Test to Determine Existence of Employer and Employee Relationship

7/30/2019 Test to Determine Existence of Employer and Employee Relationship

1/61

TEST TO DETERMINE EXISTENCE OF EMPLOYER AND EMPLOYEERELATIONSHIPFRANCISCO VS. NLRCAUGUST 21, 2006

Facts: Sometime in 1995, petitioner was hired by Kasei Corporationduring its incorporation stage. She was designated as Accountant andCorporate Secretary and was assigned to handle all the accounting needsof the company. She was also designated as Liaison Officer to the Cityof Makati to secure business permits, construction permits and otherlicenses for the initial operation of the company.

In 1996, petitioner was designated Acting Manager. As ActingManager, petitioner was assigned to handle recruitment of all employeesand perform management administration functions; represent the

company in all dealings with government agencies, especially with theBureau of Internal Revenue (BIR), Social Security System (SSS) and in thecity government of Makati; and to administer all other matters pertainingto the operation of Kasei Restaurant which is owned and operated by KaseiCorporation.

For five years, petitioner performed the duties of Acting Manager. Asof December 31, 2000 her salary was P27,500.00 plus P3,000.00 housingallowance and a 10% share in the profit of Kasei Corporation. In January2001, petitioner was replaced by Liza R. Fuentes as Manager. Petitioneralleged that she was required to sign a prepared resolution for her

replacement but she was assured that she would still be connected withKasei Corporation. Timoteo Acedo, the designated Treasurer, convened ameeting of all employees of Kasei Corporation and announced thatnothing had changed and that petitioner was still connected with KaseiCorporation as Technical Assistant toSeiji Kamura and in charge of allBIR matters. Thereafter, Kasei Corporation reduced her salary by P2,500.00a month beginning January up to September 2001 for a total reduction ofP22,500.00 as of September 2001. Petitioner was not paid her mid-yearbonus allegedly because the company was not earning well. OnOctober2001, petitioner did not receive her salary from the company. She

made repeated follow-upswith the company cashier but she was advisedthat the company was not earning well.

On October 15, 2001, petitioner asked for her salary from Acedo andthe rest of the officers but she was informed that she is no longer connectedwith the company. Since she was no longer paid her salary, petitioner didnot report for work and filed an action for constructive dismissal beforethe labor arbiter


2/61


3/61

parties. Meanwhile, pursuant to the Agreement, ABS-CBN continued toremit SONZAs monthly talent fees through his account at PCI Bank. ABS-CBN later opened a new account with the same bank where ABS-CBNdeposited SONZAs talent fees and other payments due him under theAgreement

Issue: whether an employer-employee relationship exist in the caseHeld: No. Case law has consistently held that the elements of an employer-employee relationship are: (a) the selection and engagement of theemployee; (b) the payment of wages; (c) the power of dismissal; and (d)the employers power to control the employee on the means and methods bywhich the work is accomplished.18 The last element, the so-called "controltest", is the most important element.Independent contractors often present themselves to possess unique skills,expertise or talent to distinguish them from ordinary employees. Thespecific selection and hiring of SONZA, because of his unique skills, talentand celebrity status not possessed by ordinary employees, is a circumstanceindicative, but not conclusive, of an independent contractualrelationship. If SONZA did not possess such unique skills, talent andcelebrity status, ABS-CBN would not have entered into the Agreement withSONZA but would have hired him through its personnel department justlike any other employee.

JAVIER VS. FLYACE CORPFEBRUARY 15, 2012Facts: On May 23, 2008, Javier filed a complaint before the NLRC forunderpayment of salaries and other labor standard benefits. He allegedthat he was an employee of Fly Ace since September 2007, performingvarious tasks at the respondents warehouse such as cleaning andarranging the canned items before their delivery to certain locations,except in instances when he would be ordered to accompany the companys

delivery vehicles, aspahinante. that on May 6, 2008, he reported for workbut he was no longer allowed to enter the company premises by the securityguard upon the instruction of Ruben Ong(Mr. Ong), his superior; thatafter several minutes of begging to the guard to allow him to enter, he sawOng whom he approached and asked why he was being barred fromentering the premises; that Ong replied by saying, "Tanungin mo anak mo;" that he then went home and discussed the matter with his family;


4/61

that he discovered that Ong had been courting his daughter Annalynafter the two met at a fiesta celebration in Malabon City; that Annalyntried to talk to Ong and convince him to spare her father from trouble buthe refused to accede; that thereafter, Javier was terminated from hisemployment without notice; and that he was neither given the opportunity

to refute the cause/s of his dismissal from work.On the other hand Fly Ace averred that it was engaged in the

business of importation and sales of groceries. Sometime in December2007, Javier was contracted by its employee, Mr. Ong, as extra helper onapakyawbasis at an agreed rate of P 300.00 per trip, which was laterincreased to P 325.00 in January 2008. Mr. Ong contracted Javier roughly5 to 6 times only in a month whenever the vehicle of its contracted hauler,Milmar Hauling Services, was not available. On April 30, 2008, Fly Ace nolonger needed the services of Javier. Denying that he was their employee,Fly Ace insisted that there was no illegal dismissal.Fly Ace submitted a copy

of its agreement with Milmar Hauling Services and copies ofacknowledgment receipts evidencing payment to Javier for his contractedservices bearing the words, "daily manpower(pakyaw/piece rate pay)" andthe latters signatures/initials.

Issue: Whether an Employer-employee relationship existHeld: No. The Court is of the considerable view that on Javier lies theburden to pass the well-settled tests to determine the existence of anemployer-employee relationship, viz: (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 employees conduct. Of these elements, the mostimportant criterion is whether the employer controls or has reserved theright to control the employee not only as to the result of the work but alsoas 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.1avvphi1He 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, Javiers 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 refuteFly Aces assertion that it had an agreement with a hauling company to


5/61

undertake the delivery of its goods. It was also baffling to realize thatJavier did not dispute Fly Aces denial of his services exclusivity to thecompany. In short, all that Javier laid down were bare allegationswithout corroborative proof.

Fly Ace does not dispute having contracted Javier and paid him on a "pertrip" rate as a stevedore, albeit on apakyawbasis. The Court cannot fail tonote that Fly Ace presented documentary proof that Javier was indeedpaid on apakyawbasis per the acknowledgment receipts admitted ascompetent evidence by the LA. Unfortunately for Javier, his mere denial ofthe signatures affixed therein cannot automatically sway us to ignore thedocuments because "forgery cannot be presumed and must be proved byclear, positive and convincing evidence and the burden of proof lies on theparty alleging forgery."

SMCEU-PTGWO vs. BERSAMINAFacts: Sometime in 1983 and 1984, SanMig entered into contracts formerchandising services with Lipercon and D'Rite. These companies areindependent contractors duly licensed by the Department of Labor andEmployment (DOLE). It was understood that there is no employer-employeerelationship between san Miguel and Lipercon and drite. Petitioner SanMiguel Corporation Employees Union-PTWGO (the Union, for brevity) askedsan Miguel to regularize the employment ofLipercon and Drite employees.

Liperscon and drite employees also signed up for membership before thepetitioner union.

Issue: Whether there exist an employer-employee relationship between sanMiguel and lipercon and drite employees

Held: No. the elements of employer-employee relationship are; (1) theselection and engagement of the employee; (2) the payment of wages; (3)the power of dismissal; and (4) the power to control the employeesconduct. Of these elements, the most important criterion is whether the

employer controls or has reserved the right to control the employee notonly as to the result of the work but also as to the means and methods bywhich the result is to be accomplished. It was clear in this case thatlipercon and driteemployees are not employees of san Miguel, rather theyare independent contractors.


6/61

DEFINITION OF LABOR DISPUTECITIBANK VS. CANOVEMBER 27, 1998

Facts: In 1983, Citibank and El Toro Security Agency, Inc. (hereafter ElToro) entered into a contract for the latter to provide security andprotective services to safeguard and protect the bank's premises, situated at8741 Paseo de Roxas, Makati, Metro Manila. Citibank renewed the securitycontract with El Toro yearly until 1990. On April 22, 1990, the contractbetween Citibank and El Toro expired. Citibank did not renew its contractwith El toro and instead replaced them with Golden Pyramid SecurityAgency. respondent Citibank Integrated Guards Labor Alliance-SEGA-TUPAS/FSM (hereafter CIGLA) filed after referring the case before theNational Conciliation and Mediation Board (NCMB) it filed a notice of

strike. Citibank filed an injunctive relief from the trial court, whilerespondent moved to dismiss since the jurisdiction should be in the laborarbiter being a labor dispute. Citibank contended that the case is not alabor dispute since no employer-employee relationship exist betweenCitibank and el toro.

Issue: whether the case is a labor dispute hence the labor arbiter shouldhave jurisdiction

Held: No. This Court has held in many cases that "in determining theexistence of an employer-employee relationship, the following elements aregenerally considered: 1) the selection and engagement of the employee; 2)the payment of wages; 3) the power of dismissal; and 4) the employer'spower to control the employee with respect to the means and methods bywhich the work is to be accomplished". 7 It has been decided also that theLabor Arbiter has no jurisdiction over a claim filed where no employer-employee relationship existed between a company and the security guardsassigned to it by a security service contractor. 8In this case, it was thesecurity agency El Toro that recruited, hired and assigned the watchmento their place of work. It was the security agency that was answerable to

Citibank for the conduct of its guards.

The question arises. Is there a labor dispute between Citibank and thesecurity guards, members of respondent CIGLA, regardless of whether theystand in the relation of employer and employees? Article 212, paragraph 1of the Labor Code provides the definition of a "labor dispute". It "includesany controversy or matter concerning terms or conditions of employment


7/61

or the association or representation of persons in negotiating, fixing,maintaining, changing or arranging the terms and conditions ofemployment, regardless of whether the disputants stand in the proximaterelation of employer and employee.

If at all, the dispute between Citibank and El Toro security agency is oneregarding the termination or non-renewal of the contract of services. Thisis a civil dispute. 9 El Toro was an independent contractor. Thus, noemployer-employee relationship existed between Citibank and the securityguard members of the union in the security agency who were assigned tosecure the bank's premises and property. Hence, there was no labor disputeand no right to strike against the bank.

ARTICLE 218LAND BANK OF THE PHILIPPINES, PETITIONER, VS. SEVERINO LISTANA,RESPONDENT.G.R. No. 168105, July 27, 2011

Facts: Listana is the owner of a property located in Sorsogon. The land wasvoluntarily offered for sale to the government under the ComprehensiveAgrarian Reform Program. (LBP) valued the property for acquisition atP5,871,689.03. Since the respondent rejected the said amount, a summaryproceeding for determination of just compensation was conducted by(DAR). Listana executed a deed of transfer upon acceptance of payment

from the government in the form of cash and LBP bonds worth P3.7M. DARissued a decision declaring the value of the property worth P10M. After a

year LBP filed a petition for judicial declaration of just compensationbefore the RTC contending that the valuation was unacceptable. Listanafiled a motion to dismiss contending that the contract was binding andtherefore constitutes res judicata citing also a pending case against LBPfor contempt. A motion for reconsideration as well as the appeal by the LBPwas denied. LBP filed a application for writ of preliminary injuctionagainst the of their manager which was later granted by the RTC. Listanafiled a petition for certiorari before CA which nullifies the decision of the

RTC. The trial court issued the order granting respondent's motion forreconsideration and dismissing the petition for having been filed almostone year from receipt of the copy of the PARAD's decision. A motion forreconsideration was denied.

Issue: whether or not the SAC may take cognizance of the petition fordetermination of just compensation which is filed beyond the prescribed


8/61

15-day period or more than 100 days after the PARAD rendered itsvaluation in a summary administrative proceeding.

Ruling: The valuation of property in expropriation cases pursuantto R.A. No. 6657 or the Comprehensive Agrarian Reform Law, is essentially

a judicial function which is vested in the RTC acting as Special AgrarianCourt and cannot be lodged with administrative agencies such as theDAR.Consequently, although the new rules speak of directly appealing thedecision of adjudicators to the RTCs sitting as Special Agrarian Courts, itis clear from 57 that theoriginalandexclusivejurisdiction to determinesuch cases is in the RTCs. Any effort to transfer such jurisdiction to theadjudicators and to convert the original jurisdiction of the RTCs intoappellate jurisdiction would be contrary to 57 and therefore would bevoid.

The jurisdiction of the Regional Trial Courts is not any less "originaland exclusive" because the question is first passed upon by the DAR, as the

judicial proceedings are not a continuation of the administrativedetermination.On the supposedly conflicting pronouncements in the cited decisions, theCourt reiterates its ruling in this case that the agrarian reformadjudicator's decision on land valuation attains finality after the lapse ofthe 15-day period stated in the DARAB Rules. The petition for the fixing of

just compensation should therefore, following the law and settledjurisprudence, be filed with the SAC within the said period.

Petitioner clearly slept on its rights by not filing the petition in theSAC within the prescribed fifteen-day period or a reasonable time afternotice of the denial of its motion for reconsideration.It is a fundamental legal principle that a decision that has acquiredfinality becomes immutable and unalterable, and may no longer bemodified in any respect, even if the modification is meant to correcterroneous conclusions of fact and law, and whether it be made by thecourt that rendered it or by the highest court of the land. The onlyexceptions to the general rule on finality of judgments are the so-called

nunc pro tunc entries which cause no prejudice to any party, voidjudgments, and whenever circumstances transpire after the finality of thedecision which render its execution unjust and inequitable. Indeed,litigation must end and terminate sometime and somewhere, even at therisk of occasional errors.


9/61

ARTICLE 221MANILA ELECTRIC COMPANY, vs. JAN CARLO GALAG.R. Nos. 191288 & 191304 March 7, 2012

Facts: Gala was employed by Meralco as probationary lineman. Heinitially served the crew of two trucks under the supervision of by Matisand Zuniaga respectively. On July 27, 2006, barely four months on the job,Gala was dismissed for alleged complicity in pilferages of Meralcoselectrical supplies, particularly, for the incident which took place on May25, 2006. On that day Gala was assigned to help digging for a post inVelenzuela. When they came in to the vicinity they found out that theteam of Valenzuela was already there so they decided to help. Galanoticed a non-employee named Llanes who conversing with the foreman.Llanes boarded the trucks, without being stopped, and took out what were

later found as electrical supplies. Aside from Gala, the foremen and theother linemen who were at the worksite when the pilferage happened werelater charged with misconduct and dishonesty for their involvement in theincident. Unknown to Gala and the rest of the crew, a Meralcosurveillance task force was monitoring their activities and recordingeverything with a Sony video camera. Meralco called for an investigationof the incident and asked Gala to explain. Gala denied involvement in thepilferage, contending that even if his superiors might have committed awrongdoing, he had no participation in what they did. Despite Galasexplanation, Meralco proceeded with the investigation and eventually

terminated his employment on July 27, 2006. Gala responded by filing anillegal dismissal complaint against Meralco. The complaint was dismissedby the labor arbiter. NLRC reversed the decision of the LA upon appeal butit ruled out Galas reinstatement, stating that his tenure lastedonly up tothe end of his probationary period. It awarded him backwages andattorneys fees. Both parties moved for partial reconsideration but thesame was denied. Both parties filed a petition for certiorari before CAruling for the reinstatement of Gala and denying the petition of Meralco,hence, this present. Gala contended that the petition should be dismissedbecause of procedural defect in the verification and certification and that

the counsel of Meralco failed to indicate his MCLE compliance number.

Issue: Whether or not the petition should be dismissed due to proceduraldefect

Ruling: NO. We stress at this point that it is the spirit and intention oflabor legislation that the NLRC and the labor arbiters shall use every


10/61

reasonable means to ascertain the facts in each case speedily andobjectively, without regard to technicalities of law or procedure, provideddue process is duly observed.19 In keeping with this policy and in theinterest of substantial justice, we deem it proper to give due course to thepetition, especially in view of the conflict between the findings of the labor

arbiter, on the one hand, and the NLRC and the CA, on the other. As wesaid in S.S. Ventures International, Inc. v. S.S. Ventures Labor Union,20"the application of technical rules of procedure in labor cases may berelaxed to serve the demands of substantial justice."

NATIONWIDE SECURITY and ALLIED SERVICES, INC.,vs.THE COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION andJOSEPH DIMPAZ, HIPOLITO LOPEZ, EDWARD ODATO, FELICISIMO PABONand JOHNNY AGBAY,G.R. No. 155844 July 14, 2008

Facts: 8 security guards filed a complaint for illegal dismissal againstNSAS before the LA. LA ruled that NSAS was not liable for the dismissal ofthe security guards but it was ordered to pay their separation fees, unpaidsalaries and attorneys fees. NSAS appealed before the NLRC but it wasdenied for filing beyond the reglamentary period and insufficiency ofbond. A petition for certiorari under rule 65 to CA was also denied for thesaid errors assigned were not reversible.

Issue: WHETHER OR NOT TECHNICALITIES IN LABOR CASES MUST PREVAILOVER THE SPIRIT AND INTENTION OF THE LABOR CODE UNDER ARTICLE221

Ruling: Yes. At the outset it must be pointed out here that the petition forcertiorari filed with the Court by petitioner under Rule 65 of the Rules ofCourt is inappropriate. The proper remedy is a petition for review underRule 45 purely on questions of law. There being a remedy of appeal viapetition for review under Rule 45 of the Rules of Court available to the

petitioner, the filing of a petition for certiorari under Rule 65 is improper.But even if we bend our Rules to allow the present petition for

certiorari, still it will not prosper because we do not find any grave abuseof discretion amounting to lack of or excess of jurisdiction on the part ofthe Court of Appeals when it dismissed the petition of the security agency.We must stress that under Rule 65, the abuse of discretion must be so patentand gross as to amount to an evasion of positive duty or to a virtual
http://lawphil.net/judjuris/juri2012/mar2012/gr_191288_2012.html#fnt19http://lawphil.net/judjuris/juri2012/mar2012/gr_191288_2012.html#fnt20http://lawphil.net/judjuris/juri2012/mar2012/gr_191288_2012.html#fnt20http://lawphil.net/judjuris/juri2012/mar2012/gr_191288_2012.html#fnt19


11/61

refusal to perform a duty enjoined by law, or to act at all incontemplation of law, as where the power is exercised in an arbitrary anddespotic manner by reason of passion or personal hostility. No such abuseof discretion happened here. The assailed decision by the Court of Appealswas certainly not capricious nor arbitrary, nor was it a whimsical exercise

of judgment amounting to a lack of jurisdiction.Failure to perfect an appeal renders the decision final and

executory. The right to appeal is a statutory right and one who seeks toavail of the right must comply with the statute or the rules. The rules,particularly the requirements for perfecting an appeal within thereglementary period specified in the law, must be strictly followed as theyare considered indispensable interdictions against needless delays andfor the orderly discharge of judicial business. It is only in highlymeritorious cases that this Court will opt not to strictly apply the rules andthus prevent a grave injustice from being done. The exception does not

obtain here. Thus, we are in agreement that the decision of the LaborArbiter already became final and executory because petitioner failed tofile the appeal within 10 calendar days from receipt of the decision.

ARTICLE 223 APPEALISLRIZ TRADING VS. CAPADA ET ALJANUARY 31, 2011

Facts: Respondents Efren Capada, Lauro Licup, Norberto Nigos andGodofredo Magnaye were drivers while respondents Ronnie Abel, ArnelSiberre, Edmundo Capada, Nomerlito Magnaye and Alberto Dela Vegawere helpers of Islriz Trading, a gravel and sand business owned andoperated by petitioner Victor Hugo Lu. Claiming that they were illegallydismissed, respondents filed a Complaint for illegal dismissal and non-payment of overtime pay, holiday pay, rest day pay, allowances andseparation pay against petitioner on August 9, 2000 before the LaborArbiter. On his part, petitioner imputed abandonment of work againstrespondents. The labor arbiter ruled in favor of the respondents but was

reversed before the NLRC. Petitioner did not pay the judgment monetaryaward to the respondents pending appeal of the case to the NLRC.Petitioner now contends that since the judgment was reversed, it has noobligation to pay anymore the monetary award by the labor arbiter


12/61

Issue: whether respondents may collect their wages during the periodbetween the Labor Arbiter's order of reinstatement pending appeal and theNLRC Resolution overturning that of the Labor Arbiter.

Held: Yes. paragraph 3 of Article 223 of the Labor Code which reads: In anyevent, the decision of the Labor Arbiter reinstating a dismissed orseparated employee, insofar as the reinstatement aspect is concerned,shall immediately be executory, pending appeal. The employee shall eitherbe admitted back to work under the same terms and conditions prevailingprior to his dismissal or separation or, at the option of the employer,merely reinstated in the payroll. The posting of a bond by the employershall not stay the execution for reinstatement provided herein. Even if theorder of reinstatement of the Labor Arbiter is reversed on appeal, it isobligatory on the part of the employer to reinstate and pay the wages ofthe dismissed employee during the period of appeal until reversal by the

higher court. On the other hand, if the employee has been reinstatedduring the appeal period and such reinstatement order is reversed withfinality, the employee isnotrequired to reimburse whatever salary hereceived for he is entitled to such, more so if he actually rendered servicesduring the period. GARCIA VS. KJ COMMERCIALFEBRUARY 29, 2012Facts: Respondent KJ Commercial is a sole proprietorship. It owns trucksand engages in the business of distributing cement products. On different

dates, KJ Commercial employed as truck drivers and truck helperspetitioners Cesar V. Garcia, Carlos Razon, Alberto De Guzman,Tomas Razon, Omer E. Palo, Rizalde Valencia,Allan Basa, JessieGarcia, Juanito Paras, Alejandro Orag, Rommel Pangan, Ruel Soliman,and Cenen Canlapan . On 2 January 2006, petitioners demanded fora P40 daily salary increase. To pressure KJ Commercial to grant theirdemand, they stopped working and abandoned their trucks at theNorthern Cement Plant Station in Sison, Pangasinan. They also blockedother workers from reporting to work. On 3 February 2006, petitioners filedwith the Labor Arbiter a complaint for illegal dismissal, underpayment of

salary and non-payment of service incentive leave and thirteenth monthpay. The labor arbiter ruled in favour of the petitioners. On appeal theNLRC initially denied KJs appeal with motion to reduce the bond andpresenting a partial bond of PHP 50,000 however it was later on grantedafter KJ filed a motion of reconsideration and presented to the totalamount for the bond (2,612,930.00). petitioner now contends that theNLRC committed grave abuse of discretion in allowing the appeal.


13/61

Petitioners claim that KJ Commercial failed to perfect an appeal since themotion to reduce bond did not stop the running of the period to appeal.

Issue: whetherthe LaborArbiters 30 October 2008 Decision became finaland executory;

Held: No. KJ Commercials filing of a motion to reduce bond and delayedposting of the P2,562,930 surety bond did not render the LaborArbiters 30October 2008 Decision final and executory. The Rules of Procedure of theNLRC allows the filing of a motion to reduce bond subject to twoconditions: (1) there is meritorious ground, and (2) a bond in areasonable amount is posted. InOng v. Court of Appeals , the Court heldthat the bond requirement on appeals may be relaxed when there issubstantial compliance with the Rules of Procedure of the NLRC or whenthe appellant shows willingness to post a partial bond. The Court held that,

While the bond requirement on appeals involving monetary awards hasbeen relaxed in certain cases, this can only be done where there wassubstantial compliance of the Rules or where the appellants, at the veryleast, exhibited willingness to pay by posting a partial bond.

ONG VS. CASEPTEMBER 22, 2004Facts: Petitioner is the sole proprietor of Milestone Metal Manufacturing(Milestone), which manufactures, among others, wearing apparels, belts,

and umbrellas.3 Sometime in May 1998, the business suffered very low salesand productivity because of the economic crisis in the country. Hence, itadopted a rotation scheme by reducing the workdays of its employees tothree days a week or less for an indefinite period.On separate dates, the 15respondents filed before the National Labor Relations Commission (NLRC)complaints for illegal dismissal, underpayment of wages, non-payment ofovertime pay, holiday pay, service incentive leave pay, 13th month pay,damages, and attorneys fees against petitioner. These were consolidatedand assigned to Labor Arbiter Manuel Manasala. The Labor arbiter ruledin favor of respondents, Petitioner filed with the NLRC a notice of appeal

with a memorandum of appeal and paid the docket fees therefor. However,instead of posting the required cash or surety bond, he filed a motion toreduce the appeal bond. The NLRC, in a resolution dated April 28, 2000,denied the motion to reduce bond and dismissed the appeal for failure topost cash or surety bond within the reglementary period.7Petitionersmotion for reconsideration was likewise denied. Petitioner contends that


14/61

the bond required (P1,427,802,04) was unjust and prohibitive furthermorehe faults the NLRC because it took 102 days to resolve his motion

Issue: whether THE DECISION OF THE NLRC DISMISSING THE APPEAL OFPETITIONERS FOR NON-PERFECTION WHEN A MOTION TO REDUCE APPEAL

BOND WAS SEASONABLY FILED was valid.

Held: Yes. Time and again it has been held that the right to appeal is nota natural right or a part of due process, it is merely a statutory privilege,and may be exercised only in the manner and in accordance with theprovisions of law. The party who seeks to avail of the same must comply withthe requirements of the rules. Failing to do so, the right to appeal is lost. Biogenerics Marketing and Research Corporation v. NLRC, The mandatoryfiling of a bond for the perfection of an appeal is evident from theaforequoted provision that the appeal may be perfected only upon the

posting of cash or surety bond. It is not an excuse that the over P2 millionaward is too much for a small business enterprise, like the petitionercompany, to shoulder.The law does not require its outright payment, butonly the posting of a bond to ensure that the award will be eventually paidshould the appeal fail. What petitioners have to pay is a moderate andreasonable sum for the premium for such bond.While the bond requirement on appeals involving monetary awards hasbeen relaxed in certain cases, this can only be done where there wassubstantial compliance of the Rules or where the appellants, at the veryleast, exhibited willingness to pay by posting a partial bond.22Petitioners

reliance on the case ofRosewood Processing, Inc. v. NLRC23 is misplaced.Petitioner in the said case substantially complied with the rules by postinga partial surety bond of fifty thousand pesos issued by PrudentialGuarantee and Assurance, Inc. while his motion to reduce appeal bondwas pending before the NLRC.

ROSEWOOD PROCESSING VS. NLRCFacts: a complaint for illegal dismissal; underpayment of wages; and fornonpayment of overtime pay, legal holiday pay, premium pay for holiday

and rest day, thirteenth month pay, cash bond deposit, unpaid wages anddamages was filed against Veterans Philippine Scout Security Agencyand/or Sergio Jamila IV. Thereafter, petitioner was impleaded as a third-party respondent by the security agency. The appeal filed by petitioner wasdismissed by the National Labor Relations Commissionfor failure of thepetitioner to file the required appeal bond within the reglementaryperiod. In its motion for reconsideration, petitioner contended that it


15/61

received a copy of the labor arbiter's Decision only on April 6, 1993, andthat it filed on April 16, 1993 within the prescribed time a Notice of Appealwith a Memorandum on Appeal, a Motion to Reduce Appeal Bond and asurety bond issued by Prudential Guarantee and Assurance, Inc. in theamount of P50,000.

Issue: whether there was Substantial Compliance with the Appeal BondRequirement despite being insufficient

Held: Yes. The perfection of an appeal within the reglementary period andin the manner prescribed by law is jurisdictional, and noncompliancewith such legal requirement is fatal and effectively renders the judgmentfinal and executory. Indisputable is the legal doctrine that the appeal of adecision involving a monetary award in labor cases may be perfected"only upon the posting of a cash or surety bond."10The lawmakersintended the posting of the bond to be an indispensable requirement toperfect an employer's appeal.

However, in a number of cases, this Court has relaxed this requirement inorder to bring about the immediate and appropriate resolution ofcontroversies on the merits. 12Some of these cases include: "(a) counsel'sreliance on the footnote of the notice of the decision of the labor arbiterthat the aggrieved party may appeal . . . within ten (10) working days; (b)fundamental consideration of substantial justice; (c) prevention ofmiscarriage of justice or of unjust enrichment, as where the tardy appeal is

from a decision granting separation pay which was already granted inan earlier final decision; and (d) special circumstances of the casecombined with its legal merits or the amount and the issue involved."13

FSFI vs NLRCDECEMBER 11, 2003Facts: that a complaint for illegal dismissal and monetary claims forservice incentive leave, 13th month pay and night shift differential wasfiled by respondents against petitioners before the NLRC The complaint was

assigned to Labor Arbiter Donato G. Quinto, Jr. who ordered the parties tofile their position paper. Respondents complied, but not the petitionersdespite several warnings and time extensions. The inaction was construedas a waiver by petitioners of their right to present evidence.

The Labor Arbiter decided the complaint on the merit and ruled in favorof respondents. He sustained their claim of illegal dismissal as petitionersfailed to adduce contrary evidence. Petitioners were ordered to reinstate


16/61

respondents. The monetary claims of the respondents were likewisegranted.

Petitioners appealed to the National Labor Relations Commission. For thefirst time, they submitted evidence that respondents were project employees

and that their dismissal was due to the discontinuation ofthe Jaka Tower I project where they were assigned. Respondents, however,assailed the jurisdiction of the NLRC over the appeal for failure of thepetitioners to file the appeal bond within the ten (10)-day reglementaryperiod. They further contended that it was too late for petitioners topresent evidence in the NLRC.

The NLRC nevertheless assumed jurisdiction over the appeal. Due to theevidence presented by petitioners on the issue of illegal dismissal, itremanded the case to the Labor Arbiter for further

proceedings. Respondents motion for reconsideration was denied.

Issue: Whether the NLRC committed a grave abuse of discretion inassuming jurisdiction and remanding the case to the labor arbiter

Held: Yes. The Labor Code provides a ten (10)-day period from receipt ofthe decision of the Arbiter for the filing of an appeal together with anappeal bond if the decision involves a monetary award in favor of theemployees, viz:

ART. 223. Appeal. Decisions, awards, or orders of the Labor Arbiter arefinal and executory unless appealed to the Commission by any or bothparties within ten (10) calendar days from receipt of such decisions,awards, or orders.

In case of a judgment involving a monetary award, an appeal by theemployer may beperfected only upon the posting of a cash or surety bondissued by a reputable bonding company duly accredited by theCommission in the amount equivalent to the monetary award in the

judgment appealed from.

In the case at bar, petitioners alleged that they received a copy of theArbiters decision on October 31, 1998. Their memorandum of appeal wasdated November 9, 1998, but their appeal bond to stay execution of thedecision was executed only on November 17, 1998. The records show nopartial payment of the bond was made during the reglementary periodnor was there any explanation for its late filing. Given these facts, the late


17/61

filing of the bond divested the NLRC of its jurisdiction to entertainpetitioners appeal.

BUENABORA VS. LIM KING GUANJANUARY 20, 2004Facts: Petitioners were employees of private respondent Unix InternationalExport Corporation (UNIX), a corporation engaged in the business ofmanufacturing bags, wallets and the like.Sometime in 1991 and 1992,petitioners filed several cases against UNIX and its incorporators andofficers for unfair labor practice, illegal lockout/dismissal, underpaymentof wages, holiday pay, proportionate 13th month pay, unpaid wages,interest, moral and exemplary damages and attorneys fees. The laborarbiter ruled in favor of the petitioners and the judgment become finaland executory. Petitioner contends that UNIX in order to avoid judgment

incorporated another entity called FUJI which is composed of same owners.Petitioner filed another case against FUJI and won.

Private respondents FUJI, its officers and stockholders filed amemorandum on appeal and a motion to dispense with the posting of acash or surety appeal bond on the ground that they were not the employersof petitioners. They alleged that they could not be held responsible forpetitioners claims and to require them to post the bond would be unjustand unfair, and not sanctioned by law.

NLRC denied FUJIs motion however on respondents second motionfor reconsideration, the NLRC allowed them to file the bond which thepetitioner assails being already filed out of time.

Issue: whether the NLRC acted without or in excess of its jurisdiction andwith grave abuse of discretion when it allowed the posting of respondentsbond

Held: No. The provision of Article 223 of the Labor Code requiring theposting of bond on appeals involving monetary awards must be given

liberal interpretation in line with the desired objective of resolvingcontroversies on the merits.3If only to achieve substantial justice, strictobservance of the reglementary periods may be relaxed if warranted. TheNLRC, Third Division could not be said to have abused its discretion inrequiring the posting of bond after it denied private respondents motionto be exempted therefrom.
http://lawphil.net/judjuris/juri2004/jan2004/gr_150147_2004.html#fnt3http://lawphil.net/judjuris/juri2004/jan2004/gr_150147_2004.html#fnt3http://lawphil.net/judjuris/juri2004/jan2004/gr_150147_2004.html#fnt3http://lawphil.net/judjuris/juri2004/jan2004/gr_150147_2004.html#fnt3


18/61

It is true that the perfection of an appeal in the manner and within theperiod prescribed by law is not only mandatory but jurisdictional, andfailure to perfect an appeal has the effect of making the judgment finaland executory. However, technicality should not be allowed to stand in theway of equitably and completely resolving the rights and obligations of the

parties.4We have allowed appeals from the decisions of the labor arbiter tothe NLRC, even if filed beyond the reglementary period, in the interest of

justice. The facts and circumstances of the instant case warrant liberalityconsidering the amount involved and the fact that petitioners alreadyobtained a favorable judgment on February 23, 1993 against theiremployer UNIX.

REINSTATEMENT ASPECT OF LABOR ARBITERS DECISIONPIONEER TEXTURIZING COPR vs. NLRC

Facts: Private respondent Lourdes A. de Jesus is petitioners' reviser/trimmersince 1980. As reviser/trimmer, de Jesus based her assigned work on apaper note posted by petitioners. The posted paper which contains thecorresponding price for the work to be accomplished by a worker isidentified by its P.O. Number. On August 15, 1992, de Jesus worked on P.O.No. 3853 by trimming the cloths' ribs. She thereafter submitted ticketscorresponding to the work done to her supervisor. Three days later, de Jesus

received from petitioners' personnel manager a memorandum requiringher to explain why no disciplinary action should be taken against her fordishonesty and tampering of official records and documents with theintention of cheating as P.O. No. 3853 allegedly required no trimming.The memorandum also placed her under preventive suspension for thirtydays starting from August 19, 1992. In her handwritten explanation, de

Jesus maintained that she merely committed a mistake in trimming P.O.No. 3853 as it has the same style and design as P.O. No. 3824 which has anattached price list for trimming the ribs and admitted that she may havebeen negligent in presuming that the same work was to be done with P.O.

No. 3853, but not for dishonesty or tampering. Petitioners' personneldepartment, nonetheless, terminated her from employment and sent her anotice of termination dated September 18, 1992. The labor arbiter heldthat Lourdes was accorded due process but her dismissal was not justified.On appeal the NLRC ordered her reinstatement but with no backwages.Petitioner contends that a writ of execution is needed to enforcereinstatement.
http://lawphil.net/judjuris/juri2004/jan2004/gr_150147_2004.html#fnt4http://lawphil.net/judjuris/juri2004/jan2004/gr_150147_2004.html#fnt4http://lawphil.net/judjuris/juri2004/jan2004/gr_150147_2004.html#fnt4http://lawphil.net/judjuris/juri2004/jan2004/gr_150147_2004.html#fnt4


19/61

Issue: whether an order of reinstatement needs a writ of executionHeld: No. the necessity for a writ of execution under Article 224 appliesonly to final and executory decisions which are not within the coverage ofArticle 223. Article 224 states that the need for a writ of execution applies

onlywithin five (5) years from the date a decision, an order or award becomes final and executory. It can not relate to an award or order ofreinstatement still to be appealed or pending appeal which Article 223contemplates. The provision of Article 223 is clear that an award forreinstatementshall be immediately executory even pending appealandthe posting of a bond by the employer shall not stay the execution for reinstatement. The legislative intent is quite obvious, i.e., tomake an award of reinstatement immediately enforceable, even pendingappeal. To require the application for and issuance of a writ of executionas prerequisites for the execution of a reinstatement award would

certainly betray and run counter to the very object and intent of Article223, i.e., the immediate execution of a reinstatement order. The reason issimple. An application for a writ of execution and its issuance could bedelayed for numerous reasons. A mere continuance or postponement of ascheduled hearing, for instance, or an inaction on the part of the LaborArbiter or the NLRC could easily delay the issuance of the writ therebysetting at naught the strict mandate and noble purpose envisioned byArticle 223. In other words, if the requirements of Article 224 were togovern, as we so declared inMaranaw, then the executory nature of areinstatement order or award contemplated by Article 223 will be unduly

circumscribed and rendered ineffectual.

ROQUERO VS. PALAPRIL 2, 2004Facts: Roquero, along with Rene Pabayo, were ground equipmentmechanics of respondent Philippine Airlines, Inc. (PAL for brevity). Fromthe evidence on record, it appears that Roquero and Pabayo were caughtred-handed possessing and usingMethampethamine Hydrochloride orshabu in a raid conducted by PAL security officers and NARCOM personnel.

The two alleged that they did not voluntarily indulge in the said act butwere instigated by a certain Jojie Alipato who was introduced to them by

Joseph Ocul, Manager of the Airport Maintenance Division of PAL. Pabayoalleged that Alipato often bragged about the drugs he could smuggleinside the company premises and invited other employees to take theprohibited drugs. Alipato was unsuccessful, until one day, he was able topersuade Pabayo to join him in taking the drugs. They met Roquero along


20/61

the way and he agreed to join them. Inside the company premises, theylocked the door and Alipato lost no time in preparing the drugs to be used.When they started the procedure of taking the drugs, armed men enteredthe room, arrested Roquero and Pabayo and seized the drugs and theparaphernalia used.1 Roquero and Pabayo were subjected to a physical

examination where the results showed that they were positive of drugs.They were also brought to the security office of PAL where they executedwritten confessions without the benefit of counsel. Petitioners weresubsequently terminated and filed a complaint for illegal dismissalagainst PAL. The Labor arbiter upheld the validity of the dismissal, whilethe case was pending on appeal before the NLRC, the RTC acquitted thepetitioners on drug possession on the ground of instigation. The NLRCfound PAL guilty of instigation and ordered the reinstatement, to whichPAL refused to execute and file an appeal before the CA. the CA reversedNLRCs decision and held tht the dismissal was valid however it denied the

payment of separation pay and attorneys fees.

Issue: whether the reinstatement order by the labor arbiter can be haltedby a petition filed in higher courts without any restraining order orpreliminary injunction ordered in the meantime

Held: No. Article 223 (3rd paragraph) of the Labor Code as amended bySection 12 of Republic Act No. 6715,21 and Section 2 of the NLRC InterimRules on Appeals under RA No. 6715, Amending the Labor Code, providethat an order of reinstatement by the Labor Arbiter is immediately

executory even pending appeal. The rationale of the law has beenexplained inAris (Phil.) Inc. vs. NLRC:

"In authorizing execution pending appeal of the reinstatement aspect of adecision of the Labor Arbiter reinstating a dismissed or separatedemployee, the law itself has laid down a compassionate policy which, oncemore, vivifies and enhances the provisions of the 1987 Constitution onlabor and the working man.

The order of reinstatement is immediately executory. The unjustified

refusal of the employer to reinstate a dismissed employee entitles him topayment of his salaries effective from the time the employer failed toreinstate him despite the issuance of a writ of execution. Unless there is arestraining order issued, it is ministerial upon the Labor Arbiter toimplement the order of reinstatement. In the case at bar, no restrainingorder was granted. Thus, it was mandatory on PAL to actually reinstateRoquero or reinstate him in the payroll. Having failed to do so, PAL mustpay Roquero the salary he is entitled to, as if he was reinstated, from the


21/61

time of the decision of the NLRC until the finality of the decision of thisCourt. We reiterate the rule that technicalities have no room in labor caseswhere the Rules of Court are applied only in a suppletory manner and onlyto effectuate the objectives of the Labor Code and not to defeat them.

Note: Then, by and pursuant to the same power (police power), the Statemay authorize an immediate implementation, pending appeal, of adecision reinstating a dismissed or separated employee since that savingact is designed to stop, although temporarily since the appeal may bedecided in favor of the appellant, a continuing threat or danger to thesurvival or even the life of the dismissed or separated employee and hisfamily."

AIRPHIL CORP VS. ZAMORAAUGUST 7, 2004Facts: Enrico Zamora (Zamora) was employed with Air PhilippinesCorporation (APC) as a B-737 Flight Deck Crew. He applied for promotionto the position of airplane captain and underwent the requisite trainingprogram. After completing training, he inquired about his promotion butAPC did not act on it; instead, it continued to give him assignments asflight deck crew. Thus, Zamora filed a Complaint with the Labor Arbiter.He argued that the act of APC of withholding his promotion rendered hiscontinued employment with it oppressive and unjust. He therefore askedthat APC be held liable for constructive dismissal. APC denied that it

dismissed complainant. It pointed out that, when the complaint was filedon May 14, 1997, complainant was still employed with it. It was only onMay 22, 1997 that complainant stopped reporting for work, not because hewas forced to resign, but because he had joined a rival airline, Grand Air.The labor arbiter held that there was illegal dismissal and orderedpayment of unpaid salaries. On appeal the NLRC reversed the LAs decisionand held that there was no illegal dismissal but ordered to pay theunpaid salaries. Petitioner questions the ruling of NLRC with respect to thepayment of unpaid salaries since there was no illegal dismissal

Issue: whether there was a grave abuse of discretion in ordering thepetitioner to pay respondents unpaid salaries despite finding that therewas no illedgal dismissal

Held: NO. The premise of the award of unpaid salary to respondent is thatprior to the reversal by the NLRC of the decision of the Labor Arbiter, theorder of reinstatement embodied therein was already the subject of an


22/61

alias writ of execution even pending appeal. Although petitioner did notcomply with this writ of execution, its intransigence made it liablenonetheless to the salaries of respondent pending appeal. There is logic inthis reasoning of the NLRC. InRoquerov. Philippine Airlines, Inc., weresolved the same issue as follows:

We reiterate the rule that technicalities have no room in labor cases wherethe Rules of Court are applied only in a suppletory manner and only toeffectuate the objectives of the Labor Code and not to defeat them. Hence,even if the order of reinstatement of the Labor Arbiter is reversed onappeal, it is obligatory on the part of the employer to reinstate and pay thewages of the dismissed employee during the period of appeal until reversalby the higher court. On the other hand, if the employee has beenreinstated during the appeal period and such reinstatement order isreversed with finality, the employee is not required to reimburse whatever

salary he received for he is entitled to such, more so if he actuallyrendered services during the period.

LANSANGAN VS. AMKOR TECHNOLOGY PHILIPPINESJANUARY 30, 2009Facts: An anonymous e-mail was sent to the General Manager of AmkorTechnology Philippines (respondent) detailing allegations of malfeasanceon the part of its supervisory employees Lunesa Lansangan and RositaCendaa (petitioners) for "stealing company time." Respondent thus

investigated the matter, requiring petitioners to submit their writtenexplanation. In handwritten letters, petitioners admitted theirwrongdoing. Respondent thereupon terminated petitioners for "extremelyserious offenses" as defined in its Code of Discipline, prompting petitionersto file a complaint for illegal dismissal against it. The labor arbiter heldthat the dismissal was valid but ordered reinstatement "as a measure ofequitable and compassionate relief" owing mainly to petitioners priorunblemished employment records, show of remorse, harshness of thepenalty and defective attendance monitoring system of respondent. Thepetitioner employees did not appeal the issue regarding the validity of

their dismissal but rather moved for the issuance of writ of execution as tothe order of reinstatement. Hence the order as to the validity of theirdismissal became final and executor. Amkor appealed the order ofreinstatement and the NLRC reversed the LAs ruling. Petitioner nowclaims that they are entitled to the unpaid salaries when the case waspending since the order of reinstatement was immediately executory.


23/61

Issue: Whether petitioners are entitled to the payment of unpaid salarieswhen the case was pending appeal relying on the case ofroquero vs. PALHeld: NO. The decision of the Arbiter finding that petitioners committed"dishonesty as a form of serious misconduct and fraud, or breach of trust"

had become final, petitioners not having appealed the same before theNLRC as in fact they even moved for the execution of the reinstatementaspect of the decision. It bears recalling that it was only respondent whichassailed the Arbiters decision to the NLRC to solely question the proprietyof the order for reinstatement, and it succeeded.Roquero, as well as Article223 of the Labor Code on which the appellate court also relied, finds noapplication in the present case. Article 223 concerns itself with an interimrelief, granted to a dismissed or separated employee while the casefor illegal dismissal is pending appeal, as what happened in Roquero. Itdoes not apply where there is no finding of illegal dismissal, as in the

present case.

The Arbiter found petitioners dismissal to be valid. Such finding had, asstated earlier, become final, petitioners not having appealed it. FollowingArticle 279 which provides:

In cases of regular employment, the employer shall not terminate theservices of an employee except for a just cause or when authorized by thisTitle. An employee who is unjustly dismissed from work shall be entitled toreinstatement without loss of seniority rights and other privileges and to

his full backwages, inclusive of allowances, and to his other benefits ortheir monetary equivalent computed from the time his compensation waswithheld from him up to the time of his actual reinstatement (Emphasis,underscoring and italics supplied),

petitioners are not entitled to full backwages as their dismissal was notfound to be illegal. Agabon v. NLRC so statespayment of backwages andother benefits is justified only if the employee was unjustly dismissed.

GENUINO VS. NLRCDECEMBER 4, 2007

Facts: Genuino was employed by Citibank sometime in January 1992 asTreasury Sales Division Head with the rank of Assistant Vice-President. Shereceived a monthly compensation of PhP 60,487.96, exclusive of benefitsand privileges. On August 23, 1993, Citibank sent Genuino a lettercharging her with "knowledge and/or involvement" in transactions "which


24/61

were irregular or even fraudulent." In the same letter, Genuino wasinformed she was under preventive suspension. Petitioner asked for thedetails of the accusations since the charges were too general, her counselasked for a bill of particulars from Citibank but the latter refused,petitioner did not attend the administrative investigation nor sent any

answer and was subsequently terminated by Citibank. Petitioner filed acomplaint for illegal dismissal; the labor arbiter held that genuinosdismissal was without just cause and ordered Citibank to reinstate andpay genuine for unpaid salaries and for damages, On appeal, the NLRCheld that the dismissal was for just cause but ordered Citibank to paygenuine because the dismissal was not in accordance with the two twinnotice requirement.

Issue: whether genuine is still entitled to the payment of her unpaid salarypending appeal of the case as ordered by the LA, since an order of

reinstatement is immediately executoryHeld: NO. Ordinarily, the employer is required to reinstate the employeeduring the pendency of the appeal pursuant to Art. 223, paragraph 3 of theLabor Code, which states:

In any event, the decision of the Labor Arbiter reinstating adismissed or separated employee, insofar as the reinstatement aspectis concerned, shall immediately be executory, even pending appeal.The employee shall either be admitted back to work under the same

terms and conditions prevailing prior to his dismissal or separationor, at the option of the employer, merely reinstated in the payroll.The posting of a bond by the employer shall not stay the execution forreinstatement provided herein.

If the decision of the labor arbiter is later reversed on appeal upon thefinding that the ground for dismissal is valid, then the employer has theright to require the dismissed employee on payroll reinstatement to refundthe salaries s/he received while the case was pending appeal, or it can bededucted from the accrued benefits that the dismissed employee was

entitled to receive from his/her employer under existing laws, collectivebargaining agreement provisions, and company practices. However, if theemployee was reinstated to work during the pendency of the appeal, thenthe employee is entitled to the compensation received for actual servicesrendered without need of refund.


25/61

Considering that Genuino was not reinstated to work or placed on payrollreinstatement, and her dismissal is based on a just cause, then she is notentitled to be paid the salaries awarded pending the case was on appeal.

JUANITO A. GARCIA and ALBERTO J. DUMAGO, vs. PHILIPPINE AIRLINES,INCG.R. No. 164856 January 20, 2009

Facts: The case stemmed from the administrative charge filed by PALagainst its employees-herein petitioners3 after they were allegedly caughtin the act of sniffing shabu when a team of company security personneland law enforcers raided the PAL Technical Centers Toolroom Section.After due notice, PAL dismissed petitioners for transgressing the PAL Codeof Discipline, prompting Petitioners to file a complaint for illegal dismissaland damages which was, resolved by the Labor Arbiter in their favor, thus

ordering PAL to, inter alia, immediately comply with the reinstatementaspect of the decision. Upon appeal to NLRC the decision of the LA wasreversed. Petitioners MR was denied followed by the entry of judgment.Prior to the promulgation of the Labor Arbiters decision, the Securitiesand Exchange Commission (SEC) placed PAL (hereafter referred to asrespondent), which was suffering from severe financial losses, under anInterim Rehabilitation ReceiverSubsequently LA issued a Writ of Execution (Writ) respecting thereinstatement aspect of its former decision, and later issued a Notice ofGarnishment (Notice). PAL thereupon moved to quash the Writ and to lift

the Notice while petitioners moved to release the garnished amount. NLRCruled in favor of petitioners. PAL filed a petition for certiorari withinjunction against NLRC which was granted by the CA. The rehabilitationproceeding was terminated, hence this petition.

Issue: WON a subsequent finding of a valid dismissal removes the basis forimplementing the reinstatement aspect of a labor arbiters decision

Ruling: NO. In any event, the decision of the Labor Arbiter reinstating adismissed or separated employee, insofar as the reinstatement aspect is

concerned, shall immediately be executory, pending appeal. The employeeshall either be admitted back to work under the same terms andconditions prevailing prior to his dismissal or separation or, at the optionof the employer, merely reinstated in the payroll. The posting of a bond bythe employer shall not stay the execution for reinstatement providedherein. (Emphasis and underscoring supplied)The view as maintained in a number of cases is that:
http://www.lawphil.net/judjuris/juri2009/jan2009/gr_164856_2009.html#fnt3http://www.lawphil.net/judjuris/juri2009/jan2009/gr_164856_2009.html#fnt3


26/61

x x x [E]ven if the order of reinstatement of the Labor Arbiter is reversed onappeal, it is obligatory on the part of the employer to reinstate and pay thewages of the dismissed employee during the period of appeal until reversalby the higher court. On the other hand, if the employee has beenreinstated during the appeal period and such reinstatement order is

reversed with finality, the employee is not required to reimburse whateversalary he received for he is entitled to such, more so if he actuallyrendered services during the period.In other words, a dismissed employee whose case was favorably decided bythe Labor Arbiter is entitled to receive wages pending appeal uponreinstatement, which is immediately executory. Unless there is arestraining order, it is ministerial upon the Labor Arbiter to implementthe order of reinstatement and it is mandatory on the employer to complytherewith.The spirit of the rule on reinstatement pending appeal animates the

proceedings once the Labor Arbiter issues the decision containing anorder of reinstatement. The immediacy of its execution needs no furtherelaboration. Reinstatement pending appeal necessitates its immediateexecution during the pendency of the appeal, if the law is to serve its noblepurpose. At the same time, any attempt on the part of the employer to evadeor delay its execution, as observed in Panuncilloand as what actuallytranspired inKimberly,23 Composite,24Air Philippines,25 andRoquero,26should not be countenanced.After the labor arbiters decision is reversed by a higher tribunal, theemployee may be barred from collecting the accrued wages, if it is shown

that the delay in enforcing the reinstatement pending appeal was withoutfault on the part of the employer.The test is two-fold: (1) there must be actual delay or the fact that theorder of reinstatement pending appeal was not executed prior to itsreversal; and (2) the delay must not be due to the employers unjustifiedact or omission. If the delay is due tothe employers unjustified refusal, theemployer may still be required to pay the salaries notwithstanding thereversal of the Labor Arbiters decision.

MT. CARMEL COLLEGE, vs. JOCELYN RESUENA, EDDIE VILLALON, SYLVIASEDAYON and ZONSAYDA EMNACE,G.R. No. 173076 October 10, 2007

Facts: Respondents were employees of MCC, Jocelyn Resuena (AccountingClerk), Eddie Villalon (Elementary Department Principal); Sylvia Sedayon(Treasurer), and Zonsayda Emnace (Secretary to the Director).
http://www.lawphil.net/judjuris/juri2009/jan2009/gr_164856_2009.html#fnt23http://www.lawphil.net/judjuris/juri2009/jan2009/gr_164856_2009.html#fnt23http://www.lawphil.net/judjuris/juri2009/jan2009/gr_164856_2009.html#fnt24http://www.lawphil.net/judjuris/juri2009/jan2009/gr_164856_2009.html#fnt24http://www.lawphil.net/judjuris/juri2009/jan2009/gr_164856_2009.html#fnt25http://www.lawphil.net/judjuris/juri2009/jan2009/gr_164856_2009.html#fnt25http://www.lawphil.net/judjuris/juri2009/jan2009/gr_164856_2009.html#fnt26http://www.lawphil.net/judjuris/juri2009/jan2009/gr_164856_2009.html#fnt26http://www.lawphil.net/judjuris/juri2009/jan2009/gr_164856_2009.html#fnt25http://www.lawphil.net/judjuris/juri2009/jan2009/gr_164856_2009.html#fnt24http://www.lawphil.net/judjuris/juri2009/jan2009/gr_164856_2009.html#fnt23


27/61

Respondents, together with several faculty members, non-academicpersonnel, and other students, participated in a protest action againstMCC. MCC issued a Memorandum to each of the respondents directing themto explain in writing why they should not be dismissed for loss of trust andconfidence for joining the protest action against the school

administration. After hearing conducted by the Fact-Finding Committeethey recommended the dismissal of the respondents which were latterterminated after the notice of termination was given to them. Separatecomplaints were filed by each of the four respondents against petitionerbefore Regional Arbitration for illegal dismissal. LA affirmed the validityof dismissal of the respondents but they were awarded separation fee, 13 thmonth pay and attorneys fees. MCC appealed to the NLRC but it wasdismissed. Labor Arbiter Drilon issued to the parties a Notice of

Judgment/Decision of his 25 May 1999 Decision indicating that a"decision of the Labor Arbiter reinstating a dismissed or separated

employee, in so far as the reinstatement aspect is concerned, shallimmediately be executory, even pending appeal. An MR before the NLRCwas denied. An appeal by certiorari before the CA was also denied.Respondents filed on 14 July 2004 yet another Motion to Issue a Writ ofExecution to collect backwages from 1 January 2004 to 30 June 2004.Petitioner opposed the motion, but the Motion to Issue a Writ of Executionwas granted. MCC filed a Motion for Reconsideration of the foregoingOrder contending that the judgment of the NLRC mandated the paymentof separation pay as computed in the appealed decision. A MR by MCC wasdenied and their petition for certiorari before the CA was dismissed.

Issue: WON Art.223 of the labor code is applicable in this caseRuling: NO. This Court had declared in the aforesaid case thatreinstatement during appeal is warranted only when the Labor Arbiterhimself rules that the dismissed employee should be reinstated. But this wasprecisely because on appeal to the NLRC, it found that there was no illegaldismissal; thus, neither reinstatement nor backwages may be awarded. Inthe instant petition, the NLRC Decision dated 30 October 2001 finding thetermination of respondents illegal, had the effect of reversing LaborArbiter Drilons Decision dated 25 May 1999.

This Court sees no cogent reason as to the relevance of a discussion onwhether or not reinstatement is self-executory. However, since petitionerraised this issue, this Court has opted to discuss it. Verily, Article 223 of theLabor Code is not applicable in the instant case. The said provisionstipulates that the decision of the Labor Arbiter reinstating a dismissed orseparated employee, insofar as the reinstatement aspect is concerned, shallimmediately be executory, even pending appeal.


28/61

This Court takes this occasion to reiterate that execution is the final stageof litigation, the end of the suit. It can not and should not be frustratedexcept for serious reasons demanded by justice and equity.47 "Litigationmust end sometime and somewhere. An effective and efficientadministration of justice requires that, once a judgment has become final,

the winning party be not, through a mere subterfuge, be deprived of thefruits of the verdicts. Courts must, therefore, guard against any schemecalculated to bring about that result. Constituted as they are to put anend to controversies, courts should frown upon any attempt to prolongthem."

NERISSA BUENVIAJE, SONIA FLORES, BELMA OLIVIO,GENALYN PELOBELLO, MARY JANE MENOR, JOSIE RAQUERO,ESTRELITA MANAHAN, REBECCA EBOL, and ERLINDA ARGA, petitioners,vs.THE HONORABLE COURT OF APPEALS (SPECIAL FORMER SEVENTHDIVISION),HONORABLE ARBITER ROMULUS PROTASIO, COTTONWAY MARKETINGCORPORATION and MICHAEL G. TONG,G.R. No. 147806 November 12, 2002

Facts: Petitioners were former employees of Cottonway Marketing Corp.(Cottonway), hired as promo girls for their garment products. After theirservices were terminated as the company was allegedly suffering businesslosses, petitioners filed with the NLRC a complaint for illegal dismissal,

underpayment of salary and non-payment of other remuneration againsttheir employer. LA ruled in favor of the validity of retrenchment butordered Cottonway to pay their separation fee and 13th month pay. Uponappeal to NLRC the decision of the LA was reversed ordering thereinstatement of the petitioners plus payment of back wages andremunerations. A motion for reconsideration by Cottonway was denied.Cottonway filed a manifestation before the NLRC stating that they alreadygave notice to the petitioners requiring them to go back to work but thelatter failed to do so prompting Cottonway to terminate their employment.A petition for certiorari before the SC by Cottonway was dismissed.

Petitoners filed a motion for execution before the NLRC contending thatthe judgment of NLRC became final and executor. Cottonway filed anothermanifestation reiterating its first allegation and that the petitioners havefound employment elsewhere. They also filed a manifestation requestingfor reception of evidence for the same matter. LA issued an order that theamount of back wages shall only cover the time the petitioners areillegally terminated until the order of reinstatement contending that the
http://www.lawphil.net/judjuris/juri2007/oct2007/gr_173076_2007.html#fnt47http://www.lawphil.net/judjuris/juri2007/oct2007/gr_173076_2007.html#fnt47


29/61

failure of the petitioners to report despite the notice given by Cottonway isa justifiable reason to decrease their back wages. The order was set asideby the resolution of the NLRC ordering the LA to issue a writ of executionaccording to the decision of NLRC. Upon appeal to CA the decision of NLRCwas reversed.

Issue: Whether or not the reinstatement aspect of the decision of LA isimmediately executor

Whether or not the order of the LA decreasing the back wages of thepetitioner is valid

Ruling: 1. YES. In any event, the decision of the Labor Arbiter reinstating adismissed or separated employee, insofar as the reinstatement aspect isconcerned, shall immediately be executory, even pending appeal. Theemployee shall either be admitted back to work under the same terms and

conditions prevailing prior to his dismissal or separation or, at the optionof the employer, merely reinstated in the payroll. The posting of a bond bythe employer shall not stay the execution for reinstatement providedherein.2. NO. The foregoing provision is intended for the benefit of the employee

and cannot be used to defeat their own interest. The law mandates theemployer to either admit the dismissed employee back to work under thesame terms and conditions prevailing prior to his dismissal or to reinstatehim in the payroll to abate further loss of income on the part of theemployee during the pendency of the appeal. But we cannot stretch the

language of the law as to give the employer the right to remove anemployee who fails to immediately comply with the reinstatement order,especially when there is reasonable explanation for the failure. IfCottonway were really sincere in its offer to immediately reinstatepetitioners to their former positions, it should have given them reasonabletime to wind up their current preoccupation or at least to explain why theycould not return to work at Cottonway at once. Cottonway did not doeither. Instead, it gave them only five days to report to their posts andwhen the petitioners failed to do so, it lost no time in serving them theirindividual notices of termination. We are, therefore, not impressed with

the claim of respondent company that petitioners have been validlydismissed on August 1, 1996 and hence their backwages should only becomputed up to that time. We hold that petitioners are entitled to receivefull backwages computed from the time their compensation was actuallywithheld until their actual reinstatement, or if reinstatement is no longerpossible, until the finality of the decision, in accordance with the Decision

of the NLRC dated March 26, 1996 which has attained finality.28


30/61

PFIZER, INC. AND/OR REY GERARDO BACARRO, AND/OR FERDINANDCORTES, AND/OR ALFRED MAGALLON, AND/OR ARISTOTLE ARCE, Petitioners,vs.GERALDINE VELASCO, Respondent.G.R. No. 177467 March 9, 2011

Facts: Velasco was employed with petitioner PFIZER, INC. as ProfessionalHealth Care Representative. Velasco had a medical work up for her high-risk pregnancy and was subsequently advised bed rest which resulted inher extending her leave of absence. Velasco filed her sick leave for theperiod from 26 March to 18 June 2003, her vacation leave from 19 June to20 June 2003, and leave without pay from 23 June to 14 July 2003. WhileVelasco was still on leave, PFIZER through its Area Sales Manager, Cortez,personally served Velasco a "Show-cause Notice" dated 25 June 2003. Aside

from mentioning about an investigation on her possible violations ofcompany work rules regarding "unauthorized deals and/or discounts inmoney or samples and unauthorized withdrawal and/or pull-out ofstocks" and instructing her to submit her explanation on the matterwithin 48 hours from receipt of the same, the notice also advised her thatshe was being placed under "preventive suspension" for 30 days or fromthat day to 6 August 2003 and consequently ordered to surrender thefollowing "accountabilities;" Velasco sent a letter addressed to Cortezdated 28 June 2003 denying the charges. Velasco received a "Second Show-cause Notice" informing her of additional developments in their

investigation. Velasco filed a complaint for illegal suspension with moneyclaims before the RAB. PFIZER sent her a letter inviting her to adisciplinary hearing. Velasco received it under protest and informedPFIZER via the receiving copy of the said letter that she had lodged acomplaint against the latter and that the issues that may be raised in the

July 22 hearing "can be tackled during the hearing of her case" or at thepreliminary conference set for 5 and 8 of August 2003. Velasco received a"Third Show-cause Notice which Velasco failed to heed prompting Pfizer toterminate her employment. LA ruled that Velascos dismissal was illegalwhich was affirmed by the NLRC. A motion for reconsideration by Pfizer

was denied. Pfizer filed a petition for certiorari under Rule 65 before CAwhich the court granted in its favor. Velasco filed an MR and the courtaffirmed the validity of her dismissal ordering Pfizer to pay her the wagesto which she is entitled to from the time the reinstatement order was issueduntil the promulgation of the decision.


31/61

Pfizer filed the instant petition assailing the aforementioned CAResolutions as to the period from which to be computed for the payment ofrespondents back wages.

Issue: Whether or not the decision of the LA requires a writ of execution tobecome executory to be included in the period to which back wages will becomputed

Ruling: NO. In sum, the Court reiterates the principle that reinstatementpending appeal necessitates that it must be immediately self-executorywithout need for a writ of execution during the pendency of the appeal, ifthe law is to serve its noble purpose, and any attempt on the part of theemployer to evade or delay its execution should not be allowed.Furthermore, we likewise restate our ruling that an order forreinstatement entitles an employee to receive his accrued backwages from

the moment the reinstatement order was issued up to the date when thesame was reversed by a higher court without fear of refunding what hehad received.

Foreseeably, an employer may circumvent the immediatelyenforceable reinstatement order of the Labor Arbiter by crafting return-to-work directives that are ambiguous or meant to be rejected by theemployee and then disclaim liability for backwages due to non-reinstatement by capitalizing on the employees purported refusal to work.In sum, the option of the employer to effect actual or payroll reinstatement

must be exercised in good faith.Under Article 223 of the Labor Code, an employee entitled to

reinstatement shall either be admitted back to work under the sameterms and conditions prevailing prior to his dismissal or separation or, atthe option of the employer, merely reinstated in the payroll. It isestablished in jurisprudence that reinstatement means restoration to astate or condition from which one had been removed or separated. Theperson reinstated assumes the position he had occupied prior to hisdismissal.

The Court reaffirms the prevailing principle that even if the order ofreinstatement of the Labor Arbiter is reversed on appeal, it is obligatory onthe part of the employer to reinstate and pay the wages of the dismissedemployee during the period of appeal until reversal by the higher court.

ARTICLE 224 EXECUTION OF DECISIONS, ORDERS OR AWARDS


32/61

SY ET AL KNITCRAFT CO.,DECEMBER 12, 2011Facts: Petitioners are employees of Weesan Garment (Labor only) which iscontracted by Fairland Knitcraft. The employees filed a complaint for

underpayment and/or non-payment of wages, overtime pay, premium pay

for holidays, 13th month pay and other monetary benefits against

Susan/Weesan. A certain atty. Geronimo appeared and filed position

papers on behalf of fairland and weesan. The Labor arbiter dismissed the

complaint for lack of merit. However the NLRC reversed said decision.

Respondent appealed to the CA which was granted on the ground that the

NLRC did not acquire jurisdiction of the respondents, contending that

atty. Geronimo was not authorized by fairland, and that fairland was not

summoned or was sent a copy by the NLRC hence the decision did notattain finality under art 224, because the service must be sent to the

parties and counsel. That the service to counsel binds the client is not

applicable.

The CA then concluded that since Fairland and its counsel were not

separately furnished with a copy of the August 26, 2005 NLRC Resolution

denying the motions for reconsideration of its November 30, 2004 Decision,

said Decision cannot be enforced against Fairland. The CA likewise

concluded that because of this, said November 30, 2004 Decision which

held Susan/Weesan and Fairland solidarily liable to the workers, has not

attained finality

Issue: whether the ruling of the NLRC attained finality.Held: Yes. Article 224 contemplates the furnishing of copies of finaldecisions, orders or awards bothto the parties and their counsel in

connection with the execution of such final decisions, orders or awards.However, for the purpose of computing the period for filing an appeal fromthe NLRC to the CA, same shall be counted from receipt of the decision,order or award by the counsel of record pursuant to the established rulethat notice to counsel is notice to party. And since the period for filing ofan appeal is reckoned from the counsels receipt of the decision, order oraward, it necessarily follows that the reckoning period for their finality islikewise the counsels date of receipt thereof, if a party is represented by


33/61


34/61

in Consolidated Bank and Trust Corp. v. Court of Appeals, 193 SCRA 158[1991], we ruled that:

"The well-settled doctrine is that a 'proper levy' is indispensable to a validsale on execution. A sale unless preceded by a valid levy is void. Therefore,

since there was no sufficient levy on the execution in question, the privaterespondent did not take any title to the properties sold thereunder x x x.

"A person other than the judgment debtor who claims ownership or right

over the levied properties is not precluded, however, from taking other

legal remedies."

Forum shoppingNo. In Golangco v. Court of Appeals, we held:

"What is truly important to consider in determining whether forum

shopping exists or not is the vexation caused the courts and parties-litigant by a party who asks different courts and/or administrativeagencies to rule on the same on related caused and/or grant the same orsubstantially the same reliefs, in the process creating possibility ofconflicting decisions being rendered by the different for a upon the sameissues.

"There is no forum-shopping where two different orders were questioned,

two distinct causes of action and issues were raised, and two objectives

were sought."

Remedy when there is wrong levy, a third party whose property has been levied upon by a sheriff to enforce adecision against a judgment debtor is afforded with several alternativeremedies to protect its interests. The third party may avail himself ofalternative remedies cumulatively, and one will not preclude the thirdparty from availing himself of the other alternative remedies in the eventhe failed in the remedy first availed of.

Thus, a third party may avail himself of the following alternative

remedies:a) File a third party claim with the sheriff of the Labor Arbiter, and

b) If the third party claim is denied, the third party may appeal thedenial to the NLRC.13

Even if a third party claim was denied, a third party may still file a proper

action with a competent court to recover ownership of the property illegally
http://lawphil.net/judjuris/juri2002/jan2002/gr_126322_2002.html#fnt13http://lawphil.net/judjuris/juri2002/jan2002/gr_126322_2002.html#fnt13


35/61

seized by the sheriff. This finds support in Section 17 (now 16), Rule 39,

Revised Rules of Court.

ANDO VS. CAMPOFEBRUARY 16, 2002Facts: Petitioner was the president of Premier Allied and ContractingServices, Inc. (PACSI), an independent labor contractor. Respondents were

hired by PACSI as pilers or haulers tasked to manually carry bags of sugar

from the warehouse of Victorias Milling Company and load them on

trucks. In June 1998, respondents were dismissed from employment. They

filed a case for illegal dismissal and some money claims with the National

Labor Relations Commission (NLRC), Regional Arbitration Branch No. VI,

Bacolod City. The labor arbiter and NLRC ruled in favor of the respondents

employees, and upon finality respondents moved for execution. To answerfor the monetary award, NLRC Acting Sheriff Romeo Pasustento issued a

Notice of Sale on Execution of Personal Property over the property covered

by Transfer Certificate of Title (TCT) No. T-140167 in the name of "Paquito

V. Ando x x x married to Erlinda S. Ando."

This prompted petitioner to file an action for prohibition and damages

with prayer for the issuance of a temporary restraining order (TRO) before

the Regional Trial Court (RTC), Branch 50, Bacolod City. Petitioner

claimed that the property belonged to him and his wife, not to thecorporation, and, hence, could not be subject of the execution sale. Since it

is the corporation that was the judgment debtor, execution should be

made on the latters properties.

On December 27, 2006, the RTC issued an Order denying the prayer for a

TRO, holding that the trial court had no jurisdiction to try and decide the

case. The RTC ruled that, pursuant to the NLRC Manual on the Execution of

Judgment, petitioners remedy was to file a third-party claim with the

NLRC Sheriff. Despite lack of jurisdiction, however, the RTC went on todecide the merits of the case. The CA affirmed the ruling RTC on the

ground of lack of jurisdiction

Issue: whether the regular courts has jurisdiction to restrain theimplementation of the writ of execution issued by the Labor arbiter


36/61

Held: NO. The Court has long recognized that regular courts have nojurisdiction to hear and decide questions which arise from and areincidental to the enforcement of decisions, orders, or awards rendered inlabor cases by appropriate officers and tribunals of the Department ofLabor and Employment. To hold otherwise is to sanction splitting of

jurisdiction which is obnoxious to the orderly administration of justice.

Thus, it is, first and foremost, the NLRC Manual on the Execution ofJudgment that governs any question on the execution of a judgment ofthat body. Petitioner need not look further than that. The Rules of Courtapply only by analogy or in a suppletory character.

Consider the provision in Section 16, Rule 39 of the Rules of Court on third-party claims:

SEC. 16. Proceedings where property claimed by third person.If theproperty levied on is claimed by any person other than the judgmentobligor or his agent, and such person makes an affidavit of his titlethereto or right to the possession thereof, stating the grounds of such rightor title, and serves the same upon the officer making the levy and a copythereof upon the judgment obligee, the officer shall not be bound to keepthe property, unless such judgment obligee, on demand of the officer, filesa bond approved by the court to indemnify the third-party claimant in asum not less than the value of the property levied on. In case ofdisagreement as to such value, the same shall be determined by the courtissuing the writ of execution. No claim for damages for the taking orkeeping of the property may be enforced against the bond unless the action

therefor is filed within one hundred twenty (120) days from the date of thefiling of the bond.

The officer shall not be liable for damages for the taking or keeping of theproperty, to any third-party claimant if such bond is filed. Nothing hereincontained shall prevent such claimant or any third person fromvindicating his claim to the property in a separate action, or prevent the

judgment obligee from claiming damages in the same or a separateaction against a third-party claimant who filed a frivolous or plainlyspurious claim.

When the writ of execution is issued in favor of the Republic of thePhilippines, or any officer duly representing it, the filing of such bondshall not be required, and in case the sheriff or levying officer is sued fordamages as a result of the levy, he shall be represented by the SolicitorGeneral and if held liable therefor, the actual damages adjudged by thecourt shall be paid by the National Treasurer out of such funds as may beappropriated for the purpose.


37/61

On the other hand, the NLRC Manual on the Execution of Judgment dealsspecifically with third-party claims in cases brought before that body. Itdefines 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 alsosets out the procedure for the filing of a third-party claim, to wit:

SECTION 2. Proceedings. If property levied upon be claimed by anyperson other than the losing party or his agent, such person shall make anaffidavit of his title thereto or right to the possession thereof, stating thegrounds of such right or titl

Documents

Test to Determine Existence of Employer and Employee Relationship