancellation of union registration. At any May a corporation invoke its merger with another corporation as a valid ground to exempt its “absorbed employees” from the coverage of a union shop clause contained in its existing Collective Bargaining Agreement (CBA) with its own certified labor union? The Supreme Court ruled in the negative. The former FEBTC employees retained the regular status that they possessed while working for their former employer upon their absorption by petitioner BPI. This fact would not remove them from the scope of the phrase “new employees” as contemplated in the Union Shop Clause of the CBA. The Union Shop Clause in the CBA simply states that “new employees” who during the effectivity of the CBA “may be regularly employed” by the Bank must join the union within thirty (30) days from their regularization. The plain language of the CBA provision notwithstanding, the SC held that there is nothing in the said clause that limits its application to only new employees who possess non-regular status, meaning probationary status, at the start of their employment. What is indubitable from the Union Shop Clause is that upon the effectivity of the CBA, petitioner’s new regular employees (regardless of the manner by which they became employees of BPI) are required to join the Union as a condition of their continued employment.

A local union may disaffiliate at any time from its mother federation, absent any showing that the same is prohibited under its constitution or rules. Such disaffiliation, however, does not result in it losing its legal personality. A local union does not owe its existence to the federation with which it is affiliated. It is a separate and distinct voluntary association owing its creation to the will of its members. The mere act of affiliation does not divest the local union of its own personality, neither does it give the mother federation the license to act independently of the local union. It only gives rise to a contract of agency where the former acts in representation of the latter. In the present case, whether the FFW went against the will of its principal (the member-employees) by pursuing the case despite the signing of the MOA, is not for the Court, nor for respondent employer to determine, but for the Union and FFW to resolve on their own pursuant to their principal-agent relationship. Moreover, the issue of disaffiliation is an intra-union dispute which must be resolved in a different forum in an action at the instance of either or both the FFW and the union or a rival labor organization, but not the employer as in this case.

Petitioner filed a complaint for illegal dismissal against respondent. Finding instead that petitioner had voluntarily resigned, the Labor Arbiter dismissed the complaint against respondent, but ordered the latter to pay P18,000.00 by way of financial assistance. On appeal, the NLRC found petitioner to be illegally dismissed. The Court of Appeals reaffirmed the findings of the LA but deleted the award of financial assistance, ruling that the same may not be awarded in cases of voluntary resignation. The Supreme Court, in upholding the award of financial assistance, stated that while the rule is that financial assistance is allowed only in instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character, there are instances when financial assistance may be allowed as a measure of social justice and as an equitable concession. In this case, petitioner, who has served respondent for more than eight years without committing any infraction, may be granted such financial assistance on equity considerations.

Respondent employees alleged underpayment of their wages. Petitioner employer claimed that the cost of food and lodging provided by petitioner to the respondent employees should be included in the computation of the wages received by respondents. The Court makes a distinction between “facilities” and “supplements.” Supplements constitute extra remuneration or special privileges or benefits given to or received by the laborers over and above their ordinary earnings or wages. Facilities, on the other hand, are items of expense necessary for the laborer’s and his family’s existence and subsistence so that by express provision of law, they form part of the wage and when furnished by the employer are deductible therefrom, since if they are not so furnished, the laborer would spend and pay for them just the same. In short, the benefit or privilege given to the employee which constitutes an extra remuneration above and over his basic or ordinary earning or wage is supplement; and when said benefit or privilege is part of the laborers’ basic wages, it is a facility. The distinction lies not so much in the kind of benefit or item (food, lodging, bonus or sick leave) given, but in the purpose for which it is given. In the case at bench, the items provided were given freely by petitioner employer for the purpose of maintaining the efficiency and health of its workers while they were working at their respective projects. Thus, the Court is of the view that the food and lodging, or the electricity and water allegedly consumed by respondents in this case were not facilities but supplements which should not be included in the Employees are entitled to their accrued salaries during the period between the Labor Arbiter’s order of reinstatement pending appeal and the resolution of the National Labor Relations Commission (NLRC) overturning that of the Labor Arbiter. Otherwise stated, even if the order of reinstatement of the Labor Arbiter is reversed on appeal, the employer is still obliged to reinstate and pay the wages of the employee during the period of appeal until reversal by a higher court or tribunal. On the other hand, if the employee has been reinstated during the appeal period and such reinstatement order is reversed with finality, the employee is not required to reimburse whatever salary he received for he is entitled to such, more so if he actually rendered services during the period.

In an illegal dismissal case against the petitioner employer, respondent employees alleged that they were underpaid. In their defense, petitioner employer alleged that respondent employees actually received wages higher than the prescribed minimum. The Court held that as a general rule, a party who alleged payment of wages as a defense has the burden of proving it. Specifically with respect to labor cases, the burden of proving payment of monetary claims rests on the employer, the rationale being that the pertinent personnel files, payrolls, records, remittances and other similar documents — which will show that overtime, differentials, service incentive leave and other claims of workers have been paid — are not in the possession of the worker but in the custody and absolute control of the employer. In this case, petitioner employer, aside from bare allegations that respondent employees received wages higher than the prescribed minimum, failed to present any evidence, such as payroll or payslips, to support their defense of payment. Thus, petitioner employer utterly failed to discharge the onus probandi.

Petitioner employer alleged that the cost of facilities must be included in the computation of wages paid. The Court held that before the value of facilities can be deducted from the employees’ wages, the following requisites must all be attendant: first, proof must be shown that such facilities are customarily furnished by the trade; second, the provision of deductible facilities must be voluntarily accepted in writing by the employee; and finally, facilities must be charged at reasonable value. Mere availment is not sufficient to allow deductions from employees’ wages. These requirements, however, have not been met in this case. Petitioner employer failed to present any company policy or guideline showing that provisions for meals and lodging were part of the employee’s salaries. It also failed to provide proof of the employees’ written authorization, much less show how they arrived at their valuations. At any rate, it is not even clear whether respondent employees actually enjoyed said facilities.

When the Labor Code speaks of procedural due process, the reference is usually to the two (2)-written notice rule envisaged in Section 2 (III), Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code. MGG Marine Services, Inc. v. NLRC tersely described the mechanics of what may be considered a two-part due process requirement which includes the two-notice rule, “x x x one, of the intention to dismiss, indicating therein his acts or omissions complained against, and two, notice of the decision to dismiss; and an opportunity to answer and rebut the charges against him, in between such notices.” Here, the first and second notice requirements have not been properly observed. The adverted memo would have had constituted the “charge sheet,” sufficient to answer for the first notice requirement, but for the fact that there is no proof such letter had been sent to and received by him. Neither was there compliance with the imperatives of a hearing or conference. Suffice it to point out that the record is devoid of any showing of a hearing or conference having been conducted. And the written notice of termination itself did not indicate all the circumstances involving the charge to justify severance of employment. For violating petitioner’s right to due process, the Supreme Court ordered the payment to petitioner of the amount of P30,000 as nominal damages.

In fine, an employee’s failure to meet sales or work quotas falls under the concept of gross inefficiency, which in turn is analogous to gross neglect of duty that is a just cause for dismissal under Article 282 of the Code. However, in order for the quota imposed to be considered a valid productivity standard and thereby validate a dismissal, management’s prerogative of fixing the quota must be exercised in good faith for the advancement of its interest. The duty to prove good faith, however, rests with WWWEC as part of its burden to show that the dismissal was for a just cause. WWWEC must show that such quota was imposed in good faith. This WWWEC failed to do, perceptibly because it could not. The fact of the matter is that the alleged imposition of the quota was a desperate attempt to lend a semblance of validity to Aliling’s illegal dismissal.

to the Department of Labor and Employment at least one month prior to the intended date of retrenchment; (3) That the employer pays the retrenched employees separation pay equivalent to one month pay or at least ½ month pay for every year of service, whichever is higher; (4) That the employer exercises its prerogative to retrench employees in good faith for the advancement of its interest and not to defeat or circumvent the employees’ right to security of tenure; and (5) That the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees, such as status, x x x efficiency, seniority, physical fitness, age, and financial hardship for certain workers. Petrocon exercised its prerogative to retrench its employees in good faith and the considerable reduction of work allotments of Petrocon by Saudi Aramco was sufficient basis for Petrocon to reduce the number of its personnel. As for the notice requirement, however, contrary to petitioner’s contention, proper notice to the DOLE within 30 days prior to the intended date of retrenchment is necessary and must be complied with despite the fact that respondent is an overseas Filipino worker. In the present case, although respondent was duly notified of his termination by Petrocon 30 days before its effectivity, no allegation or proof was advanced by petitioner to establish that Petrocon ever sent a notice to the DOLE 30 days before the respondent was terminated. Thus, this requirement of the law was not complied with. Despite the fact that respondent was employed by

The aforequoted Section 6 of the Implementing Rules of Book VI, Rule VIII-A of the Code specifically requires the employer to inform the probationary employee of such reasonable standards at the time of his engagement, not at any time later; else, the latter shall be considered a regular employee. Thus, pursuant to the explicit provision of Article 281 of the Labor Code, Section 6(d) of the Implementing Rules of Book VI, Rule VIII-A of the Labor Code and settled jurisprudence, petitioner Aliling is deemed a regular employee as of June 11, 2004, the date of his employment contract. The letter-offer to Aliling states that the regularization standards or the performance norms to be used are still to be agreed upon by him and his supervisor. Moreover, Aliling was assigned to GX trucking sales, an activity entirely different to the Seafreight Sales for which he was originally hired and trained for. In the present case, there was no proof that Aliling was informed of the standards for his continued employment, such as the sales quota, at the time of his engagement.

Article 283 of the Labor Code provides only the required minimum amount of separation pay, which employees dismissed for any of the authorized causes are entitled to receive. Employers, therefore, have the right to create plans, providing for separation pay in an amount over and above what is imposed by Article 283. There is nothing therein that prohibits employers and employees from contracting on the terms of employment, or from entering into agreements on employee benefits, so long as they do not violate the Labor Code or any other law, and are not contrary to morals, good customs, public order, or public policy. Consequently, petitioners are not allowed to receive separation pay from both the Labor Code, on the one hand, and the New Gratuity Plan and the SSP, on the other, they would receive double compensation for the same cause (i.e., separation from the service due to redundancy).

In determining the presence or absence of an employer-employee relationship, the Court has consistently looked for the following incidents, to wit: (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 on the means and methods by which the work is accomplished. The last element, the so-called control test, is the most important element. It can be deduced from the March 1996 affidavit of petitioner that respondents challenged his authority to deliver some 158 checks to SFC. Considering that petitioner contested respondents’ challenge by pointing to the existing arrangements between BCC and SFC, it should be clear that respondents did not exercise the power of control over petitioner, because he thereby acted for the benefit and in the interest of SFC more than of BCC.

In all the 38 projects where DMCI engaged Jamin’s services, the tasks he performed as a carpenter were indisputably necessary and desirable in DMCI’s construction business. He might not have been a member of a work pool since DMCI insisted that it does not maintain a work pool, but his continuous rehiring in 38 projects over a period of 31 years and the nature of his work unmistakably made him a regular employee. In Maraguinot, Jr. v. NLRC, 348 Phil. 580 (1998), the Court held that once a project or work pool employee has been: (1) continuously, as opposed to intermittently, rehired by the same employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and indispensable to the usual business or trade of the employer, then the employee must be deemed a regular employee. Surely, length of time is not the controlling test for project employment but it is vital in determining if the employee was hired for a specific undertaking or if it is tasked to perform functions vital, necessary and indispensable to the usual business or trade of the employer. Here, [private] respondent had been a project employee several times over. The nature of his employment ceased to be project-based when he was repeatedly re-hired due to the demands of petitioner’s business.

For willful disobedience to be a valid cause for dismissal, these two elements must concur: (1) the employee’s assailed conduct must have been willful, that is, characterized by a wrongful and perverse attitude; and (2) the order violated must have been reasonable, lawful, made known to the employee, and must pertain to the duties which he had been engaged to discharge. The petitioner’s arbitrary defiance to Graphics, Inc.’s order for him to render overtime work constitutes willful disobedience. Because of his refusal to render overtime work, the company failed to meet its printing deadlines, resulting in losses to the company. The Supreme Court took into account the fact that petitioner was inclined to absent himself and to report late for work despite being previously penalized, and affirmed the CA’s ruling that the petitioner is indeed utterly defiant of the lawful orders and the reasonable work standards prescribed by his employer. The Court reiterated its previous rulings stating that an employer has the right to require the performance of overtime service in any of the situations contemplated under Article 89 of the Labor Code and an employee’s non-compliance is willful disobedience.

The petitioner’s failure to observe Graphics, Inc.’s work standards constitutes inefficiency that is a valid cause for dismissal. Failure to observe prescribed standards of work, or to fulfill reasonable work assignments due to inefficiency may constitute just cause for dismissal. Such inefficiency is understood to mean failure to attain work goals or work quotas, either by failing to complete the same within the alloted reasonable period, or by producing unsatisfactory results. As the operator of Graphics, Inc.’s printer, he is mandated to check whether the colors that would be printed are in accordance with the client’s specifications and for him to do so, he must consult the General Manager and the color guide used by Graphics, Inc. before making a full run. The employee in this case failed to observe this simple procedure and proceeded to print without making sure that the colors were at par with the client’s demands. This resulted to delays in the delivery of output, client dissatisfaction, and additional costs to Graphics, Inc..

In King of Kings Transport, Inc. v. Mamac, this Court laid down the manner by which the procedural due requirements of due process can be satisfied: (1) The first written notice to be served on the employees should contain the specific causes or grounds for termination against them, and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period. “Reasonable opportunity” under the Omnibus Rules means every kind of assistance that management must accord to the employees to enable them to prepare adequately for their defense. This should be construed as a period of at least five calendar days from receipt of the notice to give the employees an opportunity to study the accusation against them, consult a union official or lawyer, gather data and evidence, and decide on the defenses they will raise against the complaint. Moreover, in order to enable the employees to intelligently prepare their explanation and defenses, the notice should contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the employees. A general description of the charge will not suffice. Lastly, the notice should specifically mention which company rules, if any, are violated and/or which among the grounds under Art. 282 is being charged against the employees. (2) After serving the first notice, the employers should schedule and conduct a hearing or conference wherein the employees will be given the opportunity to: (a) explain and clarify their defenses to the charge against them; (b) present evidence in support of their defenses; and (c) rebut the evidence presented against them by the management. During the hearing or conference, the employees are given the chance to defend themselves personally, with the assistance of a representative or counsel of their choice. Moreover, this conference or hearing could be used by the parties as an opportunity to come to an amicable settlement. (3) After determining that termination of employment is justified, the employers shall serve the employees a written notice of termination indicating that: (a) all circumstances involving the charge against the employees have been considered; and (b) grounds have been established to justify the severance of their employment. Graphics, Inc. failed to afford the petitioner with a reasonable opportunity to be heard and defend itself. An administrative hearing set on the same day that the petitioner received the memorandum and the 24-hour period given to him to submit a written explanation is far from reasonable. Furthermore, there is no indication that Graphics, Inc. issued a second notice, informing the petitioner of his dismissal. Graphics, Inc. admitted that it decided to terminate the petitioner’s employment when he ceased to report for work after being served with the memorandum requiring him to explain and subsequent to his failure to submit a written explanation. However, there is nothing on record showing that Graphics, Inc. placed its decision to dismiss in writing and that a copy thereof was sent to the petitioner. Notwithstanding the existence of a just cause to terminate petitioner’s employment, respondent was ordered to pay P30,000 as nominal damages for violation of the employee’s right to due process.

Willful disobedience requires the concurrence of two elements: (1) the employee’s assailed conduct must have been willful, that is, characterized by a wrongful and perverse attitude; and (2) the order violated must have been reasonable, lawful, made known to the employee, and must pertain to the duties which he had been engaged to discharge. Both elements are present in this case. First, at no point did the dismissed employees deny Kingspoint Express’ claim that they refused to comply with the directive for them to submit to a drug test or, at the very least, explain their refusal. This gives rise to the impression that their non-compliance is deliberate. The utter lack of reason or justification for their insubordination indicates that it was prompted by mere obstinacy, hence, willful thereby justifying their dismissal. Second, that the company’s order to undergo a drug test is necessary and relevant in the performance of petitioners’ functions as drivers of Kingspoint Express is obvious. As the NLRC correctly pointed out, drivers are indispensable to Kingspoint Express’ primary business of rendering door-to-door delivery services. It is common knowledge that the use of dangerous drugs has adverse effects on driving abilities that may render employees incapable of performing their duties. Not only are they acting against the interests of Kingspoint Express, they also pose a threat to the public.

While Kingspoint Express had reason to sever petitioners’ employment, this Court finds its supposed observance of the requirements of procedural due process pretentious. While Kingspoint Express required the dismissed employees to explain their refusal to submit to a drug test, the two (2) days afforded to them to do so cannot qualify as “reasonable opportunity”, which the Court construed in King of Kings Transport, Inc. v. Mamac as a period of at least five (5) calendar days from receipt of the notice. Thus, even if a just cause exists for the dismissal of petitioners, Kingspoint Express is still liable to indemnify the dismissed employees, with the exception of Panuelos, Dizon and Dimabayao, who did not appeal the dismissal of their complaints, with nominal damages in the amount of P30,000.00.

Topic/Syllabus Title of the Action G.R. No.Abandonment; elements. G.R. No. 182070

G.R. No. 187320

G.R. No. 169754

G.R. No. 165381


Apprenticeship agreement; validity.

Atlanta Industries, Inc. and/or Robert Chan vs. Aprilito R. Sebolino, et al.,

Certification election; petition for cancellation of union registration.


Certiorari under Rule 65; review of facts by the Court of Appeals.


Complaint; reinstatement. G.R. No. 167291

G.R. No. 168501

G.R. No. 179428

G.R. No. 181146

Prince Transport, Inc. and Mr. Renato Claros vs. Diosdado Garcia, et al.,

Collection of accrued wages; two-fold test.


Disciplinary measures; management prerogative.





Dismissal; neglect of duty. G.R. No. 176287

G.R. No. 176287

G.R. No. 174725

G.R. No. 179428



Dismissal; negligence in patient management.


Employee benefits; compensable illness.

Alexander B. Gatus vs. Social Security System,

Employer-employee relationship; jeepney driver.


G.R. No. 167622

G.R. No. 177937

G.R. No. 187320

G.R. No. 177937

Employer-employee relationship; primary element.

Gregorio V. Tongko vs. The Manufacturers Life Insurance Co. (Phils.), Inc. and Renato A. Vergel de Dios

Employer-employee relationship; probationary employment.


Employer-employee relationship; regular employment.




G.R. No. 176264

G.R. No. 191459

Jurisdiction; labor arbiter. G.R. No. 168757

Jurisdiction; labor dispute. G.R. No. 181146


Illegal recruitment; elements. People of the Philippines vs. Teresita “Tessie” Laogo



Renato Real vs. Sangu Philippines, Inc. et al.



G.R. No. 167291

G.R. No. 187320

Petition; verification. G.R. No. 167291

G.R. No. 178296

Petition; certificate of non-forum shopping.


Petition; failure to attach documents.



Regional director; review of decision.


G.R. No. 178296

G.R. No. 168501

G.R. No. 166109

G.R. No. 186614

Union registration; cancellation.


Wages; payment pending reinstatement.


Construction Industry; project employees.


Constructive Dismissal; security guards.


G.R. No. 186614

G.R. No. 186614

G.R. No. 184007

G.R. No. 182070

Constructive dismissal; defense of abandonment.


Constructive dismissal; defense of resignation.


Execution of Judgment; properties covered.




G.R. No. 166109

G.R. No. 167332

G.R. No. 165381

Illegal dismissal; redundancy. G.R. No. 165381








G.R. No. 169754

G.R. No. 182070

G.R. No. 184007

G.R. No. 179242

Labor Union; collateral attack on legal personality.


Money claims; burden of proof.


National Labor Relations Commission; jurisdiction.


Placement Fee; proof of excessive collection.

Avelina F. Sagun v. Sunace International Management Services, Inc.

G.R. No. 165381

Quitclaims; validity. G.R. No. 183390

G.R. No. 183390

G.R. No. 183390

Procedural due process; notice requirements.







G.R. No. 165381

Abandonment; elements. GR No. 167751

GR No. 167751

G.R. No. 169717

Unfair Labor Practice; right to self-organize.



Corporate officer; solidary liability.


Labor organization; collateral attack on legal personality.


G.R. No. 169717

G.R. No. 169717

G.R. No. 177467

Labor organization; membership of supervisory employees.


Labor organization; registration.


Reinstatement; accrued backwages.

Pfizer, Inc., et al. v. Geraldine Velasco,

G.R. No. 177467

G.R. No. 177467

G.R. No. 171189

G.R. No. 172161

Reinstatement; immediately executory order.


Reinstatement; terms and conditions.




Wages; facilities and supplements.


Wages; proof of payment. G.R. No. 172161

Wages; value of facilities. G.R. No. 172161

G.R. No. 169564

G.R. No. 169564



Dismissal; breach of trust and confidence.


Breach of Trust and Confidence; duties of employee.


G.R. No. 168922

G.R. No. 168922

G.R. No. 168922

G.R. No. 191940

Certiorari under Rule 45; questions of law and exceptions.


Rules of Procedure; liberal construction in favor of working class.

Wilfredo Y. Antiquina v. Magsaysay Maritime Corporation and/or Masterbulk Pte., Ltd.,

Disability Benefits; entitlement and burden of proof.


Public office; casual employees.


G.R. No. 191940


G.R. No. 179532

G.R. No. 179532

Public office; security of tenure.



Section 10, Republic Act No. 8042; unconstitutional.


Doctrine of Operative Fact; applied as a matter of equity and fair play.


G.R. No. 179532

G.R. No. 178903

G.R. No. 171673

G.R. No. 171673

Migrant workers; computation of salary award.




Appeal; posting of Appeal Bond; Government’s exemption from the same.


Appeal; posting of appeal bond within the 10-day period is mandatory and jurisdictional.


G.R. No. 175251

G.R. No. 175251

G.R. No. 189314

G.R. No. 170416

Voluntary Resignation; financial assistance may be awarded on equity considerations.


National Labor Relations Commission; authority to review is limited to issues specifically brought before it on appeal.


Appeal; decision of DOLE Secretary.

Miguel Dela Pena Barairo vs. Office of the President and MST Marine Services (Phils.) Inc.

Appeal from decisions of labor arbiter; bond requirement for perfection of appeal may be relaxed in meritorious cases.

University Plans, Inc. vs. Belinda P. Solano, et al.

G.R. No. 174158

G.R. Nos. 183122/

G.R. No. 160506

G.R. No. 174158

Certiorari; substantial compliance.


Collective bargaining agreement; duty of parties to maintain status quo pending renegotiation.

General Milling Corporation-Independent Labor Union [GMC-ILU] vs. General Milling Corporation/General Milling Corporation vs.General Milling Corporation-Independent Labor Union [GMC-ILU], et al.

Damages; fraud or bad faith for the award of moral damages.




G.R. No. 160506

G.R. No. 160506

G.R. No. 169191

G.R. No. 169191

Dismissal; elements for loss of trust or confidence.


Dismissal; elements for serious misconduct.

Joeb M. Aliviado, et al. vs. Procter and Gamble Phils., Inc., et al.,

Dismissal; financial assistance based on equity .


Dismissal; separation pay due to disease.


G.R. No. 178409/G.

G.R. No. 160506

G.R. No. 160506

G.R. No. 178409/G.

G.R. No. 190515

DOLE assumption of jurisdiction; effects.


Independent job contracting; required substantial capital.


Labor-only contracting v. independent job contracting.


Labor strikes; liability of union officers and participating workers.


Secretary of Labor; power to give arbitral awards.


G.R. No. 169191

Unions; disaffiliation. G.R. No. 190515

G.R. No. 146206

G.R. No. 146206




Labor relations; appropriate bargaining unit.


Labor organization; confidential employees.


G.R. No. 146206

G.R. No. 146206

G.R. No. 196426

G.R. No. 196426

G.R. No. 173792

Labor organization; ineligibility to join.


Certification election; role of employers.


Appeal of the decision of the labor arbiter; posting of bond.

Marticio Semblante and Dubrick Pilar vs. Court of Appeals


Marticio Semblante and Dubrick Pilar vs. Court of Appeals,

Labor; illegal recruitment in large scale.


G.R. No. 173792

G.R. No. 173792

Floating status; validity. G.R. No. 177816

G.R. No. 177816

Pleading; verification. G.R. No. 188086

Illegal recruitment; admissibility of POEA certification.


Illegal recruitment and estafa; may be charged separately.



Constructive dismissal; burden of proof.



G.R. No. 188086

G.R. No. 194031

G.R. No. 169510

G.R. No. 169510

G.R. No. 169510



Procedural rules; failure to attach duplicate original or certified true copy of the assailed decision.

Jobel Enterprises and/or Mr. Benedict Lim vs. NLRC and Eric Martinez, Sr.

Appeal; decision or resolution of NLRC.




Employment; regular employee.


G.R. No. 185352

G.R. No. 169905

G.R. No. 192084

G.R. No. 179593

Claim of disability benefits and sickness allowance; reporting requirements.

Coastal Safeway Marine Services vs. Esguerra


St. Paul College Quezon City, et al. vs. Remigio Michael A. Ancheta II and Cynthia A. Ancheta

Employee; existence of employer-employee relationship.

Jose Mel Bernante vs. Philippine Basketball Association, et al.

Employee benefits; principle against diminution of benefits.

University of the East vs. University of the East Employees’ Association

G.R. Nos. 178699/

G.R. No. 186209

G.R. No. 176800

G.R. No. 187887

Employment benefits; entitlement to vacation and sick leave.








G.R. No. 182397

G.R. No. 182397

G.R. No. 164181

G.R. Nos. 178699/

G.R. No. 182848










Dismissal; illegal. G.R. No. 174631

Employee; death benefits. G.R. No. 151993

G.R. Nos. 156556-

Employee; overtime pay. G.R. No. 182848

Jhorizaldy Uy vs. Centro Ceramica Corporation, et al.

Maritime Factors Inc. vs. Bienvenido R. Hindang

Employee benefits; entitlement to retirement benefits.

Enrique U. Betoy vs. The Board of Directors, National Power Corporation,


G.R. No. 176884

GSIS; retirement plan. G.R. No. 162372

Strike; illegal strike. G.R. No. 191138-3

Union shop; new employees. G.R. No. 164301

Employee; permanent disability benefits.

Carmelito N. Valenzona vs. Fair Shipping Corporation, et al.

Government Service Insurance System (GSIS), et al. vs. Commission on Audit, et al.

Magdala Multipurpose & Livelihood, et al. vs. KMLMS, et al.

Bank of the Philippine Islands vs. BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank

NLRC; Certiorari. G.R. No. 195033

G.R. No. 195033

G.R. No. 174179

G.R. No. 174179


NLRC; motion for reconsideration.


Award of attorney’s fees; concepts.


Award of attorney’s fees; Article 111.


G.R. No. 192686

G.R. No. 192686

G.R. Nos. 180849

G.R. Nos. 180849

Disability benefits; compensable.


Disability benefits; total disability.


Dismissal; gross and habitual neglect of duties.


Dismissed employees; separation pay.


Employment of seafarers. G.R. No. 185412

G.R. No. 185412

G.R. No. 178901

G.R. No. 178901


Employment of seafarers; disability compensation.


Employee’s compensation; increased risk theory.


Employees’s Compensation; proceedings; quantum of proof.


G.R. No. 169757

G.R. No. 171644

G.R. No. 192881

G.R. No. 192881

G.R. Nos. 180849



Illegal recruitment; elements.

Delia D. Romero vs. People of the Philippines, Romulo Padlan and Aruturo Siapno

Probationary employment; security of tenure.


Probationary employment; termination.




G.R. No. 194306

G.R. No. 174941

G.R. No. 175558

G.R. No. 175558

Appeal; factual finding of NLRC.


Civil Service; Clark Development Corporation.


Dismissal; resignation vs. illegal dismissal; telex is not equivalent to tender of resignation.


Dismissal; substantive and procedural due process.


G.R. No. 185665

G.R. No. 173882

G.R. No. 175932

G.R. No. 194306

Employee benefits; right to bonus; diminution.

Eastern Telecommunications Philippines, Inc. vs. Eastern Telecoms Employees Union

Employee dismissal; constructive dismissal.


Employee dismissal; disease; dereliction of duties.

Wuerth Philippines, Inc. vs. Rodante Ynson



G.R. No. 173291

G.R. No. 194306

G.R. No. 173291

G.R. No. 187122

G.R. No. 192558



Employee dismissal; grounds. Sebastian F. Oasay, Jr. vs. Palacio del Gobernador Condominium Corporation and Omar T. Cruz

Employee dismissal; just cause.


Employer; right to discipline employee.


Employer-employee relationship; onus probandi.


G.R. No. 192558

G.R. No. 179469

G.R. No. 179469

G.R. No. 187122

Employer-employee relationship; test.


Employment contract; stages. C.F. Sharp & Co. Inc. and John J. Rocha vs. Pioneer Insurance and Surety Corporation, et al.

Employment relationship; commencement.

C.F. Sharp & Co. Inc. and John J. Rocha vs. Pioneer Insurance and Surety Corporation, et al.

Forum shopping; elements; res judicata.


Jurisdiction; NLRC. G.R. No. 174941

G.R. No. 181974

G.R. No. 181974

G.R. No. 181974




Labor; liability of officers if termination is attended with bad faith.


Nature of employment; security of tenure.


G.R. No. 181974

G.R. No. 181974

G.R. No. 181974

G.R. No. 175558.

Labor; procedural and substantive due process; grounds for valid termination; breach of trust.


Labor; public prosecutor’s decision not binding on the labor tribunal.


Labor; regular employee; fixed-contract agreement, requisites for validity.


Labor Code; maximum award of attorney’s fees in cases of recovery of wages.


Labor contracting; elements. G.R. No. 160278

G.R. No. 175558

NLRC; contempt powers. G.R. No. 176085


Garden of Memories Park and Life Plan, Inc., et al. vs. NLRC, 2nd Div., et al.

Migrant Workers; RA No. 8042; money claims in cases of unjust termination.


Federico S. Robosa, et al. vs. National Labor Relations Commission (First Division), et al.


G.R. No. 172223

G.R. No. 172223

G.R. No. 187122

Reinstatement; backwages. G.R. No. 188722

Probationary employee; valid cause for dismissal but without procedural due process; employee entitled to nominal damages.


Probationary employee; valid dismissal even before 6 months.


Procedural rules; liberal application.



G.R. No. 188722

G.R. No. 165935

G.R. No. 174173

G.R. No. 190559

Reinstatement; doctrine of strained relations; when applicable.


Seafarers; employment contract; perfection stage vs. commencement stage.

Bright Maritime Corporation (BMC) / Desiree P. Tenorio vs. Ricardo B. Fantonial


Ma. Melissa A. Galang vs. Julia Malasuqui

Dismissal; loss of trust and confidence.

Blue Sky Trading Company, Inc. et al. vs. Arlene P. Blas and Joseph D. Silvano

G.R. No. 191288

G.R. No. 185255

G.R. No. 174792

G.R. No. 179652

Dismissal; probationary employees.

Manila Electric Company vs. Jan Carlo Gala

Dismissal; relief of illegally dismissed employee.

Norkis Distribution, Inc., et al. vs. Delfin S. Descallar

Employees; project vs. regular employees.

Wilfredo Aro, Ronilo Tirol, et al. vs. NLRC, Fourth Division, et al.

Jurisdiction; power of the DOLE to determine the existence of employer-employee relationship.

People’s Broadcasting Service (Bombo Rado Phils., Inc.) vs. The Secretary of the Dept. of Labor & Employment, et al

G.R. No. 184885

G.R. No. 155109/G.

Management prerogative; resignation of employees running for public office.

Ernesto Ymbong vs. ABS-CBN Broadcasting Corporation, Veranda Sy & Dante Luzon

Separation pay; payment to those who participated in illegal strikes.

C. Alcantara & Sons, Inc. vs. Court of Appeals, et al./Nagkahiusang Mamumuo sa Alsons-SPFL, et al. vs. C. Alcantara & Sons, Inc., et al./Nagkahiusang Mamumuo sa Alsons-SPFL, et al. vs. C. Alcantara & Sons, Inc., et al.

Date of PromulgationFebruary 16, 2011

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Salient DiscussionRespondents filed an illegal dismissal case against the petitioner-corporation. For its defense, petitioner-corporation alleged that the respondents abandoned their work and were not dismissed, and that it sent letters advising respondents to report for work, but they refused. The Court held that for abandonment to exist, it is essential (a) that the employee must have failed to report for work or must have been absent without valid or justifiable reason; and (b) that there must have been a clear intention to sever the employer-employee relationship manifested by some overt acts. The employer has the burden of proof to show the employee’s deliberate and unjustified refusal to resume his employment without any intention of returning. Mere absence is not sufficient. There must be an unequivocal intent on the part of the employee to discontinue his employment. Based on the evidence presented, the reason why respondents failed to report for work was because petitioner-corporation barred them from entering its construction sites. It is a settled rule that failure to report for work after a notice to return to work has been served does not necessarily constitute abandonment. The intent to discontinue the employment must be shown by clear proof that it was deliberate and unjustified. Petitioner-corporation failed to show overt acts committed by respondents from which it may be deduced that they had no more intention to work. Respondents’ filing of the case for illegal dismissal barely four (4) days from their alleged abandonment is totally inconsistent with the known concept of what constitutes abandonment. The apprenticeship agreements did not indicate the trade or occupation in which the apprentice would be trained; neither was the apprenticeship program approved by the Technical Education and Skills Development Authority (TESDA). These were defective as they were executed in violation of the law and the rules. Moreover, with the expiration of the first agreement and the retention of the employees, the employer, to all intents and purposes, recognized the completion of their training and their acquisition of a regular employee status. To foist upon them the second apprenticeship agreement for a second skill which was not even mentioned in the agreement itself, is a violation of the Labor Code’s implementing rules and is an act manifestly unfair to the employees.

Respondent union filed a petition for certification election. Petitioner moved to dismiss the petition for certification election alleging the pendency of a petition for cancellation of the union’s registration. The DOLE Secretary ruled in favor of the legitimacy of the respondent as a labor organization and ordered the immediate conduct of a certification election. Pending appeal in the Court of Appeals, the petition for cancellation was granted and became final and executory. Petitioner argued that the cancellation of the union’s certificate of registration should retroact to the time of its issuance. Thus, it claimed that the union’s petition for certification election and its demand to enter into collective bargaining agreement with the petitioner should be dismissed due to respondent’s lack of legal personality. The Court ruled that the pendency of a petition for cancellation of union registration does not preclude collective bargaining, and that an order to hold a certification election is proper despite the pendency of the petition for cancellation of the union’s registration because at the time the respondent union filed its petition, it still had the legal personality to perform such act absent an order cancelling its registration.

While it is true that factual findings made by quasi-judicial and administrative tribunals, if supported by substantial evidence, are accorded great respect and even finality by the courts, this general rule admits of exceptions. When there is a showing that a palpable and demonstrable mistake that needs rectification has been committed or when the factual findings were arrived at arbitrarily or in disregard of the evidence on record, these findings may be examined by the courts. In the present case, the Court of Appeals found itself unable to completely sustain the findings of the NLRC thus, it was compelled to review the facts and evidence and not limit itself to the issue of grave abuse of discretion.

Petitioners question the order to reinstate respondents to their former positions, considering that the issue of reinstatement was never brought up before the Court of Appeals and respondents never questioned the award of separation pay to them. Section 2 (c), Rule 7 of the Rules of Court provides that a pleading shall specify the relief sought, but may add a general prayer for such further or other reliefs as may be deemed just and equitable. Under this rule, a court can grant the relief warranted by the allegation and the evidence even if it is not specifically sought by the injured party; the inclusion of a general prayer may justify the grant of a remedy different from or in addition to the specific remedy sought, if the facts alleged in the complaint and the evidence introduced so warrant. The prayer in the complaint for other reliefs equitable and just in the premises justifies the grant of a relief not otherwise specifically prayed for. Therefore, the court may grant relief warranted by the allegations and the proof even if no such relief is prayed for. In the instant case, aside from their specific prayer for reinstatement, respondents, in their separate complaints, prayed for such reliefs which are deemed just and equitable.

After the Labor Arbiter’s decision is reversed by a higher tribunal, the employee may be barred from collecting the accrued wages, if it is shown that the delay in enforcing the reinstatement pending appeal was without fault on the part of the employer. The two-fold test in determining whether an employee is barred from recovering his accrued wages requires that — (1) there must be actual delay or that the order of reinstatement pending appeal was not executed prior to its reversal; and (2) the delay must not be due to the employer’s unjustified act or omission. If the delay is due to the employer’s unjustified refusal, the employer may still be required to pay the salaries notwithstanding the reversal of the Labor Arbiter’s Decision.

The policy of suspending drivers pending payment of arrears in their boundary obligations is reasonable. It is acknowledged that an employer has free rein and enjoys a wide latitude of discretion to regulate all aspects of employment, including the prerogative to instill discipline on his employees and to impose penalties, including dismissal, if warranted, upon erring employees. This is a management prerogative. Indeed, the manner in which management conducts its own affairs to achieve its purpose is within the management’s discretion. The only limitation on the exercise of management prerogative is that the policies, rules, and regulations on work-related activities of the employees must always be fair and reasonable, and the corresponding penalties, when prescribed, commensurate to the offense involved and to the degree of the infraction.

Respondent was suspended for one year after being charged with and found liable for AWOL. After serving her suspension, respondent was allowed to return to work. Respondent cannot be considered to have been constructively dismissed by the petitioner during her period of suspension. Constructive dismissal occurs when there is cessation of work because continued employment is rendered impossible, unreasonable, or unlikely as when there is a demotion in rank or diminution in pay or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee leaving the latter with no other option but to quit. In this case, there was no cessation of employment relations between the parties. It is unrefuted that respondent promptly resumed teaching at the university right after the expiration of the suspension period. In other words, respondent never quit. Hence, she cannot claim to have been left with no choice but to quit, a crucial element in a finding of constructive dismissal.

Respondent employee reported to the petitioner employer the loss of cash which she placed inside the company locker. Immediately, petitioner ordered that she be strip-searched by the company guards. However, the search on her and her personal belongings yielded nothing. The petitioner also reported the matter to the police and requested the Prosecutor’s Office for an inquest. Respondent was constrained to spend two weeks in jail for failure to immediately post bail. The Court ruled that petitioners failed to accord respondent substantive and procedural due process. Article 277(b) of the Labor Code mandates that subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal, except for just and authorized cause and without prejudice to the requirement of notice under Article 283 of the same Code, the employer shall furnish the worker, whose employment is sought to be terminated, a written notice containing a statement of the causes of termination, and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of a representative if he so desires, in accordance with company rules and regulations pursuant to the guidelines set by the Department of Labor and Employment. The due process requirements under the Labor Code are mandatory and may not be supplanted by police investigation or court proceedings. The criminal aspect of the case is considered independent of the administrative aspect. Thus, employers should not rely solely on the findings of the Prosecutor’s Office. They are mandated to Neglect of duty, to be a ground for dismissal, must be both gross and habitual. Gross negligence connotes want of care in the performance of one’s duties. Habitual neglect implies repeated failure to perform one’s duties for a period of time, depending upon the circumstances. A single or isolated act of negligence does not constitute a just cause for the dismissal of the employee.

Negligence is defined as the failure to exercise the standard of care that a reasonably prudent person would have exercised in a similar situation. The Court emphasizes that the nature of the business of a hospital requires a higher degree of caution and exacting standard of diligence in patient management and health care as what is involved are lives of patients who seek urgent medical assistance. An act or omission that falls short of the required degree of care and diligence amounts to serious misconduct which constitutes a sufficient ground for dismissal.

The degree of proof required under P.D. 626 is merely substantial evidence, which means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Accordingly, the claimant must show, at least by substantial evidence that the development of the disease was brought about largely by the conditions present in the nature of the job. What the law requires is a reasonable work connection, not a direct causal relation.

It is already settled that the relationship between jeepney owners/operators and jeepney drivers under the boundary system is that of employer-employee and not of lessor-lessee. The fact that the drivers do not receive fixed wages but only get the amount in excess of the so-called “boundary” that they pay to the owner/operator is not sufficient to negate the relationship between them as employer and employee.

Control over the performance of the task of one providing service – both with respect to the means and manner, and the results of the service – is the primary element in determining whether an employment relationship exists. Petitioner asserts that his employer Manulife’s control over him was demonstrated (1) when it set the objectives and sales targets regarding production, recruitment and training programs; and (2) when it prescribed the Code of Conduct for Agents and the Manulife Financial Code of Conduct to govern his activities. However, the court ruled that all these appear to speak of control by the insurance company over its agents. There are built-in elements of control specific to an insurance agency, which do not amount to the elements of control that characterize an employment relationship governed by the Labor Code. They are, however, controls aimed only at specific results in undertaking an insurance agency, and are, in fact, parameters set by law in defining an insurance agency and the attendant duties and responsibilities an insurance agent must observe and undertake. They do not reach the level of control into the means and manner of doing an assigned task that invariably characterizes an employment relationship as defined by labor law. To reiterate, guidelines indicative of labor law “control” do not merely relate to the mutually desirable result intended by the contractual relationship; they must have the nature of dictating the means and methods to be employed in attaining the result. Petitioner is an insurance agent not an employee. A probationary employee, like a regular employee, enjoys security of tenure. However, in cases of probationary employment, aside from just or authorized causes of termination, an additional ground is provided under Article 281 of the Labor Code, i.e., the probationary employee may also be terminated for failure to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of the engagement. Thus, the services of an employee who has been engaged on probationary basis may be terminated for any of the following: (1) a just or (2) an authorized cause; and (3) when he fails to qualify as a regular employee in accordance with reasonable standards prescribed by the employer.

The respondent employees were already rendering service to the company when they were made to undergo apprenticeship. The respondent were regular employees because they occupied positions such as machine operator, scaleman and extruder operator – tasks that are usually necessary and desirable in petitioner employer’s usual business or trade as manufacturer of plastic building materials. These tasks and their nature characterized the respondents as regular employees under Article 280 of the Labor Code. Thus, when they were dismissed without just or authorized cause, without notice, and without the opportunity to be heard, their dismissal was illegal under the law.

Article 279 of the Labor Code provides that an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges, to full backwages, inclusive of allowances, and to other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. However, due to the strained relations of the parties, the payment of separation pay has been considered an acceptable alternative to reinstatement, when the latter option is no longer desirable or viable. On the one hand, such payment liberates the employee from what could be a highly oppressive work environment. On the other, the payment releases the employer from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer trust. Thus, as an illegally or constructively dismissed employee, respondent is entitled to: (1) either reinstatement, if viable, or separation pay, if reinstatement is no longer viable; and (2) backwages. These two reliefs are separate and distinct from each other and are awarded conjunctively.

Recruitment and placement refers to the act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not. When a person or entity, in any manner, offers or promises for a fee employment to two or more persons, that person or entity shall be deemed engaged in recruitment and placement. Article 38(a) of the Labor Code, as amended, specifies that recruitment activities undertaken by non-licensees or non-holders of authority are deemed illegal and punishable by law. And when the illegal recruitment is committed against three or more persons, individually or as a group, then it is deemed committed in large scale and carries with it stiffer penalties as the same is deemed a form of economic sabotage. But to prove illegal recruitment, it must be shown that the accused, without being duly authorized by law, gave complainants the distinct impression that he had the power or ability to send them abroad for work, such that the latter were convinced to part with their money in order to be employed. It is important that there must at least be a promise or offer of an employment from the person posing as a recruiter, whether locally or abroad.


Petitioner was removed from his position as a manager through a Board Resolution. Petitioner filed a complaint for illegal dismissal before the labor arbiter. Respondents claimed that petitioner is both a stockholder and a corporate officer of respondent corporation, hence, his action against respondents is an intra-corporate controversy over which the Labor Arbiter has no jurisdiction. The Court ruled that this is not an intra-corporate controversy but a labor case cognizable by the labor arbiter. To determine whether a case involves an intra-corporate controversy that is to be heard and decided by the branches of the RTC specifically designated by the Court to try and decide such cases, two tests must be applied: (a) the status or relationship test, and (2) the nature of the controversy test. The first test requires that the controversy arise out of intra-corporate or partnership relations among the stockholders, members or associates of the corporation, partnership or association, between any or all of them and the corporation, partnership or association of which they are stockholders, members or associates; between such corporation, partnership, or association and the public or between such corporation, partnership, or association and the State insofar as it concerns its franchise, license or permit to operate. The second test requires that the dispute among the parties be intrinsically connected with the regulation of the corporation. The Court in this case held that petitioner is not a corporate officer because he was not validly appointed by the Board, thus, failing the relationship test, and that this is a case of employment Article 217 of the Labor Code states that unfair labor practices and termination disputes fall within the original and exclusive jurisdiction of the Labor Arbiter. As an exception, under Article 262 the Voluntary Arbitrator, upon agreement of the parties, shall also hear and decide all other labor disputes including unfair labor practices and bargaining deadlocks. For the exception to apply, there must be agreement between the parties clearly conferring jurisdiction to the voluntary arbitrator. Such agreement may be stipulated in a collective bargaining agreement. However, in the absence of a collective bargaining agreement, it is enough that there is evidence on record showing the parties have agreed to resort to voluntary arbitration.

Factual findings of labor officials, who are deemed to have acquired expertise in matters within their jurisdiction, are generally accorded not only respect but even finality by the courts when supported by substantial evidence, i.e., the amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. But these findings are not infallible. When there is a showing that they were arrived at arbitrarily or in disregard of the evidence on record, they may be examined by the courts. The CA can grant the petition for certiorari if it finds that the NLRC, in its assailed decision or resolution, made a factual finding not supported by substantial evidence. Thus, it is within the jurisdiction of the CA to review the findings of the NLRC.

While the general rule is that the certificate of non-forum shopping must be signed by all the plaintiffs in a case and the signature of only one of them is insufficient, the Court has stressed that the rules on forum shopping, which were designed to promote and facilitate the orderly administration of justice, should not be interpreted with such absolute literalness as to subvert its own ultimate and legitimate objective. Strict compliance with the provision regarding the certificate of non-forum shopping underscores its mandatory nature in that the certification cannot be altogether dispensed with or its requirements completely disregarded. It does not, however, prohibit substantial compliance therewith under justifiable circumstances, considering especially that although it is obligatory, it is not jurisdictional. In a number of cases, the Court has consistently held that when all the petitioners share a common interest and invoke a common cause of action or defense, the signature of only one of them in the certification against forum shopping substantially complies with the rules.

The respondent workers sought that the petition be dismissed outright for the petitioners’ failure to attach to the petition a copy of the Production and Work Schedule and a copy of the compromise agreement allegedly entered into — material portions of the record that should accompany and support the petition, pursuant to Section 4, Rule 45 of the Rules of Court. In Mariners Polytechnic Colleges Foundation, Inc. v. Arturo J. Garchitorena the Court held that the phrase “of the pleadings and other material portions of the record xxx as would support the allegation of the petition clearly contemplates the exercise of discretion on the part of the petitioner in the selection of documents that are deemed to be relevant to the petition. The crucial issue to consider then is whether or not the documents accompanying the petition sufficiently supported the allegations therein.” The failure to attach copy of the subject documents is not fatal as the challenged CA decision clearly summarized the labor tribunal’s rulings.

The verification requirement is deemed substantially complied with when some of the parties who undoubtedly have sufficient knowledge and belief to swear to the truth of the allegations in the petition had signed the same. Such verification is deemed a sufficient assurance that the matters alleged in the petition have been made in good faith or are true and correct, and not merely speculative. In any case, the settled rule is that a pleading which is required by the Rules of Court to be verified, may be given due course even without a verification if the circumstances warrant the suspension of the rules in the interest of justice. Indeed, the absence of a verification is not jurisdictional, but only a formal defect, which does not of itself justify a court in refusing to allow and act on a case. Hence, the failure of some of the respondents to sign the verification attached to their Memorandum of Appeal filed with the NLRC is not fatal to their cause of action.

Petitioner appealed an adverse decision to the BLR. BLR Director inhibited himself from the case because he had been a former counsel of respondent. In view of the inhibition, DOLE Secretary took cognizance of the appeal. Jurisdiction to review the decision of the Regional Director lies with the BLR. Once jurisdiction is acquired by the court, it remains with it until the full termination of the case. Thus, jurisdiction remained with the BLR despite the BLR Director’s inhibition. When the DOLE Secretary resolved the appeal, she merely stepped into the shoes of the BLR Director and performed a function that the latter could not himself perform. She did so pursuant to her power of supervision and control over the BLR.

The amendment introduced by RA 9481 sought to strengthen the workers’ right to self-organization and enhance the Philippines’ compliance with its international obligations as embodied in the International Labour Organization (ILO) Convention No. 87, pertaining to the non-dissolution of workers’ organizations by administrative authority. ILO Convention No. 87 provides that “workers’ and employers’ organizations shall not be liable to be dissolved or suspended by administrative authority.” The ILO has expressed the opinion that the cancellation of union registration by the registrar of labor unions, which in our case is the BLR, is tantamount to dissolution of the organization by administrative authority when such measure would give rise to the loss of legal personality of the union or loss of advantages necessary for it to carry out its activities, which is true in our jurisdiction. Although the ILO has allowed such measure to be taken, provided that judicial safeguards are in place, i.e., the right to appeal to a judicial body, it has nonetheless reminded its members that dissolution of a union, and cancellation of registration for that matter, involve serious consequences for occupational representation. It has, therefore, deemed it preferable if such actions were to be taken only as a last resort and after exhausting other possibilities with less serious effects on the organization. It is undisputed that appellee failed to submit its annual financial reports and list of individual members in accordance with Article 239 of the Labor Code. However, the existence of this ground should not necessarily lead to the cancellation of union registration. At any Employees are entitled to their accrued salaries during the period between the Labor Arbiter’s order of reinstatement pending appeal and the resolution of the National Labor Relations Commission (NLRC) overturning that of the Labor Arbiter. Otherwise stated, even if the order of reinstatement of the Labor Arbiter is reversed on appeal, the employer is still obliged to reinstate and pay the wages of the employee during the period of appeal until reversal by a higher court or tribunal. On the other hand, if the employee has been reinstated during the appeal period and such reinstatement order is reversed with finality, the employee is not required to reimburse whatever salary he received for he is entitled to such, more so if he actually rendered services during the period.

Petitioner is a duly licensed labor contractor engaged in painting houses and buildings. Respondents, former painters of the petitioner, filed an illegal dismissal case against petitioner. Petitioner alleged that the respondents abandoned their job and were not dismissed by the petitioner. The Labor Arbiter ruled that there was neither illegal dismissal nor abandonment of job and that the respondents should be reinstated but without any backwages. On appeal, petitioner alleged that the reinstatement of respondents to their former positions, which were no longer existing, is impossible, highly unfair and unjust. It further alleged that the project they were working on at the time of their alleged dismissal was already completed. Having completed their tasks, their positions automatically ceased to exist. Thus, there were no more positions where they can be reinstated as painters. The Court ruled that there are two types of employees in the construction industry. The first is referred to as project employees or those employed in connection with a particular construction project or phase thereof and such employment is coterminous with each project or phase of the project to which they are assigned. The second is known as non-project employees or those employed without reference to any particular construction project or phase of a project. Respondents belonged to the second type and are classified as regular employees of petitioner. It is clear from the records of the case that when one project is completed, respondents were automatically transferred to the next project awarded to petitioners. There was Respondent was hired by petitioner, a security agency, as a security guard. He was assigned at the Philippine Heart Center until his relief on January 30, 2006. Respondent was not given any assignment thereafter. Thus, on August 2, 2006, he filed a complaint for constructive dismissal and nonpayment of 13th month pay, with prayer for damages against petitioner. To refute the claim, petitioner alleged that respondent was not constructively or illegally dismissed, but had voluntarily resigned. The Court held that respondent was constructively dismissed. In cases involving security guards, a relief and transfer order in itself does not sever employment relationship between a security guard and his agency. An employee has the right to security of tenure, but this does not give him a vested right to his position as would deprive the company of its prerogative to change his assignment or transfer him where his service, as security guard, will be most beneficial to the client. Temporary “off-detail” or the period of time security guards are made to wait until they are transferred or assigned to a new post or client does not constitute constructive dismissal, so long as such status does not continue beyond six months. The onus of proving that there is no post available to which the security guard can be assigned rests on the employer. In the instant case, the failure of petitioner to give respondent a work assignment beyond the reasonable six-month period makes it liable for constructive dismissal.

Respondent filed an illegal dismissal case against the petitioner. Petitioner alleged that respondent abandoned his job and was not dismissed. The Court held that respondent was illegally dismissed. The jurisprudential rule on abandonment is constant. It is a matter of intention and cannot lightly be presumed from certain equivocal acts. To constitute abandonment, two elements must concur: (1) the failure to report for work or absence without valid or justifiable reason; and (2) a clear intent, manifested through overt acts, to sever the employer-employee relationship. In this case, petitioner failed to establish clear evidence of respondent’s intention to abandon his employment. Except for petitioner’s bare assertion that respondent did not report to the office for reassignment, no proof was offered to prove that respondent intended to sever the employer-employee relationship. Besides, the fact that respondent filed the instant complaint negates any intention on his part to forsake his work. It is a settled doctrine that the filing of a complaint for illegal dismissal is inconsistent with the charge of abandonment, for an employee who takes steps to protest his dismissal cannot by logic be said to have abandoned his work.

Respondent, a security guard, filed an illegal dismissal case against the petitioner. To refute the claim, petitioner alleged that respondent was not constructively or illegally dismissed, but had voluntarily resigned. Petitioner alleged that respondent’s resignation is evident from his withdrawal of his cash and firearm bonds. Resignation is the voluntary act of an employee who is in a situation where one believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and one has no other choice but to dissociate oneself from employment. It is a formal pronouncement or relinquishment of an office. The intent to relinquish must concur with the overt act of relinquishment. Thus, the acts of the employee before and after the alleged resignation must be considered in determining whether, he or she, in fact, intended to sever his or her employment. Should the employer interpose the defense of resignation, it is incumbent upon the employer to prove that the employee voluntarily resigned. On this point, the Court held that petitioner failed to discharge its burden. Moreover, the filing of a complaint belies petitioner’s claim that respondent voluntarily resigned.

Premier Allied and Contracting Services, Inc. (PACSI) and its President, the petitioner, were held liable to pay the respondents separation pay and attorney’s fees. To execute this judgment, the NLRC sheriff issued a Notice of Sale of a property with a TCT in the name of the petitioner and his wife. The Court ruled that the Notice of Sale is null and void. The power of the NLRC, or the courts, to execute its judgment extends only to properties unquestionably belonging to the judgment debtor alone. A sheriff, therefore, has no authority to attach the property of any person except that of the judgment debtor. Likewise, there is no showing that the sheriff ever tried to execute on the properties of the corporation. The TCT of the property bears out that, indeed, it belongs to petitioner and his wife. Thus, even if we consider petitioner as an agent of the corporation – and, therefore, not a stranger to the case – such that the provision on third-party claims will not apply to him, the property was registered not only in the name of petitioner but also of his wife. She stands to lose the property subject of execution without ever being a party to the case. This will be tantamount to deprivation of property without due process.

Respondents filed an illegal dismissal case against petitioner. Petitioner alleged that the respondents abandoned their work and were never dismissed by the petitioner. NLRC ruled that the respondents were not illegally dismissed since they failed to present a written notice of termination. This was however reversed by the Court of Appeals. The Court held that a written notice of dismissal is not a pre-requisite for a finding of illegal dismissal. Petitioner failed to prove that respondents were dismissed for a just or authorized cause. In an illegal dismissal case, the onus probandi rests on the employer to prove that the dismissal of an employee is for a valid cause.

Respondents filed an illegal dismissal case against the petitioners. Petitioners, in their defense, alleged that the respondents abandoned their work and were not dismissed by the petitioners. Although In cases of illegal dismissal, the employer bears the burden of proof to prove that the termination was for a valid or authorized cause, the employee must first establish by substantial evidence the fact that he was dismissed. If there is no dismissal, then there can be no question as to the legality or illegality thereof. In the present case, the Court held that there was no evidence that respondents were dismissed or that they were prevented from returning to their work. It was only respondents’ unsubstantiated conclusion that they were dismissed. As a matter of fact, respondents could not name the particular person who effected their dismissal and under what particular circumstances. Absent any showing of an overt or positive act proving that petitioners had dismissed respondents, the latters’ claim of illegal dismissal cannot be sustained.

Respondent employee filed an illegal dismissal case against the petitioner-company and Tom Madula, its operations manager. The case was dismissed by the labor arbiter and the dismissal was affirmed by NLRC. On August 29, 2002, the Court of Appeals reversed and set aside the NLRC decision and resolution. The CA ordered the petitioner company to pay respondent separation pay, moral and exemplary damages, and attorney’s fees. The decision became final and executory on February 27, 2004, and consequently a writ of execution was issued. Petitioner-company filed a Motion to Quash Writ of Execution. The Labor Arbiter granted the Motion and exonerated the petitioner company from paying backwages and held that it was petitioner Madula who should be liable to pay backwages. Respondent then filed before the CA a Very Urgent Motion for Clarification of Judgment. On December 10, 2004, CA granted the Motion and held that petitioner-company is solely liable for the judgment award. As a general rule, final and executory judgments are immutable and unalterable, except under these recognized exceptions, to wit: (a) clerical errors; (b) nunc pro tunc entries which cause no prejudice to any party; and (c) void judgments. The underlying reason for the rule is two-fold: (1) to avoid delay in the administration of justice and thus make orderly the discharge of judicial business, and (2) to put judicial controversies to an end, at the risk of occasional errors, inasmuch as controversies cannot be allowed to drag on indefinitely and the rights and obligations of every litigant must not hang in suspense for an indefinite period Petitioner filed a complaint against respondent company and its officers for illegal dismissal, unfair labor practice, and money claims. Petitioner alleged that the officers should be held personally liable for the acts of company which were tainted with bad faith and arbitrariness. As a general rule, a corporate officer cannot be held liable for acts done in his official capacity because a corporation, by legal fiction, has a personality separate and distinct from its officers, stockholders, and members. To pierce this fictional veil, it must be shown that the corporate personality was used to perpetuate fraud or an illegal act, or to evade an existing obligation, or to confuse a legitimate issue. In illegal dismissal cases, corporate officers may be held solidarily liable with the corporation if the termination was done with malice or bad faith. Moral damages are awarded only where the dismissal was attended by bad faith or fraud, or constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs or public policy. Exemplary damages may avail if the dismissal was effected in a wanton, oppressive or malevolent manner. In the present case, the Court held that petitioner failed to prove that his dismissal was orchestrated by the individual respondents and their acts were attended with bad faith or were done oppressively.

Respondent-company, due to business troubles and losses, implemented a Right-Sizing Program which entailed a company-wide reorganization involving the transfer, merger, absorption or abolition of certain departments of the company. As a result, respondent-company terminated the services of petitioner on account of redundancy. Petitioner filed a complaint against respondent-company and its officers for illegal dismissal, unfair labor practice, and money claims. The Court ruled that petitioner was validly dismissed. There is redundancy when the service capability of the workforce is greater than what is reasonably required to meet the demands of the business enterprise. A position becomes redundant when it is rendered superfluous by any number of factors such as over-hiring of workers, decrease in volume of business, or dropping a particular product line or service activity previously manufactured or undertaken by the enterprise. The Court has been consistent in holding that the determination of whether or not an employee’s services are still needed or sustainable properly belongs to the employer. Provided there is no violation of law or a showing that the employer was prompted by an arbitrary or malicious act, the soundness or wisdom of this exercise of business judgment is not subject to the discretionary review of the Labor Arbiter and the NLRC. However, an employer cannot simply declare that it has become overmanned and dismiss its employees without producing adequate proof to sustain its claim of redundancy. Among the requisites of a valid redundancy program are: (1) the

Petitioner moved to dismiss the petition for certification election filed by respondent union by questioning the validity of the respondent’s union registration. The Court held that legitimacy of the legal personality of respondent cannot be collaterally attacked in a petition for certification election proceeding but only through a separate action instituted particularly for the purpose of assailing it. The Implementing Rules stipulate that a labor organization shall be deemed registered and vested with legal personality on the date of issuance of its certificate of registration. Once a certificate of registration is issued to a union, its legal personality cannot be subject to a collateral attack. It may be questioned only in an independent petition for cancellation in accordance with Section 5 of Rule V, Book V of the Implementing Rules.

Respondents alleged that petitioner-corporation failed to pay them their full compensation. The Labor Arbiter granted their monetary claims but the NLRC reversed the award considering that the petitioner-corporation submitted copies of payrolls, which it annexed to its memorandum on appeal, showing full payment. The general rule is that the burden rests on the employer to prove payment, rather than on the employee to prove non-payment. The reason for the rule is that the pertinent personnel files, payrolls, records, remittances, and other similar documents — which will show that overtime, differentials, service incentive leave, and other claims of the worker have been paid — are not in the possession of the worker but in the custody and absolute control of the employer. In this case, the submission by petitioner-corporation of the time records and payrolls only when the case was on appeal before the NLRC is contrary to the elementary precepts of justice and fair play. Respondents were not given the opportunity to check the authenticity and correctness of the evidence submitted on appeal. Thus, the Supreme Court held that the monetary claims of respondents should be granted. It is a time-honored principle that if doubts exist between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter. It is the rule in controversies between a laborer and his master that doubts reasonably arising from the evidence, or in the interpretation of agreements and writing, should be resolved in the former’s favor. Respondents filed an illegal dismissal case against Premier Allied and Contracting Services, Inc. (PACSI) and its President, the petitioner. PACSI and the petitioner were held liable to pay the respondents separation pay and attorney’s fees. To execute this judgment, NLRC sheriff issued a Notice of Sale of a property with TCT in the name of the petitioner and his wife. Petitioner filed an action for prohibition and damages with prayer for the issuance of a temporary restraining order (TRO) before the Regional Trial Court (RTC). The Court ruled that the RTC lacks jurisdiction to resolve the matter. The Court has long recognized that regular courts have no jurisdiction to hear and decide questions which arise from and are incidental to the enforcement of decisions, orders, or awards rendered in labor cases by appropriate officers and tribunals of the Department of Labor and Employment. To hold otherwise is to sanction splitting of jurisdiction which is obnoxious to the orderly administration of justice. The NLRC Manual on the Execution of Judgment deals specifically with third-party claims in cases brought before that body. It defines a third-party claim as one where a person, not a party to the case, asserts title to or right to the possession of the property levied upon. It also sets out the procedure for the filing of a third-party claim, to wit: “such person shall make an affidavit of his title thereto or right to the possession thereof, stating the grounds of such right or title and shall file the same with the sheriff and copies thereof served upon the Labor Arbiter or proper officer issuing the writ and upon the prevailing party.” In the present case, there is no Petitioner filed a complaint against respondent for collection of excess placement fee defined in Article 34(a) of the Labor Code. Petitioner presented as her evidence a promissory note reflecting excessive fees and testified as to the deductions made by her foreign employer. On the other hand, respondent presented an acknowledgment receipt reflecting collection of an amount authorized by POEA. The Court held that the pieces of evidence presented by petitioner are not substantial enough to show that the respondent collected from her more than the allowable placement fee. In proceedings before administrative and quasi-judicial agencies, the quantum of evidence required to establish a fact is substantial evidence, or that level of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. The Court gave more credence to respondent’s evidence consisting of the acknowledgment receipt showing the amount paid by petitioner and received by respondent. A receipt is a written and signed acknowledgment that money or goods have been delivered. Although a receipt is not conclusive evidence, an exhaustive review of the records of the case fails to disclose any other evidence sufficient and strong enough to overturn the acknowledgment embodied in respondent’s receipt as to the amount it actually received from petitioner. Having failed to adduce sufficient rebuttal evidence, petitioner is bound by the contents of the receipt issued by respondent. The subject receipt remains as the primary or best evidence. The promissory note presented by petitioner cannot be considered as adequate

Petitioner was dismissed by respondent-company due to redundancy. However, it failed to provide the Department of Labor and Employment with a written notice regarding petitioner’s termination. The notice of termination was also not properly served on the petitioner. Further, a reading of the notice shows that respondent-company failed to properly inform the petitioner of the grounds for his termination. There are two aspects which characterize the concept of due process under the Labor Code: one is substantive — whether the termination of employment was based on the provision of the Labor Code or in accordance with the prevailing jurisprudence; the other is procedural — the manner in which the dismissal was effected. There is a psychological effect or a stigma in immediately finding one’s self laid off from work. This is why our labor laws have provided for procedural due process. While employers have the right to terminate employees it can no longer sustain, our laws also recognize the employee’s right to be properly informed of the impending termination of his employment. Though the failure of respondent-company to comply with the notice requirements under the Labor Code did not affect the validity of the dismissal, petitioner is however entitled to nominal damages in addition to his separation pay.

Respondents were terminated from employment due to retrenchment implemented by petitioner. Upon their dismissal, the respondents signed individual “Release Waiver and Quitclaim.” The Court ruled that a waiver or quitclaim is a valid and binding agreement between the parties, provided that it constitutes a credible and reasonable settlement, and that the one accomplishing it has done so voluntarily and with a full understanding of its import. In this case, the respondents were sufficiently apprised of their rights under the waivers and quitclaims that they signed. Each document contained the signatures of the union president and its counsel, which proved that respondents were duly assisted when they signed the waivers and quitclaims. Hence, the Court upheld the validity of the waivers and quitclaims signed by the respondents in this case.

Petitioner issued a Memorandum informing all its employees of the decision of the company’s Board of Directors to downsize and reorganize its business operations due to the change of its corporate structure. Petitioner served the individual notice of termination on its employees on May 14, 2004 or 30 days before the effective date of their termination on 13 June 2004, while it submitted the notice of termination to the Department of Labor and Employment only on 26 May 2004, short of the one-month prior notice requirement under Article 283 of the Labor Code. The Court held that petitioners’ failure to comply with the one-month notice to the DOLE is only a procedural infirmity and does not render the retrenchment illegal. When the dismissal is for a just cause, the absence of proper notice will not nullify the dismissal or render it illegal or ineffectual. Instead, the employer should indemnify the employee for violation of his statutory rights.

In 2004, the petitioner had to retrench and consequently terminate the employment of the respondents. Respondents questioned the validity of the retrenchment, and alleged that though petitioner’s financial statements in 2001 and 2002 reflected losses, it declared net income in 2003. The Court ruled that the fact that there was a net income in 2003 does mean that there was no valid reason for the retrenchment. Records showed that the net income of P6,185,707.05 in 2003 was not enough to allow petitioners to recover the loss of P52,904,297.88 which it suffered in 2002. Article 283 of the Labor Code recognizes retrenchment to prevent losses as a right of the management to meet clear and continuing economic threats or during periods of economic recession to prevent losses. There is no need for the employer to wait for substantial losses to materialize before exercising ultimate and drastic option to prevent such losses.

Respondent-company implemented a company-wide reorganization which resulted in the abolition of petitioner’s position. Petitioner alleged that he was illegally dismissed and that respondent-company is guilty of unfair labor practice because his functions were outsourced to labor-only contractors. The Supreme Court held unfair labor practice refers to acts that violate the workers’ right to organize. The prohibited acts are related to the workers’ right to self-organization and to the observance of a CBA. Thus, an employer may be held liable for unfair labor practice only if it can be shown that his acts interfere with his employees’ right to self-organization. Since there is no showing that the respondent company’s implementation of the Right-Sizing Program was motivated by ill will, bad faith or malice, or that it was aimed at interfering with its employees’ right to self-organization, there is no unfair labor practice to speak of in this case.

Respondent employee was dismissed by petitioners on the ground of alleged habitual absenteeism and abandonment of work. Jurisprudence provides for two essential requirements for abandonment of work to exist: (1) the failure to report for work or absence without valid or justifiable reason, and (2) clear intention to sever the employer-employee relationship manifested by some overt acts should both concur. Further, the employee’s deliberate and unjustified refusal to resume his employment without any intention of returning should be established and proven by the employer. The Court held that petitioners failed to prove that it was respondent employee who voluntarily refused to report back for work by his defiance and refusal to accept the memoranda and the notices of absences sent to him. Petitioners failed to present evidence that they sent these notices to respondent employee’s last known address for the purpose of warning him that his continued failure to report would be construed as abandonment of work. Moreover, the fact that respondent employee never prayed for reinstatement and has sought employment in another company which is a competitor of petitioners cannot be construed as his overt acts of abandoning employment. Neither can the delay of four months be taken as an indication that the respondent employee’s filing of a complaint for illegal dismissal is a mere afterthought. Records show that respondent employee attempted to get his separation pay and alleged commissions from the company, but it was only after his requests went unheeded that he resorted to Respondent employee filed an illegal dismissal case against the Petitioner Corporation and its President. Though the Court found that Respondent was illegally dismissed, it held that the President of the Petitioner Corporation should not be held solidarily liable with Petitioner Corporation. Obligations incurred by corporate officers, acting as such corporate agents, are not theirs but the direct accountabilities of the corporation they represent. Thus, they should not be generally held jointly and solidarily liable with the corporation. The general rule is grounded on the theory that a corporation has a legal personality separate and distinct from the persons comprising it. As exceptions to the general rule, solidary liability may be imposed: (1) When directors and trustees or, in appropriate cases, the officers of a corporation –(a) vote for or assent to [patently] unlawful acts of the corporation; (b) act in bad faith or with gross negligence in directing the corporate affairs; (c) are guilty of conflict of interest to the prejudice of the corporation, its stockholders or members, and other persons; (2) When the director or officer has consented to the issuance of watered stock or who, having knowledge thereof, did not forthwith file with the corporate secretary his written objection thereto; (3) When a director, trustee or officer has contractually agreed or stipulated to hold himself personally and solidarily liable with the corporation; (4) When a director, trustee or officer is made, by specific provision of law, personally liable for his corporate action. To warrant the piercing of the veil of corporate fiction, the officer’s bad faith or wrongdoing must be Respondent company questioned the legal personality of the petitioner union in a certification election proceeding. The Court ruled that the legal personality of the petitioner union cannot be collaterally attacked by respondent company. Except when it is requested to bargain collectively, an employer is a mere bystander to any petition for certification election; such proceeding is non-adversarial and merely investigative, considering that its purpose is to determine if the employees would like to be represented by a union and to select the organization that will represent them in their collective bargaining with the employer. The choice of their representative is the exclusive concern of the employees; the employer cannot have any partisan interest therein; it cannot interfere with, much less oppose, the process by filing a motion to dismiss or an appeal from it; not even the allegation that some employees participating in a petition for certification election are actually managerial employees will give an employer legal personality to block the certification election. The employer’s only right in the proceeding is to be notified or informed thereof.

Petitioner union filed a Petition for Certification Election among the regular rank-and-file employees of the respondent company. Respondent contends that petitioner union is not a legitimate labor organization because its composition is a mixture of supervisory and rank-and-file employees. The Court ruled that the inclusion of the supervisory employees in petitioner union does not divest it of its status as a legitimate labor organization. After a labor organization has been registered, it may exercise all the rights and privileges of a legitimate labor organization. Any mingling between supervisory and rank-and-file employees in its membership cannot affect its legitimacy for that is not among the grounds for cancellation of its registration, unless such mingling was brought about by misrepresentation, false statement or fraud under Article 239 of the Labor Code.

Petitioner union filed a Petition for Certification Election among the regular rank-and-file employees of the respondent company. Respondent company filed an Answer with Motion to Dismiss on the ground that petitioner union is not a legitimate labor organization because of its failure to comply with the documentary requirements set by law, i.e. non-verification of the charter certificate. The Court ruled that it was not necessary for the charter certificate to be certified and attested by the local/chapter officers. Considering that the charter certificate is prepared and issued by the national union and not the local/chapter, it does not make sense to have the local/chapter’s officers certify or attest to a document which they did not prepare. In accordance with this ruling, petitioner union’s charter certificate need not be executed under oath. Consequently, it validly acquired the status of a legitimate labor organization upon submission of (1) its charter certificate, (2) the names of its officers, their addresses, and its principal office, and (3) its constitution and by-laws— the last two requirements having been executed under oath by the proper union officials.

The Labor Arbiter and the NLRC held that petitioner employer illegally dismissed the respondent employee. On appeal, the Court of Appeals reversed the decision and ruled that the dismissal was valid. However, the Court of Appeals ordered petitioner employer to pay respondent employee her salary from the date of the Labor Arbiter’s decision ordering her reinstatement until the Court of Appeals rendered its decision declaring the dismissal valid. Petitioner employer questioned the order and refused to pay. The Court held that even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court. On the other hand, if the employee has been reinstated during the appeal period and such reinstatement order is reversed with finality, the employee is not required to reimburse whatever salary he received, more so, if he actually rendered services during the period. The payment of such wages cannot be deemed as unjust enrichment on respondent’s part.

The Labor Arbiter held that petitioner employer illegally dismissed the respondent employee. Pending its appeal, petitioner employer failed to immediately admit respondent employee back to work despite of an order of reinstatement. The Court held that that the provision of Article 223 is clear that an award by the Labor Arbiter for reinstatement shall be immediately executory even pending appeal and the posting of a bond by the employer shall not stay the execution for reinstatement. The legislative intent is to make an award of reinstatement immediately enforceable, even pending appeal. To require the application for and issuance of a writ of execution as prerequisites for the execution of a reinstatement award would certainly betray the executory nature of a reinstatement order or award. In the case at bar, petitioner employer did not immediately admit respondent employee back to work which, according to the law, should have been done as soon as an order or award of reinstatement is handed down by the Labor Arbiter without need for the issuance of a writ of execution.

Due to the order of reinstatement issued by the Labor Arbiter, petitioner employer sent a letter to the respondent employee to report back to work and assigned her to a new location. The Court held that such is not a bona fide reinstatement. Under Article 223 of the Labor Code, an employee entitled to reinstatement shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. It is established in jurisprudence that reinstatement means restoration to a state or condition from which one had been removed or separated. The person reinstated assumes the position he had occupied prior to his dismissal. Reinstatement presupposes that the previous position from which one had been removed still exists, or that there is an unfilled position which is substantially equivalent or of similar nature as the one previously occupied by the employee. Applying the foregoing principle, it cannot be said that petitioner employer has a clear intent to reinstate respondent employee to her former position under the same terms and conditions nor to a substantially equivalent position. To begin with, the return-to-work order petitioner sent to respondent employee is silent with regard to the position it wanted the respondent employee to assume. Moreover, a transfer of work assignment without any justification therefor, even if respondent employee would be presumably doing the same job with the same pay, cannot be deemed as faithful compliance with the reinstatement order. Petitioner employer ordered the respondent employee to prepare checks for payment of petitioner’s obligations. Respondent did not immediately comply with the instruction since petitioner employer has no sufficient funds to cover the checks. Petitioner employer dismissed respondent employee for willful disobedience. The Court held that respondent employee was illegally dismissed. The offense of willful disobedience requires the concurrence of two (2) requisites: (1) the employee’s assailed conduct must have been willful, that is characterized by a wrongful and perverse attitude; and (2) the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge. Though there is nothing unlawful in the directive of petitioner employer to prepare checks in payment of petitioner’s obligations, respondent employee’s initial reluctance to prepare the checks, although seemingly disrespectful and defiant, was for honest and well intentioned reasons. Protecting the petitioner employer from liability under the Bouncing Checks Law was foremost in her mind. It was not wrongful or willful. Neither can it be considered an obstinate defiance of company authority. The Court takes into consideration that respondent employee, despite her initial reluctance, eventually did prepare the checks on the same day she was tasked to do it.

Respondent employees alleged underpayment of their wages. Petitioner employer claimed that the cost of food and lodging provided by petitioner to the respondent employees should be included in the computation of the wages received by respondents. The Court makes a distinction between “facilities” and “supplements.” Supplements constitute extra remuneration or special privileges or benefits given to or received by the laborers over and above their ordinary earnings or wages. Facilities, on the other hand, are items of expense necessary for the laborer’s and his family’s existence and subsistence so that by express provision of law, they form part of the wage and when furnished by the employer are deductible therefrom, since if they are not so furnished, the laborer would spend and pay for them just the same. In short, the benefit or privilege given to the employee which constitutes an extra remuneration above and over his basic or ordinary earning or wage is supplement; and when said benefit or privilege is part of the laborers’ basic wages, it is a facility. The distinction lies not so much in the kind of benefit or item (food, lodging, bonus or sick leave) given, but in the purpose for which it is given. In the case at bench, the items provided were given freely by petitioner employer for the purpose of maintaining the efficiency and health of its workers while they were working at their respective projects. Thus, the Court is of the view that the food and lodging, or the electricity and water allegedly consumed by respondents in this case were not facilities but supplements which should not be included in the

In an illegal dismissal case against the petitioner employer, respondent employees alleged that they were underpaid. In their defense, petitioner employer alleged that respondent employees actually received wages higher than the prescribed minimum. The Court held that as a general rule, a party who alleged payment of wages as a defense has the burden of proving it. Specifically with respect to labor cases, the burden of proving payment of monetary claims rests on the employer, the rationale being that the pertinent personnel files, payrolls, records, remittances and other similar documents — which will show that overtime, differentials, service incentive leave and other claims of workers have been paid — are not in the possession of the worker but in the custody and absolute control of the employer. In this case, petitioner employer, aside from bare allegations that respondent employees received wages higher than the prescribed minimum, failed to present any evidence, such as payroll or payslips, to support their defense of payment. Thus, petitioner employer utterly failed to discharge the onus probandi.

Petitioner employer alleged that the cost of facilities must be included in the computation of wages paid. The Court held that before the value of facilities can be deducted from the employees’ wages, the following requisites must all be attendant: first, proof must be shown that such facilities are customarily furnished by the trade; second, the provision of deductible facilities must be voluntarily accepted in writing by the employee; and finally, facilities must be charged at reasonable value. Mere availment is not sufficient to allow deductions from employees’ wages. These requirements, however, have not been met in this case. Petitioner employer failed to present any company policy or guideline showing that provisions for meals and lodging were part of the employee’s salaries. It also failed to provide proof of the employees’ written authorization, much less show how they arrived at their valuations. At any rate, it is not even clear whether respondent employees actually enjoyed said facilities.

Petitioner was employed as Assistant Vice-President of the Jewelry Department in respondent bank. His employment was terminated on the ground of willful breach of trust and confidence. Jurisprudence provides for two requisites for dismissal on the ground of loss of trust and confidence; (1) the employee concerned must be holding a position of trust and confidence, and (2) there must be an act that would justify the loss of trust and confidence. Loss of trust and confidence, to be a valid cause for dismissal, must be based on a willful breach of trust and founded on clearly established facts. The basis for the dismissal must be clearly and convincingly established but proof beyond reasonable doubt is not necessary. Furthermore, the burden of establishing facts as bases for an employer’s loss of confidence is on the employer. The court held that the termination of petitioner was without just cause and therefore illegal. Although the first requisite was present, the respondent failed to satisfy the second requisite. Respondent bank was not able to show any concrete proof that petitioner had participated in the approval of the questioned accounts. The invocation by respondent of the loss of trust and confidence as ground for petitioner’s termination has therefore no basis at all.

Petitioner was employed as Assistant Vice-President in respondent bank. His employment was terminated on the ground of willful breach of trust and confidence for endorsing VISA card applicants who later turned out to be impostors resulting in financial losses to respondent bank. The court held that petitioner was illegally dismissed. As provided in Article 282 of the Labor Code, an employer may terminate an employee’s employment for fraud or willful breach of trust reposed in him. However, in order to constitute a just cause for dismissal, the act complained of must be ‘work-related’ such as would show the employee concerned to be unfit to continue working for the employer. The act of betrayal of trust, if any, must have been committed by the employee in connection with the performance of his function or position. The court found that the element of ‘work-connection’ was not present in this case since petitioner was assigned under the Jewelry department, and therefore had nothing to do with the approval of VISA Cards, which was under a different department altogether.

The Labor Arbiter and the NLRC found that respondent employer neglected to pay petitioner’s sickness allowance. However, on appeal, the Court of Appeals reversed such findings and held that petitioner already received his sickness allowance from respondent. Petitioner questioned the ruling of the Court of Appeals by filing a petition for review on certiorari under Rule 45. The Supreme Court held that, as a rule, only questions of law, not questions of fact, may be raised in a petition for review on certiorari under Rule 45. However, this principle is subject to recognized exceptions. In the labor law setting, the Court will delve into factual issues when conflict of factual findings exists among the labor arbiter, the NLRC, and the Court of Appeals. Considering that in the present case there were differing factual findings on the part of the Court of Appeals, on one hand, and the Labor Arbiter and the NLRC, on the other, the Supreme Court found it necessary to make an independent evaluation of the evidence on record.

Petitioner claimed disability benefits under a Collective Bargaining Agreement that the respondent employer entered into with a foreign union. The Court of Appeals refused to admit the evidence of petitioner showing his membership in the union on the ground that it was submitted only with the Motion for Reconsideration. The Supreme Court, in agreeing to examine the evidence belatedly submitted by petitioner, pointed out that technical rules of procedure shall be liberally construed in favor of the working class in accordance with the demands of substantial justice. Rules of procedure and evidence should not be applied in a very rigid and technical sense in labor cases in order that technicalities would not stand in the way of equitably and completely resolving the rights and obligations of the parties.

Petitioner suffered a fractured arm while working on respondent’s vessel. He filed a complaint for permanent disability benefits, among others. Petitioner claims that he is entitled to the higher amount of disability benefits under the Collective Bargaining Agreement which respondent entered into with a union of which petitioner was a member. The Court of Appeals denied the petitioner’s claim. The Supreme Court, in upholding the Court of Appeals, held that the burden of proof rests upon the party who asserts the affirmative of an issue. And in labor cases, the quantum of proof necessary is substantial evidence, or such amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. Petitioner had the duty to prove by substantial evidence his own positive assertions. He did not discharge this burden of proof when he submitted photocopied portions of a different CBA with a different union.

Respondent was a casual teller who was dismissed from service by petitioner without being formally charged. On appeal, the Civil Service Commission (CSC) upheld the dismissal and reasoned that respondent was a casual employee, and therefore her services may be terminated at any time, without need of a just cause. Upon review, both the Court of Appeals and the Supreme Court found that respondent was illegally terminated. The Supreme Court recognized its pronouncement in a recent case that “Even a casual or temporary employee enjoys security of tenure and cannot be dismissed except for cause enumerated in Sec. 22, Rule XIV of the Omnibus Civil Service Rules and Regulations and other pertinent laws.” However, the Court also went on to state that, despite this new ruling on casual employees, it is not the intention of the Court to make the status of a casual employee at par with that of a regular employee, who enjoys permanence of employment. The rule is still that casual employment will cease automatically at the end of the period unless renewed. Casual employees may also be terminated anytime though subject to certain conditions or qualifications with reference to the CSC Form No. 001. Thus, they may be laid-off anytime before the expiration of the employment period provided any of the following occurs: (1) when their services are no longer needed; (2) funds are no longer available; (3) the project has already been completed/finished; or (4) their performance are below par.

Respondent was a casual teller who, having been found guilty of ‘Discourtesy in the Course of Official Duties’ and of ‘Grave Misconduct’, was dismissed from service by petitioner. On appeal, the Civil Service Commission (CSC) ruled that despite lapses in procedural due process committed by petitioner employer, the dismissal was proper since respondent belonged to the category of a casual employee which does not enjoy security of tenure. Hence, she may be separated from service at any time, there being no need to show cause. The Court of Appeals disagreed and declared the dismissal illegal. The Supreme Court affirmed the findings of the Court of Appeals. In doing so, the Court relied on Section 3(2), Article XIII of the Constitution which guarantees the rights of all workers to security of tenure. The Court also recognized its pronouncement in a recent case that “Even a casual or temporary employee enjoys security of tenure and cannot be dismissed except for cause enumerated in Sec. 22, Rule XIV of the Omnibus Civil Service Rules and Regulations and other pertinent laws.”

Respondent was dismissed from her post as casual teller. When respondent appealed her dismissal to the Civil Service Commission (CSC), the latter found that respondent was never formally charged for the administrative offenses for which she was dismissed. However, despite finding that procedural due process was not complied with, the CSC nevertheless upheld the dismissal on the ground that being a casual employee, respondent enjoyed no security of tenure and can be dismissed anytime. The Court found that respondent was illegally terminated and ordered her reinstatement. Casual employees are entitled to due process especially if they are to be removed for more serious causes or for causes other than the reasons mentioned in CSC Form No. 001. This is pursuant to Section 2, Article IX(B) of the Constitution. Furthermore, Section 46 of the Civil Service Law provides that “no officer or employee in the Civil Service shall be suspended or dismissed except for cause as provided by law after due process.” The reason for this is that their termination from the service could carry a penalty affecting their rights and future employment in the government.

Petitioner Yap was employed as an electrician for respondent’s vessel under a 12-month contract. He was found to be illegally terminated with nine months remaining on his contract term. The Court of Appeals (CA) awarded petitioner salaries for three months as provided under Section 10 of Republic Act No. 8042. On certiorari, the Supreme Court reversed the CA and declared that petitioner was entitled to his salaries for the full unexpired portion of his contract. The Court has previously declared in Serrano v. Gallant Maritime Services, Inc. (2009) that the clause “or for three months for every year of the unexpired term, whichever is less” provided in the 5th paragraph of Section 10 of R.A. No. 8042 is unconstitutional for being violative of the rights of Overseas Filipino Workers (OFWs) to equal protection of the laws. The subject clause contains a suspect classification in that, in the computation of the monetary benefits of fixed-term employees who are illegally discharged, it imposes a 3-month cap on the claim of OFWs with an unexpired portion of one year or more in their contracts, but none on the claims of other OFWs or local workers with fixed-term employment. The subject clause singles out one classification of OFWs and burdens it with a peculiar disadvantage. Moreover, the subject clause does not state or imply any definitive governmental purpose; hence, the same violates not just petitioner’s right to equal protection, but also his right to substantive due process under Section 1, Article III of the Constitution. Petitioner Yap was employed on respondent’s vessel under a 12-month contract. Upon finding that he was illegally terminated, the Court of Appeals (CA) awarded petitioner salaries for three months as provided under Section 10 of Republic Act No. 8042 (RA 8042). While the case was pending in the Supreme Court, Section 10 of RA 8042 was declared unconstitutional. In deciding to award petitioner his salaries for the entire unexpired portion of his contract, the Supreme Court rejected the application of the operative fact doctrine. As an exception to the general rule, the doctrine applies only as a matter of equity and fair play. It recognizes that the existence of a statute prior to a determination of unconstitutionality is an operative fact and may have consequences which cannot always be ignored. The doctrine is applicable when a declaration of unconstitutionality will impose an undue burden on those who have relied on the invalid law. This case should not be included in the aforementioned exception. After all, it was not the fault of petitioner that he lost his job due to an act of illegal dismissal committed by respondents. To rule otherwise would be iniquitous to petitioner and other OFWs, and would, in effect, send a wrong signal that principals/employers and recruitment/manning agencies may violate an OFW’s security of tenure which an employment contract embodies and actually profit from such violation based on an unconstitutional provision of law.

Petitioner Yap was employed as an electrician for respondent’s vessel under a 12-month contract. He was found to be illegally terminated with nine months remaining on his contract term, and was declared to be entitled to his salaries for the balance of his contract. Respondents claim that the tanker allowance should be excluded from the definition of the term “salary.” The Supreme Court, after examining the relevant clauses of the contract, rejected respondent’s claim. The word salaries in Section 10 (5) does not include overtime and leave pay. For seafarers, DOLE Department Order No. 33, series 1996, provides a Standard Employment Contract of Seafarers, in which salary is understood as the basic wage, exclusive of overtime, leave pay and other bonuses. A close perusal of the contract reveals that the tanker allowance of US$130.00 was not categorized as a bonus but was rather encapsulated in the basic salary clause, hence, forming part of the basic salary of petitioner. If respondents intended it differently, the contract per se should have indicated that said allowance does not form part of the basic salary or, simply, the contract should have separated it from the basic salary clause.


Respondents are supervisory and rank and file employees of the DXWG-Iligan City radio station which is owned by petitioner Banahaw Broadcasting Corporation (BBC). Respondents filed a complaint for illegal dismissal, unfair labor practice, and reimbursement of unpaid Collective Bargaining Agreement (CBA) benefits against petitioner. The Labor Arbiter rendered a decision ordering petitioner BBC to pay the money claims. On appeal to the NLRC, petitioner BBC averred that since it is wholly owned by the Republic of the Philippines, it need not post an appeal bond. The NLRC dismissed the appeal of BBC for non-perfection. The Court of Appeals affirmed the NLRC. The Supreme Court, in sustaining the CA, held that as a general rule, the government and all the attached agencies with no legal personality distinct from the former are exempt from posting appeal bonds. The rationale is to protect the presumptive judgment creditor against the insolvency of the presumptive judgment debtor. When the State litigates, it is not required to put up an appeal bond because it is presumed to be always solvent. This exemption, however, does not, as a general rule, apply to government-owned and controlled corporations (GOCCs) for the reason that the latter has a personality distinct from its shareholders. In this case, BBC, though owned by the government, is a corporation with a personality distinct from the Republic or any of its agencies or instrumentalities, and therefore do not partake in the latter’s exemption from the posting of appeal bonds. Respondents filed a complaint for illegal dismissal, unfair labor practice, and reimbursement of unpaid Collective Bargaining Agreement (CBA) benefits against petitioner. The Labor Arbiter rendered a decision in favor of respondents and ordered petitioner BBC to pay the money claims. Petitioner appealed to the NLRC, and without posting the appeal bond, filed a Motion for the Re-computation of the Monetary Award in order that the appeal bond may be reduced. The NLRC denied the motion and dismissed the appeal of BBC for non-perfection. The Court of Appeals and the Supreme Court both sustained the dismissal by the NLRC. The Motion for the Re-computation of the Monetary Award filed by BBC was tantamount to a motion for extension to perfect the appeal, which is prohibited by the rules. The payment of the appeal bond within the period provided by law is an indispensable and jurisdictional requisite and not a mere technicality of law or procedure. Hence, the failure on the part of BBC to perfect the appeal had the effect of rendering the judgment final and executory.

Petitioner filed a complaint for illegal dismissal against respondent. Finding instead that petitioner had voluntarily resigned, the Labor Arbiter dismissed the complaint against respondent, but ordered the latter to pay P18,000.00 by way of financial assistance. On appeal, the NLRC found petitioner to be illegally dismissed. The Court of Appeals reaffirmed the findings of the LA but deleted the award of financial assistance, ruling that the same may not be awarded in cases of voluntary resignation. The Supreme Court, in upholding the award of financial assistance, stated that while the rule is that financial assistance is allowed only in instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character, there are instances when financial assistance may be allowed as a measure of social justice and as an equitable concession. In this case, petitioner, who has served respondent for more than eight years without committing any infraction, may be granted such financial assistance on equity considerations.

Petitioner filed a complaint for illegal dismissal against respondent. Finding that petitioner had voluntarily resigned, the Labor Arbiter dismissed the complaint against respondent, but ordered the latter to pay P18,000.00 by way of financial assistance. Respondents interposed an appeal with the National Labor Relations Commission (NLRC), purely for the purpose of questioning the validity of the grant of financial assistance made by the Labor Arbiter. Instead, the NLRC ruled that petitioner was illegally dismissed and was entitled to separation pay. The Court of Appeals (CA) held that it was grave abuse of discretion for the NLRC to rule on the issue of illegal dismissal when the only issue raised to it on appeal was the propriety of the award of financial assistance. The Supreme Court sustained the view of the CA, reasoning that Section 4(d), Rule VI of the 2005 Revised Rules of Procedure of the NLRC expressly provides that, on appeal, the NLRC shall limit itself only to the specific issues that were elevated for review. In the case at bar, the NLRC evidently went against its own rules of procedure when it passed upon the issue of illegal dismissal although this question was not raised by respondents in their appeal.

For petitioner’s refusal to comply with his deployment assignment, respondent manning agency filed a complaint against him for breach of contract before the Philippine Overseas Employment Administration (POEA). The POEA penalized petitioner with one year suspension from overseas deployment. The suspension was reduced to six months by the Secretary of Labor. Petitioner appealed the latter’s decision with the Office of the President (OP). The Supreme Court ruled that petitioner’s appeal was erroneous. The proper remedy to question the decisions or orders of the Secretary of Labor is via Petition for Certiorari under Rule 65. Appeals to the OP in labor cases have been eliminated, except those involving national interest over which the President may assume jurisdiction. The present case does not affect national interest. Hence, petitioner’s appeal to the OP did not toll the running of the period and the assailed decision of the Secretary of Labor is deemed to have attained finality.

The posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards from the decision of the labor arbiter. However, under Section 6, Rule VI of the NLRC’s Revised Rules of Procedure, the bond may be reduced albeit only (1) on meritorious grounds and (2) upon posting of a partial bond in a reasonable amount in relation to the monetary award. For this purpose, the NLRC is not precluded from conducting a preliminary determination of the employer’s financial capability to post the required bond, without necessarily passing upon the merits. In the present case, the NLRC gravely abused its discretion in denying petitioner’s motion to reduce bond peremptorily without considering the evidence presented by petitioner showing that it was under a state of receivership. Such circumstance constitutes meritorious grounds to reduce the bond. Moreover, the petitioner exhibited its good faith by posting a partial cash bond during the reglementary period.

The three material dates which should be stated in the petition for certiorari under Rule 65 are the dates when the notice of judgment was received, when a motion for reconsideration was filed and when the notice of the denial of the motion for reconsideration was received. These dates should be reflected in the petition to enable the reviewing court to determine if the petition was filed on time. In the present case, the petition filed with the Court of Appeals failed to state when petitioner received the assailed NLRC Decision and when he filed his partial motion for reconsideration. However, this omission is not at all fatal because these material dates are reflected in petitioner’s Partial Motion for Reconsideration attached to the petition. The failure to state these two dates in the petition may be excused if the same are evident from the records of the case. The Court further stated that the more important material date which must be duly alleged in the petition is the date of receipt of the resolution of denial of the motion for reconsideration. Since petitioner has duly complied with this rule, there was substantial compliance with the requisite formalities.

Article 253 of the Labor Code mandates the parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period prior to the expiration of the old CBA and/or until a new agreement is reached by the parties. The law does not provide for any exception nor qualification on which economic provisions of the existing agreement are to retain its force and effect. Likewise, the law does not distinguish between a CBA duly agreed upon by the parties and an imposed CBA like the one in the present case. Hence, considering that no new CBA had been, in the meantime, agreed upon by respondent GMC and the Union, the provisions of the imposed CBA continues to have full force and effect until a new CBA is entered into by the parties.

Moral and exemplary damages are recoverable where the dismissal of an employee was attended by bad faith or fraud, or constituted an act oppressive to labor, or were done in a manner contrary to morals, good customs or public policy. In the present case, P&G dismissed its employees in a manner oppressive to labor. The sudden and peremptory barring of petitioners from work, and from admission to the work place, after just a one-day verbal notice, and for no valid cause, constitutes oppression and utter disregard of the right to due process of the concerned petitioners. Hence, the Supreme Court held that an award of moral damages is called for under the circumstances.

Petitioner was employed as an instructor of Data Center College located in Ilocos Norte. When the college proposed to transfer him to Abra, he filed a complaint alleging constructive dismissal since his re-assignment will entail an indirect reduction of his salary or diminution of pay considering that no additional allowance will be given to cover for board and lodging expenses. He claims that such additional allowance was given in the past and therefore cannot be discontinued and withdrawn without violating the prohibition against non-diminution of benefits. The Supreme Court affirmed the findings of the lower bodies and declared that petitioner’s re-assignment did not amount to constructive dismissal. Constructive dismissal is quitting because continued employment is rendered impossible, unreasonable or unlikely, or because of a demotion in rank or a diminution of pay. It exists when there is a clear act of discrimination, insensibility or disdain by an employer which becomes unbearable for the employee to continue his employment. In the present case, the college’s right to transfer petitioner is based on contractual stipulation, particularly the condition laid down in petitioner’s employment contract that respondents have the prerogative to assign petitioner in any of its branches or tie-up schools as the necessity demands. In any event, it is management prerogative for employers to transfer employees on just and valid grounds such as genuine business necessity. Since respondents have shown that it was experiencing some financial constraints at the time, the re-assignment was not tainted with bad faith.

Petitioners were employees of Promm-Gem, a legitimate independent contractor, and were hired to work as merchandisers for respondent P&G. When petitioners filed a claim against P&G for regularization and other benefits, it likewise attacked Promm-Gem as being merely a labor-only contractor. The latter treated such move as an act of disloyalty against Promm-Gem and petitioners were dismissed on the ground of grave misconduct and breach of trust. The Supreme Court declared such termination illegal for being without valid cause. Loss of trust and confidence, as a cause for termination of employment, is premised on the fact that the employee concerned holds a position of responsibility or of trust and confidence. As such, he must be invested with confidence on delicate matters, such as custody, handling or care and protection of the property and assets of the employer. Moreover, in order to constitute a just cause for dismissal, the act complained of must be work-related and must show that the employee is unfit to continue to work for the employer. In the instant case, the petitioners have not been shown to be occupying positions of responsibility or of trust and confidence. Neither is there any evidence to show that they are unfit to continue to work as merchandisers for Promm-Gem.

Petitioners were employees of Promm-Gem, a legitimate independent contractor. After several years of working as merchandisers for respondent P&G, petitioners filed a claim against P&G for regularization and other benefits, and asserted incidentally that Promm-Gem was merely a labor-only contractor. The latter treated such move as an act of disloyalty against Promm-Gem and petitioners were dismissed on the ground of grave misconduct and breach of trust. The Supreme Court declared such termination illegal for lack of a valid clause. To be a just cause for dismissal, such misconduct (a) must be serious; (b) must relate to the performance of the employee’s duties; and (c) must show that the employee has become unfit to continue working for the employer. In other words, in order to constitute serious misconduct under Article 282 (a) of the Labor Code, it is not sufficient that the act or conduct complained of has violated some established rules or policies. It is equally important and required that the act or conduct must have been performed with wrongful intent. In the instant case, petitioners may have committed an error of judgment in claiming to be employees of P&G, but it cannot be said that they were motivated by any wrongful intent in doing so. As such, the court found them guilty of simple misconduct only which does not warrant a dismissal.

The award of separation pay is authorized under Article 283 and 284 of the Labor Code, and under Section 4 (b), Rule I, Book VI of the Implementing Rules and Regulations where there is illegal dismissal and reinstatement is no longer feasible. By way of exception, the courts have allowed grants of separation pay to stand as “a measure of social justice” where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. However, there is no provision in the Labor Code which grants separation pay to voluntarily resigning employees. In fact, the rule is that an employee who voluntarily resigns from employment is not entitled to separation pay, except when it is stipulated in the employment contract or collective bargaining agreement (CBA), or it is sanctioned by established employer practice or policy. In the present case, neither the abovementioned provisions of the Labor Code nor the exceptions apply because petitioner was not dismissed from his employment nor is there any evidence to show that payment of separation pay is stipulated in his employment contract or sanctioned by established practice or policy of his employer. Nevertheless, the Court noted that petitioner never had any derogatory record during his long years of service with respondent and that his employment was severed not by reason of any infraction on his part but because of his failing physical condition. Hence, as a measure of social and compassionate justice and as an equitable concession, the Court granted separation pay to petitioner by way of financial assistance. Petitioner was employed as a machine operator until he stopped working when he suffered from an illness. After his recovery, petitioner was directed to report for work but he refused. Instead, he filed a case with the NLRC demanding his separation pay. The NLRC awarded him separation benefits under Article 284 of the Labor Code. However, the Court of Appeals (CA) deleted such award. On appeal, the Supreme Court stated that Article 284 presupposes that it is the employer who terminates the services of the employee found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees. It does not contemplate a situation where it is the employee who severs his or her employment ties. This is precisely the reason why Section 8, Rule 1, Book VI of the Omnibus Rules Implementing the Labor Code, directs that an employer shall not terminate the services of the employee unless there is a certification by a competent public health authority that the disease is of such nature or at such a stage that it cannot be cured within a period of six (6) months even with proper medical treatment. In the present case, petitioner was not terminated from his employment and, instead, is deemed to have resigned therefrom, and therefore he is not entitled to separation pay under Article 284 of the Labor Code.

A strike conducted after the Secretary of Labor has assumed jurisdiction over a labor dispute is illegal and any union officer who knowingly participates in the strike may be declared as having lost his employment. The present case involved a slowdown strike. Unlike other forms of strike, the employees involved in a slowdown do not walk out of their jobs to hurt the company. They need only to stop work or reduce the rate of their work while generally remaining in their assigned post. The Supreme Court upheld the finding that the union officers committed illegal acts that warranted their dismissal from work when they refused to work or abandoned their work to join union assemblies after the Labor Secretary assumed jurisdiction over the labor dispute.

Petitioners assert that they are employees of P&G and that Promm-Gem and SAPS are merely labor-only contractors providing manpower services to P&G. There is “labor-only” contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such person are performing activities which are directly related to the principal business of such employer. In the instant case, the Supreme Court found that Promm-Gem has substantial investment which relates to the work to be performed. The financial statementsshow that it has authorized capital stock of P1 million and a substantial amount of paid-in capital and other assets to support its operations. Under the circumstances, Promm-Gem cannot be considered a labor-only contractor; it is in fact a legitimate independent contractor. On the other hand, the financial records of SAPS show that it has a paid-in capital of only P31,250.00. There is no other evidence presented to show how much its working capital and assets are. Furthermore, there is no showing of substantial investment in tools, equipment or other assets. Considering that SAPS has no substantial capital or investment and the workers it recruited are performing activities which are directly related to the principal business of P&G, SAPS is considered to be engaged in “labor-only contracting”.

The law allows contracting arrangements for the performance of specific jobs, works or services, regardless of whether such activity is peripheral or core in nature. However, in order for such outsourcing to be valid, it must be made to an independent contractor because the current labor rules expressly prohibit labor-only contracting. There is labor-only contracting when the contractor or sub-contractor merely recruits, supplies or places workers to perform a job, work or service for a principaland any of the following elements are present: (i) The contractor or subcontractor does not have substantial capital or investment which relates to the job, work or service to be performed and the employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal; or (ii) The contractor does not exercise the right of control on the performance of the work of the contractual employee. Where ‘labor-only’ contracting exists, the law establishes an employer-employee relationship between the employer and the employees of the ‘labor-only’ contractor. The statute establishes this relationship for a comprehensive purpose: to prevent a circumvention of labor laws. The contractor is considered merely an agent of the principal employer and the latter is responsible to the employees of the labor-only contractor as if such employees had been directly employed by the principal employer. In the present case, petitioners, who were recruited by Promm-Gem and SAPS to work as merchandisers of respondent P&G, filed a complaint against the latter A distinction exists between the ordinary workers’ liability for illegal strike and that of the union officers who participated in it. The ordinary worker cannot be terminated for merely participating in the strike. There must be proof that he committed illegal acts during its conduct. On the other hand, a union officer can be terminated upon mere proof that he knowingly participated in the illegal strike. Moreover, the participating union officers have to be properly identified. In the present case, with respect to those union officers whose identity and participation in the strike having been properly established, the termination was legal.

The Secretary of Labor is empowered to give arbitral awards in the exercise of his authority to assume jurisdiction over labor disputes under Art. 263 (g) of the Labor Code. In the present case, the Supreme Court upheld the authority of the Secretary of Labor to impose arbitral awards higher than what was supposedly agreed upon in the Memorandum of Agreement (MOA) between the parties. The Court further stated that while an arbitral award cannot per se be categorized as an agreement voluntarily entered into by the parties because it requires the interference and imposing power of the State thru the Secretary of Labor when he assumes jurisdiction, the award can be considered as an approximation of a collective bargaining agreement which would otherwise have been entered into by the parties. Hence, it has the force and effect of a valid contract obligation between the parties.


A local union may disaffiliate at any time from its mother federation, absent any showing that the same is prohibited under its constitution or rules. Such disaffiliation, however, does not result in it losing its legal personality. A local union does not owe its existence to the federation with which it is affiliated. It is a separate and distinct voluntary association owing its creation to the will of its members. The mere act of affiliation does not divest the local union of its own personality, neither does it give the mother federation the license to act independently of the local union. It only gives rise to a contract of agency where the former acts in representation of the latter. In the present case, whether the FFW went against the will of its principal (the member-employees) by pursuing the case despite the signing of the MOA, is not for the Court, nor for respondent employer to determine, but for the Union and FFW to resolve on their own pursuant to their principal-agent relationship. Moreover, the issue of disaffiliation is an intra-union dispute which must be resolved in a different forum in an action at the instance of either or both the FFW and the union or a rival labor organization, but not the employer as in this case.

An appropriate bargaining unit is defined as “a group of employees of a given employer, comprised of all or less than all of the entire body of employees, which the collective interest of all the employees, consistent with equity to the employer, indicate to be best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law”. The test of grouping is community or mutuality of interest. In this case, there should be only one bargaining unit for the employees in the Cabuyao, San Fernando, and Otis plants of the Magnolia Poultry Products involved in “dressed” chicken processing and Magnolia Poultry Farms engaged in “live” chicken operations. Certain factors, such as specific line of work, working conditions, location of work, mode of compensation, and other relevant conditions do not affect or impede their commonality of interest. Although they seem separate and distinct from each other, the specific tasks of each division are actually interrelated and there exists mutuality of interests which warrants the formation of a single bargaining unit.

Confidential employees are defined as those who (1) assist or act in a confidential capacity, in regard (2) to persons who formulate, determine, and effectuate management policies in the field of labor relations. The two criteria are cumulative, and both must be met if an employee is to be considered a confidential employee. Confidential employees, such as accounting personnel, should be excluded from the bargaining unit, as their access to confidential information may become the source of undue advantage. However, such fact does not apply to the position of Payroll Master (as in this case) and the whole gamut of employees who has access to salary and compensation data. The CA correctly held that the position of Payroll Master does not involve dealing with confidential labor relations information in the course of the performance of his functions. In other words, since the nature of his work does not pertain to company rules and regulations and confidential labor relations, it follows that he cannot be excluded from the subject bargaining unit.

Although Article 245 of the Labor Code limits the ineligibility to join, form and assist any labor organization to managerial employees, jurisprudence has extended this prohibition to confidential employees. In this regard, the CA correctly ruled that the positions of Human Resource Assistant and Personnel Assistant belong to the category of confidential employees and, hence, are excluded from the bargaining unit, considering their respective positions and job descriptions. As Human Resource Assistant, the scope of one’s work necessarily involves labor relations, recruitment and selection of employees, access to employees’ personal files and compensation package, and human resource management. As regards a Personnel Assistant, one’s work includes the recording of minutes for management during collective bargaining negotiations, assistance to management during grievance meetings and administrative investigations, and securing legal advice for labor issues from the petitioner’s team of lawyers, and implementation of company programs. Therefore, in the discharge of their functions, both gain access to vital labor relations information which outrightly disqualifies them from union membership.

The general rule is that an employer has no standing to question the process of certification election, since this is the sole concern of the workers. Law and policy demand that employers take a strict, hands-off stance in certification elections. The bargaining representative of employees should be chosen free from any extraneous influence of management. The only exception is where the employer itself has to file the petition pursuant to Article 258 of the Labor Code because of a request to bargain collectively.

The posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards from the Decision of the Labor Arbiter. However, the Supreme Court, considering the substantial merits of the case, has on certain occasions relaxed this rule on, and excused the late posting of, the appeal bond when there are strong and compelling reasons for the liberality. In this case, the exception applies. The rule on the posting of an appeal bond cannot defeat the substantive rights of respondents to be free from an unwarranted burden of answering for an illegal dismissal for which they were never responsible since no employer-employee relationship existed between the two.

Petitioners are not employees of respondents, since their relationship failed to pass the four-fold test of employment: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee’s conduct, which is the most important element. As found by both the NLRC and the CA, respondents had no part in petitioners’ selection and management; petitioners’ compensation was paid out of the arriba (which is a percentage deducted from the total bets), not by petitioners; and petitioners performed their functions as masiador and sentenciador free from the direction and control of respondents.

To prove illegal recruitment, it must be shown that appellant gave complainants the distinct impression that she had the power or ability to send complainants abroad for work such that the latter were convinced to part with their money in order to be employed. All eight private complainants in this case consistently declared that Ochoa offered and promised them employment overseas. Moreover, Ochoa can also be convicted for illegal recruitment based on Section 6 of Republic Act No. 8042, which clearly provides that any person, whether or not a licensee or holder of authority may be held liable for illegal recruitment for certain acts as enumerated in paragraphs (a) to (m). Among such acts is the “failure to reimburse expenses incurred by the worker in connection with his documentation and processing for purposes of deployment, in cases where the deployment does not actually take place without the worker’s fault.” In this case, Ochoa received placement and medical fees from private complainants and failed to reimburse the private complainants the amounts they had paid when they were not able to leave for Taiwan and Saudi Arabia, through no fault of their own.

Section 36, Rule 130 of the Revised Rules on Evidence, states that a witness can testify only to those facts which he knows of or comes from his personal knowledge, that is, which are derived from his perception. This is known as the hearsay rule. The law, however, provides for specific exceptions to the hearsay rule, and one of the exceptions refers to entries in official records made in the performance of duty by a public officer. Accordingly, in the case at bar, although Dir. Mateo was not presented in court or did not testify during the trial to verify the said certification, such certification is considered as prima facie evidence of the facts stated therein and is therefore presumed to be truthful, because Ochoa did not present any plausible proof to rebut its truthfulness.

A person may be charged and convicted separately of illegal recruitment under Republic Act No. 8042, in relation to the Labor Code, and estafa under Article 315, paragraph 2(a) of the Revised Penal Code. The offense of illegal recruitment is malum prohibitum, while estafa is malum in se. In this case, therefore, Ochoa may also be charged and correspondingly held liable for estafa since all the elements for the crime are present in Criminal Case Nos. 98-77301, 98-77302, and 98-77303. Ochoa’s deceit was evident in her false representation to private complainants Gubat, Cesar, and Agustin that she possessed the authority and capability to send said private complainants to Taiwan/Saudi Arabia for employment as early as one to two weeks from completion of the requirements, among which were the payment of placement fees and submission of a medical examination report.

The rule is settled that “off-detailing” is not equivalent to dismissal, so long as such status does not continue beyond a reasonable time and that it is only when such a “floating status” lasts for more than six months that the employee may be considered to have been constructively dismissed. A complaint for illegal dismissal filed prior to the lapse of the six-month period and/or the actual dismissal of the employee is generally considered as prematurely filed. In this case, the evidence adduced a quo clearly indicates that petitioners were not in bad faith when they placed Leynes under floating status. Disgruntled by NHPI’s countermanding of her decision to bar Engr. Cantuba from the Project, Leynes twice signified her intention to resign from her position on 12 February 2002. In view of the sensitive nature of Leynes’ position and the critical stage of the Project’s business development, NHPI was constrained to hire Engr. Jose as Leynes’ replacement as a remedial measure.

Constructive dismissal exists where there is cessation of work because continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank and a diminution in pay. In constructive dismissal cases, the employer is, concededly, charged with the burden of proving that its conduct and action or the transfer of an employee are for valid and legitimate grounds such as genuine business necessity. The Supreme Court found that in this case, respondents have more than amply discharged this burden with proof of the circumstances surrounding Engr. Carlos’ employment as Property Manager for the Project and the consequent unavailability of a similar position for Leynes.

Verification of a pleading is a formal, not jurisdictional, requirement intended to secure the assurance that the matters alleged in a pleading are true and correct. It is deemed substantially complied with when one who has ample knowledge to swear to the truth of the allegations in the complaint or petition signs the verification, and when matters alleged in the petition have been made in good faith or are true and correct. In this case, the Supreme Court found that the petition’s verification substantially complied with the requirements of the rules. The SPA authorized Bello-Ona to represent Bello in the case from which the present petition with the Supreme Court originated. As the daughter of Bello, Bello-Ona is deemed to have sufficient knowledge to swear to the truth of the allegations in the petition, which are matters of record in the lower tribunals and the appellate court.

Case law defines constructive dismissal as a cessation of work because continued employment has been rendered impossible, unreasonable, or unlikely, as when there is a demotion in rank or diminution in pay, or both, or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee. In this case, other than his bare and self-serving allegations, Bello has not offered any evidence that he was promoted in a span of four months since his employment as traffic marshal in July 2001 to a detachment commander in November 2001. At most, the BSSI merely changed his assignment or transferred him to the post where his service would be most beneficial to its clients. The management’s prerogative of transferring and reassigning employees from one area of operation to another in order to meet the requirements of the business is generally not constitutive of constructive dismissal. This was what exactly occurred in this case.

The refusal of the Court of Appeals to consider the petition was the absence of a duplicate original or certified true copy of the assailed NLRC decision, in violation of Section 3, Rule 46 of the Rules of Court (in relation to Section 1, Rule 65). The company, however, corrected the procedural lapse by attaching a certified copy of the NLRC decision to its motion for reconsideration. The Supreme Court found that the CA precipitately denied the petition for certiorari based on an overly rigid application of the rules of procedure. In effect, it sacrificed substance to form in a situation where the petitioners’ recourse was not patently frivolous or meritless. Thus, the case was remanded to the NLRC for resolution of its appeal.

As was enunciated in the case of St. Martin Funeral Home v. NLRC, the special civil action of certiorari under Rule 65 of the Rules of Civil Procedure, which is filed before the CA, is the proper vehicle for judicial review of decisions of the NLRC. The petition should be initially filed before the Court of Appeals in strict observance of the doctrine on hierarchy of courts as the appropriate forum for the relief desired. Thus, respondent’s recourse to the CA was the proper remedy to question the resolution of the NLRC.

To ascertain the existence of an employer-employee relationship jurisprudence has invariably adhered to the four-fold test, to wit: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee’s conduct, or the so-called “control test.” Applying the aforementioned test, an employer-employee relationship was found to be absent in the case at bar. Among other things, respondent was not required to report everyday during regular office hours of petitioner. Respondent’s monthly retainer fees were paid to him either at his residence or a local restaurant. More importantly, petitioner did not prescribe the manner in which respondent would accomplish any of the tasks in which his expertise as a liaison officer was needed; respondent was left alone and given the freedom to accomplish the tasks using his own means and method. Verily, the absence of the element of control on the part of the petitioner engenders a conclusion that he is not an employee of the petitioner.

Article 280 of the Labor Code, in which the lower court used to buttress its findings that respondent became a regular employee of the petitioner, is not applicable in the case at bar. The Supreme Court has ruled that said provision is not the yardstick for determining the existence of an employment relationship because it merely distinguishes between two kinds of employees, i.e., regular employees and casual employees, for purposes of determining the right of an employee to certain benefits, to join or form a union, or to security of tenure; it does not apply where the existence of an employment relationship is in dispute. It is, therefore, erroneous on the part of the Court of Appeals to rely on Article 280 in determining whether an employer-employee relationship exists between respondent and the petitioner. Therefore, despite the fact that petitioner made use of the services of respondent as a part-time consultant on retainer basis for eleven years, he still cannot be considered as a regular employee of petitioner using only as basis Article 280 of the Labor Code.

Anent a seafarer’s entitlement to compensation and benefits for injury and illness, Section 20-B (3) of 2000 POEA-SEC provides that in order for the seafarer to claim the said benefits, he must submit himself to a post-employment medical examination by a company-designated physician within three working days upon his return, except when he is physically incapacitated to do so, in which case, a written notice to the agency within the same period is deemed as compliance. Failure of the seafarer to comply with the mandatory reporting requirement shall result in his forfeiture of the right to claim the above benefits. In this case, there was no dispute regarding the fact that Esguerra had altogether failed to comply with the mandatory reporting requirement. Esguerra also did not present any evidence to prove justification for his inability to submit himself to a post-employment medical examination by a company-designated physician. Self-serving and unsubstantiated declarations are insufficient to establish a case before quasi-judicial bodies where the quantum of evidence required in establishing a fact is substantial evidence.

Employment on probationary status of teaching personnel is not only governed by the Labor Code but also by the Manual of Regulations for Private Schools. Section 91 of the Manual of Regulations for Private Schools, states that: “Every contract of employment shall specify the designation, qualification, salary rate, the period and nature of service and its date of effectivity, and such other terms and condition of employment as may be consistent with laws and rules, regulations and standards of the school.” Thus, it is important that the contract of probationary employment specify the period or term of its effectivity. In this case, therefore, the letters sent by petitioner College Dean Sr. Racadio, which were devoid of specifics, cannot be considered as contracts. The closest they can resemble to are that of informal correspondence among the said individuals. As such, petitioner school has the right not to renew the contracts of the respondents, the old ones having expired at the end of their terms. Assuming, arguendo, that the employment contracts between the petitioner school and the respondent spouses were renewed, the SC found that there was a valid and just cause for their dismissal since petitioners have repeatedly violated several departmental and instructional policies, such as the late submission of final grades, failure to submit final test questions to the Program Coordinator, the giving of tests in essay form instead of the multiple choice format as mandated by the school and the high number of students with failing grades in the classes that he handled. To determine the existence of an employer-employee relationship, case law has consistently applied the four-fold test. Respondents argue that the element of control is lacking in this case, making petitioner-referee an independent contractor and not an employee of respondents. The Supreme Court agreed as it found that there was no control over the means and methods by which petitioner performs his work as a referee officiating a PBA basketball game. The contractual stipulations in the retainer contracts do not pertain to, much less dictate, how and when petitioner will blow the whistle and make calls. On the contrary, they merely serve as rules of conduct or guidelines in order to maintain the integrity of the professional basketball league. Moreover, the following circumstances indicate that petitioner is an independent contractor: (1) the referees are required to report for work only when PBA games are scheduled, which is three times a week spread over an average of only 105 playing days a year, and they officiate games at an average of two hours per game; and (2) the only deductions from the fees received by the referees are withholding taxes. There are no deductions for contributions to the Social Security System, Philhealth or Pag-Ibig, which are the usual deductions from employees’ salaries. These undisputed circumstances buttress the fact that petitioner is an independent contractor, and not an employee of respondents.

The issue in this case was whether or not the change in the scheme of distribution of the incremental proceeds from tuition fee increase is a diminution of benefit. The Court held that it was not. Generally, employees have a vested right over existing benefits voluntarily granted to them by their employer. The principle against diminution of benefits, however, is applicable only if the grant or benefit is founded on an express policy or has ripened into a practice over a long period of time which is consistent and deliberate. In other words, the benefit must be characterized by regularity and the voluntary and deliberate intent of the employer to grant the benefits over a significant period of time. In the case at bench, contrary to UEEA’s claim, the distribution of the 70% incremental proceeds based on equal sharing scheme cannot be held to have ripened into a company practice since the practice has not been for a long period of time. The same could not also have ripened into a vested right because such grant was not a deliberate and voluntary act on the part of the petitioner. The Supreme Court held that the grant by an employer of benefits through an erroneous application of the law due to the absence of clear administrative guidelines is not considered a voluntary act which cannot be unilaterally discontinued.

BPI contends that at the time of Uy’s dismissal, she was no longer functioning as a teller of the bank but as a low-counter staff and as such, Uy is not anymore entitled to the teller’s functional allowance pursuant to company policy. BPI further argues that Uy is neither entitled to the monetary conversion of vacation and sick leaves for failure to prove that she is entitled to these benefits at the time of her dismissal. The Supreme Court ruled that Uy is entitled to the teller’s functional allowance but not to the monetary conversion of vacation and sick leaves. Uy’s function as a teller at the time of her dismissal was factually established and was never impugned by the parties during the proceedings held in the main case. Besides, BPI did not present any evidence to substantiate its allegation that Uy was assigned as a low-counter staff at the time of her dismissal. It is a hornbook rule that he who alleges must prove. As to the vacation and sick leave cash conversion benefit, the Supreme Court held that entitlement to the same should be necessarily proved since this privilege is not statutory or mandatory in character but only voluntarily granted. As such, the existence of this benefit as well as the employee’s entitlement thereto cannot be presumed but should be proved by the employee. In this case, however, the records failed to prove that Uy was receiving this benefit at the time of her dismissal on December 14, 1995.








For a transfer not to be considered a constructive dismissal, the employer must be able to show that the transfer is for a valid reason, entails no diminution in the terms and conditions of employment, and must not be unreasonably inconvenient or prejudicial to the employee. If the employer fails to meet these standards, the employee’s transfer shall amount, at the very least, to constructive dismissal. In this case, the Supreme Court found that the real reason Menese was transferred from being the agency’s payroll and billing clerk of the PGH detachment to being a lady guard in the agency’s main office, was because of the request of Dapula, the new chief of the UP-PGH Security Division. The latter’s request was based on the fact that she had committed the previous position of Menese to a certain Amy Claro, a protégée of Dapula. Thus, the Supreme Court found justification for Menese’s refusal to be transferred. Not only was the transfer arbitrary and done in bad faith, it would also result in a demotion in rank and a diminution in pay: (1) she would hold the position of lady guard and (2) she would be paid in accordance with the statutory minimum wage, or from P11,720.00 to P7,500.00. Clearly, there was a demotion in rank and salary undertaken in bad faith amounting to constructive dismissal.

Resignation is defined as “the voluntary act of employees who are compelled by personal reasons to disassociate themselves from their employment. It must be done with the intention of relinquishing an office, accompanied by the act of abandonment.” In this case, the evidence on record suggested that petitioner did not resign; he was orally dismissed by Sy. The crucial factor is the verbal order directly given by Sy, the company president, for petitioner to immediately turn over his accountabilities. It is this lack of clear, valid and legal cause, not to mention due process that made his dismissal illegal, warranting reinstatement and the award of backwages. Moreover, the filing of a complaint for illegal dismissal just three weeks later is difficult to reconcile with voluntary resignation. Had petitioner intended to voluntarily relinquish his employment after being unceremoniously dismissed by no less than the company president, he would not have sought redress from the NLRC and vigorously pursued this case against the respondents.

The death of a seaman during the term of employment makes the employer liable to his heirs for death compensation benefits. This rule, however, is not absolute. The employer may be exempt from liability if he can successfully prove that the seaman’s death was caused by an injury directly attributable to his deliberate or willful act. The Supreme Court agreed that Danilo died of Asphyxia by strangulation as proved by the NBI post-mortem findings and certification issued by the medico-legal officer, Dr. Reyes. The photocopy of the fax transmission of the purported English translation of Dr. Hameed’s medical report to prove that Danilo committed suicide should not be considered since the medical report’s genuineness and due execution were unverifiable: (1) the existence of the original medical report, which was written in the arabic language, was not even attached to the records and has not been proved; (2) the identity of the person who made the translation and whether the translator has the recognized competence in both English and the language the medical report was originally written were not established; (3) the alleged translated medical report was not even signed by Dr. Hameed which creates doubt as to its authenticity. The unsigned translated medical report is nothing but a self-serving document which ought to be treated as a mere scrap of paper devoid of any evidentiary value even in administrative proceedings.

A separation pay at the time of the reorganization of the National Power Corporation and retirement benefits at the appropriate future time are two separate and distinct entitlements. Stated otherwise, a retirement plan is a different program from a separation package. In R.A. No. 1616, the retirees are entitled to gratuity benefits to be paid by the last employer and refund of premiums to be paid by the GSIS. On the other hand, retirement benefits under C.A. No. 186, as amended by R.A. No. 8291, are to be paid by the GSIS. In view of the fact that separation pay and retirement benefits are different entitlements, as they have different legal bases, different sources of funds, and different intents, the “exclusiveness of benefits” rule provided under R.A. No. 8291 is not applicable. (Section 55 of R.A. No. 8291 states: “Whenever other laws provide similar benefits for the same contingencies covered by this Act, the member who qualifies to the benefits shall have the option to choose which benefits will be paid to him.”)

A claim for overtime pay will not be granted in the absence of any factual and legal basis. In this respect, the records indicated that the labor arbiter granted Menese’s claim for holiday pay, rest day and premium pay on the basis of payrolls. There is no such proof in support of Menese’s claim for overtime pay other than her contention that she worked from 8:00 a.m. up to 5:00 p.m. She presented no evidence to show that she was working during the entire one hour meal break. The Supreme Court thus found the NLRC’s deletion of the overtime pay award in order.

Permanent disability refers to the inability of a worker to perform his job for more than 120 days, regardless of whether he loses the use of any part of his body. What determines petitioner’s entitlement to permanent disability benefits is his inability to work for more than 120 days. The certification by the company-designated physician that petitioner is fit to work was issued after 199 days or more than 120 days from the time he was medically repatriated to the Philippines. Petitioner herein was medically repatriated to the Philippines on October 8, 2001. However, it was only on April 25, 2002 or after a lapse of 199 days that Dr. Cruz issued a certification declaring him fit to work. Thus, the Supreme Court found that petitioner’s disability is considered permanent and total because the “fit to work” certification was issued by Dr. Cruz only on April 25, 2002, or more than 120 days after he was medically repatriated on October 8, 2001. Furthermore, the company-designated physician’s certification that petitioner is fit to work does not make him ineligible for permanent total disability benefits. It does not matter that the company-designated physician assessed petitioner as fit to work. It is undisputed that from the time petitioner was repatriated on October 8, 2001, he was unable to work for more than 120 days as he was only certified fit to work on April 25, 2002. Consequently, petitioner’s disability is considered permanent and total.

Section 41(n) of Republic Act No. 8291 contemplates a situation wherein GSIS, due to a reorganization, a streamlining of its organization, or some other circumstance, which calls for the termination of some of its employees, must design a plan to encourage, induce, or motivate these employees, who are not yet qualified for either optional or compulsory retirement under our laws, to instead voluntarily retire. Such is not the case with the GSIS RFP. Its very objective, “to motivate and reward employees for meritorious, faithful, and satisfactory service,” contradicts the nature of an early retirement incentive plan, or a financial assistance plan, which involves a substantial amount that is given to motivate employees to retire early. Instead, it falls exactly within the purpose of a retirement benefit, which is a form of reward for an employee’s loyalty and lengthy service, in order to help him or her enjoy the remaining years of his life. Without a doubt, the GSIS RFP is a supplementary retirement plan, which is prohibited by the Teves Retirement Law.

There is no question that the May 6, 2002 strike was illegal, first, because when Kilusang Manggagawa ng LGS, Magdala Multipurpose and Livelihood Cooperative (KMLMS) filed the notice of strike on March 5 or 14, 2002, it had not yet acquired legal personality and, thus, could not legally represent the eventual union and its members. And second, similarly, when KMLMS conducted the strike-vote on April 8, 2002, there was still no union to speak of, since KMLMS only acquired legal personality as an independent legitimate labor organization only on April 9, 2002 or the day after it conducted the strike-vote. Consequently, the mandatory notice of strike and the conduct of the strike-vote report were ineffective for having been filed and conducted before KMLMS acquired legal personality as a legitimate labor organization, violating Art. 263(c), (d) and (f) of the Labor Code and Rule XXII, Book V of the Omnibus Rules Implementing the Labor Code. It is, thus, clear that KMLMS did not comply with the mandatory requirement of law and implementing rules on possession of a legal personality as a legitimate labor organization.

May a corporation invoke its merger with another corporation as a valid ground to exempt its “absorbed employees” from the coverage of a union shop clause contained in its existing Collective Bargaining Agreement (CBA) with its own certified labor union? The Supreme Court ruled in the negative. The former FEBTC employees retained the regular status that they possessed while working for their former employer upon their absorption by petitioner BPI. This fact would not remove them from the scope of the phrase “new employees” as contemplated in the Union Shop Clause of the CBA. The Union Shop Clause in the CBA simply states that “new employees” who during the effectivity of the CBA “may be regularly employed” by the Bank must join the union within thirty (30) days from their regularization. The plain language of the CBA provision notwithstanding, the SC held that there is nothing in the said clause that limits its application to only new employees who possess non-regular status, meaning probationary status, at the start of their employment. What is indubitable from the Union Shop Clause is that upon the effectivity of the CBA, petitioner’s new regular employees (regardless of the manner by which they became employees of BPI) are required to join the Union as a condition of their continued employment.

A writ of certiorari is a remedy to correct errors of jurisdiction, for which reason it must clearly show that the public respondent has no jurisdiction to issue an order or to render a decision. Rule 65 of the Rules of Court has instituted the petition for certiorari to correct acts of any tribunal, board or officer exercising judicial or quasi-judicial functions with grave abuse of discretion amounting to lack or excess of jurisdiction. This remedy serves as a check on acts, either of excess or passivity, that constitute grave abuse of discretion of a judicial or quasi-judicial function. In this case, the SC found that the CA proceeded to review the records and to rule on issues that were no longer disputed during the appeal to the NLRC, such as the existence of an employer-employee relationship. The pivotal issue before the NLRC was whether petitioner’s telling respondent to take a rest, or to have a break, was already a positive act of dismissing him. This issue was not discussed by the CA. The SC reviewed the NLRC Resolution that reversed the LA Decision and found nothing in it that was whimsical, unreasonable or patently violative of the law. It was the CA which erred in finding faults that were inexistent in the NLRC Resolution.

On the issue of the propriety of entertaining the Petition for Certiorari despite the prescribed Motion for Reconsideration with the NLRC, the SC found that the CA committed error when it entertained the petition for certiorari and explained that when respondent failed to file a Motion for Reconsideration of the NLRC’s 30 November 2006 Resolution within the reglementary period, the Resolution attained finality and could no longer be modified by the Court of Appeals. Untimeliness in filing motions or petitions is not a mere technical or procedural defect, as leniency regarding this requirement will impinge on the right of the winning litigant to peace of mind resulting from the laying to rest of the controversy.

There are two commonly accepted concepts of attorney’s fees – the ordinary and extraordinary. In its ordinary concept, an attorney’s fee is the reasonable compensation paid to a lawyer by his client for the legal services the former renders; compensation is paid for the cost and/or results of legal services per agreement or as may be assessed. In its extraordinary concept, attorney’s fees are deemed indemnity for damages ordered by the court to be paid by the losing party to the winning party. This is payable not to the lawyer but to the client, unless the client and his lawyer have agreed that the award shall accrue to the lawyer as additional or part of his compensation. Article 111 of the Labor Code, as amended, contemplates the extraordinary concept of attorney’s fees. Although an express finding of facts and law is still necessary to prove the merit of the award, there need not be any showing that the employer acted maliciously or in bad faith when it withheld the wages. Thus the SC concluded that the CA erred in ruling that a finding of the employer’s malice or bad faith in withholding wages must precede an award of attorney’s fees under Article 111 of the Labor Code. To reiterate, a plain showing that the lawful wages were not paid without justification is sufficient.

One of the issues of this case involved the effect of the Memorandum of Agreement provision that attorney’s fees shall be deducted from the amelioration allowance (AA) and CBA receivables. In this regard, the CA held that the additional grant of 10% attorney’s fees by the NLRC violates Article 111 of the Labor Code, considering that the MOA between the parties already ensured the payment of 10% attorney’s fees deductible from the AA and CBA receivables of the Union’s members. In the present case, the Union bound itself to pay 10% attorney’s fees to its counsel under the MOA and also gave up the attorney’s fees awarded to the Union’s members in favor of their counsel. The award by the NLRC cannot be taken to mean an additional grant of attorney’s fees, in violation of the ten percent (10%) limit under Article 111 of the Labor Code since it rests on an entirely different legal obligation than the one contracted under the MOA. Simply stated, the attorney’s fees contracted under the MOA do not refer to the amount of attorney’s fees awarded by the NLRC; the MOA provision on attorney’s fees does not have any bearing at all to the attorney’s fees awarded by the NLRC under Article 111 of the Labor Code. Based on these considerations, it is clear that the CA erred in ruling that the LA’s award of attorney’s fees violated the maximum limit of ten percent (10%) fixed by Article 111 of the Labor Code.

In this case, respondent was diagnosed with Central Retinal Vein Occlusion of his left eye. Central retinal vein occlusion causes painless vision loss which is usually sudden, but it can also occur gradually over a period of days to weeks. This condition, despite numerous medical procedures undertaken, eventually led to a total loss of sight of respondent’s left eye. Loss of one bodily function falls within the definition of disability which is essentially “loss or impairment of a physical or mental function resulting from injury or sickness.” The disputable presumption that a particular injury or illness that results in disability, or in some cases death, is work-related stands in the absence of contrary evidence. In the case at bench, the said presumption was not overturned by the petitioners. Although, the employer is not the insurer of the health of his employees, he takes them as he finds them and assumes the risk of liability. Consequently, the Court concurred with the finding of the lower courts that respondent’s disability is compensable.

A total disability does not require that the employee be completely disabled, or totally paralyzed. What is necessary is that the injury must be such that the employee cannot pursue his or her usual work and earn from it. On the other hand, a total disability is considered permanent if it lasts continuously for more than 120 days. What is crucial is whether the employee who suffers from disability could still perform his work notwithstanding the disability he incurred. Evidently, respondent was not able to return to his job as a seafarer after his left eye was declared legally blind. Records showed that the petitioners did not give him a new overseas assignment after his disability. This only proved that his disability effectively barred his chances to be deployed abroad as an officer of an ocean-going vessel. Hence, the Supreme Court found it fitting that respondent be entitled to permanent total disability benefits considering that he would not be able to resume his position as a maritime officer, and the probability that he would be hired by other maritime employers would be close to impossible.

Gross negligence connotes want of care in the performance of one’s duties, while habitual neglect implies repeated failure to perform one’s duties for a period of time, depending on the circumstances. In the case at bench, Padao was accused of having presented a fraudulently positive evaluation of the business, credit standing/rating and financial capability of Reynaldo and Luzvilla Baluma and eleven other loan applicants. Some businesses were eventually found not to exist at all, while in other transactions, the financial status of the borrowers simply could not support the grant of loans in the approved amounts. Moreover, Padao over-appraised the collateral of spouses Gardito and Alma Ajero, and that of spouses Ihaba and Rolly Pango. Padao’s repeated failure to discharge his duties as a credit investigator of the bank amounted to gross and habitual neglect of duties under Article 282 (b) of the Labor Code. He not only failed to perform what he was employed to do, but also did so repetitively and habitually, causing millions of pesos in damage to PNB. Thus, PNB acted within the bounds of the law by meting out the penalty of dismissal, which it deemed appropriate given the circumstances.

Padao is not entitled to financial assistance. The rule regarding separation pay as a measure of social justice is that it shall be paid only in those instances where the employee is validly dismissed for causes other than serious misconduct, willful disobedience, gross and habitual neglect of duty, fraud or willful breach of trust, commission of a crime against the employer or his family, or those reflecting on his moral character. In this case, Padao was guilty of gross and habitual neglect of duties.

The employment of seafarers, including claims for death benefits, is governed by the contracts they sign every time they are hired or rehired; and as long as the stipulations therein are not contrary to law, morals, public order or public policy, they have the force of law between the parties. While the seafarer and his employer are governed by their mutual agreement, the POEA rules and regulations require that the POEA Standard Employment Contract (POEA-SEC) be integrated in every seafarer’s contract. In this case, considering that petitioner executed an overseas employment contract with respondent company in November 1999, the 1996 POEA-SEC should govern. The 2000 POEA-SEC initially took effect on June 25, 2000. Thereafter, the Court issued the Temporary Restraining Order (TRO) which was later lifted on June 5, 2002. Thus, petitioner cannot simply rely on the disputable presumption provision mentioned in Section 20 (B)(4) of the 2000 POEA-SEC which states that: “Those illnesses not listed in Section 32 of this Contract are disputably presumed as work related.”

Granting that the provisions of the 2000 POEA-SEC apply, the disputable presumption provision in Section 20 (B) does not allow petitioner to just sit down and wait for respondent company to present evidence to overcome the disputable presumption of work-relatedness of the illness. Contrary to his position, the seafarer still has to substantiate his claim in order to be entitled to disability compensation. He has to prove that the illness he suffered was work-related and that it must have existed during the term of his employment contract. For disability to be compensable under Section 20 (B) of the 2000 POEA-SEC, two elements must concur: (1) the injury or illness must be work-related; and (2) the work-related injury or illness must have existed during the term of the seafarer’s employment contract. In other words, to be entitled to compensation and benefits under this provision, it is not sufficient to establish that the seafarer’s illness or injury has rendered him permanently or partially disabled; it must also be shown that there is a causal connection between the seafarer’s illness or injury and the work for which he had been contracted. Unfortunately for petitioner, he failed to prove that his varicose veins arose out of his employment with respondent company.

For a sickness or resulting disability or death to be compensable, the claimant must prove either (1) that the employee’s sickness was the result of an occupational disease listed under Annex “A” of the Amended Rules on Employees’ Compensation, or (2) that the risk of contracting the disease was increased by his working conditions. Under the increased risk theory, there must be a reasonable proof that the employee’s working condition increased his risk of contracting the disease, or that there is a connection between his work and the cause of the disease. In this case, since Besitan’s ailment, End Stage Renal Disease secondary to Chronic Glomerulonephritis is not among those listed under Annex “A,” of the Amended Rules on Employees’ Compensation, he needs to show by substantial evidence that his risk of contracting the disease was increased by his working condition.

Direct and clear evidence, is not necessary to prove a compensable claim. Strict rules of evidence do not apply as PD No. 626 only requires substantial evidence. The SC found that Besitan has sufficiently proved that his working condition increased his risk of contracting Glomerulonephritis, which according to GSIS may be caused by bacterial, viral, and parasitic infection. When Besitan entered the government service in 1976, he was given a clean bill of health. In 2005, he was diagnosed with End Stage Renal Disease secondary to Chronic Glomerulonephritis. It would appear therefore that the nature of his work could have increased his risk of contracting the disease. His frequent travels to remote areas in the country could have exposed him to certain bacterial, viral, and parasitic infection, which in turn could have caused his disease. Delaying his urination during his long trips to the provinces could have also increased his risk of contracting the disease. As a matter of fact, even the Bank Physician of Bangko Sentral ng Pilipinas, Dr. Gregorio Suarez II, agreed that Besitan’s working condition could have contributed to the weakening of his kidneys, which could have caused the disease. This Medical Certificate is sufficient to prove that the working condition of Besitan increased his risk of contracting Glomerulonephritis. In claims for compensation benefits, a doctor’s certification as to the nature of a claimant’s disability deserves full credence because no medical practitioner would issue certifications indiscriminately.


The crime of illegal recruitment is committed when two elements concur, namely: (1) the offender has no valid license or authority required by law to enable one to lawfully engage in recruitment and placement of workers; and (2) he undertakes either any activity within the meaning of “recruitment and placement” defined under Article 13 (b), or any prohibited practices enumerated under Article 34 of the Labor Code. First, the petitioner was found not to have been issued a license as proven by the certification from the DOLE-Dagupan District Office stating that petitioner has not been issued any license by the POEA and neither is it a holder of an authority to engage in recruitment and placement activities. Second, from the testimonies of the private respondents, it is apparent that petitioner was able to convince the private respondents to apply for work in Israel after parting with their money in exchange for the services she would render. The said act of the petitioner, without a doubt, falls within the meaning of recruitment and placement as defined in Article 13 (b) of the Labor Code. Finally, the Supreme Court noted that in illegal recruitment cases, the failure to present receipts for money that was paid in connection with the recruitment process will not affect the strength of the evidence presented by the prosecution as long as the payment can be proved through clear and convincing testimonies of credible witnesses.

It is settled that even if probationary employees do not enjoy permanent status, they are accorded the constitutional protection of security of tenure. This means they may only be terminated for a just cause or when they otherwise fail to qualify as regular employees in accordance with reasonable standards made known to them by the employer at the time of their engagement. In this case, the justification given by the petitioners for Sy’s dismissal was her alleged failure to qualify by the company’s standard. Other than the general allegation that said standards were made known to her at the time of her employment, however, no evidence, documentary or otherwise, was presented to substantiate the same. Neither was there any performance evaluation presented to prove that indeed hers was unsatisfactory. Hence, for failure of the petitioners to support their claim of unsatisfactory performance by Sy, the SC held that Sy’s employment was unjustly terminated to prevent her from acquiring a regular status in circumvention of the law on security of tenure.

Even on the assumption that Sy indeed failed to meet the standards set by the petitioner-employer and made known to the former at the time of her engagement, still, the termination was flawed for failure to give the required notice to Sy. Section 2, Rule I, Book VI of the Implementing Rules provides that: “If the termination is brought about by the completion of a contract or phase thereof, or by failure of an employee to meet the standards of the employer in the case of probationary employment, it shall be sufficient that a written notice is served the employee, within a reasonable time from the effective date of termination.”


Findings of fact of administrative agencies and quasi-judicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only respect but finality when affirmed by the Court of Appeals. Factual findings of quasi-judicial bodies like the NLRC, if supported by substantial evidence, are accorded respect and even finality by the Supreme Court, more so when they coincide with those of the Labor Arbiter. Such factual findings are given more weight when the same are affirmed by the Court of Appeals. In the present case, the Supreme Court found no reason to depart from these principles since the Labor Arbiter found that there was substantial evidence to conclude that Oasay had breached the trust and confidence of Palacio Del Gobernador Condominium Corporation, which finding the NLRC had likewise upheld.

Clark Development Corporation (CDC) owes its existence to Executive Order No. 80 issued by then President Fidel V. Ramos. It was meant to be the implementing and operating arm of the Bases Conversion and Development Authority tasked to manage the Clark Special Economic Zone. Expressly, CDC was formed in accordance with Philippine corporation laws and existing rules and regulations promulgated by the Securities and Exchange Commission pursuant to Section 16 of Republic Act 7227. CDC, a government owned or controlled corporation without an original charter, was incorporated under the Corporation Code. Pursuant to Article IX-B, Sec. 2(1) of the Constitution, the civil service embraces only those government owned or controlled corporations with original charter. As such, CDC and its employees are covered by the Labor Code and not by the Civil Service Law.

Article 285 of the Labor Code recognizes termination by the employee of the employment contract by “serving written notice on the employer at least one (1) month in advance.” Given that provision, the law contemplates the requirement of a written notice of resignation. In the absence of a written resignation, it is safe to presume that the employer terminated the seafarers. In this case, the Supreme Court found the dismissal of De Gracia, et al. to be illegal since Cosmoship merely sent a telex to Skippers, the local manning agency, claiming that De Gracia, et al. were repatriated because the latter voluntarily pre-terminated their contracts.

For a worker’s dismissal to be considered valid, it must comply with both procedural and substantive due process. The legality of the manner of dismissal constitutes procedural due process, while the legality of the act of dismissal constitutes substantive due process. Procedural due process in dismissal cases consists of the twin requirements of notice and hearing. The employer must furnish the employee with two written notices before the termination of employment can be effected: (1) the first notice apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the second notice informs the employee of the employer’s decision to dismiss him. Before the issuance of the second notice, the requirement of a hearing must be complied with by giving the worker an opportunity to be heard. It is not necessary that an actual hearing be conducted. Substantive due process, on the other hand, requires that dismissal by the employer be made based on a just or authorized cause under Articles 282 to 284 of the Labor Code. In this case, there was no written notice furnished to De Gracia, et al. regarding the cause of their dismissal. Cosmoship furnished a telex to Skippers, the local manning agency, claiming that De Gracia, et al. were repatriated because they voluntarily pre-terminated their contracts. This telex was given credibility and weight by the Labor Arbiter and NLRC in deciding that there was pre-termination of the employment contract “akin to resignation” and no illegal dismissal. However, as correctly ruled by the CA, the telex message is “a biased and self-serving

From a legal point of view, a bonus is a gratuity or act of liberality of the giver which the recipient cannot demand as a matter of right. The grant of a bonus is basically a management prerogative which cannot be forced upon the employer who may not be obliged to assume the onerous burden of granting bonuses. However, a bonus becomes a demandable or enforceable obligation if the additional compensation is granted without any conditions imposed for its payment. In such case, the bonus is treated as part of the wage, salary or compensation of the employee. Particularly instructive is the ruling of the Court in Metro Transit Organization, Inc. v. National Labor Relations Commission (G.R. No. 116008, July 11, 1995) where the Court said: Whether or not a bonus forms part of wages depends upon the circumstances and conditions for its payment. If it is additional compensation which the employer promised and agreed to give without any conditions imposed for its payment, such as success of business or greater production or output, then it is part of the wage. But if it is paid only if profits are realized or if a certain level of productivity is achieved, it cannot be considered part of the wage. Where it is not payable to all but only to some employees and only when their labor becomes more efficient or more productive, it is only an inducement for efficiency, a prize therefore, not a part of the wage.

In this case, there is no dispute that Eastern Telecommunications Phils., Inc. and Eastern Telecoms Employees Union agreed on the inclusion of a provision for the grant of 14th, 15th and 16th month bonuses in the 1998-2001 CBA Side Agreement, as well as in their 2001-2004 CBA Side Agreement, which contained no qualification for its payment. There were no conditions specified in In constructive dismissal cases, the employer has the burden of proving that the transfer of an employee is for just or valid ground, such as genuine business necessity. The employer must demonstrate that the transfer is not unreasonable, inconvenient, or prejudicial to the employee and that the transfer does not involve a demotion in rank or a diminution in salary and other benefits. “If the employer fails to overcome this burden of proof, the employee’s transfer is tantamount to unlawful constructive dismissal.” [Merck Sharp and Dohme (Philippines) v. Robles, G.R. No. 176506, November 25, 2009] Petitioners failed to satisfy the burden of proving that the transfer was based on just or valid ground. Petitioners’ bare assertions of imminent threat from the respondents are mere accusations which are not substantiated by any proof. The Supreme Court agreed with the Court of Appeals in ruling that the transfer of respondents amounted to a demotion.

With regard to disease as a ground for termination, Article 284 of the Labor Code provides that an employer may terminate the services of an employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health, as well as to the health of his co-employees. In order to validly terminate employment on this ground, Section 8, Rule I, Book VI of the Omnibus Rules Implementing the Labor Code requires that: (i) the employee be suffering from a disease and his continued employment is prohibited by law or prejudicial to his health or to the health of his co-employees, and (ii) a certification by a competent public health authority that the disease is of such nature or at such a stage that it cannot be cured within a period of six (6) months even with proper medical treatment. If the disease or ailment can be cured within the period, the employer shall not terminate the employee but shall ask the employee to take a leave. The employer shall reinstate such employee to his former position immediately upon the restoration of his normal health. In Triple Eight Integrated Services, Inc. v. NLRC (G.R. No. 129584, December 3, 1998), the Court held that the requirement for a medical certificate under Article 284 of the Labor Code cannot be dispensed with; otherwise, it would sanction the unilateral and arbitrary determination by the employer of the gravity or extent of the employee’s illness and, thus, defeat the public policy on the protection of labor. In this case, Ynson should have reported back to work or attended the investigations conducted by Wuerth With respect to due process requirement, the employer is bound to furnish the employee concerned with two (2) written notices before termination of employment can be legally effected. One is the notice apprising the employee of the particular acts or omissions for which his dismissal is sought and this may loosely be considered as the proper charge. The other is the notice informing the employee of the management’s decision to sever his employment. 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, thereby giving him ample opportunity to be heard and defend himself with the assistance of his representative should he so desire. The requirement of notice, it has been stressed, is not a mere technicality but a requirement of due process to which every employee is entitled. Here, Palacio Del Gobernador Condominium Corporation complied with the “two-notice rule” stated above.

Cityland did not afford Galang the required notice before he was dismissed. As the Court of Appeals noted, the investigation conference Tupas called to look into the janitors’ complaints against Galang did not constitute the written notice required by law as he had no clear idea what the charges against him were.

The validity of an employee’s dismissal from service hinges on the satisfaction of the two substantive requirements for a lawful termination. These are, first, whether the employee was accorded due process the basic components of which are the opportunity to be heard and to defend himself. This is the procedural aspect. And second, whether the dismissal is for any of the causes provided in the Labor Code of the Philippines. This constitutes the substantive aspect. On the substantive aspect, the Supreme Court found that Palacio Del Gobernador Condominium Corporation’s termination of the Oasay’s employment was for a cause provided under the Labor Code. In terminating Oasay’s employment, Palacio Del Gobernador Condominium Corporation invoked loss of trust and confidence. The first requisite for dismissal on the ground of loss of trust and confidence is that the employee concerned must be holding a position of trust and confidence. Here, it is indubitable that Oasay holds a position of trust and confidence. The position of Building Administrator, being managerial in nature, necessarily enjoys the trust and confidence of the employer. The second requisite is that there must be an act that would justify the loss of trust and confidence. Loss of trust and confidence, to be a valid cause for dismissal, must be based on a willful breach of trust and founded on clearly established facts. Palacio Del Gobernador Condominium Corporation had established, by clear and convincing evidence, Oasay’s acts which justified its loss of trust and confidence on the former. The Supreme Court found that Galang had become unfit to continue his employment. The evidence supports the view that he continued to exhibit undesirable traits as an employee and as a person, in relation to both his co-workers and his superiors, particularly Tupas, her immediate supervisor. Quoting the Court of Appeals’ decision with approval, the Supreme Court held: “Without offering any possible ill motive that might have impelled [the respondents] to summarily dismiss [Galang], who admitted having been absorbed by the former as janitor upon the termination of his contract with his agency, this Court is more inclined to give credence to the evidence pointing to the conclusion that [Galang’s] employment was actually severed for a just cause.”

In Sagales v. Rustan’s Commercial Corporation (G.R. No. 166554, November 27, 2008), the Supreme Court ruled: Truly, while the employer has the inherent right to discipline, including that of dismissing its employees, this prerogative is subject to the regulation by the State in the exercise of its police power. In this regard, it is a hornbook doctrine that infractions committed by an employee should merit only the corresponding penalty demanded by the circumstance. The penalty must be commensurate with the act, conduct or omission imputed to the employee and must be imposed in connection with the disciplinary authority of the employer. (Emphasis in the original.) In the case at bar, the penalty handed out by the petitioners was the ultimate penalty of dismissal. There was no warning or admonition for respondent’s violation of team rules, only outright termination of his services for an act which could have been punished appropriately with a severe reprimand or suspension.

The onus probandi falls on petitioner to establish or substantiate such claim by the requisite quantum of evidence. The issue of Javier’s alleged illegal dismissal is anchored on the existence of an employer-employee relationship between him and Fly Ace. As the records bear out, the Labor Arbiter and the Court of Appeals found Javier’s claim of employment with Fly Ace as wanting and deficient. Although Section 10, Rule VII of the New Rules of Procedure of the NLRC allows a relaxation of the rules of procedure and evidence in labor cases, this rule of liberality does not mean a complete dispensation of proof. Labor officials are enjoined to use reasonable means to ascertain the facts speedily and objectively with little regard to technicalities or formalities but nowhere in the rules are they provided a license to completely discount evidence, or the lack of it. The quantum of proof required, however, must still be satisfied. Hence, “when confronted with conflicting versions on factual matters, it is for them in the exercise of discretion to determine which party deserves credence on the basis of evidence received, subject only to the requirement that their decision must be supported by substantial evidence.” [Salvador Lacorte v. Hon. Amado G. Inciong, 248 Phil. 232 (1988)] Accordingly, Javier needs to show by substantial evidence that he was indeed an employee of the company against which he claims illegal dismissal.

To determine the existence of an employer-employee relationship, the following are considered: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee’s conduct. Of these elements, the most important criterion is whether the employer controls or has reserved the right to control the employee not only as to the result of the work but also as to the means and methods by which the result is to be accomplished. In this case, Javier was not able to persuade the Court that the above elements exist in his case. He could not submit competent proof that Fly Ace engaged his services as a regular employee; that Fly Ace paid his wages as an employee, or that Fly Ace could dictate what his conduct should be while at work. In other words, Javier’s allegations did not establish that his relationship with Fly Ace had the attributes of an employer-employee relationship on the basis of the above-mentioned four-fold test. Worse, Javier was not able to refute Fly Ace’s assertion that it had an agreement with a hauling company to undertake the delivery of its goods. It was also baffling to realize that Javier did not dispute Fly Ace’s denial of his services’ exclusivity to the company. In short, all that Javier laid down were bare allegations without corroborative proof.

Contracts undergo three distinct stages, to wit: negotiation; perfection or birth; and consummation. Negotiation begins from the time the prospective contracting parties manifest their interest in the contract and ends at the moment of agreement of the parties. Perfection or birth of the contract takes place when the parties agree upon the essential elements of the contract. Consummation occurs when the parties fulfill or perform the terms agreed upon in the contract, culminating in the extinguishment thereof. Under Article 1315 of the Civil Code, a contract is perfected by mere consent and from that moment the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law. An employment contract, like any other contract, is perfected at the moment (1) the parties come to agree upon its terms; and (2) concur in the essential elements thereof: (a) consent of the contracting parties, (b) object certain which is the subject matter of the contract and (c) cause of the obligation. In the present case, C.F. Sharp, on behalf of its principal, International Shipping Management, Inc., hired Agustin and Minimo as Sandblaster/Painter for a 3-month contract, with a basic monthly salary of US$450.00. Thus, the object of the contract is the service to be rendered by Agustin and Minimo on board the vessel while the cause of the contract is the monthly compensation they expect to receive. These terms were embodied in the Contract of Employment which was executed by the parties. The The commencement of an employer-employee relationship must be treated separately from the perfection of an employment contract. Santiago v. CF Sharp Crew Management, Inc., (G.R. No. 162419, 10 July 2007) is an instructive precedent on this point. In that case, the Supreme Court made a distinction between the perfection of the employment contract and the commencement of the employer-employee relationship, thus: The perfection of the contract, which in this case coincided with the date of execution thereof, occurred when petitioner and respondent agreed on the object and the cause, as well as the rest of the terms and conditions therein. The commencement of the employer-employee relationship, as earlier discussed, would have taken place had petitioner been actually deployed from the point of hire. Thus, even before the start of any employer-employee relationship, contemporaneous with the perfection of the employment contract was the birth of certain rights and obligations, the breach of which may give rise to a cause of action against the erring party. Despite the fact that the employer-employee relationship has not commenced due to the failure to deploy Agustin and Minimo in this case, Agustin and Minimo are entitled to rights arising from the perfected Contract of Employment, such as the right to demand performance by C.F. Sharp of its obligation under the contract.

For forum shopping to exist, it is necessary that (a) there be identity of parties or at least such parties that represent the same interests in both actions; (b) there be identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (c) the identity of the two preceding particulars is such that any judgment rendered in one action will, regardless of which party is successful, amount to res judicata in the other action. Petitioners are correct as to the first two requisites of forum shopping. First, there is identity of parties involved: Negros Slashers Inc. and respondent Teng. Second, there is identity of rights asserted i.e., the right of management to terminate employment and the right of an employee against illegal termination. However, the third requisite of forum shopping is missing in this case. Any judgment or ruling of the Office of the Commissioner of the Metropolitan Basketball Association will not amount to res judicata. Res judicata is defined in jurisprudence as to have four basic elements: (1) the judgment sought to bar the new action must be final; (2) the decision must have been rendered by a court having jurisdiction over the subject matter and the parties; (3) the disposition of the case must be a judgment on the merits; and (4) there must be as between the first and second action, identity of parties, subject matter, and causes of action. Here, although contractually authorized to settle disputes, the Office of the Commissioner of the Metropolitan Basketball Association is not a court of competent jurisdiction as contemplated by law with respect to the application of the doctrine of res

It is clear from the NLRC Rules of Procedure that appeals must be verified and certified against forum-shopping by the parties-in-interest themselves. The purpose of verification is to secure an assurance that the allegations in the pleading are true and correct and have been filed in good faith. In the case at bar, the parties-in-interest are petitioner Salenga, as the employee, and respondent Clark Development Corporation as the employer. A corporation can only exercise its powers and transact its business through its board of directors and through its officers and agents when authorized by a board resolution or its bylaws. The power of a corporation to sue and be sued is exercised by the board of directors. The physical acts of the corporation, like the signing of documents, can be performed only by natural persons duly authorized for the purpose by corporate bylaws or by a specific act of the board. Absent the requisite board resolution, neither Timbol-Roman nor Atty. Mallari, who signed the Memorandum of Appeal and Joint Affidavit of Declaration allegedly on behalf of respondent corporation, may be considered as the “appellant” and “employer” referred to by the NLRC Rules of Procedure. As such, the NLRC had no jurisdiction to entertain the appeal.

It is required that the employer furnish the employee with two written notices: (1) 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 (2) 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 twin requirements of notice and hearing constitute the elements of due process in cases of employee’s dismissal. The requirement of notice is intended to inform the employee concerned of the employer’s intent to dismiss and the reason for the proposed dismissal. Upon the other hand, the requirement of hearing affords the employee an opportunity to answer his employer’s charges against him and accordingly, to defend himself therefrom before dismissal is effected. Obviously, the second written notice, as indispensable as the first, is intended to ensure the observance of due process. In this case, there was only one written notice which required respondents to explain within five (5) days why they should not be dismissed from the service. Alcovendas was the only one who signed the receipt of the notice. The others, as claimed by Lynvil, refused to sign. The other employees argue that no notice was given to them. Despite the inconsistencies, what is clear is that no final written notice or notices of termination were sent to the employees. Due to the failure of Lynvil to follow the procedural requirement of two-notice rule, nominal damages in the amount of P50,000 were In labor cases, the corporate directors and officers are solidarily liable with the corporation for the termination of employment of employees done with malice or in bad faith. Indeed, moral damages are recoverable when the dismissal of an employee is attended by bad faith or fraud or constitutes an act oppressive to labor, or is done in a manner contrary to good morals, good customs or public policy. The term “bad faith” contemplates a “state of mind affirmatively operating with furtive design or with some motive of self-interest or will or for ulterior purpose.” The Supreme Court agreed with the ruling of both the NLRC and the Court of Appeals when they pronounced that there was no evidence on record that indicates commission of bad faith on the part of De Borja, the general manager of Lynvil, who was tasked with the supervision of the employees and the operation of the business. There is no proof that he imposed on Ariola, et al. the “por viaje” provision for purpose of effecting their summary dismissal.

In the context of these facts — (1) Ariola, et al. were doing tasks necessary to Lynvil’s fishing business with positions ranging from captain of the vessel to bodegero; (2) after the end of a trip, they will again be hired for another trip with new contracts; and (3) this arrangement continued for more than ten years – the Court believed that Lynvil intended to go around the security of tenure of Ariola, et al. as regular employees. The Court held that by the express provisions of the second paragraph of Article 280 which cover casual employment, Ariola, et al. had become regular employees of Lynvil.

Just cause is required for a valid dismissal. The Labor Code provides that an employer may terminate an employment based on fraud or willful breach of the trust reposed on the employee. Such breach is considered willful if it is done intentionally, knowingly, and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. It must also be based on substantial evidence and not on the employer’s whims or caprices or suspicions otherwise, the employee would eternally remain at the mercy of the employer. Loss of confidence must not be indiscriminately used as a shield by the employer against a claim that the dismissal of an employee was arbitrary. And, in order to constitute a just cause for dismissal, the act complained of must be work-related and shows that the employee concerned is unfit to continue working for the employer. In addition, loss of confidence as a just cause for termination of employment is premised on the fact that the employee concerned holds a position of responsibility, trust and confidence or that the employee concerned is entrusted with confidence in delicate matters, such as the handling or care and protection of the property and assets of the employer. The betrayal of this trust is the essence of the offense for which an employee is penalized. The Supreme Court found that breach of trust is present in this case, when Ariola (the captain), Alcovendas (Chief Mate), Calinao (Chief Engineer), Nubla (cook), Bañez (oiler), and Sebullen (bodegero) conspired with one another and stole “pampano” and “tangigue” fish and delivered them to The Supreme Court has held in Nicolas v. National Labor Relations Commission [327 Phil. 883, 886-887 (1996)] that a criminal conviction is not necessary to find just cause for employment termination. Otherwise stated, an employee’s acquittal in a criminal case, especially one that is grounded on the existence of reasonable doubt, will not preclude a determination in a labor case that he is guilty of acts inimical to the employer’s interests. In the reverse, the finding of probable cause is not followed by automatic adoption of such finding by the labor tribunals. In other words, whichever way the public prosecutor disposes of a complaint, the finding does not bind the labor tribunal. Lynvil contends that the filing of a criminal case before the Office of the Prosecutor is sufficient basis for a valid termination of employment based on serious misconduct and/or loss of trust and confidence. The Supreme Court held that Lynvil cannot argue that since the Office of the Prosecutor found probable cause for theft, the Labor Arbiter must follow the finding as a valid reason for the termination of respondents’ employment. The proof required for purposes that differ from one and the other are likewise different.

Prior Supreme Court decisions have laid two conditions for the validity of a fixed-contract agreement between the employer and employee: First, the fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress, or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent; or Second, it satisfactorily appears that the employer and the employee dealt with each other on more or less equal terms with no moral dominance exercised by the former or the latter. Lynvil contends that Ariola, et al. were employed under a fixed-term contract which expired at the end of the voyage. Contrarily, Ariola, et al. contend that they became regular employees by reason of their continuous hiring and performance of tasks necessary and desirable in the usual trade and business of Lynvil. Textually, the provision in the contract between Lynvil and Ariola, et al. that: “NA ako ay sumasang-ayon na maglingkod at gumawa ng mga gawain sang-ayon sa patakarang “por viaje” na magmumula sa pagalis sa Navotas papunta sa pangisdaan at pagbabalik sa pondohan ng lantsa sa Navotas, Metro Manila” is for a fixed period of employment. In the context, however, of the facts that: (1) Ariola, et al. were doing tasks necessarily to Lynvil’s fishing business with positions ranging from captain of the vessel to bodegero; (2) after the end of a trip, they will again be hired for another trip with new contracts; and (3) this arrangement continued for more than ten years, the clear intention is to go around the security of tenure of Ariola, et al. as Article 111 of the Labor Code provides for a maximum award of attorney’s fees in cases of recovery of wages: (a.) In cases of unlawful withholding of wages, the culpable party may be assessed attorney’s fees equivalent to ten percent of the amount of wages recovered. (b.) It shall be unlawful for any person to demand or accept, in any judicial or administrative proceedings for the recovery of wages, attorney’s fees which exceed ten percent of the amount of wages recovered. Since De Gracia, et al. had to secure the services of the lawyer to recover their unpaid salaries and protect their interest, attorney’s fees in the amount of ten percent (10%) of the total claims was imposed.

There is labor-only contracting where: (a) the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others; and (b) the workers recruited and placed by such person are performing activities which are directly related to the principal business of the employer. In the present case, the Supreme Court found that both the capitalization requirement and the power of control on the part of Requiño are wanting. Generally, the presumption is that the contractor is a labor-only contractor unless such contractor overcomes the burden of proving that it has the substantial capital, investment, tools and the like. In the present case, though Garden of Memories is not the contractor, it has the burden of proving that Requiño has sufficient capital or investment since it is claiming the supposed status of Requiño as independent contractor. Garden of Memories, however, failed to adduce evidence purporting to show that Requiño had sufficient capitalization. Neither did it show that she invested in the form of tools, equipment, machineries, work premises and other materials which are necessary in the completion of the service contract.

Section 10 of Republic Act No. 8042 (Migrant Workers Act) provides for money claims in cases of unjust termination of employment contracts: In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, the workers shall be entitled to the full reimbursement of his placement fee with interest of twelve percent (12%) per annum, plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less. The Migrant Workers Act provides that salaries for the unexpired portion of the employment contract or three (3) months for every year of the unexpired term, whichever is less, shall be awarded to the overseas Filipino worker, in cases of illegal dismissal. However, in 24 March 2009, Serrano v. Gallant Maritime Services and Marlow Navigation Co. Inc. (G.R. No. 167614), the Court, in an En Banc Decision, declared unconstitutional the clause “or for three months for every year of the unexpired term, whichever is less” and awarded the entire unexpired portion of the employment contract to the overseas Filipino worker. On 8 March 2010, however, Section 7 of Republic Act No. 10022 (RA 10022) amended Section 10 of the Migrant Workers Act, and once again reiterated the provision of awarding the unexpired portion of the employent contract or three (3) months for every year of the unexpired term, whichever is less. Nevertheless, since the termination occurred on January 1999 before the passage of the amendatory RA 10022, the Supreme Court applied RA 8042, without touching on the Under Article 218 the Labor Code, the NLRC (and the labor arbiters) may hold any offending party in contempt, directly or indirectly, and impose appropriate penalties in accordance with law. The penalty for direct contempt consists of either imprisonment or fine, the degree or amount depends on whether the contempt is against the Commission or the labor arbiter. The Labor Code, however, requires the labor arbiter or the Commission to deal with indirect contempt in the manner prescribed under Rule 71 of the Rules of Court. Rule 71 of the Rules of Court does not require the labor arbiter or the NLRC to initiate indirect contempt proceedings before the trial court. This mode is to be observed only when there is no law granting them contempt powers. As is clear under Article 218(d) of the Labor Code, the labor arbiter or the Commission is empowered or has jurisdiction to hold the offending party or parties in direct or indirect contempt. Robosa, et al., therefore, have not improperly brought the indirect contempt charges against the respondents before the NLRC.

It is a well-entrenched rule that findings of facts of the NLRC, affirming those of the Labor Arbiter, are accorded respect and due consideration when supported by substantial evidence. The Supreme Court, however, found that the doctrine of great respect and finality has no application to the case at bar. The Labor Arbiter dismissed Arnaiz, et al.’s complaints on mere technicality. The NLRC, upon appeal, then came up with three divergent rulings. At first, it remanded the case to the Labor Arbiter. However, in a subsequent resolution, it decided to resolve the case on the merits by ruling that Arnaiz, et al. were constructively dismissed. But later on, it again reversed itself in its third and final resolution of the case and ruled in favor of Julie’s bakeshop. Therefore, contrary to Reyes’s claim, the NLRC did not, on any occasion, affirm any factual findings of the Labor Arbiter. The Court of Appeals is thus correct in reviewing the entire records of the case to determine which findings of the NLRC is sound and in accordance with law. Besides, the Court of Appeals may still resolve factual issues by express mandate of the law despite the respect given to administrative findings of fact.

Section 2, Rule I, Book VI of the Labor Code’s Implementing Rules and Regulations provides: “If the termination is brought about by the completion of a contract or phase thereof, or by failure of an employee to meet the standards of the employer in the case of probationary employment, it shall be sufficient that a written notice is served the employee within a reasonable time from the effective date of termination.” Dalangin was hired by Canadian Opportunities as Immigration and Legal Manager, subject to a probationary period of six months. One month after hiring Dalangin, the company terminated his employment, declaring him “unfit” and “unqualified” to continue as Immigration and Legal Manager, for reasons which included obstinacy and utter disregard of company policies. Propensity to take prolonged and extended lunch breaks, shows no interest in familiarizing oneself with the policies and objectives, lack of concern for the company’s interest despite having just been employed in the company (Declined to attend company sponsored activities, seminars intended to familiarize company employees with Management objectives and enhancement of company interest and objectives), lack of enthusiasm toward work, and lack of interest in fostering relationship with his co-employees. The company contends that it complied with the rule on procedural due process when it asked Dalangin, through a Memorandum, to explain why he could not attend the seminar. When he failed to submit his explanation, the company served him a notice the following day terminating his employment. According to the The essence of a probationary period of employment fundamentally lies in the purpose or objective of both the employer and the employee during the period. While the employer observes the fitness, propriety and efficiency of a probationer to ascertain whether he is qualified for permanent employment, the latter seeks to prove to the former that he has the qualifications to meet the reasonable standards for permanent employment. The “trial period” or the length of time the probationary employee remains on probation depends on the parties’ agreement, but it shall not exceed six (6) months under Article 281 of the Labor Code. The Supreme Court found substantial evidence indicating that the company was justified in terminating Dalangin’s probationary employment. Dalangin admitted in compulsory arbitration that the proximate cause for his dismissal was his refusal to attend the company’s “Values Formation Seminar” scheduled for October 27, 2001, a Saturday. He refused to attend the seminar after he learned that it had no relation to his duties, as he claimed, and that he had to leave at 2:00 p.m. because he wanted to be with his family in the province. When the Chief Operations Officer, insisted that he attend the seminar to encourage his co-employees to attend, he stood pat on not attending, arguing that marked differences exist between their positions and duties, and insinuating that he did not want to join the other employees. He also questioned the scheduled 2:00 p.m. seminars on Saturdays as they were not supposed to be doing a company activity beyond 2:00 p.m. He considers 2:00 p.m. Ordinarily, rules of procedure are strictly enforced by courts in order to impart stability in the legal system. However, in not a few instances, the Supreme Court has relaxed the rigid application of the rules of procedure to afford the parties the opportunity to fully ventilate their cases on the merits. This is in line with the time honored principle that cases should be decided only after giving all the parties the chance to argue their causes and defenses. In that way, the ends of justice would be better served. For indeed, the general objective of procedure is to facilitate the application of justice to the rival claims of contending parties, bearing always in mind that procedure is not to hinder but to promote the administration of justice. In Ong Lim Sing, Jr. v. FEB Leasing and Finance Corporation (G.R. No. 168115, June 8, 2007), the Supreme Court ruled: Courts have the prerogative to relax procedural rules of even the most mandatory character, mindful of the duty to reconcile both the need to speedily put an end to litigation and the parties’ right to due process. In numerous cases, this Court has allowed liberal construction of the rules when to do so would serve the demands of substantial justice and equity. x x x Indeed the prevailing trend is to accord party litigants the amplest opportunity for the proper and just determination of their causes, free from the constraints of needless technicalities. In this case, besides the fact that a denial of the recourse to the Court of Appeals would serve more to perpetuate an injustice and violation of Teng’s rights under our labor laws, the Supreme Court found that as correctly held by the Court of Employees who are illegally dismissed are entitled to full backwages, inclusive of allowances and other benefits or their monetary equivalent, computed from the time their actual compensation was withheld from them up to the time of their actual reinstatement. But if reinstatement is no longer possible, the backwages shall be computed from the time of their illegal termination up to the finality of the decision. Thus, when there is an order of reinstatement, the computation of backwages shall be reckoned from the time of illegal dismissal up to the time that the employee is actually reinstated to his former position. Pursuant to the order of reinstatement rendered by the Labor Arbiter, the Bank of Lubao sent Manabat a letter requiring him to report back to work on May 4, 2007. Notwithstanding the said letter, Manabat opted not to report for work. Thus, it is but fair that the backwages to be awarded to Manabat should be computed from the time that he was illegally dismissed until the time when he was required to report for work, i.e. from September 1, 2005 until May 4, 2007.

Under the law and prevailing jurisprudence, an illegally dismissed employee is entitled to reinstatement as a matter of right. However, if reinstatement would only exacerbate the tension and strained relations between the parties, or where the relationship between the employer and the employee has been unduly strained by reason of their irreconcilable differences, particularly where the illegally dismissed employee held a managerial or key position in the company, it would be more prudent to order payment of separation pay instead of reinstatement. Under the doctrine of strained relations, the payment of separation pay is considered an acceptable alternative to reinstatement when the latter option is no longer desirable or viable. On one hand, such payment liberates the employee from what could be a highly oppressive work environment. On the other hand, it releases the employer from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer trust. In such cases, it should be proved that the employee concerned occupies a position where he enjoys the trust and confidence of his employer; and that it is likely that if reinstated, an atmosphere of antipathy and antagonism may be generated as to adversely affect the efficiency and productivity of the employee concerned. In the present case, the Supreme Court found that the relations between the parties had been already strained thereby justifying the grant of separation pay in lieu of reinstatement in favor of Manabat. Manabat’s reinstatement to his former position would only serve to intensify the atmosphere An employment contract, like any other contract, is perfected at the moment (1) the parties come to agree upon its terms; and (2) concur in the essential elements thereof: (a) consent of the contracting parties, (b) object certain which is the subject matter of the contract, and (c) cause of the obligation. The object of the contract was the rendition of service by Fantonial on board the vessel for which service he would be paid the salary agreed upon. In this case, the employment contract was perfected on January 15, 2000 when it was signed by the parties who entered into the contract in behalf of their principal. However, the employment relationship never commenced since Fantonial was not allowed to leave on January 17, 2000 and go on board the vessel M/V AUK in Germany on the ground that he was not yet declared fit to work on the day of his scheduled departure. But, even if no employer-employee relationship commenced, there was, contemporaneous with the perfection of the employment contract, the birth of certain rights and obligations, the breach of which may give rise to a cause of action against the erring party.

Constructive dismissal exists where there is cessation of work because continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank and a diminution in pay. Constructive dismissal is a dismissal in disguise or an act amounting to dismissal but made to appear as if it were not. In constructive dismissal cases, the employer is, concededly, charged with the burden of proving that its conduct and action or the transfer of an employee are for valid and legitimate grounds such as genuine business necessity. In the instant case, the overt act relied upon by petitioner is not only a doubtful occurrence but is, if it did transpire, even consistent with the dismissal from employment posited by the respondent. The factual appraisal of the Court of Appeals is correct. Petitioner was displeased after incurring expenses for respondent’s medical check-up and, it is credible that, thereafter, respondent was prevented entry into the work premises. This is tantamount to constructive dismissal. The Supreme Court agreed with the Court of Appeals that the incredibility of petitioner’s submission about abandonment of work renders credible the position of respondent that she was prevented from entering the property. This was even corroborated by the affidavits of Siarot and Mendoza which were made part of the records of this case.

The rule is long and well settled that, in illegal dismissal cases like the one at bench, the burden of proof is upon the employer to show that the employee’s termination from service is for a just and valid cause. The employer’s case succeeds or fails on the strength of its evidence and not on the weakness of that adduced by the employee, in keeping with the principle that the scales of justice should be tilted in favor of the latter in case of doubt in the evidence presented by them. Often described as more than a mere scintilla, the quantum of proof is substantial evidence which is understood as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other equally reasonable minds might conceivably opine otherwise. Failure of the employer to discharge the foregoing onus would mean that the dismissal is not justified and therefore illegal. In the case at bar, the Supreme Court agreed with the petitioners that mere substantial evidence and not proof beyond reasonable doubt is required to justify the dismissal from service of an employee charged with theft of company property. However, the Court found no error in the CA’s findings that the petitioners had not adequately proven by substantial evidence that Arlene and Joseph indeed participated or cooperated in the commission of theft relative to the six missing intensifying screens so as to justify the latter’s termination from employment on the ground of loss of trust and confidence.

Gala insists that he cannot be sanctioned for the theft of company property on May 25, 2006. He maintains that he had no direct participation in the incident and that he was not aware that an illegal activity was going on as he was at some distance from the trucks when the alleged theft was being committed. He adds that he did not call the attention of the foremen because he was a mere lineman and he was focused on what he was doing at the time. He argues that in any event, his mere presence in the area was not enough to make him a conspirator in the commission of the pilferage. Gala misses the point. He forgets that as a probationary employee, his overall job performance and his behavior were being monitored and measured in accordance with the standards (i.e., the terms and conditions) laid down in his probationary employment agreement. Under paragraph 8 of the agreement, he was subject to strict compliance with, and non-violation of the Company Code on Employee Discipline, Safety Code, rules and regulations and existing policies. Par. 10 required him to observe at all times the highest degree of transparency, selflessness and integrity in the performance of his duties and responsibilities, free from any form of conflict or contradicting with his own personal interest.

An illegally dismissed employee is entitled to two reliefs: back wages and reinstatement. The two reliefs provided are separate and distinct. In instances where reinstatement is no longer feasible because of strained relations between the employee and the employer, separation pay is granted. In effect, an illegally dismissed employee is entitled to either reinstatement if such is viable, or separation pay if reinstatement is no longer viable, and to back wages. The normal consequences of respondent’s illegal dismissal, then, are reinstatement without loss of seniority rights, and payment of back wages computed from the time compensation was withheld from him up to the date of actual reinstatement. Where reinstatement is no longer viable as an option, separation pay equivalent to one month salary for every year of service should be awarded as an alternative. The payment of separation pay is in addition to payment of back wages. Petitioners question the CA Resolution dated October 24, 2008, arguing that it modified its March 31, 2008 Decision which has already attained finality insofar as respondent is concerned. Such contention is misplaced. The CA merely clarified the period of payment of back wages and separation pay up to the finality of its decision (March 31, 2008) modifying the Labor Arbiter’s decision. In view of the modification of monetary awards in the Labor Arbiter’s decision, the time frame for the payment of back wages and separation pay is accordingly modified to the finality of the CA decision. The principal test for determining whether particular employees are properly characterized as “project employees” as distinguished from “regular employees” is whether or not the project employees were assigned to carry out a “specific project or undertaking,” the duration and scope of which were specified at the time the employees were engaged for that project. In a number of cases, the Court has held that the length of service or the re-hiring of construction workers on a project-to-project basis does not confer upon them regular employment status, since their re-hiring is only a natural consequence of the fact that experienced construction workers are preferred. Employees who are hired for carrying out a separate job, distinct from the other undertakings of the company, the scope and duration of which has been determined and made known to the employees at the time of the employment are properly treated as project employees and their services may be lawfully terminated upon the completion of a project. Should the terms of their employment fail to comply with this standard, they cannot be considered project employees. Applying the above disquisition, the Court agreed with the findings of the CA that petitioners were project employees. It is not disputed that petitioners were hired for the construction of the Cordova Reef Village Resort in Cordova, Cebu. By the nature of the contract alone, it is clear that petitioners’ employment was to carry out a specific project.

If a complaint is filed with the DOLE, and it is accompanied by a claim for reinstatement, the jurisdiction is properly with the Labor Arbiter, under Art. 217(3) of the Labor Code, which provides that the Labor Arbiter has original and exclusive jurisdiction over those cases involving wages, rates of pay, hours of work, and other terms and conditions of employment, if accompanied by a claim for reinstatement. In the present case, the finding of the DOLE Regional Director that there was an employer-employee relationship has been subjected to review by the Supreme Court, with the finding being that there was no employer-employee relationship between petitioner and private respondent, based on the evidence presented. The DOLE had no jurisdiction over the case, as there was no employer-employee relationship present. Thus, the dismissal of the complaint against petitioner is proper.

The Supreme Court has consistently held that so long as a company’s management prerogatives are exercised in good faith for the advancement of the employer’s interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, the Court will uphold them. In the instant case, ABS-CBN validly justified the implementation of Policy No. HR-ER-016. It is well within its rights to ensure that it maintains its objectivity and credibility and freeing itself from any appearance of impartiality so that the confidence of the viewing and listening public in it will not be in any way eroded. Even as the law is solicitous of the welfare of the employees, it must also protect the right of an employer to exercise what are clearly management prerogatives. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied.

Separation pay may be given as a form of financial assistance when a worker is dismissed in cases such as the installation of labor-saving devices, redundancy, retrenchment to prevent losses, closing or cessation of operation of the establishment, or in case the employee was found to have been suffering from a disease such that his continued employment is prohibited by law. It is a statutory right defined as the amount that an employee receives at the time of his severance from the service and is designed to provide the employee with the wherewithal during the period that he is looking for another employment. It is oriented towards the immediate future, the transitional period the dismissed employee must undergo before locating a replacement job. As a general rule, when just causes for terminating the services of an employee exist, the employee is not entitled to separation pay because lawbreakers should not benefit from their illegal acts. The rule, however, is subject to exceptions. Here, not only did the Court declare the strike illegal, rather, it also found the Union officers to have knowingly participated in the illegal strike. Worse, the Union members committed prohibited acts during the strike. Thus, as the Court has concluded in other cases it has previously decided, such Union officers are not entitled to the award of separation pay in the form of financial assistance.

G.R. No. 171189 March 09, 2011

G.R. No. 178903 May 30, 2011

G.R. No. 169191 June 01, 2011

G.R. Nos. 180849 November 16, 2011

G.R. No. 182397 September 14, 2011

G.R. Nos. 178699/ September 21, 2011



Petitioner employer ordered the respondent employee to prepare checks for payment of petitioner’s obligations. Respondent did not immediately comply with the instruction since petitioner employer has no sufficient funds to cover the checks. Petitioner employer dismissed respondent employee for willful disobedience. The Court held that respondent employee was illegally dismissed. The offense of willful disobedience requires the concurrence of two (2) requisites: (1) the employee’s assailed conduct must have been willful, that is characterized by a wrongful and perverse attitude; and (2) the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge. Though there is nothing unlawful in the directive of petitioner employer to prepare checks in payment of petitioner’s obligations, respondent employee’s initial reluctance to prepare the checks, although seemingly disrespectful and defiant, was for honest and well intentioned reasons. Protecting the petitioner employer from liability under the Bouncing Checks Law was foremost in her mind. It was not wrongful or willful. Neither can it be considered an obstinate defiance of company authority. The Court takes into consideration that respondent employee, despite her initial reluctance, eventually did prepare the checks on the same day she was tasked to do it.
















G.R. No. 186209 September 21, 2011

G.R. No. 181974 February 01, 2012

G.R. No. 164181 September 14, 2011

G.R. No. 182397 September 14, 2011

G.R. No. 176800 September 05, 2011






It is required that the employer furnish the employee with two written notices: (1) 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 (2) 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 twin requirements of notice and hearing constitute the elements of due process in cases of employee’s dismissal. The requirement of notice is intended to inform the employee concerned of the employer’s intent to dismiss and the reason for the proposed dismissal. Upon the other hand, the requirement of hearing affords the employee an opportunity to answer his employer’s charges against him and accordingly, to defend himself therefrom before dismissal is effected. Obviously, the second written notice, as indispensable as the first, is intended to ensure the observance of due process. In this case, there was only one written notice which required respondents to explain within five (5) days why they should not be dismissed from the service. Alcovendas was the only one who signed the receipt of the notice. The others, as claimed by Lynvil, refused to sign. The other employees argue that no notice was given to them. Despite the inconsistencies, what is clear is that no final written notice or notices of termination were sent to the employees. Due to the failure of Lynvil to follow the procedural requirement of two-notice rule, nominal damages in the amount of P50,000 were









G.R. No. 187887 September 07, 2011

G.R. No. 169757 November 23, 2011

G.R. No. 191459 January 17, 2011

G.R. No. 167332 February 07, 2011

G.R. No. 165381 February 09, 2011












Respondent employee filed an illegal dismissal case against the petitioner-company and Tom Madula, its operations manager. The case was dismissed by the labor arbiter and the dismissal was affirmed by NLRC. On August 29, 2002, the Court of Appeals reversed and set aside the NLRC decision and resolution. The CA ordered the petitioner company to pay respondent separation pay, moral and exemplary damages, and attorney’s fees. The decision became final and executory on February 27, 2004, and consequently a writ of execution was issued. Petitioner-company filed a Motion to Quash Writ of Execution. The Labor Arbiter granted the Motion and exonerated the petitioner company from paying backwages and held that it was petitioner Madula who should be liable to pay backwages. Respondent then filed before the CA a Very Urgent Motion for Clarification of Judgment. On December 10, 2004, CA granted the Motion and held that petitioner-company is solely liable for the judgment award. As a general rule, final and executory judgments are immutable and unalterable, except under these recognized exceptions, to wit: (a) clerical errors; (b) nunc pro tunc entries which cause no prejudice to any party; and (c) void judgments. The underlying reason for the rule is two-fold: (1) to avoid delay in the administration of justice and thus make orderly the discharge of judicial business, and (2) to put judicial controversies to an end, at the risk of occasional errors, inasmuch as controversies cannot be allowed to drag on indefinitely and the rights and obligations of every litigant must not hang in suspense for an indefinite period



Petitioner filed a complaint against respondent company and its officers for illegal dismissal, unfair labor practice, and money claims. Petitioner alleged that the officers should be held personally liable for the acts of company which were tainted with bad faith and arbitrariness. As a general rule, a corporate officer cannot be held liable for acts done in his official capacity because a corporation, by legal fiction, has a personality separate and distinct from its officers, stockholders, and members. To pierce this fictional veil, it must be shown that the corporate personality was used to perpetuate fraud or an illegal act, or to evade an existing obligation, or to confuse a legitimate issue. In illegal dismissal cases, corporate officers may be held solidarily liable with the corporation if the termination was done with malice or bad faith. Moral damages are awarded only where the dismissal was attended by bad faith or fraud, or constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs or public policy. Exemplary damages may avail if the dismissal was effected in a wanton, oppressive or malevolent manner. In the present case, the Court held that petitioner failed to prove that his dismissal was orchestrated by the individual respondents and their acts were attended with bad faith or were done oppressively.

G.R. No. 165381 February 09, 2011

G.R. No. 177937 January 19, 2011

Illegal dismissal; redundancy. Nelson A. Culili v. Eastern Telecommunications Philippines, Inc., et al.

Respondent-company, due to business troubles and losses, implemented a Right-Sizing Program which entailed a company-wide reorganization involving the transfer, merger, absorption or abolition of certain departments of the company. As a result, respondent-company terminated the services of petitioner on account of redundancy. Petitioner filed a complaint against respondent-company and its officers for illegal dismissal, unfair labor practice, and money claims. The Court ruled that petitioner was validly dismissed. There is redundancy when the service capability of the workforce is greater than what is reasonably required to meet the demands of the business enterprise. A position becomes redundant when it is rendered superfluous by any number of factors such as over-hiring of workers, decrease in volume of business, or dropping a particular product line or service activity previously manufactured or undertaken by the enterprise. The Court has been consistent in holding that the determination of whether or not an employee’s services are still needed or sustainable properly belongs to the employer. Provided there is no violation of law or a showing that the employer was prompted by an arbitrary or malicious act, the soundness or wisdom of this exercise of business judgment is not subject to the discretionary review of the Labor Arbiter and the NLRC. However, an employer cannot simply declare that it has become overmanned and dismiss its employees without producing adequate proof to sustain its claim of redundancy. Among the requisites of a valid redundancy program are: (1) the



Article 279 of the Labor Code provides that an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges, to full backwages, inclusive of allowances, and to other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. However, due to the strained relations of the parties, the payment of separation pay has been considered an acceptable alternative to reinstatement, when the latter option is no longer desirable or viable. On the one hand, such payment liberates the employee from what could be a highly oppressive work environment. On the other, the payment releases the employer from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer trust. Thus, as an illegally or constructively dismissed employee, respondent is entitled to: (1) either reinstatement, if viable, or separation pay, if reinstatement is no longer viable; and (2) backwages. These two reliefs are separate and distinct from each other and are awarded conjunctively.

Documents

Database Supreme Court Cases on Labor 2011-2012.xlsx