Labor Case Digests.doc

7/28/2019 Labor Case Digests.doc

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Rolando Tan vs. Leovigildo Lagarama & Court of AppealsG.R. No. 151228August 15, 2002

Facts: Petitioner Rolando Tan is the president of Supreme TheaterCorporation and the general manager of Crown and Empire Theaters inButuan City. Private respondent Leovigildo Lagrama is a painter, makingad billboards and murals for the motion pictures shown at the Empress,Supreme, and Crown Theaters for more than 10 years, from September 1,

1988 to October 17, 1998.

On October 17, 1998, private respondent Lagrama was summoned by Tanand upbraided: "Nangihi na naman ka sulod sa imong drawinganan." ("Youagain urinated inside your work area.") When Lagrama asked what Tanwas saying, Tan told him, "Ayaw daghang estorya. Dili ko gusto nga mo-drawing ka pa. Guikan karon, wala nay drawing. Gawas." ("Don't sayanything further. I don't want you to draw anymore. From now on, no moredrawing. Get out.")

Lagrama denied the charge against him. He claimed that he was not theonly one who entered the drawing area and that, even if the charge wastrue, it was a minor infraction to warrant his dismissal. However, everytimehe spoke, Tan shouted "Gawas" ("Get out"), leaving him with no otherchoice but to leave the premises. Lagrama filed a complaint with theNational Labor Relations Commission (NLRC) in Butuan City. He allegedthat he had been illegally dismissed and sought reinvestigation andpayment of 13th month pay, service incentive leave pay, salarydifferential, and damages.

As no amicable settlement had been reached, Labor Arbiter Rogelio P.Legaspi directed the parties to file their position papers. It declared thatthe dismissal illegal and order the payment of monetary benefits. Tanappealed to the NLRC and reversing the decision of the Labor Arbiter.

Issue: Whether or not the respondent was illegally dismissed and thusentitled to payment of benefits provided by law.

Ruling:The respondent was illegally dismissed and entitled to benefits.The Implementing Rules of the Labor Code provide that no worker shall bedismissed except for a just or authorized cause provided by law and afterdue process. This provision has two aspects: (1) the legality of the act ofdismissal, that is, dismissal under the grounds provided for under Article282 of the Labor Code and (2) the legality in the manner of dismissal. Theillegality of the act of dismissal constitutes discharge without just cause,while illegality in the manner of dismissal is dismissal without due process.

In this case, by his refusal to give Lagrama work to do and orderingLagrama to get out of his sight as the latter tried to explain his side,petitioner made it plain that Lagrama was dismissed. Urinating in a work

place other than the one designated for the purpose by the employerconstitutes violation of reasonable regulations intended to promote a

healthy environment under Art. 282(1) of the Labor Code for purposes ofterminating employment, but the same must be shown by evidence. Herethere is no evidence that Lagrama did urinate in a place other than a restroom in the premises of his work.

Instead of ordering his reinstatement as provided in Art. 279 of the LaborCode, the Labor Arbiter found that the relationship between the employerand employee has been so strained that the latter's reinstatement wouldno longer serve any purpose. The parties do not dispute this finding.

Hence, the grant of separation pay in l ieu of reinstatement is appropriate.

This is of course in addition to the payment of backwages which, inaccordance with the ruling in Bustamante v. NLRC should be computedfrom the time of Lagrama's dismissal up to the time of the finality of thisdecision, without any deduction or qualification.

The Bureau of Working Conditions 32 classifies workers paid by results intotwo groups, namely; (1) those whose time and performance is supervisedby the employer, and (2) those whose time and performance isunsupervised by the employer. The first involves an element of control andsupervision over the manner the work is to be performed, while the seconddoes not. If a piece worker is supervised, there is an employer-employeerelationship, as in this case. However, such an employee is not entitled toservice incentive leave pay since, as pointed out in Makati Haberdashery v.NLRC 33 and Mark Roche International v. NLRC, 34 he is paid a fixedamount for work done, regardless of the time he spent in accomplishingsuch work.

ANGELINA FRANCISCO vs. NLRC500 SCRA 690 (2006)

Facts: Petitioner was hired by Kasei Corporation during the incorporationstage. She was designated as accountant and corporate secretary and wasassigned to handle all the accounting needs of the company. She was alsodesignated as Liason Officer to the City of Manila to secure permits for theoperation of the company.

In 1996, Petitioner was designated as Acting Manager. She was assigned tohandle recruitment of all employees and perform managementadministration functions. In 2001, she was replaced by Liza Fuentes asManager. Kasei Corporation reduced her salary to P2,500 per month whichwas until September. She asked for her salary but was informed that shewas no longer connected to the company. She did not anymore report towork since she was not paid for her salary. She filed an action forconstructive dismissal with the Labor Arbiter.

The Labor Arbiter found that the petitioner was illegally dismissed. NLRCaffirmed the decision while CA reversed it.

Issue: Whether or not there was an employer-employee relationship.


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Ruling:The court held that in this jurisdiction, there has been no uniformtest to determine the existence of an employer-employee relation.Generally, courts have relied on the so-called right of control test wherethe person for whom the services are performed reserves a right to controlnot only the end to be achieved but also the means to be used in reachingsuch end. In addition to the standard of right-of-control, the existingeconomic conditions prevailing between the parties, like the inclusion ofthe employee in the payrolls, can help in determining the existence of anemployer-employee relationship.

The better approach would therefore be to adopt a two-tiered testinvolving: (1) the putative employers power to control the employee withrespect to the means and methods by which the work is to beaccomplished; and (2) the underlying economic realities of the activity orrelationship.

In Sevilla v. Court of Appeals, the court observed the need to consider theexisting economic conditions prevailing between the parties, in addition tothe standard of right-of-control like the inclusion of the employee in thepayrolls, to give a clearer picture in determining the existence of anemployer-employee relationship based on an analysis of the totality ofeconomic circumstances of the worker.

Thus, the determination of the relationship between employer andemployee depends upon the circumstances of the whole economic activity,such as: (1) the extent to which the services performed are an integral partof the employers business; (2) the extent of the workers investment inequipment and facilities; (3) the nature and degree of control exercised bythe employer; (4) the workers opportunity for profit and loss; (5) theamount of initiative, skill, judgment or foresight required for the success ofthe claimed independent enterprise; (6) the permanency and duration ofthe relationship between the worker and the employer; and (7) the degreeof dependency of the worker upon the employer for his continuedemployment in that line of business. The proper standard of economicdependence is whether the worker is dependent on the alleged employerfor his continued employment in that line of business.

By applying the control test, there is no doubt that petitioner is anemployee of Kasei Corporation because she was under the direct controland supervision of Seiji Kamura, the corporations Technical Consultant. Itis therefore apparent that petitioner is economically dependent onrespondent corporation for her continued employment in the latters line ofbusiness.

There can be no other conclusion that petitioner is an employee ofrespondent Kasei Corporation. She was selected and engaged by thecompany for compensation, and is economically dependent uponrespondent for her continued employment in that line of business. Hermain job function involved accounting and tax services rendered to

Respondent Corporation on a regular basis over an indefinite period ofengagement. Respondent Corporation hired and engaged petitioner for

compensation, with the power to dismiss her for cause. More importantly,Respondent Corporation had the power to control petitioner with themeans and methods by which the work is to be accomplished.

Sevilla vs CA

G..R. No. L-41182-3

April 16, 1988

Facts: The petitioners invoke the provisions on human relations of the

Civil Code in this appeal by certiorari.

Mrs. Segundina Noguera, party of the first part; the Tourist World Service,

Inc., represented by Mr. Eliseo Canilao as party of the second part, and

hereinafter referred to as appellants, the Tourist World Service, Inc. leased

the premises belonging to the party of the first part at Mabini St., Manila

for the former-s use as a branch office. In the said contract the party of the

third part held herself solidarily liable with the party of the part for the

prompt payment of the monthly rental agreed on. When the branch office

was opened, the same was run by the herein appellant Una 0. Sevilla

payable to Tourist World Service Inc. by any airline for any fare brought inon the efforts of Mrs. Lina Sevilla, 4% was to go to Lina Sevilla and 3% was

to be withheld by the Tourist World Service, Inc.

On November 24, 1961 the Tourist World Service, Inc. appears to have

been informed that Lina Sevilla was connected with a rival firm, the

Philippine Travel Bureau, and, since the branch office was anyhow losing,

the Tourist World Service considered closing down its office.

On June 17,1963, appellant Lina Sevilla refiled her case against the herein

appellees and after the issues were joined, the reinstated counterclaim of

Segundina Noguera and the new complaint of appellant Lina Sevilla were

jointly heard following which the court ordered both cases dismiss for lack

of merit.

In her appeal, Lina Sevilla claims that a joint bussiness venture was

entered into by and between her and appellee TWS with offices at the

Ermita branch office and that she was not an employee of the TWS to the

end that her relationship with TWS was one of a joint business venture

appellant made declarations.

Issue: Whether or not the padlocking of the premises by the Tourist World

Service, Inc. without the knowledge and consent of the appellant Lina

Sevilla entitled the latter to the relief of damages prayed for and whether

or not the evidence for the said appellant supports the contention that theappellee Tourist World Service, Inc. unilaterally and without the consent of


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the appellant disconnected the telephone lines of the Ermita branch office

of the appellee Tourist World Service, Inc.?

Held: The trial court held for the private respondent on the premise that

the private respondent, Tourist World Service, Inc., being the true lessee, it

was within its prerogative to terminate the lease and padlock the

premises. It likewise found the petitioner, Lina Sevilla, to be a mere

employee of said Tourist World Service, Inc. and as such, she was bound

by the acts of her employer. The respondent Court of Appeal rendered anaffirmance.

In this jurisdiction, there has been no uniform test to determine the

evidence of an employer-employee relation. In general, we have relied on

the so-called right of control test, "where the person for whom the services

are performed reserves a right to control not only the end to be achieved

but also the means to be used in reaching such end." Subsequently,

however, we have considered, in addition to the standard of right-of

control, the existing economic conditions prevailing between the parties,

like the inclusion of the employee in the payrolls, in determining the

existence of an employer-employee relationship.

the Decision promulgated on January 23, 1975 as well as the Resolution

issued on July 31, 1975, by the respondent Court of Appeals is hereby

REVERSED and SET ASIDE. The private respondent, Tourist World Service,

Inc., and Eliseo Canilao, are ORDERED jointly and severally to indemnify

the petitioner, Lina Sevilla, the sum of 25,00.00 as and for moral damages,

the sum of P10,000.00, as and for exemplary damages, and the sum of

P5,000.00, as and for nominal and/or temperate damages.

Makati Haberdashery vs NLRC, 179 SCRA 449 (89)

F a c t s : P r i v a t e c o m p l a i n a n t s a r e w o r k i n g f o r

Ma ka ti Haberdashery Inc as tailors, seamstress, sewers,basters,and plantsadoras and are paid on a piece-ratebas is (e xc ep t tw ope ti ti on er s wh o ar e pa id on amonthly basis) and in addition, theyare given a dailyallowance of P 3.00 provided they report before 9:30a.m.Work sked: 9:30-6 or 7 p.m., Mondays to Saturdays andeven on Sundays andholidays during peak periods.

Unions first case was on:underpayment of basic wage, living allowance, non-payment of , holiday pay,service incentive pay, 13th month pay, benefits provided for under Wage Orders1-5While the first case was pending decision, Pelobello left an open packagecontaining a jusi barong tagalong with salesman Rivera. He was caught and

confronted about this and he explained that this was ordered by Zapata,also a worker, for his (personal) customer. Zapata allegedly admitted

that he copied the design of the company but later denied ownership of thesame.

They were made to explain why no action shou ld be taken againstthem for accepting a job order which is prejudicial and in directcompetition with the business. However they did not submit and went onAWOL until the period given for them to explain expired hence thedismissal.

Illegal dismissal complaint on the second case filedbefore the LADiosana.

LA declared petitioners guilty of illegal dismissal and ordered to reinstatePelobel lo and Zapata and found petitioners violating decrees of COLA,service incentive and 13th month pay. Commission analyst was directed tocompute the monetary awards which retroacts to three years prior tofiling of case.

NLRC affirmed but limited back wages to one year.

Issue: WON employees paid on piece-rate basis are entitled to serviceincentive pay (relevant to title)

Held: NO, fall under exceptions set forth in the implementing rules.

Ratio: As to the service incentive leave pay: as piece-rate workersbeing paid at a f ixed amount for performing work irrespective of timeconsumed in the performance thereof, they fall under the exceptionsstated in Sec1(d), Rule V, IRR, Book III, Labor Code. Service Incentive LeaveS EC TI ON 1 . C ov er ag e. T hi s r ul e s ha ll a pp ly t o a llemployees except:(d) F i e l d pe rs on nel and ot he r em pl oy eeswh os e performance is unsupervised by the employer includingthose who are engaged on task or contract basis, purely commissionbasis, orth o se wh o a re pa id a f i x ed amount f or performing workirrespective of the time consumed in the performance thereof;

Other issues discussed:

ER-EE relationshipHeld: There is such relationship because in the application of the four-fold test,it was found that petitioners had control over the respondents not only asto the result but also as to the means and method by which the same isto be accomplished. Such control is proven by a memorandumwh ic h en um er at es procedures and instructions regarding job orders,alterations, and their behavior inside the shop.

Minimum Wage

Held : No d ispute that ent i tled to minimum wage but courtdismissed case for lack of sufficient evidence to support claim that there


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was in fact underpayment which was ruled by the LA and which the privaterespondent did not appeal to in the NLRC nor in the SC. Well-settled is therule that an appellee who has not himself appealed cannot obtain fromthe appellate court any affirmative relief other than the ones granted inthe decision of the court below.

COLAHeld: Entitled. They are regular employees. IRR of Wage No. 1,2 , an d 5provide that al l workers in the private sector, regardles s of

their posit ion, designation of status, and irrespective of themeth od by wh ic h th ei r wa ges are paid are entitled to such allowance.

13th Month payHeld: Entitled under Sec. 3(e) of the IRR of PD 851 which is an exceptionto the exception of such provision which states that employers whoseworkers are paid on piece-rate basis in which are covered by suchissuance in so far as such workers are concerned.

Illegal dismissalHeld: Dismissed for justifiable ground based on Article 283 (a)and (c).Inimical to the interest of the employer. Not dismissed just because of unionactivities.

Lazaro vs Social Security Commission (2004) G.R. 138254

Facts: Rosalina Laudato filed a petition before the SSC for social securitycoverage and remittance of unpaid monthly social security contributionsagainst her three (3) employers. Among them was Angelito Lazaro,proprietor of Royal Star, which is engaged in the business of selling homeappliances. Laudato alleged that despite her employment as salessupervisor of the sales agents for Royal Star from April of 1979 to March of1986, Lazaro had failed during the said period, to report her to the SSC forcompulsory coverage or remit Laudatos social security contributions.

Lazaro denied that Laudato was a sales supervisor of Royal Star, averringinstead that she was a mere sales agent whom he paid purely oncommission basis. Lazaro also maintained that Laudato was notsubjected to definite hours and conditions of work. As such, she could notbe deemed an employee of Royal Star.

Issue: WON Laudato is considered employee of Royal Star Marketing?

Held: Laudato is an employee of Royal Star and as such is entitled to thecoverage of Social Security Law.

It is an accepted doctrine that for the purposes of coverage under the

Social Security Act, the determination of employer-employee relationshipwarrants the application of the control test, that is, whether the

employer controls or has reserved the right to control the employee, notonly as to the result of the work done, but also as to the means andmethods by which the same is accomplished.

The fact that Laudato was paid by way of commission does not precludethe establishment of an employer-employee relationship. In Grepalife v.Judico, the Court upheld the existence of an employer-employeerelationship between the insurance company and its agents, despite thefact that the compensation that the agents on commission received was

not paid by the company but by the investor or the person insured. Therelevant factor remains, as stated earlier, whether the "employer" controlsor has reserved the right to control the "employee" not only as to theresult of the work to be done but also as to the means and methods bywhich the same is to be accomplished. It should also be emphasized thatthe SSC, also as upheld by the Court of Appeals, found that Laudato was asales supervisor and not a mere agent. As such, Laudato oversaw andsupervised the sales agents of the company, and thus was subject to thecontrol of management as to how she implements its policies and its endresults.

The finding of the SSC that Laudato was anemployee of Royal Star is supported by substantial evidence. The SSC

examined the cash vouchers issued by Royal Star to Laudato, calling cardsof Royal Star denominating Laudato as a Sales Supervisor of thecompany, and Certificates of Appreciation issued by Royal Star to Laudatoin recognition of her unselfish and loyal efforts in promoting the company.

A piece of documentary evidence appreciated by the SSC is Memorandumdated 3 May 1980 of Teresita Lazaro, General Manager of Royal Star,directing that no commissions were to be given on all main office salesfrom walk-in customers and enjoining salesmen and sales supervisors toobserve this new policy. The Memorandum evinces the fact that Royal Starexercised control over its sales supervisors or agents such as Laudato as tothe means and methods through which these personnel performed theirwork.

Sime Darby Pilipinas Inc., vs NLRC (1998) 289 SCRA 86

Facts: Prior to the present controversy, all company factory workers in

Marikina including members of private respondent union worked from 7:45

a.m. to 3:45 p.m. with a 30 minute paid on call lunch break.

On 14 August 1992 petitioner issued a memorandum to all factory-based

employees advising all its monthly salaried employees in its Marikina Tire

Plant, except those in the Warehouse and Quality Assurance Department

working on shifts, a change in work schedule effective 14 September 1992

thus

7:45 A.M. 4:45 P.M. (Mon to Fri) 7:45 A.M. 11:45 P.M.


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(Sat).

Coffee break time will be ten minutes only anytime between:

9:30 A.M. 10:30 A.M. and 2:30 P.M. 3:30 P.M.

Lunch break will be between: 12:00 NN 1:00 P.M. (Mon to Fri).

Excluded from the above schedule are the Warehouse and QA

employees who are on shifting. Their work and break time scheduleswill be maintained as it is now.

Since private respondent felt affected adversely by the change in the work

schedule and discontinuance of the 30-minute paid on call lunch break, it

filed on behalf of its members a complaint with the Labor Arbiter for unfair

labor practice, discrimination and evasion of liability pursuant to the

resolution of this Court the Labor Arbiter dismissed the complaint on the

ground that the change in the work schedule and the elimination of the 30-

minute paid lunch break of the factory workers constituted a valid exercise

of management prerogative and that the new work schedule, break time

and one-hour lunch break did not have the effect of diminishing the

benefits granted to factory workers as the working time did not exceedeight (8) hours.

Issue: WON the act of management in revising the work schedule of its

employees and discarding their paid lunch break constitutive of unfair

labor practice.

Held: The revision of work schedule is a management prerogative and

does not amount to unfair labor practice in discarding the paid lunch

break.

The right to fix the work schedules of the employees rests principally on

their employer. In the instant case petitioner, as the employer, cites as

reason for the adjustment the efficient conduct of its business operations

and its improved production. It rationalizes that while the old work

schedule included a 30-minute paid lunch break, the employees could be

called upon to do jobs during that period as they were on call. Even if

denominated as lunch break, this period could very well be considered as

working time because the factory employees were required to work if

necessary and were paid accordingly for working.

With the new work schedule, the employees are now given a one-hour

lunch break without any interruption from their employer. For a full one-

hour undisturbed lunch break, the employees can freely and effectively

use this hour not only for eating but also for their rest and comfort which

are conducive to more efficiency and better performance in their work.

Since the employees are no longer required to work during this one-hour

lunch break, there is no more need for them to be compensated for this

period. The Court agrees with the Labor Arbiter that the new work

schedule fully complies with the daily work period of eight (8) hours

without violating the Labor Code. Besides, the new schedule applies to all

employees in the factory similarly situated whether they are union

members or not.

Duncan Asso. Of Detailman-PTGWO vs Glaxo Wellcome Phils.,

(2004) G.R. 162994

Facts: Petitioner Pedro Tecson was hired by respondent Glaxo as medicalrepresentative, after Tecson had undergone training and orientation.Thereafter, Tecson signed a contract of employment which stipulates,among others, that he agrees to study and abide by existing companyrules; to disclose to management any existing or future relationship byconsanguinity or affinity with co-employees or employees of competingdrug companies and should management find that such relationship posesa possible conflict of interest, to resign from the company. The EmployeeCode of Conduct of Glaxo similarly provides that an employee is expectedto inform management of any existing or future relationship byconsanguinity or affinity with co-employees or employees of competingdrug companies.

Tecson was initially assigned to market Glaxos products in the CamarinesSur-Camarines Norte sales area. Subsequently, Tecson entered into aromantic relationship with Bettsy, an employee of Astra, a competitor ofGlaxo. She was Astras Branch Coordinator in Albay and supervised thedistrict managers and medical representatives of her company andprepared marketing strategies for Astra in that area. The two married evenwith the several reminders given by the District Manager to Tecson. InJanuary 1999, Tecsons superiors informed him that his marriage to Bettsygave rise to a conflict of interest. Tecsons superiors reminded him that heand Bettsy should decide which one of them would resign from their jobs,although they told him that they wanted to retain him as much as possiblebecause he was performing his job well. This situation eventually led to hisconstructive dismissal.

Issue: WON Glaxos policy prohibiting its employees from marrying anemployee of a competitor company is valid?

Held: Glaxos policy prohibiting an employee from having a relationshipwith an employee of a competitor company is a valid exercise ofmanagement prerogative.

Tecsons contract of employment with Glaxo being questioned, stipulatesthat Tescon agrees to abide by the existing company rules of Glaxo, and to


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study and become acquainted with such policies. In this regard, theEmployee Handbook of Glaxo expressly informs its employees of its rulesregarding conflict of interest. No reversible error can be ascribed to theCourt of Appeals when it ruled that Glaxos policy prohibiting an employeefrom having a relationship with an employee of a competitor company is avalid exercise of management prerogative. Glaxo has a right to guard itstrade secrets, manufacturing formulas, marketing strategies and otherconfidential programs and information from competitors, especially so thatit and Astra are rival companies in the highly competitive pharmaceutical

industry.

The prohibition against personal or marital relationships with employees ofcompetitor companies upon Glaxos employees is reasonable under thecircumstances because relationships of that nature might compromise theinterests of the company. In laying down the assailed company policy,Glaxo only aims to protect its interests against the possibility that acompetitor company will gain access to its secrets and procedures. ThatGlaxo possesses the right to protect its economic interests cannot bedenied. No less than the Constitution recognizes the right of enterprises toadopt and enforce such a policy to protect its right to reasonable returnson investments and to expansion and growth. Indeed, while our lawsendeavor to give life to the constitutional policy on social justice and the

protection of labor, it does not mean that every labor dispute will bedecided in favor of the workers. The law also recognizes that managementhas rights which are also entitled to respect and enforcement in theinterest of fair play.

Producers Bank vs NLRC () 335 SCRA 506

Facts: Petitioner was placed by Central Bank of the Philippines (Bangko

Sentral ng Pilipinas) under a conservator for the purpose of protecting its

assets. When the respondents ought to implement the CBA (Sec. 1, Art. 11)

regarding the retirement plan and pertaining to uniform allowance, the

acting conservator of the petition expressed objection resulting an impasse

between the petitioner bank and respondent union. The deadlock

continued for at least six months. The private respondent, to resolve the

issue filed a case against petitioner for unfair labor practice and flagrant

violation of the CBA.

The Labor Arbiter dismissed the petition. NLRC reversed the findings and

ordered the implementation of the CBA.

Issue: WON the employees who have retired have no personality to file an

action since there is no longer an employer-employee relationship.

Held: Employees who have retired still have the personality to file a

complaint.

Retirement results from a voluntary agreement between the employer and

the employee whereby the latter after reaching a certain age agrees to

sever his employment with the former. The very essence of retirement is

the termination of employer-employee relationship.

Retirement of the employee does not in itself affect his employment status

especially when it involves all rights and benefits due to him, since these

must be protected as though there had been no interruption of service. It

must be borne in mind that the retirement scheme was part of the

employment package and the benefits to be derived therefrom constituted

as it were a continuing consideration of services rendered as well as an

effective inducement foe remaining with the corporation. It is intended to

help the employee enjoy the remaining years of his l ife.

When the retired employees were requesting that their retirement benefits

be granted, they were not pleading for generosity but merely demanding

that their rights, embodied in the CBA, be recognized. When an employee

has retired but his benefits under the law or CBA have not yet been given,

he still retains, for the purpose of prosecuting his claims, the status of an

employee entitled to the protection of the Labor Code, one of which is the

protection of the labor union.

ARNULFO O. ENDICO v. QUANTUM DISTRIBUTION CENTER577 SCRA 299 (2009)

FACTS: Quantum Foods Center hired Arnulfo O. Endico (Endico) as FieldSupervisor of Davao City. He was later on transferred in Cebu. Due toEndicos achievements and contributions to Quantum Foods, he waspromoted as Area Manager of Cebu. However, after fruitful years ofemployment, Quantum Foods was adversely affected by economicslowdown, which compelled it to streamline its operations through thereduction of the companys contractual merchandisers to save onoperation cost. Thereafter, for some misfortunate events, Endico wasimmediately relieved from service. Endico thereafter filed a complaint for

constructive illegal dismissal.

The Labor Arbiter rendered a decision in Endicos favor. Quantum Foodsappealed to the National Labor Relations Commission (NLRC) whichaffirmed the Labor Arbiters decision with modification. Quantum Foodsthen filed a Petition for Certiorari before the Court of Appeals (CA) whoruled in favor of Quantum Foods. The Court of Appeals ruled that QuantumFoods had yet to decide on the administrative case when Endicoimmediately filed the complaint for constructive dismissal. The CAconcluded that Endico filed the complaint in anticipation of what heperceived to be the final outcome of the administrative investigation.Hence, this petition.

ISSUE: Whether or not Endico was constructively dismissed


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HELD:Jurisprudence recognizes the exercise of managementprerogatives. Labor laws also discourage interference with an employersjudgment in the conduct of its business. For this reason, the Court oftendeclines to interfere in legitimate business decisions of employers. The lawmust protect not only the welfare of employees, but also the right ofemployers.

In the pursuit of its legitimate business interests, especially during adversebusiness conditions, management has the prerogative to transfer or assign

employees from one office or area of operation to another provided thereis no demotion in rank or diminution of salary, benefits and other privilegesand the action is not motivated by discrimination, bad faith, or effected asa form of punishment or demotion without sufficient cause. This privilege isinherent in the right of employers to control and manage their enterpriseseffectively. The right of employees to security of tenure does not givethem vested rights to their positions to the extent of deprivingmanagement of its prerogative to change their assignments or to transferthem.

Managerial prerogatives, however, are subject to limitations provided bylaw, collective bargaining agreements, and general principles of fair playand justice.

In this case, the Court finds no reason to disturb the conclusion of the CAthat there was no constructive dismissal. Reassignments made bymanagement pending investigation of violations of company policies andprocedures allegedly committed by an employee fall within the ambit ofmanagement prerogative. The decision of Quantum Foods to transferEndico pending investigation was a valid exercise of managementprerogative to discipline its employees. The transfer, while incidental to thecharges against Endico, was not meant as a penalty, but rather as apreventive measure to avoid further loss of sales and the destruction ofQuantum Foods image and goodwill. It was not designed to be theculmination of the then on-going administrative investigation againstEndico.

Neither was there any demotion in rank or any diminution of Endicossalary, privileges and other benefits. Endico was being transferred to thehead office as area sales manager, the same position

Endico held in Cebu. There was also no proof that the transfer involved adiminution of Endicos salary, privileges and other benefits.

On the alleged inconvenience on Endico and his family because of thetransfer from Cebu to the head office in Paraaque, the Court rules thatthe transfer is valid, there being no showing that there was bad faith onthe part of Quantum Foods. Moreover, the Court finds that Quantum Foods,considering the declining sales and the loss of a major account in Cebu,was acting in the legitimate pursuit of what it considered its best interest

in deciding to transfer Endico to the head office.

Filamer v. CAG.R. No. 75112 [October 16, 1990]

Facts: Private respondent Potenciano Kapunan, Sr., an eighty-two-year oldretired schoolteacher (now deceased), was struck by the Pinoy jeep ownedby petitioner Filamer and driven by its alleged employee, Funtecha, asKapunan, Sr. was walking along Roxas Avenue, Roxas City at 6:30 in theevening of October 20, 1977. As a result of the accident, Kapunan, Sr.suffered multiple injuries for which he was hospitalized for a total of twenty

(20) days. At the time of the vehicular accident, only one headlight of thejeep was functioning. Funtecha, who only had a student drivers permit,was driving after having persuaded Allan Masa, the authorized driver, toturn over the wheels to him. The two fled from the scene after the incident.A tricycle driver brought the unconscious victim to the hospital. The trialcourt rendered judgment finding not only petitioner Filamer and Funtechato be at fault but also Allan Masa, a non-party. Only petitioner Filamer andthird-party defendant Zenith Insurance Corporation appealed the lowercourts judgment to the Court of Appeals and as a consequence, said lowercourts decision became final as to Funtecha. For failure of the insurancefirm to pay the docket fees, its appeal was dismissed on September 18,1984. On December 17, 1985, the Appellate Court rendered the assailedjudgment affirming the trial courts decision in toto. Hence the present

recourse by petitioner Filamer.

Issue: Whether or not the term employer as used in Article 2180 isapplicable to petitioner Filamer with reference to Funtecha.

Ruling: The Court ruled that even if we were to concede the status of anemployee on Funtecha, still the primary responsibility for his wrongdoingcannot be imputed to petitioner Filamer for the plain reason that at thetime of the accident, it has been satisfactorily shown that Funtecha wasnot acting within the scope of his supposed employment. His duty was tosweep the school passages for two hours every morning before his regularclasses. Taking the wheels of the Pinoy jeep from the authorized driver at6:30 in the evening and then driving the vehicle in a reckless manner

resulting in multiple injuries to a third person were certainly not within theambit of his assigned tasks. At the time of the injury, Funtecha was notengaged in the execution of the janitorial services for which he wasemployed, but for some purpose of his own. It is but fair therefore thatFuntecha should bear the full brunt of his tortious negligence. PetitionerFilamer cannot be made liable for the damages he had caused.Furthermore, the Court cited Section 14, Rule X of Book III of the LaborCode, under the Labor Code, petitioner Filamer cannot be considered asFuntechas employer. Funtecha belongs to that special category ofstudents who render service to the school in exchange for free tuitionFuntecha worked for petitioner for two hours daily for five days a week. Hewas assigned to clean the school passageways from 4:00 a.m. to 6:00 a.m.with sufficient time to prepare for his 7:30 a.m. classes. As admitted by

Agustin Masa in open court, Funtecha was not included in the companypayroll.


8/8

NOTE: This case reversed Filamer vs IAC (October 16, 1990)

Daniel Funtecha was a working student of Filamer. He was assigned as theschool janitor to clean the school 2 hours every morning. Allan Masa wasthe son of the school president and at the same time he was the schoolsjeepney service driver. On October 20, 1977 at about 6:30pm, after drivingthe students to their homes, Masa returned to the school to report andthereafter have to go home with the jeep so that he could fetch thestudents early in the morning. Masa and Funtecha live in the same place

so they usually go home together. Funtecha had a student drivers licenseso Masa let him take the drivers seat. While Funtecha was driving, heaccidentally hit an elderly Kapunan which led to his hospitalization for 20days. Kapunan filed a criminal case and an independent civil action basedon Article 2180 against Funtecha.

In the independent civil action, the lower court ruled that Filamer issubsidiarily liable for the tortious act of Funcheta and was compelled topay for damages based on Article 2180 which provides that employersshall be liable for the damages caused by their employees and householdhelpers acting within the scope of their assigned tasks. Filamer assailedthe decision and it argued that under Section 14, Rule X, Book III of theLabor Code IRR, working scholars are excluded from the employment

coverage hence there is no employer-employee relations between Filamerand Funcheta; that the negligent act of Funcheta was due to negligenceonly attributable to him alone as it is outside his assigned task of being theschool janitor. The CA denied Filamers appeal but the Supreme Courtagreed with Filamer. Kapunan filed for a motion for reconsideration.

ISSUE: Whether or not Filamer should be held subsidiarily liable.

HELD: Yes. This time, the SC ruled in favor of Kapunan (actually his heirscause by this time Kapunan was already dead). The provisions of Section14, Rule X, Book III of the Labor Code IRR was only meant to provideguidelines as compliance with labor provisions on working conditions, restperiods, and wages is concerned. This does not in any way affect theprovisions of any other laws like the civil code. The IRR cannot defeat theprovisions of the Civil Code. In other words, Rule X is merely a guide to theenforcement of the substantive law on labor. There is a distinction henceSection 14, Rule X, Book III of the Rules is not the decisive law in a civil suitfor damages instituted by an injured person during a vehicular accidentagainst a working student of a school and against the school itself.

The present case does not deal with a labor dispute on conditions ofemployment between an alleged employee and an alleged employer. Itinvokes a claim brought by one for damages for injury caused by thepatently negligent acts of a person, against both doer-employee and hisemployer. Hence, the reliance on the implementing rule on labor todisregard the primary liability of an employer under Article 2180 of theCivil Code is misplaced. An implementing rule on labor cannot be used by

an employer as a shield to void liability under the substantive provisions ofthe Civil Code.

Funtecha is an employee of Filamer. He need not have an officialappointment for a drivers position in order that Filamer may be heldresponsible for his grossly negligent act, it being sufficient that the act ofdriving at the time of the incident was for the benefit of Filamer (the act ofdriving the jeep from the school to Masas house is beneficial to the schoolbecause this enables Masa to do a timely school transportation service in

the morning). Hence, the fact that Funtecha was not the school driver orwas not acting with the scope of his janitorial duties does not relieveFilamer of the burden of rebutting the presumption juris tantum that therewas negligence on its part either in the selection of a servant or employee,or in the supervision over him. Filamer has failed to show proof of itshaving exercised the required diligence of a good father of a family over itsemployees Funtecha and Allan.
http://www.uberdigests.info/2012/11/filamer-vs-iac-1990/http://www.uberdigests.info/2012/11/filamer-vs-iac-1990/

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