Table of Contents

Abandonment 4
Absenteeism 5
Attorney’s Fees 5
Appeal 5
Perfection of Appeal 6
Rule on Technicality 7
Appearance of a Non-Lawyer 7
Bond 8
Burden of Proof 8
Business Judgment Rule 10
Collective Bargaining Agreement 10
Certificate of Non-Forum Shopping 11
Certification Election 11
Compensability of a Non-occupational Disease 12
Construction Industry 12
Constructive Dismissal 13
Withholding of Salary amounts to Constructive Dismissal 14
Contempt 14
Control Test 14
Damages 15
Date of Filing of Pleadings 16
Dismissal of Corporate Officer 16
Dole Certification 16
Due Process 17
• Hearing 18
• Notice 19
• Notice and Hearing 20
Effect of the Dismissal of Criminal Complaint 20
Employment Contracts 21
Equality 21
Evidence 21
• Bad Faith 23
• Union Fraud/Misrepresentation 23
Execution 24
• Family Home 24
Finality of Factual Findings 24
Finality of Judgment 25
• Exception 25
Forum Shopping 26
Grave Abuse of Discretion 26
Illegal Dismissal 26
• Drug Test 29
Intimidation 29
Involuntary Servitude 30
Jurisdiction 30
Job contracting/Labor-Only Contracting 32
• Test to determine Independent Contractorship 33
Liability 33
• Liability of Corporate Officers 33
• Liability of GSIS as Indirect Employer 34
• Liability of Indirect Employer 35
• Solidary Liability 35
Liberal Application of the Rules 36
Management Prerogative 37
Money Claims 39
• Interest 39
• Prescription 39
Moral Damages 40
NLRC Rules of procedure 40
• Proof and Completeness of Service 40
• Reduction of Bond 40
Piercing the Veil of Corporate Fiction 41
Preventive Suspension 41
Principle of Non-Diminution of Benefits 42
Protection to Labor 43
Reassignment 43
Re-computation of Awards as against 44
Principle of Immutability of Final Judgment 44
Retirement 44
• Retirement Plans 45
Seafarer 45
• Death Benefits 45
• Occupational Disease 47
• Disability Benefits 47
• Permanent Total Disability 48
• Prescription of Seafarer Money Claims 49
Security of Tenure of Probationary Employee 49
Separation Pay 50
• Separation Pay/Backwages 52
Social Justice 53
Strained Relationship 54
Strike 55
• Dismissal of Union Officers 55
• Consequence of Illegal Strike 55
• Requisites of a Valid Strike 56
• Picketing 56
• Prohibited Activities 57
Termination of Employment 57
Just Causes 57
• Serious Misconduct 57
• Willful Disobedience 59
• Gross and Habitual Neglect of Duty 60
• Loss of Trust and Confidence 60
Authorized Causes 62
• Cessation of Business Operation 62
• Redundancy 62
• Retrenchment 63
Types of Employees 63
Field Personnel 63
Project Employee 65
Regular Employee 65
Quitclaims 66
Teachers’ Employment on Probationary Status 67
• Rule on Probationary Status 67
and Fixed-term Employment of Teachers 67
Thirteenth Month Pay 68
Transfer 68
Transfer of Ownership 68
Unfair Labor Practice 69
Unionism 69
• Union Security and Closed Shop 70
• Employees not covered by Union Shop Clause 70
• Termination of Union Officers 71
Withholding of Salary 71

2010 CASE INDEX
January-June

Abandonment

Although under normal circumstances, an employee’s act of filing an illegal dismissal complaint against his employer is inconsistent with abandonment; in the present case, we simply cannot use that one act to conclude that Pulgar did not terminate his employment with PRRM, and in the process ignore the clear, substantial evidence presented by PRRM that proves otherwise. Our ruling on this point in Leopard Integrated Services, Inc. v. Macalinao is very relevant. We said:

The fact that respondent filed a complaint for illegal dismissal, as noted by the CA, is not by itself sufficient indicator that respondent had no intention of deserting his employment since the totality of respondent’s antecedent acts palpably display the contrary. In Abad v. Roselle Cinema, the Court ruled that:

The filing of a complaint for illegal dismissal should be taken into account together with the surrounding circumstances of a certain case. In Arc-Men Food Industries Inc. v. NLRC, the Court ruled that the substantial evidence proffered by the employer that it had not, in the first place, terminated the employee, should not simply be ignored on the pretext that the employee would not have filed the complaint for illegal dismissal if he had not really been dismissed. “This is clearly a non-sequitur reasoning that can never validly take the place of the evidence of both the employer and the employee.” [Emphasis supplied.](PHILIPPINE RURAL RECONSTRUCTION MOVEMENT( RRM)v.VIRGILIO E. PULGAR, G.R. No. 169227, July 5, 2010)

Jurisprudence has held time and again that abandonment is totally inconsistent with the immediate filing of a complaint for illegal dismissal, more so if the same is accompanied by a prayer for reinstatement. In the present case, however, petitioner filed his complaint more than one year after his alleged termination from employment. Moreover, petitioner and the other complainants’ inconsistency in their stand is also shown by the fact that in the complaint form which they personally filled up and filed with the NLRC, they only asked for payment of separation pay and other monetary claims. They did not ask for reinstatement. It is only in their Position Paper later prepared by their counsel that they asked for reinstatement. This is an indication that petitioner and the other complainants never had the intention or desire to return to their jobs. In fact, there is no evidence to prove that petitioner and his former co-employees ever attempted to return to work after they were dismissed from employment. (ELPIDIO CALIPAY v. NATIONAL LABOR RELATIONS COMMISSION, TRIANGLE ACE CORPORATION and JOSE LEE, G.R. No. 166411, August 3, 2010)
Absenteeism

Even assuming that respondent’s absenteeism constitutes willful disobedience, such offense does not warrant respondent’s dismissal. Not every case of insubordination or willful disobedience by an employee reasonably deserves the penalty of dismissal. There must be a reasonable proportionality between the offense and the penalty. (PHILIPPINE LONG DISTANCE TELEPHONE COMPANY v. JOEY B. TEVES, G.R. No. 143511, November 15, 2010)
Attorney’s Fees

This case involves the propriety of the award of disability compensation under the CBA to respondent, who worked as a seaman in the foreign vessel of petitioner Barber Ship Management Ltd. The award of attorney’s fees is justified under Article 2208 (2) of the Civil Code. Even if petitioners did not withhold payment of a smaller disability benefit, respondent was compelled to litigate to be entitled to a higher disability benefit. Moreover, in HFS Philippines, Inc. v. Pilar [11] and Iloreta v. Philippine Transmarine Carriers, Inc., [12] the Court sustained the NLRC’s award of attorney’s fees, in addition to disability benefits to which the concerned seamen-claimants were entitled. It is no different in this case wherein respondent has been awarded disability benefit and attorney’s fees by the Labor Arbiter and the Court of Appeals. It is only just that respondent be also entitled to the award of attorney’s fees. In Iloreta v. Philippine Transmarine Carriers, Inc., [13] the Court found the amount of US$1,000.00 as reasonable award of attorney’s fees. (NFD INTERNATIONAL MANNING AGENTS, INC./BARBER SHIP MANAGEMENT LTD v. ESMERALDO C. ILLESCAS, G.R. No. 183054, September 29, 2010)
Appeal

The power of the Court of Appeals to review NLRC decisions via Rule 65 or Petition for Certiorari has been settled as early as in our decision in St. Martin Funeral Home v. National Labor Relations Commission. This Court held that the proper vehicle for such review was a Special Civil Action for Certiorari under Rule 65 of the Rules of Court, and that this action should be filed in the Court of Appeals in strict observance of the doctrine of the hierarchy of courts. Moreover, it is already settled that under Section 9 of Batas Pambansa Blg. 129, as amended by Republic Act No. 7902[10] (An Act Expanding the Jurisdiction of the Court of Appeals, amending for the purpose of Section Nine of Batas Pambansa Blg. 129 as amended, known as the Judiciary Reorganization Act of 1980), the Court of Appeals – pursuant to the exercise of its original jurisdiction over Petitions for Certiorari – is specifically given the power to pass upon the evidence, if and when necessary, to resolve factual issues. (PICOP RESOURCES, INCORPORATED (PRI), v. ANACLETO L. TAÑECA, G.R. No. 160828, August 9, 2010)

Respondent alleged in his position paper that after preparing the CAPEX form on March 3, 1999, he endorsed it to Marivic Villanueva for the signature of the Executive Vice-President Ricardo T. Po. The next day, March 4, 1999, respondent received the CAPEX form containing the signature of Po. Petitioner never controverted these allegations in the proceedings before the NLRC and the CA despite its opportunity to do so. Petitioner’s belated allegations in its reply filed before this Court that Marivic Villanueva denied having seen the CAPEX form cannot be given credit. Points of law, theories, issues and arguments not brought to the attention of the lower court, administrative agency or quasi-judicial body need not be considered by a reviewing court, as they cannot be raised for the first time at that late stage. When a party deliberately adopts a certain theory and the case is decided upon that theory in the court below, he will not be permitted to change the same on appeal, because to permit him to do so would be unfair to the adverse party. (CENTURY CANNING CORPORATION, RICARDO T. PO, JR. and AMANCIO C. RONQUILLO v. VICENTE RANDY R. RAMIL, G.R. No. 171630, August 8, 2010)
Perfection of Appeal

Clearly, an appeal from a judgment as that involved in the present case is perfected “only” upon the posting of a cash or surety bond. Accessories Specialist, Inc. v. Alabanza enlightens:

The posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards from the decision of the LA. The intention of the lawmakers to make the bond a mandatory requisite for the perfection of an appeal by the employer is clearly limned in the provision that an appeal by the employer may be perfected “only upon the posting of a cash or surety bond.” The word “only” makes it perfectly plain that the lawmakers intended the posting of a cash or surety bond by the employer to be the essential and exclusive means by which an employer’s appeal may be perfected. The word “may” refers to the perfection of an appeal as optional on the part of the defeated party, but not to the compulsory posting of an appeal bond, if he desires to appeal. The meaning and the intention of the legislature in enacting a statute must be determined from the language employed; and where there is no ambiguity in the words used, then there is no room for construction.

The filing of the bond is not only mandatory but also a jurisdictional requirement that must be complied with in order to confer jurisdiction upon the NLRC. Non-compliance therewith renders the decision of the LA final and executory. This requirement is intended to assure the workers that if they prevail in the case, they will receive the money judgment in their favor upon the dismissal of the employer’s appeal. It is intended to discourage employers from using an appeal to delay or evade their obligation to satisfy their employees’ just and lawful claims. (citations omitted, italics in the original; emphasis and underscoring supplied)
(MINDANAO TIMES CORPORATION v. MITCHEL R. CONFESOR, G.R. No. 183417, February 5, 2010)
Rule on Technicality

In any case, even if the appeal was filed one day late, the same should have been entertained by the NLRC. Indeed, the appeal must be perfected within the statutory or reglementary period. This is not only mandatory, but also jurisdictional. Failure to perfect the appeal on time renders the assailed decision final and executory and deprives the appellate court or body of the legal authority to alter the final judgment, much less entertain the appeal. However, this Court has, time and again, ruled that, in exceptional cases, a belated appeal may be given due course if greater injustice will be visited upon the party should the appeal be denied. The Court has allowed this extraordinary measure even at the expense of sacrificing order and efficiency if only to serve the greater principles of substantial justice and equity. (GOVERNMENT SERVICE INSURANCE SYSTEM v. NATIONAL LABOR RELATIONS COMMISSION (NLRC), ET. Al., G.R. No. 180045, November 17, 2010 )
Appearance of a Non-Lawyer

1. SNS submits that the CA committed a serious error in ruling that the respondents’ representative’s non-membership in the bar is sufficient justification for their failure to comply with the requirements of the law. SNS argues that this ruling excuses the employment of a non-lawyer and places the acts of the latter on the same level as those of a member of the Bar. Our Labor Code allows a non-lawyer to represent a party before the Labor Arbiter and the Commission, but provides limitations: Non-lawyers may appear before the Commission or any Labor Arbiter only: (1) If they represent themselves; or (2) If they represent their organization or members thereof. Thus, SNS concludes that the respondents’ representative had no personality to appear before the Labor Arbiter or the NLRC, and his representation for the respondents should produce no legal effect. (SPIC N’ SPAN SERVICES CORPORATION v. GLORIA PAJE et. al, G.R. No. 174084, August 25, 2010)
Bond

In the present case, the Deed of Assignment, as well as the passbook, which petitioner submitted to the NLRC is neither a cash nor a surety bond. Petitioner’s appeal to the NLRC was thus not duly perfected, thereby rendering the Labor Arbiter’s Decision final and executory. (MINDANAO TIMES CORPORATION v. MITCHEL R. CONFESOR, G.R. No. 183417, February 5, 2010)
Burden of Proof
In termination cases, the employer has the burden of proving, by substantial evidence, that the dismissal is for just cause. If the employer fails to discharge the burden of proof, the dismissal is deemed illegal. In AMA Computer College — East Rizal v. Ignacio, the Court held that:
In termination cases, the burden of proof rests on the employer to show that the dismissal is for just cause. When there is no showing of a clear, valid and legal cause for the termination of employment, the law considers the matter a case of illegal dismissal and the burden is on the employer to prove that the termination was for a valid or authorized cause. And the quantum of proof which the employer must discharge is substantial evidence. An employee’s dismissal due to serious misconduct must be supported by substantial evidence. Substantial evidence is that amount of relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise.
(ALEX GURANGO v.BEST CHEMICALS AND PLASTICS INC. and MOON PYO HONG, G.R. No. 174593, August 25, 2010)

Nothing on record indicates the reason for the respondents’ termination from employment, although the fact of termination was never disputed. Swift denied liability on the basis of its contract with SNS. The contract was not presented before the Labor Arbiter, although Swift averred that under the contract, SNS would supply promo girls, merchandisers and other promotional personnel to handle all promotional aspects and merchandising strategy of Swift. We can assume, for lack of proof to the contrary, that the respondents’ termination from employment was illegal since neither SNS nor Swift, as employers, presented any proof that their termination from employment was legal. Upon proof of termination of employment, the employer has the burden of proof that the dismissal was valid; absent this proof, the termination from employment is deemed illegal, as alleged by the dismissed employees. (SPIC N’ SPAN SERVICES CORPORATION v. GLORIA PAJE et. al, G.R. No. 174084, August 25, 2010)

As to the second issue, the law mandates that the burden of proving the validity of the termination of employment rests with the employer. Failure to discharge this evidentiary burden would necessarily mean that the dismissal was not justified and, therefore, illegal. Unsubstantiated suspicions, accusations, and conclusions of employers do not provide for legal justification for dismissing employees. In case of doubt, such cases should be resolved in favor of labor, pursuant to the social justice policy of labor laws and the Constitution. (CENTURY CANNING CORPORATION, RICARDO T. PO, JR. and AMANCIO C. RONQUILLO v. VICENTE RANDY R. RAMIL, G.R. No. 171630, August 8, 2010)

In this regard, petitioners claim that Abueva has worked with respondents for more than a year already and was allowed to stay inside the hacienda. As such, he is a regular employee entitled to monetary claims. However, petitioners have not presented competent proof that respondents engaged the services of Abueva; that respondents paid his wages or that respondents could dictate what his conduct should be while at work. In other words, Abueva’s allegations did not establish that his relationship with respondents has the attributes of employer-employee on the basis of the above-mentioned four-fold test. Therefore, Abueva was not able to discharge the burden of proving the existence of an employer-employee relationship. Moreover, Abueva was not able to refute respondents’ assertions that he hires other men to perform weeding job in the hacienda and that he is not exclusively working for respondents. (Romeo Basay, et al v. Hacienda Consolacion, et al., G.R. No. 175532, April 19, 2010)

The fact of filing a resignation letter alone does not shift the burden of proving that the employee’s dismissal was for a just and valid cause from the employer to the employee. In Mora v. Avesco, we ruled that should the employer interpose the defense of resignation, it is still incumbent upon the employer to prove that the employee voluntarily resigned. To our mind, Outdoor Clothing did not discharge this burden by belatedly presenting the three memoranda it relied on. If these memoranda were authentic, they would have shown that Peñaflor’s resignation preceded the appointment of Buenaobra. Thus, they would be evidence supporting the claim of voluntariness of Peñaflor’s resignation and should have been presented early on in the case – any lawyer or layman by simple logic can be expected to know this. Outdoor Clothing however raised them only before the NLRC when they had lost the case before the labor arbiter and now conveniently attributes the failure to do so to its former counsel. Outddor Clothing’s belated explanation as expressed in its motion for reconsideration, to our mind, is a submission we cannot accept for serious consideration. We find it significant that Peñaflor attacked the belated presentation of these memoranda in his Answer to Outdoor Clothing’s Memoranda of Appeal with the NLRC, but records do not show that Outdoor Clothing ever satisfactorily countered Peñaflor’s arguments. It was not until we pointed out Outdoor Clothing’s failure to explain its belated presentation of the memoranda in our January 21, 2010 decision that Outdoor Clothing offered a justification. (MANOLO A. PEÑAFLOR V. OUTDOOR CLOTHING MANUFACTURING CORPORATION, G.R. No. 177114, April 13, 2010)
Business Judgment Rule

The determination that the employee’s services are no longer necessary or sustainable and, therefore, properly terminable for being redundant is an exercise of business judgment of the employer. The wisdom or soundness of this judgment is not subject to discretionary review of the Labor Arbiter and the NLRC, provided there is no violation of law and no showing that it was prompted by an arbitrary or malicious act. In other words, it is not enough for a company to merely declare that it has become overmanned. It must produce adequate proof of such redundancy to justify the dismissal of the affected employees. (COCA-COLA BOTTLERS PHILIPPINES, INC v. ANGEL U. DEL VILLAR, G.R. No. 163091,October 6, 2010)

Petitioner harps on the fact that there was no actual shutdown of Paper Mill No. 4 but that it continued to be operational. No evidence, however, was presented to prove that there was continuous operation after the shutdown in the year 1999. What the records reveal is that Paper Mill No. 4 resumed its operation in 2000 due to a more favorable business climate. The resumption of its industrial paper manufacturing operations does not, however, make respondent’s streamlining/reorganization plan illegal because, again, the abolishment of Paper Mill No. 4 in 1999 was a business judgment arrived at to prevent a possible financial drain at that time. As long as no arbitrary or malicious action on the part of an employer is shown, the wisdom of a business judgment to implement a cost saving device is beyond this court’s determination. After all, the free will of management to conduct its own business affairs to achieve its purpose cannot be denied. (DANNIE M. PANTOJA v. SCA HYGIENE PRODUCTSCORPORATION, G.R. No. 163554, April 23, 2010)
Collective Bargaining Agreement
While a contract constitutes the law between the parties, this is so in the present case with respect to the CBA, not to the MOA in which even the union’s signatories had expressed reservations thereto. But even assuming arguendo that the MOA is treated as a new CBA, since it is imbued with public interest, it must be construed liberally and yield to the common good.
While the terms and conditions of a CBA constitute the law between the parties, it is not, however, an ordinary contract to which is applied the principles of law governing ordinary contracts. A CBA, as a labor contract within the contemplation of Article 1700 of the Civil Code of the Philippines which governs the relations between labor and capital, is not merely contractual in nature but impressed with public interest, thus, it must yield to the common good. As such, it must be construed liberally rather than narrowly and technically, and the courts must place a practical and realistic construction upon it, giving due consideration to the context in which it is negotiated and purpose which it is intended to serve. (emphasis and underscoring supplied)
(IRTEK EMPLOYEES LABOR UNION-FEDERATION OF FREE WORKERS v. CIRTEK ELECTRONICS, INC, G.R. No. 190515, November 15, 2010)

Moreover, the last sentence of Article 253 which provides for automatic renewal pertains only to the economic provisions of the CBA, and does not include representational aspect of the CBA. An existing CBA cannot constitute a bar to a filing of a petition for certification election. When there is a representational issue, the status quo provision in so far as the need to await the creation of a new agreement will not apply. Otherwise, it will create an absurd situation where the union members will be forced to maintain membership by virtue of the union security clause existing under the CBA and, thereafter, support another union when filing a petition for certification election. If we apply it, there will always be an issue of disloyalty whenever the employees exercise their right to self-organization. The holding of a certification election is a statutory policy that should not be circumvented, or compromised. (PICOP RESOURCES, INCORPORATED (PRI), v. ANACLETO L. TAÑECA, G.R. No. 160828, August 9, 2010)
Certificate of Non-Forum Shopping

The filing of a certificate of non-forum shopping is mandatory in initiatory pleadings. The subsequent compliance with the requirement does not excuse a party’s failure to comply therewith in the first instance. In those cases where the Court excused non-compliance with the requirement to submit a certificate of non-forum shopping, it found special circumstances or compelling reasons which made the strict application of the Circular clearly unjustified or inequitable. In this case, however, the petitioners offered no valid justification for their failure to comply with the Circular. (MANDAUE GALLEON TRADE, INC. and GAMALLOSONS TRADERS, INC., represented by FAUSTO B. GAMALLO v. BIENVENIDO ISIDTO et.al., G.R. No. 181051,July 5, 2010)
Certification Election

Applying the same provision, it can be said that while it is incumbent for the employer to continue to recognize the majority status of the incumbent bargaining agent even after the expiration of the freedom period, they could only do so when no petition for certification election was filed. The reason is, with a pending petition for certification, any such agreement entered into by management with a labor organization is fraught with the risk that such a labor union may not be chosen thereafter as the collective bargaining representative. The provision for status quo is conditioned on the fact that no certification election was filed during the freedom period. Any other view would render nugatory the clear statutory policy to favor certification election as the means of ascertaining the true expression of the will of the workers as to which labor organization would represent them. (PICOP RESOURCES, INCORPORATED (PRI), v. ANACLETO L. TAÑECA, G.R. No. 160828, August 9, 2010)
Compensability of a Non-occupational Disease

On these points, we sustain the Labor Arbiter and the NLRC in granting total and permanent disability benefits in favor of Villamater, as it was sufficiently shown that his having contracted colon cancer was, at the very least, aggravated by his working conditions, taking into consideration his dietary provisions on board, his age, and his job as Chief Engineer, who was primarily in charge of the technical and mechanical operations of the vessels to ensure voyage safety. Jurisprudence provides that to establish compensability of a non-occupational disease, reasonable proof of work-connection and not direct causal relation is required. Probability, not the ultimate degree of certainty, is the test of proof in compensation proceedings. (LEONIS NAVIGATION CO., INC. and WORLD MARINE PANAMA, S.A v. CATALINO U. VILLAMATER and/or The Heirs of the Late Catalino U. Villamater, represented herein by Sonia Mayuyu Villamater; and NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 179169, March 3, 2010)
Construction Industry

• Length of Service

Generally, length of service provides a fair yardstick for determining when an employee initially hired on a temporary basis becomes a permanent one, entitled to the security and benefits of regularization. But this standard will not be fair, if applied to the construction industry, simply because construction firms cannot guarantee work and funding for its payrolls beyond the life of each project. And getting projects is not a matter of course. Construction companies have no control over the decisions and resources of project proponents or owners. There is no construction company that does not wish it has such control but the reality, understood by construction workers, is that work depended on decisions and developments over which construction companies have no say. (DANIEL P. JAVELLANA , JR.,V. ALBINO BELEN, G.R. No. 181913, ALBINO BELEN V. DANIEL P. JAVELLANA, JR. and JAVELLANA FARMS, INC., G.R. No. 182158, March 5, 2010)
Constructive Dismissal

Accordingly, petitioners are liable for constructive dismissal for placing respondents on shifts of a few days per month and in eventually denying them workplace access, rendering respondents’ employment impossible, unreasonable or unlikely, leaving them no choice but to quit. (PASIG CYLINDER MFG., CORP.,et. al v. DANILO ROLLO, et. al., G.R. No. 173631 September 8, 2010)

While we recognize the rule that in illegal dismissal cases, the employer bears the burden of proving that the termination was for a valid or authorized cause, in the present case, however, the facts and the evidence do not establish a prima facie case that the employee was dismissed from employment. Before the employer must bear the burden of proving that the dismissal was legal, the employee must first establish by substantial evidence the fact of his dismissal from service. Logically, if there is no dismissal, then there can be no question as to its legality or illegality. Bare allegations of constructive dismissal, when uncorroborated by the evidence on record, cannot be given credence.
As we said in Machica v. Roosevelt Services Center, Inc.:

The rule is that one who alleges a fact has the burden of proving it; thus, petitioners were burdened to prove their allegation that respondents dismissed them from their employment. It must be stressed that the evidence to prove this fact must be clear, positive and convincing. The rule that the employer bears the burden of proof in illegal dismissal cases finds no application here because the respondents deny having dismissed the petitioners. [Emphasis supplied.]
(PHILIPPINE RURAL RECONSTRUCTION MOVEMENT( RRM)v.VIRGILIO E. PULGAR, G.R. No. 169227, July 5, 2010)

Another basic principle is that expressed in Article 4 of the Labor Code – that all doubts in the interpretation and implementation of the Labor Code should be interpreted in favor of the workingman. This principle has been extended by jurisprudence to cover doubts in the evidence presented by the employer and the employee. As shown above, Peñaflor has, at very least, shown serious doubts about the merits of the company’s case, particularly in the appreciation of the clinching evidence on which the NLRC and CA decisions were based. In such contest of evidence, the cited Article 4 compels us to rule in Peñaflor’s favor. Thus, we find that Peñaflor was constructively dismissed given the hostile and discriminatory working environment he found himself in, particularly evidenced by the escalating acts of unfairness against him that culminated in the appointment of another HRD manager without any prior notice to him. Where no less than the company’s chief corporate officer was against him, Peñaflor had no alternative but to resign from his employment. (MANOLO A. PEÑAFLOR v. OUTDOOR CLOTHING MANUFACTURING CORPORATION, G.R. No. 177114, January 21, 2010)

While the letter states that Peñaflor’s resignation was irrevocable, it does not necessarily signify that it was also voluntarily executed. Precisely because of the attendant hostile and discriminatory working environment, Peñaflor decided to permanently sever his ties with Outdoor Clothing. This falls squarely within the concept of constructive dismissal that jurisprudence defines, among others, as involuntarily resignation due to the harsh, hostile, and unfavorable conditions set by the employer. It arises when a clear discrimination, insensibility, or disdain by an employer exists and has become unbearable to the employee. The gauge for constructive dismissal is whether a reasonable person in the employee’s position would feel compelled to give up his employment under the prevailing circumstances. With the appointment of Buenaobra to the position he then still occupied, Peñaflor felt that he was being eased out and this perception made him decide to leave the company. (MANOLO A. PEÑAFLOR V. OUTDOOR CLOTHING MANUFACTURING CORPORATION, G.R. No. 177114, April 13, 2010)
Withholding of Salary amounts to Constructive Dismissal

In this case, the withholding of respondent’s salary does not fall under any of the circumstances provided under Article 113. Neither was it established with certainty that respondent did not work from November 16 to November 30, 2005. Hence, the Court agrees with the LA and the CA that the unlawful withholding of respondent’s salary amounts to constructive dismissal. (SHS PERFORATED MATERIALS, INC., WINFRIED HARTMANNSHENN, and HINRICH JOHANN SCHUMACHER v. MANUEL F. DIAZ, G.R. No. 185814, October 13, 2010)
Contempt

To be considered contemptuous, an act must be clearly contrary to or prohibited by the order of the court or tribunal. A person cannot, for disobedience, be punished for contempt unless the act which is forbidden or required to be done is clearly and exactly defined, so that there can be no reasonable doubt or uncertainty as to what specific act or thing is forbidden or required. (BANK OF THE PHILIPPINE ISLANDS v. LABOR ARBITER RODERICK JOSEPH CALANZA et al., G.R. No. 180699, October 13, 2010)
Control Test

It should be remembered that the control test merely calls for the existence of the right to control, and not necessarily the exercise thereof. It is not essential that the employer actually supervises the performance of duties of the employee. It is enough that the former has a right to wield the power. (MANILA WATER COMPANY, INC, v. JOSE J. DALUMPINES, ET. Al., G.R. No. 175501, October 4, 2010)
CBA Coverage

Under these terms, the petitioners are members of the appropriate bargaining unit because they are regular rank-and-file employees and do not belong to any of the excluded categories. Specifically, nothing in the records shows that they are supervisory or confidential employees; neither are they casual nor probationary employees. Most importantly, the labor arbiter’s decision of January 17, 2002 – affirmed all the way up to the CA level – ruled against ABS-CBN’s submission that they are independent contractors. Thus, as regular rank-and-file employees, they fall within CBA coverage under the CBA’s express terms and are entitled to its benefits. (FARLEY FULACHE et. al., v. ABS-CBN BROADCASTING CORPORATION, G.R. No. 183810, January 21, 2010)
Damages

Because of his unjustified dismissal, we likewise award in Del Villar’s favor moral and exemplary damages. Award of moral and exemplary damages for an illegally dismissed employee is proper where the employee had been harrassed and arbitrarily terminated by the employer. Moral damages may be awarded to compensate one for diverse injuries such as mental anguish, besmirched reputation, wounded feelings, and social humiliation occasioned by the employer’s unreasonable dismissal of the employee. We have consistently accorded the working class a right to recover damages for unjust dismissals tainted with bad faith; where the motive of the employer in dismissing the employee is far from noble. The award of such damages is based not on the Labor Code but on Article 220 of the Civil Code. These damages, however, are not intended to enrich the illegally dismissed employee, such that, after deliberations, we find the amount of P100,000.00 for moral damages and P50,000.00 for exemplary damages sufficient to assuage the sufferings experienced by Del Villar and by way of example or correction for the public good. (COCA-COLA BOTTLERS PHILIPPINES, INC v. ANGEL U. DEL VILLAR, G.R. No. 163091, October 6, 2010)

On the matter of damages prayed for by the petitioners, we have held that as a general rule, a corporation cannot suffer nor be entitled to moral damages. A corporation, and by analogy a labor organization, being an artificial person and having existence only in legal contemplation, has no feelings, no emotions, no senses; therefore, it cannot experience physical suffering and mental anguish. Mental suffering can be experienced only by one having a nervous system and it flows from real ills, sorrows, and griefs of life – all of which cannot be suffered by an artificial, juridical person. A fortiori, the prayer for exemplary damages must also be denied. Nevertheless, we find it in order to award (1) nominal damages in the amount of P250,000.00 on the basis of our ruling in De La Salle University v. De La Salle University Employees Association (DLSUEA-NAFTEU) and Article 2221, and (2) attorney’s fees equivalent to 10% of the monetary award. The remittance to petitioners of the collected union dues previously turned over to Remigio and Villareal is likewise in order. ( EMPLOYEES UNION OF BAYER PHILS.,v. BAYER PHILIPPINES, INC., G.R. No. 162943, December 6, 2010)
Date of Filing of Pleadings

Thus, the date of filing is determinable from two sources: from the post office stamp on the envelope or from the registry receipt, either of which may suffice to prove the timeliness of the filing of the pleadings. If the date stamped on one is earlier than the other, the former may be accepted as the date of filing. This presupposes, however, that the envelope or registry receipt and the dates appearing thereon are duly authenticated before the tribunal where they are presented. (GOVERNMENT SERVICE INSURANCE SYSTEM v. NATIONAL LABOR RELATIONS COMMISSION (NLRC), ET. Al., G.R. No. 180045, November 17, 2010 )
Dismissal of Corporate Officer

The criteria for distinguishing between corporate officers who may be ousted from office at will, on one hand, and ordinary corporate employees who may only be terminated for just cause, on the other hand, do not depend on the nature of the services performed, but on the manner of creation of the office. In the respondent’s case, he was supposedly at once an employee, a stockholder, and a Director of Matling. The circumstances surrounding his appointment to office must be fully considered to determine whether the dismissal constituted an intra-corporate controversy or a labor termination dispute. We must also consider whether his status as Director and stockholder had any relation at all to his appointment and subsequent dismissal as Vice President for Finance and Administration. (ATLING INDUSTRIAL AND COMMERCIAL CORPORATION,RICHARD K. SPENCER,CATHERINE SPENCER, AND ALEX MANCILLA v. RICARDO R. COROS, G.R. No. 157802, October 13, 2010)
Dole Certification

In this case, petitioners failed to discharge such burden of proof. The Certifications from the DOLE stated that there are no pending labor cases against petitioners filed before said office, but said certifications “do not cover cases filed before the National Labor Relations Commission and the National Conciliation and Mediation Board.” The Order dated January 17, 2001 issued by the DOLE, in fact, showed that in the year 2000, petitioner security agency was found to have committed the following violations: underpayment of overtime pay, underpayment of 13th month pay, underpayment of 5 days Service Incentive Leave Pay, and underpayment of night shift differential pay. Then, said Order stated that, since petitioner security agency had submitted “[p]ayrolls showing backwages of the above-noted violations amounting to x x x (P443,512.51) benefitting 279 guards” to show compliance with labor laws, “the DOLE considered the inspection closed and terminated.” For the years 2001and 2002, the DOLE Reports stated only that based on records submitted by petitioners, it had no violations. Verily, such documents from the DOLE do not conclusively prove that respondent, in particular, has been paid all her salaries and other benefits in full. In fact, the Order dated January 17, 2001 even bolsters respondent’s claim that she had not been paid overtime pay, 13th month pay, and Service Incentive Leave Pay. The statement in said Order, that backwages for 279 guards had been paid, does not in any way prove that respondent is one of those 279 guards, since petitioners failed to present personnel files, payrolls, remittances, and other similar documents which would have proven payment of respondent’s money claims. It was entirely within petitioners’ power to present such employment records that should necessarily be in their possession; hence, failure to present such evidence must be taken against them. (DANSART SECURITY FORCE & ALLIED SERVICES COMPANY and DANILO A. SARTE v. JEAN O. BAGOY, G.R. No. 168495, July 2, 2010)
Due Process

The purpose of the one month prior notice rule is to give DOLE an opportunity to ascertain the veracity of the cause of termination. Non-compliance with this rule clearly violates the employee’s right to statutory due process. (SHIMIZU PHILS. CONTRACTORS, INC. v. VIRGILIO P. CALLANTA, G.R. No. 165923, September 29, 2010)

With regard to the requirement of a hearing, the essence of due process lies in an opportunity to be heard. Such opportunity was afforded the petitioner when she was asked to explain her side of the story. In Metropolitan Bank and Trust Company v. Barrientos, we held that, “the essence of due process lies simply in an opportunity to be heard, and not that an actual hearing should always and indispensably be held.” Similarly in Philippine Pasay Chung Hua Academy v. Edpan, we held that, “[e]ven if no hearing or conference was conducted, the requirement of due process had been met since he was accorded a chance to explain his side of the controversy.” (NAGKAKAISANG LAKAS NG MANGGAGAWA SA KEIHIN(NLMK-OLALIA-KMU) andHELEN VALENZUELA v. KEIHIN PHILIPPINES CORPORATION, G.R. No. 171115, August 9, 2010)

Significantly, Artificio regrettably chose not to present his side at the administrative hearing scheduled to look into the factual issues that accompanied the accusation against him. In fact, he avoided the investigation into the charges by filing his illegal dismissal complaint ahead of the scheduled investigation. He, on his own decided that his preventive suspension was in fact illegal dismissal and that he is entitled to backwages and separation pay. Indeed, Artificio would even reject reinstatement revealing his bent to have his own way through his own means. As aptly noted by the NLRC, Artificio preempted the investigation that could have afforded him the due process of which he would then say he was denied. (JOSE P. ARTIFICIO v. NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 172988, July 26, 2010)

The essence of due process is the opportunity to be heard; it is the denial of this opportunity that constitutes violation of due process of law. The respondent was given the opportunity to be heard when a proper notice of investigation was sent to him, although the notice did not reach him for reasons outside the petitioner’s control. He was not also totally unheard on the matter as he was able to explain his side through the two (2) explanation letters he submitted. These letters are clear indications that he intimately knew of the matter for which he was being investigated. If he was denied due process at all, the denial was with respect to the charges of extortion, tardiness and absenteeism, which are grounds invoked separately from loss of trust and confidence and which were not serious considerations in the dismissal that followed. We need not therefore consider these grounds as material to the present case. (BIBIANA FARMS AND MILLS, INC v. ARTURO LADO, G.R. No. 157861, February 2, 2010)

Petitioners should thus indemnify Dy for their failure to observe the requirements of due process. Dy is not entitled to reinstatement, backwages and attorney’s fees because Dy’s dismissal is for just cause but without due process. In light of this Court’s ruling in Agabon v. National Labor Relations Commission, the violation of Dy’s right to statutory due process by petitioners, even if the dismissal was for a just cause, warrants the payment of indemnity in the form of nominal damages. This indemnity is intended not to penalize the employer but to vindicate or recognize the employee’s right to statutory due process which was violated by the employer. Considering that both the Labor Arbiter and the NLRC found that petitioners already gave Dy P120,000 of their own free will, this amount should thus constitute the nominal damages due to Dy. (HILTON HEAVY EQUIPMENT CORPORATION v. ANANIAS P. DY, G.R. No. 164860, February 2, 2010)
• Hearing

While no actual hearing was conducted before petitioners dismissed respondent, the same is not fatal as only an “ample opportunity to be heard” is what is required in order to satisfy the requirements of due process. Accordingly, this Court is guided by Solid Development Corporation Workers Association v. Solid Development Corporation (Solid), where the validity of the dismissal of two employees was upheld notwithstanding that no hearing was conducted, to wit:

[W]ell-settled is the dictum that the twin requirements of notice and hearing constitute the essential elements of due process in the dismissal of employees. It is a cardinal rule in our jurisdiction that the employer must furnish the employee with two written notices before the termination of employment can be effected: (1) the first apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the second informs the employee of the employer’s decision to dismiss him. The requirement of a hearing, on the other hand, is complied with as long as there was an opportunity to be heard, and not necessarily that an actual hearing was conducted.

In separate infraction reports, petitioners were both apprised of the particular acts or omissions constituting the charges against them. They were also required to submit their written explanation within 12 hours from receipt of the reports. Yet, neither of them complied. Had they found the 12-hour period too short, they should have requested for an extension of time. Further, notices of termination were also sent to them informing them of the basis of their dismissal. In fine, petitioners were given due process before they were dismissed. Even if no hearing was conducted, the requirement of due process had been met since they were accorded a chance to explain their side of the controversy. (PHARMACIA and UPJOHN, INC. (now PFIZER PHILIPPINES, INC.) v. RICARDO P. ALBAYDA, JR., G.R. No. 172724 August 23, 2010)
• Notice

More importantly, the records are bereft of evidence that Loreta was duly informed of the charges against her and that she was given the opportunity to respond to those charges prior to her dismissal. If there were indeed charges against Loreta that Wensha had to investigate, then it should have informed her of those charges and required her to explain her side. Wensha should also have kept records of the investigation conducted while Loreta was on leave. The law requires that two notices be given to an employee prior to a valid termination: the first notice is to inform the employee of the charges against her with a warning that she may be terminated from her employment and giving her reasonable opportunity within which to explain her side, and the second notice is the notice to the employee that upon due consideration of all the circumstances, she is being terminated from her employment. This is a requirement of due process and clearly, Loreta did not receive any of those required notices. (WENSHA SPA CENTER, INC. v. LORETA T. YUNG, G.R. No. 185122,
August 16, 2010)

In this case, the Labor Arbiter, the NLRC and the Court of Appeals all found that respondents were validly terminated due to the completion of the phases of work for which respondents’ services were engaged. The above rule clearly states, “If the termination is brought about by the completion of the contract or phase thereof, no prior notice is required.” Cioco, Jr. v. C.E. Construction Corporation explained that this is because completion of the work or project automatically terminates the employment, in which case, the employer is, under the law, only obliged to render a report to the DOLE on the termination of the employment. (D.M. CONSUNJI, INC. v. ANTONIO GOBRES et. al., G.R. No. 169170, August 8, 2010)

• Notice and Hearing

As can be seen, under the peculiar circumstances of this case, it cannot be concluded that the sending of the notices and setting of hearings were a mere afterthought because petitioners were still awaiting the report from Bagasala when respondents pre-empted the results of the ongoing investigation by filing the subject labor complaint. For this reason, there was sufficient compliance with the twin requirements of notice and hearing even if the notices were sent and the hearing conducted after the filing of the labor complaint. Thus, the award of nominal damages by the appellate court is improper. (New Puerto Commercial and Richard Lim v. Rodel Lopez and Felix Gavan G.R. No. 169999, July 26, 2010) Dismissal due to closed shop CBA provision

Irrefragably, GMC cannot dispense with the requirements of notice and hearing before dismissing Casio, et al. even when said dismissal is pursuant to the closed shop provision in the CBA. The rights of an employee to be informed of the charges against him and to reasonable opportunity to present his side in a controversy with either the company or his own union are not wiped away by a union security clause or a union shop clause in a collective bargaining agreement. An employee is entitled to be protected not only from a company which disregards his rights but also from his own union the leadership of which could yield to the temptation of swift and arbitrary expulsion from membership and hence dismissal from his job. (GENERALMILLING CORPORATION, v. ERNESTO CASIO, et al., G.R. No. 149552, March 10, 2010)

Effect of the Dismissal of Criminal Complaint

The mere fact that the criminal complaints against the terminated Union members were subsequently dismissed for one reason or another does not extinguish their liability under the Labor Code. Nor does such dismissal bar the admission of the affidavits, documents, and photos presented to establish their identity and guilt during the hearing of the petition to declare the strike illegal. The technical grounds that the Union interposed for denying admission of the photos are also not binding on the NLRC. (C. ALCANTARA & SONS, INC. v. COURT OF APPEALS, et al.,G.R. No. 155109, G.R. No. 155135, G.R. No. 179220, September 29, 2010)

Employment Contracts

Significantly, too, the Articles of Merger and Plan of Merger dated April 7, 2000 did not contain any specific stipulation with respect to the employment contracts of existing personnel of the non-surviving entity which is FEBTC. Unlike the Voluntary Arbitrator, this Court cannot uphold the reasoning that the general stipulation regarding transfer of FEBTC assets and liabilities to BPI as set forth in the Articles of Merger necessarily includes the transfer of all FEBTC employees into the employ of BPI and neither BPI nor the FEBTC employees allegedly could do anything about it. Even if it is so, it does not follow that the absorbed employees should not be subject to the terms and conditions of employment obtaining in the surviving corporation.

The rule is that unless expressly assumed, labor contracts such as employment contracts and collective bargaining agreements are not enforceable against a transferee of an enterprise, labor contracts being in personam, thus binding only between the parties. A labor contract merely creates an action in personam and does not create any real right which should be respected by third parties. This conclusion draws its force from the right of an employer to select his employees and to decide when to engage them as protected under our Constitution, and the same can only be restricted by law through the exercise of the police power.(BANK OF THE PHILIPPINE ISLANDS v. BPI EMPLOYEES UNION-DAVAO CHAPTER-FEDERATION OF UNIONS IN BPI UNIBANK, G.R. No. 164301, August 10, 2010)
Equality

We find these guidelines complied with in the present case. To reiterate, Lado held a position of trust and confidence and was given access to and authority over company property with clear tasks and guidelines laid down very early in his employment. Like any business entity, the petitioner has every right to protect itself from actual threats to the viability of its operations. Lado, given what happened on September 7, 1998, not only violated the company’s trust and confidence; he had become a threat to the viability of company operations and to rule that he should be reinstated would be oppressive to the petitioner. The law, in protecting the rights of the employee, authorizes neither the oppression nor the self-destruction of the employer. (BIBIANA FARMS AND MILLS, INC v. ARTURO LADO, G.R. No. 157861, February 2, 2010)

Evidence

Even if we assume that under the above provision of the contract, Dacuital was informed of the nature of his employment and the duration of the project, that same contract is not sufficient evidence to show that the other employees were so informed. It is undisputed that petitioners had individual employment contracts, yet respondents opted not to present them on the lame excuse that they were similarly situated as Dacuital. The non-presentation of these contracts gives rise to the presumption that the employees were not informed of the nature and duration of their employment. It is doctrinally entrenched that in illegal dismissal cases, the employer has the burden of proving with clear, accurate, consistent, and convincing evidence that the dismissal was valid. Absent any other proof that the project employees were informed of their status as such, it will be presumed that they are regular employees. (JUDY O. DACUITAL , et. al. v. L.M. CAMUS ENGINEERING CORPORATION and/or LUIS M. CAMUS, G.R. No. 176748, September 1, 2010)

While the Court adheres to the principle of liberality in favor of the seafarer in construing the Standard Employment Contract, we cannot allow claims for compensation based on surmises. When the evidence presented negates compensability, we have no choice but to deny the claim, lest we cause injustice to the employer. (SOUTHEASTERN SHIPPING,SOUTHEASTERN SHIPPING GROUP, LTD., G.R. No. 167678, June 22, 2010

As a final note, the Court is wont to reiterate that while an employer has its own interest to protect, and pursuant thereto, it may terminate a managerial employee for a just cause, such prerogative to dismiss or lay off an employee must be exercised without abuse of discretion. Its implementation should be tempered with compassion and understanding. The employer should bear in mind that, in the execution of the said prerogative, what is at stake is not only the employee’s position, but his very livelihood, his very breadbasket. Indeed, the consistent rule is that if doubts exist between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter. The employer must affirmatively show rationally adequate evidence that the dismissal was for justifiable cause. Thus, when the breach of trust or loss of confidence alleged is not borne by clearly established facts, as in this case, such dismissal on the cited grounds cannot be allowed. (Lima land, inc. v. MARLYN CUEVAS, G.R. No. 169523, June 16, 2010)

While we can grant that the standards were duly communicated to the petitioners and could be applied beginning the 1st trimester of the school year 2000-2001, glaring and very basic gaps in the school’s evidence still exist. The exact terms of the standards were never introduced as evidence; neither does the evidence show how these standards were applied to the petitioners. Without these pieces of evidence (effectively, the finding of just cause for the non-renewal of the petitioners’ contracts), we have nothing to consider and pass upon as valid or invalid for each of the petitioners. Inevitably, the non-renewal (or effectively, the termination of employment of employees on probationary status) lacks the supporting finding of just cause that the law requires and, hence, is illegal. (YOLANDA M. MERCADO et al. v. AMA COMPUTER COLLEGE, G.R. No. 183572, April 13, 2010)

• Bad Faith

This finding lacks basis. Based on the records, respondent failed to allege either in his complaint or position paper that petitioner, as Vice-President of VIPS Coffee Shop and Restaurant, acted in bad faith. Neither did respondent clearly and convincingly prove that petitioner, as Vice-President of VIPS Coffee Shop and Restaurant, acted in bad faith. In fact, there was no evidence whatsoever to show petitioner’s participation in respondent’s alleged illegal dismissal. Clearly, the twin requisites of allegation and proof of bad faith, necessary to hold petitioner personally liable for the monetary awards to respondent, are lacking. (IRENE MARTEL FRANCISCO v. NUMERIANO MALLEN, JR, G.R. No. 173169, September 22, 2010)

• Union Fraud/Misrepresentation

In Heritage Hotel Manila v. Pinag-Isang Galing at Lakas ng mga Manggagawa sa Heritage Manila, the employer filed a petition to revoke the registration of its rank-and-file employees’ union, accusing it of committing fraud and misrepresentation. The Court held that the petition was rightfully denied because the employer failed to prove that the labor union committed fraud and misrepresentation. The Court held that:

Did respondent PIGLAS union commit fraud and misrepresentation in its application for union registration? We agree with the DOLE-NCR and the BLR that it did not. Except for the evident discrepancies as to the number of union members involved as these appeared on the documents that supported the union’s application for registration, petitioner company has no other evidence of the alleged misrepresentation. But those discrepancies alone cannot be taken as an indication that respondent misrepresented the information contained in these documents.

The charge that a labor organization committed fraud and misrepresentation in securing its registration is a serious charge and deserves close scrutiny. It is serious because once such charge is proved, the labor union acquires none of the rights accorded to registered organizations. Consequently, charges of this nature should be clearly established by evidence and the surrounding circumstances. (Emphasis supplied)

(YOKOHAMA TIRE PHILIPPINES, INC., v. YOKOHAMA EMPLOYEES UNION, G.R. No. 163532, March 10, 2010 )
Execution
• Family Home

If the family home was constructed before the effectivity of the Family Code or before August 3, 1988, then it must have been constituted either judicially or extra-judicially as provided under Articles 225, 229-231 and 233 of the Civil Code. Judicial constitution of the family home requires the filing of a verified petition before the courts and the registration of the court’s order with the Registry of Deeds of the area where the property is located. Meanwhile, extrajudicial constitution is governed by Articles 240 to242 of the Civil Code and involves the execution of a public instrument which must also be registered with the Registry of Property. Failure to comply with either one of these two modes of constitution will bar a judgment debtor from availing of the privilege.

On the other hand, for family homes constructed after the effectivity of the Family Code on August 3, 1988, there is no need to constitute extrajudicially or judicially, and the exemption is effective from the time it was constituted and lasts as lo=g as any of its beneficiaries under Art. 154 actually resides therein. Moreover, the family home should belong to the absolute community or conjugal partnership or if exclusively by one spouse, its constitution must have been with consent of the other, and its value must not prior to August 3, 1988, or as early as 1944, they must comply with the procedure mandated by the Civil Code. Pandacan property was judicially or extrajudicially constituted as the Ramos’ family home, the law’s protective mantle cannot be availed of by petitioners. Parenthetically, the records show that the sheriff exhausted all means to execute the judgment but failed because Ramos’ bank accounts were already closed while other properties in him or the company’s name had already been transferred, and the only property left was the Pandacan property. (JUANITA TRINIDAD RAMOS,et al. v. DANILO PANGILINAN et. al.,G.R. No. 185920, July 20, 20100)
Finality of Factual Findings

Accordingly, for want of substantial basis, in fact or in law, factual findings of an administrative agency, such as the NLRC, cannot be given the stamp of finality and conclusiveness normally accorded to it, as even decisions of administrative agencies which are declared “final” by law are not exempt from judicial review when so warranted. Contrary to petitioner’s assertion, therefore, this Court sees no error on the part of the CA when it made a new determination of the case and, upon this, reversed the ruling of the NLRC. (CENTURY CANNING CORPORATION, RICARDO T. PO, JR. and AMANCIO C. RONQUILLO v. VICENTE RANDY R. RAMIL, G.R. No. 171630, August 8, 2010)

Finally, it bears to point out that the Decision of the Labor Arbiter was affirmed by the NLRC and the CA. The settled rule is that the factual findings of the Labor Arbiter and the NLRC, especially when affirmed by the CA, are accorded not only great respect but also finality, and are deemed binding upon this Court so long as they are supported by substantial evidence. In the present case, the Court finds no cogent reason to depart from this rule. (ELPIDIO CALIPAY v. NATIONAL LABOR RELATIONS COMMISSION, TRIANGLE ACE CORPORATION and JOSE LEE, G.R. No. 166411, August 3, 2010)
Finality of Judgment

It is no longer legally feasible to modify the final ruling in this case through the expediency of a petition questioning the order of execution. This late in the day, petitioner Victor Morales is barred, by the fact of a final judgment, from advancing the argument that his real property cannot be made liable for the monetary award in favor of respondent. For a reason greater than protection from personal liability, petitioner Victor Morales, as president of his corporation, cannot rely on our previous ruling that “to hold a director personally liable for debts of a corporation and thus pierce the veil of corporate fiction, the bad faith or wrongdoing of the director must be established clearly and convincingly.” Judgments of courts should attain finality at some point lest there be no end in litigation. The final judgment in this case may no longer be reviewed, or in any way modified directly or indirectly, by a higher court, not even by the Supreme Court. The reason for this is that, a litigation must end and terminate sometime and somewhere, and it is essential to an effective and efficient administration of justice that, once a judgment has become final, the winning party be not deprived of the fruits of the verdict. Courts must guard against any scheme calculated to bring about that result and must frown upon any attempt to prolong controversies. (MARMOSY TRADING, INC. and VICTOR MORALES v. COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 170515, May 6, 2010)
• Exception

The company insists that the Court should reinstate the original CA decision, given the findings of the Labor Arbiter and the NLRC that it had not dismissed Siazar. Ordinarily, the Court will not, on petition for review on certiorari, reexamine the facts of the case. Here, however, since the CA overturned its earlier ruling and its factual findings now differ from those of the Labor Arbiter and the NLRC, the Court is making an exception. (AGRICULTURAL AND INDUSTRIAL SUPPLIES CORPORATION,et. al., v. JUEBER P. SIAZAR G.R. No. 177970, August 25, 2010)

Forum Shopping

All these go to show that ABS-CBN acted with patent bad faith. A close parallel we can draw to characterize this bad faith is the prohibition against forum-shopping under the Rules of Court. In forum-shopping, the Rules characterize as bad faith the act of filing similar and repetitive actions for the same cause with the intent of somehow finding a favorable ruling in one of the actions filed. ABS-CBN’s actions in the two cases, as described above, are of the same character, since its obvious intent was to defeat and render useless, in a roundabout way and other than through the appeal it had taken, the labor arbiter’s decision in the regularization case. Forum-shopping is penalized by the dismissal of the actions involved. The penalty against ABS-CBN for its bad faith in the present case should be no less. (FARLEY FULACHE et. al., v. ABS-CBN BROADCASTING CORPORATION, G.R. No. 183810, January 21, 2010)

Grave Abuse of Discretion

Despite all these clear pieces of evidence of illegal obstruction, the NLRC looked the other way and chose not to see the unmistakable violations of the law on strikes by the union and its respondent officers and members. Needless to say, while the law protects the rights of the laborer, it authorizes neither the oppression nor the destruction of the employer. For grossly ignoring the evidence before it, the NLRC committed grave abuse of discretion; for supporting these gross NLRC errors, the CA committed its own reversible error. (PHIMCO INDUSTRIES, INC. v. PHIMCO INDUSTRIES LABOR ASSOCIATION (PILA), et al,G.R. No. 170830, August 11, 2010)

Illegal Dismissal

The respondent worker’s allegation that Teng summarily dismissed them on suspicion that they were not reporting to him the correct volume of the fish caught in each fishing voyage was never denied by Teng. Unsubstantiated suspicion is not a just cause to terminate one’s employment under Article 282 of the Labor Code. To allow an employer to dismiss an employee based on mere allegations and generalities would place the employee at the mercy of his employer, and would emasculate the right to security of tenure. For his failure to comply with the Labor Code’s substantive requirement on termination of employment, we declare that Teng illegally dismissed the respondent workers. (ALBERT TENG, doing business under the firm name ALBERT TENG FISH TRADING, and EMILIA TENG-CHUA v. ALFREDO S. PAHAGAC, G.R. No. 169704, November 17, 2010)

It is likewise evident that, even in the petition before this Court, Bonifacio Bryan Cu signed the Verification and Certification of Non-Forum Shopping and Antonio Cu signed the Secretary’s Certificate. The fact remains that the Cu family continues to operate petitioner’s business. Despite the alleged recent sale to SCBC, represented by Willy Deterala, petitioner failed to refute the allegations of respondents that the Cu family still continues to own and operate petitioner, or even to show that Willy Deterala is actually in charge of petitioner’s business. Petitioner did not confront this issue head-on, and its failure to do so is fatal to its cause. Petitioner having failed to discharge its burden of submitting sufficient and convincing evidence required by law, we hold that respondents were illegally dismissed. (PEÑAFRANCIA TOURS AND TRAVEL TRANSPORT, INC., v. JOSELITO P. SARMIENTO and RICARDO S. CATIMBANG, G.R. No. 178397, October 20, 2010)

Petitioners’ lack of just cause and non-compliance with the procedural requisites in terminating respondent’s employment renders them guilty of illegal dismissal. Consequently, respondent is entitled to reinstatement to his former position without loss of seniority rights and payment of backwages. However, if such reinstatement proves impracticable, and hardly in the best interest of the parties, perhaps due to the lapse of time since his dismissal, or if he decides not to be reinstated, respondent should be awarded separation pay in lieu of reinstatement. (ST. LUKE’S MEDICAL CENTER, INC v. ESTRELITO NOTARIO, G.R. No. 152166, October 20, 2010)

Hence, consistent with the Court’s ruling in Jaculbe, having terminated petitioner merely on the basis of a provision in the retirement plan which was not freely assented to by her, UNIPROM is guilty of illegal dismissal. Petitioner is thus entitled to reinstatement without loss of seniority rights and to full backwages computed from the time of her illegal dismissal in February 16, 2001 until the actual date of her reinstatement. If reinstatement is no longer possible because the position that petitioner held no longer exists, UNIPROM shall pay backwages as computed above, plus, in lieu of reinstatement, separation pay equivalent to one-month pay for every year of service. This is consistent with the preponderance of jurisprudence relative to the award of separation pay in case reinstatement is no longer feasible. LOURDES A. CERCADO v. UNIPROM, INC.,G.R. No. 188154, October 13, 2010)

To reiterate, this Court will not hesitate to defend respondents’ right to security of tenure. The premature dismissal from the service of respondents Palacio, Calibod, Laquio, Santander and Montederamos is unwarranted. However, we take exception to the case of respondent Saile who, as alleged by petitioner, was not qualified to take the LET as she only had three out of the minimum 10 required educational units to be admitted to take the LET pursuant to Section 15 of RA 7836, which fact respondent Saile did not refute. Not being qualified to take the examination to become a duly licensed professional teacher, petitioner cannot be compelled to retain her services as she cannot possibly obtain the needed prerequisite to allow her to continue practicing the teaching profession. Thus, we find her termination just and legal. (St. Mary’s Academy of Dipolog City v. Teresita Palacio et. al., September 8, 2010,G.R. No. 164913)

Here, the company did not adduce any evidence to prove that Siazar’s dismissal had been for a just or authorized cause as in fact it had been its consistent stand that it did not terminate him and that he quit on his own. But given that the company dismissed Siazar and that such dismissal had remained unexplained, there can be no other conclusion but that his dismissal was illegal. (AGRICULTURAL AND INDUSTRIAL SUPPLIES CORPORATION,et. al., v. JUEBER P. SIAZAR G.R. No. 177970, August 25, 2010)

Verily, there was a dearth of evidence directly linking respondent Mongcal to the commission of the crime of theft, as his mere act of loading the dump truck with aggregates did not show that he knew of Rasote’s plan to deliver the load to a place other than petitioner’s construction site. The only conclusion, therefore, is that petitioner illegally dismissed respondent Mongcal. (SARGASSO CONSTRUCTION and DEVELOPMENT CORPORATION v. NATIONAL LABOR

The absurdity of petitioner’s defense highlights the fact that respondent’s claim, that she was dismissed without any notice and hearing, rings with truth. This Court views with approval the observation of the CA and the NLRC, to wit:

x x x the petitioners cannot justify their defense of abandonment as they failed to prove that indeed private respondent had abandoned her work. It did not even bother to send a letter to her last known address requiring her to report for work and explain her alleged continued absences. The ratiocination of public respondent [NLRC] on this score merits our imprimatur, viz:

The law clearly spells out the manner with which an unjustified refusal to return to work by an employee may be established. Thusly, respondent should have given complainant a notice with warning concerning her alleged absences (Section 2, Rule XIV, Book V, Implementing Rules and Regulations of the Labor Code). The notice requirement actually consists of two parts to be separately served on the employee to wit: (1) notice to apprise the employee of his absences with a warning concerning a possible severance of employment in the event of an unjustified excuse therefor, and (2) subsequent notice of the decision to dismiss in the event of an employee’s refusal to pay heed to such warning. Only after compliance had been effected with those requirements can it be reasonably concluded that the employee had actually abandoned his job. In respondent’s case, it is noted that more than two (2) months had already lapsed since complainant allegedly started to absent herself when the latter instituted her action for illegal dismissal. During the said period of time, no action was taken by the respondents regarding complainant’s alleged absences, something which is quite peculiar had complainant’s employment not been severed at all. Accordingly, we do not find respondents defense of abandonment to be impressed with merit in view of an utter lack of evidence to support the same. Hence, complainant’s charge of illegal dismissal stands uncontroverted x x x .
(DIVERSIFIED SECURITY, INC v. ALICIA V. BAUTISTA, G.R. No. 152234, April 15, 2010)

While Promm-Gem had complied with the procedural aspect of due process in terminating the employment of petitioners-employees, i.e., giving two notices and in between such notices, an opportunity for the employees to answer and rebut the charges against them, it failed to comply with the substantive aspect of due process as the acts complained of neither constitute serious misconduct nor breach of trust. Hence, the dismissal is illegal. (JOEB M. ALIVIADO, et al. v. PROCTER & GAMBLE PHILS., INC.,and PROMM-GEM INC., G.R. No. 160506, March 9, 2010)

The injustice committed on the petitioners/drivers requires rectification. Their dismissal was not only unjust and in bad faith as the above discussions abundantly show. The bad faith in ABS-CBN’s move toward its illegitimate goal was not even hidden; it dismissed the petitioners – already recognized as regular employees – for refusing to sign up with its service contractor. Thus, from every perspective, the petitioners were illegally dismissed. (FARLEY FULACHE et. al., v. ABS-CBN BROADCASTING CORPORATION, G.R. No. 183810, January 21, 2010)
• Drug Test

The law is clear that drug tests shall be performed only by authorized drug testing centers. In this case, Sulpicio Lines failed to prove that S.M. Lazo Clinic is an accredited drug testing center. Sulpicio Lines did not even deny Nacague’s allegation that S.M. Lazo Clinic was not accredited. Also, only a screening test was conducted to determine if Nacague was guilty of using illegal drugs. Sulpicio Lines did not confirm the positive result of the screening test with a confirmatory test. Sulpicio Lines failed to indubitably prove that Nacague was guilty of using illegal drugs amounting to serious misconduct and loss of trust and confidence. Sulpicio Lines failed to clearly show that it had a valid and legal cause for terminating Nacague’s employment. When the alleged valid cause for the termination of employment is not clearly proven, as in this case, the law considers the matter a case of illegal dismissal. (JEFFREY NACAGUE v. SULPICIO LINES, INC., G.R. No. 172589, August 8, 2010)

Intimidation

None of these requisites was proven by petitioner. No demand was made on petitioner to resign. At most, she was merely given the option to either resign or face disciplinary investigation, which respondent had every right to conduct in light of the numerous infractions committed by petitioner. There is nothing irregular in providing an option to petitioner. Ultimately, the final decision on whether to resign or face disciplinary action rests on petitioner alone. (MA. SOCORRO MANDAPAT v. ADD FORCE PERSONNEL SERVICES, INC. and COURT OF APPEALS, G.R. No. 180285, July 6, 2010)

Involuntary Servitude

Employment is a personal consensual contract and absorption by BPI of a former FEBTC employee without the consent of the employee is in violation of an individual’s freedom to contract. It would have been a different matter if there was an express provision in the articles of merger that as a condition for the merger, BPI was being required to assume all the employment contracts of all existing FEBTC employees with the conformity of the employees. In the absence of such a provision in the articles of merger, then BPI clearly had the business management decision as to whether or not employ FEBTC’s employees. FEBTC employees likewise retained the prerogative to allow themselves to be absorbed or not; otherwise, that would be tantamount to involuntary servitude. (BANK OF THE PHILIPPINE ISLANDS v. BPI EMPLOYEES UNION-DAVAO CHAPTER-FEDERATION OF UNIONS IN BPI UNIBANK, G.R. No. 164301, August 10, 2010)

Jurisdiction

Respecting Ikdal’s joint and solidary liability as a corporate officer, the same is in order too following the express provision of R.A. 8042 on money claims, viz:

SEC. 10. Money Claims.—Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual moral, exemplary and other forms of damages.

The liability of the principal/employer and the recruitment/placement agency for any and all claims under this section shall be joint and several. This provision shall be incorporated in the contract for overseas employment and shall be a condition precedent for its approval. The performance bond to be filed by the recruitment/placement agency, as provided by law, shall be answerable for all money claims or damages that may be awarded to the workers. If the recruitment/placement agency is a juridical being, the corporate officers and directors and partners as the case may be, shall themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid claims and damages. (emphasis and underscoring supplied)
(ATCI OVERSEAS CORPORATION, AMALIA G. IKDAL and MINISTRY OF PUBLIC HEALTH-KUWAIT v. MA. JOSEFA ECHIN, G.R. No. 178551, October 11, 2010)

Prudential Bank and Trust Company v. Reyes, a case involving a lady bank manager who had risen from the ranks but was dismissed, the Court held that her complaint for illegal dismissal was correctly brought to the NLRC, because she was deemed a regular employee of the bank. The Court observed thus:

It appears that private respondent was appointed Accounting Clerk by the Bank on July 14, 1963. From that position she rose to become supervisor. Then in 1982, she was appointed Assistant Vice-President which she occupied until her illegal dismissal on July 19, 1991. The bank’s contention that she merely holds an elective position and that in effect she is not a regular employee is belied by the nature of her work and her length of service with the Bank. As earlier stated, she rose from the ranks and has been employed with the Bank since 1963 until the termination of her employment in 1991. As Assistant Vice President of the Foreign Department of the Bank, she is tasked, among others, to collect checks drawn against overseas banks payable in foreign currency and to ensure the collection of foreign bills or checks purchased, including the signing of transmittal letters covering the same. It has been stated that “the primary standard of determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual trade or business of the employer. Additionally, “an employee is regular because of the nature of work and the length of service, not because of the mode or even the reason for hiring them.” As Assistant Vice-President of the Foreign Department of the Bank she performs tasks integral to the operations of the bank and her length of service with the bank totaling 28 years speaks volumes of her status as a regular employee of the bank. In fine, as a regular employee, she is entitled to security of tenure; that is, her services may be terminated only for a just or authorized cause. This being in truth a case of illegal dismissal, it is no wonder then that the Bank endeavored to the very end to establish loss of trust and confidence and serious misconduct on the part of private respondent but, as will be discussed later, to no avail. (ATLING INDUSTRIAL AND COMMERCIAL CORPORATION,RICHARD K. SPENCER,CATHERINE SPENCER, AND ALEX MANCILLA v. RICARDO R. COROS, G.R. No. 157802, October 13, 2010)

One. The NLRC acquires jurisdiction over parties in cases before it either by summons served on them or by their voluntary appearance before its Labor Arbiter. Here, while the Union insists that summons were not properly served on the impleaded Union members with respect to the Company’s amended petition that sought to declare the strike illegal, the records show that they were so served. The Return of Service of Summons indicated that 74 out of the 81 impleaded Union members were served with summons. But they refused either to accept the summons or to acknowledge receipt of the same. Such refusal cannot of course frustrate the NLRC’s acquisition of jurisdiction over them. Besides, the affected Union members voluntarily entered their appearance in the case when they sought affirmative relief in the course of the proceedings like an award of damages in their favor. (C. ALCANTARA & SONS, INC. v. COURT OF APPEALS, et al.,G.R. No. 155109, G.R. No. 155135, G.R. No. 179220, September 29, 2010)
Job contracting/Labor-Only Contracting

In the present case, the maestros did not have any substantial capital or investment. Teng admitted that he solely provided the capital and equipment, while the maestros supplied the workers. The power of control over the respondent workers was lodged not with the maestros but with Teng. As checkers, the respondent workers’ main tasks were to count and classify the fish caught and report them to Teng. They performed tasks that were necessary and desirable in Teng’s fishing business. Taken together, these incidents confirm the existence of a labor-only contracting which is prohibited in our jurisdiction, as it is considered to be the employer’s attempt to evade obligations afforded by law to employees. (ALBERT TENG, doing business under the firm name ALBERT TENG FISH TRADING, and EMILIA TENG-CHUA v. ALFREDO S. PAHAGAC, G.R. No. 169704, November 17, 2010)

In order that a labor relationship can be categorized as legitimate/permissible job contracting or as prohibited labor-only contracting, the totality of the facts and the surrounding circumstances of the relationship ought to be considered. Every case is unique and has to be assessed on the basis of its facts and of the features of the relationship in question. In permissible job contracting, the principal agrees to put out or farm out with a contractor or subcontractor the performance or completion of a specific job, work or service within a definite or predetermined period, regardless of whether such job, work or service is to be performed or completed within or outside the premises of the principal. The test is whether the independent contractor has contracted to do the work according to his own methods and without being subject to the principal’s control except only as to the results, he has substantial capital, and he has assured the contractual employees entitlement to all labor and occupational safety and health standards, free exercise of the right to self-organization, security of tenure, and social and welfare benefits. (SPIC N’ SPAN SERVICES CORPORATION v. GLORIA PAJE et. al, G.R. No. 174084, August 25, 2010)

Furthermore, the petitioners have been charged with the merchandising and promotion of the products of P&G, an activity that has already been considered by the Court as doubtlessly directly related to the manufacturing business, which is the principal business of P&G. Considering that SAPS has no substantial capital or investment and the workers it recruited are performing activities which are directly related to the principal business of P&G, we find that the former is engaged in “labor-only contracting”. (JOEB M. ALIVIADO, et al. v. PROCTER &GAMBLE PHILS., INC.,and PROMM-GEM INC., G.R. No. 160506, March 9, 2010)

• Test to Determine Independent Contractorship

Petitioner cannot rely either on AMPCO’s Certificate of Registration as an Independent Contractor issued by the proper Regional Office of the DOLE to prove its claim. It is not conclusive evidence of such status. The fact of registration simply prevents the legal presumption of being a mere labor-only contractor from arising. In distinguishing between permissible job contracting and prohibited labor-only contracting, the totality of the facts and the surrounding circumstances of the case are to be considered.=(SAN MIGUEL CORPORATION v. VICENTE B. SEMILLANO, ET. al., G.R. No. 164257, July 5, 2010)
Liability

• Liability of Corporate Officers

Petitioners withheld respondent’s salary in the sincere belief that respondent did not work for the period in question and was, therefore, not entitled to it. There was no dishonest purpose or ill will involved as they believed there was a justifiable reason to withhold his salary. Thus, although they unlawfully withheld respondent’s salary, it cannot be concluded that such was made in bad faith. Accordingly, corporate officers, Hartmannshenn and Schumacher, cannot be held personally liable for the corporate obligations of SHS. (SHS PERFORATED MATERIALS, INC., WINFRIED HARTMANNSHENN, and HINRICH JOHANN SCHUMACHER v. MANUEL F. DIAZ, G.R. No. 185814, October 13, 2010)

As to respondent Camus’ liability as LMCEC president, it is settled that in the absence of malice, bad faith, or specific provision of law, a director or officer of a corporation cannot be made personally liable for corporate liabilities.

As held in Lowe, Inc. v. Court of Appeals, citing McLeod v. NLRC:

Personal liability of corporate directors, trustees or officers attaches only when (1) they assent to a patently unlawful act of the corporation, or when they are guilty of bad faith or gross negligence in directing its affairs, or when there is a conflict of interest resulting in damages to the corporation, its stockholders or other persons; (2) they consent to the issuance of watered down stocks or when, having knowledge of such issuance, do not forthwith file with the corporate secretary their written objection; (3) they agree to hold themselves personally and solidarily liable with the corporation; or (4) they are made by specific provision of law personally answerable for their corporate action.

(JUDY O. DACUITAL , et. al. v. L.M. CAMUS ENGINEERING CORPORATION and/or LUIS M. CAMUS, G.R. No. 176748, September 1, 2010)

In the subject decision, the CA concluded that petitioner Xu and Wensha are jointly and severally liable to Loreta. We have read the decision in its entirety but simply failed to come across any finding of bad faith or malice on the part of Xu. There is, therefore, no justification for such a ruling. To sustain such a finding, there should be an evidence on record that an officer or director acted maliciously or in bad faith in terminating the services of an employee. Moreover, the finding or indication that the dismissal was effected with malice or bad faith should be stated in the decision itself. (WENSHA SPA CENTER, INC. v. LORETA T. YUNG, G.R. No. 185122, August 16, 2010)

• Liability of GSIS as Indirect Employer

Lastly, we do not agree with petitioner that the enforcement of the decision is impossible because its charter unequivocally exempts it from execution. As held in Government Service Insurance System v. Regional Trial Court of Pasig City, Branch 71, citing Rubia v. GSIS:

The processual exemption of the GSIS funds and properties under Section 39 of the GSIS Charter, in our view, should be read consistently with its avowed principal purpose: to maintain actuarial solvency of the GSIS in the protection of assets which are to be used to finance the retirement, disability and life insurance benefits of its members. Clearly, the exemption should be limited to the purposes and objects covered. Any interpretation that would give it an expansive construction to exempt all GSIS assets from legal processes absolutely would be unwarranted.

Furthermore, the declared policy of the State in Section 39 of the GSIS Charter granting GSIS an exemption from tax, lien, attachment, levy, execution, and other legal processes should be read together with the grant of power to the GSIS to invest its “excess funds” under Section 36 of the same Act. Under Section 36, the GSIS is granted the ancillary power to invest in business and other ventures for the benefit of the employees, by using its excess funds for investment purposes. In the exercise of such function and power, the GSIS is allowed to assume a character similar to a private corporation. Thus, it may sue and be sued, as also, explicitly granted by its charter x x x.

To be sure, petitioner’s charter should not be used to evade its liabilities to its employees, even to its indirect employees, as mandated by the Labor Code. (GOVERNMENT SERVICE INSURANCE SYSTEM v. NATIONAL LABOR RELATIONS COMMISSION (NLRC), ET. Al., G.R. No. 180045, November 17, 2010 )

• Liability of Indirect Employer

Petitioner’s liability covers the payment of respondents’ salary differential and 13th month pay during the time they worked for petitioner. In addition, petitioner is solidarily liable with DNL Security for respondents’ unpaid wages from February 1993 until April 20, 1993. While it is true that respondents continued working for petitioner after the expiration of their contract, based on the instruction of DNL Security, petitioner did not object to such assignment and allowed respondents to render service. Thus, petitioner impliedly approved the extension of respondents’ services. Accordingly, petitioner is bound by the provisions of the Labor Code on indirect employment. Petitioner cannot be allowed to deny its obligation to respondents after it had benefited from their services. So long as the work, task, job, or project has been performed for petitioner’s benefit or on its behalf, the liability accrues for such services. The principal is made liable to its indirect employees because, after all, it can protect itself from irresponsible contractors by withholding payment of such sums that are due the employees and by paying the employees directly, or by requiring a bond from the contractor or subcontractor for this purpose. (GOVERNMENT SERVICE INSURANCE SYSTEM v. NATIONAL LABOR RELATIONS COMMISSION (NLRC), ET. Al., G.R. No. 180045, November 17, 2010 )

• Solidary Liability

Thus, petitioner SMC, as principal employer, is solidarily liable with AMPCO, the labor-only contractor, for all the rightful claims of respondent. Under this set-up, AMPCO, as the “labor-only” contractor, is deemed an agent of the principal (SMC). The law makes the principal responsible over the employees of the “labor-only” contractor as if the principal itself directly hired=the employees. (SAN MIGUEL CORPORATION v. VICENTE B. SEMILLANO, ET. Al., G.R. No. 164257, July 5, 2010)

We modify, however, our ruling on the extent of liability of Outdoor Clothing and its co-respondents. A corporation, as a juridical entity, may act only through its directors, officers and employees. Obligations incurred as a result of the directors’ and officers’ acts as corporate agents, are not their personal liability but the direct responsibility of the corporation they represent. As a rule, they are only solidarily liable with the corporation for the illegal termination of services of employees if they acted with malice or bad faith. In the present case, malice or bad faith on the part of the Syfu, Demogena, and Lee, as corporate officers of Outdoor Clothing, was not sufficiently proven to justify a ruling holding them solidarily liable with Outdoor Clothing. (MANOLO A. PEÑAFLOR V. OUTDOOR CLOTHING MANUFACTURING CORPORATION, G.R. No. 177114, April 13, 2010)

Liberal Application of the Rules
The appellate court’s brushing aside of the “Paliwanag” and the minutes of the meeting that resulted in the conclusion of the MOA because they were not verified and notarized, thus violating, so the appellate court reasoned, the rules on parol evidence, does not lie. Like any other rule on evidence, parol evidence should not be strictly applied in labor cases.
The reliance on the parol evidence rule is misplaced. In labor cases pending before the Commission or the Labor Arbiter, the rules of evidence prevailing in courts of law or equity are not controlling. Rules of procedure and evidence are not applied in a very rigid and technical sense in labor cases. Hence, the Labor Arbiter is not precluded from accepting and evaluating evidence other than, and even contrary to, what is stated in the CBA. (emphasis supplied)
(IRTEK EMPLOYEES LABOR UNION-FEDERATION OF FREE WORKERS v. CIRTEK ELECTRONICS, INC, G.R. No. 190515, November 15, 2010)

“While the Court adheres to the principle of liberality in favor of the seafarer in construing the Standard Employment Contract, we cannot allow claims for compensation based on surmises. When the evidence presented negates compensability, this Court has no choice but to deny the claim, lest we cause injustice to the employer.” (MEDLINE MANAGEMENT, INC. and GRECOMAR SHIPPING AGENCY v. GLICERIA ROSLINDA and ARIEL ROSLINDA, G.R. No. 168715, September 15, 2010)

It is well-settled that the application of technical rules of procedure may be relaxed to serve the demands of substantial justice, particularly in labor cases. Labor cases must be decided according to justice and equity and the substantial merits of the controversy. Procedural niceties should be avoided in labor cases in which the provisions of the Rules of Court are applied only in suppletory manner. Indeed, rules of procedure may be relaxed to relieve a part of an injustice not commensurate with the degree of non-compliance with the process required.(ARNOLD F. ANIB v. COCA-COLA BOTTLERS PHILS., INC. and/or RHOGIE FELICIANO,G.R. No. 190216, August 16, 2010)

Finally, it bears stressing that while it is true that litigation is not a game of technicalities and that rules of procedure shall not be strictly enforced at the cost of substantial justice, it does not mean that the Rules of Court may be ignored at will and at random to the prejudice of the orderly presentation and assessment of the issues and their just resolution. It must be emphasized that procedural rules should not be belittled or dismissed simply because their non-observance might have resulted in prejudice to a party’s substantial rights. Like all rules, they are required to be followed, except only for the most persuasive of reasons. (MANDAUE GALLEON TRADE, INC. and GAMALLOSONS TRADERS, INC., represented by FAUSTO B. GAMALLO v. BIENVENIDO ISIDTO et.al., G.R. No. 181051,July 5, 2010)

Management Prerogative

While management has the prerogative to discipline its employees and to impose appropriate penalties on erring workers, pursuant to company rules and regulations, however, such management prerogatives must be exercised in good faith for the advancement of the employer’s interest and not for the purpose of defeating or circumventing the rights of the employees under special laws and valid agreements. The Court is wont to reiterate that while an employer has its own interest to protect, and pursuant thereto, it may terminate an employee for a just cause, such prerogative to dismiss or lay off an employee must be exercised without abuse of discretion. Its implementation should be tempered with compassion and understanding. The employer should bear in mind that, in the execution of said prerogative, what is at stake is not only the employee’s position, but his very livelihood, his very breadbasket. (PHILIPPINE LONG DISTANCE TELEPHONE COMPANY v. JOEY B. TEVES, G.R. No. 143511, November 15, 2010)

The foregoing illustrates why it is dangerous for this Court and even the CA to look into the wisdom of a management prerogative. Certainly, one can argue for or against the pros and cons of transferring respondent to another territory. Absent a definite finding that such exercise of prerogative was tainted with arbitrariness and unreasonableness, the CA should have left the same to petitioners’ better judgment. The rule is well settled that labor laws discourage interference with an employer’s judgment in the conduct of his business. Even as the law is solicitous of the welfare of employees, it must also protect the right of an employer to exercise what are clearly management prerogatives. As long as the company’s exercise of the same is in good faith to advance its interest and not for the purpose of defeating or circumventing the rights of employees under the laws or valid agreements, such exercise will be upheld. (PHARMACIA and UPJOHN, INC. (now PFIZER PHILIPPINES, INC.) v. RICARDO P. ALBAYDA, JR., G.R. No. 172724 August 23, 2010)

In the absence of arbitrariness, the CA should not have looked into the wisdom of a management prerogative. It is the employer’s prerogative, based on its assessment and perception of its employee’s qualifications, aptitudes, and competence, to move them around in the various areas of its business operations in order to ascertain where they will function with maximum benefit to the company. (PHARMACIA and UPJOHN, INC. (now PFIZER PHILIPPINES, INC.) v. RICARDO P. ALBAYDA, JR., G.R. No. 172724 August 23, 2010)

We held that work reassignment of an employee as a genuine business necessity is a valid management prerogative. After being given an option to be transferred, petitioner rejected the offer for reassignment to Paper Mill No. 5 even though such transfer would not involve any diminution of rank and pay. Instead, he opted and preferred to be separated by executing a release and quitclaim in consideration of which he received separation pay in the amount of P356,335.20 equal to two months pay for every year of service plus other accrued benefits. Clearly, petitioner freely and voluntarily consented to the execution of the release and quitclaim. Having done so apart from the fact that the consideration for the quitclaim is credible and reasonable, the waiver represents a valid and binding undertaking. As aptly concluded by the CA, the quitclaim was not executed under force or duress and that petitioner was given a separation pay more than what the law requires from respondent. (DANNIE M. PANTOJA v. SCA HYGIENE PRODUCTSCORPORATION, G.R. No. 163554, April 23, 2010)

Approval of applications for the ERP is within Korean Air’s management prerogatives. The exercise of management prerogative is valid as long as it is not done in a malicious, harsh, oppressive, vindictive, or wanton manner. In the present case, the Court sees no bad faith on Korean Air’s part. The 21 August 2001 memorandum clearly states that Korean Air, on its discretion, was offering ERP to its employees. The memorandum also states that the reason for the ERP was to prevent further losses. Korean Air did not abuse its discretion when it excluded Yuson in the ERP. To allow Yuson to avail of the ERP would have been contrary to the purpose of the ERP. (KOREAN AIR CO., LTD v. ADELINA A.S. YUSON, G.R. No. 170369, June 16, 2010)

We will emphasize anew that the power to dismiss is a normal prerogative of the employer. This, however, is not without limitations. The employer is bound to exercise caution in terminating the services of his employees especially so when it is made upon the request of a labor union pursuant to the Collective Bargaining Agreement. Dismissals must not be arbitrary and capricious. Due process must be observed in dismissing an employee, because it affects not only his position but also his means of livelihood. Employers should, therefore, respect and protect the rights of their employees, which include the right to labor. (PICOP RESOURCES, INCORPORATED (PRI), v. ANACLETO L. TAÑECA, G.R. No. 160828, August 9, 2010)

Besides, as the employer, respondent has the right to regulate, according to its discretion and best judgment, all aspects of employment, including work assignment, working methods, processes to be followed, working regulations, transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and recall of workers. Management has the prerogative to discipline its employees and to impose appropriate penalties on erring workers pursuant to company rules and regulations. (JOSE P. ARTIFICIO v. NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 172988 , July 26, 2010)

Here, there was no diminution of petitioner’s salary and other benefits. There was no evidence that she was harassed or discriminated upon, or that respondents made it difficult for her to continue with her other duties. Absent any evidence of bad faith, it is within the exercise of respondents’ management prerogative to transfer some of petitioner’s duties if in their judgment, it would be more beneficial to the corporation. There was no basis for the NLRC’s finding that from performing managerial functions, petitioner was reduced to performing clerical tasks. (ESTRELLA VELASCO v. TRANSIT AUTOMOTIVE SUPPLY, INC., G.R. No. 171327, June 18, 2010)

Money Claims

• Interest

Further, since the monetary awards remained unpaid even after it became final on September 22, 2008 because of issues raised respecting the correct computation of such awards, it is but fair that respondent Javellana be required to pay 12% interest per annum on those awards from September 22, 2008 until they are paid. The 12% interest is proper because the Court treats monetary claims in labor cases the equivalent of a forbearance of credit. It matters not that the amounts of the claims were still in question on September 22, 2008. What is decisive is that the issue of illegal dismissal from which the order to pay monetary awards to petitioner Belen stemmed had been long terminated. (DANIEL P. JAVELLANA , JR.,V. ALBINO BELEN, G.R. No. 181913, ALBINO BELEN V. DANIEL P. JAVELLANA, JR. and JAVELLANA FARMS, INC., G.R. No. 182158, March 5, 2010)

• Prescription

In Southeastern Shipping v. Navarra, Jr., we ruled that “Article 291 is the law governing the prescription of money claims of seafarers, a class of overseas contract workers. This law prevails over Section 28 of the Standard Employment Contract for Seafarers which provides for claims to be brought only within one year from the date of the seafarer’s return to the point of hire.” We further declared that “for the guidance of all, Section 28 of the Standard Employment Contract for Seafarers, insofar as it limits the prescriptive period within which the seafarers may file their money claims, is hereby declared null and void. The applicable provision is Article 291 of the Labor Code, it being more favorable to the seafarers and more in accord with the State’s declared policy to afford full protection to labor. The prescriptive period in the present case is thus three years from the time the cause of action accrues.” (MEDLINE MANAGEMENT, INC. and GRECOMAR SHIPPING AGENCY v. GLICERIA ROSLINDA and ARIEL ROSLINDA, G.R. No. 168715, September 15, 2010)

Moral Damages

As for P&G, the records show that it dismissed its employees through SAPS in a manner oppressive to labor. The sudden and peremptory barring of the concerned petitioners from work, and from admission to the work place, after just a one-day verbal notice, and for no valid cause bellows oppression and utter disregard of the right to due process of the concerned petitioners. Hence, an award of moral damages is called for. (JOEB M. ALIVIADO, et al. v. PROCTER & GAMBLE PHILS., INC.,and PROMM-GEM INC., G.R. No. 160506, March 9, 2010)

NLRC Rules of procedure
• Proof and Completeness of Service

It cannot be determined from the records who hired Naronio; but it is also undisputed that petitioners are not his employers. Indeed, Naronio serviced all the businesses operating within the compound where the arbiter’s ruling was mailed. Thus, it is not even necessary to determine whether Naronio’s “duties are not so integrated to the business that [his] absence or presence will not toll the entire operation” of petitioners’ business. This test presupposes that the recipient of the legal document is employed by the addressee. For remedial law purposes, Naronio’s receipt of any processes intended for petitioners was receipt by a stranger, without legal significance to petitioners. (PASIG CYLINDER MFG., CORP.,et. al v. DANILO ROLLO, et. al., G.R. No. 173631 September 8, 2010)

• Reduction of Bond

Nor was petitioners’ filing of a reduced appeal bond fatal to their appeal. True, Article 223 of the Labor Code requires the filing of appeal bond “in the amount equivalent to the monetary award in the judgment appealed from.” However, both the Labor Code and this Court’s jurisprudence abhor rigid application of procedural rules at the expense of delivering just settlement of labor cases. Petitioners’ reasons for their filing of the reduced appeal bond – the downscaling of their operations coupled with the amount of the monetary award appealed – are not unreasonable. Thus, the recourse petitioners adopted constitutes substantial compliance with Article 223 consistent with our ruling in Rosewood Processing, Inc. v. NLRC, where we allowed the appellant to file a reduced bond of P50,000 (accompanied by the corresponding motion) in its appeal of an arbiter’s ruling in an illegal termination case awarding P789,154.39 to the private respondents. (PASIG CYLINDER MFG., CORP.,et. al v. DANILO ROLLO, et. al., G.R. No. 173631 September 8, 2010)

Piercing the Veil of Corporate Fiction

Applying the doctrine to the case at bar, we find no reason to pierce the corporate veil of respondent and go beyond its legal personality. Control, by itself, does not mean that the controlled corporation is a mere instrumentality or a business conduit of the mother company. Even control over the financial and operational concerns of a subsidiary company does not by itself call for disregarding its corporate fiction. There must be a perpetuation of fraud behind the control or at least a fraudulent or illegal purpose behind the control in order to justify piercing the veil of corporate fiction. Such fraudulent intent is lacking in this case. (NASECO GUARDS ASSOCIATION-PEMA (NAGA-PEMA) v. NATIONAL SERVICE CORPORATION (NASECO), G.R. No. 165442, August 25, 2010)

Preventive Suspension

In this case, Artificio’s preventive suspension was justified since he was employed as a security guard tasked precisely to safeguard respondents’ client. His continued presence in respondents’ or its client’s premises poses a serious threat to respondents, its employees and client in light of the serious allegation of conduct unbecoming a security guard such as abandonment of post during night shift duty, light threats and irregularities in the observance of proper relieving time. (JOSE P. ARTIFICIO v. NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 172988, July 26, 2010)

In this case, Artificio’s preventive suspension was justified since he was employed as a security guard tasked precisely to safeguard respondents’ client. His continued presence in respondents’ or its client’s premises poses a serious threat to respondents, its employees and client in light of the serious allegation of conduct unbecoming=g a security guard such as abandonment of post during night shift duty, light threats and irregularities in the observance of proper relieving time. (JOSE P. ARTIFICIO v. NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 172988, July 26, 2010)
Principle of Non-Diminution of Benefits

Article 100 of the Labor Code, otherwise known as the Non-Diminution Rule, mandates that benefits given to employees cannot be taken back or reduced unilaterally by the employer because the benefit has become part of the employment contract, written or unwritten. The rule against diminution of benefits applies if it is shown that the grant of the benefit is based on an express policy or has ripened into a practice over a long period of time and that the practice is consistent and deliberate. Nevertheless, the rule will not apply if the practice is due to error in the construction or application of a doubtful or difficult question of law. But even in cases of error, it should be shown that the correction is done soon after discovery of the error. The argument of petitioner that the grant of the benefit was not voluntary and was due to error in the interpretation of what is included in the basic salary deserves scant consideration. No doubtful or difficult question of law is involved in this case. The guidelines set by the law are not difficult to decipher. The voluntariness of the grant of the benefit was manifested by the number of years the employer had paid the benefit to its employees. Petitioner only changed the formula in the computation of=the 13th-month pay after almost 30 years and only after the dispute between the management and employees erupted. This act of petitioner in changing the formula at this time cannot be sanctioned, as it indicates a badge of bad faith. (CENTRAL AZUCARERA DE TARLAC DECISION v. CENTRAL AZUCARERA DE TARLAC LABOR UNION-NLU, G.R. No. 188949,July 26, 2010)

All given, business losses are a feeble ground for petitioner to repudiate its obligation under the CBA. The rule is settled that any benefit and supplement being enjoyed by the employees cannot be reduced, diminished, discontinued or eliminated by the employer. The principle of non-diminution of benefits is founded on the constitutional mandate to protect the rights of workers and to promote their welfare and to afford labor full protection. (LEPANTO CERAMICS, INC.V. LEPANTO CERAMICS EMPLOYEES ASSOCIATION, G.R. No. 180866, March 2, 2010)

Albeit the amounts representing tollgate fees were deducted from gross revenues and not directly from Taroy’s commissions, the labor tribunal and the appellate court correctly held that the withholding of those amounts reduced the amount from which Taroy’s 9% commission would be computed. Such a computation not only marks a change in the method of payment of wages, resulting in a diminution of Taroy’s wages in violation of Article 113 vis-à-vis Article 100 of the Labor Code, as amended. It need not be underlined that without Taroy’s written consent or authorization, the deduction is considered illegal.
Besides, the invocation of the rule on “company practice” is generally used with respect to the grant of additional benefits to employees, not on issues involving diminution of benefits. (GENESIS TRANSPORT SERVICE, INC. v. UNYON NG MALAYANG MANGGAGAWA NG GENESIS TRANSPORT (UMMGT), G.R. No. 182114, April 5, 2010)

Protection to Labor

Although it cannot be determined with certainty whether respondent worked for the entire period from November 16 to November 30, 2005, the consistent rule is that if doubt exists between the evidence presented by the employer and that by the employee, the scales of justice must be tilted in favor of the latter in line with the policy mandated by Articles 2 and 3 of the Labor Code to afford protection to labor and construe doubts in favor of labor. For petitioners’ failure to satisfy their burden of proof, respondent is presumed to have worked during the period in question and is, accordingly, entitled to his salary. Therefore, the withholding of respondent’s salary by petitioners is contrary to Article 116 of the Labor Code and, thus, unlawful. (SHS PERFORATED MATERIALS, INC., WINFRIED HARTMANNSHENN, and HINRICH JOHANN SCHUMACHER v. MANUEL F. DIAZ, G.R. No. 185814, October 13, 2010)

Reassignment

In Abbott Laboratories (Phils.), Inc. v. National Labor Relations Commission, which involved a complaint filed by a medical representative against his employer drug company for illegal dismissal for allegedly terminating his employment when he refused to accept his reassignment to a new area, the Court upheld the right of the drug company to transfer or reassign its employee in accordance with its operational demands and requirements. The ruling of the Court therein, quoted hereunder, also finds application in the instant case:

Therefore, Bobadilla had no valid reason to disobey the order of transfer. He had tacitly given his consent thereto when he acceded to the petitioners’ policy of hiring sales staff who are willing to be assigned anywhere in the Philippines which is demanded by petitioners’ business.

By the very nature of his employment, a drug salesman or medical representative is expected to travel. He should anticipate reassignment according to the demands of their business. It would be a poor drug corporation which cannot even assign its representatives or detail men to new markets calling for opening or expansion or to areas where the need for pushing its products is great. More so if such reassignments are part of the employment contract.

(PHARMACIA and UPJOHN, INC. (now PFIZER PHILIPPINES, INC.) v. RICARDO P. ALBAYDA, JR., G.R. No. 172724 August 23, 2010)

Re-computation of Awards as against
Principle of Immutability of Final Judgment

Consistent with what we discussed above, we hold that under the terms of the decision under execution, no essential change is made by a re-computation as this step is a necessary consequence that flows from the nature of the illegality of dismissal declared in that decision. A re-computation (or an original computation, if no previous computation has been made) is a part of the law – specifically, Article 279 of the Labor Code and the established jurisprudence on this provision – that is read into the decision. By the nature of an illegal dismissal case, the reliefs continue to add on until full satisfaction, as expressed under Article 279 of the Labor Code. The re-computation of the consequences of illegal dismissal upon execution of the decision does not constitute an alteration or amendment of the final decision being implemented. The illegal dismissal ruling stands; only the computation of monetary consequences of this dismissal is affected and this is not a violation of the principle of immutability of final judgments. (SESSION DELIGHTS ICE CREAM AND FAST FOODS v. THE HON. COURT OF APPEALS (Sixth Division), HON. NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 172149, February 8, 2010)

Retirement

At the risk of stating the obvious, private respondent was not separated from petitioner’s employ due to mandatory or optional retirement but, rather, by termination of employment for a just cause. Thus, any retirement pay provided by PAL’s “Special Retirement & Separation Program” dated February 15, 1988 or, in the absence or legal inadequacy thereof, by Article 287 of the Labor Code does not operate nor can be made to operate for the benefit of private respondent. Even private respondent’s assertion that, at the time of her lawful dismissal, she was already qualified for retirement does not aid her case because the fact remains that private respondent was already terminated for cause thereby rendering nugatory any entitlement to mandatory or optional retirement pay that she might have previously possessed. (NATIONAL LABOR RELATIONS COMMISSION and AIDA M. QUIJANO v. PHILIPPINE AIRLINES, INC. G.R. No. 123294,October 20, 2010)

Admittedly, petitioner worked for 14 years for the bus company which did not adopt any retirement scheme. Even if petitioner as bus conductor was paid on commission basis then, he falls within the coverage of R.A. 7641 and its implementing rules. As thus correctly ruled by the Labor Arbiter, petitioner’s retirement pay should include the cash equivalent of the 5-day SIL and 1/12 of the 13th month pay. (RODOLFO J. SERRANO v. SEVERINO SANTOS TRANSIT G.R. No. 187698, August 9, 2010)

Undoubtedly, under this provision, the retirement age is primarily determined by the existing agreement or employment contract. Absent such an agreement, the retirement age shall be fixed by law. The above-cited law mandates that the compulsory retirement age is at 65 years, while the minimum age for optional retirement is set at 60 years. Moreover, Article 287 of the Labor Code, as amended, applies only to a situation where (1) there is no CBA or other applicable employment contract providing for retirement benefits for an employee; or (2) there is a collective bargaining agreement or other applicable employment contract providing for retirement benefits for an employee, but it is below the requirement set by law. The rationale for the first situation is to prevent the absurd situation where an employee, deserving to receive retirement benefits, is denied them through the nefarious scheme of employers to deprive employees of the benefits due them under existing labor laws. The rationale for the second situation is to prevent private contracts from derogating from the public law. (AMELIA R. OBUSAN v. PHILIPPINE NATIONAL BANK, G.R. No. 181178, July 26, 2010)

• Retirement Plans

Retirement plans allowing employers to retire employees who have not yet reached the compulsory retirement age of 65 years are not per se repugnant to the constitutional guaranty of security of tenure. By its express language, the Labor Code permits employers and employees to fix the applicable retirement age at 60 years or below, provided that the employees’ retirement benefits under any CBA and other agreements shall not be less than those provided therein. By this yardstick, the PNB-RP complies. (AMELIA R. OBUSAN v. PHILIPPINE NATIONAL BANK, G.R. No. 181178, July 26, 2010)

Seafarer
• Death Benefits

In the present case, Eduardo was repatriated for medical reasons; he arrived in the Philippines on June 17, 1999, to undergo further evaluation and treatment after being diagnosed with advanced mycobacterium tuberculosis, advanced HIV disease, cardiac dysrhythmias, and anemia. Eduardo’s employment was therefore terminated upon his repatriation on June 17, 1999. Thus, when Eduardo died on June 9, 2001, approximately two (2) years after his repatriation, his employment with the respondents had long been terminated. As we held in Prudential Shipping and Management Corporation v. Sta. Rita:

The death of a seaman during the term of employment makes the employer liable to his heirs for death compensation benefits. Once it is established that the seaman died during the effectivity of his employment contract, the employer is liable. However, if the seaman dies after the termination of his contract of employment, his beneficiaries are not entitled to the death benefits enumerated above. [Emphasis supplied.]
(LYDIA ESCARCHA v. LEONIS NAVIGATION CO., INC. and/or WORLD MARINE PANAMA, S.A., G.R. No. 182740, July 5, 2010)

Moreover, there is no evidence to show that Juliano’s illness was acquired during the term of his employment with petitioners. In respondents’ Position Paper, they admitted that Juliano was discharged not because of any illness but due to the expiration of his employment contract. Although they stated that Juliano was hospitalized on August 28, 1999, or five months before his contract expired, they presented no proof to support this allegation. Instead, what respondents presented were the Medical Certificates issued by Dr. Lloren attesting to the fact that on March 6, 2000, Juliano consulted her complaining of abdominal distention. We find this not substantial evidence to prove that Juliano’s illness which caused his death was contracted during the term of his contract. “Indeed, the death of a seaman several months after his repatriation for illness does not necessarily mean that: a) the seaman died of the same illness; b) his working conditions increased the risk of contracting the illness which caused his death; and c) the death is compensable, unless there is some reasonable basis to support otherwise.” In the instant case, Juliano was repatriated not because of any illness but because his contract of employment expired. There is likewise no proof that he contracted his illness during the term of his employment or that his working conditions increased the risk of contracting the illness which caused his death. (MEDLINE MANAGEMENT, INC. and GRECOMAR SHIPPING AGENCY v. GLICERIA ROSLINDA and ARIEL ROSLINDA, G.R. No. 168715, September 15, 2010)

Thus, as we declared in Gau Sheng Phils., Inc. v. Joaquin, Hermogenes v. Oseo Shipping Services, Inc., Prudential Shipping and Management Corporation v. Sta. Rita, Klaveness Maritime Agency, Inc. v. Beneficiaries of Allas, in order to avail of death benefits, the death of the employee should occur during the effectivity of the employment contract. For emphasis, we reiterate that the death of a seaman during the term of employment makes the employer liable to his heirs for death compensation benefits, but if the seaman dies after the termination of his contract of employment, his beneficiaries are not entitled to the death benefits. Federico did not die while he was under the employ of petitioners. His contract of employment ceased when he arrived in the Philippines on March 30, 1998, whereas he died on April 29, 2000. Thus, his beneficiaries are not entitled to the death benefits under the Standard Employment Contract for Seafarers. (SOUTHEASTERN SHIPPING,SOUTHEASTERN SHIPPING GROUP, LTD., G.R. No. 167678, June 22, 2010)

• Occupational Disease

The wording of the section cited above clearly states that for an injury or illness to be compensable under the POEA Standard Employment Contract, it must be work-related. Petitioner has failed to convince this Court that the illness he suffered can be reasonably linked to the performance of his work as 2nd Assistant Engineer on board M/V Chaiten or to prove that it was aggravated during his stint in the vessel. We therefore find that the Court of Appeals correctly affirmed the findings of the NLRC dismissing his appeal for lack of merit. (ARNALDO G. GABUNAS, SR.,v. SCANMAR MARITIME SERVICESSERENO, JJ.INC., G.R. No. 188637, December 15, 2010)

AIDS is not listed as an occupational disease both under the POEA-SEC and the ECC Rules. Thus, the claimant bears the burden of reasonably proving the relationship between the work of the deceased and AIDS, or that the risk of contracting AIDS was increased by the working conditions of the deceased. (LYDIA ESCARCHA v. LEONIS NAVIGATION CO., INC. and/or WORLD MARINE PANAMA, S.A., G.R. No. 182740, July 5, 2010)

• Disability Benefits

Although strict rules of evidence are not applicable in claims for compensation and disability benefits, the Court cannot just disregard the provisions of the POEA SEC. Significantly, a seaman is a contractual and not a regular employee. His employment is contractually fixed for a certain period of time. Petitioner and respondents entered into a contract of employment. It was approved by the POEA on October 25, 2005 and, thus, served as the law between the parties. Undisputedly, Section 20-B of the POEA Amended Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels (POEA-SEC) provides for compensation and benefits for injury or illness suffered by a seafarer. It says that, in order to claim disability benefits under the Standard Employment Contract, it is the ‘company-designated’ physician who must proclaim that the seaman suffered a permanent disability, whether total or partial, due to either injury or illness, during the term of the latter’s employment. In German Marine Agencies, Inc. v. NLRC, the Court’s discussion on the seafarer’s claim for disability benefits is enlightening. Thus:

[In] order to claim disability benefits under the Standard Employment Contract, it is the “company-designated” physician who must proclaim that the seaman suffered a permanent disability, whether total or partial, due to either injury or illness, during the term of the latter’s employment. There is no provision requiring accreditation by the POEA of such physician. In fact, aside from their own gratuitous allegations, petitioners are unable to cite a single provision in the said contract in support of their assertions or to offer any credible evidence to substantiate their claim. If accreditation of the company-designated physician was contemplated by the POEA, it would have expressly provided for such a qualification, by specifically using the term “accreditation” in the Standard Employment Contract, to denote its intention. For instance, under the Labor Code, it is expressly provided that physicians and hospitals providing medical care to an injured or sick employee covered by the Social Security System or the Government Service Insurance System must be accredited by the Employees Compensation Commission. It is a cardinal rule in the interpretation of contracts that if the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulation shall control. There is no ambiguity in the wording of the Standard Employment Contract – the only qualification prescribed for the physician entrusted with the task of assessing the seaman’s disability is that he be ‘company-designated.’ When the language of the contract is explicit, as in the case at bar, leaving no doubt as to the intention of the drafters thereof, the courts may not read into it any other intention that would contradict its plain import. [Emphasis supplied]

In this case, the findings of respondents’ designated physician that petitioner has been suffering from brief psychotic disorder and that it is not work-related must be respected. (EDGARDO M. PANGANIBAN v. TARA TRADING SHIPMANAGEMENT INC.AND SHINLINE SDN BHD, G.R. No. 187032, October 18, 2010)

Specifically with respect to mental diseases, for the same to be compensable, the POEA-SEC requires that it must be due to traumatic injury to the head which did not occur in this case. While disability should be understood less on its medical significance but more on the loss of earning capacity, the appellate court’s sweeping observations that “the hostile working environment and the emotional turmoil suffered by [herein] respondent from his employers caused him mental and emotional stress that led to severe mental disorder and rendered him permanently unable to perform any work,” and that “his working condition increased the risk of sustaining” the illness complained of do not lie. (PHILIPPINE TRANSMARINE CARRIERS, INC., GLOBAL NAVIGATION, LTD., v. SILVINO A. NAZAM G.R. No. 190804,October 11, 2010)

• Permanent Total Disability

In accordance with the avowed policy of the State to give maximum aid and full protection to labor, the Court has applied the Labor Code concept of permanent total disability to Filipino seafarers, it holding that the notion of disability is intimately related to the worker’s capacity to earn, what is compensated being not his injury or illness but his inability to work resulting in the impairment of his earning capacity; hence, disability should be understood less on its medical significance but more on the loss of earning capacity. (RIZALDY M. QUITORIANO v. JEBSENS MARITIME, INC., G.R. No. 179868, January 21, 2010)

• Prescription of Seafarer Money Claims

Based on the foregoing, it is therefore clear that Article 291 is the law governing the prescription of money claims of seafarers, a class of overseas contract workers. This law prevails over Section 28 of the Standard Employment Contract for Seafarers which provides for claims to be brought only within one year from the date of the seafarer’s return to the point of hire. Thus, for the guidance of all, Section 28 of the Standard Employment Contract for Seafarers, insofar as it limits the prescriptive period within which the seafarers may file their money claims, is hereby declared null and void. The applicable provision is Article 291 of the Labor Code, it being more favorable to the seafarers and more in accord with the State’s declared policy to afford full protection to labor. The prescriptive period in the present case is thus three years from the time the cause of action accrues. (SOUTHEASTERN SHIPPING,SOUTHEASTERN SHIPPING GROUP, LTD., G.R. No. 167678, June 22, 2010)

Thus, when petitioner signed his contract with respondent on 22 December 2001, it was the 2000 POEA Standard Employment Contract that was already in effect. Consequently, his action, which was filed on 10 June 2004, was filed within the three year prescription period under the 2000 POEA Standard Employment Contract. Despite having filed his action within the prescriptive period, his action must fail. (ARNALDO G. GABUNAS, SR.,v. SCANMAR MARITIME SERVICES SERENO, JJ.INC., G.R. No. 188637, December 15, 2010)

Security of Tenure of Probationary Employee

Respondent was constructively dismissed and, therefore, illegally dismissed. Although respondent was a probationary employee, he was still entitled to security of tenure. Section 3 (2) Article 13 of the Constitution guarantees the right of all workers to security of tenure. In using the expression “all workers,” the Constitution puts no distinction between a probationary and a permanent or regular employee. This means that probationary employees cannot be dismissed except for cause or for failure to qualify as regular employees. (SHS PERFORATED MATERIALS, INC., WINFRIED HARTMANNSHENN, and HINRICH JOHANN SCHUMACHER v. MANUEL F. DIAZ, G.R. No. 185814, October 13, 2010)

Separation Pay

We are aware that in several instances this Court has awarded separation pay as a measure of social justice. However, the matter of the award of separation pay based on social justice has been clarified in Philippine Long Distance Telephone Company v. National Labor Relations Commission where the Court categorically declared that “separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for cause other than serious misconduct x x x.” Likewise, we ruled in Toyota Motor Philippines Corp. Workers Association (TMPCWA) v. National Labor Relations Commission that in addition to serious misconduct, separation pay should not be conceded to an employee who was dismissed based on willful disobedience. (Equitable PCI Bank (Now Banco De Oro Unibank, Inc.), v. Castor A. Dompor, G.R. Nos. 163293 & 163297, December 8, 2010)

Petitioner’s liability, however, cannot extend to the payment of separation pay. An order to pay separation pay is invested with a punitive character, such that an indirect employer should not be made liable without a finding that it had conspired in the illegal dismissal of the employees. (GOVERNMENT SERVICE INSURANCE SYSTEM v. NATIONAL LABOR RELATIONS COMMISSION (NLRC), ET. Al., G.R. No. 180045, November 17, 2010 )

In other words, under the present jurisprudential framework, the grant of separation pay as a matter of equity to a validly dismissed employee is not contingent on whether the ground for dismissal is expressly under Article 282(a) but whether the ground relied upon is akin to serious misconduct or involves willful or wrongful intent on the part of the employee. (NATIONAL LABOR RELATIONS COMMISSION and AIDA M. QUIJANO v. PHILIPPINE AIRLINES, INC. G.R. No. 123294,October 20, 2010)

Under the circumstances, the grant of separation pay in lieu of reinstatement of the petitioners was proper. It is not disputable that the grant of separation pay or some other financial assistance to an employee is based on equity, which has been defined as justice outside law, or as being ethical rather than jural and as belonging to the sphere of morals than of law. [21] This Court has granted separation pay as a measure of social justice even when an employee has been validly dismissed, as long as the dismissal has not been due to serious misconduct or reflective of personal integrity or morality. (DANILO ESCARIO v. NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 160302, September 27, 2010)

An employee who is illegally dismissed is entitled to the twin reliefs of full backwages and reinstatement. If reinstatement is not viable, separation pay is awarded to the employee. In awarding separation pay to an illegally dismissed employee, in lieu of reinstatement, the amount to be awarded shall be equivalent to one month salary for every year of service. Under Republic Act No. 6715, employees who are illegally dismissed are entitled to full backwages, inclusive of allowances and other benefits, or their monetary equivalent, computed from the time their actual compensation was withheld from them up to the time of their actual reinstatement. But if reinstatement is no longer possible, the backwages shall be computed from the time of their illegal termination up to the finality of the decision. Moreover, respondents, having been compelled to litigate in order to seek redress for their illegal dismissal, are entitled to the award of attorney’s fees equivalent to 10% of the total monetary award. (PICOP RESOURCES, INCORPORATED (PRI), v. ANACLETO L. TAÑECA, G.R. No. 160828, August 9, 2010)

In awarding separation pay to an illegally dismissed employee, in lieu of reinstatement, the amount to be awarded shall be equivalent to one month salary for every year of service reckoned from the first day of employment until the finality of the decision. Payment of separation pay is in addition to payment of backwages. And if separation pay is awarded instead of reinstatement, backwages shall be computed from the time of illegal termination up to the finality of the decision. (AGRICULTURAL AND INDUSTRIAL SUPPLIES CORPORATION,et. al., v. JUEBER P. SIAZAR G.R. No. 177970, August 25, 2010)

In the instant case, this Court rules that an award to respondent of separation pay by way of financial assistance, equivalent to one-half (1/2) month’s pay for every year of service, is equitable. Although respondent’s actions constituted a valid ground to terminate his services, the same is to this Court’s mind not so reprehensible as to warrant complete disregard of his long years of service. It also appears that the same is respondent’s first offense. While it may be expected that petitioners will argue that respondent has only been in their service for four years since the merger of Pharmacia and Upjohn took place in 1996, equity considerations dictate that respondent’s tenure be computed from 1978, the year when respondent started working for Upjohn. (PHARMACIA and UPJOHN, INC. (now PFIZER PHILIPPINES, INC.) v. RICARDO P. ALBAYDA, JR., G.R. No. 172724 August 23, 2010)

An employee who is illegally dismissed is entitled to the twin reliefs of full backwages and reinstatement. If reinstatement is not viable, separation pay is awarded to the employee. In awarding separation pay to an illegally dismissed employee, in lieu of reinstatement, the amount to be awarded shall be equivalent to one month salary for every year of service. Under Republic Act No. 6715, employees who are illegally dismissed are entitled to full backwages, inclusive of allowances and other benefits or their monetary equivalent, computed from the time their actual compensation was withheld from them up to the time of their actual reinstatement but if reinstatement is no longer possible, the backwages shall be computed from the time of their illegal termination up to the finality of the decision. Thus, Casio, et al. are entitled to backwages and separation pay considering that reinstatement is no longer possible because the positions they previously occupied are no longer existing, as declared by GMC. (GENERALMILLING CORPORATION, v. ERNESTO CASIO, et al., G.R. No. 149552, March 10, 2010)

Separation pay, on the other hand, is equivalent to one month pay for every year of service, a fraction of six months to be considered as one whole year. Here that would begin from January 31, 1994 when petitioner Belen began his service. Technically the computation of his separation pay would end on the day he was dismissed on August 20, 1999 when he supposedly ceased to render service and his wages ended. But, since Belen was entitled to collect backwages until the judgment for illegal dismissal in his favor became final, here on September 22, 2008, the computation of his separation pay should also end on that date. (DANIEL P. JAVELLANA , JR.,V. ALBINO BELEN, G.R. No. 181913, ALBINO BELEN V. DANIEL P. JAVELLANA, JR. and JAVELLANA FARMS, INC., G.R. No. 182158, March 5, 2010)

• Separation Pay/Backwages

The awards of separation pay and backwages are not mutually exclusive and both may be given to the respondent. In Nissan North Edsa Balintawak, Quezon City v. Serrano, Jr., the Court held that:

The normal consequences of a finding that an employee has been illegally dismissed are, firstly, that the employee becomes entitled to reinstatement to his former position without loss of seniority rights and, secondly, the payment of backwages corresponding to the period from his illegal dismissal up to actual reinstatement. The statutory intent on this matter is clearly discernible. Reinstatement restores the employee who was unjustly dismissed to the position from which he was removed, that is, to his status quo ante dismissal, while the grant of backwages allows the same employee to recover from the employer that which he had lost by way of wages as a result of his dismissal. These twin remedies —reinstatement and payment of backwages — make the dismissed employee whole who can then look forward to continued employment. Thus, do these two remedies give meaning and substance to the constitutional right of labor to security of tenure. The two forms of relief are distinct and separate, one from the other. Though the grant of reinstatement commonly carries with it an award of backwages, the inappropriateness or non-availability of one does not carry with it the inappropriateness or non-availability of the other. x x x As the term suggests, separation pay is the amount that an employee receives at the time of his severance from the service and x x x is designed to provide the employee with “the wherewithal during the period that he is looking for another employment.” In the instant case, the grant of separation pay was a substitute for immediate and continued re-employment with the private respondent Bank. The grant of separation pay did not redress the injury that is intended to be relieved by the second remedy of backwages, that is, the loss of earnings that would have accrued to the dismissed employee during the period between dismissal and reinstatement. Put a little differently, payment of backwages is a form of relief that restores the income that was lost by reason of unlawful dismissal; separation pay, in contrast, is oriented towards the immediate future, the transitional period the dismissed employee must undergo before locating a replacement job. x x x The grant of separation pay was a proper substitute only for reinstatement; it could not be an adequate substitute both for reinstatement and for backwages. (Emphasis supplied.)

The case is, therefore, remanded to the Labor Arbiter for the purpose of computing the proper monetary award due to the respondent. (CENTURY CANNING CORPORATION, RICARDO T. PO, JR. and AMANCIO C. RONQUILLO v. VICENTE RANDY R. RAMIL, G.R. No. 171630, August 8, 2010)

The basis for the payment of backwages is different from that for the award of separation pay. Separation pay is granted where reinstatement is no longer advisable because of strained relations between the employee and the employer. Backwages represent compensation that should have been earned but were not collected because of the unjust dismissal. The basis for computing backwages is usually the length of the employee’s service while that for separation pay is the actual period when the employee was unlawfully prevented from working. (GOLDEN ACE BUILDERS v. JOSE A. TALDE, G.R. No. 187200 May 5, 2010)
Social Justice

Bitter labor disputes, especially strikes, always generate a throng of odium and abhorrence that sometimes result in unpleasant, although unwanted, consequences. Considering this, the striking employees’ breach of certain restrictions imposed on their concerted actions at their employer’s doorsteps cannot be regarded as so inherently wicked that the employer can totally disregard their long years of service prior to such breach. The records also fail to disclose any past infractions committed by the dismissed Union members. Taking these circumstances in consideration, the Court regards the award of financial assistance to these Union members in the form of one-half month salary for every year of service to the company up to the date of their termination as equitable and reasonable. (C. ALCANTARA & SONS, INC. v. COURT OF APPEALS, et al.,G.R. No. 155109, G.R. No. 155135, G.R. No. 179220, September 29, 2010)

While the Constitution is committed to the policy of social justice and the protection of the working class, it should not be supposed that every labor dispute will be automatically decided in favor of labor. Management also has its rights which are entitled to respect and enforcement in the interest of simple fair play. Out of its concern for those with less privileges in life, the Supreme Court has inclined, more often than not, toward the worker and upheld his cause in his conflicts with the employer. Such favoritism, however, has not blinded the Court to the rule that justice is in every case for the deserving, to be dispensed in the light of the established facts and the applicable law and doctrine. (PHILIPPINE RURAL RECONSTRUCTION MOVEMENT( RRM)v.VIRGILIO E. PULGAR, G.R. No. 169227, July 5, 2010)

Nonetheless, given the attendant circumstances in this case, namely, that Artificio had been working with the company for a period of sixteen (16) years and without any previous derogatory record, the ends of social and compassionate justice would be served if Artificio be given same equitable relief in the form of separation pay. (JOSE P. ARTIFICIO v. NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 172988, July 26, 2010

Strained Relationship

We are in accord with the pronouncement of the CA that the reinstatement of Loreta to her former position is no longer feasible in the light of the strained relations between the parties. Reinstatement, under the circumstances, would no longer be practical as it would not be in the interest of both parties. Under the law and jurisprudence, an illegally dismissed employee is entitled to two reliefs – backwages and reinstatement, which are separate and distinct. If reinstatement would only exacerbate the tension and further ruin the relations of the employer and the employee, or if their relationship has been unduly strained due to irreconcilable differences, particularly where the illegally dismissed employee held a managerial or key position in the company, it would be prudent to order payment of separation pay instead of reinstatement. In the case of Golden Ace Builders v. Talde, We wrote:
Under the doctrine of strained relations, the payment of separation pay has been considered an acceptable alternative to reinstatement when the latter option is no longer desirable or viable. On the one hand, such payment liberates the employee from what could be a highly oppressive work environment. On the other, the payment releases the employer from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer trust.

(WENSHA SPA CENTER, INC. v. LORETA T. YUNG, G.R. No. 185122,
August 16, 2010)

The Court has held that, under Article 279 of the Labor Code, separation pay may be awarded to an illegally dismissed employee in lieu of reinstatement when continued employment is no longer possible where, as in this case, the continued relationship between the employer and the employee is no longer viable due to strained relations between them and reinstatement appears no longer practical due to the length of time that had since passed. (AGRICULTURAL AND INDUSTRIAL SUPPLIES CORPORATION,et. al., v. JUEBER P. SIAZAR G.R. No. 177970, August 25, 2010)

Strike
• Dismissal of Union Officers

In the present case, respondents Erlinda Vazquez, Ricardo Sacristan, Leonida Catalan, Maximo Pedro, Nathaniela Dimaculangan, Rodolfo Mojico, Romeo Caramanza, Reynaldo Ganitano, Alberto Basconcillo, and Ramon Falcis stand to be dismissed as participating union officers, pursuant to Article 264(a), paragraph 3, of the Labor Code. This provision imposes the penalty of dismissal on “any union officer who knowingly participates in an illegal strike.” The law grants the employer the option of declaring a union officer who participated in an illegal strike as having lost his employment. (PHIMCO INDUSTRIES, INC. v. PHIMCO INDUSTRIES LABOR ASSOCIATION (PILA), et al,G.R. No. 170830, August 11, 2010)
• Consequence of Illegal Strike

Contemplating two causes for the dismissal of an employee, that is: (a) unlawful lockout; and (b) participation in an illegal strike, the third paragraph of Article 264(a) authorizes the award of full backwages only when the termination of employment is a consequence of an unlawful lockout. On the consequences of an illegal strike, the provision distinguishes between a union officer and a union member participating in an illegal strike. A union officer who knowingly participates in an illegal strike is deemed to have lost his employment status, but a union member who is merely instigated or induced to participate in the illegal strike is more benignly treated. Part of the explanation for the benign consideration for the union member is the policy of reinstating rank-and-file workers who are misled into supporting illegal strikes, absent any finding that such workers committed illegal acts during the period of the illegal strikes. (DANILO ESCARIO v. NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 160302, September 27, 2010)

As regards the rank and file Union members, Article 264 of the Labor Code provides that termination from employment is not warranted by the mere fact that a union member has taken part in an illegal strike. It must be shown that such a union member, clearly identified, performed an illegal act or acts during the strike. (C. ALCANTARA & SONS, INC. v. COURT OF APPEALS, et al.,G.R. No. 155109, G.R. No. 155135, G.R. No. 179220, September 29, 2010)

We explained in Samahang Manggagawa sa Sulpicio Lines, Inc.-NAFLU v. Sulpicio Lines, Inc. that the effects of illegal strikes, outlined in Article 264 of the Labor Code, make a distinction between participating workers and union officers. The services of an ordinary striking worker cannot be terminated for mere participation in an illegal strike; proof must be adduced showing that he or she committed illegal acts during the strike. The services of a participating union officer, on the other hand, may be terminated, not only when he actually commits an illegal act during a strike, but also if he knowingly participates in an illegal strike. (PHIMCO INDUSTRIES, INC. v. PHIMCO INDUSTRIES LABOR ASSOCIATION (PILA), et al,G.R. No. 170830, August 11, 2010)

• Requisites of a Valid Strike

Since strikes affect not only the relationship between labor and management but also the general peace and progress of the community, the law has provided limitations on the right to strike. Procedurally, for a strike to be valid, it must comply with Article 263 of the Labor Code, which requires that: (a) a notice of strike be filed with the Department of Labor and Employment (DOLE) 30 days before the intended date thereof, or 15 days in case of unfair labor practice; (b) a strike vote be approved by a majority of the total union membership in the bargaining unit concerned, obtained by secret ballot in a meeting called for that purpose; and (c) a notice be given to the DOLE of the results of the voting at least seven days before the intended strike. (PHIMCO INDUSTRIES, INC. v. PHIMCO INDUSTRIES LABOR ASSOCIATION (PILA), et al,G.R. No. 170830, August 11, 2010)

• Picketing

To strike is to withhold or to stop work by the concerted action of employees as a result of an industrial or labor dispute. The work stoppage may be accompanied by picketing by the striking employees outside of the company compound. While a strike focuses on stoppage of work, picketing focuses on publicizing the labor dispute and its incidents to inform the public of what is happening in the company struck against. A picket simply means to march to and from the employer’s premises, usually accompanied by the display of placards and other signs making known the facts involved in a labor dispute. It is a strike activity separate and different from the actual stoppage of work. (PHIMCO INDUSTRIES, INC. v. PHIMCO INDUSTRIES LABOR ASSOCIATION (PILA), et al,G.R. No. 170830, August 11, 2010)

• Prohibited Activities

With a virtual human blockade and real physical obstructions (benches and makeshift structures both outside and inside the gates), it was pure conjecture on the part of the NLRC to say that “[t]he non-strikers and their vehicles were x x x free to get in and out of the company compound undisturbed by the picket line.” Notably, aside from non-strikers who wished to report for work, company vehicles likewise could not enter and get out of the factory because of the picket and the physical obstructions the respondents installed. The blockade went to the point of causing the build up of traffic in the immediate vicinity of the strike area, as shown by photographs. This, by itself, renders the picket a prohibited activity. Pickets may not aggressively interfere with the right of peaceful ingress to and egress from the employer’s shop or obstruct public thoroughfares; picketing is not peaceful where the sidewalk or entrance to a place of business is obstructed by picketers parading around in a circle or lying on the sidewalk. (PHIMCO INDUSTRIES, INC. v. PHIMCO INDUSTRIES LABOR ASSOCIATION (PILA), et al,G.R. No. 170830, August 11, 2010)

Termination of Employment
Just Causes
• Serious Misconduct

It is noteworthy that prior to this incident, there had been several cases of theft and vandalism involving both respondent company’s property and personal belongings of other employees. In order to address this issue of losses, respondent company issued two memoranda implementing an intensive inspection procedure and reminding all employees that those who will be caught stealing and performing acts of vandalism will be dealt with in accordance with the company’s Code of Conduct. Despite these reminders, Helen took the packing tape and was caught during the routine inspection. All these circumstances point to the conclusion that it was not just an error of judgment on the part of Helen, but a deliberate act of theft of company property. (NAGKAKAISANG LAKAS NG MANGGAGAWA SA KEIHIN (NLMK-OLALIA-KMU) and HELEN VALENZUELA v. KEIHIN PHILIPPINES CORPORATION, G.R. No. 171115, August 9, 2010)

Respondent’s acts constitute serious misconduct which is a just cause for termination under the law. Theft committed by an employee is a valid reason for his dismissal by the employer. Although as a rule this Court leans over backwards to help workers and employees continue with their employment or to mitigate the penalties imposed on them, acts of dishonesty in the handling of company property, petitioner’s income in this case, are a different matter. (MARIBAGO BLUEWATER BEACH RESORT, INC. v. NITO DUAL, G.R. No. 180660, July 20, 2010)

Withal, the law, in protecting the rights of the laborers, authorizes neither oppression nor self-destruction of the employer. While the Constitution is committed to the policy of social justice and the protection of the working class, it should not be supposed that every labor dispute will be automatically decided in favor of labor. The management also has its own rights, as such, are entitled to respect and enforcement in the interest of simple fair play. Out of its concern for those with less privileges in life, the Supreme Court has inclined more often than not toward the worker and upheld his cause in his conflicts with the employer. Such favoritism, however, has not blinded the Court to the rule that justice is in every case for the deserving, to be dispensed in the light of the established facts and applicable law and doctrine. (MARIBAGO BLUEWATER BEACH RESORT, INC. v. NITO DUAL, G.R. No. 180660, July 20, 2010)

In other words, in order to constitute serious misconduct which will warrant the dismissal of an employee under paragraph (a) of Article 282 of the Labor Code, it is not sufficient that the act or conduct complained of has violated some established rules or policies. It is equally important and required that the act or conduct must have been performed with wrongful intent. In the instant case, petitioners-employees of Promm-Gem may have committed an error of judgment in claiming to be employees of P&G, but it cannot be said that they were motivated by any wrongful intent in doing so. As such, we find them guilty of only simple misconduct for assailing the integrity of Promm-Gem as a legitimate and independent promotion firm. A misconduct which is not serious or grave, as that existing in the instant case, cannot be a valid basis for dismissing an employee. (JOEB M. ALIVIADO, et al. v. PROCTER & GAMBLE PHILS., INC.,and PROMM-GEM INC., G.R. No. 160506, March 9, 2010)

Based on these considerations, we can only conclude that Lado has become unfit to remain in employment with the petitioner. When he disregarded Manalo’s note, Lado violated company procedures, laying the company open to the possibility of loss. This is already serious misconduct for which he should be held accountable. When he failed to unload despite the clear obligation to do so, he consummated his end of the deal that would have led to the loss of company property and thereby violated his fiduciary duty as custodian of company property. (BIBIANA FARMS AND MILLS, INC v. ARTURO LADO, G.R. No. 157861, February 2, 2010)

Considering these findings, it is clear that Agad committed a serious infraction amounting to theft of company property. This act is akin to a or willful disobedience by the employee of the lawful orders of his employer in connection with his work, a just cause for termination of employment recognized under Article 282(a) of the Labor Code.

Misconduct has been defined as a transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment. To be serious, the misconduct must be of such grave and aggravated character. (CALTEX (PHILIPPINES), INC., v. HERMIE G. AGAD, G.R. No. 162017, April 23, 2010)

• Willful Disobedience

As a just cause for dismissal of an employee under Article 282 of the Labor Code, willful disobedience of the employer’s lawful orders requires the concurrence of two elements: (1) the employee’s assailed conduct must have been willful, i.e., characterized by a wrongful and perverse attitude; and (2) the order violated must have been reasonable, lawful, made known to the employee, and must pertain to the duties which he had been engaged to discharge. Both requisites are present in the instant case. It is noteworthy that upon receipt of the notice of suspension, petitioner did not question such order at the first instance. He immediately defied the order by reporting on the first day of his suspension. Deliberate disregard or disobedience of rules by the employee cannot be countenanced. It may encourage him to do even worse and will render a mockery of the rules of discipline that employees are required to observe. (JIMMY ARENO, JR., v. SKYCABLE PCC-BAGUIO, G.R. No. 180302, February 5, 2010)

As a just cause for dismissal of an employee under Article 282 of the Labor Code, willful disobedience of the employer’s lawful orders requires the concurrence of two elements: (1) the employee’s assailed conduct must have been willful, i.e., characterized by a wrongful and perverse attitude; and (2) the order violated must have been reasonable, lawful, made known to the employee, and must pertain to the duties which he had been engaged to discharge. Both requisites are present in the instant case. It is noteworthy that upon receipt of the notice of suspension, petitioner did not question such order at the first instance. He immediately defied the order by reporting on the first day of his suspension. Deliberate disregard or disobedience of rules by the employee cannot be countenanced. It may encourage him to do even worse and will render a mockery of the rules of discipline that employees are required to observe. (JIMMY ARENO, JR., v. SKYCABLE PCC-BAGUIO, G.R. No. 180302, February 5, 2010)
• Gross and Habitual Neglect of Duty

It is significant that petitioner did not even deny that it was he who signed, approved and facilitated the subject transactions relating to the various abstractions committed by a bank employee. It was an implied admission that he was the one who opened the door for the commission of the unlawful abstractions by failing to ensure that all requirements for the opening of accounts were complied with. This constituted gross negligence. (JESUS E. DYCOCO, JR. v. EQUITABLE PCI BANK (NOW BANCO DE ORO) , G.R. No. 188271,August 16, 2010)

Under Article 282 (b) of the Labor Code, an employer may terminate an employee for gross and habitual neglect of duties. Neglect of duty, to be a ground for dismissal, must be both gross and habitual. Gross negligence connotes want of care in the performance of one’s duties. Habitual neglect implies repeated failure to perform one’s duties for a period of time, depending upon the circumstances. A single or isolated act of negligence does not constitute a just cause for the dismissal of the employee. Under the prevailing circumstances, respondent exercised his best judgment in monitoring the CCTV cameras so as to ensure the security within the hospital premises. Verily, assuming arguendo that respondent was negligent, although this Court finds otherwise, the lapse or inaction could only be regarded as a single or isolated act of negligence that cannot be categorized as habitual and, hence, not a just cause for his dismissal. (ST. LUKE’S MEDICAL CENTER, INC v. ESTRELITO NOTARIO, G.R. No. 152166, October 20, 2010)

• Loss of Trust and Confidence

With respect to the third issue, while We have previously held that employers are allowed a wider latitude of discretion in terminating the services of employees who perform functions which by their nature require the employers’ full trust and confidence and the mere existence of basis for believing that the employee has breached the trust of the employer is sufficient, this does not mean that the said basis may be arbitrary and unfounded. (CENTURY CANNING CORPORATION, RICARDO T. PO, JR. and AMANCIO C. RONQUILLO v. VICENTE RANDY R. RAMIL, G.R. No. 171630, August 8, 2010)

We cannot give credence to petitioner’s claim that the Labor Arbiter and the NLRC decided his case purely on the basis of respondent’s evidence. A perusal of petitioner’s own pleadings and evidence readily showed his admission that he personally processed the two Certificates of Time Deposit (CTDs) at issue, despite his knowledge that they were unfunded. In fact, he admittedly issued them even before he received the purported manager’s checks that would fund the time deposits and, again by his own allegation, he had to cancel the CTDs when the promised checks were not delivered to him at the appointed time. To be sure, it is incomprehensible why petitioner was so eager to issue the CTDs (which may be used as evidence of the existence of time deposits in the names of petitioner’s clients for the total amount of P538,360,000.00) on the mere verbal representations of the clients and the expedient of being shown a passbook from a different bank. We hardly find it believable that petitioner was, as he averred, motivated by a noble desire to generate more business for the respondent bank. If he truly had the bank’s best interests at heart, with more reason that he would exercise caution before issuing CTDs for enormous amounts by waiting for the funds to be actually deposited instead of exposing his employer to great risk. The fact that petitioner had the unfunded CTDs eventually cancelled is of no moment. He should have never issued those CTDs in the first place since, through those documents, he was in effect certifying the existence of time deposits in his branch that were actually fictitious. Thus, it can be said that his obvious laxity or negligence in the issuance of the said CTDs was even tainted with dishonesty. We can come to no other conclusion but that respondent bank was justified in terminating petitioner’s employment on the ground of loss of trust and confidence. (LEANDRO M. ALCANTARA v. THE PHILIPPINE COMMERCIAL AND INTERNATIONAL BANK ,G.R. No. 151349, October 20, 2010)

After committing gross negligence, petitioner surprisingly still expects respondent bank to retain him. Nothing can compel an employer to continue availing of the services of an employee guilty of acts inimical to its interests as this is a ground for loss of confidence. Petitioner’s breach of respondent bank’s policies intended to safeguard the bank and its clients’ funds was clearly inimical to the interests of his employer. Loss of confidence and dismissal from employment were therefore justified. (JESUS E. DYCOCO, JR. v. EQUITABLE PCI BANK (NOW BANCO DE ORO), G.R. No. 188271, August 16, 2010)

Further, Agad’s conduct constitutes willful breach of the trust reposed in him, another just cause for termination of employment recognized under Article 282(c) of the Labor Code. Loss of trust and confidence, as a just cause for termination of employment, is premised on the fact that the employee concerned holds a position of responsibility, trust and confidence. The employee must be invested with confidence on delicate matters, such as the custody, handling, care and protection of the employer’s property and funds.

As a superintendent, Agad occupied a position tasked to perform key and sensitive functions which necessarily involved the custody and protection of Caltex’s properties. Consequently, Agad comes within the purview of the trust and confidence rule. (CALTEX (PHILIPPINES), INC., v. HERMIE G. AGAD, G.R. No. 162017, April 23, 2010)

Authorized Causes
• Cessation of Business Operation

The Court is not impressed with the claim that actual severe financial losses exempt MMC from paying separation benefits to complainants. In the first place, MMC did not appeal the decision of the Court of Appeals which affirmed the NLRC’s award of separation pay to complainants. MMC’s failure had the effect of making the awards final so that MMC could no longer seek any other affirmative relief. In the second place, the non-issuance of a permit forced MMC to permanently cease its business operations, as confirmed by the Court of Appeals. Under Article 283, the employer can lawfully close shop anytime as long as cessation of or withdrawal from business operations is bona fide in character and not impelled by a motive to defeat or circumvent the tenurial rights of employees, and as long as he pays his employees their termination pay in the amount corresponding to their length of service. The cessation of operations, in the case at bar is of such nature. It was proven that MMC stopped its operations precisely due to failure to secure permit to operate a tailings pond. Separation pay must nonetheless be given to the separated employees. (MANILA MINING CORP. EMPLOYEES ASSOCIATION-FEDERATION OF FREE WORKERS CHAPTER, SAMUEL G. ZUÑIGA, in his capacity as President v. MANILA MINING CORP., et. al., G.R. Nos. 178222-23, September 29, 2010)

Furthermore, petitioner cannot use the argument that it is suffering from financial losses to claim exemption from the coverage of the law on 13th-month pay, or to spare it from its erroneous unilateral computation of the 13th (CENTRAL AZUCARERA DE TARLAC DECISION v. CENTRAL AZUCARERA DE TARLAC LABOR UNION-NLU, G.R. No. 188949, July 26, 2010)

• Redundancy

Del Villar’s poor employee performance is irrelevant as regards the issue on redundancy. Redundancy arises because there is no more need for the employee’s position in relation to the whole business organization, and not because the employee unsatisfactorily performed the duties and responsibilities required by his position. (COCA-COLA BOTTLERS PHILIPPINES, INC v. ANGEL U. DEL VILLAR, G.R. No. 163091, October 6, 2010)

In this case, there is no proof that the essential requisites for a valid redundancy program as a ground for the termination of the employment of respondent are present. There was no showing that the function of respondent is superfluous or that the business was suffering from a serious downturn that would warrant redundancy considering that such serious business downturn was the ground cited by petitioners in the termination letter sent to respondent. (LAMBERT PAWNBROKERS and JEWELRY CORPORATION and LAMBERT LIM v. HELEN BINAMIRA, G.R. No. 170464, July 12, 2010)
• Retrenchment

Respondent, in any of the pleadings filed by him, never refuted the foregoing facts. Respondent’s argument that he was singled out for termination as allegedly shown in petitioner’s monthly termination report for the month of July 1997 filed with the DOLE does not persuade this Court. Standing alone, this document is not proof of the total number of retrenched employees or that respondent was the only one retrenched. It merely serves as notice to DOLE of the names of employees terminated/ retrenched only for the month of July. In other words, it cannot be deemed as an evidence of the number of employees affected by the retrenchment program. Thus we cannot conclude that no other employees were previously retrenched. (SHIMIZU PHILS. CONTRACTORS, INC. v. VIRGILIO P. CALLANTA, G.R. No. 165923, September 29, 2010)

Fourth. TSFI resorted to other measures to abate its losses. It claimed that during the crises period, it used as an office a small-room (a mere cubicle) with only a two-person support staff in the persons of Grapilon and Hermle; it reduced the salaries of its employees by as much as 30%. This submission by the company is substantiated by the schedule of Operating Expenses for the year ended December 31, 2002 and September 30, 2002. A quick glance at the schedule readily shows a reduction of TSFI’s operating expenses across the board. The schedule indicates a substantial decrease in the operating expenses, from P5,733,735.00 in September 2002 to P1,698,552.36 as of the end of December 2002.
On the whole, we find that TSFI satisfied the requisites for a valid retrenchment. (FRANCIS RAY TALAM V. NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 175040, April 6, 2010)

Types of Employees

• Field Personnel

It bears emphasis that under P.D. 851 or the SIL Law, the exclusion from its coverage of workers who are paid on a purely commission basis is only with respect to field personnel. The more recent case of Auto Bus Transport Systems, Inc., v. Bautista clarifies that an employee who is paid on purely commission basis is entitled to SIL:

A careful perusal of said provisions of law will result in the conclusion that the grant of service incentive leave has been delimited by the Implementing Rules and Regulations of the Labor Code to apply only to those employees not explicitly excluded by Section 1 of Rule V. According to the Implementing Rules, Service Incentive Leave shall not apply to employees classified as “field personnel.” The phrase “other employees whose performance is unsupervised by the employer” must not be understood as a separate classification of employees to which service incentive leave shall not be granted. Rather, it serves as an amplification of the interpretation of the definition of field personnel under the Labor Code as those “whose actual hours of work in the field cannot be determined with reasonable certainty.”

The same is true with respect to the phrase “those who are engaged on task or contract basis, purely commission basis.” Said phrase should be related with “field personnel,” applying the rule on ejusdem generis that general and unlimited terms are restrained and limited by the particular terms that they follow. Hence, employees engaged on task or contract basis or paid on purely commission basis are not automatically exempted from the grant of service incentive leave, unless, they fall under the classification of field personnel.
x x x x

According to Article 82 of the Labor Code, “field personnel” shall refer to non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. This definition is further elaborated in the Bureau of Working Conditions (BWC), Advisory Opinion to Philippine Technical-Clerical Commercial Employees Association which states that:

As a general rule, [field personnel] are those whose performance of their job/service is not supervised by the employer or his representative, the workplace being away from the principal office and whose hours and days of work cannot be determined with reasonable certainty; hence, they are paid specific amount for rendering specific service or performing specific work. If required to be at specific places at specific times, employees including drivers cannot be said to be field personnel despite the fact that they are performing work away from the principal office of the employee.
x x x x (emphasis, italics and underscoring supplied)

(RODOLFO J. SERRANO v. SEVERINO SANTOS TRANSIT G.R. No. 187698, August 9, 2010)

• Project Employee

A project employee is assigned to a project which begins and ends at determined or determinable times. Employees who work under different project employment contracts for several years do not automatically become regular employees; they can remain as project employees regardless of the number of years they work. Length of service is not a controlling factor in determining the nature of one’s employment. Their rehiring is only a natural consequence of the fact that experienced construction workers are preferred. In fact, employees who are members of a “work pool” from which a company draws workers for deployment to its different projects do not become regular employees by reason of that fact alone. The Court has consistently held that members of a “work pool” can either be project employees or regular employees. (JUDY O. DACUITAL , et. al. v. L.M. CAMUS ENGINEERING CORPORATION and/or LUIS M. CAMUS, G.R. No. 176748, September 1, 2010)

But the test for distinguishing a “project employee” from a “regular employee” is whether or not he has been assigned to carry out a “specific project or undertaking,” with the duration and scope of his engagement specified at the time his service is contracted. Here, it is not disputed that petitioner company contracted respondent Trinidad’s service by specific projects with the duration of his work clearly set out in his employment contracts. He remained a project employee regardless of the number of years and the various projects he worked for the company. (WILLIAM UY CONSTRUCTION CORP. and/or TERESITA UY and WILLIAM UY V. JORGE R. TRINIDAD, G.R. No. 183250, March 10, 2010)

• Regular Employee

Assuming arguendo that petitioner hired respondent initially on a per project basis, his continued rehiring, as shown by the sample payrolls converted his status to that of a regular employee. Following Cocomangas Beach Hotel Resort v. Visca, the repeated and continuing need for respondent’s services is sufficient evidence of the necessity, if not indispensability, of his services to petitioner’s business and, as a regular employee, he could only be dismissed from employment for a just or authorized cause. (MILLENNIUM ERECTORS CORPORATION v. VIRGILIO MAGALLANES, G.R. No. 184362, November 15, 2010)

The primary standard of determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. In this case, the connection is obvious when we consider the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety. Finally, the repeated and continuing need for the performance of the job is sufficient evidence of the necessity, if not indispensability of the activity to the business. (MANILA WATER COMPANY, INC. v. JOSE J. DALUMPINES, G.R. No. 175501, October 4, 2010)

Quitclaims

The Receipt and Quitclaim executed by respondent lacks the elements of voluntariness and free will and, therefore, does not absolve petitioners from liability in paying him the sickness wages and other monetary claims. (VARORIENT SHIPPING CO., INC., and.,d ARIA MARITIME CO., LTD v. GIL A. FLORES, G.R. No. 161934, October 6, 2010)

A perusal of the provisions of the Receipt and Quitclaim shows that respondent would be releasing and discharging petitioners from all claims, demands, causes of action, and the like in an all-encompassing manner, including the fact that he had not contracted or suffered any illness or injury in the course of his employment and that he was discharged in good and perfect health. These stipulations clearly placed respondent in a disadvantageous position vis-á-vis the petitioners. (VARORIENT SHIPPING CO., INC., and.,d ARIA MARITIME CO., LTD v. GIL A. FLORES, G.R. No. 161934, October 6, 2010)

First, the contents of the quitclaim documents that have been signed by the respondents are simple, clear and unequivocal. The records of the case are bereft of any substantial evidence to show that respondents did not know that they were relinquishing their right short of what they had expected to receive and contrary to what they have so declared. Put differently, at the time they were signing their quitclaims, respondents honestly believed that the amounts received by them were fair and reasonable settlements of the amounts which they would have received had they refused to voluntarily resign from the said company. (GOODRICH MANUFACTURING CORPORATION & MR. NILO CHUA GOY v. EMERLINA ATIVO ET. Al, G.R. No. 188002, February 1, 2010)

Given the release and quitclaim, we do not see how TSFI can be made to answer for failure to afford Talam procedural due process. The release and quitclaim, to our mind, erased whatever infirmities there might have been in the notice of termination as Talam had already voluntarily accepted his dismissal through the release and quitclaim. With this acceptance, the written notice became academic; the notice, after all, is merely a protective measure put in place by law and serves no useful purpose after protection has been assured. We thus find no basis for the conclusion that TSFI violated procedural due process and should pay nominal damages. (FRANCIS RAY TALAM V. NATIONAL LABOR RELATIONS COMMISSION, G.R. No.175040, April 6, 2010)

Teachers’ Employment on Probationary Status

A reality we have to face in the consideration of employment on probationary status of teaching personnel is that they are not governed purely by the Labor Code. The Labor Code is supplemented with respect to the period of probation by special rules found in the Manual of Regulations for Private Schools. On the matter of probationary period, Section 92 of these regulations provides:

Section 92. Probationary Period. – Subject in all instances to compliance with the Department and school requirements, the probationary period for academic personnel shall not be more than three (3) consecutive years of satisfactory service for those in the elementary and secondary levels, six (6) consecutive regular semesters of satisfactory service for those in the tertiary level, and nine (9) consecutive trimesters of satisfactory service for those in the tertiary level where collegiate courses are offered on a trimester basis. [Emphasis supplied] (YOLANDA M. MERCADO et al. v. AMA COMPUTER COLLEGE, G.R. No. 183572, April 13, 2010)

• Rule on Probationary Status
and Fixed-term Employment of Teachers

Given the clear constitutional and statutory intents, we cannot but conclude that in a situation where the probationary status overlaps with a fixed-term contract not specifically used for the fixed term it offers, Article 281 should assume primacy and the fixed-period character of the contract must give way. This conclusion is immeasurably strengthened by the petitioners’ and the AMACC’s hardly concealed expectation that the employment on probation could lead to permanent status, and that the contracts are renewable unless the petitioners fail to pass the school’s standards.

To highlight what we mean by a fixed-term contract specifically used for the fixed term it offers, a replacement teacher, for example, may be contracted for a period of one year to temporarily take the place of a permanent teacher on a one-year study leave. The expiration of the replacement teacher’s contracted term, under the circumstances, leads to no probationary status implications as she was never employed on probationary basis; her employment is for a specific purpose with particular focus on the term and with every intent to end her teaching relationship with the school upon expiration of this term.

If the school were to apply the probationary standards (as in fact it says it did in the present case), these standards must not only be reasonable but must have also been communicated to the teachers at the start of the probationary period, or at the very least, at the start of the period when they were to be applied. These terms, in addition to those expressly provided by the Labor Code, would serve as the just cause for the termination of the probationary contract. As explained above, the details of this finding of just cause must be communicated to the affected teachers as a matter of due process. (YOLANDA M. MERCADO et al. v. AMA COMPUTER COLLEGE, G.R. No. 183572, April 13, 2010)

Thirteenth Month Pay

The argument of petitioner that the grant of the benefit was not voluntary and was due to error in the interpretation of what is included in the basic salary deserves scant consideration. No doubtful or difficult question of law is involved in this case. The guidelines set by the law are not difficult to decipher. The voluntariness of the grant of the benefit was manifested by the number of years the employer had paid the benefit to its employees. Petitioner only changed the formula in the computation of the 13th-month pay after almost 30 years and only after the dispute between the management and employees erupted. This act of petitioner in changing the formula at this time cannot be sanctioned, as it indicates a badge of bad faith. (CENTRAL AZUCARERA DE TARLAC DECISION v. CENTRAL AZUCARERA DE TARLAC LABOR UNION-NLU, G.R. No. 188949, July 26, 2010)
Transfer

This Court has long stated that the objection to the transfer being grounded solely upon the personal inconvenience or hardship that will be caused to the employee by reason of the transfer is not a valid reason to disobey an order of transfer. Such being the case, respondent cannot adamantly refuse to abide by the order of transfer without exposing himself to the risk of being dismissed. Hence, his dismissal was for just cause in accordance with Article 282(a) of the Labor Code. (PHARMACIA and UPJOHN, INC. (now PFIZER PHILIPPINES, INC.) V. RICARDO P. ALBAYDA, JR., G.R. No. 172724 August 23, 2010)

Transfer of Ownership

On this ground, petitioner terminated the employment of respondents. However, what petitioner apparently made was a transfer of ownership. It is true that, as invoked by petitioner, in Manlimos, et al. v. NLRC, et al., we held that a change of ownership in a business concern is not proscribed by law. Lest petitioner forget, however, we also held therein that the sale or disposition must be motivated by good faith as a condition for exemption from liability. Thus, where the charge of ownership is done in bad faith, or is used to defeat the rights of labor, the successor-employer is deemed to have absorbed the employees and is held liable for the transgressions of his or her predecessor. (PEÑAFRANCIA TOURS AND TRAVEL TRANSPORT, INC., v. JOSELITO P. SARMIENTO and RICARDO S. CATIMBANG, G.R. No. 178397, October 20, 2010)

Unfair Labor Practice

This is the reason why it is axiomatic in labor relations that a CBA entered into by a legitimate labor organization that has been duly certified as the exclusive bargaining representative and the employer becomes the law between them. Additionally, in the Certificate of Registration issued by the DOLE, it is specified that the registered CBA serves as the covenant between the parties and has the force and effect of law between them during the period of its duration. Compliance with the terms and conditions of the CBA is mandated by express policy of the law primarily to afford protection to labor and to promote industrial peace. Thus, when a valid and binding CBA had been entered into by the workers and the employer, the latter is behooved to observe the terms and conditions thereof bearing on union dues and representation. If the employer grossly violates its CBA with the duly recognized union, the former may be held administratively and criminally liable for unfair labor practice. ( EMPLOYEES UNION OF BAYER PHILS.,v. BAYER PHILIPPINES, INC., G.R. No. 162943, December 6, 2010)

For a charge of unfair labor practice to prosper, it must be shown that CAB was motivated by ill will, “bad faith, or fraud, or was oppressive to labor, or done in a manner contrary to morals, good customs, or public policy, and, of course, that social humiliation, wounded feelings or grave anxiety resulted x x x” in suspending negotiations with CABEU-NFL. Notably, CAB believed that CABEU-NFL was no longer the representative of the workers. It just wanted to foster industrial peace by bowing to the wishes of the overwhelming majority of its rank and file workers and by negotiating and concluding in good faith a CBA with CABELA.” Such actions of CAB are nowhere tantamount to anti-unionism, the evil sought to be punished in cases of unfair labor practices. (CENTRAL AZUCARERA DE BAIS EMPLOYEES UNION-NFL [CABEU-NFL] v. CENTRAL AZUCARERA DE BAIS, INC. [CAB], G.R. No. 186605, November 17, 2010)

Unionism

In the case at bar, since the former FEBTC employees are deemed covered by the Union Shop Clause, they are required to join the certified bargaining agent, which supposedly has gathered the support of the majority of workers within the bargaining unit in the appropriate certification proceeding. Their joining the certified union would, in fact, be in the best interests of the former FEBTC employees for it unites their interests with the majority of employees in the bargaining unit. It encourages employee solidarity and affords sufficient protection to the majority status of the union during the life of the CBA which are the precisely the objectives of union security clauses, such as the Union Shop Clause involved herein. We are indeed not being called to balance the interests of individual employees as against the State policy of promoting unionism, since the employees, who were parties in the court below, no longer contested the adverse Court of Appeals’ decision. Nonetheless, settled jurisprudence has already swung the balance in favor of unionism, in recognition that ultimately the individual employee will be benefited by that policy. In the hierarchy of constitutional values, this Court has repeatedly held that the right to abstain from joining a labor organization is subordinate to the policy of encouraging unionism as an instrument of social justice. (BANK OF THE PHILIPPINE ISLANDS v. BPI EMPLOYEES UNION-DAVAO CHAPTER-FEDERATION OF UNIONS IN BPI UNIBANK, G.R. No. 164301, August 10, 2010)
• Union Security and Closed Shop

“Union security” is a generic term which is applied to and comprehends “closed shop,” “union shop,” “maintenance of membership” or any other form of agreement which imposes upon employees the obligation to acquire or retain union membership as a condition affecting employment. There is union shop when all new regular employees are required to join the union within a certain period for their continued employment. There is maintenance of membership shop when employees, who are union members as of the effective date of the agreement, or who thereafter become members, must maintain union membership as a condition for continued employment until they are promoted or transferred out of the bargaining unit or the agreement is terminated. A closed-shop, on the other hand, may be defined as an enterprise in which, by agreement between the employer and his employees or their representatives, no person may be employed in any or certain agreed departments of the enterprise unless he or she is, becomes, and, for the duration of the agreement, remains a member in good standing of a union entirely comprised of or of which the employees in interest are a part. (BANK OF THE PHILIPPINE ISLANDS v. BPI EMPLOYEES UNION-DAVAO CHAPTER-FEDERATION OF UNIONS IN BPI UNIBANK, G.R. No. 164301, August 10, 2010)

• Employees not covered by Union Shop Clause

All employees in the bargaining unit covered by a Union Shop Clause in their CBA with management are subject to its terms. However, under law and jurisprudence, the following kinds of employees are exempted from its coverage, namely, employees who at the time the union shop agreement takes effect are bona fide members of a religious organization which prohibits its members from joining labor unions on religious grounds; employees already in the service and already members of a union other than the majority at the time the union shop agreement took effect; confidential employees who are excluded from the rank and file bargaining unit; and employees excluded from the union shop by express terms of the agreement. (BANK OF THE PHILIPPINE ISLANDS v. BPI EMPLOYEES UNION-DAVAO CHAPTER-FEDERATION OF UNIONS IN BPI UNIBANK, G.R. No. 164301, August 10, 2010)

• Termination of Union Officers

Three. Since the Union’s strike has been declared illegal, the Union officers can, in accordance with law be terminated from employment for their actions. This includes the shop stewards. They cannot be shielded from the coverage of Article 264 of the Labor Code since the Union appointed them as such and placed them in positions of leadership and power over the men in their respective work units. (C. ALCANTARA & SONS, INC. v. COURT OF APPEALS, et al.,G.R. No. 155109, G.R. No. 155135, G.R. No. 179220, September 29, 2010)
Withholding of Salary

Management prerogative refers “to the right of an employer to regulate all aspects of employment, such as the freedom to prescribe work assignments, working methods, processes to be followed, regulation regarding transfer of employees, supervision of their work, lay-off and discipline, and dismissal and recall of work.” Although management prerogative refers to “the right to regulate all aspects of employment,” it cannot be understood to include the right to temporarily withhold salary/wages without the consent of the employee. To sanction such an interpretation would be contrary to Article 116 of the Labor Code, which provides:

ART. 116. Withholding of wages and kickbacks prohibited. – It shall be unlawful for any person, directly or indirectly, to withhold any amount from the wages of a worker or induce him to give up any part of his wages by force, stealth, intimidation, threat or by any other means whatsoever without the worker’s consent.

(SHS PERFORATED MATERIALS, INC., WINFRIED HARTMANNSHENN, and HINRICH JOHANN SCHUMACHER v. MANUEL F. DIAZ, G.R. No. 185814, October 13, 2010)